Volume 9 Issue 1 April - June 1996

Deposits Deduction of IT at source from Interest paid on

Recollect
Term deposits (TDS)
Interest Rates on Deposits As per a suggestion received from IBA, the
RBI has amended its earlier directive amount of tax to be deducted on the interest accru-
regarding opening of SB account in the name of ing on RIP deposit for the financial year could be
bodies/organisations. As per the amendment, SB debited to the running account (SB/CA) of the
accounts can be opened by any Public Sector Bank depositor, wherever balance is available, if the
in the names of Nagar Panchayats, Nagar Palikas option is given by the depositor. In this process,
and Municipal Bodies in relation to funds (Central the depositor is assured of getting the maturity
assistance plus State share) given under Nehru value quoted in the deposit receipt.
Rozgar Yojana towards subsidy, training and Branches are advised to counsel the custom-
infrastructure under SUME and Scheme of Urban ers on the availability of the above option which is
Wage Employment (SUWE). Branches are advised applicable for existing as well as new accounts. A
to take advantage of the enabling provision of the proforma of the option letter is enclosed to the
directive. circular.
(DEP.1/96-97 dt.01.04.96) (DEP.4/96-97 dt.10.04.96)

Deposit Mobilisation - Staff Participation Stock Invest Scheme

In order to recognise and further motivate RBI in consultation with SEBI has decided
the efforts of staff members in the mobilisation of that a ceiling of Rs.10 lakhs per individual per
deposits, it has been decided to issue letters of capital issue should be prescribed for issue of
appreciation/Merit Certificates to individual staff stockinvests by banks. The above ceiling would
members as under. not be applicable to Mutual Funds. Any
Issue of Appreciation Letters violation/cir- cumvention of the above instructions
would invite action by RBI against the bank
Category Deposit Signed by including penal action as provided under B.R.
mobilised Act,1949.
Rural Upto Rs.1 lakh ZM
1 - 5 lakhs GM (DEP.5/96-97 dt.12.04.96)
Semi Upto Rs.5 lakh ZM
Urban/Urban 5 - 10 lakhs GM
Metropolitan Upto Rs.10 ZM Variable Deposit Scheme
lakhs
10 - 25 lakhs GM The name of the above scheme has been
changed as ‘Variable Recurring Deposit’ Scheme.
A few modifications have been made to the above
Issue of Merit Certificates scheme with retrospective applicability wherever
feasible.
Category Deposit Signed by
mobilised 1. The penal interest for failure to remit the
Rural 5 - 10 lakhs ED monthly core deposit is waived.
Above 10 lakhs MD
Semi 10 - 20 lakhs ED
2. In order to ensure that the customer does
Urban/Urban Above 20 lakhs MD
not lose interest on the terminal month,
Metropolitan 25 - 50 lakhs ED branches shall fix the period of deposit in
Above 50 lakhs MD such a way that the due date falls on the 1st
day of next month. However, it shall be
ensured that the period of deposit does not
Branches are advised to furnish the details exceed 10 years.
of deposits canvassed by all staff members to the
respective Zonal Managers for issuance of letters (DEP.6/96-97 dt.22.04.96)
of appreciation/Merit Certificates.
Renewal of overdue Term Deposits
(DEP.2/96-97 dt.03.04.96)
IBA has informed that addition has been
made to the relevant GRACE Rule No.4(E) as
follows :
PDF-1996-1Q

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 Volume 9 Issue 1 April - June 1996

10 years ceiling shall be interpreted as Advances

from the date of renewal in the case of
overdue deposits.
Accordingly branches may renew overdue Interest since the date of filing of suit -
deposits from the date of maturity even if the payable on suit claim and not merely on the
overdue period is more than 10 years provided the original sum advanced
due date of the renewed deposit does not fall A few High courts have given judgements
beyond 10 years from the date of (presentation for) in a few cases to the effect that interest is payable
renewal. on the original sum advanced and not on the suit
claim. However, the Hon’ble Supreme Court have
(DEP.8/96-97 dt.09.05.96)
in their judgement dt.21.09.94 held that the suit
claim is the ‘Principal sum adjudged’ and not the
Special Recurring Deposit Scheme ‘sum borrowed’ and held that interest since the
IBA has modified GRACE Rule 4(K)(b) and date of suit is payable on the suit claim. A copy of
4(K)(e). As per the modification, Special Recur- the judgement is enclosed to the circular.
ring Deposits can be accepted in monthly instal-
ments also, besides quarterly/half yearly/annual (ADV.4/96-97 dt.06.04.96)
instalments. Further, the instalments irrespective
of periodicity shall be in multiples of Rs.500/- Safeguards against issue of false Credit
with a minimum of Rs.1000/- Reports

(DEP.9/96-97 dt.16.05.96)
When any credit report is received from
another Bank in the same centre, the issuing bank
should be contacted for confirmation of the report.
Allowing withdrawal slips in cheque operated If the Bank is located at outstation centre, it should
accounts be contacted through our branch in the centre for
It has been decided that cash withdrawals confirmation. If no branch of our Bank exists at
by withdrawal slips in cheque operated SB the centre, a letter of acknowledgement-cum-
accounts may be allowed as a special case subject thanks should be sent to the issuing bank along
to the following conditions : with the photocopy of the report received. The
credit report should be acted upon only after
i. The customer must come in person along obtaining confirmation or after waiting for 15 days
with the passbook from the date of issue of such acknowledgement
ii. He should be properly identified letter.
iii. The withdrawal slips must be issued as per When requests for confirmation are
the procedure given in the Manual of received from other banks for the credit reports
Instructions - Deposits purportedly issued by us, wherein if it is found that
such reports have not been issued by us, the bank
The facility should not be allowed as a seeking confirmation should be immediately
matter of routine. The facility can be allowed only informed and a report should be sent to Zonal
at the discretion of officers in the level of Assistant Office/CO:Vigilance Department.
Branch Manager/Branch Manager.
(ADV.8/96-97 dt.15.04.96)
(DEP. 11/96-97 dt.07.06.96)

Payment of interest on current account Security Norms for Agricultural Advances

balances of RRBs
RBI has revised the security norms for
In terms of the instructions received from agricultural advances as follows.
RBI, branches are advised not to pay interest on
current account balances of RRBs not sponsored For crop loans and term loans where
by us, w.e.f. 1.10.95 movable assets are created, the limit for not
obtaining collateral security by way of
(DEP.13/96-97 dt.19.06.96) mortage/third party guarantee has been raised
from Rs.15,000 to Rs.25,000. In respect of term
loans, where movable assets are not created, the

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 Volume 9 Issue 1 April - June 1996

limit for not obtaining mortgage of land has been should be no dilution of standards in this regard
raised from Rs.5,000 to Rs.10,000. for any extraneous consideration.

(ADV.14/96-97 dt.27.04.96) (ADV.26/96-97 dt.20.05.96)

Prime Ministers’ Integrated Urban Poverty

Periodicity in updating DCB data with regard to Eradication Programme (PMIUPEP)
agricultural advances RBI has announced certain modifications to
RBI has instructed that the data on recovery the above scheme. As against the original decision
of agricultural advances shall be submitted to them to implement the scheme in all class II urban
as of March and September every year. Hence, agglomeration with population between 50,000 to
branches should update the DCB register with 100,000, it has been decided to extend the scheme
regard to agricultural advances as of September to certain other towns/areas as per list annexed to
and March and furnish only such data in AR-11 the circular. Further, branches need not insist on
statement. Branches should ensure that the data training prior to disbursement of loans wherever
furnished by them is correct in all respects. the training is considered redundant. The formats
of monthly/quarterly progress reports have been
(ADV.18/96-97 dt.09.05.96) revised and the revised formats are annexed to the
circular. No upper age limit is fixed for borrowers
SIDBI Refinance - Absorption of upfront fee by under the programme.
the Bank - Maximisation of availment of SIDBI
(ADV.28/96-97 dt.23.05.96)
refinance
Branches need not charge upfront fee to the Financing of farmers for purchase of generator
borrowal accounts eligible for SIDBI refinance sets for irrigation purposes
w.e.f. 01.05.96.
RBI has informed that the loans extended by
All eligible disbursements qualifying for Banks to farmers for purchasing generator sets as a
SIDBI refinance should be reported immediately to stand by arrangement for energising pumpsets may
SIDBI Refinance availment centres to ensure be classified under direct finance to agriculture
prompt and full availment although the norms for provided such loans are eligible for refinance from
refinance provide a maximum time of 6 months for NABARD.
availment from the date of first disbursement.
(ADV.30/96-97 dt.25.05.96)
(ADV.19/96-97 dt.10.05.96)
PMRY - Assistance to SCs/STs
Rural Lending - Service Area Approach (SAA)
The High Power Committee on PMRY has
RBI has decided that if the Service Area advised that in the case of married woman appli-
Branches do not issue ‘No due certificate’ within cants, the income of their parents-in-law should
15 days from the date of receipt of the application also be taken into consideration while deciding on
therefor, the borrower will be free to approach any the eligibility for assistance under PMRY.
other branch in the block for his credit require- Further, the borrower can avail incentives from
ments without production of ‘No due certificate State Government provided his contribution of 5%
from the concerned Service Area Branch’. of the project cost is not diluted. Branches have
been advised to bring about substantial improve-
(ADV.23/96-97 dt/16.05.96)
ments in providing credit to SC/ST as our
performance in this regard is unsatisfactory.
Deposit Linked Advances Branches and controlling offices have been called
RBI has advised banks to desist from upon to accord top priority to the submission of
becoming party to unethical practices of raising monthly/quarterly progress reports.
resources through agents/third parties to meet the
(ADV.32/96-97 dt.28.05.96)
credit needs of the existing/prospective borrowers
or to grant loans to intermediaries based on
consideration of deposit mobilisation whose Scheme for financing commission agents for
requirement for funds are not for genuine business supply of agricultural inputs to farmers
requirements. All credit proposals should be RBI has decided that bank loans extended to
subjected to normal appraisal standards and there commission agents/Arthias for meeting their

3
 Volume 9 Issue 1 April - June 1996

working capital requirements on account of credit Credit Management-Directions of Top Manage-

extended to farmers for supply of inputs may be ment Council (TMC)
reckoned as indirect finance to agriculture. Branch
Managers are not empowered at present to The over-expanded credit position of our
sanction such loans. They should submit proposals Bank is a matter of grave concern requiring
under this head only to ZCC through their immediate corrective action. In this regard, the
Regional Managers. While extending such a facil- Top Management Council has given the following
ity it should be ensured that the loans have actually directions :
been given to farmers at reasonable rates of inter- i. No adhocs/excesses/TODs can be allowed
est and that the facility is not misused. without the prior sanction of the appropriate
authority. Excesses/adhocs may be considered by
(ADV.34/96-97 dt.04.06.96) the competent authorities only if there is strong
evidence of future inflows.
Delegation of powers to sanction filing of
ii. No facilities shall be allowed to continue in
suits/initiation of recovery proceedings
any borrowal account without proper/timely
Our Board has resolved to reduce/curtail review/renewal of accounts.
the powers delegated to various authorities for
iii. Appraisal of proposals for non-fund based
sanction of filing of suits/initiation of recovery
limits shall be made in the same manner as appli-
proceeding. The revised powers are given below :
cable for fund-based limits. Before such limits are
Authority Monetary Limit approved it should be ensured that there is a
Where the claim does proper tie-up for meeting the commitments (under
not exceed LCs/guarantees) on due dates. These facilities
should also be reviewed periodically.
RMs (in scale IV) Rs.1,00,000 in each
case iv. No advance sanctioned should be released
RMs (in scale V) / Rs.2,00,000 in each
unless all the terms and conditions are strictly
AGMs (in operations) case complied with.
ZMs /DGMs (in Rs.5,00,000 in each v. Interest debited should be recovered
operations) case immediately as otherwise the advance may become
GMs Rs.7,50,000 in each
an NPA.
case vi. Overdues under export finance should be
ED Rs.25,00,000 in each recovered on a war-footing. ECGC claims should
case be preferred wherever necessary with the permis-
EC (C) /CMD Rs.50,00,000 in each sion of the competent authority.
case vii. Irregular Import Finance such as advance
MC All claims without any bills must be followed up vigorously and the entire
limit advance recovered.
viii. NPAs should be reduced in the shortest
possible time.
i. Filing of suit cannot be sanctioned by an
authority if the loan was sanctioned by the ix. Branch Managers should comment on the
same individual. valuation report of our approved engineers in
respect of property taken as security for advances.
ii. A report of the status shall be submitted by Wherever they differ, the reason therefor shall be
the sanctioning authorities to their next
recorded.
higher authority for review
x. Branches/ROs/ZOs should ensure that
iii. Before according sanction, the authority CMOs discharge their duties as per guidelines
should satisfy himself that all other possible given to them. They should be used as effective
steps for recovery have been taken. tools for reducing/controlling NPAs and for
iv. Staff accountability should be looked into stopping any slippage in the category of assets.
both from vigilance and non-vigilance xi. Besides accounts enjoying facilities of Rs.5
angle. crores and above, partnership firms having limits
(ADV.35/96-97 dt.06.06.96)
of Rs.3 crores and above shall also be brought
under yearly stock Audit System.

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 Volume 9 Issue 1 April - June 1996

The above directions of TMC shall be blank space. If the BPOs are presented at a branch
complied with without fail. other than the issuing branch in the same city, they
can be paid to the debit of ‘DDs/BPOs Paid
(ADV.36/96-97 dt.07.06.96) Account’ provided they are otherwise in order.
The paid BPOs should be presented in clearing and
Credit monitoring system under IRAC norms realised on the same day or by the next day. The
other procedural aspects are more or less the same
The following modifications have been as in the cases of DDs drawn on service branches
made to the new four-way classification system of and payable at par.
monitoring.
i. Review of advances shall be made on half- (CRA 1/96-97 dt.06.04.96)
yearly basis instead of quarterly basis.
Service Charges
ii. Review shall be done by an authority one
level higher to that of the sanctioning authority. The service charges have been prescribed/
revised as the case may be in respect of the follow-
iii. Loans against deposits/NSC/LIC policies
ing :
and staff advances wherein interest is payable after
recovery of the principal are exempted from i. Attestation of Rs.10 per occasion.
review as long as they are not classified as NPA. customer’s signature
Review of such accounts may be done in consoli- in business transac-
dated form as is being done for accounts with tions such as transfer
balance upto Rs.25,000. of shares
ii. DD cancellation Rs.20 per DD
(ADV.39/96-97 dt.20.06.96)
charges irrespective of the
amount
Personnel iii. Closure of current Rs.25
account within a year
of opening (except in
Revised guidelines under Indian Bank the event of death of
Officers’ Service Regulations - Reimburse- the account holder)
ment of hospitalisation charges to officers iv. Issuance of solvency Re.1/- per Rs.1000/-
certificate with a minimum of
The modified scheme comes into effect
Rs.25/- and a
from 01.11.94. The claim for reimbursement maximum of Rs.500/-
should be submitted to the sanctioning authority
within 6 weeks from the date of discharge from the
hospital or the officer’s rejoining duty from
sickness whichever is later. The reimbursement (CRA.5/96-97 dt.15.05.96)
will be allowed to the extent of 100% in case of
self and 75% in case of members of family,
however to the ceilings fixed for various catego- Service Charges - Specialised Agricultural
ries of fees/ charges. The schedule for reimburse- Finance Branches
ment of hospitalisation expenses is enclosed to the
circular. The following service charges are
prescribed for the specialised services rendered by
(PRNL.7/96-97 dt.08.05.96) specialised Agricultural Finance Branches.
Feasibility studies (Project cost)
CRA Above Rs.5 lakhs and Rs.5,000
upto Rs.25 lakhs
Payment of BPOs issued by other branches in Above Rs.25 lakhs and Rs.10,000
the town/city upto Rs.50 lakhs

It has been decided to provide a facility of Above Rs.50 lakhs 0.1% of the project
encashment of BPOs at par in our branches within outlay with a minimum
the same town/city of issue. At the time of issue, a of Rs.1 lakh
rubber stamp bearing the words ‘Payable at par at Project Formulation (Project cost)
all branches in .........’ should be affixed. The
name of town/city of issue should be written in the Upto Rs.10 lakhs Rs.5000

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 Volume 9 Issue 1 April - June 1996

Over 2 years 15.0 %

Above Rs.10 lakhs and 0.5% of project outlay
upto Rs.10 crores with a minimum of
The revised interest rates on deposits would
Rs.10000
be applicable only to fresh deposits and on renewal
Above Rs.10 crores Rs.5 lakhs for Rs.10 of maturing deposits
crores + 0.25% of
Project outlay in excess (FX.2/96/97 dt.16.04.96)
of Rs.10 crores.
Servicing of NRI customers
Other conditions
The increasing non-resident Indian commu-
1. In addition to tariff, actual costs incurred if
nity, having an effective presence in almost all the
any on conveyance, lodging, boarding, etc.,
countries in the world is a perennial/perpetual
shall be recovered from the client and taken
source for mobilisation of deposits. Branches are
to income account.
advised to render prompt and personalised service
2. 50% of charges to be paid in advance and to their NRI clientele and give no scope for them
balance at the time of receiving project to complain with. The following are the general
reports. complaints voiced by the NRI community.
3. Bank reserves the right to charge in excess 1. Non-response to queries/letters.
of the tariffs in case of additional workload.
2. Inordinate delay in acknowledging remit-
4. Consultancy Services are provided without tances, sending of statement of accounts,
any commitment on the part of the Bank or cheque book, pass book, deposit receipts,
its officers. etc.

(CRA.6/96-97 dt.22.05.96) 3. Delay in remittance of periodical interest on

term deposits.
4. Delay/mistake in carrying out standing
FX instructions.
5. Non-receipt of due date notices.
Money laundering through NRE accounts
6. Non-renewal of deposits on due dates, etc.
Branches have been advised to be extremely
cautious not only while opening of NRE accounts Branches should adopt an NRI-customer
but in their conduct as well. The provisions friendly attitude and attend to their requirements
contained in para 13-B-1 to 13-B-25 of Exchange with a positive frame of mind. Branches requiring
Control Manual should be scrupulously adhered any clarification may consult CO: ID or the NRI
to. The accounts should be closely monitored with Cells at the following places.
regard to eligible credits and any trace of irregu- 1. Pondicherry Zonal Office
larity in the conduct of such accounts (Bogus gifts,
Drug money, Hawala Money etc., being laundered 2. RFEC, Calcutta
through NRI channels) should be reported to the 3. Regional Office, Ahmedabad
higher authorities for necessary action 4. Zonal Office, Trichy
(FX.1/96-97 dt.11.04.96) 5. Goa
6. NRI Cell, Ernakulam
Interest rates on Term Deposits under The circular also lists out the various strate-
Non-Resident (External) Rupee Accounts (NRE gies for mobilising NRI deposits.
accounts)
(FX.4/96-97 dt.01.06.96)
With effect from 16.04.96, the rates of
interest on NRE Term Deposits stand revised as
Interest rates on Term Deposits under NRE
under :
(Rupee) accounts
Duration Rate of interest The interest rates on NRE term deposits
6 months and above upto 2 12.0 % have been revised as under with effect from
years 21.6.96.

6
 Volume 9 Issue 1 April - June 1996

Duration Rate of interest circular also gives a gist of some important circu-
lars brought out by Head Office for ready refer-
6 months and above upto 2 12.0 % ence by branches.
years
Over 2 years 16.0 % (GENL.3/96-97 dt.02.04.96)

Security Procedures in TBC branches

The revised interest rates would be applica-
ble only to fresh deposits and on renewal of matur- A study conducted by Inspection Depart-
ing deposits. ment of the computer operations in some TBC
branches has revealed several lapses which include
(FX.7/96-97 dt.22.06.96) absence of a second line for system administration,
non-maintenance of password norms/secrecy,
non-generation of print-outs of important reports,
General non-creation of back ups, etc., Branch Managers
and system administrators are exhorted to strictly
Inter Branch Reconciliation follow the security measures and rectify the lapses.
All the staff members are requested to take a keen
RBI has fixed a time frame for reconcilia-
interest in enlarging their knowledge in computer
tion of IBR entries of yester years and to reconcile
operations.
all the entries of Rs.1 lakh and above within 2
months and other entries within 6 months on an (GENL.05/96-97 dt.04.04.96)
on-going basis in respect of entries generated
w.e.f. September ‘95. Hence, the following proce-
dures are introduced. Compulsory Deposit Scheme (ITP) Act 1974 -
Rate of interest
1. To maintain a register for recording details
of all Internal Reversal Rectification as and The interest rates as applicable in our Bank
when they are made. to the above deposits are as follows :
2. To send an advance copy of IBR Schedule 11% w.e.f. 25.02.95
to CO:Reconciliation Department/Zonal 12% w.e.f. 18.04.95
IBR Cell as the case may be.
13% for the period from 21.10.95 to
3. Originating branches to get the date of 31.03.96. No interest should be paid
responding of entries of Rs.50 lakhs and after 31.03.96.
above and record the particulars in a
separate register. Responding branches to (GENL.14/96-97 dt.15.05.96)
send confirmation of having responded to
such entries immediately on responding. Precautions to be taken by branches while
4. To maintain a register for recording the acting on telephonic messages received
particulars of cheques sent/received in Branches are cautioned to be alert and
External Clearing and to verify the advices follow the safeguards prescribed while acting on
received from Service Branch with the telephonic message. Requests for non-sensitive
recordings in the register. Differences, if information over phone may be entertained.
any, to be taken up with Service Branch However, if information sought is on sensitive
immediately. maters, more caution is warranted. Skills should
5. Duplicate advices to be signed by two be developed for identifying the voice of important
officers, one of whom to be preferably the clients who make phone calls frequently. In case of
Manager of the Branch/Department. doubt, they may be called back for confirmation.
More discretion and care should be exercised in
6. To recover excess payment made on respect of phone calls purportedly made by top
account of twice responding and in case it is officials of Bank/Government etc., seeking action
not possible, to obtain necessary sanction on sensitive matters. While responding to such
from the appropriate authority for reversal calls, the interests of the Bank should be protected
of the amount outstanding under IBR. without however offending the caller. Wherever
A list of Dos and Don’ts to be observed by needed, the immediate controlling office should be
branches while attending to IBR has been enclosed contacted for advice.
to the circular. A revised IBGA code book updated
upto 30.09.95 has been brought out. Further the

7
 Volume 9 Issue 1 April - June 1996

The instructions contained in the various Decisions of the Apex level Joint Customer
manuals in this regard are reproduced as Annexure Service Committee
to the circular.
The apex committee comprising of the
(GENL.15/96-97 dt.20.05.96) Chief Executive, 5 GMs and representatives of
workmen union/officers’s association met on
Customer Service Measures 4.5.96 and resolved the following :

As per a directive received from the Minis- 1. The joint customer service committee at
try of Finance, the following qualitative customer branch/RO/ZO should meet periodically
service measures are to be introduced with with due participation by select customers.
immediate effect. 2. Observance of 15th of every month as
1. Replies to written reference from customers customer day
should go from the branch/office within a 3. Provision of teller system at more branches
week. Any delay beyond one week should
be explained. Default on this score will be 4. Improvement in punctuality and discipline
treated as a major lapse. 5. Extending of ICOOC facility and payment
2. Discussions on crucial matters like business of interest on delayed collections as a
matters, advances should be comprehen- matter of routine
sively recorded. 6. Adherence to time norms for specified
3. A trilingual check-list (vernacular/Hindi/ transactions
English) on various transactions should be 7. Legible writing of pass books/statements
furnished to customers. The checklist will
soon be supplied to branches. 8. Introduction of single window concept for
issue of BPOs/DDs upto Rs.5,000 (this
4. Draft of agreements/documents to be decision is being pursued with further
executed by the customer should be sent discussions)
along with a covering letter and the terms
and conditions. 9. Enhanced teller payment upto Rs.7,000
(category “A” Tellers) in line with VI
5. The branch/office should not attribute any Bipartite Settlement.
delay/inadequate action to the customer for
his incomplete information or procedural Branches are advised to ensure compliance
infirmities. The Bank is duty bound to assist with the above decisions of the Apex Committee.
the customer and facilitate his compliance
(GENL.23/96-96 dt.03.06.96)
with the necessary formalities.

(GENL.16/96-97 dt.22.05.96) System for communicating with HO/ZO and

sending copies of correspondence to HO/ZO
Fraud committed by forging foreign Demand Branches should not directly communicate
Drafts with HO except in the following cases.
Foreign visitors to India open accounts on 1. Suggestions under Staff suggestion scheme
the basis of fake passports with fictitious
addresses. Forged foreign demand drafts were 2. Submission of quick figures to
presented to the banks for collection/encashment CO:Accounts Dept.
over the counter. The sophisticated technology 3. Clarifications on HO guidelines which are
used for printing and the clever forgery made on immediately required.
the instruments rendered it difficult for the banks
to detect such frauds. Hence, RBI has advised that 4. Replies to HO letters addressed directly to
in addition to the usual safe guards taken at the branches.
time of opening the accounts/allowing 5. Any other matter in which HO has specifi-
withdrawals, branches may verify wherever possi- cally instructed for direct communication.
ble, the resident permits issued by Police Depart-
ment in India to all foreign nationals and retain a Copies of inter-branch correspondence on
copy thereof for their record. routine matters such as inter branch reconciliation,
follow-up of collection advices, personnel matters
(GENL.19/96-97 dt.28.05.96) such as availing of PL, LFC, etc. should not be
marked to HO/ZO.

8
 Volume 9 Issue 1 April - June 1996

Copies can be marked to HO/ZO only when Improvement in the quality of Credit
such correspondence are needed by them for Management, Non-fund based business, Reversal
follow-up or if the original correspondence had of BP returned unpaid, overdue export bills,
emanated from them. Copies of letters addressed defaulted guarantees, overdue advance bills, etc.,
to one department at HO may be marked to other Housekeeping and customer service are areas
department(s) only when the other department’s which require immediate attention.
co-ordination is necessary for taking action by the
Urgent steps are to be taken at branch level
addressee department and not as a matter of
for reversing the trend of low profitability by
routine.
improving the deposit-mix and by increasing the
Wherever clarifications are sought by HO average yield on advances through recovery of
from ZO/RO on credit or other matters, branches NPA.
may mark copies of their replies to HO as it will
Our CMD has appealed to the staff
facilitate in quicker feedback. However, where the
members of the Bank to reinvigorate the bank in
matter is dealt with by Regional Office in respect
all its major operational areas for a better and
of which ZO/HO are not in the picture, copy of
creditable performance during this year.
correspondence need not be marked to them.
Request for supply of manuals, discretion- (MD/ED 1/96-97 dt.16.04.96)
ary powers booklet, specimen signature booklet,
circular digest, etc. should be made only to the Housekeeping
immediate controlling authority (RO/ZO). Such
letters should neither be addressed directly to HO In the Business Plan Conference held in
nor copies marked to them as a matter of routine. March ‘96, we set a goal for ourselves that there
should be no book remaining unadjusted for more
(GENL.30/96-97 dt. 20.06.96) than a year as on 31.03.96. However, it is
reported that in some branches, a few books still
remain unadjusted. Staff members are advised to
MD/ED put in maximum efforts to see that by June 10,
1996, their branch does not have any unadjusted
book not only for more than a year but even as on
Business Performance - 1995-96 31.03.96.
The aggregate domestic deposits grew (MD/ED.3/96-97 dt.23.05.96)
during the year ended 31.03.96 by 6.38% or
Rs.707 crores to Rs.11787 crores. Deposits exclu-
sive of CDs rose by Rs.923 crores of which
Customer Service
Rs.437 crores accounted for the rise during the last One of the important measures introduced
two and a half months of the year. While congratu- by the bank is the positioning of every one of us
lating the Zones/Regions/Branches which have atleast 15 minutes before the commencement of
reached their deposit targets, regulated credit and banking hours. The resultant customer satisfaction
performed well in other areas during the year will usher in a surge in our bank’s business. It is
ended 95-96, our CMD has urged the field levels only the ‘Service in time with a smile’ that would
functionaries to improve upon this tempo so as to set at rest any kind of customer dissatisfaction.
reach positively the non-incremental non-CD Customers when readily attended to as they enter
deposit growth of Rs.1684 crores targeted for the bank’s premises will turn out to be our ambas-
1996-97. sadors of goodwill and will contribute to our
Non-food credit for 96-97 should be growth. It is expected that the staff members
contained to a total net expansion of Rs.345 crores would eagerly respond positively to the corporate
only. Recoveries in regard to NPAs during the expectations.
year will be a minimum of Rs.565 crores. (MD/ED.5/96-97 dt.27.06.96)

9
 Volume 9 Issue 2 July - Sep 1996

Deposits Special Savings Bank Account Drive

Recollect
Savings bank accounts are required by all
Minimum period for acceptance of Term
segments of population. They are low cost
Deposits resources and are generally stable. During this
financial year, it is aimed to achieve 18% growth
The minimum period for acceptance of in Savings Bank Customer Base. The strategies in
Term Deposits has been reduced from 46 days to this regard include
30 days, with effect from 2.7.96. Branches are
1. establishing direct contacts with customers
advised to accept deposits of 30 days maturity at
both existing and potential;
rate applicable for 46 days.
2. team work by our employees to render the
(DEP.14/96-97 dt.04.07.96) best quality of service;
3. tapping potential sources such as canvassing
Interest rates on domestic term deposits and securing salary accounts of employees of
corporate bodies linked to ATM branches,
W.e.f 15.7.96 the interest rate structure has
pensioners, retiring employees, maturing Life
been revised as follows:
policies, Court Deposits, NRI Deposits etc.;
Period of Deposit Interest % 4. revival of inoperative accounts. Staff
per annum meetings and customer service committee
30 days to 45 days 8 meetings should be conducted regularly to solve
problems if any. These forums may also be used to
46 days to 179 days 9
chalk out marketing strategies.
180 days to 1 year 10
Over 1 year to 2 years 11 (DEP.20/96-97 dt.6.8.96)
Over 2 years to 3 years 12
Renewal of Overdue Domestic Term Deposits -
Over 3 years 13 reduction of minimum period to 30 days
Branches are aware that the minimum
The revised interest rates apply only to period for acceptance of Term deposits has been
fresh deposits and on renewal of maturing reduced from 46 days to 30 days. Consequently,
deposits. renewal of Overdue Deposits shall be for a
minimum period extending upto at least 30 days
(DEP.15/96-97 dt.13.07.96)
beyond the date of renewal i.e. the date of presen-
tation of deposit receipt for the purpose of
Addition/deletion/substitution of names by renewal.
surviving depositors in a Joint Account
(DEP.21/96-97 dt.18.9.96)
It has been decided to include an additional
clause in the Savings Bank/Term Deposit Opening
Form which will enable the survivor(s) to ADVANCES
add/delete/substitute name(s) in the deposit after
the death of one or more joint account holders. Recovery of overdues under agricultural
The modified clause is given in the circular. Until advances
the revised opening forms containing the modified
clause are received, branches shall affix the clause After reviewing the bank’s performance in
by means of a rubber stamp in the opening forms recovery of agricultural advances, our Board has
at the time of opening the account. directed that recovery of agricultural advances
should be stepped up to atleast 75% and that NPAs
Whenever any addition/deletion of names be reduced by 50% before March 1997. Branches
are to be made, branches are advised to obtain a are advised to take every possible effort to
fresh nomination from all the joint account holders improve the recovery. An illustrative list of strate-
after such addition/deletion. gies to be adopted by branches is given in the
circular.
(DEP.19/96-97 dt.5.8.96)
(ADV.45/96-97 dt.1.7.96)

PDF-1996-2Q

1
 Volume 9 Issue 2 July - Sep 1996

Documents for Education Loan format is enclosed to the circular. Branches are
advised to use the modified format for placing
In respect of an education loan granted to a review proposals to sanctioning authorities with
student during his minority, the following proce- immediate effect.
dure should be adopted by branches immediately
upon the student attaining majority. (ADV.56/96-97 dt.19.07.96)
1. A letter of undertaking (F-162 - format
enclosed to the circular) should be obtained from Interest rate chargeable
the student confirming the loan wherein the
guarantors should also confirm the guarantee. Wherever credit limits of Rs.2 lakhs and
2. An acknowledgement of debt cum security below under different facilities enjoyed by a
(D-11) duly signed by the borrowers (erstwhile customer aggregate to over the level of Rs.2 lakhs,
minor and the guardian) and guarantors should be the interest rate chargeable for each of such facili-
obtained. ties shall be at the rate specified for the respective
facility against ‘Over Rs.2 lakhs’ category. The
(ADV.49/96-97 dt.9.7.96) interest rate so fixed for facilities after aggregation
of limits shall continue till closure of all accounts
Sanctioning of credit facilities to group of the borrower.
concerns Further by way of clarification to branches,
As per the earlier guidelines of RBI, it was the interest rates for plantation loans are given in
stipulated that before extending any credit facility, the form of a table below :
whether fresh or additional to any of the units Agricultural working capital :
belonging to a particular group, banks should
invariably obtain credit report/consent of the lead For traditional plantation Interest rates as appli-
bank financing the main company. In view of the upto 20 acres cable for priority sector
practical difficulties experienced by banks in
implementing the above guideline, RBI has now For plantations of over 20 PLR + 4.5% + Interest
advised that banks should make enquiries and acres tax (21.75%)
satisfy themselves about the conduct of the Priority and Non-Priority Term Loan/ Plantation :
accounts of the companies in a group with differ-
ent banks before extending credit facilities and Term loans for develop- PLR + 1.5% + Interest
they need not necessarily obtain the consent of the ment (priority) tax (18.75)
lead bank financing the main company of the Term loans coming under PLR + 3.5% + Interest
group before extending credit facilities to other non-priority tax (20.75%)
companies in the group.

(ADV.52/96-97 dt.16.7.96)
(ADV.59/96-97 dt.25.07.96)

Treatment of margin money on account of Revised eligibility criteria for drawing

LC/Bank Guarantee refinance from NABARD under schematic
RBI has observed that some banks treat lending for 1996-97
‘Margin Money’ as part of current assets and
NABARD has decided to continue the exist-
provide credit to their borrowers against such
ing criteria/norms for drawal of refinance by
margin money. In such cases the very purpose for
commercial banks under schematic lending for
which margin money was taken gets defeated. RBI
1996-97. However the eligibility norms are
has therefore advised that margin money should be
proposed to be revised in a phased manner as
excluded from current assets while assessing
given below :
working capital credit needs of a borrower.
Year Cut-off point of recovery
(ADV.54/96-97 dt.16.07.96)
percentage for unrestricted
category
Revised format of proposal for review of credit
1997-98 65%
facilities
1998-99 70%
In view of the changes in the advance
portfolio and credit policy, the format for review 1999-2000 75%
of advances has been modified. The modified

2
 Volume 9 Issue 2 July - Sep 1996

For determining the eligibility, each branch Questionnaire for filing of suit
will be considered as one unit. The recovery
percentage will be calculated by branches with The formats of the questionnaire and staff
reference to DCB position maintained by them as accountability to be submitted to sanctioning
of 30th June every year. authorities for seeking their permission to file suit
have been modified. The revised formats are
(ADV.62/96-97 dt.31.07.96)
enclosed to the circular.
Interest rate surcharge on import finance (ADV.67/96-97 dt.10.08.96)
RBI has w.e.f. 23.07.96 withdrawn the levy
of interest rate surcharge on import finance. Fresh Finance extended to dealers in drip
drawals as well as outstanding bank credit for irrigation/sprinkler irrigation/Agricultural
import finance will not be subject to interest rate machinery and Traditional plantations
surcharge from this date. Further, it is no longer
RBI has advised that advances to dealers in
necessary to maintain an import CC account
drip irrigation/sprinkler irrigation/Agricultural
carved out of the regular cash credit limit and
machinery will be classified as ‘indirect finance to
borrowers can also be permitted to repay outstand-
agriculture’ under priority sector, subject to the
ing advances against imports even before the
following conditions.
expiry of one month from the date of
disbursement/drawal subject to compliance with 1. Dealer should be located in rural/semi-
the lending guidelines under the Loan system. urban areas

(ADV.63/96-97 dt.02.08.96) 2. He should be dealing exclusively in such

items or maintain separate and distinct
records of such items.
Powers to sanction Agricultural Term loans
3. A ceiling of upto Rs.10 lakhs per dealer
At present, Branch Managers have been should be observed.
empowered to sanction agricultural term loans
Further all advances both under STPL and
only if refinance from NABARD/SIDBI is avail-
MTL provided to Traditional Plantation crops
able. Due to various reasons, NABARD has
irrespective of the area of estate shall be classified
restricted refinance support to Banks. However,
as agricultural advances under priority sector.
Banks have been directed to enhance the flow of
credit to agriculture. Hence, it has been decided to (ADV.74/96-97 dt.30.08.96)
allow Branch Managers/GKLC/RMs/CMs/ZMs to
exercise powers delegated to them to sanction
Agricultural term loans whether refinance is avail-
Rate of interest on advances against term
able or not. The authorisation is subject to the deposits
following conditions. Branches are advised to charge interest
1. The restoration of powers is applicable only w.e.f 4.7.96 on all loans and advances of over
to branches where the percentage of recov- Rs.2 lakhs granted against domestic/NRE term
ery of agricultural advances as of immedi- deposits to a person in whose name the deposit
ate previous half year is 60% and above. stands (singly or jointly or as guardian) at 2% over
the deposit rate plus interest tax or PLR + interest
2. The sanction proposed should be within the tax whichever is higher.
allocation made under performance budget
and SACP. (ADV.77/96-97 dt.03.09.96)
3. Sanctions made should be reported to the
next higher authority as per HO guidelines. Amendments to Manual of Instructions I -
Priority Sector Advances - Agriculture
4. Branches should continue to obtain specific
permission from RMs concerned in regard Amendments to be carried in the above
to farm mechanisation. manual are given in the form of a booklet enclosed
to the circular. The amendments are based on
5. In all cases, only unit cost approved by various circulars issued by respective departments
NABARD/DCC/SLBC should be adopted. for the period upto 31.7.96.
(ADV.64/96-97 dt.02.08.96) (ADV.84/96-97 dt.19.9.96)

3
 Volume 9 Issue 2 July - Sep 1996

Loan against NSC to retired staff Declaration from Borrowers/Associates in

respect of facilities availed in other
It has been decided to permit loan against banks/branches
NSC to retired staff under Scheme I only upto a
maximum of Rs.60,000/- subject to the following Branches were advised to obtain a declara-
terms and conditions: tion on the borrower’s relationship, if any, with
the senior officials of the bank (vide ADV.118/89
1. Margin 5% dt.6.7.89 - Booklet on Discretionary Powers -
Annexure III).
2. Rate of 13% (inclusive of interest tax)
Interest This declaration has now been modified to
3. Repayment 60 monthly instalments (both include a clause wherein the Borrowers/Associates
principal and interest to be recov- would declare that they do not enjoy credit facili-
ered from pension) ties with other banks/branches of our bank or in
case they have availed any such credit limits,
4. Other terms Lien in favour of the bank to be would furnish details of the same. The relevant
marked on NSCs pledged with clause has been given in the circular. Branches
Bank
should invariably obtain the declaration as
mentioned above from all credit applicants/their
associates.
All other terms and conditions would be the
same as applicable to staff members. (ADV.89/96-97 dt.27.9.96)
(ADV.85/96-97 dt.20.9.96)
Non issuance of true certified copies of
Rate of interest applicable for accounts identi- security documents to borrowers/signatories
fied as NPA where the repayment has The true copies of security documents
commenced regularly and operations have executed by borrowers/signatories could be handed
started over to them against their written request duly
retaining the original with the bank. However,
It is hereby clarified that overdue interest before parting with the copies it should be ensured
viz. 2% over the normal rate of interest or PLR + that the original documents executed are perfect in
7% + interest tax whichever is higher should be every respect so as to avoid future litigation from
charged on the ‘Past Due’ portion of the amount the parties on the legal enforceability of such
outstanding under NPAs of substandard and documents.
standard classification and on the entire outstand-
ing under Doubtful, Loss as also Suit Filed As regards title deeds deposited as security,
Accounts. It is further clarified that ‘Past Due’ the borrowers may obtain certified copies from the
refers to amounts which remain unpaid beyond one Registrar Office. However, in special cases where
month from the due date. the bank is to furnish such true copies the fact of
the bank holding the original documents as
(ADV.86/96-97 dt.20.9.96) security should be explicitly stated. The issue of
copies to parties should be considered on a case to
Loans and advances against case basis depending on the merits of each case.

shares/debentures (ADV.93/96-97 dt.28.9.96)

RBI has now decided to raise with immedi-

ate effect the existing limit of Rs.5 lakhs to Rs.10 PERSONNEL
lakhs per individual borrower in respect of
advances against shares/debentures. The monetary Job Rotation
limit for advances to individuals where the securi-
Branches/offices are advised to implement
ties are required to be transferred in bank’s name
periodical rotation of staff as set out below.
is also raised to Rs.10 lakhs.

(ADV.88/96-97 dt.26.9.96) 1. Cash Department 3 months

2. ALPMs/Computer operators 6 months
3. Data entry operators at Zonal 15 months
EDPs

4
 Volume 9 Issue 2 July - Sep 1996

4. Sections other than FX and 6 months

Loans Depts in Branches of block block
Scale IV and above 2 wages 278.00 414.00
: wages 358.00 498.00
5. FX/Loans Depts in Branches of 1 year
Scale IV and above
(PRNL.54/96-97 dt.3.9.96)
PRNL.44/96-97 dt.1.8.96)
Inclusion of Conveyance Allowance to award
Continuation of fixed personal allowance on staff as taxable income and new exemption
account of promotions - from clerical to officer limits for PL encashment on retirement for IT
cadre and from sub-staff to clerical cadre purposes
Hitherto the clerks/sub-staff members who Conveyance Allowance
were drawing fixed personal allowance and In terms of the notification received from
promoted to officer/clerical cadre respectively CBDT the conveyance allowance paid to employ-
after 01.11.93 were not allowed to draw the same ees as part of salary is to be included for computa-
after their promotion. Neither were they entitled tion of income tax w.e.f from 1.4.96.
for any additional increment in lieu of FPA. It has
now been clarified by IBA that the bank may Leave encashment at the time of retirement
continue the payment of FPA drawn by an Encashing PL on retirement is exempted
employee at the time of promotion even after his from income tax and the maximum exemption
promotion. Branches/offices are to submit in the limits prescribed are as follows:
format enclosed to the circular, particulars of
Officers/ clerks presently working with them, who Period of Retirement Exemption Limit
were promoted after 1.11.93 from clerical/substaff 1.1.88 to 31.3.95 Rs. 79,920
cadre as the case may be and were drawing FPA at 1.4.95 to 30.6.95 Rs.1,30,320
the time of promotion. CO: Personnel Department
1.7.95 onwards Rs.1,35,360
will advise branches/offices suitably for payment
of FPA to such employees.
The limit for exemption is equal to eight
(PRNL.45/96-97 dt.08.08.96) months average salary during the period of ten
months immediately prior to retirement or the
Indian Bank (Employees’) Pension Regulations figures mentioned above whichever is lower.
1995 - Pension on Voluntary Retirement
(PRNL.68/96-97 dt.25.9.96)
It has been decided to permit the encash-
ment of Privilege leave in terms of Regulation 38
of IBOSR, 1979/Clause 8 & 9 of Bipartite Settle-
Modification in request transfer policy for
ment dated 29.6.90 to officer employees/award award staff
staff respectively who seek voluntary retirement The existing ceiling on number of request
on or after 1.11.93 under Indian Bank transfers in the inter-state Category transfer has
(Employees’) Pension Regulations, 1995. been revised to Two. Consequently, the ceiling in
each category of request transfers would be as
(PRNL.46/96-97 dt.9.8.96) follows:

Payment of TA/LFC advance to award staff - General category : 4

S.J.S.category : 2
Eligible amount as per revised Railway tariff
Inter-state category : 2
W.e.f 1.8.96 the revised per unit entitle-
However, the present maximum eligible
ments for journeys performed on or after 1.8.96
request transfers numbering 5 under the Transfer
are as under. (Rs.)
Policy remains unaltered. An award staff member
availing the fifth and final chance will be entitled
Two years Four years
block block only for Travel time and not for joining time and
1. Clerk 2028.00 3496.00 TA/Batta.
2. Substaff 414.00 588.00
(PRNL.69/96-97 dt.26.9.96)
3. Part time employees
a wages 204.00 332.00

5
 Volume 9 Issue 2 July - Sep 1996

CRA Service Charges

Processing Charges for non-fund based
Service Charges - Safe Deposit Lockers
advances
We are aware that staff members are eligi-
It has been decided to levy processing
ble for 25% concession on the rental rates for the
charges for credit proposals for non fund based
locker facility availed by them. It has been decided
limits also on par with fund based advances.
that the concession in rent for lockers shall be
Branches are advised to levy processing charges
available only for one locker per staff member at a
for credit proposals taking into account the total
time. If any staff member hires more than one
limit applied for (fund based + non-fund based) at
locker, then the rental charges for the additional
the appropriate rate as communicated by HO
lockers hired will be as applicable to general
earlier. They may follow the instructions contained
public. Branches are advised to obtain a declara-
in HO circular CRA.7/95-96 dt.8.5.95 for the
tion from all the staff members having a locker
procedure to be adopted in this regard.
account or opening a locker account to the effect
that he/she does not hold any locker in any other Concessions to Defence Personnel
branch under concessional rates. A format of the
The following concessions only shall be
declaration is enclosed to the circular.
extended to defence, para military and
(CRA.11/96-97 dt.23.7.96) ex-servicemen :
i. At par collection of salary/terminal dues.
Custody and Collection of post dated ii. At par remittance to family upto Rs.5000/-
interest/dividend warrants per month and one time remittance for
payment of school/college fees in a year.
It has been decided to accept for safe (Out of pocket expenses, if any, to be
custody, post-dated interest/dividend warrants and recovered).
collect them on the due date subject to the follow-
iii. At par custody of wills
ing terms and conditions:
iv. Standing instructions within the branch,
i. The service shall be rendered only to free of charge.
customers having at least Rs.25,000/- as average
balance in their accounts. The account should have For all other services, normal service
been satisfactorily conducted for at least one year. charges should be levied.

ii. The service shall be extended only to (CRA.14/96-97 dt.19.8.96)

warrants issued by RBI/PSUs.
iii. An authority letter should be taken from the Handbook on Service charges
customer (format enclosed to the circular) The revised handbook on Service Charges
iv. The instructions for collection of warrants updated upto May 1996 has been brought out,
periodically should be renewed by the customer copies of which shall be made available to
every year. branches/offices through their controlling offices.
Branches are advised to keep the booklet updated
v. The safe custody receipt should be issued as and when the circulars issued by HO, having a
with a notation that the receipt is subject to Clause bearing on service charges are received by them.
No 7 of Safe Custody Application. This clause has
been given in the circular. (CRA.17/96-97 dt.10.9.96)
In addition to the usual collection charges
wherever required branches shall levy a service
charge of Rs.10/- per instrument. A Due Date FX
Diary shall be maintained for the purpose of noting NR-NR-RDS - Clarifications
the due dates of the warrants and a suitable notifi-
cation shall also be made in the Standing Instruc- There have been a lot of queries as to
tions Register. The amendments to be carried out whether an NR-NR-RDS account, standing in the
in the Manual of Ancillary Services are given in name of an NRI, can continue to be treated so, on
the form of an amendment slip attached to the a perpetual basis, even after his becoming a
circular. resident. RBI has clarified that if the account
holder returns to India on a permanent basis during
(CRA.13/96-97 dt.8.8.96) the currency of the deposit, the account can be
continued till maturity and the contracted rate of

6
 Volume 9 Issue 2 July - Sep 1996

interest would be payable on the deposit till matur- e. Serviceability of burglar alarm; if
ity. However, the deposit cannot be renewed after not installed reasons therefor.
maturity. It is further clarified that RD accounts
A detailed report should follow within two
cannot be opened under NR-NR scheme.
days.
(FX.13/96-97 dt.20.8.96 and FX.14/96-97
(GENL.36/96-97 dt.11.7.96)
dt.24.8.96)

Revisions in BSR Reporting System

IBA Master Chart - Maturity chart for FCNR
deposits RBI has now introduced several changes in
the occupation and organisation codes in BSR 1A,
The master chart for arriving at the matur- 1B and in the formats relating to BSR 1A, 1B and
ity values for FCNR deposits for interest rate from 2. A copy of the revised booklet ‘Hand Book of
0.25% to 3% p.a. are enclosed to the circular. The Instructions’ is enclosed to the circular. A list of
master chart contains three tables applicable the changes made in each BSR format is given in
respectively for RIP, monthly income deposits and the circular.
quarterly income deposits. The master chart for
the interest rate for FCNR deposits from 3% to (GENL.38/96-97 dt.19.7.96)
15% p.a. have already been provided to branches.
Settlement Procedure in respect of fraudulent
(FX.15/96-97 dt.26.8.96)
instruments
Income Tax on Interest earned on NRO depos- When a dispute arises between two banks
its maintained by NRIs on account of payment of fraudulent instrument the
matter may be referred to RBI for arbitration,
It is clarified that in the case of Non provided a police complaint had been lodged by
Resident Individuals, income tax has to be either of the banks and the police investigation
deducted at source at 30% of the amount of report reveals no fraud or if the case is closed for
income by way of interest on their NRO accounts want of evidence. Branches are advised to file a
or at rates (normal rate) if such income had been police complaint immediately in cases where they
the total income whichever is higher. However if have the first knowledge of perpetration of fraud.
the Double Taxation Avoidance Agreement Further, when the forgery is established prima
(DTAA) is in force with the country of residence facie, payment should be made to the affected
of the Non resident, tax at the above rates or at account holder promptly against the indemnity of
rates specified in the DTAA whichever is benefi- the other bank involved in the transaction after
cial to the non resident shall be deducted at source. obtaining the necessary clearance from
The TDS rates under DTAA are furnished in the CO:Vigilance Department. RBI guidelines stipu-
annexure to the circular. late that such cases should be settled immediately
and in any case within 4 months from the date of
(FX.16/96-97 dt.6.9.96) complaint. SB account holders should be compen-
sated by way of interest at prevailing SB rates for
the period involved.
GENERAL
(GENL.42/96-97 dt.16.08.96)
Reporting of Security Breach
Reports regarding bank robberies/dacoities/ Monthly statement of fund-based account of
burglaries are to be sent to RBI by HO within 24 large borrowers
hours of occurrence by the fastest means of
RBI has now decided to discontinue the
communication. Branches should adhere to this
above statement with immediate effect. Hence,
time limit and wherever it is not possible to furnish
branches need not submit the same.
the complete report within the time frame, a
preliminary report in the following format should (GENL.45/96-97 dt.30.08.96)
be sent to CO: Security Department.
a. Nature of incident Modification in AUM-4 format
b. Date and time of occurrence In order to make AUM-4 return more infor-
c. Loss incurred mative and thus enable better monitoring of
advances by branches/controlling offices, the
d. Cash Balance on the day of incident return has been modified to include

7
 Volume 9 Issue 2 July - Sep 1996

i. The name of the inspecting official with his enclosed to the circular. Staff members are
remarks exhorted to use the information regarding the
strength of our bank in their interaction with
ii. Number of KL/KCC/OCC/PCC accounts in
customers and improve the bank’s image further
the branch of which godowns inspected
by financial performance.
during the month and reasons for not
inspecting all the godowns during the (MD/ED.7/96-97 dt.05.09.96)
month.
Controlling offices may condone Ten Commandments
non-inspection of any godown during the month
only if the reason sighted therefor is genuine. The field level functionaries are requested
However, it should be ensured that no godown to involve themselves whole heartedly in the task
remains un-inspected for more than 2 months. of bringing about a turn-around in different areas
of the functioning of the bank. The important
(GENL.50/96-97 dt.12.09.96) strategies which require implementation at all
levels are enumerated below :
1. Mobilisation of core deposits and reduc-
MD/ED tion of cost of deposits
Our Bank’s financial results for 1995-96 - During 1995-96 our deposit growth was
business development - public image only 5.6% which necessitated the bank to go in for
high cost call borrowings/CDs. Hence it is impera-
The bank had to book operating and net loss tive that we should reach the targeted deposit
for 1995-96 mainly due to provisions made for growth (Rs.1684 Crores for 96-97) .
a. NPA Our Bank’s share of demand deposits is
b. Depreciation on investments 28% as compared to the industry average of 38%.
Even 1% increase in this regard will save us inter-
c. payment of salary arrears est cost of Rs.10 crores p.a. Hence it should be
However there is no need for being unduly our endeavour to augment the number of accounts.
alarmed as the amount of loss is not totally 2. Reduction in NPAs
irretrievable. It is our duty to see that our bank
turns around in the next 2 or 3 years. For this “Reduce NPA and ensure TQM” must be
every staff member should take up the following our motto during 1996-97. The current year’s
tasks. target for recovery/reduction of NPA is Rs.875
crores. Recovery of NPAs will augment current
i. Mobilise core deposits at lower interest year’s income besides retrieving the provision
cost. made earlier. Further, substandard assets can be
ii. Render efficient and good quality customer upgraded to standard category. Categorywise /
service backed by aggressive marketing. accountwise analysis (ABC analysis) should be
made and priority should be set for immediate
iii. Step up the recovery of NPA. action.
iv. Increase income, especially, the 3. Increasing income
non-interest income.
Canvassing more remittance business and
v. Reduce expenditure - reducing operating avoiding leakage of income would help augment
expenses and avoiding wasteful expenses income.
through economy and rationalisation.
4. Rent on premises
vi. Ensure house keeping by adjusting all books
and reducing interbranch/interbank entries
The rent recommended should be based on
to the barest minimum.
prevailing market rent. Shifting of premises should
It is also the duty of everyone of us to be considered only when absolutely necessary.
ensure that no misinformation is spread among the
5. Postages, telegrams and telephones
public or among ourselves. The Government of
India and RBI have extended their full support to
Sending mails through couriers as a matter
our bank. A text of the press release issued by the
of routine should be avoided. Expenses on
Government in this regard mentioning that the
telephones should be brought down by observing
financial performance of the bank during the
strict economy. Recoveries for
current financial year has been quite satisfactory is

8
 Volume 9 Issue 2 July - Sep 1996

postage/telegram/tele- phone should be made 9. Travelling expenses on other journeys

wherever applicable.
Expenditure under this head should be
6. Repairs to vehicles
drastically reduced. Travel expenses on account of
inspection of units should be recovered from the
Vehicles should be properly maintained so
parties.
that expenditure under this head is kept under
control. Old vehicles should be disposed as per 10. Overtime expenses
norms.
Expenditure under this head should be
7. Printing and stationery eliminated. Effective steps should be taken to
ensure that the work allotted is completed within
Annual requirement should be properly the working hours.
estimated and excess stationery must be allocated
to needy branches.
All branches/offices are advised to abide by
8. Miscellaneous expenditure the above ten commandments which will help the
bank to achieve a sizeable operating profit during
This expenditure should be kept under the current year.
control by proper monitoring and avoiding waste-
ful expenditure. Items which could not be
classified under other heads should alone find a (MD/ED.8/96-97 dt.17.09.96)
place under this head.

9
 Volume 9 Issue 3 Oct - Dec 1996

DEPOSITS Service Charges - Inoperative SB accounts

Recollect
It has been decided to levy a service charge
Naming of Automatic Renewal of Short Term
of Rs.10 per year for all inoperative SB accounts
Deposit Scheme - INDSTAR (with or without cheque facility) where the balance
The above scheme aims at curtailment of is Rs.100 or below and if there is no transaction in
expenditure on stationery, reduction of workload the account during the year. If the balance is insuf-
for branches and rendering better and efficient ficient to levy such service charges the available
customer service. To make the scheme more balance shall be debited as service charges and the
popular, it has been decided to name the product account closed under intimation to the customer.
as ‘INDSTAR’ (acronym for Indian Bank Short The service charges as above shall be levied from
Term Automatic Renewal). Branches are advised January 1997. A notice as per Annexure to the
to maintain a separate head as ‘INDSTAR’ in the circular shall be displayed in the notice board
General Ledger for the accounts opened under the meant for the public. The service charges are also
scheme. The figures under INDSTAR should be applicable to inoperative SB accounts kept in
clubbed along with Short Term Deposits for the unclaimed deposits.
purpose of reporting in the Assets and Liabilities
(weekly) statement. (DEP.29/96-97 dt.21.11.96 & DEP.31/96-97
dt.26.12.96)
(DEP.24/96-97 dt.04.10.96)
Tiny Deposit Scheme
Amendment to Manual of Instructions - IV - With a view to minimise the incidence of
Deposits foreclosure, the rules relating to foreclosure of
Tiny Deposit are modified as follows:
The amendments to be incorporated in the
Manual of Instructions - Deposits on account of the i. Premature closure of accounts before
various HO circulars issued from 01.01.96 to completion of 12 months will be allowed
31.07.96 have been brought out in the form of a only if the depositor is willing to surrender
booklet which is enclosed to the circular. Branches in full to the bank the commission allowed
are instructed to note the amendment in the to the Tiny agent in respect of the account.
relevant chapters/para giving reference to this No interest will be paid by the bank.
circular and amendment number. ii. In case of premature closure after 12
months, interest will be allowed with 1%
(DEP.25/96-97 dt.05.10.96)
penalty. The commission paid to the agent
need not be recovered.
Growth in Deposits of the bank
In the post liberalisation scenario there is (DEP.32/96-97 dt.30.12.96)
tremendous boost in the investment opportunity
and the economy of the country is growing at an
average rate of 6.5%. However, the growth in ADVANCES
deposits of our bank during the first seven months
of the current financial year is not very encourag- Housing Finance
ing. The percentage of growth is 3.86% as
compared to the industry average of 7.02%.Inspite Branches are aware that as per RBI direc-
of limited branch network and late entry into the tive, banks have to allocate funds under housing
banking field the growth in regard to deposits of finance every year at 1.5% of the incremental
newly opened private sector banks during the deposits. For 1996-97, RBI has directed that banks
above period is spectacular (around 35%). It is should compute the allocation on the above guide-
critical at this juncture to ensure that our share of lines or the amount of allocation for housing
growth is not progressively eroded. Lower growth finance fixed for 1995-96, whichever is higher.
in deposits would hamper various other banking The sub-allocation norms for direct finance,
functions/ aspects such as funds management, indirect finance and investments in bonds of
credit expansion, investments, profitability, etc., NHB/HUDCO have been done away with. All
The field level functionaries are exhorted to adopt other instructions issued in this regard remain
appropriate strategies to accelerate the deposit unchanged.
growth.
(ADV.94/96-97 dt.01.10.96)
(DEP.27/96-97 dt.31.10.96) PDF-1996-3Q

1
 Volume 9 Issue 3 Oct - Dec 1996

Amendment to Manual of Instructions VII - 2. Export credit refinance to the extent of 20%
Conventional Advances of the outstanding export credit eligible for
refinance as on 16.02.96 plus 100% of the increase
The new policy/procedural guidelines and in outstanding export credit over the level as on
modifications made to the existing guidelines relat- 16.02.96.
ing to conventional advances after the issue of the
above manual and communicated to branches by 3. Target for export credit increased to 12% of
net bank credit from the present level of 10%.
way of HO circulars from time to time have been
brought out in the form of a booklet which is 4. W.e.f. 21.10.96, the interest rates on
enclosed to the circular. Branches are instructed to deposits for maturity of 30 days and upto one year
note the amendment in the relevant chapters/para reduced by 1% to ‘not exceeding 10% p.a. from
giving reference to this circular and amendment the present level of ‘not exceeding 11% p.a.’
number. 5. Rate of interest on Post-shipment Rupee
Export Credit for the period beyond 90 days and
(ADV.95/96-97 dt.04.10.96) upto 6 months is prescribed at 15% w.e.f.
21.10.96. The higher rate is applicable for the
Revision in discretionary powers delegated for period beyond 90 days and not from date of
sanction of agricultural jewel loan advance.
W.e.f. 28.09.96 the sanctioning powers of 6. In the light of package measures announced,
Branch Managers in Scale I to III have been RBI expects banks to reduce PLR appropriately.
revised upward from the existing maximum of
7. W.e.f. 21.10.96 commodities hitherto
Rs.30,000 to Rs.50,000 per borrower. The change
subject to selective credit control (SCC) except
should be noted in the Booklet on discretionary
buffer stock and the unreleased stocks of sugar to
powers.
sugar mills are exempted from all stipulations of
(ADV.99/96-97 dt.22.10.96) SCC.
8. Banks are permitted to provide foreign
Staff Loans - outside the Approved schemes currency denominated loans to their customers
wherein the exchange risk is to be borne by the
It has been decided not to entertain any loan borrowers.
proposal from staff members outside the purview
9. Ground rules for consortium arrangement
of the approved schemes until further instructions.
must be framed by the participating banks.
(ADV.100/96-97 dt.24.10.96) 10. The norms governing loan system for deliv-
ery of bank credit are revised as follows :
SIDBI Refinance Scheme under Single Window Borrowers with Out of MPBF, cash
Scheme (SWS) assessed MPBF of credit component
limited to
The ceiling on venture outlay [aggregate
Rs.10 Crores or above 40% (balance 60% in
cost of project (excluding working capital margin) but less than Rs.20 the form of loan)
and total working capital requirement] of SSI units crores
for the purpose of eligibility of SIDBI refinance Rs.20 Crores or above 25% (balance 75% in
under SWS has been increased from Rs.50 lakhs to the form of loan)
Rs.100 lakhs. The salient features of the scheme
Renewal/Roll over of loan component
are reiterated in the circular. permitted and bills limit for inland sales permitted
out of loan component. The minimum period of
(ADV.102/96-97 dt.26.10.96)
loan component would be 6 months.
Monetary/credit Policy of RBI for the Second 11. The amount of commercial paper that can
Half of 1996-97 be issued will not henceforth be restricted to cash
credit component.
The gist of the Monetary/credit policy of
12. Banks are now allowed to purchase shares
RBI for the second half of 1996-97 is given below: and debentures in the secondary market within the
existing ceiling of 5% of incremental deposits of
1. CRR reduced by 2% (to be reduced in four
the previous year.
phases of 0.5% from 12% as of now to 10% from
18.01.97)

2
 Volume 9 Issue 3 Oct - Dec 1996

The credit policy measures have necessi- document besides recovering out-of-pocket
tated branches to accelerate their efforts in expenses (like Xerox charges)
business development. The circular lists out the
corporate expectations of the measures to be (ADV.109/96-97 dt.16.11.96)
implemented by branches in this regard.

(ADV.104/96-97 dt.29.10.96) Revision of PLR and consequent changes of

interest rate on various loans and advances
Engaging outside agencies for seizure of of over Rs.2 lakhs
vehicles, tractor, machinery, etc., from In consonance with the monetary and credit
defaulting borrowers policy announced by RBI recently, our Bank has
revised PLR from 16.5% to 15.5%. The interest
Zonal Managers/Regional Managers have rates on advances of over Rs.2 lakhs category are
been authorised to permit branches to engage revised effective from 1.11.96 (detailed in Annex-
outside agencies for seizure of vehicles, tractors, ure I & II of the circular) The revised lending rates
machinery, etc. in respect of chronically overdue will be applicable to existing as well as fresh
accounts. As the results accomplished have been borrowal accounts. Sanctioning authorities should
encouraging, it has been decided to permit all specify the interest rates with linkage to PLR in all
branches to engage reputed outside agencies for their credit approvals/renewal sanctions
the purpose. The procedure to be followed in this
regard has been outlined in Annexure-I to the (ADV.111/96-97 dt.26.11.96)
circular. Branches are advised to adopt this proce-
dure extensively and recover the maximum Loan system for Delivery of Bank Credit
overdue possible.
At the time of introduction, the above
As regards the charges to be paid to such
system was applicable to borrowers with assessed
agencies ZMs/RMs are advised to take a decision
MPBF of Rs.20 crores or above. Subsequently it
after analysing the charges levied by various
was extended in phases to cover borrowers of
agencies. The charges paid to the agencies will
Rs.10 crores and above. The percentage of ‘Loan
have to be borne by the borrower.
component’ of the working capital limits has also
(ADV.105/96-97 dt.02.11.96) been gradually enhanced. Consequent to the
changes announced in the recent monetary policy,
RBI has issued revised guidelines which supersede
Advance against Ind Ratna units the existing guidelines.
As per the revised guidelines, the ‘cash
Unit holders of Ind Ratna have been offered credit’ component would be restricted to 25% of
the option of Roll over or Redemption of units at the MPBF in case of borrowers with assessed
the value of Rs.14.14 per unit as of February 96. MPBF of Rs.20 crores and above. For those with
If the option for Roll over is not exercised it would assessed MPBF of Rs.10 crores or above but less
be deemed that the holder has opted for redemp- than Rs.20 crores, the cash credit component will
tion. It is learnt that substantial advances against be restricted to 40%. The balance of MPBF will
Ind Ratna units are still outstanding at branches.
have to be in the form of loan for working capital
They have to initiate appropriate action to adjust
purposes. For detailed operating instructions refer-
the liabilities or arrange to surrender the units and ence may be made to the annexure appended to the
appropriate the proceeds towards liabilities without circular.
any further loss of time. Balance outstanding, if
any, should be recovered from the borrower (ADV.115/96-97 dt.27.11.96)
within a reasonable time as permitted by the
controlling authority.
PMIUPEP - Clarifications
(ADV.107/96-97 dt.08.11.96) Further to cir. ADV.145/95-96 dt.29.02.96
the following clarifications are made.
Service charges - Issuance of True/certified All urban poor educated upto IX Standard
copies of Security Documents to are eligible for coverage provided their annual
borrowers/signatories family income is below Rs.11850 Training is a
compulsory input only in those activities which
Further to the circular ADV.93/96-97
require special skills. Even in such cases training
dt.28.09.96 on the above subject, branches are
should not be insisted provided the beneficiary
advise to levy a service charge of Rs.10 for
has,

3
 Volume 9 Issue 3 Oct - Dec 1996

i. already undergone training in the trade charged on overdue bills from the due date to the
from a registered NGO/Voluntary Organisa- tion. date of realisation and in the case of dishonoured
bills penal interest should be charged from the date
ii. acquired the skill by way of family trade
of discount. Branches are required to comply with
and the fact has been certified by ULB.
the above instructions without fail.
iii. worked as apprentice/employee in private/
public registered companies in the line of activity. (ADV.123/96-97 dt.19.12.96)

The exemption shall be made after verifica-

tion of documentary evidence.
Selective Credit Control

However no certificate should be insisted With effect from 21.10.96 it has been
from the applicant for his being below the poverty decided to fix a uniform margin of 50% for
line. All loan applications received under this advances against sensitive commodities other than
scheme should be disposed of within 15 days. sugar (buffer/unreleased stocks). In respect of
unreleased stocks of sugar the minimum margin is
(ADV.119/96-97 dt.07.12.96) lowered to 15%. In the case of buffer stock of
sugar existing prescription of Zero% shall
continue.
PMRY
RBI has clarified on various aspects of the (ADV.124/96-97 dt.20.12.96)
scheme such as extension of additional finance,
components of project cost, loans to partnership
firms, charging of penal interest/processing PERSONNEL
charges, effective date of FDR, eligible subsidy,
collateral security/guarantee, training, sponsoring
Importance of speedy decision making within
of applications, role of district level co-ordinators, delegated powers
Audit Certificates, etc. For detailed information Decision making is an essential core
the circular may be referred to. function of management. It involves collection of
various data, assessing the data and various conse-
(ADV.120/96-97 dt. 10.12.96) quences of possible options and then choosing the
best possible option. Every layer of management
Credit report to other banks/FIs has to take several decisions in their day to day
It was earlier instructed that competent functions. Professionalism in decision making can
authorities should sign the credit reports before be achieved by practising the following steps:
sending the same to banks/FIs in addition to their i. Define objective
signing the covering letters. IBA has now advised
that as the authenticity of the credit report is ii. Collect all relevant information
provided in the forwarding letter signed by the iii. Develop possible options of solutions
official concerned, it is not necessary for the
officials to sign the credit report. Hence iv. Evaluate each option and identify the best
branches/offices are advised to follow the revised v. Implement the decision taken
procedure stated below :
vi. Ensure that the decision taken is well within
i. BMs (who are not competent authorities) the discretionary powers.
should prepare the credit report in the prescribed
form in duplicate, sign one copy of the report and Speedy and professional decision making is
send it along with the unsigned copy to the compe- the need of the hour. The professional expertise
tent authority. developed in decision making will help us to
improve our customer service and thereby overall
ii. The competent authority, after scrutiny, business position of the bank which will culminate
will sign the prescribed covering letter only and in restoring the past glory of our beloved bank.
forward the unsigned credit report (without affix- However, it should be ensured that the decisions
ing his signature) to the banks/ FIs concerned. taken by a person are within the powers delegated
to him. All field level functionaries are advised to
(ADV.122/96-97 dt.18.12.96) develop the ‘skills’ for speedy decision making
within their delegated powers so as to improve
Penal interest on overdue bills
IBA with the concurrence of RBI has
communicated that penal interest should be

4
 Volume 9 Issue 3 Oct - Dec 1996

customer service and thereby the image and stature Conveyance Loan (Four Wheelers) Scheme to
of our beloved bank. officers. The modifications to the terms and condi-
tions are set out below.
(PRNL.73/96-97 dt.07.10.96)
Conveyance Loan Conveyance Loan
Delegation of powers to pass TA Bills (Two Wheelers) (Four Wheelers)
Scheme Scheme to officers
It has been decided to entrust the functions
Maximum Rs.15,000 at conces- Rs.80,000 at conces-
of passing of TA bills of staff members working at
Loan sional rate of interest sional rate of interest
branches to Regional/Zonal Office. The powers to
+ Rs.15,000 at + Rs.1,20,000 at
pass TA bills stand modified as follows
commercial rate of commercial rate of
interest interest
Designation Nature of Sanction-
TA ing Margin 10% 20%
Authority
1. Branch / RO All TA Bills RM Rate of i. 7.5% upto i. 8.5% upto
Staff of Branch / Office except LFC Interest Rs.15,000 Rs.80,000
coming under the direct Bills
control of RO ii. PLR+Int.tax ii. PLR + Int. tax
(17.25% at (17.25% at
2. Zonal Inspectorates (ZI) All TA Bills AGM of ZI
Staff of ZI including present) for the present) for the
LFC separate loan separate loan
3. Zonal Office exceeding exceeding
a. Staff of Branch/Offices All TA Bills CM of ZO Rs.15,000 Rs.80,000
coming under the direct except LFC
control of ZO including Repay- 84 months (5:1) 200 months (3:2)
ZTCs ment
b. Staff of Branch/office LFC Bills AGM of
coming under the control of ZO/ZM
ZO including ZTCs Zonal Manager is the authority to sanction
c. CMs/RMs All TA Bills AGM of the loans under the modified scheme where
including ZO/ZM
LFC
commercial rate of interest is involved. For
documentation, accounting procedure and other
d. AGMs - do - ZM
terms and conditions, the circular may be referred
to.
Local conveyance charges should be fixed
after getting permission from respective RO/ZO. (PRNL.76/96-97 dt.11.10.96)
Advances pending under Sundries Receivable
account should be reversed at the earliest. Items Contribution to Newspapers, Radio etc.,
pending beyond reasonable time should be taken It is observed that some of the staff
up with concerned RO/ZO. members contribute articles to newspapers, or
participate in radio programmes without obtaining
(PRNL.74/96-97 dt.08.10.96)
prior permission of the bank. Some of the articles
are critical in nature about the policies of Govern-
Scheme for extending Vehicle Loan to Staff ment of India, RBI and the bank. Hence, all the
members under Commercial Rate of interest staff members are instructed not to contribute
Considering the increase in the cost of articles to newspapers or participate in radio
vehicles and the request from AIIBOA/FIBEU it programmes without getting prior permission from
has been decided to consider sanction of additional the competent authority. Any violation will be
limit under Staff Vehicle Loan scheme, to eligible dealt with as per Conduct Regulations or Bi-partite
staff members, of Rs.15,000 for purchase of 2 Settlement as the case may be.
wheeler and Rs.1,20,000 for purchase of 4
(PRNL.78/96-97 dt.14.10.96)
wheeler at commercial rate of interest. Workmen
employees drawing pay of Rs.1,200 or more as
per V Bipartite settlement or corresponding basic Payment of Halting Allowance to Officers,
pay as per VI bipartite settlement and all officers revised tariff rates of ITDC star Hotels
confirmed in the Bank’s service are eligible for Regulation 41(4) of Indian Bank Officers’
Conveyance Loan (Two wheelers) scheme. All Service regulations 1979 deals with payment of
confirmed officers with a minimum basic pay of Halting Allowance whenever an officer is required
Rs.3050 as per old scale of pay are eligible for to travel on duty. It provides that the officers

5
 Volume 9 Issue 3 Oct - Dec 1996

should reside in ITDC Hotels of eligible star -01038. In the unfortunate event of any accident,
category, depending on their grades/scales. The staff members are requested to inform the occur-
revised rates applicable to different grades of rence of the accident to insurance company in the
Officers are given below : prescribed format. Staff members working in
Central Office should submit their claim alongwith
Grades of Officers Eligible Maximum tariff for reimburse- Medical Bills through CO:Personnel Department
star ment to officers who stay at and other staff through their respective Zonal
category Non-ITDC Hotels or ITDC
Offices within a period of one month. The
of ITDC Hotels of ineligible star
Hotel as category at centres where
documents required and the procedures for prefer-
per ITDC hotels of eligible star ring claim are given in Annexure II to the circular.
regula- category are not available
tions (Rs.) (PRNL.94/96-97 dt.26.12.96)
Major A Area I Other
Class
cities
places Places
CRA
Top Executive 4 star 3,000 1,750 1,500 Transfer of Long Pending Travellers’ Cheques
Grade Scales Account
VI & VII
As in the case of DDP/Gift Cheques, it has
Senior Manage- 3 star 1,195 975 875 been decided to permit branches to transfer entries
ment Grade
Scales IV and V
pending for more than one year in Travellers’
Cheques also. Before effecting the transfer it
Middle Manage- 2 star 700 600 525 should be ensured that the balances are extracted
ment Grade (Non and adjusted with GL, that there is no claim/
Scales II & III AC) correspondence pending in relation to the entries
Junior Manage- 1 star 450 375 325 and that the payment has not been effected to the
ment Grade (Non debit of any other account.
Scale I AC)
Branches should list out all entries pending
for more than one year as on 30th September
every year, prepare a statement in triplicate as per
If Officer employees in Top Executive
Annexure to the circular and credit CO:Accounts
Grade (Scales VI & VII) are unable to stay in
Department under Schedule 8 of IBGA for total
ITDC Hotels at Delhi and at other hotels at
amount of the statement. The credit advice along
Mumbai within the tariff limit of ITDC Hotels,
with two copies of the statement should be sent to
they be reimbursed actual lodging expenses for
CO:Accounts Dept. in the first week of October
staying in other hotels not exceeding 125% of the
every year. The original vouchers relating to the
tariff of their entitled class at Mumbai and Delhi.
entries should be replaced with certified copies.
(PRNL.82/96-97 dt.19.11.96) The copy of the statement and related vouchers
should be preserved in separate file and an entry to
the effect should be made in the Branch Document
CCIL Scheme for officers and award staff
Register. CO:Accounts wills send the second copy
It has been decided to extend CCIL (Govt) of the statement as acknowledgement which should
scheme for meeting the funeral expenses of be kept in the same file. Any claims subsequently
parents/spouses/children of staff under social received may be paid to the debit of Sundries
obligation category. All other terms and conditions receivable Account and the amount paid should be
governing the scheme remain the same. claimed form CO:Accounts.

(PRNL.90/96-97 dt.12.12.96) (CRA.20/96-97 dt.5.11.96)

Renewal of Group Personal Accident Policy Expressway Scheme for speedy collection of
The Group Personal Accident Insurance
outstation cheques - Revision of service
Policy providing round the clock personal accident charges
cover with the sum insured at 48 times of salary The Expressway scheme is now operative in
(Basic + DA), covering all the employees of our 12 centres, the latest one being Coimbatore. In
bank was taken from New India Assurance order to improve the functioning of the scheme
Company, Divisional Office, 21 Pattullos Road, and thus enhance the quality of customer service,
Chennai-2 in 1986 and is being renewed periodi- the following measures are suggested.
cally. The renewed policy number is 42710700

6
 Volume 9 Issue 3 Oct - Dec 1996

i. Familiarisation of the staff in the centres Services continue to hold good. Branches should
with the operational aspects of the scheme note the amendments in the Manual.
ii. Popularising the scheme among the (CRA.22/96-97 dt.5.12.96)
customers.
iii. Routing of BP instruments through Express-
way scheme. FX
iv. Using of exclusive ‘Expressway’ envelopes
for sending instruments to Service/Main Calculation of Interest on FCNR (B) Deposits
Branch
RBI has informed that banks are allowed to
v. According same priority to outstation compound interest at an interval of 180 days for
cheques as for local clearing cheques and FCNR (B) deposits of more than 6 months. Hence
using modem/telex facilities for sending branches are advised to follow the procedures
advance information of cheques as well as given below :
realisation advices.
i. For deposits kept for 6 months interest shall
To make the scheme more attractive, the be calculated for actual number of days during 6
service charges leviable in lieu of postal/out-of- months without any compounding effect.
pocket expenses are revised as under with immedi-
ate effect. ii. For deposits of more than 6 months interest
shall be calculated for every block of 180 days and
For instruments upto Rs.1000 Nil thereafter for the remaining actual number of days
with compounding effect. Few examples of the
For instruments above Rs.1000 Rs.5 per calculation on the above basis are furnished in the
upto Rs.5000 instrument annexure to the circular. The above procedure will
For instruments above Rs.5000 Rs.10 per apply to fresh deposits and on renewals of matur-
upto Rs.50000 instrument ing deposits. Branches are advised not to use the
master charts given for the calculation of maturity
For instruments above Rs.20 per
values.
Rs.50000 instrument
(FX.21/96-97 dt.06.11.96)
These charges shall be levied in addition to
the usual collection charges. Conversion of NRE / FCNR accounts of return-
ing Indians to RFC accounts
(CRA.21/96-97 dt.5.11.96)
NRIs who have returned to India for perma-
Revalidation of Drafts nent settlement can transfer balances held in their
NRE/FCNR accounts to open RFC accounts and
The procedure for revalidation of drafts is no penal interest should be charged on such
revised as follows. foreclosures if the deposits have to be preclosed.
In respect of FCNR(A) deposits w.e.f. 15.08.94
1. A demand draft should be revalidated only the minimum and maximum period was 3 years
once. If a draft is presented for revalidation after 6 only and hence deposits when preclosed for the
months but before 1 year from the date of issue, it purpose of transfer to RFC were technically not
shall be revalidated for a period of 6 months from eligible to earn interest. To remove this anomaly
the date of such revalidation. A stamp indicating RBI has decided to permit banks to pay interest on
the date upto which the draft is revalidated shall be FCNR(A) deposits for the period run at the rate as
affixed on the DD in the format furnished in the applicable to the corresponding maturity available
circular. Revalidation can be done only at the under FCNR(B) scheme. However no interest is
request of the purchaser and not at the request of payable if the deposit has not run for 6 months.
payee/endorsee. The exchange risk on account of interest so paid
should be borne by the bank concerned.
2. If a demand draft is presented after 1 year
from the date of issue, it should neither be paid (FX,23/96-97 dt.07.12.96)
nor revalidated. Such a draft should be cancelled.
The other guidelines for revalidation of
drafts as enumerated in the Manual of Ancillary

7
 Volume 9 Issue 3 Oct - Dec 1996

GENERAL Stapling of bank notes

RBI has decided to do away with stapling of
Change of name from Madras to Chennai
fresh bank notes by note presses. To start with the
The Government of Tamil Nadu has issued Note Press at Mysore has started supplying new
a gazette notification changing the name of Madras Rs.100 notes of Gandhi series in shrink wrapped
as Chennai. The change in the name is to be bundles i.e. 10 packets of 100 notes each. The note
brought about in all official communications, letter packets are secured with a paper band and are
heads, sign boards, name plates, rubber stamps, unstapled. Branches are advised that fresh unsta-
etc. pled paper banded note packets may be issued
without stapling them.
(GENL.57/96-97 dt.07.10.96)
(GENL.67/96-97 dt.31.10.96)
SFVM - Difference between the balance as per
master print and GL Monthly Performance Monitoring System
(MPMS)
It is observed that in many branches there is
a difference between the balance in SFVM account In the efforts undertaken by branches to
as per their GL and the master print received from achieve a turn around, there is a need for frequent
Zonal EDP. The difference arises on account of comparison of the actuals with the budgets to initi-
the fact that some branches do not vouch the book ate timely corrective action. To enable the
value as at the end of the previous year while branches to do so on monthly basis it has been
accounting transactions of sales, write-off and decided to introduce MPMS w.e.f from Oct.97.
transfer to other branches whereas HO rectifies the The reporting format - MPMS1 is given as Annex-
amount reported in the statement by incorporating ure to the circular. For the guidelines for prepar-
the book value as at the end of the previous year. ing the monthly report and the time schedule for
The differences could be identified and rectified by submission, the circular may be referred to.
branches by verifying the credit entries of SFVM
account and these entries should tally with the (GENL.68/96-97 dt.1.11.96)
book value of the respective SFVM item as at the
end of the previous year as per the master print. Allotment of New Permanent Account Number
The accounting procedure for passing rectification (PAN) for our Bank by Income Tax Department,
entries is given in the annexure to the circular. Chennai
Branches are advised to avoid such mistakes in
future. The new Permanent Account number allot-
ted to our Bank is AAACI 1607 G. Branches/
(GENL.60/96-97 dt.15.10.96) offices are instructed to quote the same in all
future correspondence addressed to IT Department
Fire Incident - Precautions and in all tax documents such as returns, challans,
TDS certificates, Appeals, etc., without fail.
In order to prevent electrical fires, the Non-compliance of the above instructions will
following precautionary measures shall be attract penalty u/s 272A(d) of IT Act, 1961.
adopted:
(GENL.75/96-97 dt.7.12.96)
i. The capacity of the service line should be
reviewed considering the load requirement of the
branch. Acceptance/Exchange of Cut Notes -
Liberalisation
ii. Electrical circuit breakers to be provided
wherever necessary. RBI has directed that cut notes of the under-
mentioned type should hereafter be freely
iii. Switch boards/plug points and wiring to be exchanged by all bank branches. They should also
checked periodically for loose contacts, overload- be accepted across the counter for payment of
ing etc. Govt. Dues and for credit of accounts maintained
iv. Fire extinguishers should be in serviceable with branches.
condition and staff should be conversant in using 1. Single numbered notes - Re.1, Rs.2 and
them. Rs.5 which are presented in not more than
two pieces of which no essential feature is
(GENL.61/96-97 dt.16.10.96)
missing and complete number can also be
identified in an undivided area on one of the
pieces.

8
 Volume 9 Issue 3 Oct - Dec 1996

2. Double numbered notes - Rs.10, Rs.20, meetings convened informing the developments
Rs.50, Rs.100 and Rs.500 which are taking place in the Bank and the need to bring
presented in not more than two pieces of about a sustained growth in our banking
which no essential feature is missing and operations. The achievement made so far has not
both the pieces can be identified as belong- been commensurate with our corporate expecta-
ing to the same note and the complete tions. Hence it was felt expedient to specify the
number can be identified in an undivided areas requiring urgent attention for brining about a
area at each of the two places at which it is turn-around in our Bank.
printed.
A. Mobilisation of Deposits
The above type of notes shall henceforth be
During the first half, the deposits grew by
treated as soiled notes and be packed along with
Rs.645 crores as against corporate goal of Rs.1575
soiled notes which shall be deposited in currency
crores. Achieving the target set will not be a diffi-
chests for onward transmission to RBI. The notice
cult task if every one of the staff members canvass
received from RBI in this regard alongwith illus-
deposits and contribute a minimum of Rs. 1 lakh
trations of the acceptability of cut notes are
each month. The heads of branches/offices should
enclosed to the circular.
convene a staff meeting and chalk out programmes
(GENL.76/96-97 dt.26.12.96) to mobilise fresh deposits. Each staff member may
set a target for himself/herself. Explanation of our
deposit schemes to prospective clients, particularly
MD/ED the advantages of 30 days deposit, rendering excel-
lent customer service, aggressive canvassing of
institutional deposits, interacting with our custom-
Our Bank’s business - Decision making in a ers on the strengths of our bank etc. are the strate-
professional manner gies to be adopted for achieving the corporate
goals.
The Bank’s image can be built only upon its
financial performance. In this regard the human B. Credit Administration
resource potential available in the bank is capable The credit growth should be regulated
of rising upto the occasion to face the challenges. without affecting the genuine/need based credit
requirements of our existing customers. The CD
The positive feed back received from
ratio should be brought down to the desired level.
several valued constituents speak well of the
quality of our service and the customer friendly C. Recovery of Non-performing assets
attitude of staff members. As all of us are aware,
the growth of individual employee is intertwined We are targeting to reduce NPAs atleast by
with the growth of our beloved institution. Rs.875 crores by 31.03.97, through actual/cash
recoveries, upgradation or by compromise/write-
We have to step up and accelerate our off. reduction of NPAs enhances profitability and
efforts further for achieving the desired growth in hence is a matter of urgency. Slippage in the status
deposits. The competitive edge in our interest rates of loan assets should be avoided. Recoveries must
on deposits should be skilfully marketed so as to be made in time to avoid addition of fresh NPAs
ensure a substantial increase in our clientele base during the current year.
and our core deposits.
D. Profitability
All of us should act within the framework
The increase in cost of funds and reduction
of the prescribed rules and regulations. Our
philosophy must be to do what is right. Decisions in PLR is likely to affect the profitability in
must be taken in a professional and objective general. This may be off-set by curtailing avoid-
manner. When officers and staff act with integrity able expenditure, increasing low cost/no cost
funds, prevention of leakage of income, increasing
and their actions are bonafide and are within the
ancillary business, reduction of NPAs etc. The
ambit of rules and regulations, they need not have
staff members are advised to maximise
either inhibition to function or fear of action.
profitability.
(MD/ED.10/96-97 dt.08.11.96) E. Internal Controls and House - keeping
Rectification of deficiencies pointed out in
For a Better bank - Better we grow
inspection/audit reports and submission of FRC in
The staff members are aware that the Chair- time, reconciling all the pending inter-branch
man has been in frequent communication with entries immediately and endeavouring to clear all
them through circulars/DO letters or through

9
 Volume 9 Issue 3 Oct - Dec 1996

the arrears in balancing of books by 31.03.97 are of our Harbour Branch, hosting of Homepage in
the tasks to be undertaken by us on a war-footing. the Website on the Internet and addressing
thousands of customers and staff of our bank.
F. Professional Approach to decision making
subsequent to our Finance Ministers’ visit it is
It has already been clarified that whenever found that a lot of confidence in exuded and the
officers and staff act with integrity, bona fide continued patronage of customers is reassured.
intentions and within the rules, they need not have The excerpts from Finance Ministers’ address are
any inhibition or fear of action. Every one of the given in the circular. While allaying the fears of
staff member is advised to take proper decisions. the public about the future of the bank, our
Finance Minister commended on the creditable
The staff members were required to send
performance of the bank in the first nine months of
immediately a format (as per Annexure) to the
the current financial year and also appealed to the
Chairman indicating the target set for himself/
staff to go an extra mile to get deposits, recover
herself to mobilise deposits and for recovery of
loans outstanding and instil confidence in the
NPAs. The second format should be sent to him on
minds of constituents. He also requested them to
a monthly basis regarding the progress and
work an extra hour to see that the bank turns
achievement made.
around faster.
(MD/ED. 11/96-97 dt.16.12.96) The Chairman has appealed to the staff to
work harder to achieve our goal of posting an
Hon’ble Finance Minister’s visit to our Bank operating profit by March 1997 and to make net
profit by March 1998.
Our Hon’ble Finance Minister, Shri P
Chidambaram visited our bank on 28.12.96 for the (MD/ED.12/96-97 dt.30.12.96)
inauguration of the Total Branch Computerisation

10
 Volume 9 Issue 4 Jan - Mar 1997

Deposits Advances
Recollect

Reintroduction of Cash Certificate Scheme

It has been decided to re-introduce Cash Educational Loan Scheme of Our Bank -
Certificate Scheme with immediate effect. The Modification in Family Income Norms
existing stocks of Cash Certificate Receipts and Our Board has modified the family income
RIP/CC Ledgers may be utilised for this purpose. norms in respect of education loan for computer
Branches are advised to effectively mobilise depos- courses. As per the revised norms, the family
its under the scheme from target groups such as income should not exceed Rs.15000/- p.m. for
middle income group, salaried class, etc.
i. Educational loans for computer courses
(DEP.33/96-97 dt.07.01.97) with placement assurance and
ii. Educational loans for computer courses to
Introduction of Unit Deposit Scheme under salaried persons and or their sons/daughters
NRE (R) and NR-NR-RDS against check-off facility.
It has been decided to extend the benefit of (ADV.130/96-97 dt.03.01.97)
Unit Deposit Scheme to Non-resident customers.
Two new schemes, viz., Unit Deposit (NRE-R)
Scheme and Unit Deposit (NR-NR-RDS) Scheme Credit Information System - Introduction of
have been introduced. Under both the schemes, the Multiple Facility Codes for all ‘Loan against
deposit is divided into units of Rs.5000 and the Own Deposit’ Accounts
depositor is allowed to withdraw one or more units It has been decided to bring ‘Loans against
without the need for foreclosing the entire deposit. own deposits’ also under the fold of the Multiple
Further the penal interest of 1% will be charged Facility Code System, so as to assess/compute the
only on the amount withdrawn and not on the facilities/liabilities sanctioned borrower-wise at
entire deposit. The minimum amount of deposit is individual branches. Branches are advised to
Rs.10000 and the deposit can be accepted in multi- inform the changes in the existing CIS Account
ples of Rs.5000. The salient features of the numbers duly incorporating the multiple facility
schemes such as nature of deposits, eligibility for codes to their EDPs and to give Multiple Facility
opening, mode of opening, minimum amount, Codes for all the subsequently sanctioned limits
period, rate of interest, repatriability, loans, etc., w.e.f. 01.01.97 onwards.
have been explained in detail in the annexures I
and II of the circular. (ADV.131/96-97 dt.03.01.97)

(DEP.41/96-97 dt.15.02.97)
Appropriation of Recoveries in Suit Filed
Accounts
Modification under Section 54EB of Income
Tax Act 1961 - Exemption from Capital Gains In respect of suit filed accounts it has been
decided that the recovery proceeds should be first
As per the notification of CBDT, w.e.f applied for adjustment of Memorandum of Interest
01.10.96 a deposit for a period of not less than 7 by crediting income account and the surplus if any,
years placed with SBI or its subsidiaries or nation- towards adjustment of protested bills and law
alised banks will be treated as long term specified charges. Further recoveries made towards interest
asset for re-investment for the purpose of claiming from date of filing suit, after adjusting MOI, PB
exemption from Capital Gains. The depositor will and LC can be taken directly to income account.
lose all the benefits of capital gains, if he
forecloses or raises any loan/advance against such (ADV.136/96-97 dt.17.01.97)
deposit during the tenure of 7 years. The deposit
can be accepted as FD or as RIP for a period of Agricultural STPL accounts - Clarification
not less than 7 years under the above scheme.
whether secured
Branches are advised to make use of the above
provision and mobilise more deposits. It has been decided to treat uniformly
STPLs conforming to approved scale of finance as
(DEP.43/96-97 dt.21.03.97) secured advance considering the position that the
crops under hypothecation are available either on
the field or are in the process of being marketed
PDF-1996-4Q

1
 Volume 9 Issue 4 Jan - Mar 1997

immediately after harvest. Branches are advised to Prime Bank’s LC subject to the bill being in
explain to the auditors as and when need arises. conformity with the terms of LC.’

(ADV.138/96-97 dt.18.01.97) (ADV.149/96-97 dt.12.02.97)

Limits on Credit Exposure to individual/Group Interest rate on Indirect Housing Finance

of Borrowers - Advance against security of (under Non-priority) to private builders/public
Term Deposits agencies
Branches are aware that exposure to a The interest rates on advances of over Rs.2
borrower will include 100% of funded and 50% of lakhs were advised to branches vide Adv.111/
non-funded credit limits including underwriting 96-97 consequent to the revision of PLR to 15.5%
and similar commitments. RBI has now advised from 16.5.% w.e.f. 01.11.96. It has now been
that loans and advances granted against the decided to retain the rate of interest chargeable on
security of Bank’s own term deposits shall be indirect Housing finance (under non-priority) to
excluded from the purview of “exposure ceiling”. private builders/public agencies at 20.25% as
existed prior to 01.11.96 by revising the spread
(ADV.140/96-97 dt.27.01.97) over PLR from 3% to 4%.

Sanction of Jewel Loans for Non-Agricultural (ADV.150/96-97 dt.12.02.97)

purposes
Modification of certain guidelines by RBI
It has been decided to introduce jewel loan
governing IRDP - Back ending of subsidy
for non-priority purposes also with immediate
effect at all branches where jewel loan is being RBI has now introduced the back-end
sanctioned. Branch Managers irrespective of the subsidy system in IRDP under which the entire
scale can sanction non-agricultural jewel loan upto project cost (inclusive of subsidy) has to be
Rs.50000/- per borrower. The advance rate will be financed by branches. The loan documents shall be
the same as for agricultural jewel loans. Repay- obtained for the actual amount disbursed, viz., full
ment should be made within a maximum period of project cost. The loan instalment shall be fixed for
one year. Interest should be charged at PLR + 2% the gross loan only. Subsidy should be claimed
+ interest tax (presently 18.25% p.a.). Of the from the Nodal branch and the amount received
existing jewel loan limit fixed for the branch, 75% should be credited to Subsidy Reserve Fund
can be used for agricultural purposes and 25% for Account (SRFA - a new GL head with weekly
non-agricultural purposes. The sanction of loans is code 4.5.0 under other liabilities) borrower-wise.
subject to observance of all the safeguards / guide- The existing practice of debiting SR-II account is
lines stipulated for credit dispensation by HO. dispensed with.

(ADV.147/96-97 dt.03.02.97) While charging interest on the loan, the

subsidy amount should be excluded. No deposit
receipt should be issued for the subsidy amount.
Guidelines on exercise of discretionary No interest is payable on the amount kept under
powers SRFA. It should be transferred to the loan account
Para 21.2 of the guidelines on exercise of at the time of closure of the loan account. The
discretionary powers delegated for sanctioning of subsidy benefit would be available to the borrow-
advances/facilities by various sanctioning authori- ers only upon prompt repayment and further
ties has been modified to read as follows. subject to the maintenance of the asset(s) in good
condition. In the event of misutilisation, the entire
‘A borrower to whom limits have been amount of subsidy will be forfeited.
sanctioned by a higher level authority will not be
eligible for further advances by any lower level Disbursement of IRDP loans should be
authority down the line upto Branch Manager level made in the presence of a committee of
under his discretionary powers. This prohibition non-officials. For further details on the modifica-
will not however apply for advances against tions made, the circular may be referred to.
Government Securities, Jewel loans, Deposits with
the Bank and negotiation of export bills under (ADV.152/96-97 dt.21.02.97)

Security Norms under IRDP loans

The clarification received from RBI regard-
ing the security norms for IRDP loans is furnished

2
 Volume 9 Issue 4 Jan - Mar 1997

below. Bank’s approved panel. For this purpose, they

Loan Security to be Remarks themselves should select the engineers and should
Amount furished not leave it to the choice of the borrowers. The
(A) Where movable assets are created valuation reports should be directly received by
1. Upto Pledge/hypotheca- No margin money,
them and not through the borrowers. The obtention
Rs.25000 tion of assets mortgage of land/ of valuation report does not absolve the branches/
created out of loan collateral security controlling offices of their responsibility of verify-
such as insurance ing such reports. In case any over-valuation is
policy, marketable detected, action should be initiated for delisting/
security, deeds of deletion of the concerned engineer from the
other property approved list.
etc.are required.
2. Above In addition to No collateral (ADV.162/96-97 dt.10.03.97)
Rs.25000 security cover security in the
but upto under 1 above, form of LIC policy,
Rs.50000 suitable margin marketable Priority Sector Advances - Housing Finance
money/mortgage security, deeds of
RBI has revised the definition of priority
of land at the other property etc.
discretion of banks are required. sector housing loans under the direct and indirect
categories. As per the revised definition priority
3. Above In addition to Nil
Rs.50000 Security cover sector advances will include,
under 1 & 2 above, i. loans to individuals upto Rs.3 lakhs for
collateral security
construction of houses and upto Rs.50000
in the form of LIC
policy marketable for repairs (to be classified under Housing -
security, deeds of Direct finance)
property, etc. may
ii. assistance to any government agency/NGO
be furnished
approved by NHB for the purpose of
(B) Where movable assets are not created
refinance, for construction of houses or for
(eg.dugwell,
slum clearance and rehabilitation of slum
development of land etc.)
dwellers upto a ceiling of Rs.3 lakhs of loan
1. Upto Mortgage of land No margin money per housing unit (to be classified under
Rs.25000 (where there are / colletaral security
genuine difficulties as mentioned
Housing - Indirect finance).
in mortgage of above is required.
land, banks may (ADV.164/96-97 dt.17.03.97)
take third party
guarantee) Obtaining details of legal heirs in loan
2. Above In addition to No collateral applications
Rs.25000 security cover security as
but upto under 1 above, mentioned above It has been decided to provide additional
Rs.50000 suitable margin is necessary. columns in loan applications for entering details of
money at the the legal heirs of borrowers/guarantors, such as
discretion of the name, age, relationship and address. The above
bank. information will facilitate branches to implead
3. Above In addition to Nil legal heirs on the death of the borrower/guarantor.
Rs.50000 security cover The information should be updated on an ongoing
under 1 & 2 above
collateral security basis even after filing of suit.
at the discretion of
the bank. (ADV.165/96-97 dt.17.03.97)

Penal/Higher rate of interest

(ADV.156/96-97 dt.04.03.97) As per the extant guidelines, penal interest
of PLR + 7% + interest tax should be charged for
Valuation of properties by Engineers in Bank’s adhocs, TODs, excesses, overdues, defaulted
approved list guarantees and advances arising on account of
devolved LCs. Further, in respect of NPAs where
In order to prevent the over-valuation of repayment has commenced, interest shall be
properties offered as securities in collusion with charged at PLR + 7% + Interest tax or 2% over
the borrowers, it has been decided that the applicable rate whichever is higher. It has now
BMs/RMs/ZMs should themselves refer cases of been decided to revert to the earlier practice of
valuation in writing directly to the Engineers in

3
 Volume 9 Issue 4 Jan - Mar 1997

charging penal interest at 2% over the card rate except those situated in the zones headed by GMs
applicable besides interest tax for the borrower such as Delhi and Chennai.
w.e.f. 01.01.97. The penal rates in vogue on
different dates are given in Annexure I of the (PRNL.108/96-97 dt.12.02.97)
circular and the guidelines relating to penal/higher
rates of interest upto date are furnished in Annex- Special Clean Loan to members of staff
ure II thereof. against PF Contribution
(ADV.170/96-97 dt.29.03.97) In partial modification of the existing guide-
lines for availing special clean loan against PF, it
Loan to Pensioners to meet medical expenses has been decided to waive the submission of
medical certificate for sanction of special clean
In response to the representation received loan on medical grounds.
from the All India Indian Bank Retirees’ Associa-
tion, it has been decided to extend the above (PRNL.110/96-97 dt.14.02.97)
scheme to the retired staff of our Bank also, who
draw pension through our branches. The sanction Indian Bank (Officer’s) Service Regulations,
of loan is subject to the same terms and conditions 1979 - Loan for purchase/construction of
as stipulated for other pensioners. House
(ADV.172/96-97 dt.31.03.97) Regulation 28 of the IBOSR 1979 has been
amended. The amendment is made through the
insertion of a new para 12(iii) which reads that “In
PERSONNEL case of construction of a new house by a Govern-
ment agency, recovery will commence from the
Job Role of Branch Managers/Asst Branch pay of the month following the completion of the
Managers/Asst. managers/Managers house or the 36th month after the date of payment
The job roles of the above functionaries of the first instalment, whichever is earlier”.
have been reviewed and redesigned. The roles
(PRNL.114/96-97 dt.22.02.97)
specified for Branch Managers are applicable to all
Branch Managers irrespective of their scales. The
same is the case with regard to the roles specified Allocation of work to Promotee Officers on
for Asst. Branch Managers. Though the Probation
duties/responsibilities have been spelt out for all In order to improve customer service, the
the officers, the Branch Manager will bear the following modifications/additions have been made
overall responsibility. In the event of any in the functions of promotee officers on probation.
exigency, he has the necessary authority to entrust
any other work in addition to the routine/normal a. Their power to pass cheques and withdraw-
work performed by the officers. All the officers alslips in SB and current accounts stands
are expected to assist the branch manager and increased to Rs.10000/-.
work as a team in improving the business of the b. Checking of local drafts book, clearing
branch, maintain good customer service, house- schedule, clearing register, etc. Inter-
keeping, improving profitability, etc. The revised branch credit advices may be initialled by
guidelines have been given in the booklet attached them before being signed by a powered
to the circular. officer.
(PRNL.99/96-97 dt.18.01.97) c. Checking of OBC, IBC registers, signing of
OBC, IBC schedules, fate cards, intimation,
Procedure for taking Disciplinary action etc. Credit advices to branches may be
against Award Staff initialled by them before being signed by a
powered officer.
It is notified that the Executive discharging
the duties of the Executive Director shall be the d. Follow-up of long pending unreconciled
Appellate Authority in respect of disciplinary cases items in IBGA. Rectification vouchers
of the Award Staff in the zones headed by GMs. should be signed by powered officer only.
Consequently, the Executive discharging the duties e. Verification of SFVM ledger including
of GM (General Credit) shall be the Appellate physical verification at regular intervals.
Authority in respect of disciplinary cases of the
Award Staff in all the branches/offices in India

4
 Volume 9 Issue 4 Jan - Mar 1997

Branches are advised to take note of the the next working day of the receipt of the
above modifications/additions while allocating instruments.
work to promotee officers on probation.
The officer-in-charge of inward mails
(PRNL.119/96-97 dt.15.03.97) should ensure that all advices of realisation
received are branded with the date stamp and sent
to OBC section immediately. The officer-in-charge
Social Circles of OBC section will be responsible for releasing
A new concept of Social Circles is proposed the credits to the customer’s account on the same
to be introduced in our branches and offices. A day of receipt of the advice. It is the responsibility
Social Circle is a voluntary group of members of of the Branch manager to ensure that the bills /
staff in a branch or office who come together to despatch sections are not closed on any account.
identify the needs of the locality and organise / Further it will be the overall responsibility of the
implement community welfare and development branch manager to ensure that the above
programmes. The number of members in a Circle mentioned procedure is followed meticulously. It
will not be less than 7. There is no ceiling on the will be the responsibility of the Asst. Branch
maximum number of members. The details of the Manager to submit AUQ-5 and initiate follow-up
concept and working of the Social Circles are action in co-ordination with the officer-in-charge
furnished in the Annexure to the circular. Staff of OBC section.
members desirous of forming Social Circles may At the Collecting Centres (including Service
apply to HO:Public Relations Department through Branches), the officer-in-charge of inward mails
their facilitator (Branch Manager in branches and should ensure that the covering schedules of
CM/SM in charge of priority sector at RO/ZO) cheques and bills received are branded with the
with the names of the members of the proposed date seal and sent to clearing or the respective
Social Circle. The Social Circles will be registered section immediately against the acknowledgement
with HO and a number will be allotted to each of the officer concerned. The officers of the
circle thus formed. sections concerned should ensure that cheques are
Awards will be presented every year to the debited/presented in clearing preferably on the
Social Circles that have distinguished themselves same day. Bills received should be presented on
in different community development activities. the same day or latest by the next day. The realisa-
tion advices/returned instruments should be sent to
(PRNL.123/96-97 dt.29.03.97) the officer-in-charge of Despatch section against
his acknowledgement. The Despatch section is
responsible for sending the advices/instruments on
CRA the same day.
Staff Accountability on realisation of outsta- SM/CM in-charge of the Audit Department
tion instruments at Controlling offices will monitor receipt of
AUQ-5 return and initiate follow-up action.
A system of staff accountability on realisa-
tion of outstation instruments has been evolved (CRA.29/96-97 dt.06.02.97)
under which accountability has been fixed on the
officer and the clerk in charge of the OBC section
for
Service Charges - Safe Deposit Lockers

i. verification of the correctness of the The rental rate structure of lockers has been
particulars on the pay-in-slip at the time of revised w.e.f. 01.03.97. The revised rates are
receipt of the outstation cheques/bills given in Annexure 1 of the circular. The rates are
applicable for the existing locker holders from the
ii. Registering of all cheques/bills received in next renewal date on or after 01.03.97. Individual
the Collection Register on the same day locker holders are to be advised of the revision as
iii. Preparation of covering schedules, entry of per the format given in Annexure 2 of the circular,
cheques/bills along with the schedules in a by registered post and their acceptance obtained. A
register and delivering them to the officer- copy of the revised rates should be displayed in the
in-charge of Despatch section against his Public Notice Board.
acknowledgement
(CRA.30/96-97 dt.06.02.97)
The clerk and officer-in-charge of Despatch
section will be accountable for despatching the
cheques/bills received on the same day or latest by

5
 Volume 9 Issue 4 Jan - Mar 1997

Introduction of MICR Clearing at Hyderabad ii. Collapsible gates/rolling shutters should be

strengthened with horizontal steel bars
MICR Clearing is presently in operation at wherever necessary so that they do not
the four metros, viz., Mumbai, Chennai, Delhi come out of the groove when pulled with
and Calcutta. RBI has decided to introduce MICR force.
Clearing in Hyderabad from April 1997. Hence iii. Safe keys should never be left in the branch
branches are advised to issue DDs drawn on overnight and be always held in the person
service branch, Hyderabad in MICR format only. of the officer/shroff. Safes should be
The instructions governing issue of MICR DDs are preferably of 61" size and be embedded in
reproduced on the reverse of the circular. the wall properly wherever necessary.
(CRA.35.96-97 dt.26.03.97) iv. The alarm should not get disconnected when
main switch is turned off.

FX v. The building should be surrounded by

barbed fencing or compound wall and the
Combined agreement for Import and Inland lighting around should be adequate.
LCs Other precautionary measures include
minimising of cash balance held, advising the
As the existing documents for LCs, viz.,
neighbours for alerting Police in case of any suspi-
D-87 for inland LCs and D-48 for import LCs are
cious movement around the bank, arranging for
not suitable to cover combined limits (which the
Police patrolling particularly on week
parties may use for both inland and import LCs), a
ends/holidays, conducting mock exercises, etc.
revised agreement form ‘Agreement for irrevoca-
The circular also reiterates on post burglary action
ble LC’ D-48 (revised) has been devised. The
plan to be carried out by branches if such an event
agreement form is enclosed to the circular. This
takes place.
form is in substitution of the existing D-87 and
D-48 and can be used for the following limits: (GENL.78/96-97 dt.02.01.97)
i. Inland LCs (D-87 now taken is dispensed
with) Quick Audit of Sundry/Suspense accounts
ii. Import LCs
Based on RBI directive, a quick audit of
iii. Combined limit for Import and Inland LCs. select branches was made with particular reference
to Nominal accounts. The audit revealed that
Wherever combined limits are already in
adherence to guidelines in the maintenance of
force, the revised D-48 shall be taken
nominal accounts needs improvement. All Branch
immediately.
Managers are required to ensure that
(FX.29/96-97 dt.24.02.97) i. every entry in the nominal accounts is duly
authenticated and that full particulars are
available both in the vouchers and ledgers
GENERAL
ii. immediate follow-up action has been taken,
Preventive Measures against Burglary iii. all items pending for more than 6 months
are analysed and reversed and those which
The alarming increase in the incidents of are less than 6 months old are followed-up
attempted burglary against our bank branches has on an ongoing basis
called for greater awareness and alertness on the
part of our branch managements and staff iv. clearing adjustment account is closely
members. They are exhorted to review the follow- monitored to ensure that no old items are
ing preventive arrangements for their effectiveness pending.
and make improvements wherever required.
Controlling Offices should scrutinise the
i. All weak points (exhaust fans, AC Ducts respective returns received and follow-up with
and windows) should be strengthened with branches for the reversal of the pending items.
RCC/steel plates/grills. Unnecessary
windows should be walled up. Electrical (GENL.83/96-97 dt.22.01.97)
shafts/junction boxes should also be
strengthened and kept locked.

6
 Volume 9 Issue 4 Jan - Mar 1997

Bomb Threat clearly and concisely in the report avoiding vague

and generalised terms.
Whenever branches receive threats of bomb
attack/looting, they are advised to inform Police (GENL.94/96 dt.18.02.97)
immediately and seek protection. The following
precautions should be observed.
i. Oversized letters/Parcels should be accepted
only after verification of the genuineness of MD/ED
the sender/origin.
Our Bank's Home Page on the Internet
ii. A close watch should be maintained on all
persons entering the premises and unidenti- Our Honourable Finance Minister Shri P.
fied persons/strangers should be questioned. Chidambaram inaugurated our Home Page on the
Internet on 28.12.96. Internet is a world-wide
iii. The entrance should be chained to permit network for information exchange. Besides having
entry of only one person at a time. access to a very vast library of information includ-
iv. The Alarm System should be kept in ing the facility of retrieval wherever required, an
working condition. Internet user can also send E-mails, visit Home
Pages, etc. A Home Page can be created by any
Further the branch should be opened and one, whether individual or corporate wherein they
closed in the presence of an officer only. Any can provide information about themselves and the
unclaimed/suspicious object noticed should not be products and services provided by them. In our
touched and Police should be informed Bank's Home Page, we have furnished a profile of
immediately. our Bank, the various schemes we offer for
non-resident Indians including the interest rates
(GENL.87/96-97 dt.22.01.97) and a guest book through which our Home Page
visitors may send their suggestions and queries.
Reporting of frauds by Banks to RBI Our Bank's Home Page address for being accessed
The existing format for reporting the in the Internet is http:/www.indian-bank.com. The
actual/suspected frauds to CO:Vigilance Depart- Email address of the Bank is
ment by branches has been modified. The modified indbank@giasmd01.vsnl.net.in. Branches can
format is enclosed to the circular. Branches are advise our NRI clientele of the availability of our
advised to ensure that the modus operandi is given Home Page on the Internet and intimate the above
address.

(MD/ED 14/96-97 dt.21.01.97)

7
 Volume 10 Issue 1 April - June 1997

Deposits Certificate of Deposits

Recollect
RBI has announced that the minimum
Interest rates on premature closure of
amount that can be accepted from a single investor
deposits for issue of certificate of deposit has been reduced
RBI has amended its directive on payment from the existing Rs.25 lakhs to Rs.10 lakhs. CDs
of interest on preclosure of term deposits. As per above Rs.10 lakhs will be in multiples of
the amended directive, interest payable on a Rs.5 lakhs. Branches are advised to make use of
preclosed term deposit shall be either one percent the above modification for mobilisation of funds.
less than the rate applicable to the period for However, no efforts should be spared in mobilis-
which the deposit remained with the bank or one ing core deposits. For details/clarifications on
percent less than the contracted rate, whichever is acceptance of CDs, branches may contact their
lower. The amendment comes into effect from Zonal Offices.
1.4.97.
(DEP.7/97-98 dt.08.05.97)
(DEP.1/97-98 dt.01.04.97)
Interest rates on term deposits
W.e.f. 10.6.97, the interest rates on
Nomination facilities to Deposit Accounts
i. Domestic term deposits will be as follows:
RBI has advised that nomination facility
may be extended to deposits held in the name of a Period of Deposit Interest Rate % p.a
sole proprietary concern also. The nomination will 30 days to 45 days 7
stand cancelled if the constitution of the concern is
changed as partnership or company etc. 46 days to 179 days 8
180 days to 1 year 9
(DEP.2/97-98 dt.10.04.97)
Over 1 year to 2 years 11
Over 2 years to 3 years 11.5
Interest rates on domestic and NRE term Over 3 years 12.5
deposits
ii. NRE term deposits will be as follows:
W.e.f. 16.4.97, the interest rate on domes-
tic term deposits for maturities of 180 days to one Period of Deposit Interest Rate % p.a
year is revised to 9%, while that on NRE term
deposits for maturities of 6 months and above upto 6 months to 1 year 9
1 year is revised to 9%. Over 1 year to 3 years 12.5

(DEP.3/97-98 dt.17.04.97) Over 3 years 13.5

The revised rates would be applicable to

Interest rates on domestic term deposits fresh deposits and on renewal of maturing deposits
W.e.f. 23.4.97, the interest rates on domes-
(DEP.9/97-98 dt.06.06.97)
tic term deposits are revised as follows :
Period of Deposit Interest Rate % p.a Deposit mobilisation - Savings Bank Accounts
30 days to 45 days 7 During 1996-97, our Bank had performed
46 days to 179 days 8 well increasing the deposits by Rs.1251 crores
inspite of the onslaught of adverse media publicity.
180 days to 1 year 9
While the feed back on customer service is encour-
Over 1 year to 2 years 10 aging, it requires some more efforts on our part to
Over 2 years to 3 years 11 surpass the target of Rs.1625 crores and achieve
Over 3 years 12.5
our mission of ‘Profit making Bank with growth
and glory’. Our action plan for the year envisages
The revised rates would apply only to fresh improvement in deposit mix of SB:CA:TD from
deposits and on renewal of maturing deposits. 19:11:70 to 22:12:66. With 1485 branches and a
marketing force of 27000 employees, the action
(DEP.4/97-98 dt.22.04.97)
plan could easily be achieved. Concentration on PDF-1997-1Q
SB accounts with good customer service will help

1
 Volume 10 Issue 1 April - June 1997

mobilise more term deposits besides increasing Funds. Any violation in this regard would invite
‘float funds business’ such as issue of DDs result- appropriate action from RBI including penal
ing in enhanced profitability. Branches are advised action.
to focus on opening of more savings bank accounts
(DEP.12/97-98 dt.17.06.97)
as indicated below:
Minimum Fresh SB a/cs to be Interest rates on domestic and NRE term
Category
opened deposits
Rural 300 W.e.f. 26.6.97, the interest rate on domes-
Semi-Urban 600 tic term deposits for maturities of 180 days to one
year is revised to 8%, while that on NRE term
Urban 1,500 deposits for maturities of 6 months and above upto
Metro - residential 2,400 1 year is revised to 8%.
Metro-others 2,400 (DEP.13/97-98 dt.26.06.97)
The above strategy will help mobilise about
Rs.600 crores in savings bank deposits alone.
Branches can constitute a marketing committee
with representatives from all categories of staff to Advances
oversee customer service, door to door campaign-
ing, conducting of customer meet/staff meet/
Procedure for creation of second charge
deposit mobilisation fortnight, etc., besides devis- The procedure for creation of second
ing suitable strategies for mobilisation of deposits. charge on fixed assets already mortgaged to Finan-
cial Institutions is as follows :
Number of accounts and amount mobilised
every month shall be reported to Zonal Office. 1. A consent letter from the borrower agreeing
Regional Manager/Zonal Manager shall review the to create a second charge in our favour on
performance in their review meetings. Branches the fixed assets already charged to the
shall report extra-ordinary performance of any Financial Institution should be obtained.
employee to their RM/ZM under copy to AGM
(Marketing). 2. A letter should be sent to the concerned FI
for their NOC.
(DEP.10/97-98 dt.10.06.97) 3. The FI will usually send a format of
consent/authority letter to be signed by the
Payment of Bearer Cheques Bank (Standard formats are enclosed to the
circular. Formats other than these must be
The earlier instructions calling for identifi-
approved by CO: Legal department)
cation while making payment of bearer cheques of
Rs.5,000 and above stand modified. The revised 4. The branch should sign and send the author-
procedure stipulates that in addition to the usual ity letter to the FI for ceding the second
precautions to be observed, branches should charge, after the Working Capital limits are
record details of the presenter such as name, sanctioned.
address, reference, etc. on the reverse of the
5. After the above formalities are over, the
instrument before making payment of bearer
branch should ensure that the borrower
cheques of Rs.20,000 and above. It is however
actually creates second charge as agreed.
desirable to record such details on all bearer
The procedure may slightly vary from insti-
cheques irrespective of the amount. While exercis-
tution to institution.
ing the normal care and caution, it should be
ensured that bonafide presenters of bearer cheques 6. The branch should get the letter from the FI
are not put to inconvenience. ceding second charge in our favour along
with the copies of memorandum of
(DEP.11/97-98 dt,12.06.97) entry/tripartite agreement.
7. In case of Limited Companies, modification
Stockinvest Scheme of charge should be registered with ROC.
As has been advised by RBI, branches are While renewing the limits sanctioned, if
instructed to restrict issue of Stockinvest upto a
there is no change in the total limit, there is no
ceiling of Rs.50,000 per individual per capital
need for further documentation. If there is any
issue. The ceiling is not applicable to Mutual
enhancement in limit, a simple agreement of

2
 Volume 10 Issue 1 April - June 1997

second charge duly executed by the borrower may on the concept of MPBF. Banks have been advised
be obtained and sent to the first charge holder and to evolve an appropriate system for assessing the
their acknowledgement obtained. Arrangements working capital needs of the borrowers, within the
may then be made for creating second charge and existing prudential guidelines and exposure norms.
registering the modification of charge with ROC as This measure is intended to speed up credit
explained above. decision in the banking system. In our Bank, the
various aspects of RBI’s pronouncement are being
(ADV.5/97-98 dt.29.04.97) examined for revision of the policy/guidelines for
working capital assessment. Until the revised
policy is communicated, branches are advised to
Selective credit control - Reintroduction of
follow the existing guidelines.
controls on advances against wheat
RBI has directed that advances against (ADV.11/97-98 dt.09.05.97)
wheat which were exempt from the provisions of
SCC be brought back under the controls w.e.f. Post shipment finance in respect of exports
8.4.97 for period of 3 months. The minimum through the Warehouse-cum-Display centre at
margin and level of credit ceiling on advances Dubai
against wheat are given in the annexure to the
circular. FIEO has arranged for setting up a
Warehouse-cum-Display centre (WCD) at Dubai
(ADV.7/97-98 dt.06.05.97) to facilitate storing of Indian goods, their display
and off-the-shelf sales. RBI has permitted that the
Discretionary Power Booklet - Margin on Bill proceeds of exports made to WCD Centre be
realised within a period of 10 months from the
limits
date of shipment. Consequently, the interest rates
W.e.f. 1.4.97, the minimum margin on post on Post-shipment credit extended to such exports
sale credit limits shall be fixed as follows : are revised as follows :
Facility Min.Margin Period of Postshipment credit
for exports made to WCD Rate of interest
Cheque BP, FBN Nil Centre, Dubai

FBP/BP 5% Upto 90 days Rate as for usance bills upto

90 days (Presently 13% p.a.)
FBP/Usance, Doc.BP, DABP &
10% Beyond 90 days & upto 10 Rate as for usance bills for a
CSBP
months from the date of total period beyond 90 days
Any relaxation in the above norms which shipment and upto 6 months (Presently
merits consideration may be taken up with HO 15%)
through ZMs. The margins may be appropriated
towards interest, if any due on realisation/reversal If export proceeds are not realised within 10
of bills and the surplus, if any may be appropriated months of shipment, higher rate of interest as
towards other dues such as term loan instalments, applicable for bills realised beyond 6 months from
DPG, etc. Wherever overdues/arrears subsist, the date of shipment (Presently PLR +4%) will
sanctioning authorities may fix higher margins. apply for the entire period beyond 6 months. The
The minimum margin norms prescribed are above relaxation will remain valid upto
subject to compliance of RBI directive on the 31.12.1997, subject to review by RBI. Refinance
overall minimum margin towards working capital available from RBI will however not exceed 180
limits (presently 20% for working capital limits of days.
less than Rs. 1 crore and 25% for limits of Rs.1 (ADV.12/97-98 dt.12.05.97)
crore and above) and wherever necessary the
margin on pre-sale/cash credit limit shall be suita-
bly increased. Appropriation of recoveries in suit filed
accounts
(ADV.8/97-98 dt.07.05.97)
When an NPA account is transferred to
protested bills account, the interest upto the date of
Norms for assessment of working capital - filing suit should be calculated and recorded in the
concept of MPBF MoI account. No debit entry shall be made to the
RBI has withdrawn its prescription as protested bills account for the interest kept in MoI.
regards assessment of working capital needs based The plaint will be accompanied by two statements,
viz., the statement of the advance account and the

3
 Volume 10 Issue 1 April - June 1997

statement of MoI account. The accounting proce- a. Commitment letter should be obtained from
dure in this regard shall be explained in the plaint. the borrower to pay the amount agreed.
No debits shall be made to the protested b. Securities should not be released till the
bills account except for accounting partial recover- compromise amount together with interest
ies taken to income account. Interest shall not be is received in full.
calculated after the suit is filed so as to add the
c. Sale proceeds of fixed assets, if any, should
same in MoI account. MoI in respect of a suit filed
be applied for adjustment of liability.
account will represent only the interest charged
from the date of its becoming NPA to the date of Upon approval by the concerned
filing suit. Partial recoveries made if any, should authorities, the terms of compromise shall be
first go towards amount kept in MoI, secondly to communicated to the parties in the format as per
Protested Bills and then to law charges in that Annexure 2/3 of the circular as the case may be.
order unless the contrary is indicated by the parties In case of suit filed accounts, such communication
or the court. should expressly state that the Bank’s approval is
without prejudice to the claim/rights of the bank
(ADV.13/97-98 dt.12.05.97) under the suit. Wherever compromise settlement
provides for, half the court fee should be received
Loan system for delivery of bank credit through the advocate and credited to Bank’s
income account. Wherever necessary, suitable
The norms governing loan system for deliv- legal documentation shall be obtained in consulta-
ery of bank credit are revised as follows : tion with the legal adviser and CO:Legal Depart-
Borrowers enjoying W.C. Cash credit component ment.
limit of limited to Conditions for consideration
Rs.10 crore or above but less 25% (balance 75% in the 1. Consideration of proposal is subject to
than Rs.20 crore form of loan) borrowers agreeing for down payment with at least
Rs.20 Crores or above 20% (balance 80% in the 10% of the compromise amount deposited upfront
form of loan) with the branch in a ‘No lien account’
2. Under exceptional circumstances where
For borrowers with Working Capital credit
down payment in full is not possible at least 20%
limit of less than Rs.10 crore, the level of loan and
to 30% of the compromise amount over and above
cash component may be settled between the bank
the upfront payment should be paid. In such a
and the customer.
case, the first down payment shall be made within
Exemption from the above norms may be 60 days and the balance along with interest shall
allowed by our Board in case of industries which be paid within a maximum of 24 months in
are cyclical and seasonal in nature, on a case to suitable instalments.
case basis, if recommendations to the effect are
3. If the terms of compromise are not fulfilled,
received from Zonal Office. For detailed opera-
the compromise will be no longer valid and the
tional instructions reference may be made to the
borrowers will have to repay the full dues
annexure to the circular.
outstanding as before conclusion of compromise
(ADV.15/97-98 dt.17.05.97) terms.
For further details such as the methodology
Compromise or negotiated settlement of for consideration, delegation of powers, reporting
Non-Performing Assets - updated general system, staff accountability, etc., the circular may
be referred to.
guidelines
A Settlement Advisory Committee (SAC)
Compromise proposals will generally be has been set up at Head Office with a retired judge
considered only in NPA accounts with special as chairman, a retired senior banker and 2 GMs as
emphasis on doubtful and loss assets. In case of members. The committee normally considers
sub standard assets, it can be considered only if all proposals that do not strictly conform to the
possible efforts to upgrade it have failed. Working prescribed norms and/or where the sacrifice is
the economics of the compromise proposal using beyond the powers of CMD and makes its recom-
discounted cash flow technique is given in Annex- mendations for the action to be taken.
ure 1 of the circular. Before recommending a
compromise proposal, the following measures/ (ADV.16/97-98 dt,20.05.97)
safeguards be observed.

4
 Volume 10 Issue 1 April - June 1997

Revision of PLR Quarterly reviews of NPAs As of 31st March, 30th

The PLR of the Bank stands reduced from June, 30th September
and 31st December to
15.5% to 14%. The interest rates on advances over
Board
Rs.2 lakhs category are revised effective from
16.4.97 (detailed in Annexures I & II of the circu- Zonal offices should forward the reports
lar). The revised lending rates will be applicable to received from branches in respect of sanctions at
existing as well as fresh borrowal accounts. the level of ZM and above and also sanction of
Sanctioning authorities should specify the interest Rs.1 crore and above made by RMs to the
rate with linkage to PLR in all their credit approv- concerned credit desk at HO irrespective of
als/ renewal sanctions. whether the account is a performing asset or NPA.
(ADV.17/97-98 dt.22.05.97)
(ADV.28/97-98 dt. 09.06.97)

Interest rate on Export Credit New Entrepreneur Development Agency

RBI has advised that w.e.f. 16.04.97, inter- (NEDA) Remodelled Scheme
est rates on Postshipment rupee credit on demand
The above scheme has been remodelled.
bills for transit period and usance bills upto 90
Unemployed graduates/diploma holders between
days (inclusive of usance period, transit period and
22-28 years of age with 3 to 5 years experience in
grace period) will be ‘not exceeding 13% p.a.’ as
the line of activity proposed are eligible to apply.
against the existing rate of 13%. In our Bank, the
The sponsorship criterion and training of appli-
rate for such advances continues to be at 13% p.a.
cants before selection/availment of loans stipulated
However, representation from select high rated
in the earlier version of the scheme have now been
exporter customers for reduction of interest rates
dispensed with.
for post shipment credit upto 90 days may be
forwarded by branches to Zonal Office/Head All industrial SSI activities may be consid-
Office alongwith the recommendations. The ered. Proposals with project cost not exceeding
ZCC/Head office may consider on merits, finer Rs.20 lakhs should only be considered. The
rate of interest. maximum finance available is Rs.15 lakhs. Apart
from the primary security of assets created out of
(ADV.22/97-98 dt.04.06.97) bank finance, collateral security and the personal
guarantee of parents/spouse should be insisted.
Credit Monitoring system under IRAC norms Repayment of term loans shall be within a
maximum period of 7 years including a holiday
In order to simplify the reporting system of
period which may extend to a maximum of 1 year.
credit monitoring under IRAC norms, it has been
Interest shall be charged at 1% less than the card
decided to introduce a single format (as per annex- rate applicable for similar SSI units. During
ure to the circular) for reporting performing assets holiday period, only PLR at simple interest should
as well as non-performing assets. Report in the be applied. All proposals under the scheme should
format should be sent to the controlling offices as be submitted to Head Office through RO/ZO along
on 31st March and 30th September for performing with the viability report of IDO for consideration
assets and on quarterly basis for non-performing of sanction of credit limits.
assets. Form C & D of CO:IRRD circular
ADV.159/95-96 dt.19.3.96 stands withdrawn. For For comprehensive details about the
accounts with balance of Rs.25000 and below the scheme, the circular may be referred to.
existing guidelines will continue to apply.
(ADV.29/97-98 dt.11.06.97)
The report will be used by RO/ZO/HO for
the following reviews : Suit filed accounts - Delegation of discretion-
Name of the review Periodicity
ary powers
Quick review of all borrowal Annually as on 31st Our Board has approved the delegation of
accounts having limit/balance of March to Management discretionary powers to different executives /
Rs.1 crore and above (inclusive of Committee officers of the Bank for sanction/confirmation of
non-fund based limits) law charges and expenses in respect of suit filed
accounts, filing of recovery applications before the
Half yearly review under IRAC As of 30th Sept. only Debt Recovery Tribunals, suits filed against the
norms (both performing and Bank and consumer disputes raised by parties
non-performing) against the Bank. The different categories under

5
 Volume 10 Issue 1 April - June 1997

which discretionary powers have been delegated industrial units, the extant instructions will
are enumerated in the circular. The powers continue to remain in force.
delegated shall come into force with immediate
The list of large borrowers who have opted
effect. All sanctions/confirmations made by the
for syndication and the steps taken for the same
concerned officials as per the powers delegated
shall be furnished by branches on a quarterly basis
shall be reported to the next higher authorities at
to Zonal Office who in turn will consolidate and
quarterly intervals.
submit the report to CO: CPGD.
(ADV.32/97-98 dt.25.06.97)
(ADV.35/97-98 dt.27.06.97)

Scheme for educational loans to students in

Adequacy of Institutional Credit and Flow of
Private Professional (medical/dental) colleges
credit to SSI
RBI has clarified the following :
RBI has decided that henceforth, the credit
1. Fresh students admitted in 1996-97 may be requirements of village industries, tiny industries
granted loan on the terms and conditions stated in and other SSI units (new as well as existing)
circular ADV.133/96-97 dt.06.01.97 having aggregate fund based working capital limit
upto Rs.200 lakhs from the banking system may be
2. Students who were granted loans in 1995-96
computed on the basis of minimum of 20% of their
and now studying in the second year after success-
projected annual turn over. The other instructions
ful completion of first year may be granted loans
issued earlier in this regard remain unchanged.
subject to terms and conditions as stated in (1)
above. (ADV.36/97-98 dt.28.06.97)
3. Loans granted to payment seat students and
loans in excess of Rs.15000 granted to free seat
students are to be backed by security. Personnel
4. The amount of loans should be directly Payment of TA/LFC advance to award staff -
remitted to the college concerned. It cannot be Eligible amount as per revised Railway tariff
used to repay loans availed of from other sources
for payment of fees. W.e.f 1.4.97, the revised per unit entitle-
ments for journeys performed on or after 1.4.97
(ADV.34/97-98 dt.26.06.97) are as under :
2 years block 4 Years block
Lending under consortium arrangement Designation
Rs. Rs.
In the recent credit policy, RBI has 1. Clerk 2,232 3,846
withdrawn the existing mandatory requirement on
formation of consortium. Banks are free to adopt 2. Substaff 414 588
sole bank/multiple bank/consortium or syndication 3. Part time
approach, by framing necessary ground rules on employee 204 332
operational aspects. The level of individual bank’s 1/3 wages
share shall continue to be governed by the norm
for single borrower/group exposure. 1/2 wages 278 414

In case requests are received from consor- 3/4 wages 358 498
tium borrowers rated strong/very strong for avail- 4. Part time
ing the relaxations announced by RBI and where 1,392 2,232
clerks
we are the leaders, details thereof may be submit-
ted to CO: Credit Desks. If we are members, a
(PRNL.12/97-98 dt.21.05.97)
copy of the ‘Information Memorandum’ about the
borrower prepared by the mandated bank should
be sent to CO: Credit Desk. Punctuality and Discipline
In case of accounts other than under consor- The corporate objective for the current year
tium, if the borrowers opt for syndication of is to turn our bank into ‘a profit making bank with
credit, branches should prepare ‘Information growth and glory’ which can be attained only
Memorandum’ and submit to ZO/HO. through the extension of exemplary customer
service and improved productivity of all resources
In respect of borrowers not opting out of including human resources. The underlying factor
consortium and in respect of financing of sick is staff discipline, which among other things,

6
 Volume 10 Issue 1 April - June 1997

include punctuality in attending office. It is neces- However, employees dropping out of a course on
sary to ensure that all the staff attend office at the their own will not be eligible to undergo any
appointed time, be available for service to custom- course under DLSD for the next 3 years. The
ers during the business hours and contribute their course is offered for 3 levels, each containing 3
best during the entire business hours. Some of the modules. On completion of the course, a certifi-
important guidelines issued by HO in this regard cate will be issued to the staff member besides
have been recapitulated in the circular for ready noting of the same in his/her service record. For
reference. full details on the courses/modules offered includ-
ing the procedure for enrolment, the circular may
(PRNL.13/97-98 dt.26.05.97) be referred to.

Revision in the interest rate on PF (PRNL.23/97-98 dt.19.06.97)

W.e.f 1.4.97, the rate of interest on PF

Conveyance loan to staff members
contribution has been increased from 11% p.a. to
12% p.a. and consequently the interest on PF W.e.f. 3.5.97, the quantum of loan for
Loan, Refundable loan and special clean loan purchase of two wheeler and four wheeler under
stands revised to 13% p.a. (including interest tax). concessional rate of interest in the scheme of
Further, the surplus interest of 1% on the amounts conveyance loan to staff members has been
outstanding as on 31.3.95 has already been increased. Workmen employees drawing pay of
credited to the PF subscription account as on Rs.2370/- p.m or more and confirmed officers in
March 1997. the bank’s service are eligible for conveyance loan
(Two wheelers) scheme. All confirmed officers
(PRNL.21/97-98 dt,19.06.97) drawing a basic pay of Rs.6210/-p.m. or more are
eligible for Conveyance Loan (Four wheelers)
Loan for purchase of moped to substaff scheme to officers. The important terms and
conditions including the modifications made are
W.e.f. 3.5.97 the ceiling for grant of loan set our below:
to substaff for purchase of moped has been
increased to Rs,14000 or 90% of the cost of
moped whichever is less. The scheme is available Conveyance Loan Conveyance Loan
for substaff employees who have joined the bank (Two wheelers) (Four Wheelers)
on or after 1.10.94 upon completion of 5 years of Scheme Scheme
continuous service and those who are eligible to Maximum
Rs.40,000 Rs.2,00,000
avail conveyance loan on or after 1.10.94. Loan
Substaff availing moped loan will not be eligible Margin 10% 20%
for loan for purchase of scooter, etc. The loan
shall carry simple interest at 7.5% p.a. plus inter- Rate of i. 7.5% p.a (Simple i. 8.5% p.a (Simple)
Interest upto Rs,15,000) upto Rs.80,000
est tax and shall be repaid in 84 equal monthly
instalments, recovery of principal and interest ii. Bank rate or 12% ii. Bank rate or 12%
being in the ratio 5:1. The minimum margin shall p.a (Simple) which- p.a (Simple) which-
ever is higher for ever is higher for
be 10%. Purchase of second hand vehicles aged loan exceeding loan exceeding
upto 5 years with 20% margin will be allowed. Rs.15,000 but upto Rs.80,000 but upto
Availment under the scheme can be had thrice in Rs.30,000 Rs.1,60,000
the career with a minimum gap of 7 years from the iii. Commercial rate of iii. Commercial rate of
date of availing the previous loan except in the interest interest
case of theft or accident rendering the vehicle (PLR+int.tax) for (PLR+int.tax) for
damaged beyond repair. For further details, the loan exceeding loan exceeding
circular may be referred to. Rs.30,000 Rs.1,60,000
200 equal monthly
(PRNL.22/97-98 dt.19.06.97) Repayment 84 months (5:1)
instalments (3:2)

Distance Learning for Self Development For details regarding sanctioning

(DLSD) authorities, documentation, accounting procedure
and other terms and conditions, the circular may
DLSD has been centralised at IMAGE since be referred to.
October 1996. W.e.f 19.6.97, DSLD has been
made as an open programme for all staff members (PRNL.24/97-98 dt.25.06.97)
of the bank. Any interested employee can register
under DLSD at anytime and do the course.

7
 Volume 10 Issue 1 April - June 1997

CRA Grant of ‘at par’ facility for Dividend/Interest

Warrants and Refund orders
Signing of DDs/BPOs - Enhancement of
RBI has advised banks to be very careful in
Powers
extending ‘at par’ facilities and observe the follow-
It has been decided that demand drafts for ing additional safeguards :
amounts upto Rs.10,000 shall be signed by one
a. Facility should be sanctioned only by
powered officer having specimen signature number
Central Office and that too only for first
and those for amounts of above Rs.10,000 shall be
class parties with excellent track record.
signed by two authorised signatories, one of whom
should be a powered officer having specimen b. Prefunding should be ensured by monitoring
signature number. on a daily basis
Consequent to the above revision, branch c. The facility should be extended only at
managers of single man branches are now author- select dedicated branches with necessary
ised to issue DDs with their single signature only infrastructure to facilitate monitoring.
up to Rs.10,000. It has been proposed to circulate
d. No instrument payable at par should exceed
the specimen signatures of special assistants to all
the ceiling mutually agreed and in any case
branches and once this is done, special assistants
not exceeding Rs.10,000/- each.
will have authority to sign DDs singly for amounts
upto Rs.5,000 and jointly with a powered officer e. A master list of centre-wise payments to be
having specimen signature number for amounts made with full particulars thereof should be
exceeding Rs.5,000. obtained in advance. Such designated
centres shall not exceed 100. The company
The above procedure should be followed for
should fund the controlling branch as per
issue of BPOs also. The amendments to be carried
the master list on day one. The controlling
out in the Manual on Ancillary Services are given
branch should ensure that the account
in the form of amendment slip attached to the
remains in credit throughout and no hidden
circular.
overdrafts are created either at their branch
(CRA.1/97-98 dt.01.04.97) or paying branch. If necessary, each desig-
nated branch may be funded as per the
centre-wise list with instructions to refuse
Prudential norms - Revised guidelines for payment of warrants over and above the
Agricultural advances funds provided.
It was advised vide circular CRA.33/96-97 f. The company should declare the correctness
dt.28.02.97 that in respect of agricultural advances of master list and undertake not to issue
where interest/instalment are in arrears for more warrants beyond the master list.
than two quarters from the date they are due, the
advance should be treated as NPA. RBI has now g. The Registrars/Company’s auditors should
advised that the above guidelines will be applicable certify the master list.
only from the next accounting year ending h. Centre-wise unpaid list should be compiled
31.03.98. Consequently, for the year ended periodically and reconciled.
31.03.97 the guidelines that were in force prior to
the issue of the above circular will continue to i. The company should enter into an MoU
apply. This decision of RBI should result in with the bank incorporating the terms and
conditions of at par facility.
a. reduction in NPAs due to reclassification as
standard assets and (CRA.10/97-98 dt.06.06.97)
b. increase in interest income due to reduction
in interest reversals.
FX
The old guidelines with suitable illustrations
have been given in the circular for ready
reference. Classification of IBGA transactions relating to
FCNR deposits
(CRA.3/97-98 dt.21.04.97)
It has been decided that with immediate
effect all transactions relating to FCNR deposits
should be classified as internal liabilities under
schedules 7 and 15 alongwith other FX

8
 Volume 10 Issue 1 April - June 1997

transactions (except FOBC, which should continue General

to be classified in schedule 5/13). Branches should
ensure correct classification/reporting of all IBGA Follow up of entries in Sundry Deposit
transactions as it has a direct bearing on the
maintenance of CRR and SLR and thus on the The following changes have been made to
profitability of the bank. the existing guidelines on maintenance of Sundry
Deposit account. Branches may take to Income
(FX.1/97-98 dt.05.04.97) account all entries upto Rs.100 (including excess
cash) kept in Sundry Deposit and outstanding for
over 2 years, after obtaining the approval from
their controlling offices. This exercise may be
WTPCG and WTPSG of ECGC done at the time of transfer of entries to
W.e.f. 1.7.97, the premium rate on whole CO:Accounts in July every year. The sanction
turn over guarantees has been increased by 1%. obtained along with a copy of the list of such
Accordingly the premium will be @ 7 paise per entries should be kept in a separate file for verifi-
Rs.100/- p.m for WTPCG and 6 paise per cation. For the total amount transferred to income,
Rs.100/- p.m. for WTPSG. Branches should pay contra vouchers should be prepared debiting
premium at revised rates from the month of July ‘customers’ liability on suspense accounts trans-
97 onwards to the designated ECGC office under ferred’ and crediting ‘Liability on suspense
copy to their ZO. accounts transferred’. Any claim received in
respect of such entries may be paid to the debit of
(FX.3/97-98 dt.22.04.97) ‘Miscellaneous expenditure’ after verifying the
genuineness of the claim. The contra entry in
Interest rates on term deposits under NRE respect thereof should be reversed and a note of
Rupee Accounts and NR-NR-RDS reversal made in the list of entries maintained.
W.e.f. 28.04.97, the interest rates are In respect of entries of Rs.1000 and above,
revised as follows: a duplicate/certified copy of the voucher should be
prepared and kept in a separate file at the time of
Duration NRE (Rupee) NR-NR-RDS crediting the sundry deposit. The original voucher
6 months to 1 year 9% 14.5% need not be removed from the voucher bundles as
advised earlier. The file will be a part of Branch
Over 1 year to 3 years 14% 14% Document Register and be held in the custody of
Over 3 years 13.5% -- the officer concerned. The revised instructions will
come into force from 01.07.97.
The revised interest rates are applicable
only to fresh deposits and on renewal of maturing (GENL.1/97-98 dt.01.04.97)
deposits.
Internal control/Concurrent Audit
(FX.4/97-98 dt.22.04.97)
Concurrent audit has to focus on substantive
checking rather than test checking with a view to
Renewal of overdue deposits under preclude the incidence of serious errors and
NR-NR-RDS fraudulent manipulations. The basic objective is to
It is hereby clarified that on renewal of an provide additional administrative support to
NR-NR-RDS deposit, interest shall be allowed for branches in adhering to the prescribed systems and
the overdue period at the rate prevailing on the procedures and for timely detection of lapses/
due date of the original deposit or on the date on irregularities. New formats of monthly/quarterly
which renewal is sought, whichever is less. The audit reports have been introduced, keeping in
deposit so renewed should be for a period of not view the above objective.
less than 6 months and not more than 3 years. The concurrent auditor should oversee the
Further, it has been decided to permit execution of decisions at branch level to ensure
automatic renewal of NR-NR-RDS deposits on the that it is within the policy parameters of the
due date as in the case of NRE (Rupee) term Bank/RBI. While he is not expected to interfere
deposits by getting instructions to the effect from with the decision making of the Branch Manager,
customers at the time of opening of the account he should certainly report all deviations.
itself. Branch Manager should discuss on a daily
basis with the auditors, not only to clarify the
(FX.8/97-98 dt.24.05.97) points raised but also to ensure immediate

9
 Volume 10 Issue 1 April - June 1997

corrective/preventive measures. It is desirable to Maintenance and Disposal of old records -

have a weekly meeting of all officers with the Retention period of indemnities kept as
concurrent auditors to take stock of the observa- branch documents
tions and carry out rectifications. Wherever
immediate rectification is not possible, and where In order to reduce the number of records
the non-rectification does not endanger the Bank’s kept as branch documents, period of retention has
interest, Branch Manager should specify a period been prescribed in respect of the following
(maximum 30 days), within which the rectification documents of indemnity.
can be carried out. The undertaking given should
Nature of Transaction for which Period of retention
form part of the concurrent audit report every indemnity is obtained
month. Every concurrent audit report should be
accompanied by the Rectification report for the Duplicate DD 5 years from date of issue of
previous report. duplicate DD

Matters in which no action is possible at Duplicate TDR Permanent

branch level should be reported to the controlling Duplicate Travellers' Cheque 5 years from the date of
office and discussed in ZAC. A report on all such refund
matters shall form part of the quarterly report
CAQ. Duplicate Stockinvest 5 years from the date of
refund
Branches not covered under concurrent
audit should make effective use of their audit Duplicate Gift Cheque 5 years from date of
reporting system to prevent/rectify the deficiencies payment/refund
noticed. RMs/ZMs are requested to ensure close After the retention period is over, the
monitoring in this regard and also to have interac- documents shall be treated as old records and their
tions with auditors at the time of their branch visits maintenance/disposal will thereafter be governed
so as to make the system more effective. by the instructions contained in GENL.27/95-96
(GENL.2/97-98 dt.03.04.97)
dt.05.10.95.

(GENL.5/97-98 dt.10.04.97)
General Instructions on Software usage
Software piracy, viz., the unauthorised/
unlicensed copying or use of a computer Revised Inspection rating of branches
programme attracts penalty under the Copy Right
To make the rating system more compre-
Act which may include imprisonment of 7 days to
hensive and meaningful, the report on Inspection
3 years or a fine of Rs.50,000 to Rs.2,00,000. To
rating of branches has been revised and furnished
avoid such penalties, we should purchase and use
as Annexure-1 to the circular. Guidelines to
only the authorised original software. Software
Inspectors on rating of branches are set out in
purchased should be used in only one system and
not copied in other systems without prior written Annexure-2 of the circular. The format enables
consent of the software manufacturer/publisher. branches to focus on key functional areas and
Copied softwares may also carry viruses which provides the controlling offices with a qualitative
may destroy valuable data and hard disk. profile of each branch for more effective control
and follow-up.
All PC users in our bank are advised to
The marks allotted to various parameters in
verify and ensure that the software used by them is
supported by the relevant licence/certificate apart the rating chart aggregate to a maximum of 1000
from the safe custody of the manual and media, if and the total marks will be converted to a percent-
any, supplied at the time of purchase. All PC users age point. Branches will be graded based on the
are advised to strictly follow the above percentage scored by them as follows :
instructions, as otherwise, they will be subjected to 80% and above Very Good
not only penal action but also departmental action.
60% and above but below 80% Good
(GENL.4/97-98 dt.10.04.97)
50% and above but below 60% Satisfactory
40% and above but below 50% Unsatisfactory
Below 40% Poor

Irrespective of the percentage, a branch will

be graded poor, if any major fraud or

10
 Volume 10 Issue 1 April - June 1997

embezzlement involving act of providing improved and quality service to them.

commission/omission by staff is detected during Strategies in this regard should be discussed in the
the review period of current rating. The authority Joint Customer Service Committee Meetings and
inspecting the branch will award marks based on implemented. While the feed back on quality of
his observations and the same will be vetted by customer service at select branches has been
encouraging, it is desired that customers of the
ZAC or by HO: Inspection department. The exist-
bank express similar feelings about all the
ing procedure of deputing on officer/Executive branches of the Bank.
above the scale of the branch manager concerned
stands withdrawn. The Bank’s image can be further enhanced
through our participation in Community Develop-
Branch managements may convene staff ment Programmes and social service activities.
meet for discussing the new system and familiarise The concept of ‘Social Circles’ may be used
all staff members about the specific functional towards this end.
areas to be evaluated under the rating exercise
besides motivating them to put in their best efforts Our mission is to turn our Bank into a
for accomplishing an excellent rating. ‘Profit making Bank with Growth and Glory’
and this can be achieved only by rendering
(GENL.6/97-98 dt.15.04.97) ‘customer service with a smile’. Besides extending
pleasant, courteous and efficient counter service
we should also adopt other strategies which
Agenda of Joint Customer Service Committee
include aggressive marketing of Bank’s
Meetings services/products through door to door campaigns,
The scope of the above committee may personal visits to institutions of major business
henceforth cover the following also. clients, etc. Our ultimate aim is to enhance the
image and business of the bank.
1. Resource mobilisation - canvassing low cost
deposits, long term deposits, etc. (MD/ED.1/97-98 dt.07.04.97)
2. NPA Recovery - Bringing down NPA to the
desired level. Appointment of Shri A G Joshi as Executive
Director of our Bank
(GENL.16/97-98 dt.08.05.97)
Shri A G Joshi has assumed charge as
Procedure for imposing penalty on loss of Executive Director of our Bank on 28.05.97
token (MD/ED.2/97-98 dt.28.05.97)
It has been decided that in the event of loss
of a token issued to a party, a penalty of Rs.25 Deposit Mobilisation - Educational/Academic
shall be recovered from him. However, before Institutions as potential source
recovering the penalty, the party may be requested
to make a complete search on his person and Due to rise in living standards and techno-
belongings to ensure that the token has indeed been logical developments, the cost of education has
lost. Penalty once recovered will not be refunded gone up resulting in heavy flow of funds to
under any circumstances. educational/academic institutions. The collection
of fees for a full term is made in advance and this
(GENL.23/97-98 dt.28.05.97) is precisely the time for us to cash in this opportu-
nity by establishing good rapport with potential
institutions such as professional/technical institu-
MD/ED tions, colleges, schools and universities.
All members of staff are exhorted to put in
Good customer service - key to Business
their best of efforts in identifying and establishing
Development rapport with such institutions for getting their
During 1996-97, the bank had performed business and after securing the business ensure that
creditably in aggregate domestic deposits which the goodwill generated remains intact. RMs/ZMs
increased by Rs.1251 crores thanks to the should ensure that no potential centre/institute in
co-operation and support of our customers. It is their area of operation is left unapproached.
the duty of each and every one of us to reciprocate
the faith reposed in the bank by the customers by (MD/ED 3/97-98 dt.24.06.97)

11
 Volume 10 Issue 2 July - Sep 1997

Deposits make a random verification for adherence to the

Recollect
above guidelines during their branch visits.
Interest rates on domestic, NRE and
NR-NR-RDS (DEP.15/97-98 dt.09.08.97)

W.e.f. 26.6.97, the interest rates on

i. domestic term deposits will be as follows: Advances
Period of Deposit Interest Rate % p.a Standard format of Recall Notice
30 days to 45 days 6.00 It has been decided that prior to issuing
legal notice, a recall notice should be sent to
46 days to 179 days 7.00 borrowers/guarantors. A standard format of the
180 days to 1 year 8.00 recall notice is enclosed to the circular. The
format could be used as a model to draft recall
Over 1 year to 2 years 11.00
notice on a case to case basis, in consultation with
Over 2 years to 3 years 11.50 bank’s approved lawyer. The recall notice should
Over 3 years 12.00
be issued only after
i. getting the approval of competent authority
The above rates are also applicable to
deposits accepted under Capital Gains Scheme. ii. verifying the facts and figures
ii. NRE term deposits will be as follows: iii. ensuring the correctness/enforceability of
documents.
Period of Deposit Interest Rate % p.a If criminal action is also proposed, an
6 months to 1 year 8.00 additional para should be included in consultation
with the lawyer. For any further clarification, HO:
Over 1 year to 3 years 12.00 Legal Department may be contacted.
Over 3 years 12.50
(ADV.37/97 dt.01.07.97)
iii. W.e.f. 23.07.97, the interest rate on NRNR
term deposits of 6 months and above upto 3 years Declaration from borrowers about their
stands revised as 13.5% p.a. relatives employed in our bank
In all the cases, the revised rates would be In partial modification of the existing
applicable only to fresh deposits and on renewal of instructions, it has been decided that at the time of
maturing deposits. receiving a credit proposal, a declaration should be
obtained from the borrowers about their relatives,
(DEP.14/97-98 dt.16.07.97)
if any, employed in the bank, whether as officer or
award staff. A format of the declaration is
Opening, maintenance and monitoring of enclosed to the circular, which may be used in
Savings Bank Accounts of staff members substitution of Annexure III of the booklet on
The Audit Committee of our Board had discretionary powers.
directed that the existing guidelines in regard to
(ADV.42/97-98 dt.16.07.97)
the above be reiterated for strict observance. The
Committee has also directed as follows :
Reduction of Interest rates on Post-shipment
1. Staff accounts should necessarily be Rupee Export Credit
segregated in separate ledgers so as to enable
closer scrutiny of the operations in such accounts RBI has informed that w.e.f. 26.6.97, the
irrespective of the number of such accounts. interest rate on post-shipment rupee export credit
on demand bills for transit period and usance bills
2. A critical scrutiny of daily transactions in for total period upto 90 days is changed as ‘not
staff accounts may be ensured as stipulated in the exceeding 12% p.a.’ and that on usance bills for
guidelines. total period beyond 90 days and upto 6 months
Branches are advised to ensure strict from the date of shipment is reduced to 14% p.a.
compliance of the above instructions. Inspectors In our bank, the rates have been revised as 12%
should verify this aspect and observe the devia- and 14% respectively w.e.f. 26.06.97.
tions if any in their reports. RMs/ZMs should
(ADV.43/97-98 dt.29.07.97)
PDF-1997-2Q

1
 Volume 10 Issue 2 Apl - June 1997

Lending arrangements under consortium - Such loans should be treated as bank’s

Level of participation investment in shares and hence would come under
the ceiling of 5% of incremental deposits of the
The level of participation in consortium previous year.
accounts coming under HO powers is modified as
follows: No loan should be sanctioned against partly
paid shares.
I. Accounts with limit/balance of Rs.25 crores and
above : Our Board has stipulated margin as 40%
1.
and repayment period as maximum of one year. It
Meeting requiring Policy decisions/ assessment of
may be noted that such advances are subject to
limits
credit regulatory measures in force from time to
Leader GM of the respective Department at HO time.
along with ZM
Member ZM alongwith AGM of HO of respective (ADV.53/97-98 dt.14.08.97)
credit desk/AGM (ZO)/
AGM(Region)/AGM(Branch) Credit Rating system for borrowal accounts
2. Review meetings
The existing parameters for credit rating
Leader ZM and the guidelines governing the procedures for
Member AGM(ZO)/AGM (Region)/AGM (Branch) rating have been fine-tuned. The salient features of
II. For accounts with limit/balance of less than Rs.25 the modifications made are as follows :
crores 1. Rating to be used not only for deciding on
1 Meeting requiring policy decisions/ assessment of finer rate but also for effective appraisal of the
limits account/borrowers of over Rs.2.00 lakhs category.
Leader ZM alongwith AGM (Region)/
2. The marks should not be disclosed to
AGM(HO)/AGM(Branch)
borrowers
Member ZM (Other than GMs) alongwith CM of the
branch and Senior Officer from the respec- 3. Credit Risk Monitoring Cell (CRMC) at
tive credit desk at HO/ZO/RO Head Office will place industries in low, moderate
2. Review Meetings or high risk categories and award appropriate
marks against industry risk.
Leader AGM(ZO)/AGM(RO)/CM of the branch
where there is no AGM 4. Broad parameters for rating to cover
Member CM (Branch)/CMs(Credit) at ZO and RO a. Managerial risk
In respect of problem accounts where we b. Industry risk
are the leader and our exposure is over Rs.10 c. Financial parameters to include ratio of
crores, if need be, GM from HO to attend. The TOL to TNW
circular also gives additional directions to be
complied with in respect of all consortium d. Security/documentation
accounts. The above directions supercede all the e. Operational aspects including reports of
earlier guidelines governing participation/ repre- servicing of interest on working capital advances,
sentation at consortium meetings. recovery of interest/instalments of term loans/
DPG, FB and NFB business, compliance of stock
(ADV.52/97-98 dt.13.08.97) audit/Inspection, etc.

Advances against Shares 5. The marks for the parameters have been
suitably adjusted to accommodate the above
RBI has now directed that banks may extend change.
loans to corporates to meet promoter’s contribu-
tion to the equity of new companies in anticipation In the revised system 17 parameters have
of raising resources subject to the following : been suggested and a maximum of 100 points are
assigned as detailed in the annexure to the
i. banks to determine margin and repayment circular. For the rating chart and the guidelines on
period computing of finer rates of interest, authority to
ii. genuineness and marketability of shares sanction finer rates of interest, etc., the circular
offered to be ascertained may be referred to.

iii. compliance with Sec.19(2) of BR Act 1949. (ADV.54/97-98 dt.18.08.97)

2
 Volume 10 Issue 2 Apl - June 1997

Financing of Small Scale Industries v. The account shows healthy fluctuations and
turnover
RBI has informed the decisions taken by the
High powered Standing Advisory Committee to All others to be subjected to inspection
review flow of credit to SSI Sector as follows : 3. The order of priority for inspection of units
1. Banks to ensure that out of funds available may be drawn as follows:
to all segments of SSI Sector, 40% is made avail- i. Accounts which do not show healthy signs
able for units with investment in plant and machin- of operation and the submission of stock
ery upto Rs.5 lakhs, 20% for units with investment statements and other financial data are
between Rs.5 lakhs and Rs.25 lakhs and the irregular
remaining 40% for other SSI units.
ii. Accounts with healthy operations
2. Simplified turn over method to be followed
for sanction of working capital limits upto Rs.2 iii. Consortium advances
crores. 4. For outstation units/assets, Zonal Manager
3. Time norms prescribed for disposal of may be requested to arrange for inspection by the
applications to be adhered to. nearest branch
4. Modalities for taking credit decisions to be 5. Duplication of unit visits by branch officials
examined and a monitoring mechanism to be put in and concurrent auditors to be avoided. The
place [In our Bank, the mechanism is already in element of surprise is to be kept up. Unit visits by
place by way of submission of ‘Monthly return on concurrent auditors should not be undertaken on
disposal of applications’ (AUM -2)] their own, without being accompanied by branch
official.
5. In branches with specialisation/ concentra-
tion of SSI accounts, attention need to be bestowed 6. Proper records of unit visits/inspec-
on attitudinal change in the mind-set of staff, train- tion should be maintained.
ing, etc., to ensure their improved functioning.
(ADV.63/97-98 dt.19.09.97)
6. Grievances redressal machinery at control-
ling offices to be reactivated. [Zonal offices have Scheme of educational loan to students in
‘Advisory and Grievances Committee’ for this
purpose]
Medical/Dental courses in private professional
college
(ADV.59/97-98 dt.08.09.97) It was earlier communicated that the above
scheme will continue for the academic year
Unit visits by concurrent auditors 1996-97 also (vide circular ADV.34/97-98
dt.26.06.97). Now RBI has advised that the
The following clarifications are given on scheme would continue to be operative until it is
the above subject. modified/withdrawn. It has further been clarified
1. Based on existing parameters for that interest @4.25% is to be charged only for
verification/inspection of assets, the following advances granted during 1995-96. For advances
order of priority may be adopted : sanctioned subsequently, interest is to be charged
as per HO:CPGD circular issued from time to
i. All OCC/KCC godowns time.
ii. Plant/Machinery/Vehicles hypothecated/
pledged for Term Loans (ADV.66/97-98 dt.22.09.97)

iii. Inspection of other assets charged to the Methodology of assessment of working capital
Bank as primary/collateral security
requirements for our borrowers-Revision of
2. Where number of advance accounts of Policy
Rs.10 lakhs and above is high, the possible excep-
tions could be accounts in respect of which The policy and guidelines for assessment of
working capital requirements have been revised
i. stock statements are submitted regularly based on a report submitted by Shri R Viswana-
ii. QIS statements submitted regularly and in than, an eminent banker and consultant. A copy of
time his report alongwith a set of illustrations for
assessment of working capital limits under Turn
iii. drawings are within the Drawing Limit over method and revised formula of Short Term
iv. Interest is serviced regularly; and, Bank Credit are enclosed to the circular. Some of

3
 Volume 10 Issue 2 Apl - June 1997

the salient features of the Revised system are given Refinance - Revision in composite Loan
below : Scheme
1. Turn over method to be adopted for fund SIDBI has revised the scheme w.e.f.
based limits upto Rs.2 crores (except 1.9.97, in terms of which the ceiling amount under
traders). composite loan scheme has been increased from
2. A holding level of about 5 months (45%) Rs.50000 to Rs.2 lakhs. The scheme will cover
fixed for current assets. For specific indus- village and cottage Industries as also small scale
1
tries it will be 4 months (33 3 % of gross industries in the Tiny Sector located in areas other
than metros. The location criteria is not applicable
sales) or projected current assets whichever to artisans. SIDBI will extend 100% refinance
is less. under the scheme. Detailed guidelines on the
3. Margin on LCs/Guarantees are proposed to revised scheme are furnished in the annexure to
be included as current assets. the circular.
4. Current liabilities to include annual matur- (ADV.68/97-98 dt.23.09.97)
ing term liabilities.
5. Current ratio to be at least 1.20 including Credit Information System
annual maturing term liabilities and at least
The Credit Information System has been
1.33 excluding such liabilities.
revised and the salient features of the revised
6. No distinction as to pre-sale or post-sale system are as follows :
facility although sub-ceilings may be fixed.
i. Branches are to submit CIS Advance Regis-
7. No distinction of unpaid and paid for ter on fortnightly basis.
stocks.
ii. The formats of CIS Advances Register,
8. Introduction of pre-release audit. Balances Register, Changes Register,
Accounts Register, etc. have been
9. New norms of financial prescribed are
re-designed to reduce the work load of
i. Acceptable level of TOL/TNW can be 3 branches.
except in special cases like NBFC
iii. The revisions will facilitate Zonal EDP to
ii. Current ratio of atleast 1.20/1.33 as the generate LBR 2 returns and DCB
case may be statements.
iii. Interest coverage ratio to be atleast twice iv. The revision in coding system will facilitate
the interest to be serviced the obtention of up-to-date feed back on
recovery performance.
iv. Borrower’s operations result in net profit
every year Branches are to use the revised formats with
effect from 1.10.97. The major changes in the
For detailed guidelines, the circular may be
revised booklet are furnished in the circular.
referred to.
The revised booklets are being sent to all
(ADV.67/97-98 dt.23.09.97) branches by HO: Stationery Department. Branches
are required to ensure timely submission of error
free data.

(ADV.69/97-98 dt.24.09.97)

Rectification of Documentation irregularities

Our Board has observed that a specific
Action Plan is necessary for rectification of irregu-
larities pointed in various Inspection Reports. The
Board has further directed that all documentation
irregularities should be rectified and confirmed to
controlling offices and that in respect of enhance-
ments or fresh sanctions of advances, any release
can be made only after
i. documentation is completed and

4
 Volume 10 Issue 2 Apl - June 1997

ii. informing the sanctioning authority of the staff only after complying with all the terms and
same and obtaining his prior permission for conditions stipulated for acceptance of resignation/
the release. voluntary retirement.
Branches are advised to strictly comply with (PRNL.32/97-98 dt.15.07.97)
the directions of the Board.

(ADV.72/97-98 dt.29.09.97) Staff Housing Loan Scheme to award staff

W.e.f. 3.5.97, the Staff Housing Loan
scheme for award staff members has been
Personnel modified as follows:
Resignation/voluntary retirement Quantum : Rs.2 lakhs for substaff and Rs.3 lakhs
for clerical staff
Staff members who intend to resign or
voluntarily retire from the services of the bank For enlarging accommodation of existing
should submit notice in the format enclosed to the house (not acquired under SHL) the amount admis-
circular. In case of voluntary retirement, the sible is 50 times the monthly pay including special
notice should be accompanied by a xerox copy of allowance ranking for PF or Rs.60,000 whichever
the acknowledgement from HO:Personnel accept- is less.
ing the pension option exercised earlier.
Interest : @5% simple interest upto Rs.1.10 lakhs
The staff members should also give uncon- and @ 11% simple interest for above Rs.1.10
ditional undertaking letters to the Trustees of PF lakhs.
and Gratuity fund for adjusting their direct/indirect
For other information regarding eligibility,
liabilities from the proceeds of terminal benefits.
repayment period, etc. the circular may be
On receipt of the notice of resignation/ referred to.
voluntary retirement, branches/offices where the
staff is working should forward the notice to the (PRNL.35/97-98 dt.11.08.97)
respective Zonal Manager/Controlling authority on
the same day of receipt. Indian Bank (Officers’) Service Regulations,
The details of leave/absence should be 1979 - Loan for purchase/construction of
furnished to the leave sanctioning authority. While house
forwarding the notice, the following should be Regulation 28 of Officers’ Service Regula-
ensured : tions, 1979 has been amended with effect from
i. Furnishing of particulars of liabilities of the 3.5.97. In terms of the amendment, the amount of
staff house building advance for officers is increased to
a maximum of Rs.5 lakhs irrespective of their
ii. Submission of undertaking letter by the staff scale. The rate of interest is as follows :
member to the Trustees of PF as referred
above. Upto Rs.1.10 lakhs 5% p.a. simple
In case of resignation of officers and volun- Above Rs.1.10 lakhs 11% p.a. simple
tary retirement by employees/officers, a copy of The above modifications are applicable to
the forwarding letter should be sent to DGM (PL) officers who have not availed SHL so far. Besides
and CMD’s Secretariat. enumerating the other terms and conditions of the
In case of resignation by award staff, ZM modified scheme, the circular also gives in detail
should take a decision within the stipulated time the guidelines on sanction of additional housing
after ensuring that there is no DP pending against loan and the guidelines on the continuance of the
the staff. existing facility for purchase of a new house after
disposing of the existing house acquired under
ZM (wherever the same is not within his SHL.
purview)/Controlling authority should forward the
notice along with specific recommendations to (PRNL.36/97-98 dt.11.08.97)
HO:Personnel Department on the same day of
receipt from branch/office. DP clearance should
be given for Officers in Scale I & II.
Request by staff to continue the liability
after resignation/voluntary retirement will not be
considered. Branches/offices should relieve the

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 Volume 10 Issue 2 Apl - June 1997

CRA Arrangement with SBI for honouring travellers

cheques
Caution Deposit for lockers
The existing arrangement with SBI for
It has been decided to seek caution deposit honouring travellers cheques at par on a reciprocal
from locker hirers, the interest on which would basis is discontinued with immediate effect.
take care of the payment of the rent on lockers. Branches may, if the customer so desires, take
The objective in introducing the system is to such cheques for collection/purchase subject to the
enable the bank to take care of the recovery of the recovery of the appropriate charges, provided such
locker rents on the due dates and to compensate instruments are otherwise in order.
the bank adequately for incidental expenses likely
to be incurred in the event of breaking open the (CRA 24/97-98 dt.25.09.97)
locker.
The introduction of caution deposit will do FX
away with the existing system of collection of key
deposit of Rs.250. Staff members are exempted Extension of concessive credit for deemed
from making the caution deposit although the exports
exemption is available only for one locker per staff
at a time. RBI has informed that effective from 5.7.97
banks may extend pre-shipment credit and post
The procedure for acceptance of caution supply credit (for a maximum period of 30 days or
deposit for allotment of lockers/continuance of upto the actual date of payment by the receiver of
existing locker facilities is given in Annexure I to goods, whichever is earlier) to all categories of
the circular. supply of goods regarded as deemed exports at
concessional rates of interest. Banks would also be
(CRA 17/97-98 dt.11.07.97)
eligible for refinance from RBI for such credit
extended both at pre-shipment and post supply
Handing over keys of surrendered lockers in a stages.
sealed condition to subsequent hirer
(FX.10/97-98 dt.30.08.97)
As per existing guidelines, keys of all
surrendered lockers must be placed at once in a
separate envelope and sealed by the officer-in- Prudential writing off of bad debts in ECGC
charge of locker department in the presence of the claim paid accounts
branch manager and kept along with other keys in As per the existing guidelines branches are
the cupboard inside the strong room. Further, expected to keep the claim amounts received from
when a locker is vacated by the party, the branch ECGC in ‘Claims Reimbursed by ECGC’ account
should get the lock of the locker changed by the and pursue recovery efforts against the exporters
manufacturer by interchanging the lock with concerned for the full amount of dues inclusive of
another vacant locker. It has now been decided the claims paid. Such claim amounts can be set off
that the changed keys should also be sealed in the against the dues only after the bank treats the
manner as instructed above, after noting the new amounts due from the exporters concerned as
numbers in the locker key register and that these irrecoverable and write-off the same after obtain-
keys should be handed over to the subsequent ing the prior approval of ECGC. ECGC has now
hirers only in a sealed condition. decided to let banks to exercise the option of
write-off in such cases without prior reference to
(CRA 22/97-98 dt.17.09.97)
them, subject however to the fulfillment of certain
conditions. These conditions are enumerated in the
circular.

(FX.11/97-98 dt.08.09.97)

General
IBA survey on customer service in banks
IBA survey on customer service in banks
covered 27 banks in 6 regions. The total number
of bank branches surveyed was 2553 of which the

6
 Volume 10 Issue 2 Apl - June 1997

number of our bank’s branches was 90. Our It is distressing to note that the laid down
branches in northern, eastern and central sectors norms and procedures are flouted frequently
did not score better than Grade B. However, it is resulting in frauds and loss of money. Some frauds
gratifying that we have not gone below Grade B, reported recently include
in any sector. No complacency is justifiable on this
1. permitting as a matter of routine withdrawal
score as 16 other banks have done well of which
against uncleared effects
10 have been rated better than our bank. Branches
are exhorted to gear up their across-the-counter 2. unusual operations in staff accounts
service especially in the area of personal banking
3. non-adherence to norms in the opening of
which alone would improve the core deposits of
new accounts and monitoring operations
the bank. The Joint Customer Service Committee
therein
should strive to improve the efficiency of service
rendered by identifying the causes of delay, if any, 4. opening of deposit accounts in fictitious
in day to day operations. names, failure to verify receipt of consid-
eration by the bank/signatures, etc.
(GENL.38/97-98 dt.11.07.97)
5. failure to reconcile operations in bank
accounts, NOSTRO accounts.
Numbering of computers and peripherals
6. allowing TODs, etc. without proper credit
As per the present guidelines all the assets assessment
at branches/offices are to be serially numbered and
entered in the SFVM Register. However in respect 7. failure to follow up long pending BPs,
of computers there is a need for spelling out the failure to return unpaid bills within reason-
numbering pattern in specific terms as the able time, etc.
computer is a general broad term. PCs, file 8. non-compliance of terms and conditions
servers, work stations, diskless nodes, ALPMs, governing sanction of at par facilities
printers, scanners, etc. are classified as computers
and the numbering pattern should enable identifi- 9. indiscriminate debits to nominal accounts
cation of these different items separately. The without proper authority
procedure for numbering computer items including All officials of the bank are exhorted to
the abbreviations to be used, the procedure for
adhere scrupulously to the systems and procedures
addition or transfer of nodes and the reporting
system are given in detail in the circular. prescribed by the bank. Deviations resulting in
frauds would be viewed seriously.
(GENL.40/97/98 dt.22.07.97)
(GENL.53/97-98 dt.10.09.97)
Non-observance of systems and procedures -
sharpening of perceptions on preventive Improving non-interest income
vigilance The process of interest rate deregulation has
resulted in shrinkage of spread in fund based
Achieving a turnaround for our bank lies
activities. However the banking sector reforms
not only in improving our core deposit, credit
have led to the emergence of new types of services
discipline, reduction of NPAs, etc. but also in
having high potential for earning non-interest
averting the frauds perpetrated on the bank. Our
income. A comparative position of our bank vis-a-
endeavour in this regard should be preventive than
vis a few other banks with regard to the share of
being corrective. It is observed that frauds occur
non-interest income as a percentage of total
mostly in the following areas.
income and the coverage of other income over
i. Cash and bank balance management employee expenses is given in the circular. There
is a visible shift in favour of fee-based services
ii. Monitoring the newly opened accounts and
with a view to augment non-interest income. Many
inoperative accounts
of the fee based services also offer excellent cost
iii. Bills free float fund benefit to the bank.
iv. Use of discretionary powers Further good and prompt service rendered
will enhance the goodwill among the public which
v. Control over expenditure
in turn will bring in large number of new custom-
vi. Maintenance of nominal accounts ers to our fold. It is observed that the bank’s share
of such float funds is slowly coming down and
there is an urgent need to arrest the decline and

7
 Volume 10 Issue 2 Apl - June 1997

ensure that our share of float funds goes up to 6% Towards better business performance
from the present level of 4% by 31.3.98. Individ-
ual branches are to record a growth rate of not less There has been substantial progress in the
than 50% in their turnover of remittance, bills, mobilisation of core deposits during the first 5
Government Transactions and payments. months of this year. During this period core depos-
its grow by 5.9% or Rs.669 crores as against the
(GENL.58/97-98 dt.26.09.97) target of Rs.1625 crores set for the entire year.
However, the growth in deposit is not significant
when compared to that of all scheduled commer-
ED/MD cial banks. The increase in deposits as recorded by
many of the banks of comparable size or even
smaller ones has been much higher both quantum-
Improvements desired in deposits, recovery of
wise and percentage-wise.
NPAs etc.,
Branches are advised to adopt various
It has been reported that ‘the stoppage of strategies for increasing the core deposits. The
lending activity is forcing our good borrowal ratio of term, Savings, Current deposits to total
accounts to shift to other banks’. In this regard it is deposits has been projected at 68.5%, 20.9% and
clarified that several steps have been taken by the 10.6% respectively as on 31.3.98. Accordingly,
bank to retain its good borrowal accounts. branches in urban and metropolitan centres should
Our bank has taken a lead in formulating mobilise more number of savings and current
the revised method for assessment of working account deposits. Rural and semi-urban branches
capital needs of borrowers and credit rating may adopt the policy of ‘one bank account for
parameters have been overhauled. We have done every household’. Increase of fee-based business
well in lending to priority sector. However the and selective expansion of quality assets should
recovery rates are rather poor and need substantial also be endeavoured. Uniform growth in deposits
improvement. An improved recovery performance should be ensured throughout the remaining part of
together with an increase in core deposits will the year. Any resort to window dressing will be
alone make it possible for the bank to lend further. viewed seriously.
Credit appraisal skills also need to be improved. Our performance in the last year has been
The prime need of the hour is to increase creditable with regard to recovery of NPAs which
core deposits, canvass new deposit accounts, amounted to Rs.407 crores. The recovery made so
develop further on the existing good image of the far this year is around Rs.100 crores as against the
bank and continue to earn the customers’ loyalty target of Rs.470 crores. Field level functionaries
and trust for the bank. Further efforts should also should make all out efforts in improving the bank’s
be focussed on recovery of NPAs. performance in the recovery of NPAs. Further
greater attention should be given to the key aspects
Branches are asked to bring to the knowl- which include quality customer service, proper
edge of CMD of any genuine credit requirements housekeeping, prevention of frauds, containment
being denied to well conducted borrowal accounts of wasteful expenditure and better human resource
so that it will be possible to take necessary rectifi- management. All staff members are requested to
catory steps. extend their whole hearted support and
(MD/ED.5/97-98 dt.26.08.97)
co-operation in the reaching and surpassing of our
deposit target besides bringing about significant
improvement in other key functional areas.

(MD/ED.6/97-98 dt.15.09.97)

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 Volume 10 Issue 3 Oct- Dec 1997

Deposits exempted from the above provision. For SB

Recollect
accounts of pensioners (where pension drawing
Interest rates on Domestic, Capital Gains, NRE arrangement exists) and students (subject to
and NRNRRDS production of certificate from the educational insti-
tution), the minimum balance prescription shall be
Domestic Term Deposits and Capital Gains Rs.250/- for accounts with cheque facility and
Scheme Rs.100/- for accounts without cheque facility. The
revised norms come into effect from 1.1.98.
Duration Int.Rate % p.a
Where the balance falls below the stipulated
30 days to 179 days 6.00 minimum, a service charge of Rs.5 shall be levied
on each occasion.
180 days to one year 8.00
Over one year to 2 years 10.50 (DEP.19/97-98 dt.04.11.97)

Over 2 years to 3 years 11.00

Mobilisation of Resources - Certificate of
Over 3 years 11.50 Deposits (CDs)
NRE Term Deposits RBI has announced that the minimum size of
certificate of deposits that can be issued to a single
6 months and above upto 1 year 8.00
investor has been reduced from the existing Rs.10
Over 1 year to 3 years 10.50 lakhs to Rs.5 lakhs. CDs above Rs.5 lakhs will be
in multiples of Rs.1 lakh. The amount relates to
Over 3 years 11.50
the face value i.e. maturity value of CDs issued.
NR NR Term Deposits All other terms and conditions relating to issue of
CDs by banks remain unchanged. Since interest
6 months and above upto 1 year 11.00
rates on CDs vary almost on daily basis, prior
Over 1 year to 3 years 12.00 permission of Central Office should be obtained in
this regard before issuing CDs.
(DEP.18/97-98 dt.04.11.97)
(DEP.20/97-98 dt.06.11.97)

Minimum balance in SB & Current Accounts

Issue of large number of cheque books to
It has been decided to revise the prescrip- customers
tion of minimum balance in SB and current
account. For this purpose, branches are classified RBI has observed that some companies issue
into three categories viz., post dated cheques ranging from 1-25 years to
their investors under various schemes. It is likely
1. Computerised branches. that gullible investors are made to believe the
2. Non-computerised branches in metro and assured repayment of their investments due to the
urban centres. bank’s name appearing on the cheques. Hence
banks are required to make sure that any unusually
3. Non-computerised branches in semi-urban large demand by any account holder is for genuine
and rural centres. short term business requirements. Banking facili-
For each category, the initial ties should not be allowed to be misused by any
deposit/minimum balance maintained shall be as constituent for mobilising resources by giving
follows: people a false sense of assurance through issue of
such long duration post dated cheques. Apart from
Non-computerised complying with the instructions contained in para
Compute
Nature of Account rised
branches 22 of chapter 4 of the Manual of Instructions -
branches Metro / S. U./ Deposits, branches are also advised to be cautious
Urban Rural in dealing with request of the account holders,
Current Account Rs.5000 Rs.3000 Rs.1000 especially corporate clients, for issue of large
SB Account with number of cheque books. Need based requests
Rs. 500 Rs. 500 Rs. 500
cheque facility alone are to be acceded to in strict conformity with
SB account without the procedures laid down.
Rs. 250 Rs. 250 Rs. 100
cheque facility
(DEP.21/97-98 dt.10.11.97)
Current accounts opened by Govt depart-
ments for disbursement of employees’ salaries are PDF-1997-3Q

1
 Volume 10 Issue 3 Oct- Dec 1997

Balancing of Books of Accounts income of lending institutions has been reduced

from 3% to 2% on chargeable interest accruing or
Branches are aware that proper and timely arising after 31.3.97. Hence, w.e.f. 1.4.97
balancing of books of accounts is one of the prime branches are instructed to charge interest tax at
functions of a prudent banker. Instructions in this 2% as per the chart enclosed to the circular. The
regard are available in Chapter 4 page 4.64 of the excess interest tax of 1% charged from 1.4.97
Manual of Instructions - Deposits. The need for shall be adjusted out of the future interest tax to be
timely balancing of books has been emphasised by levied. For other salient features of interest tax,
various authorities from time to time. Branch the circular may be referred to.
managers are exhorted to strictly adhere to the
periodicity prescribed for balancing of books. In (ADV.73/97-98 dt.03.10.97)
addition, the following points are reiterated.
Ÿ Proper job allocation among award Purchase of cheques from Third parties and
staff/officers has to be ensured allowing TODs
Ÿ Due care should be given to ensure In modification of the guidelines contained
adequate preventive vigilance methods such in Chapter 10 - Para 16 of the Manual on Conven-
as allocating balancing of books to persons tional Advances and CPGD circular ADV.118/89
who do not handle the ledgers and the same dt.6.7.89 - Para 31, page 21 of Discretionary
persons are not allotted the same books Powers booklet, it has been decided as under :
continuously to the extent possible
i. To stop exercise of discretionary powers for
Ÿ Wherever subsidiary General Ledger is purchase of cheques from third parties, other than
maintained, they should be posted/checked those authorised under Customer Service Cell
on daily basis and also balanced Circular CRA/30/92-93 dated 23.03.93 - upto
periodically Rs.5000/- (Rupees Five thousand only) and under
Ÿ The balance books on adjustment should be regular limits sanctioned to the parties
properly inked and authenticated ii. No discretion shall be exercised to permit
Ÿ All balance books should be kept under lock TODs.
and key The above instructions were communicated
Ÿ Wherever any rectification voucher is to ZMs on 23.9.97 for advising branches under
passed it should be duly recorded and their control to ensure strict compliance.
properly authorised (ADV.74/97-98 dt.07.10.97)
(DEP.23/97-98 dt.26.11.97)
Methodology of Assessment of Working
Minimum balance in SB and Current accounts Capital requirements
Further to the circular Dep.19/97-98 Further to circular ADV.67/97-98 dt.
dt.4.11.97, it has been decided that branches with 23.9.97 on the above subject, the cut-off limit for
partial computerisation and ALPMs will be pre-release audit has been fixed at Rs.5 crore.
grouped under non-computerised category. Branches/offices are advised to ensure obtention of
Further, Savings Bank accounts of Staff members prior approval of controlling authorities for
in which staff salaries are credited are exempted documentation and compliance of terms and condi-
from the prescription of minimum balance. In tions of sanction before release of any facility in
respect of all inoperative Current Accounts, (viz., respect of advances of Rs.5 crores and above. The
those which are not operated for 2 years and above instructions come into force with immediate
above), where the balance is less than Rs.500, a effect.
service charge of Rs.20 per year shall be levied.
(ADV.76/97-98 dt.13.10.97)
(DEP.25/97-98 dt.19.12.97)
Assets and Liabilities Management - Forma-
Advances tion of Credit Sub-Group
Asset Liability matching and management is
IT Act, 1974 - Reduction of Interest tax with a view to ensure orderly and balanced growth
from 3% to 2% of advances leading to a viable C-D ratio and
In terms of a notification by Government of further to steer clear of Asset Liability
India, the levy of interest tax on the interest mismatches. Individual segments such as

2
 Volume 10 Issue 3 Oct- Dec 1997

industrywise exposure, interest rate movement, crores. For other salient features of the scheme,
deployment of surpluses, etc. will be given the circular may be referred to.
focused attention.
(ADV.80/97-98 dt.15.10.97)
In order to assist the Assets and Liabilities
Committee (ALCO) and to co-ordinate the comple-
mentary functions of Treasury, liabilities and
Definition of Group concept
credit, three sub groups have been formed. The The guidelines for group concept as
credit sub group comprises of GMs concerning provided in the booklet on discretionary powers
Credit, Recovery and Rehabilitation (RR) and have been redefined as under for
AGM(DC) as convenor. The deliberations of
credit sub-group will include a. computation of credit exposure ceiling

a. Forecasting inflow and outflow in credit b. for sanction of credit facilities to group of
portfolio borrowers

b. Undrawn balances in the wholesale credit i. Sole proprietary concerns / firms / compa-
segment and the likely repayments/reduc- nies where the proprietor/ any one partner /
tions therein Director / guarantor is common will be
treated as a group; however in case of
c. Forecasting performance of various indus- public limited companies, if share holding
tries and the desirable exposure to such by the common director and associates is
industries less than 33 1/3% of share capital they need
d. Forecasting movements in interest rates and not be treated as group companies.
recommending suitable structuring of ii. Wherever personal guarantees of directors
advances to maximise yields and managerial personnel of a body corpo-
e. Opportunities available such as refinance/ rate are obtained irrespective of their share
rediscounting, participation, increasing / holding, such body corporate will be treated
downsizing exposures to various industries. as a group of other concerns / firms /
companies in which such directors /
By way of data input to the committee, managerial personnel are interested.
periodical returns on maturity profile of assets and
forecast of interest rate movement of advances iii. An associate will mean a firm where its
have been devised and Zonal Offices have been proprietor / any partner(s) is/are interested
advised to collect the returns from major branches. in another concern/firm. It will also mean
The purpose behind the issue of circular to all an individual / firm / company other than
branches is to impress on them the need for proper public limited company where the individ-
planning and forecast to function effectively and to ual, proprietor, partner(s), director(s) and /
sustain the increasingly competitive environment. or a brother, sister, spouse, son, daughter,
father or mother of the individual pro-
(ADV.77/97-98 dt.14.10.97) prietor / partner(s) / Director(s) is / are
directly / indirectly interested. Between two
associate companies if any one is able to
Priority Sector advances - Special Rural
exercise control on the internal policy and
housing scheme of NHB other matters of the other company or if
In accordance with the announcement made both the companies are directed by an
in the budget speech for 1997-98, NHB has formu- outside common individual/ close relative/
lated a Special Rural Housing Scheme. The objec- associate, then these units may be treated as
tive of the scheme is to enable individuals in rural a group. Joint sector project will not be
areas to build a new house or improve existing treated as an associate company of other
house through access to housing credit. The crite- firms / concerns / companies in which the
ria for Rural area will be that the population does main promoter director of the joint sector
not exceed 50000 as per 1991 census. Credit company is interested.
provided will be upto Rs.2 lakhs for While group concept is applied for sanction-
acquiring/construction of new houses and upto ing of credit facilities to group borrowers, it need
Rs.50000 for upgradation / major repairs. The not be applied for determining the sanction for
scheme is effective from 16.8.97 to 15.8.98. filing suit (in cases where there is no common
Advances granted under the scheme will be security). However, such cases are to be referred
reckoned as Priority Sector advance and will be to MC as to whether suits have to filed in respect
eligible for 100% refinance from NHB. The target
fixed for our Bank is 300 units amounting to Rs.3

3
 Volume 10 Issue 3 Oct- Dec 1997

of all the acounts or only against some accounts in i. The power to sanction filing of suit shall not
the group. be exercised by an authority if the loan was
sanctioned by the same individual
RBI has decided that credit exposure to
borrowers belonging to a group may exceed the ii. RMs according sanctions shall report the
current exposure norm of 50% of the bank’s same to ZMs immediately
capital funds by an additional 10% provided the
iii. Before according sanction, the authority
additional credit exposure is on account of infra-
should satisfy himself that all other possible
structure projects. However there is no change in
steps for recovery have been taken.
the exposure norms of 25% of the bank’s capital
funds in respect of credit exposure to a single Where the sanction is beyond the powers of
borrower. ZMs, the questionnaire shall be forwarded to the
concerned department at Head Office through
(ADV.82/97-98 dt.17.10.97) proper channel.

Sanction of term loans for projects (ADV.92/97-98 dt.28.10.97)

RBI has decided to dispense with the stipula-

tion regarding the ceiling/sub-ceiling on the Reduction of interest rates on Post Shipment
quantum of term loan which can be granted by Rupee Export Credit
banks individually or in consortia/syndicate for a
single project. Accordingly, banks would have the RBI has decided to reduce the interest rates
discretion to sanction term loans to all projects on Post-shipment Rupee Export Credit w.e.f.
within the overall ceiling of the prudential 13.9.97, and the reduced rates are applicable both
exposure norms, prescribed by RBI viz., 25% of for fresh as well as existing advances. RBI has
the capital funds in the case of an individual clarified that where the amount outstanding relates
borrower and 50% in the case of borrower group. to credit originally allowed on an export bill for a
The group exposure norm of 50% can be exceeded total period over 90 days and upto 6 months, the
by 10% provided the additional exposure is revised interest rate of 13% p.a. would apply for
towards financing infrastructural projects viz., the remaining period of the original credit. The
power, telecom, roads and ports. Banks would be interest rate to be charged in our bank on export
free to decide the period of term loans keeping in credit w.e.f. 13.9.97 is furnished in the annexure
view the maturity profile of their liabilities. Other to the circular.
terms and conditions laid down in ADV.115/94-95
and ADV.126/95-96 for sanction of term loans (ADV.94/97-98 dt.06.11.97)
would continue.
Fast Track - Quicker Assessment and sanction
(ADV.84/97-98 dt.18.10.97) of credit facilities
Fast track system for quicker assessment
and sanction of credit facilities has been intro-
Delegation of powers to sanction filing of suits duced as a strategy of marketing for standard
and initiation of recovery proceedings corporate accounts. The eligibility criteria include,
The powers delegated to various authorities a. Accounts of Public Limited Companies
to sanction filing of suits and initiations of recov- which are standard asset as on 31.3.97 and with
ery proceedings are given below : fund based and non-fund based limit of Rs.5 Crore
and above
(Amount in Rs. in lakhs)
b. Accounts in specialised/designated branches
Authority Limit which report directly to Zonal Office.
CMD/EC(C) Without limit Accounts under Fast Track will be brought
ED 75.00 under joint appraisal by branch, Zonal Office and
Head Office in case of Chennai Zone and by
GMs in charge of credit at branch and Zonal Office in other Zones. In any
25.00
HO/GM, New Delhi case, the joint appraisal shall be initiated by ZM
ZMs/DGM in Scale VI 15.00 and completed and sent to the credit desk, at HO
within 15 days of receipt of the applications at the
ZMs & RMs in Scale V 7.50 branch in a cover marked ‘Under Fast Track
RMs in Scale IV 1.00 System’. In case of Zones other than Chennai,

4
 Volume 10 Issue 3 Oct- Dec 1997

before commencing joint appraisal, a copy of the interest tax) and a separate prime term lending rate
proposal shall be sent to Head office. at 12.75% (exclusive of interest tax) fixed for term
loans of 3 years and above. The above rates are
The approach would be to avoid repetition
effective from 3.11.97. The maximum spread over
of data/observation already covered by ZO. The
PLR and PTLR will continue to be at 4% for all
over all time frame for decision taking will be 30
advances/term loans of over Rs.2 lakhs except for
days. The joint appraisal team shall include (i)
categories already communicated vide circular
Branch Manager, (ii) AGM (Credit) at Zonal
ADV.17/97-98. Further, effective from 22.10.97,
Office (and desk officer of Head Office for
interest rates on certain categories of advances
Chennai Zone). Party shall be called for discussion
have been revised and for details of the revision,
to get additional information / details, if any.
the circular may be referred to.
At Head Office, the proposals will be
placed simultaneously for funds clearance. For the (ADV.99/97-98 dt.12.11.97)
purpose of handling such proposals, it is proposed
to have a Corporate Banking Division at HO. Selective Credit Control
As part of Fast Track System, proposals RBI has directed that w.e.f. 22.10.97, the
may be taken up for consideration without latest minimum margins on levy sugar shall be lowered
audited balance sheet subject to the eligibility by 5% from existing 15% to 10%, while that for
criteria as given below: free sale sugar shall continue to be 15%. Margin
a. Minimum current ratio of 1.33 consistently for buffer stock shall continue to be zero percent.
for last 3 years
(ADV.100/97-98 dt.13.11.97)
b. Record of net profit after tax for last 3
years
Inland Way Bill (IWB) issued by Container
c. Account to be serviced at
designated/specialised branch Corporation of India Ltd. (CONCOR)
CONCOR is a Public Sector Enterprise
d. ‘A’ Grade rating as per the revised credit
rating parameters. (Standard assets to be under the Railway Ministry. For domestic/interna-
considered till new credit rating system tional cargo accepted by CONCOR for movement
stabilises) in containers, IWB is issued instead of RR. IWB
issued by CONCOR is a valid transport document
The Fast Track System comes into force and must be treated on par with RRs for all
with immediate effect. matters of negotiation including purchase/discount
of documents accompanying them.
(ADV.96/97-98 dt.07.11.97)
(ADV.101/97-98 dt.15.11.97)
Priority Sector Advances - Small Road and
Water Transport Operators Discretionary powers - Legal Expenses other
Branches are aware that as per the existing than law charges
guidelines, advances granted to Road and Water The discretionary powers for
Transport Operators owning not more than 6 sanction/confirmation of legal expenses other than
vehicles (including those proposed to be financed) law charges have been delegated as follows :
are treated as under priority sector lending. In
modification of the same, it has been decided by RMs Upto Rs.500
RBI to increase the number of vehicles from 6 to
ZMs Upto Rs.1000
10 (including the ones proposed to be financed) for For amounts exceeding Rs.1000,
the purpose of computation of priority sector sanction/confirmation of Head Office shall be
advances. obtained. References to lawyers seeking special
opinion shall be made only after obtaining prior
(ADV.98/97-98 dt.10.11.97) approval of RM/ZM as the case may be.
As regards legal expenses in suits filed
Revision of PLR and consequent change in against the bank and consumer disputes where no
interest rate on various loans and advances monetary relief is claimed against the bank and
Keeping in view the monetary and credit where no schedule of fee is prescribed,
policy for second half of 1997-98, our Bank’s PLR sanction/confirmation shall be obtained from Head
has been reduced to 13% from 14% (exclusive of Office.

5
 Volume 10 Issue 3 Oct- Dec 1997

Also, discretionary powers have been be complied with. Proper follow-up should be
delegated to Zonal Managers and to various made to ensure prompt realisation of the
authorities at Head Office for purchase of law instruments.
books/subscriptions to periodicals and journals.
(ADV.107/97-98 dt.27.11.97)
For further details, the circular may be
referred to.
Take over of SSI accounts from other banks
(ADV.102/97-98 dt.18.11.97)
The guidelines under para 26.3.1 in page
4.49 of the Manual of Instructions - SSI have been
modified. Accordingly, take over as a matter of
PMRY - dissolution of partnership policy should be discouraged. In principle
As per extant instructions, if more than one approval of CMD should be obtained before take
applicant join together and form a partnership, over of SSI accounts from other banks. Such
they will be eligible for a total loan and subsidy accounts should be of standard category. The text
subject to the condition that proportionate of the amendment is given in the circular.
loan/subsidy to each borrower does not exceed the
prescribed ceiling. The total project cost finance (ADV.108/97-98 dt.29.11.97)
however should not exceed Rs.5 lakhs. In case of a
firm with two parners, upon dissolution of the
partnership due to retirement of one partner, if the Fast Track system - Setting up of Corporate
other partner agrees to continue the activity as a Banking Service Dept
sole proprietor, the procedure to be adopted is as
follows: In order to co-ordinate and to support effec-
tive implementation of the Fast Track System a
1. In case the activity to be continued by the Corporate Banking Services Department has been
remaining partner is within Rs.1 lakh, the subsidy set up at Central Office and is headed by a General
would be admissible to him; the retiring partner is Manager. The department will lend its support to
not eligible for subsidy. the field level functionaries in their efforts for
2. In case it is above Rs.1 lakh no subsidy bringing into our bank’s fold new well-rated and
shall be admissible. high profile corporate groups. The marketing
officers of the branch are expected to play an
Regarding provision of additional finance important role in this process.
towards working capital, RBI has clarified that the
term loan and working capital sanctioned should (ADV.110/97-98 dt.01.12.97)
not exceed the prescribed ceiling amount fixed for
the borrower (i.e. Rs.1 lakh) or for all the partners
DRT cases of the Bank
collectively and the proposal for additional finance
should also be approved by the Task Force Government of India has in terms of the
Committee. provisions of ‘Recovery of Debts due to Banks and
Financial Institutions Act 1993, constituted Debt
(ADV.106/97-98 dt.26.11.97) Recovery Tribunals (DRTs) in New Delhi,
Calcutta, Bangalore, Jaipur, Ahmedabad,
Chennai, Guwahati and Patna, each Tribunal
Purchase of cheques from third parties having jurisdiction over one or more states. As per
In partial modification of the directions the Act, all Bank recovery cases for value of Rs.10
given in ADV.74/97-98 dt.07.10.97, it has been lakhs and above pending in civil courts (except
decided with immediate effect to permit where appeals are pending) are transferred to the
BMs/RMs/ZMs/ZCC to exercise their discretion- respective DRTs. All new recovery cases of such
ary powers for purchase of third party cheques. values are also filed only before DRTs.
The facility should be allowed only to prime/well While deciding a case in favour of the bank,
known clients of established credibility and in case the DRT will issue a Recovery Certificate. The
of borrowers, preferably to those under standard Recovery officer attached to DRT will upon receipt
asset category. Only local and outstation third of the Recovery Certificate, issue a demand recov-
party cheques, DDs and pay orders of Govt. ery notice calling upon judgement debtors to pay
undertakings/depts, PSUs and reputed public the amount and authorise the Branch Manager
limited companies should be purchased. The facil- concerned to serve the notice.
ity should not be allowed to be misused for kite
flying operations. HO guidelines in this regard
including recovery of interest/commission should

6
 Volume 10 Issue 3 Oct- Dec 1997

The procedures for service of demand 2. Non-insistence on collateral security.

recovery notice, attachment proceedings, etc. have
3. Coverage of DWCRA and family credit plan
been given in detail in the circular.
to increase investment level under IRDP
(ADV.112/97-98 dt.05.12.97) 4. Assisting eligible general category candi-
dates in the event of non-availability of
Commercial Paper candidates under SC/ST to meet the target
of 22.5%
RBI has decided to dispense with the
requirement of minimum current ratio of 1.33:1 as 5. Due monthly reconciliation of achievements
part of the eligibility conditions for issue of CP. with implementing agencies
Further, RBI has decided that banks may hence- 6. Training to Managers to bring about attitu-
forth decide the manner in which the working dinal change.
capital limit may be restored upon repayment of
Commercial Paper. In our bank, any restoration of Branches have to ensure 100% achievement
Working capital (fund based) credit limit conse- under all Government sponsored schemes
quent to repayment of Commercial Paper should especially under PMRY and IRDP. The recovery
be decided by the sanctioning authority based on performance should also be improved.
the merits of each case.
(ADV.127/97-98 dt.23.12.97)
(ADV.121/97-98 dt.18.12.97)
Swarna Jayanti Shahari Rojgar Yojana
Loan system for delivery of bank credit (SJSRY)
RBI has now prescribed a uniform level of Government of India have launched a
loan component for borrowers having working rationalised poverty alleviation scheme, namely,
capital (fund based) limits of Rs.10 crore and Swarna Jayanti Shahari Rojgar Yojana replacing
above from the banking system. The minimum the three existing schemes, viz.,
level of loan component in such cases shall be 80%
1. Nehru Rozgar Yojana (NRY)
(ADV.125/97-98 dt.22.12.97)
2. Urban Basic Services for the Poor (UBSP)
and
Interest on Post-shipment rupee export credit
As per RBI decision, w.e.f. 27.11.97, inter- 3. Prime Minister’s Integrated Urban Poverty
est rate on post shipment rupee export credit on Eradication Programme (PMIUPEP)
usance bills for total period of 90 days and upto 6 The new scheme is operative from 1.12.97
months from the date of shipment is increased in all urban towns in India. It seeks to provide
from 13% to 15% pa. In respect of such advances gainful employment to the urban poor living below
granted prior to 15.12.97, the interest rate of 15%
the urban poverty line through self-employment or
would apply for the period beyond 90 days and not
wage employment. A copy of the guidelines of the
from the date of advance. However, for advances
granted on or after 15.12.97, the interest rate of scheme is enclosed to the circular.
15% would be applicable from the date of SJSRY consists of two special schemes, viz.,
advance. In the annexure to the circular is given
an example for application of interest rate in 1. Urban Self Employment Programme
respect of such advances. (USEP)
2. Urban Wage Employment Programme
(ADV.126/97-98 dt.22.12.97) (UWEP)
and among other components, the following
Implementation of Government sponsored two components of USEP involve extension of
schemes - Action points bank credit.
In a review meeting conducted by Ministry i. Assistance to individual urban poor
of Finance, it was decided to adopt the following beneficiaries for setting up gainful
measures. employment
1. Disposal of all applications under Govern- Unemployed/under employed urban youth
ment sponsored schemes within the time whose family income is below poverty line and
norms who have got educated upto 9th standard will be
financed for their projects costing upto Rs.50000.

7
 Volume 10 Issue 3 Oct- Dec 1997

Government subsidy is available at 15% of project members are advised not to apply to Manager,
cost subject to a maximum of Rs.7500. Margin of Tirupathi for allotment of room in the guest house.
5% is fixed.
(PRNL.50/97-98 dt.13.10.97)
ii. Development of women and children in
Urban Areas (DWCUA)
Indian Bank Officers’ Service Regulations,
Self employment Groups of urban poor 1979 - Regulation 22
women may set up any economic activity. The
DWCUA group shall consist at least 10 women and In terms of the above regulation, where an
is entitled to a subsidy of Rs.1.25 lakhs or 50% of officer is provided with residential
the project cost, whichever is less. The group will accommodation, on and from 1.11.94, 4% of basic
be encouraged to form a thrift and credit society. pay in the first stage of Scale of pay in which he is
placed or the standard rent for the accommodation,
For further details, the circular may be whichever is less, is recovered from him. The
referred to. existing rates of standard and procedure for assess-
ment of living area, etc. are given in detail in
(ADV.128/97-98 dt.26.12.97) circulars PRNL.175/90-91 and 25/91-92. IBA has
advised revision of standard rent which is effective
Jewel Loans - Rate per gram of gold from 01.07.97. For details of the modified
In view of the recent declining trend in gold standard rent and reckoning of the living area, the
rate, it has been decided to reduce the advance rate circular may be referred to.
to Rs.260/- per gram of 22ct. gold ornaments. As
(PRNL.51/97-98 dt.22.10.97)
IRAC norms are applicable to jewel loans also,
periodical review should be conducted particularly
in case of overdues to ensure that the balance Supply of uniform to sub-staff
outstanding does not exceed 70% of market value It has been decided to permit the armed
pledged at any point of time. In such cases as also guards as well as other sub staff to select the
in case of accounts which have become due, design of woollen uniforms, either coat or pull
immediate action should be taken for redemption over at their option, subject to within the same
of jewels. cost and colour in force (Bluish grey for armed
guards and navy blue for sub staff) and strictly
(ADV.129/97-98 dt.30.12.97) fulfilling all other terms and conditions prescribed
for supply of woollen uniforms.
Advance against shares/debentures/bonds to
individuals (PRNL.52/97-98 dt.22.10.97)

RBI has advised banks to retain minimum 1% additional interest on PF subscription for
margin for loans to individuals against equity the year ended March 1996
shares at 50% as is the policy hitherto. However in
respect of loans to individuals against preference The Trustees of the Indian Bank Staff Provi-
shares/debentures/bonds, banks are free to decide dent Fund have approved payment of an additional
on margins. Our Bank has decided to reduce interest of 1% on both the employees’ and bank’s
PF contributions for the financial year ended
minimum margin for loans to individuals against
preference shares and debentures/bonds of corpo- 31.3.96. The additional interest has been credited
rate bodies to 30% from the existing 50%. It may along with regular interest for half year ended
be noted that such advances are subject to credit September 1997.
regulatory measures in force, from time to time. (PRNL.59/97-98 dt.20.11.97)
(ADV.129A/97-98 dt.31.12.97)
Memorandum of Understanding (MoU) -
Strategic Revival Plan
Personnel As branches are aware, the Government has
Guest House at Tirupathi agreed to recapitalise our Bank to the tune of
Rs.1750 crores to make the net worth positive by
The guest house at Tirupathi has been the end of this financial year. The recapitalisation
closed with immediate effect. Hence staff of the Bank has been facilitated by the signing of
MoU by all Unions/Associations representing the

8
 Volume 10 Issue 3 Oct- Dec 1997

entire staff of the Bank. A copy of the MoU is damage beyond recovery. Hence, branches are
enclosed to the circular. The MoU covers advised to adhere to the prescribed time schedule
a. Economy in expenditure of forwarding MPMS statements to their respective
controlling offices ie. on or before 2nd of the
b. Work culture succeeding month. Certain modifications/clarifica-
c. Business Plan and tions have been made to the existing guidelines
which are given below:
d. Structural changes
1. Henceforth, branches may prepare the state-
A monitoring committee consisting of ment based on the weekly as on last Friday of
representatives of Unions/Associations has been
every month instead of as on last working day.
set up to monitor the implementation of MoU and
in the first meeting held on 9.12.97, our CMD 2. NIL figure shall be reported for the month
highlighted the impressive performance of the of April and October under column No.1 - Balance
Bank in the current year and exhorted the staff to upto the previous month in respect of all items of
maintain the momentum and ensure that our Bank income and expenditure as well as recoveries
emerges as ‘a Profit making Bank with Growth effected. However, in respect of items under II
and Glory’. All Unions/Associations have Deposits, III Advances and IV NPAs, (i) old NPAs
expressed their resolve to play their part in the balances as per BS 1 & 2 / NPA as on 31st
successful implementation of MoU. March/30th September as the case may be shall be
The action points relating to economy of reported.
expenditure and work culture are highlighted in
3. Estimate of provision should be correctly
the circular for implementation by all members of
staff. given under Column No.4
4. Targets for the current period under column
(PRNL.63/97-98 dt.17.12.97) No.6 and shortfall/variation in target under
column No.7 should be correctly worked out.
Reference may be made to the circular for detailed
CRA illustration.
Quarterly Balance Sheet and Profit and Loss 5. Average deposits and advances should be
account calculated based on cumulative weekly average
It has been decided to introduce Quarterly balance of all the weeks upto the month/period
Balance Sheet and Profit & Loss account for under review.
quarters ending 30th June and 31st December
every year to enrich the Management Information (CRA.31/97-98 dt.31.12.97)
System. Accordingly branches and administrative
offices should prepare the same (in BS 1 to 4
format) in duplicate and forward one copy to
FX
Zonal Office so as to reach them on or before 3rd
of the succeeding month. ZOs will submit (as is Interest rates on deposits held under FCNR
being done for half-yearly/ annual closing of Accounts (Banks) Scheme
accounts) the consolidated statement to CO:
Accounts on or before 10th of the following In terms of the recent credit policy, banks
month. The formats will be supplied to have been given freedom to fix interest rates on
branches/offices by Zonal EDPs. While filling up FCNR(B) deposits and accordingly, the interest
the forms, branches are to be guided by the exist- rates on these deposits stand revised as under.
ing instructions as well as the special points W.e.f. 22.12.97
brought forth in the circular.
Rate of interest % per
(CRA.30/97-98 dt.12.12.97) Period annum
£ US $ DM ¥
Monthly Performance Monitoring System 1. 6 months and 6.25 5.00 3.25 0.50
(MPMS) above but less
than 1 year
MPMS being a vital management tool, delay
2. 1 year and above 6.50 5.75 3.75 0.50
in submission of the report will defeat the purpose but less than 2
for which it is meant leading to irreparable years

9
 Volume 10 Issue 3 Oct- Dec 1997

3. 2 years and above 6.75 6.00 4.25 0.50 must be strictly followed. Physical security
but less than 3 measures available should be reviewed in the
years monthly staff meetings.
4. 3 years only 7.00 6.00 4.50 0.75
(GENL.73/97-98 dt.17.11.97)
(FX.12/97-98 dt.18.12.97)

W.e.f. 29.12.97 Asset Liability Management

Rate of interest % per

Asset Liability Management (ALM) has
annum assumed significance with the ushering in of finan-
Period
cial sector reforms which brought in its stride
£ US $ DM ¥ deregulation of interest rates, emergence of new
1. 6 months and 6.25 5.00 3.25 0.50 players/products in the market, greater use of
above but less information technology with increased MIS capac-
than 1 year ity, etc. The consequent interest rate volatility
2. 1 year and above 6.50 5.75 3.75 0.50 necessitated matching of Assets and liabilities to
but less than 2 safeguard interest spread. Prudential norms on
years income recognition, asset classification, provision-
3. 2 years and above 6.75 6.00 4.25 0.50 ing and capital adequacy impacted on profita-
but less than 3 bility/performance. Financial Transaction assumed
years complex risks in view of the integration of domes-
4. 3 years only 6.75 6.00 4.25 0.75 tic with external markets. Hence it became
imperative to upgrade risk management techniques
(FX.14/97-98 dt.29.12.97) and adopt more comprehensive and effective ALM
practices.
In simple terms, ALM is the management of
General the total balance sheet dynamics to ensure an
Customer Service and Turnaround acceptable balance between profitability, growth
and risk. ALM exercise essentially includes
‘Commitment to serve’ has been given
much emphasis in our bank’s turn-around strategy. Ÿ estimating core resources, discretionary
The factors that lead to customer satisfaction such funds like CD and borrowings
as courteous, dignified and qualitative service, Ÿ prudential management of funds with
Personal Banking, understanding of his/her needs respect to risk and duration
for prompt attention, etc. have been dealt with in
detail in the circular. Willingness to serve coupled Ÿ minimising undesirable maturity mismatch
with a sense of devotion to duty form the basic to avoid liquidity problem
edifice of customer service. It is the service that Ÿ reduce the gap between risk sensitive assets
gives us a crucial edge over others in a competi- and risk sensitive liabilities within the risk
tive environment. The customer unreservedly taking capacity.
deserves the best as he/she is the person deciding
our growth, prosperity and ultimately our healthy ALM can be used as a tool at branch level
survival. itself for effective utilisation of resources,
minimising risks and improving profitability.
(GENL.65/97-98 dt.05.11.97)
The Funds and Investments Committee was
formed with a view to ensure proactive manage-
Safety of Bank’s premises and property ment of bank’s assets and liabilities by strategising
Improvement of safety measures is a business growth. Our Bank has been doing
continuous process. The security of branch extremely well in reducing risk weighted assets,
premises and other assets must be a matter of dependence on call money and CDs, reduction of
concern for all staff members. The ways in which non-interest and non-salary expenses, etc. As the
staff can contribute towards safety include exercise next step in this direction, it is felt that the ALCO
of vigil over access to premises, adherence to (Asset Liability Committee) functioning must be
secrecy and security measures prescribed for cash revitalised.
remittance, assessing adequacy of safety in the
light of incidents of security threats reported, etc. ALCO aims to achieve the following :
The security precautions advised through circulars

10
 Volume 10 Issue 3 Oct- Dec 1997

1. To enable the Bank assume intermediation still more recovery’ should be our aim for this
risks year. The strategy to be adopted for improving
recovery performance/reduction of NPA level
2. To maintain a healthy spread between inter-
include the following.
est earned and interest expended
Ÿ Recovery month to be observed; all NPA
3. To assess and then to regulate and/or
borrowers to be called on to step up recov-
assume interest rate mismatches and maturity
ery
mismatches
Ÿ New compromise proposals to be taken up
4. To manage various holdings of remunera-
quickly; recovery in case of all compromise
tive assets in a manner which results in lesser costs
proposals approved by HO to be geared up
and higher yields so as to maximise the profits
Ÿ signs of slippage in assets to be individually
5. To analyse the current sources of funds and
analysed and corrective action taken
estimates in short, medium and long runs the costs
and quantum of such funds, Ÿ outstandings in MoI accounts to be reversed
quickly
i. to assess risk factors associated with
assets including costs and returns Ÿ recovery officers should play a leading role
under the guidance of RO/ZO
ii. to evolve gap management strategies
for both interest mismatch and Ÿ recovery camps must be conducted for
amount mismatch. accelerating recovery
Three subgroups namely Treasury Sub Ÿ individual follow up in respect of suit
Group, Credit Sub Group and Sub Group on filed/decreed accounts
Liabilities are also formed.
Ÿ effective functioning of task forces; prompt
Branches are advised to understand and rehabilitation of viable sick units.
practice the concepts of ALM so as to insulate the
The suggestions given above are only
bank from various intermediation risks.
indicative and branches are advised to implement
(GENL.76/97-98 dt.24.11.97) appropriate strategies as considered suitable.

(MD/ED.7/97-98 dt.28.11.97)
Citizen’s Charter
In terms of the directions of Government of Mobilisation of SB and Current Account
India, our Bank has brought out ‘Citizen’s Deposits
Charter’ first in English followed by Hindi
version. The pattern of distribution of the books is Interest spread as a ratio to working funds
given in the circular. Copies of citizen’s charter and net profit as a ratio to working funds have
are meant for distribution to chosen important been showing a declining trend in our bank, while
customers and for perusal/permanent reference of in the case of all scheduled commercial banks, the
others at the branch. Branch managements are to ratio has been found to be consistently improving.
ensure that no complaint of The ratio of low cost deposits (viz., SB and
refusal/unresponsiveness/non-production of the Current account) to total deposits which has a
charter arises from any customer. The charter is bearing on profitability is also found to be poor in
not exhaustive and has been designed to provide our bank (less than 33%) as compared to the
customers with firsthand knowledge on the Bank’s banking system (nearly 50%). Even smaller banks
schemes and services. were found to have higher ratio of low-cost depos-
its to total deposits.
(GENL.79/97-98 dt.27.11.97)
There is thus an urgent need to improve the
ratio of low cost deposits to total deposits. All field
MD/ED level functionaries are required to improve the
level of the low cost deposits by taking up with the
Recovery of Non-performing assets existing savings bank and current account holders
and also by canvassing new SB and current
Increase in low-cost core deposits coupled accounts. This calls, inter alia for improving the
with reduction in NPAs are the two vital areas that
quality of customer service which include expedi-
require utmost attention for a quick turn around of
ent issue/updation of statements/pass books,
our bank. As the bank’s ratio of NPAs to total
extended hours of service, rendering personalised
credit is very high, ‘recovery, more recovery and
service, promptitude in execution of standing

11
 Volume 10 Issue 3 Oct- Dec 1997

instructions, crediting of SB interest and collection to ensure that the bank makes operating profit by
services, etc. The declining trend should be 31.3.98, the steps that are to be taken in various
arrested before this year end and branch manage- areas, viz., deposits, NPA recovery, advances,
ments should motivate all their colleagues with a income & expenditure, housekeeping, punctuality
view to show positive results. and productivity and effective human relations
have been enumerated in the circular.
(MD/ED.8/97-98 dt.29.11.97)
Field level functionaries have been advised
to take decisions prudently and promptly and there
Recapitalisation of our Bank by Government of is no need for any fear psychosis in the name of
India and implementation of MOU accountability. Any authority taking bona fide
It is a matter of great pleasure that all the decisions in the interest of the bank within his
Unions and Associations have extended their discretionary powers will be protected. Sugges-
support and signed the MOU which is a major step tions for reaching corporate goals and to realise
in the process of the turnaround efforts. On our mission viz., ‘to make Indian Bank a profit
account of these efforts and consequent progress in making bank with growth and glory’ are welcome.
the Bank’s financial performance, the Govt. of It is our sacred duty and solemn mission to trans-
India has approved the Bank’s strategic revival form our Mother Institution to its pristine glorious
plan and has agreed in principle to recapitalise our position and in this direction, the Chairman wishes
bank to the tune of Rs.1750 crores to make the net every one of the staff members god-speed and
worth positive by the end of this year. MoU good luck.
monitoring committee has already been set up at
HO and such committees will be set up at (MD/ED.9/97-98 dt.15.12.97)
Zonal/Regional levels also in due course. In order

12
 Volume 10 Issue 4 Jan - Mar 1998

Deposits Deposit Mobilisation - Staff Participation

Recollect
During the current year the bank has
Issue of large number of cheque books to
mobilised core deposits of over Rs.1500 crores as
customers against the annual target of Rs.1625 crores, which
Further to the circular DEP.21/97 on the is mainly due to the active involvement of staff
above subject, it has been decided to incorporate members. The names of staff members who have
suitable enabling clauses in the current account mobilised substantial deposits during the period
opening forms meant for limited companies and 01.04.97 to 31.12.97 and who have been congratu-
firms, whereby the bank will have the discretion to lated in their efforts by CMD/ED/GM are given in
restrict the issue of cheque books. The customer the annexure to the circular.
will also undertake to indemnify the bank against
any possible claims made against it through issue (DEP.32/97-98 dt.28.01.98)
of post-dated cheques. The text of the clause is
available in the circular which may be incorpo- Opening of SB accounts in the name of Self
rated in the opening form. Branches are also Help Groups (SHGs)
advised to take note of the amendment to the
current account rules/Manual of Instructions - RBI has informed that Self Help Groups,
Deposits given in Annexure A to the circular. registered or unregistered which are engaged in
promoting savings habit among their members will
(DEP.28/97-98 dt.17.01.98) be eligible to open SB accounts. It is further clari-
fied that SHGs need not necessarily have availed
credit facilities from the bank before opening such
Review of overdue deposits
accounts.
The existing guidelines provide that a
regular follow-up for renewal of overdue deposits (DEP.36/97-98 dt.27.2.98)
shall be made by branches. It is now decided that
Branch Managers should review the pending
entries in overdue deposits every month at the time
of balancing and take suitable follow-up measures Agasthya Deposit Scheme
so as to avoid the scope for any customer
complaints. Branches are advised to carry out the Although the scheme was discontinued in
amendment to the Manual of Instructions-Deposits 1995, reports are received from many branches
as per the annexure to the circular. about the existence of large number of Agasthya
Deposit accounts with relatively low balances.
(DEP.29/97-98 dt.22.01.98) With a view to accelerate the efforts towards
closure of such accounts, branches are advised to
Interest rates on term deposits display a notice in the public notice board as given
in Annexure-1 to the circular and also send
W.e.f. 23.01.98, the interest rates on
individual notices to all the Agasthya Deposit
various term deposits will be as follows:
account holders as per Annexure-2 to the circular.
Domestic Term Deposits / Capital Gains Scheme In the absence of response from customers before
Duration Int. Rate % p.a 30.4.98, further action to be taken shall be as
30 days to 45 days 8.00
follows:
46 days to 179 days 9.00 i. Where balance is Rs.15 or less, the account
180 days to 1 year 9.50 may be closed by appropriating the entire balance
Over 1 year to 2 years 11.00 to our Income account.
Over 2 years to 3 years 11.50
ii. Where the balance is more than Rs.15, the
Over 3 years 12.00
follow up exercise should be intensified to get the
NRE Term Deposits
accounts closed.
6 months and above upto 1 year 9.00
Over 1 year to 3 years 11.00 (DEP.38/97-98 dt.11.03.98)
Over 3 years 12.00
NR NR Term Deposits
6 months and above upto 1 year 12.00
Introduction of Vidhya Nidhi Deposit Scheme
Over 1 year to 3 years 12.50
In order to enable the customers to make a
(DEP.30/97-98 dt.22.01.98) financial provision well in advance to meet the
future expenditure on education of their children, a
PDF-1997-4Q
new deposit scheme under the above name has

1
 Volume 10 Issue 4 Jan - Mar 1998

been proposed to be launched by our bank from Bill Finance for settlement of dues of SSI
15.4.98. The scheme can also be used for other suppliers
specific purposes like investments, payment of
annual instalments etc. The salient features of the Branches shall advise all corporate borrow-
scheme are given as under : ers coming under the purview of CMA that w.e.f.
01.01.98, they should finance their domestic credit
i. Three types of accounts (Plan A, B, C) have purchases from SSI units as also from SSI and
been designed with remittance period of 36, 48 others taken together, at least to the extent of
and 60 months respectively. The repayments will 25%. This requirement should be stipulated in the
be 3, 4 and 5 annual instalments respectively. Thus terms of sanction/covenants and borrower’s accep-
including the remittance period and the repayment tance thereof should be obtained. It should also be
period, the total period of the schemes A, B and C brought to the notice of such corporate borrowers
will be 5, 7 and 9 years respectively. that non-compliance with the above stipulation will
ii. Repayments shall be fixed in multiples of attract additional penal interest of 2%.
Rs.1000 and accordingly monthly instalments shall
(ADV.133/97-98 dt.10.01.98)
be fixed.
iii. The interest shall be payable at the appro- Financing of Small Scale Industries
priate rate as applicable for term deposits of corre-
sponding period. RBI has re-emphasised that all out efforts
should be made to implement the simplified
iv. Other features like loan facility, premature method of assessment of working capital limits
closure, nomination, opening in joint names, upto Rs.2 crores on the basis of 20% of the
minor accounts, preferential interest rate for staff, projected annual turnover. By way of ‘Bottom up
etc., are applicable as in the case of other term approach’, branches should prepare the annual
deposit schemes. budget in respect of working capital requirement
For detailed operational guidelines, the of all SSI units before commencement of the year
circular may be referred. covering healthy units already enjoying credit
facilities with us, new units and sick units under
(DEP.39/97-98 dt.19.03.98) rehabilitation. The budget should be sent through
the controlling office to Head Office for earmark-
Renewal of overdue deposits ing funds for SSI financing.

Consequent to the reduction of minimum (ADV.134/97-98 dt.10.01.98)

period of deposits from 46 days to 30 days, IBA
and RBI have clarified that interest is payable for Interest rate on certain categories of advances
the overdue period only if the overdue deposit is
renewed and retained for a minimum period of 30 W.e.f. 3.11.97, interest rate for loan
days. If the depositor requests for premature against NSC to staff stand revised as follows:
closure of such renewed overdue deposits before
Scheme I Scheme II
completion of 30 days from the date of renewal,
no interest shall be payable for the overdue period. Upto Rs.60,000
12.75% 13.77%
(12.5+ Int.Tax) (13.5+ Int.Tax)
(DEP.42/97-98 dt.28.03.98) PLR + Int.Tax PLR + Int. Tax
or or
12.5+1%+Int.Tax 13.5+1%+Int.Tax
Advances Over Rs.60,000
whichever is whichever is higher
higher i.e 13.77% i.e. 14.79% at
Interest rate surcharge on import finance at present present

RBI has decided to reintroduce interest rate

The interest rate for loan granted to housing
surcharge of 15% of the actual lending rate
finance intermediary agencies stands revised as
(excluding interest tax) on bank credit for imports
12.5% plus interest tax.
w.e.f. 18.12.97. Five categories of advances have
been exempted from levy of such surcharge which (ADV.135/97-98 dt.17.01.98)
are listed in the circular.

(ADV.131/97-98 dt.10.01.98) Export Credit - Interest rates on Post-shipment

credit
In compliance with the directions of RBI on
the subject, it has been decided to charge w.e.f.

2
 Volume 10 Issue 4 Jan - Mar 1998

18.12.97, interest at the rate of 20% p.a. on post- Loan System for delivery of Bank Credit
shipment rupee export credit outstanding against
overdue bills. The higher interest rate of 20% will Further to circular ADV.125/97-98 dated
be applicable only for the overdue period and not 22.12.97, branches are advised to persuade
from the date of advance. The higher rate of inter- borrowers with fund-based working capital limits
est will not be applicable to overdues in respect of of less than Rs.10 crores also to go in for the
chronic cases beyond the control of exporters. ‘Loan System’ as prescribed in the above circular.
Chronic cases are defined as those where the bills
were overdue even six months ago, i.e. overdues (ADV.148/97-98 dt.12.02.98)
which existed as on 01.07.97.
RBI has advised that w.e.f. 01.01.98, inter-
Priority Sector Advances - Loans for housing
est rate on post-shipment rupee export credit on RBI has advised that loans upto Rs.5 lakhs
usance bills for total period beyond 90 days and for construction of houses by individuals (direct
upto 6 months from the date of shipment is finance) will be treated as priority sector. Under
reduced to 13% p.a. from 15% p.a. Further, the indirect finance, assistance to governmental
interest rate of 13% p.a. would be applicable only agency or non-governmental agency approved by
for the period beyond 90 days and not from the NHB, for construction of houses or for slum clear-
date of advance. The lower rate of interest will be ance and rehabilitation of slum dwellers subject to
applicable for fresh as well as existing advances. a ceiling of loan component of Rs.5 lakhs per
housing unit will be treated as priority sector. The
(ADV.136/97-98 dt.28.01.98) amount of loan eligible to be reckoned as housing
finance under the scheme of yearly housing
Interest rate surcharge on import finance finance allocation made to banks is raised from
RBI has advised that w.e.f. 17.1.98, inter- i. Rs.3 lakhs to Rs.10 lakhs per individual in
est rate surcharge will be 30% of the actual respect of houses constructed in
lending rate (excluding interest tax) on bank credit urban/metropolitan areas
for imports. In respect of existing borrowal
ii. Rs.3 lakhs to Rs.5 lakhs per individual in
accounts, the interest rate surcharge is leviable at
respect of houses constructed in rural/semi-
the rate of 30% on the outstanding balance as well
urban areas
as fresh drawals on or after 17.1.98
It is further informed that banks will grant
(ADV.137/97-98 dt.03.02.98) term loans to housing intermediary agencies only
against direct loans sanctioned/proposed to be
Revision of PLR and consequent changes in sanctioned (including NRIs) by the latter subject to
interest rates on loans and advances the area-wise per individual ceilings prescribed.
Further, term loans granted to housing intermedi-
It has been decided to revise our PLR w.e.f. ary agencies against their on-lending to NRIs will
17.1.98 upward by 1.5% to 14.5% (exclusive of not be treated as housing finance for the purpose
interest tax) and PTLR to 14.25% (exclusive of of yearly allocation of housing finance made to
interest tax). The maximum spread over PLR and banks.
PTLR will continue to be at 4% for all advances
over Rs.2 lakhs except consumer credit for which (ADV.149/97-98 dt.13.02.98)
the maximum spread will be 6% subject to credit
rating parameters. The interest rates for advances Guidelines/procedures on sanction of credit
over Rs.2 lakhs have to be accordingly revised.
facilities to individuals/Group/Associate
The rate for advances upto Rs.25000 and that for
over Rs.25000 and upto Rs.2 lakhs will continue at accounts at multiple branches
12% p.a. and 13.5% p.a. respectively exclusive of Guidelines on sanction of credit facilities at
interest tax. The revised rates will be applicable same branch/multiple branches as approved by our
for fresh as well as existing advances. For other Board are as follows:
changes envisaged in the revision the circular may
be referred to. Where credit facilities are sought Authority to
to be sanctioned consider
(ADV.138/97-98 dt.04.02.98)
Sanctioning
authority under
Same branch whose discre-
tionary powers
the limits fall

3
 Volume 10 Issue 4 Jan - Mar 1998

Within the same region but in b. Ascertaining the integrity of the

Concerned RM* customer/borrower
more than one branch
Within the same zone but in Concerned
c. Good market report.
more than one region AGM/ZM* d. Excellent credit opinion from the present
bankers.
In multiple branches, situated in Concerned GM
more than one zone at HO* e. Account to be a standard asset.
f. ‘A’ Grade rating as per revised credit rating
* These authorities will sanction the proposal if the limits fall parameters.
within their discretionary powers and in other cases recommend
the same to the competent higher level sanctioning authority. g. Satisfactory conduct of the account in the
other bank
In all the above cases, mention of the
liabilities at other branches shall be made as a h. Availability of excellent financial/collateral
footnote on each sanction ticket and a copy of the security
sanction ticket should be sent to other branches/ i. Minimum current ratio to be 1.33 for the
ROs/ZOs concerned for mutual information. last 3 years.
Further, it should be ensured that acknowledge- j. Record of net profit after tax for the last 3
ments of other liabilities are also obtained from the years.
borrowers before release of credit. Existing
accounts falling within the above categories should (ADV.154/97-98 dt.21.02.98)
be taken up for review/renewal sanction with the
appropriate sanctioning authority in accordance Loan Policy 1997-98
with the above guidelines.
The Board of Directors has approved the
(ADV.150/97-98 dt.14.02.98) Loan Policy for the period 1997-98 which is based
on the various guidelines of RBI on credit includ-
Enhancement of investment limits in small ing the credit policy announced by RBI for the first
scale and ancillary industry undertakings and second half of 1997-98, recommendations of
ICRA and the Corporate guidelines of our Bank.
As per Govt. of India notification, w.e.f. The policy envisages reduction of NPAs and
11.12.97, the ceiling on investment in plant and
ensuring qualitative/profit-centre approach to
machinery of SSI and Ancillary units has been
credit dispensation. The salient features covered in
raised from Rs.60 lakhs/Rs.75 lakhs respectively
to Rs.3 crore. In order to ensure availability of the Loan Policy include credit expansion, CD
credit to all segments of SSI sector, it has been ratio, credit management, credit marketing, credit
decided that out of funds allocated to SSI sector rating, profit generation, recovery policy - NPA
under priority sector advances, 40% shall be made management, priority sector and social lending,
available for units with investment in plant and export credit, Assessment of working capital
machinery upto Rs.5 lakhs, 20% for units with requirements, Lending to NBFCs, CP, consortium
investments between Rs.5 lakhs and Rs.25 lakhs lending, Advances against shares, Bridge loans,
and the remaining 40% for other SSI units. Copy Trade and infrastructure advances, industry-wise
of the Gazette Notification is enclosed to the exposure, etc. For further details, the circular may
circular. be referred to.
(ADV.152/97-98 dt.18.02.98) (ADV.155/97-98 dt.27.02.98)

Transfer of borrowal accounts from one bank Enhancement in the investment limit for SSI
to another units
The following additional guidelines are Consequent to the enhancement in the
issued on the subject (earlier reference ADV.200/ investment ceiling for SSI units, SIDBI has
88 and ADV.108/97-98). informed that deferred payment transactions
1. As a general policy, taking over an account involving sale of equipment by/to industrial under-
from other banks should be discouraged. takings whose investment in plant and machinery
2. If at all take over is considered, it shall be does not exceed the ceilings prescribed i.e. Rs.300
on merits subject to the following: lakhs would be eligible for coverage under bills
rediscounting scheme of SIDBI. As per the revised
a. Obtention of in-principle approval/clearance
of CMD guidelines, the ceiling on investment in plant and

4
 Volume 10 Issue 4 Jan - Mar 1998

machinery of tiny enterprises now stands increased 5. Stocks received on consignment should not
from the present level of Rs.5 lakhs to Rs.25 lakhs be considered for bank finance.
irrespective of the location of the unit. 6. Finance for purchase of an existing business
by a new owner or even by one of the partners of
(ADV.162/97-98 dt.12.03.98) the old firm should not be entertained.

Delegation of authority for execution of 7. For new units

documents under consortium lending i. Borrower’s total liability/equity ratio should
not generally exceed 3.
Further to circular ADV.43/93-94 dated
17.06.93, it has been decided that the powers for ii. Borrower should earn net profit every year.
execution of documents or signing of letters of
iii. Interest coverage ratio should be adequate.
undertaking on behalf of the bank in consortium
That is cash accruals before interest should
accounts where we are leader bank, hitherto vested
be around twice the amount of interest
with ZMs/DGMs in charge of credit desks and
payable.
above have been relaxed. Powers have now been
delegated to RMs, AGMs in charge of regions, (ADV.172/97-98 dt.31.03.98)
AGMs of ELBs and AGMs/DGMs and above in
charge of credit desks at HO to execute
documents/sign letters of undertaking on behalf of Personnel
the bank/sign inter se agreement between banks
under SWCL for all advances under consortium Memorandum of settlement on residual issues
arrangement where we are members and to obtain
documents on behalf of consortium from the The salient features of the settlement
borrowers where we are leaders. dt.28.11.97 between IBA and workmen unions are
given below: (The changes will come into effect
(ADV.164/97-98 dt.20.03.98) from 01.04.97 unless otherwise specified)
1. Part time employees
Methodology of assessment of working capital Part time employees shall be paid consoli-
requirements of borrowers in trade and dated wages as under :
services sector From 1.11.92 From
A new method for assessing working capital to 31.10.94 1.11.94
requirements of trade and services sector has been Upto 3 hrs. Rs.130 pm Rs.150 pm
devised and approved by board. The document More than 3 hrs but
containing the review of policy with illustrations, Rs.375 pm Rs.440 pm
less than 6 hrs.
application forms and proposal format are
enclosed to the circular. The salient features of the 2. Leave Fare Concession
new/revised system are as under: Non-subordinate staff and members of their
1. Two different methods suggested based on family would be eligible for AC-2 tier fare for the
the quantum of credit limits i.e. upto Rs.10 lakhs actual journey performed by mail/express train
and above Rs.10 lakhs. (excluding Rajdhani and Shatabdi Express).
Sub-ordinate staff and members of their family
2. Advances to trade and services to be would be eligible for II Class sleeper fare for the
restricted to select branches. Fresh advances over actual journey performed by mail/express train. In
Rs.10 lakhs to be confined to metro, urban and case of clerical staff, if they choose to travel by II
semi-urban centres. class, they will be reimbursed the actual fare
3. For advances over Rs.10 lakhs of working incurred or the notional I class fare for the permis-
capital limits, assessment will be based on actual sible distance, whichever is less. In case of
level of stocks and receivables and monthly substaff, if they choose to travel by any other
overheads. Thereafter the credit requirement is mode, they will be reimbursed the actual fare
assessed based on projections subject to maximum incurred or the notional II class fare for the
increase of 20% over the actuals. permissible distance, whichever is less.
4. Eligible working capital may be sanctioned In the case of substaff, the maximum
as one compound limit comprising pre-sale and permissible distance is revised as 1700 kms. under
post-sale components 2 year block and as 3400 kms. under 4 year block.
3. Project Area Compensatory Allowance

5
 Volume 10 Issue 4 Jan - Mar 1998

Project Area compensatory allowance will

be paid as under: Srirangam Srimad Andavan Ashram
Behind Lord Venkateswara Temple
Group A Group B Tirumala, Andhra Pradesh
Clerical Staff Rs.100 pm Rs.80 pm
Subordinate Staff Rs.80 pm Rs.60 pm
Two suites and one room are available, the
charges payable at the time of occupation being
4. Split Duty Allowance Rs.50 and Rs.30 per day respectively. Rent of
Rs.10 per room/suite per day is to be remitted by
Split Duty Allowance shall be as under : way of MT on Tirumala branch for booking in
At CCA centres Rs.60 pm advance.
At non-CCA centres Rs.50 pm (PRNL.74/97-98 dt.22.01.98)
5. Compensation on transfer
Halting allowance to Officers - Revised tariff
Compensation on transfer shall be a rates
maximum of the amounts indicated as under :
IBA has advised revision in tariff rates as
Clerical Staff Rs.500* Rs.300 ** under:
Substaff Rs.300* Rs.200 ** Maximum tariff for reimbursement
for stay at non-ITDC Hotels of
*
Upon production of receipt/statement of loss in respect Eligibility star ineligible star category where
of breakages Scales of category of ITDC hotels of eligible star
** Officers ITDC Hotel as category are not available (Rs.)
Lumpsum payments in the absence of production of per regulations
receipt/statement of loss Major ‘A’ Area I Other
Class cities Places Places
6. Sick Leave
VI & VII 4 Star 3,500 1,750 1,500
Sick leave will be admissible for service in IV & V 3 Star 1,600 1,195 1,050
excess of 24 years of service subject to the usual 2 Star
II & III 825 700 600
norms for accrual/ availment. (Non-AC)
1 Star
7. Income Criteria I
(Non-AC)
500 425 350

The term wholly dependent child/brother/ Major ‘A’ Mumbai, Calcutta, Delhi, Chennai,
sister/parent shall mean such relative having a Class cities Ahmedabad, Bangalore and Hyderabad
monthly income not exceeding Rs.1500 pm. If the Pune, Nagpur, Kanpur, Surat, Jaipur and
aggregate income of both the parents exceeds Area I cities
Lucknow
Rs.1500 pm, they shall not be considered as
wholly dependent on the employee. If officers in top executive grade (Scale VI
8. Holidays to watch and ward staff and VII) are unable to stay in ITDC hotels at
Delhi, and at other hotels at Mumbai and Calcutta
The members of watch and ward staff shall within the tariff limit of ITDC hotels they may be
be given as many number of holidays in a year as reimbursed actual expenses for staying in other
there are public holidays as declared by the respec- hotels not exceeding 125% of the tariff or the
tive State Governments/Union Territories under entitled class at Delhi, Mumbai and Calcutta.
the Negotiable Instruments Act,1881 in that year. ITDC offers a special discount of 20% or alterna-
For further details the circular may be tively ‘Special Independence Package’ where
referred to. normal tariff is charged which is inclusive of free
breakfast, lunch and dinner. Officers can avail
(PRNL.71/97-98 dt.06.01.98) either of the above offers. However when break-
fast, lunch and dinner are provided free of cost,
Guest House at Tirumala they will not be eligible for boarding expenses.

A Guest House at Tirumala for use of our (PRNL.77/97-98 dt.31.01.98)

staff members has been established at the follow-
ing address IBR unmatched entries relating to PF subscrip-
tion, loan, etc.
It has been decided that henceforth branches
should submit PEM-2 and PEM-2A statements to

6
 Volume 10 Issue 4 Jan - Mar 1998

their controlling offices so as to reach the latter on Prevention of sexual harassment in work
or before 5th of the next month. Controlling place
offices should ensure that the statements so
received are sent in one lot so as to reach Person- The Supreme Court has in a recent judge-
nel Dept. on or before 12th of the next month. ment defined what constitutes sexual harassment in
Correct and prompt submission of the returns will work places, laid down certain guidelines to
ensure the accuracy and timely credit of PF prevent such harassment and has directed that
subscriptions, besides sanction of PF loans in time these guidelines be strictly observed at all work
and proper accounting of the recoveries thereof. places for the preservation and enforcement of the
The common deficiencies/mistakes observed are
highlighted in the circular. right to gender equality of working women. The
detailed guidelines formulated by the Supreme
(PRNL.79/97-98 dt.13.02.98) Court are set out in the circular. In terms of the
guidelines, the offender is liable to be prosecuted
Allowing SC/ST employees to write to National under IPC and other Acts. Further appropriate
Commission for SC/ST directly disciplinary action may also be taken against him.
The victims of sexual harassment will have the
Govt. of India have reiterated their direc- option to seek transfer of the perpetrator or their
tive which enjoins that SC/ST employees may be own transfer. In regard to the procedure for
permitted to write to the National Commission for handling the grievances of women employees, the
SC/ST directly on matters relating to appointments guidelines given in circular No. PRNL.116/81
against the reserved quota and that it is not neces- dt.20.8.81 should be followed.
sary for them to seek prior permission from Head
of the Department/branches for such corres- Women employees/officers may use the
pondence. service of the ‘Complaints (women) Redressal
Committee’ constituted at Central and Zonal
(PRNL.85/97-98 dt.02.03.98) Offices for expressing their grievances of confi-
dential nature. Where sexual harassment is perpe-
trated by any third party/outsider, the person in
Renewal of Group Personal Accident Policy charge of the branch/office will provide necessary
The Group Personal Accident Insurance protection/support to the affected person.
Policy providing round the clock personal accident
cover with the sum insured at 48 times of salary (PRNL.96/97-98 dt.17.03.98)
(Basic + DA), covering all the employees of our
bank taken from New India Assurance Company,
Divisional Office, 21 Pattullos Road, Chennai-2 CRA
has since been renewed for one year. The renewed
policy number is 42710700-01157. In the unfortunate Revised system for issue and payment of DDs
event of any accident, staff members are requested
first to inform the occurrence of the accident to A revised system for issue and payment of
insurance company in the prescribed format. DDs is being put in place w.e.f. 1.4.98. The
Preference of claim shall be made within one distinctive features of the system include the
month. The documents required and the proce- following:
dures for preferring claim are given in Annexure
II to the circular. 1. All branches will issue only MICR drafts
2. DD leaves of different colours prescribed
(PRNL.88/97-98 dt.07.03.98)
for different ranges of amount
Perquisite on LFC for Income Tax purpose 3. Manifold copies for DDs of less than Rs.1
lakh dispensed with.
The rules in regard to the above have been
amended w.e.f. 01.10.97. The amendments, inter 4. Accounting of DDs issued and paid taken
alia, provide that where the journey is performed out of the purview of IBGA
by air on or after 01.10.97, an amount not exceed- 5. DDs issued and paid at branches have to be
ing the air economy fare of the National carrier by accounted in the same GL head - Demand Drafts
the shortest route to the place of destination shall account
be exempted. (Earlier, the difference between air
fare and the eligible rail fare was taken as perqui- 6. The reconciliation system will match the
site). For other details, the circular may be DDs on one-to-one basis
referred to. 7. Separate schedules prescribed for reporting
DDs issued and paid
(PRNL.93/97-98 dt.11.03.98)

7
 Volume 10 Issue 4 Jan - Mar 1998

8. Transparent stickers have to be affixed on but less than 1 year

all the DDs over the amount in figures
2. 1 year and above but
6.50 5.50 3.75 0.50
A hand book containing the operative less than 2 years
details of the revised system is enclosed to the 3. 2 years and above
6.75 5.50 4.00 0.50
circular. but less than 3 years
4. 3 years only 6.75 5.50 4.25 0.75
(CRA.34/97-98 dt.06.02.98)
(FX.15/97-98 dt.13.01.98)
Service Charges
Conversion of FCNRB accounts into RFC
It is now decided to levy/recover, in respect
of deposit of title deeds or extension of EM, an accounts/ Resident Rupee Accounts - Payment
additional Service Charge of Rs.10000 per of Interest
borrower, at each instance of sanction for borrow- RBI has permitted banks to pay interest not
ers enjoying credit limits of Rs.25 lakhs and exceeding RFC SB rates on foreclosure of FCNRB
above. deposits before the stipulated minimum period
In case of a party availing limits at different viz., 6 months provided they are reinvested in
branches, a service charge of Rs.5000/- p.a. for RFC/Resident Rupee accounts.
each branch for such allocation of limits is to be
(FX.17/97-98 dt.12.02.98)
levied/recovered.
A front-end service charge of 1% on Ordinary non-resident account (NRO) held
advances for purchase of consumer articles, jointly with residents
vehicles, etc., to be levied/recovered.
As per extant RBI guidelines NRO accounts
The above charges will come into effect can be held by a non-resident jointly with
from 5.12.97 and will be in addition to the residents. Legitimate dues in rupees of the account
processing charges already in force. holder in India may also be allowed to be credited
to NRO account. RBI has further clarified that
(CRA.41/97-98 dt.20.03.98) such joint holdings is permitted only to facilitate
operations in the account. The funds of the
Revised system for issue and payment of DDs resident joint holder cannot be credited to the
- Procedure for reconciliation NRO account and then reinvested in the joint
names of resident and non-resident.
The procedural aspects relating to recon-
ciliation and rectification process are enclosed to (FX.20/97-98 dt.12.03.98)
the circular. Annexure-I of the circular contains
important points to be noted and precautions to be Interest rates on deposits held under FCNRB
strictly observed under the revised system and
scheme
Annexure-II contains guidelines for submission of
DDs Account Statements. Branches are advised to W.e.f. 20.03.98, interest rates on FCNRB
keep the circular appended to the hand book on deposits stand revised as under:
revised system for issue and payment of DDs.
(Rate of interest percent per
annum)
(CRA.42/97-98 dt.21.02.98) Period
£ $ DM ¥

1. 6 months and above

FX but less than 1 year
6.25 5.25 3.25 0.50

2. 1 year and above but

Interest rates on deposits held under FCNRB less than 2 years
6.50 5.50 3.75 0.50
scheme 3. 2 years and above 6.75 5.50 4.00 0.50
W.e.f. 13.1.98, interest rates on FCNRB but less than 3 years
deposits stand revised as under: 4. 3 years only 6.75 5.50 4.25 0.75

(Rate of interest percent per

Period annum) (FX.21/97-98 dt.19.03.98)
£ $ DM ¥
1. 6 months and above 6.25 5.00 3.25 0.50

8
 Volume 10 Issue 4 Jan - Mar 1998

Forward cover for NRE rupee accounts and sphere as well, in order not to attract any customer
FCNRB accounts complaint/claim and customer ill-will.
RBI has permitted banks to extend forward (GENL.108/97-98 dt.18.02.98)
cover facility to NRIs in respect of deposits held in
NRE rupee accounts and FCNRB accounts. All Customer Service - Consumer Protection Act
forex authorised branches are permitted to provide 1986
the facility. Non-authorised branches may
approach OSB in the event of receiving such In the wake of increasing complaints from
requests from their NRI customers. The salient customers alleging deficiency in service, branches
features of the facility are enumerated in the circu- are advised to ensure that proper customer service
lar. should be rendered without leaving scope for
complaint. Where a customer complaint is identi-
(FX.22/97-98 dt.23.03.98) fied as based on genuine deficiency in service,
immediate redressal measures should be taken so
Premium on WTPSG scheme of ECGC as to avoid the customer from approaching
Consumer Forum.
As per RBI guidelines it has been decided to
absorb guarantee premium on WTPSG w.e.f In case a complaint is filed with Consumer
1.1.98 by the bank without passing it on to the Forum/Commission and if the contention is
borrowers. The premium amount on WTPSG is to genuine, the matter should be endeavoured to be
be debited to ‘Guarantee Fees Paid Account’ and settled amicably without leaving scope for
the details thereof should be recorded in the consumer forum to pass adverse comments against
voucher. the bank. Staff responsible for lapses must be
made accountable for the loss caused to the bank.
(FX.23/97-98 dt.26.03.98) Instructions for filing of appeal, etc., should be
sought from ZO where the amount involved is less
Coverage of new accounts under than Rs.1 lakh and in other cases from HO: Legal
WTPCG/WTPSG Dept. Lawyers should be advised to inform the
outcome of the proceedings instantly.
ECGC has clarified that any new account
with a branch where the pre-shipment/post- It is better to know the fate of the case first
shipment limit sanctioned to an exporter is in from the branch/branch lawyers than through
excess of the discretionary limit fixed for the bank newspapers.
(Rs.100 lakhs for our bank) under WTPCG/
(GENL.109/97-98 dt.23.02.98)
WTPSG will require the approval of ECGC for
cover. For this purpose the application in the
prescribed format should be submitted by the Concurrent Audit System - Forex Transactions
branch to the designated office of ECGC within 60 In terms of the directions of RBI, all author-
days from the date of sanction. ECGC has further ised branches and other branches with sizeable FX
clarified that in respect of limit sanctioned to a transactions are being brought under concurrent
new borrower being within the discretionary limit, audit. Concurrent auditors should look into all
the branch should notify the limit in the prescribed forex transactions and ensure that the transactions
format to the designated office of ECGC within 30 or decisions are within the policy parameters laid
days from the date of sanction. down by HO, in compliance of the provisions of
EC Manual and FERA 1973 and within the
(FX.24.97-98 dt.30.03.98)
delegated authority. Concurrent auditors are to
submit a certificate with the CAM reports as per
Annexure-1 to the circular. Branch managers
General should ensure that all Forex transactions of the
Illegible entries in pass books - deficiency in branch are audited by the concurrent/internal
service auditors and that the discrepancies pointed out are
rectified then and there and reported in the compli-
It is necessary that pass book entries are ance report submitted along with CAMs. This
made neatly and legibly not only to ensure aspect must be verified by ZMs/RMs/AGMs of
customer satisfaction and goodwill but also to ZICs during their branch visits. Audit of FX trans-
pre-empt their approaching forums like Banking actions should be made a permanent agenda of
Ombudsman, Consumer Redressal Forum, etc. ZIAC meetings and a review thereof for the finan-
with complaints on grounds of deficiency of cial year should be submitted by end of May each
service. Our staff members should do well in this

9
 Volume 10 Issue 4 Jan - Mar 1998

year for being placed to Audit Committee of the expenditure. The above changes will come into
Board. effect from 1.4.98.

(GENL.112/97-98 dt.24.02.98) (GENL.123/97-98 dt.26.03.98)

Reorganisation of role of compliance officer in

our bank MD/ED
RBI has directed that GM in charge of Gazette Notification on re-capitalisation of our
Audit and Inspection shall be nominated as the Bank
Bank’s Compliance Officer. The Compliance
Govt. of India has issued a Gazette notifica-
Officer will act as a nodal agency in co-ordinating
tion on 24.1.98 relating to re-capitalisation of our
and ensuring that important instructions of
Bank to the tune of Rs.1750 crores and this
Government of India/RBI/Board are complied with
provides the necessary motivation to all of us in
and irregularities, if any, are rectified on an
realising our mission - to make Indian Bank a
ongoing basis. The Compliance Cell at HO will
profit making bank with growth and glory. Despite
assist the compliance officer in this regard. It has
the general depressing trend in the banking indus-
now been decided to set up Compliance Cells at
try, our bank could record impressive progress in
RO/ZO to be headed by SM/CM/AGM in charge
various crucial areas of operation in the last two
of Audit and Inspection functions. Branches are to
calendar years thanks to the persistent efforts of all
submit a monthly certificate to their controlling
members of the Indian Bank family. We should all
office towards compliance of all
endeavour that even by 31.3.98, our Bank posts
instructions/guidelines issued by RBI/Government
operating profit. A little more hard work in impor-
of India/Board/MC/ Audit Committee from time to
tant areas such as mobilising core deposits, recov-
time and for submission of all statutory returns to
ery of NPAs and better housekeeping will translate
various offices. The controlling offices are to
our efforts into reality. The Chairman wishes that
collect the certificates and submit a consolidated
our aspirations and hopes are translated into reali-
certificate of compliance to HO:Compliance Cell
ties this year.
every month. It should be ensured that the compli-
ance certificate is not a qualified one. (MD/ED.10/97-98 dt.29.01.98)
(GENL.118/97-98 dt.10.03.98)
Bank’s Guidelines issued under different key
Removal of miscellaneous expenditure areas
It has been decided to scrap the head ‘Misc. Circulars periodically issued by Head
Expenditure’. Items hitherto classified under Office contain norms, systems and procedures to
Miscellaneous Expenditure have been regrouped be followed by branches on all matters including
for being classified under difference expenditure those relating to credit. The guidelines/norms are
subheads already existing or newly introduced. to be used as a benchmark by field level function-
Those which could not be grouped under any aries for better negotiation skills and must be
specific head are to be classified under a new head treated as confidential. They should not be
called ‘Residual Expenditure’. The per voucher disclosed to the borrowers/parties under any
ceiling prevailing at present for misc. expenditure circumstances. Meticulous compliance with the
will ipso facto be applicable for residual above instructions by all staff members should be
ensured.

(MD/ED.14/97-98 dt.21.03.98)

10
 Volume 11 Issue 1 April - June 1998

Deposits
Recollect
NRE Term Deposits
6 months and above upto 1 year 8.50
Interest rates on domestic, capital gains, NRE
and NRR term deposits Over 1 year to 3 years 11.00
Over 3 years 12.00
The interest rates on various deposit
schemes stand revised as under w.e.f 20.04.98:
NR NR Term Deposits
Int. Rate 6 months and above upto 1 year
Duration 11.00
% p.a
Over 1 year to 3 years 12.00
Domestic Term Deposits / Capital Gains Scheme
30 days to 45 days 7.00
Penal interest on premature withdrawal of
46 days to 179 days 8.00
domestic terms deposits
180 days to 1 year 9.00
The rules with regard to penal interest on
Over 1 year to 2 years 10.50 premature withdrawal of domestic term deposit are
Over 2 years to 3 years 11.50 revised as under:
Over 3 years 12.00
Period within
NRE Term Deposits
Applicable penal
which deposit is
interest
6 months and above upto 1 year 9.00 foreclosed
Over 1 year to 3 years 11.00 Upto 14 days No interest will be paid
Over 3 years 12.00
2% below the applicable
15 days to 45 days
NR NR Term Deposits rate
6 months and above upto 1 year 11.50
46 days and above
Over 1 year to 3 years 12.00 Applicable rate of interest
a. Upto Rs.1 lakh
will be paid without any
penal interest
(DEP.1/98-99 dt.17.04.98)
1% below the applicable
b. Above Rs.1 lakh rate
Opening of savings bank accounts in the name
of Farmers’ clubs - Vikas Volunteer Vahini
Differential rate of interest according to the size
RBI has informed that savings bank of the deposit
accounts may be opened in the name of Farmers’
club - Vikas Volunteer Vahini (VVV) with the It has been decided to offer the following
designated banks. differential rates of interest on domestic term
deposits of maturity upto 1 year.
(DEP.2/98-99 dt.21.04.98) Amount of Single Rate over and above the applicable
Deposit rate for the respective period
Interest rates on domestic, capital gains, NRE Rs.15 lakhs to 1
and NRR term deposits 0.25%
crore
The interest rates on various deposit Above Rs.1 crore 0.50%
schemes stand revised as under w.e.f 06.05.98:
Int. Rate (DEP.3/98-99 dt.05.05.98)
Duration
% p.a
Domestic Term Deposits / Capital Gains Minimum balance in SB account of pensioners
Scheme It has been decided not to insist on the
15 days to 45 days 5.00 maintenance of revised minimum balance by the
46 days to 179 days 7.00 pensioners for their pension drawing savings bank
accounts without cheque facility. Hence, no
180 days to 1 year 8.50
charges for non-maintenance of minimum balance
Over 1 year to 2 years 10.00 in such accounts be levied. However, for SB
Over 2 years to 3 years 11.00 accounts of pensioners with cheque facility, the
Over 3 years 11.50
PDF-1998-1Q

1
 Volume 11 Issue 1 April - June 1998

minimum balance to be maintained shall continue i. no proposal be it fresh, enhancement or

to be Rs.250. compromise be rejected at their level.

(DEP.4/98-99 dt.15.05.98) ii. Any case of rejection should be referred to

the next higher authority clearly stating the reasons
for rejection and only after concurrence of the
Renewal of overdue Domestic Term Deposits immediate higher authority, the application should
The minimum period for acceptance of be rejected specifying the reasons
domestic term deposit has been reduced from 30
days to 15 days. Hence, renewal of overdue (ADV.3/98-99 dt.07.04.98)
domestic term deposits shall be for the period
extending upto at least 15 days beyond the date of Interest rate on direct housing loans to
presentation for the purpose of renewal. individuals
(DEP.5/98-99 dt.27.05.98) The rate of interest to be charged by the
bank on Direct Housing Loans to individuals
Preferential int. rates on domestic term stands revised w.e.f. 1.11.97 as under:
deposits Size of Loan Rural Urban
For acquisition or construction of new units
The preferential rates of interest have been
revised w.e.f. 11.6.98 as follows: 13.00% +
Upto Rs.50,000 12.00% + Int.tax
Int.tax
Rate over and above the 15.50% +
Rs.50,001 to Rs.2,00,000 14.50% + Int.tax
Amount of Deposit applicable rate for the Int.tax
prescribed period
Rs.2,00,001 to Rs.3,00,000
Rs. 15 lakhs to less *
0.25% more 18.50% +
than Rs.1 crore (From 1.12.97 limit from 18.50% + Int.tax
Int.tax
Rs. 1 crore and above Rs.2,00,001 to
0.50% more Rs.5,00,000)
to less than Rs.2 crores
Rs. 2 crores and above Rs.3,00,001 to
0.75% more Rs.10,00,000 *
to less than Rs.10 18.50% +
crores (From 1.12.97 limit from 18.50% + Int.tax
Int.tax
Rs.5,00,001 to
Rs. 10 crores and Rs.10,00,000)
To be taken up with HO.
above For Upgradation
Upto Rs.50,000 12.00% 13.00%
The differential interest rates would be Rs.50,001 to Rs.1,00,000 -- 15.50%
applicable only to fresh deposits and on renewal of
maturing deposits. * PLR + 4% as advised by CPGD.

(DEP.7/98-99 dt.11.06.98) For guidelines and formats on submission of

refinance claims and quarterly return on housing
finance, the circular may be referred to.
Advances
(ADV.4/98-99 dt.7.4.98)
Credit Information System - Sub classification
of SSI advances Revised Methodology for Assessment of
In the CIS, under subsector codes for SSI working capital requirements
advances (Refer Page 71 of the booklet on CIS)
The following modifications/clarifications
some of the existing codes have been reclassified
are given on the revised methodology for assess-
and certain additional codes introduced. The
ment of working capital requirements:
revised codes are to be used for reporting in CIS
w.e.f. 1.7.98. For details, the circular may be 1. The revised methodology provides for
referred to. combination of pre-sale and post-sale limits into a
single hypothecation facility against stock and
(ADV.1/98-99 dt.01.04.98) receivables, suitable sub-ceilings by way of
definite percentages could be fixed within the
Rejection of fresh overall limit for drawings separately against inven-
credit/enhancement/compromise proposals tory and/or receivables to ensure that the total
limit is not used for inventory or receivables
Branches are advised that alone.

2
 Volume 11 Issue 1 April - June 1998

2. STBC can co-exist with WCDL and will be Loan against FCNRB Deposits
a part/whole of fund based working capital limits.
It has been decided to charge the following
3. Wherever it is felt that composite facility is rates of interest on loans against FCNR(B)
not to be considered, bifurcated assessed limits deposits:
such as KCC, OCC, Doc.BP, DABP, Supply BP,
ODBD, etc. may be considered. However export 1. Rupee loans to self to be adjusted out of
finance cannot be considered for STBC and can be rupee resources or NRO funds
sanctioned independent of STBC or sub-limit to a. Upto Rs.25000 12% + Int.tax
STBC, but however, within the overall assessed
limit. b.
Beyond Rs.25000 upto
13.5% + Int.tax
Rs.2 lakhs
4. The four financial parameters prescribed
will be applicable to existing units also which were PLR + 0.5% + Int.
not hitherto with our bank and also to new units Tax
(about to go in for production) with such financial or
c. Beyond Rs.2 lakhs
projections. Dep. rate + 2% + Int.
tax
5. For units which do not satisfy the financial whichever is higher
parameters, the sanctioning authority has to take a
Rupee loans to third
view. 2 PLR + 4% + Int.tax
parties
6. While fixing limit for borrowers having
Loans in foreign
fund based working capital limit upto Rs.2 crores,
currency to be repaid Dep. rate + 2% +
wherever actual working capital needs are to be 3
out of forex remittance Int.tax
assessed, (alternative method) the assessment or proceeds of FCNRB
would be done based on the level of current assets
as a percentage of gross sales.
(ADV.10/98-99 dt.16.04.98)
7. Fixing of composite limit is applicable to
both for turnover and alternative method of Amendments to Manual of Instructions I -
assessment. Priority Sector Advances - Agriculture
8. The relaxation provided in the policy
Amendments to be carried out in the above
empowering sanctioning authorities to consider
manual are given in the annexure to the circular.
cases for maintenance of inventory for above 5
The amendments are based on circulars issued
months sales (45%) should not be allowed as a from 1.8.96 to 31.3.98
matter of routine but only after full justification.
9. While undertaking stock inspection, apart (ADV.12/98-99 dt.22.4.98)
from assessing the value of stocks, stocks brought
under LCDA should also be earmarked. However, Loan to Pensioners
detailed assessment of level of Sundry Creditors at
The scheme of loan to pensioners has been
the time of every inspection is not intended.
modified. All pensioners drawing pension through
10. Any depletion in NWC may indicate diver- our branches (except family pensioners and Malay-
sion of bank funds. Obtention, scrutiny and sian pensioners) who are not re-employed are
follow-up of QIS statements will effectively guard eligible to avail the loan for genuine purposes
against possible diversion. including for medical purposes. The amount of
loan sanctioned will be equivalent of one month’s
11. As a measure of export promotion, NWC
pension amount or Rs.5000 whichever is less. The
need not be maintained on export receivables.
rate of interest will be as applicable for consumer
12. Any increase sanctioned on the basis of loans, ie.PLR+6% + Interest Tax. All other
projection is subject to QIS discipline which seeks terms and conditions as mentioned in the earlier
to control the drawings based on actual NWC circulars in this regard remain unchanged.
available. Any deviation of the actuals from earlier
projections of NWC has to be critically viewed. (ADV.13/98-99 dt.28.4.98)
Such projections are not to be accepted as a matter
of routine and will have to be subject to review.

(ADV.7/98-99 dt.13.04.98)

3
 Volume 11 Issue 1 April - June 1998

Revision of PLR and consequent changes in The warning signals should be taken
interest rates on advances seriously and immediate corrective action must be
taken. Even in initial stage, interaction with the
Consequent to the reduction of Bank rate by key persons of the borrowing unit is necessary to
RBI to 10% w.e.f. 2.4.98, it has been decided fix up a time frame for regularisation.
w.e.f. 20.4.98
All accounts of Rs.1 crore and above
i. to revise our PLR to 14% coming under the purview of QIS discipline must
ii. to have PTLR at the same level of PLR ie. be looked into by ZM personally. Branches must
14% and ensure that slippage of standard assets is avoided at
all costs.
iii. to maintain a maximum spread of 4% for
different categories of advances over Rs.2 lakhs (ADV.16/98-99 dt.29.04.98)
except for consumer credit for which the
maximum spread will be 6%. Revision of PLR and consequent changes in
Branches are advised to revise interest rate interest rates on advances
on advances of over Rs.2 lakhs for the various
W.e.f. 06.05.98, the PLR and PTLR of the
categories of loans and advances linked to PLR
Bank stand reduced from 14% to 13.5%. The
accordingly. The rates for advances upto Rs.25000
maximum spread over PLR will be 4% for all
and for those over Rs.25000 and upto Rs.2 lakhs
advances (except consumer credits for which the
will continue at 12% p.a. and 13.5% p.a. respec-
maximum spread is 6%).
tively exclusive of interest tax. The revised rates
will be applicable to existing as well as fresh The interest rate on advances against
borrowal accounts whether working capital domestic/NRE term deposits to the depositor
advances or term loans. Branches should charge (singly/jointly or as guardian) is to be charged at
the interest rates irrespective of whether refinance deposit rate plus 2% plus interest tax or PLR +
is availed or not, unless advised by the refinance Interest Tax whichever is less. For detailed
desks concerned. instructions on the revised interest rates applicable
for various categories of advances consequent to
(ADV.14/98-99 dt.28.04.98) the revision of PLR, the circular may be referred
to.
Swarna Jayanti Shahari Rozgar Yojana
(ADV.18/98-99 dt.19.05.98)
(SJSRY)
Further to the circular ADV.128/97-98 Loans and advances against shares and
dt.26.12.97, the clarifications made by Govern- debentures
ment of India in regard to the above scheme are
given in the annexure to the circular. The aspects As per the extant guidelines, shares/deben-
covered include age limit, admissibility of subsidy, tures taken as security by the Bank should be
definition of family, area coverage, etc. transferred in the bank’s name with exclusive and
unconditional voting rights if the advance limit
(ADV.15/98-99 dt.29.04.98) exceeds Rs.10 lakhs. RBI has advised that in
regard to securities held in dematerialised form,
Monitoring of Borrowal Accounts banks are free to take their own decision on the
transfer of such securities in their name. However,
Close monitoring of borrowal accounts to such holding is subject to the provisions contained
ensure that they do not slip into NPAs is done in section 19(2) of the Banking Regulation Act,
through 1949.
1. Periodical inspection of the unit RBI has also advised that banks are no
2. Analysis of financial statements in the form longer required to obtain its prior approval for the
of MSOD, QIS-1, QIS-2 and QIS-3 as well exercise of voting rights.
as audited financial statements. The detailed guidelines for lending against
3. Review of the account dematerialised securities are given in the annexure
to the circular. In view of the gaining popularity of
4. Scrutiny of reports like stock audit, concur- the depository concept and the electronic share
rent auditor’s report and inspection reports holding/trading, branches are advised to take
5. Comments in LFAR advantage of the benefits arising out of lending
against D-mat shares/bonds and popularise the
6. Scrutiny of operations in the account same. Such advances are however subject to credit

4
 Volume 11 Issue 1 April - June 1998

regulatory measures in force from time to time. ii. Where group liabilities exist
All precautions applicable for advances against
Release of securities, whether primary or
shares will be applicable for D-Mat shares also.
additional/collateral, should not be considered as a
(ADV.20/98-99 dt.22.05.98) matter of course until all the group liabilities are
cleared/adjusted.
Inspection of stocks/units by branches other (ADV.27/98-99 dt.13.06.98)
than lending branch
The instructions in regard to the above Revision of interest rate on ECNOS at preship-
subject are available in para 11.17 page 7.19 of ment stage
the Manual of Instructions - Conventional
With effect from 30.4.98 it has been
Advances. The following additional guidelines
decided to stipulate interest rate at 19% p.a. for
may also be taken note of.
ECNOS (Export Credit Not Otherwise Specified)
i. Sanctioning authorities need to incorporate at preshipment stage. There is no change in the
suitable terms/instructions to branches vide their interest rate for ECNOS at post-shipment stage
sanction letter for conduct of inspection at outside which remains at 20%.
centres and mark a copy of the sanction ticket to
the branch at such centre and to the concerned (ADV.29/98-99 dt.16.06.98)
zonal office
ii. Branches at outside centres should conduct Methodology for assessment of working
such inspection periodically and send a report in capital requirements - Clarifications
AUM 4 format to the lending branch along with
the stock statement. 1. Lodgement of goods under Bank’s lock
and key (Pledge)
iii. Lending branch need to follow up conduct
of such inspection at outside centres and ensure The existing procedure for lodgement of
receipt of inspection reports/stock statements; goods (only paid-for stocks) under pledge (key
incorporate the details of such inspection in the loan / KCC) will continue even under the revised
AUM 4 submitted by them to controlling office. method for assessment of working capital.

The lending branch may also conduct 2. Export Receivables

surprise inspections. The necessity and periodicity Export receivables will be excluded from
of such inspections are to be decided by the current assets and export bills
sanctioning authority. purchased/discounted and outstanding will be
excluded from current liabilities for the purpose of
(ADV.24/98-99 dt.05.06.98) arriving at current ratio. However, for the purpose
of assessment, export receivables will form part of
Manufacture of the product ‘organic manure’ current assets.
from city garbage/solid wastes
(ADV.30/98-99 dt.16.06.98)
Govt. of India has notified that the
manufacture of products ‘organic manure’ from
city garbage/solid waste is to be allowed in the Renewal of Certificate of Registration as
Small Scale Sector and can be registered under Bankers to Issue
SIDO Registration programme subject to fulfil- Our Registration to act as Bankers to issue
ment of all other criteria/formality has been renewed by SEBI for a period of 3 years
from 1.12.97 to 30.11.2000 and accordingly we
(ADV.25/98-99 dt.08.06.98) are authorised to carry out the following activities:

Release of Security i. Acceptance of application and application

monies
i. Where there is no group liability
ii. Acceptance of allotment or call monies
Release of securities, whether primary or
additional/collateral should be made only after all iii. Refund of application monies
direct and indirect liabilities whether fund based or iv. Payment of dividend or interest warrants
non-fund based are cleared/adjusted, and after
getting permission from the concerned sanctioning
authorities.

5
 Volume 11 Issue 1 April - June 1998

Branches are advised to get in touch with The quarter from 01.07.98 to 30.09.98 is
merchant bankers in their area for improving this observed as a Recovery Quarter with a view to
segment of business. ensure intensified recovery efforts for concrete
results and set the tone for the rest of year. Recov-
(ADV.37/98-99 dt.22.06.98) ery performance will be given due credit while
assessing performance/potential of officers/staff
Interest Tax Act 1974 - Clarification members. Grant of incentives for achieving recov-
ery targets is under examination. Detailed action
The types of credit institutions exempted points towards concerted efforts in recovery are
from the purview of Interest Tax Act 1974 are listed in the circular.
furnished in the Annexure to the circular.
Branches are required to obtain an undertaking (ADV.42/98-99 dt.25.06.98)
letter from such credit institutions (as per Annex-
ure I of circular ADV.153/91-92) seeking exemp-
tion of interest tax and recommend to ZM for
permission for not collecting interest tax. Personnel
Supplementary housing loan granted to staff
(ADV.38/98-99 dt.23.06.98)
members by IBH
Strategic Revival Plan - Intensified drive for On examining a report received from
improved recovery performance Indbank Housing Ltd that certain loan accounts of
staff have remained overdue, it was observed that
Recovery is the corner stone for the such overdues arise mainly due to resignation,
turnaround of the bank and it is the first road and suspension, voluntary cessation, death or retire-
sure route to profitability. The bank has introduced ment of the employees and that in such cases the
various measures to accelerate the recovery SHL accounts of the employees were also overdue.
performance which include In order to expedite recovery, branches are
1. Mechanism of Zonal Special Recovery advised to initiate joint legal action against the
Committee immovable property for recovery of the dues both
to our bank and to IBH for which consent letter
2. Concurrent Monitoring of high value NPAs from IBH has to be obtained. On recovery of SHL
by CO: SRMC in full, if loan with IBH is remaining overdue,
3. Mechanism of Settlement Advisory documents of title deeds to the house property
Committee should be handed over to IBH for further action at
their end.
4. Nomination of Recovery officers for select
branches with high NPA profile. (PRNL.3/98-99 dt.15.4.98)
The recovery target for 1998-99 originally
fixed at Rs.575 crores was revised upwards to Conclusion of discussions between IBA and
Rs.914 crores (including Rs.232 crores by way of the Officers Organisations on Residual Issues
upgradation), in order to register an operating
The gist of the conclusions reached on the
profit in 1998-99. Branches have been advised to
residual issues relating to officers’ service regula-
entrust every advance of Rs.5 crore and above to a
tions which are effective from 01.04.97 are as
separate recovery officer and that accounts of Rs.1
under:
crore and above upto Rs.5 crores are to be
monitored by a team of officers, besides utilisation i. Project area compensatory allowance:
of services of IDO/RDO/Recovery Rs.125 p.m or Rs.100 p.m. according to classifi-
officer/Agricultural Assistant. Branches should cation of the area as Group ‘A’ or Group ‘B’
forward weekly reports to the sanctioning author-
ii. Mid-Academic year transfer allowance:
ity, Zonal Office and HO:IRRD on their recovery
Rs.300 p.m. to an officer on transfer to another
performance. Recovery officers are to maintain a
place in the midst of an academic year, if he is
diary for recording their efforts on a daily basis.
having one or more children studying in school or
Active participation of all staff members, college in the former place - eligible from the date
irrespective of cadre, is a prerequisite for he reports at the latter place upto the end of the
improved recovery performance. Staff meetings academic year. Such allowance shall cease if all
may be conducted to enhance their morale and the children cease studying at the former place.
ensure their involvement. Team approach on recal-
iii. Deputation allowance : Receipt of emolu-
citrant borrowers is a proven method for recovery.
ments attached to the post to which deputed.

6
 Volume 11 Issue 1 April - June 1998

Alternatively, option to draw, in addition to pay, iii. The exercise should be done systematically
deputation allowance of 12% of pay with a and in a time bound manner.
maximum of Rs.1000 p.m. However, for deputa-
An illustrative list of instances wherein the
tion to an organsiation located at the same place,
need for assessing staff accountability arises is
to training establishments of the Bank as faculty or
given in the circular along with the procedure for
to BSRB, deputation allowance payable will be 6%
submission of staff lapse report, the action point at
of the pay with a maximum of Rs.500 p.m.
various levels and the factors to be taken into
iv. Closing allowance: Rs.250 per each closing consideration while determining staff accountabil-
in March/September for attending to closing of ity, etc.
books at branches (branches however should
continue to comply with the MoU guidelines (PRNL.15/98-99 dt.30.05.98)
communicated to them)
v. Split duty allowance: Rs.70 p.m.
Modifications to SHL scheme - Award Staff

vi. Unavailed casual leave in any year may be 1. Additional Housing Loan
availed in the following three years. All Award Staff are eligible to avail the
vii. Compensation on transfer for transporting difference between the earlier sanctioned limits
baggage and the present enhanced limit of
Rs.3 lakhs to clerks
Pay Range Family Single
Rs.2 lakhs to substaff
Rs.4250 - 6210 3000 kg 1500 kg
as additional loan as one time measure for the
Rs.6211 and above Full wagon 2500 kg purpose of additional construction/improvements/
renovations, irrespective of the number of times
viii. Lump sum payment on transfer they have availed additional loan earlier.
Grade Lump sum The facility would be available upto
31.03.99 only.
Top executive and Senior
Rs.5000
Management 2. Second Housing Loan
Middle and Junior As a consequence of the enhancement in the
Rs.4000
management limits for SHL, one of the three criteria for the
determination of second housing loan, viz.,
ix. Definition of ‘Family’ ‘Present Eligible Limit’ also stands modified
The limit of income for the purpose of accordingly. The enhancement in limit comes into
definition of wholly dependent family members effect from 21.05.98. The Second Housing Loan
shall be raised from Rs.500 p.m. to Rs.1500 p.m. will be available for those who have availed SHL
prior to 31.1.91 only. For those who have availed
Branches/offices are authorised to calculate Second Housing Loan, additional loan for take
and disburse immediately an adhoc amount equiva- over of liability with IBH only will be permitted as
lent to the net arrears payable to eligible officers a one time measure upto 31.3.99, subject to a
for the period from 1.4.97 to 31.3.98 and continue maximum of
to pay adhoc amount on a monthly basis from
1.4.98 till formalities amending the regulations are Rs.75,000 for clerks
completed. Rs.50,000 for substaff

(PRNL.5/98-99 dt.30.4.98) (PRNL.17/98-99 dt.12.06.98)

Staff accountability Modifications to SHL scheme - Officers

The staff accountability policy of the bank 1. Additional Housing Loan
is based on the following ideals: All officers are eligible to avail the differ-
i. Staff accountability exercise should be used ence between the earlier sanctioned limits and the
rather as a regulatory instrument for initiating present enhanced limit of Rs.5 lakhs as additional
corrective measures than as a destructive weapon. loan as one time measure for the purpose of
additional construction/improvements/renovations,
ii. The aim should be as much as to protect the irrespective of the number of times they have
innocent as to punish the guilty. availed additional loan earlier. The facility would

7
 Volume 11 Issue 1 April - June 1998

be available upto 31.03.99 only. This will also be earlier. For details of the modifications, the annex-
available to those officers who have been ure to the circular may be referred to.
sanctioned additional loan for take over of IBH
liability, subject to the total availment not exceed- (CRA.2/98-99 dt.21.04.98)
ing the present enhanced limit of Rs.5 lakhs.
2. Second Housing Loan
Service charges - revised
As a consequence of the enhancement in the The following revisions are made with
limits for SHL, one of the three criteria for the immediate effect in respect of
determination of second housing loan, viz., 1. DD Cancellation Charges
‘Present Eligible Limit’ also stands modified
accordingly. The enhancement in limit comes into Cancellation Charges
DD Amount
effect from 21.05.98. The Second Housing Loan for each DD
will be available for those officers who have
availed SHL prior to 11.2.93 only. Rs.20 and less Rs.5
For those who have availed Second Housing Rs.21 - Rs.49 Rs.10
Loan, additional loan for take over of liability with
IBH only will be permitted as a one time measure Rs.50 and above Rs.20
upto 31.3.99, subject to a maximum of Rs. 1 lakh.
2. Outward cheque returns through local
(PRNL.18/98-99 dt.12.06.98) clearing
Amount of cheque Handling charges
Closure of Holiday Home at Yercaud
Upto Rs.50000 Rs.25
It has been decided to close the holiday
home at Yercaud w.e.f. 31.07.98 in view of the At the rate of 5 paise per
poor occupancy rate. Above Rs.50000 Rs.100 per day with a
minimum of Rs.25
(PRNL.19/98-99 dt.19.06.98)
The above charges will vary according to
the cheque return time of the local clearing house
CRA and also intervening holidays.
Revised System for Issue and Payment of DDs (CRA.6/98-99 dt.15.05.98)
The instructions for reporting in Sec.42
statement are as under:
1. For branches not coming under FX
Service Branches
WTPCG and WTPSG of ECGC
If DDs account balance is in credit, it
should be shown under Bills Payable - Column ECGC has renewed the captioned two
3.1.0; and if in debit, it should be shown under guarantees upto 30.06.98. All preshipment and
DDPWA - Column 8.0. post shipment advances granted by all our
branches in India as per RBI guidelines are
2. For branches in Service Branch Centres covered under the guarantee except
Credit balance in DDs account should be 1. Advances granted for exports made on
shown under Bills Payable - Column 3.1.0. deferred terms of payment, turnkey projects,
Balance under DDs Paid Account (Service Branch) construction works and service contracts and
should be shown under DDPWA - Column 8.0.
2. Advances granted to wholly owned Govern-
3. As regards Service Branches, balance under ment of India enterprises
DDs Account will always be in debit and hence
should be shown under DDPWA - Column 8.0 3. Advances granted against Letters of Credit
The loss coverage for WTPCG is 60%. In
(CRA.1/98-99 dt.02.04.98)
the case of WTPSG, for policy holders the cover-
age is 60% and for others it is 50%.
Revised System for Issue and Payment of DDs
(FX.1/98-99 dt.13.04.98)
Based on the feedback received, certain
modifications were made to the guidelines issued

8
 Volume 11 Issue 1 April - June 1998

Issue of Policies to exporters placed in Interest rates on domestic, capital gains, NRE
specific approval list of ECGC and NRNR term deposits
While sanctioning credit facilities to an The maturity pattern of deposits with differ-
exporter, the bank explores the possibility of ent rates of interest stand revised as under w.e.f.
policy cover being taken by the concerned 13.05.98
exporter as it gives protection against overseas
Int. Rate
credit risks and the bank becomes the beneficiary Duration
% p.a
of the policy in the event of a loss being suffered
by the exporter. However, ECGC has advised that Domestic Term Deposits / Capital Gains
banks should not be influenced only by the issue of Scheme
policies by ECGC to an exporter while considering 15 days to 45 days 5.00
sanction of credit facilities. Each proposal has to
be evaluated on merits and the prescription of 46 days to 179 days 7.00
obtention of ECGC policy may be made as an 180 days to less than 1 year 8.50
additional stipulation. 1 year to less than 2 years 10.00
ECGC has further informed that they may 2 years to less than 3 years 11.00
consider issue of policy even to an exporter in the 3 years and above 11.50
Specific Approval List of ECGC on merits.

(FX.2/98-99 dt.18.04.98) NRE Term Deposits

6 months and above upto less than
8.50
Charging of interest on Packing Credit 1 year
1 year to less than 3 years 11.00
In modification of the guidelines given in
para 6.4, page 4.9 of the Manual of Instructions - 3 years and above 11.50
Foreign Exchange Transactions, it has been
decided that w.e.f. 01.04.98, interest on packing NR NR Term Deposits
credit should be debited to the packing credit
account of the exporter-borrower only and no 6 months and above upto less than
11.00
TOD should be permitted for this purpose in his 1 year
operative/current account. The exporter has to be 1 year to 3 years 12.00
informed that the interest debited to PC account is
to be repaid within one week failing which the (FX.5/98-99 dt.13.05.98)
bank would besides charging normal interest
would also take steps for recovery. In case of
default, the matter should be referred to the General
sanctioning authority.

(FX.3/98-99 dt.23.04.98) Furnishing of supplementary information in

Sec 42 return
Interest rates on deposits held under FCNR(B) Branches should report only the balance in
Interest rates on FCNR(B) deposits stand FCNR(B) deposits in the column provided for
revised as under w.e.f. 04.05.98. FCNR in Sec.42 statement. Non-reporting/incor-
rect reporting of data in Sec.42 may result in
Int. rate % p.a maintenance of excess CRR by the Bank than the
Period actual requirement, thus denying the bank the
£ US $ DM ¥ benefit of exemption and will have serious impli-
6 months to less cation on the reserve management of the bank.
6.25 5.25 3.25 0.40
than 1 year
It is further advised that
1 year to less than
6.50 5.50 3.75 0.50 i. All branches except OSBs need not submit
2 years
Sec.42 statements to HO: Accounts Dept.
2 years to less than
6.50 5.50 4.00 0.50
3 years ii. Submission of Sec.42 Quick Data figures
3 years 6.50 5.50 4.25 0.75 through telex/telegram to HO: Accounts is
discontinued.
(FX.4/98-99 dt.12.05.98)

9
 Volume 11 Issue 1 April - June 1998

iii. Regional Offices need not submit regional However, it may be noted that the old Rs.500
weekly deposit/advance data to HO: notes continue to be legal tender.
Accounts.
(GENL.15/98-99 dt.23.06.98)
(GENL.3/98-99 dt.07.04.98)

MD/ED
Banking Ombudsman Scheme 1995
Credit facilities to Standard Accounts
The centres where Banking Ombudsman
Scheme has been operationalised are listed in the The first priority of branches should be to
circular. Information posters are enclosed to the take care of the need based request of the borrowal
circular for being displayed prominently in two accounts of the standard assets category and
places of the Banking Hall. Brief particulars of the consider without delay such requests to prevent
Scheme are also furnished in the Annexure to the their approaching other banks. Branch Managers
circular which are to be filed separately for ready should be in constant touch with good borrowers to
reference and for customer guidance on demand. understand their needs and promptly respond to
their immediate requirements. In this era of fierce
(GENL.11/98-99 dt.11.05.98) competition, it is our paramount duty to remain
vigilant and to retain the existing standard
Risks in Computer Environment category accounts in our fold. The cutting edge in
today’s competitive environment is the qualitative
The guidelines issued earlier in respect of service and quick response. Marketing officers
security measures to be adopted under Computer- have to play an active and important role in this
ised Environment have been consolidated and regard.
given in the enclosure to the circular by way of
reiteration for the benefit of branches/offices. The Decisions have to be taken in a professional
security aspects include explanation of the risk and objective manner. The time frame set by RBI
factors and the security requirement in computer- for disposal of credit application is only the outer
ised environment such as security of physical limit. Today’s competition and the increasing
computer assets, security of data stored in customer expectations demand a much quicker
computers/magnetic media, Human factor, decision making and action.
Password, Mirror status in the server, Mainte- Avoiding taking decisions on the pretext of
nance of reports (including hard copies), Back-up, fear of accountability probably stems from the
training of officers, disposal of old floppies/print- misconception that accountability devolves if a
outs, etc., Maintenance of registers, Functions of decision is taken and no accountability will be
System Manager, File server cabin and UPS. The there for indecision. Such an attitude is not only
circular may be referred to for details of the above detrimental to the growth of business but also mars
guidelines. Administrative offices may adopt the the process of swift turnaround. As long as the
guidelines to the extent they are applicable to decisions are judicious and without culpable negli-
non-branch environment. gence, there is no need to have fear of accountabil-
ity. In the circumstances in which our bank is
(GENL.12/98-99 dt.11.06.98) placed, decision making has to be very prompt. In
addition to scouting for good new accounts, lever-
Old design of Rs.500 notes - Non issue of aging on proactive measures such as simplified
assessment, objective credit rating, competitive
RBI has informed that it has been decided to interest rates, Fast Track System, etc., attention
phase out the old Rs.500 notes, viz., those contain- has to be paid to maintain the asset quality of the
ing the Ashoka Pillar Watermark and the portrait existing standard accounts.
of Mahatma Gandhi progressively. Accordingly
branches are advised to refrain from issuing old Losing deposit accounts or borrowal
Rs.500 notes held in their stock to other accounts of the standard category to other banks
banks/branches and to Public. Old Rs.500 notes cannot be tolerated. Borrowal accounts of the
received at counters or through remittances may standard category should be properly serviced as it
after careful examination be treated as would not only augment the income and enhance
non-issuable notes, packeted separately and remit- the image of the bank but also help in securing
ted to RBI along with the soiled note remittances. good quality assets.

(MD/ED.5/98-99 dt.25.06.98)

10
 Volume 11 Issue 2 July- September 1998

Deposits period of repayment. As regards foreclosure, a

Recollect
worked out example is furnished in the annexure
Unclaimed Deposits - Sec.26 of Banking to the circular with a view to facilitate a better
Regulation Act, 1949 understanding of the procedure laid down.
Branches are aware that deposit accounts (DEP.13/98-99 dt.31.08.98)
not operated upon for 10 years or more should be
transferred to the GL head “Unclaimed Deposit Rounding off of paise transactions to the
Accounts” .The circular intends to dispel the nearest rupee
common misconceptions on the procedure relating
to unclaimed deposits by reiterating and amplify- Banks are required to deal in a number of
ing the existing instructions. Unclaimed deposits transactions involving paise as some customers
should not be transferred to Central Office. The still use paise while drawing cheques/bills or
annual statement in form ACA 1, should be making remittances. The Banking Operations
compiled as on 31st December every year and sent Committee of IBA has advised banks to educate
to the controlling office along with the quarterly customers on the need to round off paise transac-
balance sheet returns for December. Ledgers for tion to the nearest rupee. Branches are accordingly
unclaimed deposits should be maintained category- advised to counsel their customers on the rounding
wise, i.e. Current account, SB, term deposits, etc. off of paise transaction to the nearest rupee.
to facilitate easy and accurate compilation of the However it should be ensured that cheques issued
return on unclaimed deposits. by customers containing fraction of a rupee are not
dishonoured, if otherwise in order.
For detailed instructions on the compilation
procedure, submission of the return, revival of (DEP.14/98-99 dt.31.08.98)
unclaimed deposit accounts, etc., the circular may
be referred to.
Deposit mobilisation - Staff participation
(DEP.9/98-99 dt.27.07.98) In case of deposits mobilised by staff
members, branches shall send the details thereof to
Preferential interest rates on domestic term their ZM by post. Such reports and copies of
deposits reports to HO should not be sent through courier.
As per the norms, letters of appreciation or merit
It has been decided to revise the preferential certificate, as the case may be, will be issued.
rates of interest on single deposits as under:
(DEP.16/98-99 dt.11.09.98)
Rate over and above the
Amount of Deposit applicable rate for the Facility Deposit Scheme
respective period
It has been decided that under Facility
Rs.15 lakhs to less than Deposit Scheme, deposits under Reinvestment Plan
Rs.1 Crore 0.50% more
may also be accepted. While the periodical interest
Rs.1 Crore and above to
on fixed deposits under the scheme is to be
less than Rs.2 Crores 0.75% more credited to the overdraft account, the interest
accrued on RIP deposits will be credited to the
To be decided at HO on daily
Rs.2 Crores and above basis, depending on market respective RIP accounts. The overdraft limit will
conditions be 90% of the initial deposit only. No request for
enhancement in the limit against the accrued inter-
For deposits of Rs.2 crores and above, est shall be considered. The modified clause 2 of
branches are advised to take up with Head Office, the letter of undertaking and the amendments to be
Accounts Department for offering preferential rate incorporated in the Manual of Instruction - Depos-
of interest. The above modification comes into its are given in the circular.
force w.e.f. 24.08.98.
(DEP.17/98-99 dt.19.09.98)
(DEP.12/98-99 dt.22.08.98)

Vidya Nidhi Deposit Scheme Advances

In response to the queries received from Loan to pensioners
various branches, it is clarified that the rate of The eligible amount of loan to pensioners
interest payable on the deposit is the rate eligible has been revised as equivalent of 3 months pension PDF-1998-2Q
for the entire period of the deposit including the or Rs.5000 whichever is less. The sanction of

1
 Volume 11 Issue 2 July- September 1998

loans (other than to Indian Bank Retired Staff who dematerialised securities also stands reduced from
draw pension through our branches) is subject to 50% to 25%.
funds clearance from Zonal Manager. All other
terms and conditions remain unchanged. (ADV.48/98-99 dt.21.07.98)

(ADV.44/98-99 dt.01.07.98) Recommendations of Gupta Committee

IRDP Group Loan The Gupta Committee was constituted by
RBI in December 1997 to suggest measures for
RBI has introduced Group Loan system improving the delivery system as well as simplifi-
under IRDP. The group selected may form a cation of procedure for agricultural credit. Based
society or a registered company or a partnership on the Committee’s report, RBI has indicated
firm. The number of members may vary from 5 to certain procedural modifications in case of 20
15. The sanctioning authority will be RM/ZM items relating to agricultural advances. Of these
depending on the size of the loan. The subsidy items, immediate steps are to be taken in respect
eligible will be 50% of the project cost or Rs.1.25
of 10 items and the action to be taken by branches
lakhs whichever is less and the same on receipt
in regard to each item is given in detail in the
from the Government will be kept in Subsidy
Reserve Fund. The rate of interest applicable will circular. The RBI version of the recommendations
be related to the per capital limit/size of the loan is furnished in Annexure-1 and Annexure-2 of the
sanctioned (i.e. the gross loan divided by the total circular.
number of members). However, the net bank loan
alone should be taken into account for calculation (ADV.49/98-99 dt.22.07.98)
of interest as is being done for other IRDP loans.
DRDA will be the sponsoring agency. The repay- Loan policy 98-99
ment period shall be for a period of not less than 5
years and may be fixed taking into account the The major variations in the loan policy for
level of income generation and economic life of 98-99 as compared to the policy for 97-98 are as
the assets. The salient features of the scheme follows:
advised by RBI are furnished in the annexure to 1. Gross non-food credit budgeted to
the circular. expand by Rs.1000 crore. A strong credit culture
should be cultivated and concentration should be
(ADV.45/98-99 dt.02.07.98)
on identifying and bringing into the bank’s fold
good credit proposals of corporate accounts.
Flow of credit to SSI sector
2. Emphasis be given to retain existing
RBI has advised that the simplified proce- good customer accounts in cashew, leather,
dure of sanctioning working capital limits on the diamond, cotton yarn textiles/industries.
basis of 20% of the projected annual turnover may
be adopted to all SSI units requiring aggregate 3. All educational loan accounts should
fund based working capital limits upto Rs.400 be reviewed. There is enough scope for further
lakhs from the banking system. Branches are lending on selective basis.
required to satisfy themselves about the reason- 4. All Proposals for term loans of over
ableness of the projected annual turnover and Rs.10 lakhs need not be referred to HO;
ensure that a minimum of 5% of the proposed fresh/renewal sanction in case of existing standard
annual turnover is brought in as margin money. asset borrowal accounts could be considered by
various authorities within their powers. However
(ADV.47/98-99 dt.18.07.98) term loan proposals for new customers could be
considered subject to funds clearance.
Advance against D-mat shares
5. Secured overdraft facility has been
At present, advances against shares and discontinued; instead wherever justified secured
debentures to individuals is subject to a ceiling of term loans with suitable repayment schedule may
Rs.10 lakhs per borrower. RBI has advised that the be sanctioned.
ceiling has been increased to Rs.20 lakhs if the
advances are secured by dematerialised securities. 6. The level of NPAs to be substantially
The minimum margin prescription against reduced by March’99; fresh accretion to NPA to
be restricted to 2% of performing assets.
7. Timely review/renewal of accounts
to be ensured; 100% review/renewal to be
achieved during 1998-99.

2
 Volume 11 Issue 2 July- September 1998

The detailed loan policy is given in the given in Annexure-II of the circular. In respect of
annexure to the circular. deleted/delisted shares, borrowers should be
advised to substitute such shares with adequate
(ADV.50/98-99 dt.30.07.98) number of approved shares to cover the advance.
Wherever substitution is not possible, the drawing
Amendment to Sec.28 of the Indian Contract limit should be correspondingly reduced and the
Act - Effect on Bank Guarantees excess recovered within a maximum period of 6
months. Suitable collateral security such as LIC
Branches are aware that to take care of policy, NSCs, FD, etc., should be obtained from
Bank’s interest as to the period of guarantee, the the borrower to cover the excess.
amount and the time within which demand/claim is
to be made, a restrictive clause called ‘notwith- (ADV.64/98-99 dt.19.8.98)
standing Clause’ is included in the guarantees
issued. Sec.28 of the Indian Contract Act has been Credit monitoring - renewal of credit facilities
amended with effect from 08.01.97 and the
amendment has rendered the ‘notwithstanding While credit sanction/disbursement is to be
clause’ void. As per the amendment, any contract made after careful evaluation and appraisal of loan
containing clauses to the effect that the parties to proposal in all its aspects, post-sanction follow up
the contract have to enforce their rights/claims is to be made through various monitoring tools
within a particular period (which is less than the including MSOD, QIS, periodical inspections,
normal limitation prescribed under law, viz., 30 management counseling, analysis of
years in case of Government and 3 years in the annual/quarterly financial statements, etc.
case of others) failing which the rights/liabilities Review/renewal is yet another important tool for
are forfeited/discharged, is void and unenforceable monitoring. These monitoring exercises help in
to that extent. retention of good quality assets, prevent slippage
in asset quality and get a fair return on the asset.
Taking into account the above changes in
law, IBA has formulated an amended ‘notwith- While taking up review/renewal proposals
standing clause’ which is given in the circular. branches should rectify the irregularities identified
Branches are advised to incorporate the above in the inspection reports. Fresh A & L statements
clause in all guarantees issued by our Bank in should be obtained and credit reports sent at the
place of the earlier ‘notwithstanding clause’ .The time of renewal. Apart from documentation, the
letter of extension of guarantee (F-75) shall also review/renewal proposal should highlight end use
contain the amended ‘notwithstanding clause’ of credit, functioning of the unit on projected line,
(format of amended extension letter is enclosed to availability of adequate security, creation of
the circular). For any guidance/clarification in the proper charge and insurance coverage of the
matter branches may refer to HO: Legal securities.
Department. All branches/offices should endeavour to
achieve 100% review/renewal of all standard loan
(ADV.51/98-99 dt.01.08.98)
accounts and also for NPA accounts, wherever
applicable, well before March’99 .All accounts
Payment of dues to SSI units without exception should be reviewed once in 6
Branches/Controlling offices should ascer- months and renewal proposal put up once in a
tain periodically from medium/large industrial year.
borrowers, the extent of their dues to SSI suppliers
and the action proposed for clearing the overdues, (ADV.67/98-99 dt.29.08.98)
if any. In case such overdues continue to persist, it
should be taken as a negative factor while fixing Swarna Jayanthi Shahari Rozgar Yojana
the rate of interest on the advances of such (SJSRY)
borrowers.
A physical target under the Urban Self
(ADV.63/98-99 dt.18.8.98) Employment Programme (USEP), a special
programme under SJSRY, will be decided by the
State Governments. Further SJSRY would be
Advances against approved shares implemented in all the areas falling under the
The shares approved for being taken as jurisdiction of urban local bodies irrespective of
security against advances were reviewed and a population size. Borrowers who have been
revised list of approved shares has been enclosed sanctioned loan/subsidy under the erstwhile SUME
as Annexure-I to the circular. The norms/guide- but who have not drawn the full amount will be
lines for advance against the security of shares are allowed to take advantage of the enhanced

3
 Volume 11 Issue 2 July- September 1998

loan/subsidy under SJSRY. In case of DWCUA, if and book debts under the revised system of
the project cost exceeds Rs.2.5 lakhs, the bank working capital assessment (STBC).
loan component will cover the project cost less
subsidy (Rs.1.25 lakhs) and margin money (5% of (ADV.77/98-99 dt.11.09.98)
the project cost), even if the bank loan exceeds
50% of the project cost. Guidelines regarding Pre-release audit - release of sanctioned
administration of subsidy under USEP and credit facilities
DWCUA of SJSRY are given in annexure 1 of the
circular. The designated authority for approving the
release of sanctioned facilities under pre-release
(ADV.68/98-99 dt.02.09.98) audit, whether fresh, increase, additional, etc.,
will henceforth be as follows:
i. For all sanctions falling within the powers
Export Credit - Interest rates of Head Office, functional GMs at HO.
RBI has decided that effective from 6.8.98 ii. In respect of sanctions falling within the
interest rates on pre-shipment and post-shipment powers of ZCC/GM of zones, ZM/GM of the
rupee export credit should be reduced. The reduc- zone.
tion in interest rates would be upto 31.3.99. From
For any modification/amendment/ waiver of
1.4.99, the rates applicable prior to the issue of the
the terms and conditions of sanction, reference
circular will come into force automatically unless
should be made to the respective sanctioning
notified otherwise by RBI. The benefit of reduc-
authority.
tion in interest rates will be applicable to both
fresh as well as existing advances. The existing (ADV.78/98-99 dt.14.09.98)
interest rate on export credit and those effective
from 6.8.98 are given in the annexure to the
circular.
Interest Rate on various loans and advances
Further to circular ADV.18/98-99
(ADV.75/98-99 dt.10.09.98) dt.19.05.98, a chart with interest rates on
advances other than export credit is enclosed as
Priority Sector Advances - Credit deployment annexure to the circular to serve as ready refer-
to SSI sector ence.
Consequent to the increase in the ceiling on (ADV.81/98-99 dt.21.09.98)
investment in plant and machinery of tiny
enterprises/unit from Rs.5 lakhs to Rs.25 lakhs, Classification of bank credit to NBFCs against
the limit for investment in plant and machinery in
respect of industry related small scale
financing of trucks under priority sector
service/business enterprises (SSSBEs) has also RBI has advised that advances to NBFCs
been increased to Rs.25 lakhs. An illustrative list which are eligible for bank finance for on lending
of activities covered under SSSBEs is given in the to Small Road and Water Transport Operators
annexure I to the circular and those not covered (SRWTOs) are to be classified as priority sector
under SSSBEs are listed in annexure II. lending provided the ultimate borrowers satisfy the
eligibility requirement under priority sector. The
(ADV.76/98-99 dt.10.09.98) relevant column numbers and codes for the
purpose of entry in the CIS register are furnished
Documentation for combined OCC against in the circular.
stock/bookdebts (D-105)
(ADV.82/98-99 dt.23.09.98)
A new document, viz., Agreement for Open
Cash Credit (Stock/bookdebts) - D-105 and a state-
ment of inventories and receivables (F-162) have Personnel
been evolved. Copies of the formats are enclosed Modifications in the application for staff
to the circular along with the documentation chart.
Branches are advised to obtain the documentation
CCL/Vehicle Loan
as prescribed from the borrowers who are The application form for staff CCL/Vehicle
sanctioned combined OCC facility against stock Loan has been modified with a view to cover
additional information generally required by

4
 Volume 11 Issue 2 July- September 1998

sanctioning authorities for according sanction. The 2 years Block 4 years Block
modified format is enclosed to the circular. Designation
Rs. Rs.
(PRNL.22/98-99 dt.08.07.98) Part-Time Sweepers
i. ard Wages 240 382
Nomination to PF and Gratuity account
ii. ½ Wages 316 472
The rules governing Indian Bank Staff iii. :th Wages 404 594
Provident Fund and Gratuity provide for nomina-
tion facility. It is very much desirable that all staff (PRNL.27/98-99 dt.24.07.98)
members in their own interest file nominations in
respect of PF/Gratuity as it could help in avoiding
delay in settlement of PF/Gratuity besides legal Job Rotation - A tool for HRD
hassles if any. Detailed guidelines for making As frontline HRD managers, branch manag-
nominations and modifications thereof are given in ers are required to ensure proper job allocation
annexure 1 to the circular while the list of forms and effecting job rotation as per the periodicity
purposewise is given in annexure 2. The proforma prescribed in PRNL.44/96-97 dt.1.8.96. While job
of the forms are also annexed to the circular. All allocation is essential with a view to specify the
forms except declaration are to be submitted in areas of operation for employees, job rotation is
quadruplicate. Branches/offices will retain one essential from two angles, viz.,
copy for their files and forward the remaining 3
copies to HO:Personnel Department. After regis- 1. to ensure that each staff member is exposed
tering the nominations, HO: Personnel Department to different areas of functioning and moulded to
will forward 2 copies of the nomination forms to take higher responsibilities and
the branch/office incorporating therein the details 2. as a preventive vigilance tool
of registration. The branch/office should hand over
one copy of the duly registered nomination form All the books of accounts at the branch
received from Central Office to the staff member should be tallied with the General Ledger periodi-
concerned against acknowledgement. cally. The job of balance extraction as well as
adjustment should also be rotated among staff. It
(PRNL.23/98-99 dt.09.07.98)
should also be ensured that the staff who is operat-
ing a particular ledger should not be entrusted with
Registration for request transfer under Inter- the job of balancing that ledger.
state category - Award staff
The above aspect should be examined by
Henceforth, award staff members can regis- RMs during their visits for necessary corrective
ter their request for transfer under interstate action. Inspectors/Internal Auditors should observe
category on completion of 6 months at any one and comment on the above aspect in their reports.
state as in the case of general/SJS categories.
However, the transfer will be taken up for consid- (PRNL.32/98-99 dt.19.08.98)
eration only on completion of the minimum reten-
tion period. Holiday Home at Simla
(PRNL.26/98-99 dt.2.07.98) The work of reservation/allotment of rooms
at Simla Holiday Home is being shifted from
Payment of TA/LFC advance to award staff Simla branch to Regional Office, Chandigarh
w.e.f 1.1.99. Staff members shall apply to
W.e.f 20.6.98, the revised per unit entitle- Regional Office, Chandigarh for allotment of
ment for journeys performed on or after 20.06.98, rooms at Simla guest house for their stay on or
will be as follows: after 1.1.99 and send MT towards rental charges
2 years Block 4 years Block drawn on Chandigarh Main branch alongwith the
Designation application.
Rs. Rs.

Clerk 2,312 3,966 (PRNL.37/98-99 dt.24.09.98)

Part-Time clerk 1,452 2,312

Sub-Staff 472 682

5
 Volume 11 Issue 2 July- September 1998

CRA Hence, Branches/sanctioning authorities are

advised to prescribe credit insurance policies as
Electronic Funds Transfer Scheme (EFT) collateral wherever possible. Dispensing with such
policies as a marketing technique may be counter
The EFT scheme introduced by RBI was productive and may harm the interests of the
operational between Mumbai and Chennai from exporter as well as the bank.
February 1996 and had since been extended to
Delhi and Calcutta from April 1998. Under the (FX.7/98-99 dt.06.07.98)
EFT scheme, anyone can transmit funds from a
branch of our Bank to the credit of an account with Extension of ECGC cover for postshipment
another branch of any other bank in the 4 metro
centres and vice versa. The credit to the benefici-
credits of longer periods not exceeding 15
ary’s account is made on the next day itself. The months
details of the scheme/procedural guidelines have ECGC has decided to extend cover under
already been provided to the branches concerned individual postshipment export credit guarantee
through their Zonal Offices. (IPSG) scheme for advances granted against bills
drawn by exporters on their associates/overseas
(CRA.10/98-99 dt.21.08.98) offices where the tenor of the bills does not exceed
15 months, subject to the following :
Submission of Sec.42 return
1. The branch maintaining the account has to
In order to meet the additional data require- submit IPSG proposal form along with guarantee
ments of RBI, an Annexure format to be submitted fee of Rs.100, copy of sanction letter, latest
by branches alongwith Sec.42 statement is being audited financial statements of the exporter and
introduced, copy of which is enclosed to the circu- copy of RBI approval to the nearest ECGC office.
lar. The annexure is to be submitted w.e.f. Friday
dt.25.09.98. 2. The exporter should obtain necessary credit
insurance policy for covering the relative
(CRA.15/98-99 dt.23.09.98) shipments as a pre-requisite for consideration of
IPSG.

FX (FX.10/98-99 dt.07.09.98)

Postshipment credit facilities Exchange control measures in Malaysia

The credit insurance policies issued by Government of Malaysia has imposed strin-
ECGC help the exporters to protect themselves gent capital control measures in order to protect
against commercial and political risks and also their currency exchange rates and US dollar
offer indirect protection to the banks. Generally, reserves. Some of these measures have been listed
the terms and conditions of sanction provide that in the circular. Branches are therefore advised not
the exporter shall obtain credit insurance policies to purchase or claim in RDPA any drafts in
from ECGC. ECGC has observed that some bank Malaysian Ringitt drawn on OSB, Chennai by
branches, in order to attract exporters dealing with Bank of Commerce, Kualalampur with whom we
other banks, have started dispensing with the have our Nostro account. Such instruments are to
obtention of credit insurance policies. Such a be taken only on collection basis and sent to OSB,
practice is unfair and results in unhealthy competi- Chennai. The customers who bring such DDs must
tions among banks. As non-payment risks from be explained suitably the reasons for taking the
overseas buyers/countries are on the increase, an instruments on collection basis. In respect of the
exporter left unprotected from such credit risk following trade related transactions (exceeding
may suffer huge losses and in the process the Malaysian Ringitt of 1000 or its equivalent) with
financing bank may also end up with bad debts. Malaysia, branches are advised to exercise caution
Coverage under WTPSG cannot be cited as a and to contact HO:International Division, before
reason for dispensing with credit insurance policies taking up any exposure.
as WTPSG provides guarantee cover for
non-payment risk of exporters only and does not i. Establishment of import LC for import from
cover buyers risks/country risks. Further, under Malaysia
WTPSG, the protection available to the bank is ii. Negotiation of documents under LC estab-
more in respect of policy holders than for lished by a bank in Malaysia and where reimburse-
non-policy holders. ment is to be provided by a bank in Malaysia

6
 Volume 11 Issue 2 July- September 1998

iii. Purchase of export bills drawn on importers problem. Worldwide, computer users are devising
in Malaysia strategies to overcome the Y2K problem. Our
bank has already taken steps in this direction and
iv. Purchase of export bills drawn on parties in some of the measures are enumerated in the circu-
other countries where the destination of goods is to lar. It is advised that whenever any person
Malaysia. working in a computerised environment comes
across any instance of non-compliance of Y2K in
(FX.13/98-99 dt.11.09.98) the software used in office/branch, the same may
be reported immediately to the concerned Zonal
EDP/CPPD for remedial action.
General (GENL.25/98-99 dt.04.08.98)

Prevention of frauds
Revised system for handing over/taking over
Strict adherence to systems and procedures charge at branches
laid down with a view to ensure better internal
control and preventive vigilance has been empha- The system for handing over/taking over
sised in the various circulars and communications charge at branches and the format of the Relieving
issued from time to time. Some of the circulars Manager’s Certificate have been reviewed and the
recently issued on the above aspect have been revised system/format are enclosed to the circular.
listed in the circular. Further the instructions on The distinctive features of the revised system
some of the areas requiring constant vigil have
been reiterated. The areas include the following: include the following :

Cash Management, Bank Balance manage- 1. System of taking charge extended to second
ment, Monitoring of newly opened accounts, Staff level officers at ELBs/VLBs
accounts, inoperative accounts, uncleared effects,
TODs, BP, nominal accounts, clearing, reconcilia- 2. Branch functions for scrutiny by the incom-
tion of unmatched entries, expenditure control, at ing official grouped under 3 schedules A, B and C
par facility and maintenance of numbered items, which respectively cover credit, non-credit and
check cypher codes, etc. general management aspects.
During branch visits, RMs/officials 3. The officials taking charge to submit the
concerned should verify lack of concern/breach of
modified relieving certificate to ZO (through RO
systems and procedures, if any. The Manual on
Personnel and office administration gives an wherever applicable) along with exceptional
account of responsibility of officers at branches in reports containing adverse features noticed and
reporting to higher authorities on any matter of corrective action taken/proposed.
importance. Accordingly, the officers at all levels
at branches are advised to report gross violations if 4. Time norms for taking charge prescribed.
any in adherence to systems and procedures to the 5. Audit departments to scrutinise the reports
higher officials.
and follow up for rectification.
(GENL.19/98-99 dt.04.07.98) 6. ZO/HO to use the system as yet another
feed back mechanism on the working of branches
Year 2000 (Y2K) problem in computer The revised system comes into force with
operations immediate effect.
In the early years of introduction of
(GENL.43/98-99 dt.28.09.98)
computers, generally while entering the date field,
the first 2 digits of the year were ignored, in order
to save disc space and RAM to the maximum
possible extent,
ED/CMD
The conventional limited field structure for Performance during 1997-98
date, will not hold good when the year 2000 The highlights of our bank’s creditable
arrives. This is known as the year 2000 problem performance in 1997-98 are given below:
shortly called Y2K. Wherever
calculations/comparisons involve date, it may not - Highest ever growth of Rs.2086 crores
be possible to use the computer with the Y2K (18.4%) in domestic core deposits

7
 Volume 11 Issue 2 July- September 1998

- Aggregate global deposits reached a level of operation as enumerated above and more
Rs.15423 crores from Rs.14329 crores importantly the recapitalisation of the bank to the
tune of Rs.1750 crores.
- Increase in savings deposits by Rs.556
crores The ambitious goals set for 1998-99 include
the following:
- Recovery of NPAs of Rs.366 crores along-
with increase in core deposits, brought down the i. Core deposit growth of Rs.2592 crores with
dependence on CDs, Call money and other simultaneous increase in low cost deposits
borrowings
ii. Reduction in NPAs by Rs.800 crores
- CDs brought down by Rs.1042 crores to
iii. Expansion of performing/good quality
Rs.620 crores as at 31.3.98 and further by Rs.478
credit by over Rs.1000 crores
crores to reach a level of Rs.142 crores as on
26.6.98. iv. Minimum of 15% growth in non-interest
incomev. 20% growth under non-fund based
- The low cost deposit mix to total deposits
and fee based business
improved from 29.4% as on 31.3.97 to 32% as on
31.3.98 and further to 33% as on 22.5.98 vi. Average interest rate on working funds at
2.25%
There are many areas where our perform-
ance leaves much to be desired, particularly the vii. 16% growth in foreign exchange profit
recovery of NPAs. The key to success of a quick from merchant and trading operations
turnaround lies among other factors in the recov-
Unions/Associations have already agreed
ery of NPAs and containing further generation of
that the MoU covering 4 broad areas viz., business
NPAs. Branches should pursue their recovery
plan, structural changes, economy in expenditure
efforts with redoubled vigour to achieve the targets
and work culture will be continued this year also.
set for them.
Everyone at the branch level should pay individual
While the bank has posted a net loss of attention to customers, meet large depositors
Rs.301.51 crores for the year ended 31.3.98 the personally, organise customer meet and explain
loss has been significantly reduced over the previ- the bank’s performance in various areas. Extension
ous year on account of factors which include the of exemplary customer service, quick response to
following: and faster disposal of their needs without giving
scope for complaints/displeasure are the canons to
1. Recovery of NPA by Rs.366 crores
be followed in the present context of fiercely
2. The decrease in cost of funds by Rs.89 competitive environment.
crores
We have come a long way through many
3. Reduction in average cost of deposits from ordeals. We will be able to reach our mission with
9.37% to 8.56% a little more patience and hard work and feel
proud of our institution. The excellent human
4. Reduction in average cost of borrowing
resources of the bank is a force to reckon with and
from 8.98% to 8.72%
is equal to this task and the day is not far off when
5. An all time growth in domestic core deposit the bank stages a smart turnaround and rewrites its
resulting in a sharp reduction of financial history. All of us must raise upto the occasion and
mismatch surpass the target set which will ensure in realising
our mission of making our bank A profit making
Whenever queries are made by customers
bank with growth and glory
on the press reports about the working results of
our bank, staff members should explain to them (MD/ED.6/98-99 dt.04.07.98)
the progress made by us in several vital areas of

8
 Volume 11 Issue 3 Oct - December 1998

Deposits 3. As soon as DRT applications are filed,

Recollect
branches should collect the relevant data on the
Compulsory quoting of PAN from 1.11.98 available securities and keep it ready to be
In terms of the recent amendments made to furnished to the Statutory Recovery Officer
the Income Tax Rules, w.e.f. 1.11.98, every immediately after the recovery certificate is issued
person is required to quote his Permanent Account by the DRT.
Number (PAN) or GIR No. (General Index Regis- 4. No scope should be given for unnecessary
tration) in all documents pertaining to certain
adjournments/delays particularly with regard to
transactions prescribed by CBDT. These transac-
tions, inter alia include placing of time deposit DRT cases.
with bank for an amount exceeding Rs.50,000 and 5. Compromise settlements should be endeav-
also opening of an account with a bank. The above oured even in suit filed accounts. Attempts could
provisions do not apply to persons in receipt of be made through lawyers of both the sides to
only agricultural income and also to non-residents
prevail on the defendants for compromise
as defined under Income Tax Act. However, the
settlement.
former has to make a declaration in Form No.61,
while the latter is required to furnish a copy of the Besides listing the action points at
passport. Those who do not have either PAN or Zonal/Head Office, the circular gives an account
GIR number are required to furnish a declaration
of the powers delegated at various levels for
in Form 60.
payment of lawyers fees in DRT cases as also
The Manager or officer of the bank has to incentives payable to lawyers who involve
forward to the concerned director of Income Tax
themselves in speeding up recovery in suit filed
(Investigation) statement containing details of all
documents pertaining to such transactions along accounts.
with copies of declarations in Form-60/61/copies
of passports as the case may be. Branches have to (ADV.84/98-99 dt.08.10.98)
take at least two copies of the documents required
to be sent to Income Tax authorities, one of which Interest rates on advances against
must be held for branch reference. In certain domestic/NRE term deposits
cases, branches may have to quote our bank’s
PAN which is AAACI1607 G. Strict compliance As per Circular ADV.18/98-99 dt.19.5.98,
with the above regulations must be ensured as any the interest rate to be charged in respect of
violation attracts penalty of minimum of Rs.500 advances against domestic/NRE term deposit to
extending upto Rs.10,000 for each act of the depositor is deposit rate + 2% + Interest Tax
default/failure, which will be collected from the or PLR + Interest Tax whichever is less. As the
person responsible for the failure/violation. interest charged on loans against deposits happens
to be less than the interest paid on deposits in
(DEP.18/98-99 dt.06.11.98) certain cases, the matter has been taken up with
RBI. In the meanwhile, it is advised that the rate
of interest conveyed vide the above circular is to
Advances be followed for fresh loans advanced w.e.f.
6.5.98. The rate of interest to be charged for exist-
Strategic Revival Plan - Reduction of NPAs in ing loans sanctioned prior to 6.5.98 will be
suit filed accounts governed by the old rates prescribed as follows:
The important points of follow up activities
to be meticulously carried out at various levels are Upto Rs.2 lakhs Deposit rate + 2% + Int. Tax
listed in the circular. The branch level action
points include the following: Deposit rate + 2% + Int. Tax or
Over Rs.2 lakhs PLR + Int. Tax, whichever is
1. Branches having high value suit filed higher
accounts of Rs.20 lakhs and above should submit a
monthly report on the follow-up and developments
in respect of each case to Zonal Office. (ADV.85/98-99 dt.09.10.98)

2. ARM branches should concentrate their

follow up of all accounts handled by them and
Loan to Pensioners
submit their reports every month to Zonal Office. W.e.f. 1.10.98, it is decided that funds
PDF-1998-3Q
clearance is not required for sanction of pension

1
 Volume 11 Issue 3 Oct - December 1998

loans and further that pension loans can be consid- norms with regard to sanction of finer rates of
ered by branches themselves as per the guidelines interest, etc., the circular may be referred to.
irrespective of their NPA level.
(ADV.93/98-99 dt.15.10.98)
(ADV.86/98-99 dt.09.10.98)
Credit Regulatory measures - Funds clearance
Revised guidelines on relief measures in With a view to allow more operational
areas affected by natural calamities flexibility, it has been decided to dispense with the
existing system of funds clearance completely with
RBI has since reviewed and revised the effect from 1.11.98. However, the exercise of
guidelines on the above subject, which are discretionary powers is subject to certain terms
furnished in the annexure to the circular. In case and conditions which inter alia include the
of occurrence of such calamities, branches are following:
advised to initiate appropriate relief measures after
getting the specific approval of their RM. i. The existing restrictions on fresh advances
relating to Real Estate, Hire Purchase,
(ADV.87/98-99 dt.09.10.98) Leasing, NBFCs, Cinema/Film Industry,
Hotel, Lodge, Marriage Hall and other
Recommendations of the RBI Working Group construction activities, property advances
and share advances by way of secured OD
to review the functioning of DRTs will continue.
The working group constituted by RBI ii. Discretionary powers should be judiciously
under the Chairmanship of Shri N V Deshpande exercised with utmost care/caution.
has inter alia made the following recommen-
dations: iii. Any increase for existing accounts/renewals
should be considered after all existing
a. Banks and FIs should ensure that the notices irregularities identified during inspection
to the defendants in DRT cases are properly are rectified.
served.
iv. Credit expansion should be with a view to
b. The management of Banks and FIs should generate profit.
actively interact with Unions/Federations
for expeditious recovery proceedings. v. Lending to priority sector may be only by
recycling of funds through aggressive
c. Banks and FIs should impress upon the recovery in the existing priority sector
officers and staff to take keen interest in the advances.
proceedings so as to ensure recovery of
amounts without any difficulty. vi. Proposals for Rs.1 lakh and above in the
standard asset borrowal accounts should not
Branches are advised to gear up their recov- be rejected without HO clearance.
ery efforts particularly in DRT cases, keeping in
view the above recommendations. vii. ZM is authorised to withdraw the discre-
tionary powers of BMs/RMs who do not
(ADV.92/98-99 dt.12.10.98) exercise their discretionary powers
judiciously.
Credit rating system for borrowal accounts BMs are to submit AUF-1 on a weekly basis
Taking into consideration the developments to their controlling offices before the Wednesday
that have emerged in the credit scenario such as of the succeeding week failing which their discre-
revised method of credit assessment, credit expan- tionary powers will stand withdrawn
sion, market competition, changes in policy, etc., automatically. Copy of AUF-1 should be marked
the existing credit rating parameters have been to Zonal Inspectorates. For further details on the
reviewed and revised. The revisions made lay instructions issued, the circular may be referred
more emphasis on financial and operational to.
parameters keeping in view not only profitability
and retention of the standard assets in our fold but (ADV.101/98-99 dt.02.11.98)
also to attract good quality borrowal accounts. For
details regarding the revised parameters, the Kisan Gold Card Scheme modified as Indian
Bank Kisan Card
Our existing Kisan Gold Card Scheme has
been suitably modified and renamed as Indian

2
 Volume 11 Issue 3 Oct - December 1998

Bank Kisan Card Scheme. The detailed operational goods. However for 2 wheelers and 4 wheelers,
instructions are given in the annexure to the circu- the eligible amount will be 5 times the monthly
lar. The improvements over the Kisan Gold Card gross salary or Rs.3 lakhs whichever is less. For
Scheme are as under: professionals and others the maximum loan
amount is limited to Rs.25,000 for consumer
Ÿ Limit fixed for 3 years and renewed/
durable and white goods, and Rs.3 lakhs for 2
reviewed every year in order to ensure
wheelers and 4 wheelers.
meeting the timely credit needs of the
farmers. 4. A minimum of 25% margin shall be held.
Ÿ One time documentation and simplified 5. The rate of interest shall be PLR + 6% +
system of renewal interest tax (a remission of 1% can be considered
by the sanctioning authority in cases where the
Ÿ Any number of credits/debits allowed
corporates, etc. are agreeable to deduct the instal-
Ÿ Inclusion of post harvest/household ment amount from salary and remit it to us).
requirements at 10% of crop cultivation
6. Repayment in 60 EMI for 4 wheelers and
expenses subject to a maximum of
36 EMI in other cases. For non-salaried class, post
Rs.3,000 besides contingency provision of
dated cheques for monthly instalments covering
20% of the card limit to meet escalation in
repayment period should be obtained.
cultivation cost.
7. Hypothecation of the articles purchased to
Ÿ In the case of crop being affected by
be obtained as security.
natural calamities, the loan amount could
be rescheduled/ rephased as term loan and For further details the circular may be
the farmer could operate the account as referred to.
per the seasonal sub-limits already fixed.
(ADV.104/98-99 dt.10.11.98)
The scheme will be launched shortly.
Branches are advised to take effective steps to
popularise the scheme.
Credit Regulatory measures
In partial modification of the directions
(ADV.102/98-99 dt.02.11.98) given in ADV.101/98-99 dt.02.11.98, it is hereby
advised that branch managers should report in
Indian Bank Consumer Loan Scheme AUF-1, the details of advances sanctioned under
the discretionary powers on a weekly basis directly
The existing consumer loan scheme has to the Zonal Manager concerned with a copy
been modified and revised as Indian Bank marked to the Regional Manager and the Zonal
Consumer Loan Scheme. The detailed guidelines Inspectorate concerned before Wednesday of the
for sanction of the loan under the scheme are given succeeding week.
in the annexure enclosed to the circular. The
scheme comes into effect from 1.11.98. The (ADV.105/98-99 dt.11.11.98)
salient features are as follows:
1. Existing customers of the bank, properly Sanction of jewel loans under
introduced and having permanent employment in non-priority/non-agriculture category
Government/reputed corporates are eligible. It has been decided that the limit under
Professionals who are IT assessees and whose non-priority/ non-agriculture jewel loans be
repaying capacity is satisfactory are also eligible. increased from the existing 40% to 50% of the
In both the cases, the parties should have total jewel loan limits w.e.f. 1.11.98. Further it
maintained satisfactorily operated account for a has been decided that non-priority/non-agriculture
minimum period of one year. Retired employees jewel loan can be introduced in all metropolitan
and newly introduced employees of and urban branches subject to the availability of
Government/Corporates are also eligible subject to requisite infrastructure. Authorisation for intro-
certain conditions given in the circular. duction of the jewel loan in metro/urban branches
2. The articles eligible for purchase include and branchwise allocation of limits will be done by
consumer durables, white goods and vehicles. ZMs. The salient features of jewel loans for
non-agriculture purpose include the following:
3. For salaried class the minimum loan shall
be Rs.10,000 and the maximum loan permissible Maximum Rs.50,000 per
shall be five times the monthly take home salary or Amount borrower. While there will be no
Rs.25,000 whichever is less for purchase of white minimum for rural and

3
 Volume 11 Issue 3 Oct - December 1998

semi-urban branches, for For monthly recoveries of Issued by

metro/urban branches a
minimum of Rs.5000 per Rs.25000 - Rs. 1 lakh ZM
borrower is prescribed.
Above Rs.1 lakh - Rs.3 lakhs GM(RR)
Rs.260/- per gram on 22 ct.
Advance rate jewels or 70% of the market Above Rs.3 lakhs - Rs.5 lakhs ED
value whichever is less
Above Rs.5 lakhs CMD
Rate of interest PLR + 4% + Interest tax
ii. Entry in the service records of staff for
Period Maximum of 1 year
excellent individual recovery performance:
25 paise to 30 paise per Rs.100 (Rs. in lakhs)
Appraiser fee of the loan amount with a
minimum of Rs.2.50 Other
BM/RO Award Staff
Officers
Irrespective of the scale of the branch, BMs
can exercise discretionary powers upto Rs.50000. Rural 10 5 1
Branches having good potential for giving jewel Semi-urban 20 10 2
loans for non-priority/non-agricultural purpose
may take up with their ZM through their control- Urban 50 25 5
ling offices for necessary authorisation and alloca-
tion of limits. The above measures are intended Metropolita
100 50 10
n
with a view to increase not only the credit outflow
but also the profitability of the bank. For detailed
guidelines the circular may be referred to. (ADV.112/98-99 dt.30.11.98)

(ADV.106/98-99 dt.11.11.98) SSI Sector development, nursing and rehabili-

tation of sick units - Role of IDOs
Strategic revival plan - measures to accelerate
recovery during 98-99 The revised job role of IDOs at various
levels is given in the Annexures I to V enclosed to
It has been decided to introduce the follow- the circular. The major role of IDO includes
ing two schemes to recognise the recovery identification of the viability of sick units for being
performance of the branches and the staff. The taken up for rehabilitation and close monitoring of
qualifying parameters for being eligible for the sick units with a view to ensure upgradation of the
awards for the year 1998-99 under each of the account as a standard one. IDOs are required to
schemes are also given. submit a monthly flash report and a quarterly
1. Award of rolling shield to best performing report to ZO/HO and the formats of these reports
branch in recovery of NPAs. Further, separate are given in Annexure VI and VII respectively.
shields are to be awarded to branches under each IDOs may be provided with a technical magazine
category who fulfil the following parameters. and may also be permitted to attend technical
workshops/seminars/exhibitions and request in this
Category Recovery Performance in a year* regard from IDOs may be taken up with
HO:SIFD. IDOs may be permitted to buy a finan-
Rural Rs.40 lakhs cial daily. They may be provided with a two
Semi-Urban Rs.80 lakhs wheeler and in this regard the respective Zonal
Offices will re-deploy the available vehicles. For
Urban Rs.150 lakhs any further clarification HO: SIFD may be
contacted.
Metropolitan Rs.300 lakhs
(ADV.114/98-99 dt.27.11.98)
Ÿ to be evaluated considering the annual
recovery performance as above or 50% reduction Recommendations of Kapur Committee
in NPA level outstanding as at 31st March, which-
ever is less. The Kapur Committee constituted by RBI to
suggest measures for improving the delivery
2. Non-cash incentives to staff viz., system as well as simplification of procedure for
i. Award of Merit Certificate credit to SSI sector has made 126 recommenda-
tions of which RBI has accepted 35 recommenda-
tions for implementation. Of these 35 items, the 14

4
 Volume 11 Issue 3 Oct - December 1998

points requiring immediate steps/ensuring imple- already been initiated as given in Annexure 2 of
mentation are given as under the circular.
i. Compliance of Nayak Committee recom- RBI will review the progress in implemen-
mendations and 7 point action plan. tation of the recommendations of Kapur Commit-
tee on a quarterly basis. Branches/offices are
ii. Use of prescribed loan application form advised to adhere to the above guidelines and
iii. Scrutiny of filled in application forms vis-a- ensure that the guidelines are put into practice in
vis check list letter and spirit.

iv. Extending assistance to the applicants in (ADV.116/98-99 dt.30.11.98)

filling up of applications.
Discretionary powers for sanction of advances
v. Assessment of working capital requirements by a committee of CM and IDO at specialised
to SSI borrowers where fund based limits
exceed Rs.4 crores (STBC method)
SSI Branches
A committee consisting of the CM and IDO
vi. Posting of Technically oriented direct of specialised SSI branch should be formed with
recruits in specialised SSI branches (all SSI immediate effect. The facilitywise discretionary
branches in our bank are posted with an powers vested in the above committee for various
IDO) credit limits are given in the annexure to the circu-
vii. Delegation of enhanced powers to special- lar. The specialised SSI branch should consider
ised SSI Branches high value credit proposals of Rs.25 lakhs and
above only. The sanctions made by the committee
viii. Entertaining SSI proposals of loan limit of as in the other cases should be reported to ZM
less than Rs.5 lakhs (Sub sectoral allocation every week in AUF-1 format with copies marked
had already been communicated vide to RM and the concerned Zonal Inspectorate. The
ADV.59/97-98 and ADV.162/97-98) exercise of these powers is subject to various
guidelines/regulations issued from time to time and
ix. Disposal of applications - within a fortnight in force.
for credit limit upto Rs.25000 and within 8
to 9 weeks in other cases. (ADV.119/98-99 dt.08.12.98)
x. Finer rate of interest (Credit Rating system
is already introduced) Bank advances to retail traders under priority
sector
xi/xii. Working skills of BMs/Officers/staff
dealing with SSI sector and specialised SSI RBI has advised that the present ceiling of
branches (branches can take up the training bank advances under priority sector to retail
requirements with their respective Zonal traders is increased from Rs.2 lakhs to Rs.5 lakhs.
Office/HO:SIFD).
(ADV.122/98-99 dt.22.12.98)
xiii. Machinery to look into complaints (already
in place - branches/controlling offices are
required to reactivate the machinery Personnel
available)
Disciplinary/appellate/reviewing authorities
xiv. Procedure for making complaints (Systems for officers
are already in place)
In accordance with Indian Bank Officer
The exact version of RBI recommendations Employees’ (Discipline and Appeal) Regulations
on the 14 items is given in Annexure 1 of the 1976, the following are the disciplinary/appellate/
circular. Of the remaining 21 items action has reviewing authorities in respect of officers in
various scales.

5
 Volume 11 Issue 3 Oct - December 1998

Disciplina Reviewin amendments to the rules/regulations will be

Officers in Appellate communicated in due course.
ry g
Scale I & II in ED/CMD (PRNL.46/98-99 dt.10.11.98)
ZM $ GM(I)/ED*
Zones *

Scale I & II at Appointment of Sri T S Raghavan as CMD of

DGM (ID) GM(I) ED
HO our bank
Scale III & IV GM(I) ED CMD Shri T S Raghavan has assumed charge as
Chairman and Managing Director of our Bank on
Scale V ED CMD Board
7.12.98.
Scale VI & VII CMD Board Board
(PRNL.57/98-99 dt.07.12.98)
$
Where in the opinion of GM(P&HR), the
ZM cannot function as disciplinary authority due
to legal, administrative or other reasons, DGM
CRA
(ID) shall be the disciplinary authority. Manual on Ancillary Services - Amendments
* If the disciplinary authority is in the cadre to Chapter on Government Transactions
of DGM, GM(I) shall be the appellate authority The amendments made to the Chapter on
and ED shall be the reviewing authority. If the Government Transactions in the Manual of
disciplinary authority is in the cadre of General Instructions - Ancillary Services for the period
Manager, ED shall be the appellate authority and upto 31.3.98 are given in the annexure to the
CMD shall be the reviewing authority. circular. Branches are advised to note the amend-
ments in the manual.
(PRNL.42/98-99 dt.16.10.98)
(CRA.16/98-99 dt.10.10.98)
Renewal of Group Personal Accident Policy
Caution Deposit for lockers - Handing over of
The Group Personal Accident Insurance receipt to locker hirers
Policy providing round the clock personal accident
Branches are aware that as per the extant
cover with the sum insured at 48 times of salary
guidelines, the Caution Deposit receipt should be
(Basic + DA) covering all employees of our bank got discharged by the locker hirers for being
has been renewed for one year with United India retained at the branch along with the locker agree-
Insurance Company Ltd., Division Office No.V, ment. It has now been decided that the caution
Catholic Centre, 64, Armenian Street, Chennai - deposit receipts may be handed over to the locker
600 001. The renewal policy number is hirers against their acknowledgement. It will be
010504/00/42/11/07/42421/98. In the unfortunate the responsibility of the officer in charge of the
event of any accident, staff members are requested locker section to ensure that lien is noted on the
first to inform the occurrence of the accident to the deposit receipt and in the ledger before the receipt
Insurance Company in the format furnished in is handed over to the hirer. Although the caution
Annexure-1 of the circular. Preference of claim deposit receipts are handed over to the hirers, due
date of annual interest should be diarised and the
should be made within a month. The documents
annual interest in deposit should be appropriated
required and the procedures for preferring claim regularly towards the rent on locker without fail.
are given in Annexure-II to the circular.
(CRA.18/98-99 dt.03.11.98)
(PRNL.43/98-99 dt.20.10.98)
Manual on Ancillary Services - Amendments
Government guidelines regarding age of The amendments made to the Manual of
retirement of employees Instructions - Ancillary Services for the period
upto 31.3.97 are given in the annexure to the
Government of India have advised that the circular. Branches are advised to note the amend-
age of retirement of all officers and award staff ments in the manual.
employees in public sector banks/financial institu-
tions will be 60 years w.e.f. 22.5.98. Necessary (CRA.19/98-99 dt.09.11.98)

6
 Volume 11 Issue 3 Oct - December 1998

Service Charges i. Formation of European Central Bank (ECB)

in Frankfurt to decide on the monetary
The service charges in respect of certain policy of the participating countries. ECB
services rendered have been revised w.e.f. will be independent of the national govern-
1.12.98, the details of which are given in the ments, parliaments as well as the EU’s own
annexure to the circular. The provisions of the institutions.
circular will not apply to our staff members for
whom the existing arrangements will continue. In ii. Linking of the currencies of the participat-
respect of forex transactions, FEDAI rules are to ing countries firmly and irrevocably with
be followed. For services not covered in the circu- one another.
lar, the existing charges will continue. The iii. From 1999, a common single currency
BM/RM/ZM have no discretionary powers to Euro will be the legal currency of the
deviate from the prescribed charges. participating countries.
(CRA.20/98-99 dt.23.11.98) The introduction of Euro will give the
members of the EMU enormous bargaining power.
There will be no trade or customs barrier within
FX the EU. There will be total elimination of
exchange risk and interest rate risk among
European Countries and total savings on exchange
Closure of our bank’s representative office at commission. These factors will boost trade, reduce
Jakarta, Indonesia real interest rates and favour investment. With the
The above representative office of our Bank strength gained due to monetary union, the Euro is
ceased to function since the close of business hours likely to replace US dollar invoicing for European
of 22.10.98. Matters relating to deposits of NRIs trade.
in Indonesia kept with various branches of our The Euro will be made up of 100 cents. The
bank will henceforth be handled by the NRI Desk Euro notes and coins will start circulation on
at our Singapore branch. Branches who are 1.1.2002. During the transition period, i.e. from
maintaining the deposits are advised to ensure 1.1.1999 to 31.12.2001, the Euro and the National
efficient service to the depositors and to get in Currencies will coexist and free use of either Euro
touch with our Singapore branch in the event of or national currencies will be allowed for receipts
any operational difficulties. and payments. However, for certain core opera-
tions use of Euro right from 1.1.99 is mandatory.
(FX.19/98-99 dt.31.10.98) On 1.1.99, the exchange rates of the national
currencies will be irrevocably fixed with the value
European Economic and Monetary Union - of Euro.
Emergence of ‘Euro’ Introduction of Euro will not affect the
The European Union is a group of 15 continuity of contracts. Indian corporates have
European nations. These nations signed on 7.2.92 better opportunities in the single European market.
a treaty known as ‘Maastricht Treaty’ wherein They may be able to raise finance from European
certain parameters were decided upon. The Banks at lower interest rates and also tap the bond
countries fulfilling these criteria known as markets in Europe. While these are the
‘convergence criteria’ would join together in a advantages, the Indian corporates will lose their
common Economic and Monetary Union (EMU). differential pricing strategy which was available
The convergence criteria included achievement of earlier. Several settlement and clearing options for
specific parameters with regard to inflation rate, Euro are available for the details of which the
Government deficit, Government debt, exchange circular may be referred.
rates and interest rates. 11 Nations qualified for With the emergence of Euro replacing the
participation in EMU and these will be the ‘In’ legacy currencies and the consequent
countries. UK, Denmark and Sweden chose not to hardware/software changes introduced, it may be
enter the Union while Greece did not fulfill the difficult for our correspondent banks to respond to
convergence criteria. queries on transactions entered upto 31.12.98 in
This Union of ‘in’ countries would create a legacy currencies and hence there is an urgent
new Central Bank responsible for monetary policy need to reconcile our NOSTRO accounts upto date
and common single currency called ‘Euro’. and settle all entries with immediate effect.

EMU rests on the following three key CPPD will be issuing instructions to forex
elements computerised branches on the changes to be

7
 Volume 11 Issue 3 Oct - December 1998

effected in the software. SWIFT service centre, present himself in the bank, a mark can be
Mumbai will issue guidelines regarding modifica- obtained on the cheque/withdrawal form
tions to be done in SWIFT messages for Euro which should be identified by two independ-
related transactions. ent witnesses one of whom should be a
responsible bank officer.
(FX.22/98-99 dt.04.12.98)
The customer may indicate as to who would
withdraw the amount from the bank through the
Acceptance of Euro deposits under FCNR(B) above cheque/withdrawal slip and the person so
FCNR(B) authorised branches may accept indicated should be identified by two independent
Euro deposits from 1.1.99 onwards. Deposits in witnesses and his specimen signature should be
DM may continue to be accepted upto 31.12.2001. obtained. In respect of a person who had lost both
After 31.12.2001, deposits held in DM would be his hands, it is clarified that a mark can be
automatically converted to Euro at the fixed obtained from the above person in any manner. It
conversion rate between DM and Euro. Hence could even be his toe impression.
acceptance/renewal of deposits in DM with matur-
ity period beyond 31.12.2001 may be done with (GENL.46/98-99 dt.07.11.98)
the conditional clause that they would be converted
to Euro on 31.12.2001, which may be super- Year 2000 phenomenon
scribed on the deposit receipt itself. These rules
In connection with the above issue,
also apply to EEFC and RFC accounts. Interest
offices/branches are advised to ensure the
rates on Euro deposits would be communicated
following:
shortly.
a. A clause should be included in the loan
(FX.25/98-99 dt.31.12.98) sanction ticket to borrowers using comput-
ers in their business that they should ensure
Y2K compliance within a cut off date (to be
General specified). This should be followed up
subsequently and in any case positive
Operation of bank accounts by compliance should be ensured before
old/sick/incapacitated customers 30.9.99.
RBI has advised that the facilities offered to b. Whenever any hardware (including equip-
pension account holders may be extended to ments that have embedded chips such as
sick/old/incapacitated customers who are not security alarms, elevators, etc.) or software
willing to open joint account. The procedure to be is purchased, a suitable clause on Y2K
followed in such cases will be as under: compliance should be included.
a. Where the thumb or toe impression of the c. In case of NBFCs or other customers who
account holder is obtained, it should be use computers in their operations, Y2K
identified by two independent witnesses one compliance should be taken up.
of whom should be a responsible bank
officer. (GENL.47/98-99 dt.10.11.98)
b. Where the customer cannot affix thumb
impression and cannot also physically

Corrigendum
In the Recollect issue for the quarter April-June 1998, under circular DEP.3/98-99 dt.5.5.98, the
interest rate on NRE term deposit for over 3 years is wrongly mentioned as 12.00% p.a. which should be
read as 11.5% p.a.

8
 Volume 11 Issue 4 Jan - March 1999

Deposits effect that the balances are adjusted with the

Recollect
General Ledger. Zonal Offices will arrange for
Interest rates on domestic term deposits data entry of transferred items, verify and transfer
the same to HO:Accounts within a month by way
The interest rates on domestic term deposits of a single credit advice along with the error free
stand revised as under w.e.f 18.01.1999 : data entry file in magnetic media.
Rate of Interest Claims received subsequent to the transfer
Duration
%
of long pending entries may be paid by branches to
15 days to 45 days 5.0 the debit of Sundries Receivable account after
46 days to 90 days 7.0 satisfying themselves about the genuineness of the
claim. Branches should in turn submit the claims
91 days to 179 days 8.5 with full details to their respective Zonal Offices.
180 days to less than 1 year 9.5 Zonal Offices will prefer a consolidated claim
from HO:Accounts as on the last date of every
1 year to less than 2 years 10.5
month. Zonal Offices will send individual credit
2 years to less than 3 years 11.0 advices to the respective branches after receipt of
3 years and above 11.5 credit advice from HO: Accounts Department.
The circular comes into effect from
Preferential Rate of Interest 01.03.99.
Rate over and (DEP.25/98-99 dt.18.02.99)
above the applica-
Amount
ble rate of the
respective period
Guidelines regarding payment of deposit of
Rs.20,000 and over
Rs.15 lakhs to less than
Rs.1 Crore - for deposits of 6 0.25% more As per Sec.269 T of IT Act, repayment of
months and above deposits can be made in cash only if the amount of
deposit along with the interest is less than
Rs.1 Crore and above to less Rs.20,000/-. In other cases, repayment shall be
than Rs.2 Crores - for deposits 0.50% more made by an account payee bank draft or to the
of 6 months and above credit of the account in the name of the depositor.
Decided at HO on Detailed instructions in this regard are available in
Rs. 2 Crores and above
daily basis Para 25 of chapter 7 of Manual of Instructions -
Deposits. However, there appears to be a contra-
For deposits of Rs.15 lakhs to less than diction between para 25.3 (ii) and illustration 2
Rs.2 Crores preferential rates are not offered for given under para 25.4. It is hereby clarified that if
maturities of less than 6 months. the aggregate of deposits with interest paid/payable
is/exceeds Rs.20,000/-, the repayment should be
(DEP.21/98-99 dt.13.01.99) made in either of the modes specified in the Act
and not in cash. An amended illustration 2 has
Transfer of long pending entries in Nominal been given in the circular for being incorporated in
Accounts - Change of procedure the Manual.

As per the existing guidelines, long pending (DEP.28/98-99 dt.01.03.99)

entries in Nominal Accounts are transferred to
HO: Accounts Department directly as per the Unit Deposit Scheme - Modifications
periodicity prescribed. Hereafter, branches are
advised to transfer such entries to their respective It is observed that there is no significant
Zonal Offices under the same periodicity. growth in the amount of deposits under the Unit
Deposit Scheme. The scheme has been reviewed
However, in respect of DDs Payable based on the feedback received with a view to
account, the time for transfer of entries is changed simplify the operational features and make it more
from first week of January 99 to first week of attractive to customers so as to remain competitive
April 99. After adjusting DDs Payable account with similar schemes of other banks. Accordingly,
with their GL balance, branches should transfer the following modifications have been made:
the entire balance to their respective Zonal
Offices. In all cases of transfer of long pending i. The restriction with regard to maximum
entries, the credit advice should be accompanied number of part withdrawals of four during the
PDF-1998-4Q
by a certificate from Branch Managers to the

1
 Volume 11 Issue 4 Jan - March 1999

tenure of the account is removed. As such any increase the eligible amount of pension loan to
number of part withdrawals is allowed. Rs.10,000 or 3 months pension whichever is less.
ii. The interval of six months between two part (ADV.130/98-99 dt.21.01.99)
withdrawals is removed. Consequently no interval
need be insisted between part withdrawals
Gupta Committee Recommendations - Cash
iii. The existing provision of accepting disbursements for agricultural loans
additional deposits in the same account is
removed. Henceforth, for each deposit, separate The revised guidelines for disbursement of
account will be opened and a separate pass book agricultural loans in the light of the Gupta
issued. Committee recommendations are as under.
i. In respect of STPL, loan should be
(DEP.30/98-99 dt.10.3.99) disbursed in two instalments in cash. The second
instalment may be released after ensuring the end
Advances use of first instalment. Post disbursement inspec-
tion to be carried out and a mention made on
Payment of dues of units of SSI sector records of such inspection.
Branches are aware that all corporate ii. In respect of medium term loans for
borrowers enjoying working capital or term purchase of machinery, cash disbursement upto
loan/DPG limit of Rs.10 crores and above from Rs.10,000 may be made through the SB account of
the banking system are required to have at least the borrower. Where the amount exceeds
25% of their purchases from SSI units by way of Rs.10,000, payment shall be made directly to the
acceptance of bills drawn on them. It has now been suppliers as per the usual norms.
decided to implement with immediate effect the
above guidelines for all corporate borrowers iii. For other MTLs such as land development,
enjoying working capital or term loan/DPG limits digging of well, etc. disbursement can be made in
of Rs.2 Crores and above. Branches should get a cash in stages based on the progress of work.
declaration along with QIS from the corporate
(ADV.131/98-99 dt.25.01.99)
borrowers regarding their dues to SSI suppliers,
which should be verified under the scope of stock
audit and security verification. The respective Indian Bank consumer loan scheme
sanctioning authority should ensure compliance of The existing guidelines circulated vide
the guidelines in this regard. ADV.104/98-99 stand modified as follows:
(ADV.126/98-99 dt.02.01.99) 1. The eligibility criteria will include any
customer whether existing or new, properly intro-
Submission of control returns by branches duced with impeccable credentials whose
salary/income/ earnings are routed through his
The time norms for submission of certain account so as to have his float funds with the
specific returns viz., AUF-I, AUM-1, AUM-2, branch. The stipulations viz., minimum period of
AUM-4, AUM-5 and AUM-7, AUQ-2, 1 year connection with the branch and obtention of
AUQ-8A-C, AUH-1 and AUF-II have been undertaking from the employer for direct deduc-
reviewed and revised. The revised norms are tion and remittance of loan instalments to the
furnished in the annexure to the circular. branch have been deleted.
Non-submission of the returns within the time
norms laid down will result in classifying the 2. The rate of interest shall be PLR + 4% +
branch as a chronic defaulter. The revised norms Interest tax. In addition front end service charge of
come into effect from 1.4.99. Branches are 1% on the advance amount besides processing
advised to be prompt in the submission of all the charges shall be levied.
control returns henceforth and avoid being listed 3. The concession allowing remission of 1%
as chronic defaulter. on interest rate if the employer is agreeable to
direct deduction and remittance of loan instalments
(ADV.127/98-99 dt.04.01.99) to the branch is withdrawn.

Loan to pensioners All other guidelines remain unchanged.

In partial modification of the existing guide- (ADV.134/98-99 dt.28.01.99)

lines, it is decided with immediate effect to

2
 Volume 11 Issue 4 Jan - March 1999

Eligibility for finer interest rates for borrowers 1. Where concessions as mentioned above
falling under selective credit control have been sanctioned in an account/Group
accounts, for any further review/renewal or
As per the present guidelines, credit facili- increase in limits, the proposals should be submit-
ties against commodities falling under the purview ted to Management Committee as a one time
of selective credit control do not qualify for finer measure.
rates of interest. It has now been decided that
borrowal accounts enjoying credit limits over Rs.2 2. Subsequent to sanction by MC,
lakhs against commodities coming within the a. Further review/renewal or increase in limits
purview of selective credit control are eligible for upto 25% of sanctioned limits without any change
finer rates of interest on a case to case basis on in sanction terms relating to security can be done
merits. by the appropriate sanctioning authority. If change
in sanction terms for security is envisaged, the
(ADV.135/98-99 dt.28.01.99)
same should be referred to MC.
Revision of PLR b. Further increase in limits (Fund Based and
Non-Fund based) in excess of 25% of sanctioned
It has been decided to increase w.e.f. limits with or without change in sanction terms
1.2.99, the prime lending rate of the bank from relating to security can be done only by MC.
13.5% to 14%. The maximum spread on all loans
and advances of over Rs.2 lakhs will be at 4%. A (ADV.145/98-99 dt.18.02.99)
chart containing amended interest rates effective
from 1.2.99 on advances other than export credit Qualitative credit expansion
is annexed to the circular.
It is necessary that credit expansion must be
(ADV.138/98-99 dt.29.01.99) qualitative and also profitable to the bank. The
corporate plan for 1999-2000 envisages expansion
Guidelines for assessment/sanction of in gross non-food credit by Rs.1205 crores and
working capital finance to information technol- NPA recovery of Rs.540 crores. The gross credit
expansion has to reach Rs.1800 crores in order to
ogy and achieve the corporate targets. Further the growth
software industry in credit should be in proportion to the growth in
Policy guidelines for assessment of working resources and also remain consistent on a month to
capital finance for IT and software industry are month basis. There is a need for close interaction
given in the annexure to the circular. These guide- with all existing borrowers so that their genuine
lines conform to the guidelines issued by RBI in business needs are met in time. Further such inter-
this regard. As per the policy, IT and software actions should also be used to bring in fresh
industry could be broadly classified into 4 catego- business from new clients. Marketing for credit is
ries viz., software services, project services, necessary so that good business is canvassed rather
software products and packages and IT related than entertaining ‘walk-in business’. While
services. The policy inter alia contains operational customers may expect lower rates of interest and
guidelines for extension of working capital finance availability of services on competitive/cheaper
including the eligibility norms, methodology for terms in comparison to other banks, the Bank
assessment, documents to be obtained along with cannot overlook the overall cost-benefit analysis.
proposal, nature of credit facilities to be Branch managers must keep themselves abreast of
sanctioned, margin, security, administrative competitive services offered by other banks and
arrangements, etc. For further details the circular build up relationship value which can more than
may be referred. compensate such monetary consideration. In
achieving the corporate objective ‘Credit Expan-
(ADV.139/98-99 dt.01.02.99) sion with Profitability’,
Ÿ we should target the areas in which we are
Sanction of advances in respect of strong
accounts/group accounts where concession by
way of waiver or/and write-off has been Ÿ we will work on our strength to get stronger
extended Ÿ be pro-active rather than being risk averse
The existing guidelines on the above subject (ADV.146/98-99 dt.01.03.99)
stand modified as follows:

3
 Volume 11 Issue 4 Jan - March 1999

Indian Bank Consumer Loan Scheme financial statements, CMO reports etc., These
tools will help in detecting the warning signals
The discretionary powers for sanction of much in advance so that dialogue could be initiated
loans under the above scheme have been revised as with the borrowers at the level of ZM for neces-
follows with immediate effect. sary corrective action. Our Management Commit-
tee has observed that the slippages are due to lack
Sanctioning authorities Limits (Rs.)
of monitoring and non-initiation of corrective
Scale I 25,000 action at the appropriate time. Hence
branches/controlling offices are advised to closely
Scale II 50,000 monitor the borrowal accounts and also take
Scale III 100,000 corrective measures in time.
Chief Manager/Scale IV 200,000 (ADV.150/98-99 dt.06.03.99)
RM in Scale IV and above 300,000
Export Credit - Interest Rates
(ADV.147/98-99 dt.04.03.99) RBI has revised the interest rates on
preshipment and postshipment rupee credit effec-
Format of DPN/document printed/supplied tive from 1.4.99. The revised rates are given in
the annexure to the circular.
Branches should verify the printed docu-
ments/forms available with them and confirm that (ADV.154/98-99 dt.22.03.99)
the same are printed strictly as per the format
prescribed in the Documentation Manual. The Recovery of processing fee and lead bank
verification should be made again at the time of charges
execution of documents as well as before filing
suit/recovery applications. To quote an instance, in Branches are aware that the processing fee
a DPN filed for legal proceedings, the blank space and lead bank charges are to be recovered then and
provided for filling in the periodical rests at which there in respect of borrowal accounts. W.e.f.
interest is charged was not available and the 1.4.99, for accounts which have fallen due for
branch did not write the words ‘quarterly’ and renewal, branches should certify/confirm at the
consequently the bank’s claim for quarterly rests time of submitting renewal proposal that process-
was rejected and only simple interest was granted. ing fee/lead bank charges have been recovered on
Hence branches are advised to meticulously adhere the due date of renewal. For any enhancement in
to the above instructions. limits sanctioned subsequently, the difference in
the charges shall be recovered.
(ADV.148/98-99 dt.23.02.99)
(ADV.156/98-99 dt.25.03.99)

Prevention of slippage in asset quality Take over of borrowal accounts from other
Qualitative credit appraisal, proper banks
documentation, close watch on the operations and
In modification of the existing guidelines, it
careful monitoring are necessary to ensure that the
is decided with immediate effect that take over of
borrowal account is maintained in the standard
borrowal accounts (including SSI accounts) from
category. A thorough knowledge of the borrowing
other banks can be considered on merits by the
unit and the industry in general is required to
respective sanctioning authority from the level of
decide on whether to exit out of the situation or
RM and above, waiving thereby the existing
not. Slippage of asset takes place generally due to
requirement of prior in-principle approval/ clear-
the casual treatment given to warning signals such
ance of CMD. Further, no irregular/unsatisfactory
as devolvement of LCs, non-servicing of
account should be considered for take over from
interest/instalments, etc. Incurring of cash loss
other banks.
may result in erosion of security and drawing
power which may turn out to a permanent irregu- (ADV.157/98-99 dt.25.03.99)
larity. Non-adherence to sanction terms may also
lead to slippage in asset quality. The tools for
effectively monitoring credit include periodical
Submission of AUF-1
review/renewal, inspection of units, rectifying W.e.f. 03.04.99, in modification of the
deficiencies pointed out in various inspection existing guidelines, all advances sanctioned within
reports, obtention of QIS data, stock audit reports, the discretionary powers of BMs should be
periodical consortium meetings, analysis of

4
 Volume 11 Issue 4 Jan - March 1999

reported in AUF-1 on a fortnightly basis on the CRA

second Friday and on the last Friday of every
month to the immediate controlling authority Introduction of High Value DDs
within 3 days from the date to which the return
relates. The immediate controlling authorities will It has been decided to provide high value
closely monitor the sanctions and ensure that no DD leaves to select branches for issue of DDs for
violation of norms/guidelines has occurred. Rs.10 lakhs and above but below Rs.1 Crore. The
high value DD books will be supplied to branches
(ADV.158/98-99 dt.25.03.99) only on the specific recommendations of the Zonal
Manager. While placing their indent with Zonal
Office for high value DDs, branches should make
Personnel a proper and reasonable assessment of their annual
requirement for such DDs and ZMs shall make
Need for proper and effective internal their recommendations only after satisfying
communication themselves of the correctness of the assessment
Effective and free flow of communication is made by branches. It will be the responsibility of
essential for the integrated functioning of branches the branch manager to ensure proper
and controlling offices. Controlling offices will custody/accounting of high value DD forms.
keep the branches informed of corporate guide- Verification of stock should be made on a weekly
lines, policy decisions, etc. Branches have to basis. All precautions applicable for issue and
report to controlling offices of the local conditions, payment of DDs in general will hold good for high
important developments in the area etc., which value DDs also.
have a bearing on the functioning of the branch.
Normally on the local happenings branches should (CRA.27/98-99 dt.05.02.99)
communicate with their immediate controlling
office and the controlling offices have to write to
the concerned functional GM at HO. In certain FX
cases, it is observed the field level functionaries
address such communication directly to CMD/ED. Export Credit - Floriculture, Grapes and other
Such practice should be stopped forthwith. All agro products
correspondence should be routed only through
proper channel. With a view to promoting exports of flori-
culture, grapes and other agro products, RBI has
(PRNL.69/98-99 dt.05.02.99) decided to allow banks to extend concessional
credit for working capital purposes in respect of
Grant of ex-gratia to surviving pre-01.01.86 export related activities of all agro products,
retirees including purchase of fertilizers, pesticides and
other inputs for growing of flowers, grapes, etc.
Government of India has advised that banks However, banks should be in a position to clearly
may provide ex-gratia relief to employees who identify such activities as export related and satisfy
retired on or before 31.12.85 provided they have themselves of the export potential thereof besides
rendered atleast 20 years of continuous service and ensuring that the activities are not covered by
are not getting any pensionary benefit from the direct/indirect finance schemes of NABARD or
bank. The ex-gratia is to be sanctioned by any other agency. The credit will be subject to the
HO:Personnel Department. The amount payable is normal terms and conditions relating to packing
Rs.300 pm. with dearness relief. Arrears of credit such as period, quantum, liquidation, etc.
ex-gratia payment will be payable with effect from Export credit should not however be extended for
01.11.97. The format of the application form for investments such as import of foreign technology,
the purpose is enclosed to the circular. If any equipments, land development, etc or any other
pre-86 retiree of our bank approaches the branch item which cannot be regarded as working capital.
in this regard, he/she may be provided with the
application form with a request to forward the (FX.32/98-99 dt.17.02.99)
same duly filled in to HO:Personnel Department.
ECGC cover for export finance to IT/software
(PRNL.75/98-99 dt.05.03.99) industries
ECGC has decided to extend cover for
export credit for software industry under its Credit
Guarantee Schemes for short term exports in

5
 Volume 11 Issue 4 Jan - March 1999

particular the WTPCG/WTPSG. Branches are obtention of duplicate cheque/realisation in case of

advised to cover the advances granted to software loss in transit.
exports under the above two credit guarantees.
(FX.38/98-99 dt.26.03.99)
(FX.36/98-99 dt.15.03.99)
General
Collection of Foreign Currency instruments
through OSBs Year 2000 computer problem - credit risks
faced by lending institutions
The credit advices received from OSBs
generally mention of the holding period for collec- Controlling offices/branches are advised to
tion proceeds of foreign currency instruments. The take note of the credit risk exposures to year 2000
holding period is normally about 21 days and it problems while sanctioning/reviewing/renewing
appears that branches have not clearly understood credit limits of large borrowal accounts. A detailed
the impact of this provision. NOSTRO correspon- account of the credit risk exposure to Year 2000
dent banks adopt either Cash Letter Service or problem and the associated operational risks is
Cheque Collection Service/Final Credit Service. given in the circular.
Under Cash Letter Service which is the Branch managers/credit desk officers may
most common mode, conditional credit is afforded take steps to conduct educational campaigns and
pending realisation of the cheque. However if the enhance customer awareness on Year 2000 issues.
cheque is returned unpaid, the NOSTRO account Branch Managers may get the questionnaire as per
will be debited. In that case, the customer’s proforma enclosed to the circular duly completed
account to which credit was made earlier is to be by identified borrowers of the branch and send a
debited not only for the rupee equivalent of the copy of the same to the respective sanctioning
credit given but also for the exchange difference authority for their assessment of risks and taking
appropriate action.
and charges if any. The reserve period is to be
mentioned in the credit advice and branches are (GENL.59/98-99 dt.02.02.99)
expected to part with the amount only after the
reserve period.
Procedure for holding premises keys
In the Cheque Collection Service the
The keys of branch/office premises shall be
NOSTRO bank gives irrevocable credit to our
in sets of two only and the custody shall be as
account. This method offers greater security follows:
although it is more costly and work intensive.
Category First Key Second Key
Cash Letter Service is most suited for faster
realisation of instruments such as Travellers Small / Medium Branch Manager Other
cheques, DDs, IMOs, etc. Cheque Collection Branches officers on
Service may be resorted to in case of cheques rotation *
drawn by individuals where there may be a need to Large / VL / EL BM or officer
- do -
exercise greater caution. Branch Managers have to Branches designated by BM
judiciously decide on the mode of collection Administrative CM / SM in charge
- do -
depending on the nature of the instrument and Offices of admn.
customer’s standing. Where the instrument is to be
* In respect of singleman branches, the second set of
sent on collection basis, it should be specifically keys is to be deposited in the nearby branch of our
stated in the covering schedule to OSB so that Bank. If none of our branches is nearby, the second set
credit will be made only upon final payment by the may be deposited with the nearest public sector bank. In
drawee bank. Branches are advised to obtain this regard, the procedure for deposit of duplicate safe
keys as per Para 1.6 - Chapter 1 of the Manual on Cash
necessary instructions from customers lodging Handling and Management should be followed.
foreign currency instruments as per the format
enclosed to the circular indicating their option The opening and closing of branch should
either for Cash Letter Service or Final Credit be done in the presence of the branch manager or
Service. However branch manager shall exercise in the presence of an officer holding the keys. The
his discretion regarding the mode of collection and movement of keys should be recorded in a separate
inform the customer accordingly. Further branches register and the entries therein should be authenti-
are advised to take a xerox copy of the instrument cated by the BM/ABM.
(front and back) at bank’s cost and keep it along
with copy of the forwarding schedule to enable (GENL.60/98-99 dt.09.02.99)

6
 Volume 12 Issue 1 April - June 1999

Deposits
Recollect
PREFERENTIAL RATES OF INTEREST
Amount of Deposit Rate over and above
Deposit accepted by offering preferential inter- the applicable rate of
est rates the respective period
Presently Zonal Offices are submitting data Rs.15 lakhs to less than 0.50%
on preferential deposits of Rs.2 Crores and above Rs.2 crores - for depos-
on a daily basis. It has been decided to collect the its of upto 1 year
data on all preferential deposits of Rs.15 lakhs and Rs. 2 crores and above Decided at Head
above in order to comply with the reporting Office on daily
requirements prescribed by RBI and also for basis
management information purposes. Branches are
required to submit to their Zonal Offices, the (DEP.2/1999-2000 dt.11.05.99)
details of all PDs as on 31.3.99 and the consoli-
dated statement of PDs opened and closed between
1.4.99 and 9.4.99 in the format annexed to the Amendments to Manual of Instructions - IV -
circular. Further, a Weekly statement of PDs Deposits
opened and closed for each 7 day period ending The amendments made to the Manual of
with a Friday (to reach Zonal Office by the follow- Instructions - Deposits for the period from August
ing Monday) is also to be submitted as per the 1996 to March 1999 are given in the annexure to
relevant format enclosed to the circular. the circular. Branches are advised to note the
amendments in the manual.
(DEP.1/1999-2000 dt.06.04.99)
(DEP.6/1999-2000 dt.15.06.99)
Interest rates on deposits -
Domestic/NRE/NRNR Deposits Nomination facility in deposit accounts
The rates of interest for domestic, NRE and Branches are aware that in respect of
NRNR Term Deposits for different maturities nominations made for deposit accounts, the
stand revised as under w.e.f. 17.5.99 particulars of nominations are to be entered in the
nomination register and the notation 'Nomination
DOMESTIC T ERM DEPOSITS Registered' should be entered in the pass
Rate of Interest book/term deposit receipt. In order to facilitate
Duration easy reference, it is advised that the nomination
%
registration number be recorded on the face of the
15 days to 45 days 5.00
pass book/term deposit receipt by affixing a rubber
46 days to 90 days 7.00 stamp as under:
91 days to 179 days 8.00
Nomination registered on
180 days to less than 1 year 8.50 ................. vide registration number
..........
1 year to less than 2 years 10.00
2 years to less than 3 years 10.50 (DEP.7/1999-2000 dt.15.06.99)
3 years and above 11.00
NRE TERM DEPOSITS
Prohibition against opening of SB accounts in
the names of certain bodies/organisations
6 months to less than 1 year 8.25
The names of bodies/institutions which have
1 year to less than 3 years 10.50 been prohibited from opening of Savings Accounts
3 years and above 11.00 and those which have been permitted for opening
of SB accounts were furnished vide circular
NR NR T ERM DEPOSITS DEP.33/97-98 dt.06.02.98. RBI has informed that
6 months to less than 1 year 10.50 political parties also come within the purview of
1 year to less than 3 years 11.00 prohibition on opening of SB accounts. Branches
are advised not to open Savings Bank accounts in
3 years only 11.50 the name of any political party.

(DEP.8/1999-2000 dt.26.06.99) PDF-1999-1Q

1
 Volume 12 Issue 1 April - June 1999

Advances 2. Minimum educational qualification of 8th

standard pass stipulated, preference to those
Revised format for review/renewal of advance trained in any trade in Government recognised/
proposals upto Rs.2 lakhs approved institutions such as ITI for at least 6
months.
The existing format is modified to suit the
requirements for review/renewal of advances 3. All economically viable activities excluding
under agriculture, DRI and other small loans. The direct agriculture operations covered.
modified format is enclosed to the circular and 4. Composite loan upto Rs.2 lakhs to be
may be used for review/renewal of all types of sanctioned for activities other than business sector.
credit facilities upto Rs.2 lakhs. For review/ For business sector, loan restricted to Rs.1 lakh.
renewal of credit facilities of over Rs.2 lakhs, the For partnership of two or more eligible persons,
existing forms will continue to be used. finance to be extended to projects upto Rs.10
lakhs, assistance however being limited to individ-
(ADV.1/1999-2000 dt.06.04.99)
ual admissibility.
Interest rates on advances upto Rs.2 lakhs 5. Subsidy limited to 15% of the project cost
subject to a ceiling of Rs.7500 (except North-
It has been decided that w.e.f. 1.4.99, the eastern states). A margin of 5% to 16.25% of the
interest rates for all advances upto Rs.2 lakhs project cost to be taken from the borrowers so as
(other than DRI, Export Credit, Staff loans and to make the total of subsidy and margin equivalent
non-priority loans) will be as follows: to 20% of the project cost. In North-eastern States
1. For advances upto Rs.25000 : 1% below subsidy eligible will be 15% of the project cost
PLR + Int.Tax with a ceiling of Rs.15000 per borrower.

2. For advances over Rs.25000 and upto Rs.2 6. No collateral security to be sought for
lakhs : PLR + Int.Tax projects upto Rs.1 lakh.
7. Interest to be at rates as advised by HO
(ADV.2/1999-2000 dt.07.04.99) from time to time. Repayment to be fixed in the
range of 3 to 7 years after an initial moratorium as
Classification of bank credit to NBFCs per existing guidelines.
It has already been advised that advances The other provisions of the scheme remain
granted to NBFCs for onlending to SRWTOs are unchanged.
to be classified under priority sector lending
provided the ultimate borrowers (SRWTOs) satisfy (ADV.4/1999-2000 dt.13.04.99)
the eligibility requirements under priority sector.
RBI has now advised that for the above purpose, Flow of credit to SSI sector
SRWTOs would not include truck operators (i.e.
advances granted to NBFCs for onlending to RBI has directed that Banks henceforth
SRWTOs other than truck operators alone need be should adopt the simplified procedure of sanction-
classified under priority sector lending). Further, ing working capital limits on the basis of 20% of
portfolio purchases (purchase of hire purchase the projected annual turnover to all SSI units (new
receivables) from NBFCs made after 31.7.98 as well as existing) requiring aggregate fund based
would also qualify for inclusion under priority working capital limits upto Rs.500 lakhs from the
sector lending provided the portfolio relates to banking system. Branches/offices are required to
SRWTOs satisfying priority sector norms. satisfy themselves about the reasonableness of the
projected annual turnover and ensure that the
(ADV.3/1999-2000 dt.09.04.99) minimum of 5% of the projected annual turnover
is brought in as margin money.

PMRY - Modifications in guidelines of the (ADV.5/1999-2000 dt.17.04.99)

scheme
The Government of India has made certain
Insurance of assets charged to Bank -
modifications in the scheme, the details of which Payment of insurance premium
are as follows: All securities charged to the Bank must be
1. Age limit relaxed upto 45 years for SC/ST, insured adequately to protect the Bank's interest.
Ex-servicemen, physically handicapped and Where the borrower does not pay insurance
women premium in time in spite of reminders, the branch

2
 Volume 12 Issue 1 April - June 1999

should pay the premium to the debit of borrower's 1. Credit for food and agro processing
account under advice to him. This may in certain industries
cases lead to an excess over the sanctioned 2. Lending to NBFCs/other financial interme-
limit/DL. The authorisation of the excess on diaries for onlending to tiny sector
account of payment of insurance premium may be
3. Bank finance to HUDCO either as a line of
made by the immediate controlling authority in credit or by way of investment in special bonds
respect of limits sanctioned by branch managers issued by HUDCO for onlending to artisans,
and in other cases by ZM subject however to the handloom weavers, etc. under tiny sector (to be
ceiling limit for such authorisation, which shall be classified as indirect lending to SSI).
as under : Branches are aware that forestry has
already been included under priority sector.
Upto Rs.0.5 lakh RM in Scale IV
Efforts to promote forestry activities are to be
Upto Rs.1 lakh RM in Scale V/AGM at ZO intensified by financing bankable schemes.
Upto Rs.5 lakhs ZM in Zones headed by DGM (ADV.10/1999-2000 dt.04.05.99)
Upto Rs.15 GMs of Zones/functional GMs at
lakhs HO Recommendations of the Kapur Committee on
the flow of credit to SSI sector
Upto Rs.25 ED
lakhs Of the recommendations made by the Kapur
Committee on the flow of credit to SSI sector, 35
Without limit CMD have so far been accepted/identified by RBI for
implementation by Banks, the details of which
Steps should be taken for recovery of the were given in circular ADV.116/98-99
excess immediately. In case of consortium dt.30.11.98. Sixteen recommendations had already
accounts claim for pro rata payment must be made
been in vogue in our Bank and of the remaining 19
from other member banks on all remittances which
recommendations, detailed guidelines in respect of
could be shared later upon receipt of the amount
six have been given in Part A of the circular. Part
from the borrower. The insurance due date regis-
B of the circular covers another four recommenda-
ter should be maintained properly and insurance tions including the directions of RBI and action
policy should be kept in force without any break. points identified. For further details the circular
(ADV.7/1999-2000 dt.17.04.99)
may be referred to.

(ADV.13/1999-2000 dt.10.05.99)
SSI Registration to erstwhile Non-SSI units -
Waiving of time limit for registration Export credit interest - Applicability of conces-
Branches are aware that while raising the sional rate of interest in change of tenor of the
enhancement of ceiling on investment in Plant & bill
Machinery of SSI/Ancillary units to Rs.3 crores,
the Govt. of India also fixed a time limit of 180 RBI has permitted ADs to allow change of
days for registration of erstwhile non-SSI units, tenor of bills drawn on the original buyer or alter-
which otherwise satisfy the criteria for definition nate buyer subject to the condition that the revised
of SSI units. It is now informed that the time limit due date of payment does not fall beyond 6 months
fixed for registration has been dispensed with. An from the date of shipment. Further, the change of
industrial undertaking is eligible to be registered as tenor should be made before the original due date
a small scale/ancillary industrial undertaking at of payment. Banks have been advised to extend
any time provided it satisfies the definitional concessional rate of interest (10% p.a. for a period
criteria. upto 90 days and 12% p.a. for period beyond 90
days and upto 6 months) to the exporters in all
(ADV.9/1999-2000 dt.23.04.99) such cases where change of tenor has been allowed
upto the revised notional due date subject to a
maximum of 6 months from the date of shipment.
Priority sector lending - flow of credit to food
and agro based processing, forestry and tiny (ADV.14/1999-2000 dt.14.05.99)
sector enterprises
RBI has directed the following lending by
banks to be classified under priority sector:

3
 Volume 12 Issue 1 April - June 1999

Revision of PLR advances against such deposits shall be deposit rate

+ 2% + Interest Tax.
It has been decided to reduce w.e.f.
17.05.99, the PLR of the bank to 13.5% from The above changes in the interest rates on
14%. The maximum spread on all loans and advances (both existing and fresh) against term
advances of over Rs.2 lakhs will be at 4%. The deposits will be effective from 14.05.99.
prime term lending rate (PTLR) is also fixed as
13.5%. Enclosed to the circular is a chart contain- (ADV.21/1999-2000 dt.24.05.99)
ing the revised interest rates effective from
17.5.99 on advances other than export credit. SIDBI refinance - Revision in composite loan
scheme
(ADV.18/1999-2000 dt.15.05.99)
Subsequent to the enhancement in compos-
ite loan limit from Rs.2 lakhs to Rs.5 lakhs on the
Sanction of rupee loans/OD against pledge of
basis of Kapur Committee recommendations,
Resurgent India Bonds (RIBs) SIDBI has made the following revisions:
It has been decided to allow 1. Extent of refinance enhanced from Rs.2
loans/overdrafts in non-repatriable rupees in India lakhs to Rs.5 lakhs.
against pledge of RIBs to non-resident/resident
holders of RIBs and third parties who are resident 2. Refinance under the scheme extended to
in India, preferably our customers for genuine village and cottage industries as also to SSI units in
business/personal requirements. The loan may be the tiny sector irrespective of the location.
allowed for a period of 3 years with annual review The modifications are effective from
and continuation of the facility thereafter shall be 16.3.99. The revised scheme of SIDBI is furnished
at the option of the bank. However, the period of in the annexure to the circular.
the facility shall not exceed the unexpired period
of maturity of the bonds. (ADV.22/1999-2000 dt.25.05.99)
A minimum margin of 15% of the face
value shall be fixed (for bonds with cumulative Role of branch manager in credit expansion
interest option, interest enhanced value shall be
For the year 1999-2000, incremental credit
taken for arriving at margin). Interest shall be
target of Rs.1290 Crores has been set. In 1998-99,
charged at PLR + 4% + Interest tax. Request for
the growth, a substantial part of which was by way
lower rates of interest may be considered by CMD
of food credit, amounted to Rs.699 crores as
on a case to case basis.
against a target of Rs.1098 crores. Despite several
The loan shall be repaid by fresh remit- positive initiatives such as dispensing with funds
tances from abroad or transfer from existing clearance, restoration of discretionary powers to
NRE/FCNR/NRO accounts or maturity proceeds BMs/RMs etc., the credit off take in the first 45
of RIBs and in the case of resident borrowers out days of the year has been very meagre. Hence
of rupee resources. The loan shall be disbursed there is an imperative need to market credit by
only after receiving confirmation of lien from keeping a close watch on the potentials available in
State Bank of India. For further details, the circu- the command area and by tapping market intelli-
lar may be referred to. gence for bringing in good borrowal clients. In the
present days of highly competitive environment,
(ADV.20/1999-2000 dt.18.05.99) waiting for walk in business will not be of any
avail. The borrower customers are as important as
Interest rate for advances against term deposit customers. Close liaison coupled with
deposits prompt and courteous service would ensure that
the existing customers do not tend to move away.
The existing guidelines provide that the
interest rate to be charged for advance against own Proposals sent should contain full details
term deposits shall be including analysis of various risks involved so that
speedier decisions could be taken without raising
Deposit rate + 2% + Interest Tax
or
queries. The availability of collateral will be
PLR + Interest Tax whichever is less
addition of strength for considering the proposal.
Loans to medium size corporates, firms with sound
However, in cases where the deposit rates equity and financials may help the bank to broad
are equal or more than the PLR or less than 1%
below PLR, then the interest rate to be charged on base the clientele, distribute the risks and make
available higher interest spreads.

4
 Volume 12 Issue 1 April - June 1999

Branch managers are exhorted to shed the interest/exchange rates. This in turn has given
fear of accountability and actively involve place to intense competition, risks and pressure on
themselves in building up the image and profitabil- profit margins of banks. Thus there is a need to
ity of the bank through developing a sound credit manage various risks and balance growth with
portfolio and mobilisation of low cost deposits. profitability. Risk can be defined as a measure of
the extent of variability between expected and
(ADV.23/1999-2000 dt.26.05.99)
actual outcome due to unforeseen changes in
economic/financial variables and may arise from
Pre-release audit - Need for seeking approval internal as well as external factors. The types of
for release of facilities risks relevant to banks include credit risk, interest
The pre-release audit system covering rate risk, exchange risk, liquidity risk, IT risk and
facilities to borrowers with limits of Rs.50 lakhs capital adequacy risk.
and above was introduced in order to ensure that The asset liability management is part of
the prescribed documentation has been obtained
organised risk management system and takes care
and that the pre-disbursement terms and conditions
have been complied with. The steps to be taken by of liquidity and interest rate risks. The guidelines
branches before release of sanctioned facilities on credit appraisal include assessment of credit
include the following: risk and any inadequate focus in this regard may
adversely affect the quality of credit portfolio.
1. Informing the borrower in writing of the
While risk assessment should also take into
terms and conditions of sanction and getting the
acceptance of the borrower. In case of corporate account the risk perspectives of the borrower, its
borrowers, Board resolution towards acceptance to ultimate aim must ensure that the borrowal
be obtained, the resolution to indicate the names of account is continuously maintained under the
persons authorised to execute security documents. standard asset category. The important compo-
2. Execution of documents by the borrower, nents of risk particular to the area of credit are
creation of charge on securities, compliance of given in detail in the circular. The measures to
terms and conditions, etc. as per sanction contain and manage credit risk include setting of
exposure limits, appraisal of risk, monitoring,
3. Informing Zonal Office to request Zonal
choosing exit route where necessary, securitisation
Inspectorates for conducting pre release audit
and zero error documentation.
4. Rectification of omission/short comings
pointed out by the Inspectors. Every loan appraisal should involve identifi-
cation of risk elements and their acceptability
5. Forwarding pre release audit report to ZM towards arriving at a balanced credit decision.
for ZO sanctioned accounts and GM at HO for HO
Proper analysis of risk and its impact on the
sanctioned accounts for release of sanctioned
facilities. borrower would go a long way in ensuring the
quality of loan, prevent slippages, reduce
Pre release audit with qualifying remark, if incidence of NPAs and lead to improved profit-
any, should be routed through controlling offices
ability and growth of the bank.
alongwith necessary comments and the time frame
within which the defects will be rectified. The
(ADV.28/1999-2000 dt.11.06.99)
controlling office should forward the branch
request to ZM/GM at HO with their
recommendations. Advances against bearer securities
Branch Managers are exhorted to adhere to In addition to the existing guidelines on
the guidelines on pre release audit as it would be advances against bearer securities, branches shall
in their own interest since the system provides observe the following:
support to avoid accountability.
i. Independent written confirmation about the
(ADV.27/1999-2000 dt.09.06.99) genuineness of the certificates/bearer securities
shall be obtained from the issuing authorities
Risk Management before sanctioning the advance.

The globalisation of economy, privatisation, ii. The branch officials should personally get
liberalisation and information technology have the certificates verified/lien noted by the authori-
ties concerned and no third party should be
inter alia brought about deregulation of
engaged for the purpose.

5
 Volume 12 Issue 1 April - June 1999

iii. The procedure prescribed by the authorities the above increase to the eligible employees w.e.f.
concerned should be ascertained and complied 18.1.99.
with.
(PRNL.4/1999-2000 dt.09.04.99)
(ADV.30/1999-2000 dt./15.06.99)
Additional Staff Housing Loan
Recommendations of Kapur Committee on The award staff and officers were permitted
flow of credit to SSI to avail additional housing loan upto 31.3.99 as a
One of the 38 recommendations of Kapur one time measure for liquidating liability with
Committee accepted by RBI so far relates to IndBank Housing Limited and for additional
assessment of flow of credit to SSI by using data construction/repairs/renovation, etc. It has been
on disbursement rather than outstanding balance. decided to extend the time for availing the facility
The committee has felt that banks could achieve a of additional staff housing loan by one more year
growth rate of 30% p.a. in terms of disbursement ie. upto 31.3.2000, keeping all other terms and
and are to be advised to fix their disbursement conditions unaltered.
targets accordingly. More attention should be paid
(PRNL.10/1999-2000 dt.18.05.99)
to backward States such as Bihar, J & K, Madhya
Pradesh and North Eastern states while fixing
lending targets and monitoring the progress Staff Welfare Scheme - Free medical check up
thereof. RBI has clarified that the growth rate at Sevakshetra Hospital, Bangalore and
suggested by the committee may be made applica- Medical facility at Madras Medical Mission,
ble to term loans/composite loans alone as in Chennai
respect of working capital advances, operations
are on a continuing basis. Field level functionaries 1. Sevakshetra Hospital, Bangalore
are advised to ensure the implementation of this The scheme of reservation of beds in the
recommendation in letter and spirit. hospital has been withdrawn with immediate effect
and in lieu thereof free medical check up is
(ADV.36/1999-2000 dt.30.06.99) provided to staff/dependents who are above 40
years of age. For those who are below 40 years of
age, permission for medical check up may be
Personnel granted upon production of specific MC from a
Amendments to Indian Bank Officer Employees doctor satisfactory to the bank. For availing the
(Discipline and Appeal) Regulations, 1976 facility application shall be made to Zonal Office,
Bangalore with necessary particulars in the
Regulations 4, 6, 8, 17 and 18 of Indian Format-A annexed to the circular. The facility can
Bank Officer Employees (Discipline and Appeal) be availed only once in a year either for self or for
deal with penalties, procedure for imposing major one dependent. The facility is available to 150
penalties, procedure for imposing minor penalties, applicants on a first come first served basis in a
appeals and review respectively. Amendments to calendar year.
the above regulations as communicated by the
2. Madras Medical Mission, Chennai
Government and adopted by our Board are given
in the annexure to the circular. The free medical facility (package charges)
arranged with the above hospital has been renewed
(PRNL.2/1999-2000 dt.07.04.99) for 3 years on the existing terms and conditions
and is valid upto 3.3.2002.
Grant of allowance to stenographers and
typists for doing official work in (PRNL.15/1999-2000 dt.03.06.99)
Hindi/Regional Language in addition to
English Loan against title deeds to staff members
IBA has advised that the quantum of Hindi The scheme for grant of secured loan
incentive allowance be raised from Rs.60 pm to against title deeds to members of staff has been
Rs.120 pm and from Rs.40 pm to Rs.80 pm approved. The loan could be granted upto a
payable to the English stenographers and typists maximum of Rs.1 lakh to award staff and Rs.1.5
respectively who fulfil the criteria as advised in lakhs to officers for the following purposes.
HO circular PRNL.159/88 dt.3.11.88. All the i. Education of son, daughter, brother, sister,
sanctioning authorities are advised to give effect of etc.

6
 Volume 12 Issue 1 April - June 1999

ii. Additional cost of construction of house copies of it should be sent to HO:Accounts

under SHL Department.
iii. Unforeseen medical expenses for (CRA.7/1999-2000 dt.19.06.99)
self/dependents
iv. Marriage expenses of son, daughter, Revised system for issue and payment of DDs
brother, sister, etc.
The revised system for issue and payment
Repayable in 60 monthly instalments of DDs which came into effect from 2.4.98 was
(including interest), the loan will bear commercial reviewed in the light of feed back obtained from
rate viz., PLR + Int. Tax. The security will various quarters and based on the feed back certain
include deposit of title deeds/extension of EM modifications have been made to the existing
created for SHL. A margin of 50% excluding the guidelines. The modifications inter alia cover
existing liability if any is stipulated. For staff at guidelines relating to the issue of DDs for Rs.10
HO/subsidiaries and Zonal Managers, GM(GC) lakhs and above, powers for passing of DDs by
will be the sanctioning authority and for others, officers and action to be taken by paying branches
the respective Zonal Managers. For further details when coming across DDs drawn with discrepan-
the circular may be referred to. cies. The modifications are furnished on the
reverse of the circular.
(PRNL.19/1999-2000 dt.12.06.99)
(CRA.8/1999-2000 dt.28.06.99)

CRA
Amendments of Manual of Instructions - VIII-
Recovery of processing charges for sanction Ancillary Services
of jewel loans
The amendments made to the Manual of
It has been decided with immediate effect to Instructions - Ancillary Services (other than those
levy processing charges for sanctioning jewel loans relating to chapter on Government Transactions)
as follows: for the period from 01.04.1997 to 31.03.1999 are
given in the annexure to the circular. Branches are
For advances upto Rs.25000 No Charges advised to note the amendments in the manual.
For advances exceeding
Rs.25000
0.5% of the limit (CRA.9/1999-2000 dt.28.06.99)

Where there are multiple availment of jewel At par remittance of donations to Army Relief
loans of less than Rs.25000 by the same borrower Fund
and the loans are outstanding, the aggregate of all
As a gesture of encouraging donors in offer-
such limits should be added to the proposed loan
ing relief/donations to Army Relief Fund, all our
and processing charges are to be collected on the
branches are advised to permit customers as well
total of all the limits. The recovery of appraiser
as non-customers to remit the donations by way of
fee will continue to be as per the existing
DDs/MTs/TTs at par for Army Relief Fund/Army
guidelines.
Central Welfare Fund/National Defence Fund or
(CRA.5/1999-2000 dt.03.06.99) similar bodies engaged in collection of donations
for the purpose.
Submission of Sec.42 statement (CRA.10/1999-2000 dt.30.06.99)
The annexure to Sec.42 statement is
modified to include some additional information
such as the balance outstanding in overdraft and FX
OCC accounts. The format of the modified annex-
Non-Resident Special Rupee (NRSR) account
ure is enclosed to the circular. Branches are
advised to submit the annexure along with the scheme
main Sec.42 statement as on every Friday begin- The above scheme as communicated by RBI
ning from 25.06.99 to the respective comes into effect from 15.4.99. NRSR account
Regional/Zonal Offices. Neither the statement nor can be opened by NRI individuals or Persons of
Indian Origin. A person on becoming non-resident
will have the option of designating his account as
NRO or NRSR account. Existing NRO account

7
 Volume 12 Issue 1 April - June 1999

can also be converted into NRSR account. The and the safeguards required to be observed in the
scheme provides for opening the account in the process.
form of current, savings, recurring or fixed
3. Availability of rates
deposit and will be governed by the directions of
RBI for resident accounts. Joint holding with The rate to be applied for shall be as per the
residents is permitted. weekly rate list received from OSBs and where the
value of TCs exceed the limit prescribed for appli-
The format of the application form and the cation of card rate, the rate should be obtained
undertaking letter to be obtained are enclosed to from OSB. Non availability of current rate should
the circular. There is no need to verify the source not be a ground for refusal to encash and where
of credits and purpose of debits made to the necessary, rates could be ascertained from the
account or call for particulars of approvals for nearest authorised branch. The rates, charges and
investments/disinvestments. It is the responsibility rules for encashment shall be prominently
of the account holder and not the bank to ensure displayed in all authorised branches.
that all operations in the account comply with
Exchange Control Regulations. 4. Residents
Residents are permitted to receive foreign
The rates of interest are same as applicable
currency towards services rendered or settlement
for resident accounts. Funds held in the account
of any legal obligation from persons resident
including the income/interest thereon cannot be
outside India during their visits to India provided
repatriated at any time under any circumstances.
that such foreign currencies held in excess of US$
The account holders can nominate residents or
2000 or its equivalent is sold to an authorised
non-residents as nominees. The account holders
dealer within 7 days of receipt. Branches are
are permitted to freely transfer funds from
advised to freely accept such tenders subject to the
NRO/NRE/FCNR account to NRSR account.
guidelines issued from time to time.
However, funds held in NRSR account cannot be
transferred to NRO/NRE/FCNR account. A chart (FX.4/1999-2000 dt.30.04.99)
furnishing comparative features of various
non-resident schemes is enclosed to the circular.
Conversion of NRE accounts of returning
(FX.3/1999-2000 dt.15.04.99) Indians to RFC accounts - Payment of Interest
Branches are aware that interest may be
Encashment of foreign currency notes and paid on prematurely withdrawn FCNR(B) deposits
travellers cheques before completion of the minimum stipulated
period of 6 months for conversion into RFC
The instructions issued towards facilita-
account. RBI has decided to extend similar facility
ting/encouraging encashment of foreign currency
to NRE deposits also. Branches may henceforth
notes (FCN) and foreign travellers cheques (FTCs)
pay interest even if the deposit has not run for a
are as under:
minimum maturity of 6 months at interest rate not
1. Credit to non-resident account of the exceeding the rate payable for RFCSB accounts
tenderer for the period for which the deposit has run till
NRIs during their temporary visit to India preclosed for investment under RFC scheme. The
or return to India may tender FTCs/FCNs with a RFCSB rates are as follows:
request to credit the proceeds to their accounts. US$ 3.2% pa
Such credits will be subject to the provisions
contained in para 13B.22 of Exchange Control GBP 4.3% pa
Manual (ECM). No further documentation or DEM 1.3% pa
source of instrument should be called for beyond
the provisions of ECM. Further, no limits should (FX.6/1999-2000 dt.20.05.99)
be placed on tender of FCN/FTCs when the
proceeds are credited to the non resident account
of the tenderer. Whole Turnover Packing Credit Guarantee
(WTPCG) and Whole Turnover Postshipment
2. Payment of cash
Guarantee (WTPSG)
Requests for cash payment may be accepted
atleast to the extent of US$1000 or its equivalent ECGC has renewed the captioned two
per transaction in tourist centres and major towns guarantees upto 30.06.99. The loss payable as a
and to the extent of US$500 or its equivalent per claim under WTPSG has been increased from 50%
transaction in smaller towns subject however to the to 60% for the current period, viz., 01.07.98 to
credit discretionary powers of branch concerned 30.06.99. All other terms and conditions remain

8
 Volume 12 Issue 1 April - June 1999

the same. The salient features in brief are given in v. Built-in safety/security
the annexure to the circular.
vi. Being a sophisticated service enhances the
(FX.7/1999-2000 dt.24.05.99) pride of users
vii. Potential multilingual facility
General viii. Scope for introduction of several value
added services
Avoidance of marking copies to HO
II. For the cashiers
In disregard to the instructions contained in
the circular GENL.30/96-97 dt.20.06.96, branches i. Relief from pressure of peak hour rush
are marking copies of letter to HO on all types of ii. Reduction in work load enabling greater
correspondence as a matter of routine. By marking attention to other customers
copies to Head Office, branches shall not be
III. For the Bank
absolved of their responsibility/accountability as
Head Office is not expected to take cognisance of i. Increased business through improved
copies of letters and act on it. It may be noted that customer service
marking of such copies serve no useful purpose
ii. Helps to retain existing customers and
and results in avoidable wastage of manpower,
attract new customers
stationery and postage. The need of the hour is
conservation and optimum utilisation of resources. iii. Provision for extended hours of banking
service
(GENL.2/1999-2000 dt.15.04.99) iv. Improves the image of the bank
v. Time saved could be utilised to offer
Format for Expenditure Proposal - Revised
additional services in a better manner
The Group 10 memo for expenditure vi. Enables reduction in space needed for front
proposals has been reviewed and revised as per the office operations thereby reducing the rental
format enclosed to the circular. Branches are cost
advised to use the revised format henceforth for
submitting their expenditure proposals. vii. Provision for linking the switch with other
bank ATMs for a fee.
(GENL.4/1999-2000 dt.04.05.99) viii. Scope for offering access to other banks for
a fee.
ix. Scope for offering ATM services to
Automated Teller Machines (ATMs) Master/VISA card members
ATMs are intended to meet the customers' x. Scope for earning acquirer fee by installing
normal banking requirements such as cash ATMs in strategic locations
withdrawals, deposit of cash/cheque, issue of
cheque book, balance enquiry, statement of The circular has been issued with a view to
accounts, etc. Our bank is a forerunner in the enhance the staff awareness about the ATM
introduction of ATMs, being the first nationalised services. It also covers other aspects such as ATM
bank to install an ATM in Chennai City and the card and procedure for issue, mode of functioning
first bank to install a drive-in ATM in the country. of ATMs in our bank, shared payment network
The benefits attributed to ATM services may be system and steps to be taken at various levels for
listed as under: marketing the ATM services. A pamphlet on ATM
is being designed for supply to branches. With the
I. For the customers active involvement of field level functionaries, we
i. Availability of round the clock banking should be able to achieve the desired card base
services level of 1 lakh ATM cards within a span of 5
years.
ii. Locations spread out to give ease of access
(GENL.7/1999-2000 dt.11.05.99)
iii. Facility of privacy in operations
iv. Hassle free quick service

9
 Volume 12 Issue 2 July - Sept 1999

Deposits Advances
Recollect

Preferential interest rates on domestic term Credit for infrastructure

deposits Infrastructure includes sectors such as
The important points relating to preferential power, telecommunication, roads, ports, airports,
rate of interest have been explained for a better water supply, water ways, urban transport systems
understanding of the concept by branches. and others with similar characteristics. The criteria
for financing infrastructure projects will include
1. As per RBI directive, banks are permitted the following:
to offer preferential rates of interest on term
deposits of Rs.15 lakhs and above. 1. The amount sanctioned should be in confor-
mity with the prudential exposure norms
2. Interest rates should be as per the schedule prescribed by RBI from time to time.
and not be subject to negotiation between the
depositor and the bank. 2. The income generated from the project
should be sufficient to service the debt.
3. The interest rates for amounts from Rs.15
lakhs to less than Rs.2 crores are advised from 3. The bank should not run into liquidity
time to time by way of circulars. mismatch on account of such lending.
4. For preferential interest rates on amounts of 4. An appropriate Debt Equity Ratio should be
Rs.2 Crores and above, branches should contact evolved for each project, wherever necessary in
HO:Accounts Department for domestic deposits consultation with the financial institutions
and HO:ID for NRNRRDS, as these rates are concerned.
decided on a daily basis. The rates so obtained 5. Banks are free to decide the period of loans
from Head Office are valid only for that day’s
transaction and shall not be applied for any other keeping in view inter alia the maturity profile of
day. their liabilities.
5. Interest at preferential rate shall invariably 6. The project to be financed should be
be paid for single deposits of Rs.15 lakhs and appraised by competent person/agency for techni-
above as there should not be any discrimination
between customers, for the same size and period cal feasibility, financial viability and bankability
of deposits. with particular reference to risk analysis and sensi-
6. Branches have no discretion to deviate from tivity analysis.
the rates prescribed by Head Office. 7. In respect of projects undertaken by PSUs,
term loans may be sanctioned only to corporate
(DEP.10/1999-2000 dt.21.7.99)
entities. However, such term loans shall not be in
lieu of the budgetary resources envisaged for the
Interest rates on domestic term deposits
project.
With effect from 1.9.99, the rates of inter-
est on domestic term deposits stand revised as Financing of infrastructure projects could
under: be done by way of
Rate of Int. (%) i. Subscribing to subordinated debt subject to
Duration (p.a) terms and conditions stipulated by RBI
15 days to 45 days 5.00 ii. Take-out financing arrangement with
IDFC/other FIs or availing liquidity support
46 days to 90 days 6.50 from such FIs.
91 days to 179 days 7.50 iii. Direct financing through rupee term loans,
180 days to less than 1 year 8.00 DPG, foreign currency loan, etc.

1 year to less than 3 years 10.00 iv. Investment in infrastructure bonds issued by
project promoters/FIs.
3 years and above 10.50
For other details such as issue of inter insti-
tutional guarantees, appraisal of the project,
(DEP.11/1999-2000 dt.20.8.99)
PDF-1999-2Q

1
 Volume 12 Issue 2 July - Sept 1999

regulatory compliances, administrative arrange- classified under a new segment viz., advances to
ments, etc, the circular may be referred to. non-SSI food and agro based industries.

(ADV.38/1999-2000 dt.06.07.99) (ADV.43/1999-2000 dt.19.07.99)

Interest rates on Rupee loans/overdrafts Rashtriya Krishi Bhima Yojana - New Crop
granted to depositors against the security of Insurance Scheme
deposits under NR-NR-RDS (for purposes A new improved crop insurance scheme in
other than investment) the above name was dedicated to the nation by
W.e.f. 1.7.99, loans/overdrafts granted in Honourable Prime Minister of India on 22.6.99.
The new scheme will be implemented from Rabi
India to depositors against their deposits under
1999-2000 season. As compared to the existing
NRNRRDS should be charged interest at the scheme, the new scheme includes the following
following rate: distinctive features:

Deposit rate + 2% + interest tax i. coverage of more crops including cash

crops and commercial/horticultural crops.
The above revised interest rate is applicable ii. Non-loanee farmers have the option to
to existing and fresh borrowal accounts. cover their crops
iii. No restriction on total sum insured; option
(ADV.40/1999-2000 dt.13.07.99)
to cover upto 150% of average yield of the crop by
payment of additional premium
The Interest on Delayed Payments to Small
Scale and Ancillary Industrial Undertakings iv. Initially implemented by GIC, the scheme
(Amendment) Act - 1998 would eventually be operated by a separate organi-
sation called The Rashtriya Krishi Bhima Nigam
The amendment to the interest on delayed
payments to small scale and ancillary industrial v. While area approach will be adopted for
undertakings Act - 1993 has introduced the follow- widespread calamities, settlement of claims in the
ing changes: case of localised calamities will be on individual
basis.
i. Agreement between the seller and buyer
shall not exceed 120 days. The details of the scheme are furnished in
the Annexure to the circular. Branches are advised
ii. State Governments have been empowered to to popularise the scheme among farmers.
establish Industry Facilitation Councils for settle-
ment of disputes. (ADV.46/1999-2000 dt.23.07.99)
iii. Payment of interest by buyers at 1.5 times Amendments to Manual of Instructions - II -
the PLR of SBI for any delay beyond the agreed Priority Sector advances - Small Scale
period.
Industries
A copy of the gazette notification in this
The amendments made to the Manual of
regard has been enclosed to the circular.
Instructions based on the circulars issued from
(ADV.42/1999-2000 dt.19.07.99) 1.1.94 to 31.3.99 are given in the annexure to the
circular. Branches are advised to note the amend-
ments in the Manual.
Loans to industries in food and agro based
processing sector (ADV.47/1999-2000 dt.26.07.99)
Branches are aware that advances to indus-
Repayment under soft loan schemes - Modifi-
tries in food and agro based processing sector are
to be classified under Priority Sector. RBI has now cation in the refinance scheme
clarified that if such industries satisfy the defini- Branches are aware that SIDBI extends
tion for SSI, advances to such units shall be 100% reimbursement to banks for the soft loan
reported as SSI advances. Advances to industries assistance extended under National Equity Fund
under the sector which do not satisfy the definition (NEF) and Mahila Udhayam Nidhi (MUN)
for SSI should be reported as a separate segment schemes. As per the extant guidelines repayment
under priority sector. Such advances may be of term loan and soft loan are to be received
simultaneously. Where such payments are made
towards term loan alone, repayment of soft loan

2
 Volume 12 Issue 2 July - Sept 1999

under NEF/MUN should be insisted and where insisted upon. Waiver in this regard may be made
this is not forthcoming, the repayment received in exceptional cases after obtaining the prior
should be proportionately adjusted towards term approval of CMD. In cases where the staff
loan and soft loan. member is not willing to extend the guarantee,
such proposals should not be entertained and the
In regard to SIDBI refinance scheme, the
borrower should be suitably advised of the regula-
following modifications have been made.
tions in force. The circular also contains the
i. The system of levy of upfront fee abolished. detailed guidelines issued by RBI in respect of
loans and advances made to officers and loans,
ii. The ceiling on refinanceable term loans to
advances and award of contracts to relatives of
units in SSI sector enhanced to Rs.300 lakhs.
senior officers (Scale IV and above).
iii. The ceiling on term loans per project eligi-
ble for refinance under ARS raised to Rs.200 (ADV.53/1999-2000 dt.17.08.99)
lakhs.
iv. A ceiling of Rs.10 crores on project cost
Simplification of agricultural loan application
prescribed for service sector units (tourism, hospi- forms
tals, hotels, etc.). The simplified agricultural loan application
v. 100% refinance extended to all eligible forms recommended by Gupta Committee are
proposals (including working capital) subject to being adopted in our bank for implementation with
overall annual limits of refinance wherever effect from 1.1.2000. A list of the simplified appli-
applicable. cation forms are given in the annexure to the
circular. Branches are advised to contact
vi. Sanction of refinance both under ARS and HO:Stationery Department for supply of the
NRS will be valid for a period of 24 months from forms.
the date of sanction.
(ADV.56/1999-2000 dt.31.08.99)
(ADV.49/1999-2000 dt.30.07.99)
Restriction on credit to companies for buy
Interest rate surcharge on Import Finance back of their securities
Certain categories of bank credit for The recent amendment to the Indian
imports were exempted from the levy of interest Companies Act,1956 enables companies to
rate surcharge as already communicated vide purchase their own shares/other specified securi-
circular ADV.131/97-98 dt.05.01.98. RBI has now ties out of their free reserves, share premium
advised that the following two categories of bank account or the proceeds of any shares/specified
credit for imports would also qualify for such securities subject to compliance of various condi-
exemption. tions specified in the Act. RBI has advised that
i. Import of crude oil by private and joint banks should not provide loans to companies for
sector refineries for actual use in their own buy back of shares/securities as it will amount to
refineries. mis-utilisation of funds.
ii. All bonafide imports against credit under (ADV.58/1999-2000 dt.03.09.99)
Duty Entitlement Pass Book (DEPB)
scheme contained in the EXIM policy 1997- Loan against NSC to members of staff
2000.
It is clarified that discharging of certificates
(ADV.50/1999-2000 dt.02.08.99) by members of staff need not be insisted for NSC
loans both under Scheme I and Scheme II since
Credit facilities to relatives of members of recoveries are made in monthly instalments from
staff the salary of staff members. Further, in regard to
Scheme II as bank’s lien on NSC is registered with
The existing guidelines define the term Post Office, the payment thereof can be obtained
relative and also provide for delegation of powers from the Post Office through discharge on the
to Zonal Managers for sanction of credit facilities certificate by the bank.
to relatives of staff members subject to quantitative
ceilings. In the case of such advances, the guaran- (ADV.59/1999-2000 dt.04.09.99)
tee of the staff concerned should be stipulated in
the terms of sanction and obtained accordingly.
Even for existing loans, the guarantee must be

3
 Volume 12 Issue 2 July - Sept 1999

Delegation of powers to branch managers for been amended. For details of amendments the
sanction of adhoc working capital limits to SSI circular may be referred to.
units
(ADV.61/1999-2000 dt.09.09.99)
W.e.f. 1.9.99 all the branch managers are
delegated powers to sanction adhoc facilities to the Amendments to Manual of Instructions - I -
extent of 20% of the sanctioned limits/drawing Priority Sector advances - Agriculture
limit whichever is less for SSI units irrespective of
The amendments made to the Manual of
the sanctioning authority subject to the following
Instructions based on the circulars issued from
terms and conditions.
1.4.98 to 31.3.99 are given in the annexure to the
i. The adhoc facility should not extend beyond circular. Branches are advised to note the amend-
2 months. ments in the Manual.
ii. The facility should be allowed only for (ADV.65/1999-2000 dt.27.09.99)
working capital purposes
iii. The quantum shall be 20% of the total fund Amendments to Manual of Instructions - VII -
based working capital drawing Conventional Advances
limit/composite loans. The amendments made to the Manual of
iv. Such sanction should be reported then and Instructions based on the circulars issued from
there to the next higher authority as well as 1.8.96 to 31.3.99 are given in the annexure to the
to the sanctioning authority and got circular. Branches are advised to note the amend-
confirmed within one month. ments in the Manual.
The adhoc limit should be sanctioned on the (ADV.66/1999-2000 dt.30.09.99)
written request of the SSI unit, strictly on merits
on a case to case basis on due assessment and
appraisal of the need. Personnel
The eligibility criteria includes the Exemption Limit for PL encashment on retire-
following: ment for Income Tax Purposes
a. Standard asset for at least 2 half years in the
The Income Tax exemption limit on the
immediate past.
encashment of earned leave at the credit of the
b. Limits should be in force through regular employees at the time of their retirement is
review/renewal sanction. enhanced from the present limit of Rs.135360 to
Rs.240000 where the employee retires after
c. Submission of QIS/Stock Statements/
01.07.97.
MSOD/other credentials wherever applica-
ble should not have been defaulted. (PRNL.25/1999-2000 dt.21.07.99)
d. Compliance with all the terms and condi-
tions for existing facilities Scheme for recognition of branch managers
with exemplary performance
e. Group accounts if any should be regular.
Towards recognition of exemplary perform-
f. No overdues in respect of other institutional
ance of branch managers, a scheme has been
loans.
evolved the details of which have been furnished in
(ADV.60/1999-2000 dt.08.09.99) the annexure to the circular. According to the
scheme the first three toppers in performance on
an all India basis will be permitted to go to a place
Advance against book debts of attraction/importance of his/her choice along
It has been decided to classify advances with his/her spouse for three days (excluding
granted against book debts under secured category. travel time). In addition, best rated performers in
Credit sanctioning authorities in Scale IV and each Zone (excluding the three performers
above are hereby authorised to exercise discretion- referred above) will also be permitted to go to a
ary powers for sanction of advances against book place of attraction/importance of his/her choice in
debts in terms of the provisions contained in India for 3 days (excluding travel time). The
Chart-2, Clause-9, Page No.8 of the Discretionary second ranker in each Zone will be presented with
Power Booklet. Consequently the relevant guide- a watch embossed with our bank’s symbol. The
lines in the Discretionary Power Booklet have award of recognition will be notified through an all
branch circular.

4
 Volume 12 Issue 2 July - Sept 1999

The scheme will be implemented from the Educational Term Loan can be used for educa-
year 2000-2001 based on the performance as on tional purposes. For other purposes, no application
31.3.2000. format is prescribed. In such cases, all required
information/data should be furnished by the
(PRNL.26/1999-2000 dt.10.08.99) employees.

(PRNL.30/1999-2000 dt.19.08.99)
Loan against title deeds to staff members -
clarifications Conveyance loan for purchase of
The following clarifications are made with scooter/motorcycle
regard to the sanction of the above loan.
At present sub-staff members availing
i. Loan can be sanctioned for the education of moped loan facility are not eligible for conveyance
son, daughter, brother, sister, etc. provided they loan for purchase of scooter or other types of two
have secured a minimum of 50% marks in the last wheelers. Government of India has now advised
preceding public examination. The courses for that substaff employees are eligible for taking loan
which loans could be sanctioned include regular for purchase of a scooter/motorcycle subject to the
graduation, post-graduation and any other course condition that an employee should not be allowed
approved by University/UGC/ Government. The to avail loan both for moped and scooter/motorcy-
study may cover courses in India or abroad for a cle simultaneously and the loan, if any, taken for
period not exceeding 5 years. purchase of moped together with interest thereon
should have been repaid in full. Accordingly it has
ii. Loan for additional construction can be been decided to extend the facility of conveyance
considered only if such construction is for a loan to all sub-staff members who fulfil the eligi-
minimum of 100 sq.ft. for award staff and 150 bility criteria subject to the norms and guidelines
sq.ft. for officers. in force. The earlier availment of moped loan if
iii. Loan can be sanctioned to meet the any by the sub-staff member will also be consid-
marriage expenses of the applicant himself/herself ered as one of the maximum permissible three
occasions.
iv. Repayment of principal should be in 60
equal monthly instalments. However the repay- (PRNL.33/1999-2000 dt.30.08.99)
ment period should be fixed in such a way that the
entire loan is recovered within the remaining
period of service of the employee. Interest charged CRA
in any quarter should be recovered equally in three
succeeding months. Recovery should be by way of Storage of cash at branches
deduction from the salary of the employee As per the existing guidelines, wherever the
concerned. strong room has been built in accordance with the
v. In case of house property already charged standard specifications laid down by RBI, cash
to the bank under SHL, the existing liability under may also be stored in steel cabinets under dual
SHL has to be deducted from the latest valuation control and kept in the strong room. For security
of the property and a limit of 50% of the amount reasons, it has been decided that cash shall hence-
so arrived at will be considered for sanction, forth be kept only in cash safe under dual custody
keeping a margin of 50%. in the strong room. Para 1.3.1, Page 2 of the
Manual of Instructions - Cash Handling and
vi. The carry home pay of the employee under Management has been amended accordingly.
no circumstances should be less than 40% of the
gross emoluments. (CRA.11/1999-2000 dt.01.07.99)
vii. No loan can be sanctioned for reimburse-
ment of already incurred cost except in the case of Asset Liability Management (ALM) system
unforeseen medical expenses of self/ dependants. The objectives of ALM system are as
viii. Part time employees can also avail the facil- under:
ity in proportion to the scale wages drawn by them 1. Targeting an optimal balance sheet instead
ix. Loan cannot be sanctioned for purposes of fat balance sheets as in the past.
other than those already specified. Loan can be 2. Regulate and consciously manage interest
sanctioned for more than one specified purpose. rate mismatches and maturity mismatches
x. Loan application meant for SHL can be
used for additional construction and that for

5
 Volume 12 Issue 2 July - Sept 1999

3. Plan direct and control the flow, mix and copy of the shipping bill containing the Export
cost/yield of the consolidated funds of the bank General Manifest (EGM) number issued by
Customs Department. Under the EDI system,
4. Assume and manage intermediation risks
DDB would be credited to the Bank accounts of
5. Maintain healthy spread between interest the exporters at the designated bank.
earned and interest expended
Branches may extend advance against DDB
6. Manage remunerative assets in such a way to exporters under the revised system in accor-
as to result in lesser cost and higher yields thus dance with the procedure laid down in the Manual
maximising the profits. of Instructions - Foreign Exchange. The financing
7. Evolve gap management strategies branch has to ensure that its lien is noted with the
designated bank and make arrangements with the
8. Analyse past data to fix suitable benchmarks latter for transfer of DDB proceeds as and when
for the maturity profile of various assets and the same is credited by the Customs. Our Harbour
liabilities including off balance sheet items.
branch has been notified as the designated bank for
9. Study and take view on interest rate release of DDB under EDI system by Custom
movements and prudential limits on the gaps. House (Sea Port), Chennai. Wherever necessary,
RBI has prescribed a reporting system for the details of the designated bank and branch in
banks with regard to management of their assets other centres may be ascertained from the respec-
and liabilities. Accordingly two statements viz., tive Customs Houses/Airport Customs.
1. Statement of structural liquidity (Actual (FX.10/1999-2000 dt.28.07.99)
position) and
2. Statement of structural liquidity (Term RBI guidelines on simplification of procedures
Deposits - Net Projections) on Export Credit
have been introduced for submission by RBI has issued guidelines for simplification
branches. The format of the statements are of procedures on Export Credit with a view to
enclosed to the circular. RBI has suggested obten- make the export finance schemes more popular
tion of data from select branches with a coverage and accessible to as many exporters as possible. In
of 70% of total assets and liabilities till March our bank, we have already implemented most of
2000 and thereafter upto 100%. The list of select the guidelines. The guidelines of RBI and the
branches is being advised to Zonal Offices. These relevant action points arising thereof are given in
select branches have to submit the statements as on the form of a chart in the circular. Branches are
the last Friday of every month to their Zonal advised to comply with the guidelines in letter and
Offices so as to reach them by the 5th of the spirit so as to bring about a perceptible improve-
succeeding month. Zonal Offices shall send the ment in export credit delivery and related banking
consolidated figures of the zone to HO: Accounts services. The guidelines of RBI are applicable
by 10th of the succeeding month. Branches which uniformly to export credit in foreign currency as
are not selected are advised to start the exercise of well as rupee export credit.
preparing data for the said statements so that they
will be able to furnish the statements with effect (FX.12/1999-2000 dt.03.08.99 and FX.13/1999-
from 1.4.2000. For guidelines regarding the 2000 dt.06.09.99)
preparation of statements and concepts on ALM
the circular may be referred to.
General
(CRA.12/1999-2000 dt.06.07.99)
Tax deducted at source - Surcharge of 10% on
Income Tax
FX As per Finance Act 1999, in respect of
deduction of Income Tax at source on the
Advance against Duty Drawback claims payments prescribed under the Income Tax Act
Branches are aware that exporters can avail (Salaries, interest paid on deposits, payment to
credit (upto 90 days) at concessional rates of inter- contractors/sub-contractors, rent paid to landlords,
est against incentives receivable from the Govern- fees paid for professional/technical services, etc.),
ment. Subsequent to the introduction of Electronic a surcharge of 10% on the income tax applicable
Data Interchange (EDI), RBI has decided that should also be deducted and paid to the credit of
advance against DDB receivables may be made Government of India. The deduction of additional
available to exporters against export promotion charge comes into force for payments to be made

6
 Volume 12 Issue 2 July - Sept 1999

w.e.f. 1.4.99. The circular reiterates the guide- Electronic Mail Services (E-mail)
lines issued on the deduction of tax at source,
particularly the consequences of non-deduction of E-mail is an electronic message sent from
tax and lists the various circulars issued earlier in one computer to another with or without attach-
this regard. ments, viz., files like word document files or
image files. E-mail is one of the fastest mode of
(GENL.17/1999-2000 dt.19.07.99) communication and is cheaper than the postal
route. Our bank has obtained Internet connectivity
for some of the departments at HO, ten Zonal
Rs.500 notes - clarifications issued Offices and Singapore and Colombo branches.
Further, personal E-mail addresses have been
In response to the queries received from provided to the Executives at Head Office. E-mail
branches, the distinctive features, particularly the services offered by M/s Global Electronic
security features of Rs.500 notes have been Commerce Services Ltd. (GECS) have been
outlined in the circular. RBI has advised that all provided to sixty five branches/offices. The list of
the Rs.500 notes issued by them are legal tender E-mail addresses of our offices/foreign branches,
and should be accepted by the banks. Executives at Head Office and offices/branches
provided with GECS E-mail services are given in
(GENL.18/1999-2000 dt.26.07.99) Annexures I, II and III of the circular. The circu-
lar also covers the working of E-mail mechanism,
Concurrent Audit of branches - Internal etiquette to be observed while using E-mail and
guidelines for making effective use of E-mail
Auditors services.
Concurrent audit takes place at the same
time as the transaction or is carried out as near (GENL.20/1999-2000 dt.18.08.99)
thereto as possible. The emphasis is in favour of
substantive checking in key areas rather than test Amendments to Manual of Instructions XI -
checking. Concurrent audit seeks to preclude the Security Management
incidence of serious errors and fraudulent manipu-
lations. In our bank some of our own officers have The amendments made to the Manual of
been identified and posted as internal auditors to Instructions - Security Management for the period
select branches to undertake concurrent audit. The upto 31.3.99 are given in the annexure to the
circular gives in detail, the objectives, job role and circular. Branches are advised to note the amend-
the administrative control relating to internal ments in the manual.
auditors.
(GENL.28/1999-2000 dt.30.09.99)
(GENL.19/1999-2000 dt.02.08.99)

7
 Volume 12 Issue 3 October - December 1999
Recollect
DEPOSITS Interest rates on domestic term deposits
The rates of interest on domestic term
Edge in Interest rates - A selling point for
deposit mobilisation
deposits stand revised as under w.e.f. 31.12.99.
Duration Rate of Int. (%) (p.a)d
As of September 99, the Bank registered
15 days to 45 days 5.00
an increase in deposits to the extent of Rs.1411
46 days to 90 days 7.00
crores as against the target of Rs.1230 crores.
91 days to 179 days 8.00
There is a need for improvement of the deposit
180 days to less than 1 year 8.50
mix of our Bank particularly in the light of the 1 year to less than 2 years 9.50
fact that our low cost deposits constitute around 2 years to less than 3 years 10.00
30.42% as compared to 45% in few other banks. 3 years and above 10.50
Hence, canvassing of low cost deposits should be
given more thrust and in this regard, the (DEP.16/1999-2000 dt.23.12.99)
comparatively attractive interest rates of our
Bank for deposits of shorter maturities should be
brought to the notice of the customers. The edge ADVANCES
available in the interest rates should be used as Amendments to Manual of Instructions -
an effective marketing tool for mobilising more Priority Sector - Small Borrowers
deposits in such categories which will also
ensure reduction of overall cost of deposits. The amendments made to the Manual of
Instructions - Small Borrowers based on the
(DEP.12/1999-2000 dt.15.10.99) circulars issued from 1.7.95 to 31.3.99 are given
in the annexure to the circular. Branches are
Cheques bearing pre-printed year ‘19.....’ advised to note the amendments in the Manual.
IBA has advised that correction of the (ADV.67/1999-2000 dt.01.10.99)
preprinted year ‘19.....’ in cheques to ‘2000’ does
not constitute a material alteration and hence Extension of computer loan scheme for staff
does not require drawer’s authentication. It members
would be legally in order for banks to honour It has been decided to extend loans to all
cheques containing such alterations. Branches staff members for purchase of personal comput-
may however note that if the last two digits of ers. The maximum loan permissible for award
the preprinted portion ‘19.....’ is filled in and staff is Rs.50000 and that for officers is
then struck off so as to write ‘2000’ or any other Rs.60000. A margin of 5% has been stipulated.
relevant year, it would constitute a material The rate of interest will be PLR + Interest Tax
alteration and require drawer’s authentication. and the interest will be compounded at quarterly
(DEP.13/1999-2000 dt.23.11.99) intervals. The loan should be repaid in 60
monthly instalments. The quarterly interest
Interest rates on domestic term deposits charged should be recovered in three equal
monthly instalments in the succeeding quarter
The rates of interest on domestic term itself.
deposits stand revised as under w.e.f. 01.12.99.
The loan can be sanctioned by credit
Duration Rate of Int. (%) (p.a)
sanctioning authorities at Scale IV/Scale V
15 days to 45 days 5.00 branches/ Regional/Zonal/Head Office. The loan
46 days to 90 days 6.50 should be availed only at the branch where the
salary of the staff is credited. The minimum take
91 days to 179 days 7.50
home salary should be 40% after deduction of
180 days to less than 1 year 8.00
instalments for various loans including the
1 year to less than 2 years 9.50 proposed instalment for the computer loan. No
2 years to less than 3 years 10.00 deduction should be added back to net salary to
3 years and above 10.50 arrive at carry home pay. The loan should be
classified in GL under the existing head ‘Loan
(DEP.14/1999-2000 dt.24.11.99) Others’. Only one loan for computer articles
should be outstanding at a time for a staff either

1
Volume 12 Issue 3 October - December 1999

in CCIL or under this scheme. For further details not exceeding 18 months may be
the circular may be referred to. considered.
(ADV.68/1999-2000 dt.05.10.99) For further details including rate of
interest, discretionary powers etc., the circular
Consortium Advances - Framing of Ground may be referred.
Rules
(ADV.70/1999-2000 dt.11.10.99)
Branches are aware that it is no longer
obligatory for Banks to form a consortium even Restoration of secured OD facility
if the credit limit of the borrower exceeds Rs.50
In response to representations from field
crores. Framing of ground rules for consortium
level functionaries, it has been decided to restore
arrangements has been left entirely to the partici-
the secured OD facility with necessary
pating banks. Our Bank’s policy guidelines on
safeguards. Normally, working capital facility is
consortium containing inter alia the ground rules
sanctioned by way of cash credit. However, in
for consortium advances and internal guidelines
such cases where stocks/receivables could not be
as approved by the Board are given in the enclo-
furnished as security, secured loan with repay-
sure to the circular.
ment schedule based on cash flow could be
(ADV.69/1999-2000 dt.11.10.99) considered. Where stocks are not available and
where secured loan with repayment schedule is
Modification in the guidelines on Housing not feasible, secured overdraft may be considered
Finance for select category of borrowers such as contrac-
tors, dealers, brokers, transport operators, ancil-
The existing policy guidelines on Housing
lary units, etc. Working capital needs are to be
Finance have been revised with a view to
assessed under the applicable methodology of
improve our lending under this segment. The
assessment and drawings under secured OD are
salient features of the revised guidelines are as
to be permitted within the assessment.
under:
The relevant safeguard measures including
i. The eligible persons will include salaried
personal visit/verification of the property, direct
class, professionals and self employed/
businessmen. If the applicant is a salaried obtention of EC, directly taking up with the
person, he should have completed a approved engineer for valuation, branch
minimum period of 3 years of permanent manager’s independent assessment of the valua-
service in government/quasi government tion of the property, obtention of original
bodies/trust/corporate sector/ reputed orga- document of title, verification of tax receipts,
nisations/schools/colleges and should not insurance, etc., have been enumerated in the
be above 50 years of age. Professionals circular. The circular also gives the modification
should have three years experience in their in discretionary powers at various levels for
line, be aged not above 55 years and must sanction of secured overdrafts. The existing
be income tax assessees. For others, they procedure of obtention of funds clearance from
must be income tax assessees for the last HO for sanction of secured overdraft is dispensed
three years and should not be above 55 with. Branches are advised to meticulously
years of age. follow the guidelines while building up quality
assets in the loan portfolio.
ii. The loan is subject to a ceiling of 30 times
of gross salary in the case of salaried (ADV.71/1999-2000 dt.11.10.99)
persons and 40 times the average gross
monthly earnings in the case of others. Swarnajayanti Gram Swarozgar Yojana
(SGSY)
iii. A margin of 25% for loans upto Rs.5 lakhs
and 30% for loans above Rs.5 lakhs has Government of India has launched the
been stipulated. above scheme w.e.f. 1.4.99 by restructuring the
existing schemes such as IRDP, TRYSEM,
iv. The repayment schedule should be fixed in
DWCRA, Supply of Improved Toolkits to Rural
EMI taking into account the repaying
Artisans (SITRA), Ganga Kalyan Yojana (GKY)
capacity and shall not exceed 15 years. For
construction of new houses, a moratorium and Million Wells Scheme (MWS). The objec-
tive of the scheme is to bring every assisted
family above the poverty line within three years.

2
Volume 12 Issue 3 October - December 1999

The detailed guidelines of the scheme including 1. Priority attention to the needs of existing
target strategy, selection of key activities, cluster borrowers
approach, formation of self help group, training,
2. Credit expansion to be uniform every
sanction/disbursement of loans and asset crea-
month and correspond to growth in deposits
tion, interest, documentation, discretionary
powers, subsidy administration, repayment, 3. Expansion in credit to medium sized
measures for effecting recovery, etc. are borrowers as a strategy
furnished in the annexure to the circular. The two
important aspects over which great emphasis is 4. Concentration on focus areas such as retail
lending, medium sized corporates, non-priority
laid in the scheme are
jewel loans, Cheque BP, Pension loans, food
i. Disposal of the application within 15 days credit and consumer credit and thrust areas such
as tea and coffee, fertilisers, refineries, cement,
ii. Built-in incentives to the borrower for
software, information technology, pharmaceuti-
prompt repayment and engaging the
cals, etc.
services of NGOs or individuals (other
than Government servants) as monitors 5. Lending to NBFCs, Real estate, film
cum recovery facilitators on commission activities to be contained
basis. Branches should ensure a recovery
6. Housing finance to be encouraged
of not less than 90% by taking advantage
of these provisions. 7. TODs should not be given for more than 3
occasions during a month in a single account
As regards discretionary powers, branch manag-
ers irrespective of their scale can sanction loans 8. Secured overdraft facility restored
upto the unit cost as approved by NABARD for
9. Time norms for disposal of proposals
farm sector and the district SGSY Committee for
prescribed.
ISB activities.
The policy guidelines also cover the
(ADV.72/1999-2000 dt.11.10.99 and ADV.100/1999-2000
dt.09.12.99) parameters to be looked into while appraising
proposals, pricing of credit, monitoring, follow-
Revision of Prime Term Lending Rate (PTLR) up, recovery, etc.
W.e.f. 01.10.99, the PTLR of our Bank For further details the circular may be
has been revised downward to 13% from 13.5% referred.
for fresh term loans with maturities of five years (ADV.76/1999-2000 dt.20.10.99)
and above and for existing term loans with
unexpired repayment period (residual period) of Indian Bank consumer loan scheme -
5 years and above. The maximum interest spread modifications
will however remain at 4 percentage points.
Certain provisions of the above scheme
(ADV.75/1999-2000 dt.20.10.99) have been modified as follows:
Loan Policy 1999 - 2000 The maximum loan permissible is
enhanced to
‘Profit maximisation through credit’ is the
objective of the Bank’s loan policy for 1999- i. Rs.60000 towards purchase of new
2000. The corporate plan for 1999-2000 envis- computer with software for salaried class,
ages gross expansion in non-food credit by professionals and others
Rs.1742.77 crores including a projected recovery ii. Rs.5 lakhs for purchase of four wheeler
in NPA amounting to Rs.452.45 crores. The RBI
stipulations on priority sector (40%), agriculture Advances should not be sanctioned for
(18%) and exports (12%) are sought to be purchase of second hand vehicles or computers.
maintained. The policy prescribes industrywise The discretionary powers for Chief Managers has
exposure norms in percentage terms. The direc- been enhanced to Rs.3 lakhs and that for AGMs
tions in the policy with regard to in Branch/Region/Zone and Zonal Manager
appraisal/disbursal/ delivery of credit include the enhanced to Rs.5 lakhs. The possibility of
following: obtaining suitable personal guarantee and/or

3
Volume 12 Issue 3 October - December 1999

additional security should be explored to ensure recovery officer for the purpose of attachment
the quality of the advance. and sale.
(ADV.77/1999-2000 dt.20.10.99) (ADV.82/1999-2000 dt.12.11.99)

National Agricultural Insurance Scheme Disclosure of information in credit proposals

(Rashtriya Krishi Bima Yojana)
Branches shall henceforth require custom-
Branches are aware that the above insur- ers to incorporate in all application forms for
ance scheme was launched by the Hon’ble Prime credit facilities, whether for fresh limits/renewal,
Minister on 22.6.99 and the salient features of the details of all litigations against them (whether
the scheme were conveyed vide circular as individual, partner, director, etc.) initiated by
ADV.46/99-2000 dt.23.7.99. The detailed opera- any financier including other banks/financial
tional guidelines of the scheme have been institutions. Arrangements are being made for
furnished in the annexure to the circular. incorporating a column in all application
forms/renewal proposals for the purpose. Till
(ADV.78/1999-2000 dt.21.10.99) such time the forms are made available, branches
may ensure incorporation of the details as stated
Disclosure of names of defaulters - Obtention above in the existing forms.
of consent from all big Borrowers
(ADV.83/1999-2000 dt.13.11.99)
RBI has been collecting from and dissemi-
nating to banks and FIs information on defaulters Interest rate surcharge on import finance
with outstandings aggregating to
RBI has withdrawn w.e.f 29.10.99, the
i. Rs.1 crore and above in respect of interest rate surcharge of 30% on import finance
accounts classified as doubtful or loss which has been in force since 17.1.98. Hence it is
assets and where suits have been filed no longer necessary to maintain an import cash
ii. Rs.25 lakhs and above in case of wilful credit account carved out of the regular cash
defaulters credit account. Borrowers can be permitted to
repay the advances against imports even before
RBI has decided to publicise the names of the expiry of one month from the date of
defaulters and has directed that banks should disbursement/drawal subject to compliance with
incorporate an enabling clause in the loan agree- existing guidelines.
ment whereby the consent of the borrowers for
such publication is obtained. Accordingly, (ADV.84/1999-2000 dt.15.11.99)
branches are advised to obtain an undertaking/
consent letter from the existing big borrowers Rejection of credit applications
(viz., borrowers with aggregate credit limits of As per the extant guidelines, Branch
Rs.25 lakhs and above) in the format numbered Managers are required to seek the concurrence of
F-164 enclosed to the circular. The same format the immediate higher authority for rejection of
may be used whenever fresh loans are disbursed credit proposals. It has been decided that there is
to big borrowers. no need for reference of proposals of all
sectors/borrowers to higher authorities for rejec-
(ADV.81/1999-2000 dt.11.11.99) tion except the following three categories.
Suit Filed Accounts before DRTs 1. SC/ST - to be referred to next higher
Branches are advised to obtain encum- authority
brance certificate for properties under Equitable 2. SSI - to be referred to next higher
Mortgage to the Bank at the time of filing of the authority
case before DRT and also periodically thereafter
during the pendency of the suit. This will enable 3. Export sector - to be referred to HO
the bank to array the subsequent purchasers/ through ZO
mortgagees, if any, as parties in the proceedings
In regard to other credit proposals, branch
so as to get an order against them also besides
managers are free to decide on merits. However,
the borrowers. This would also facilitate
compromise proposals should not be rejected at
enforcing the mortgaged securities through the

4
Volume 12 Issue 3 October - December 1999

branch level and be referred to the higher author- Whenever an upward revision comes into force,
ity or the sanctioning authority. branches should collect the difference between
the old and new rates from the customers for the
(ADV.85/1999-2000 dt.15.11.99)
remaining period of liability.
Bill finance for settlement of dues of (ADV.97/1999-2000 dt.06.12.99)
suppliers
Revised form of reassignment of LIC policy -
Branches are aware that corporate borrow-
F-43
ers are required to have at least 25% of their
purchases by way of acceptance of bills drawn on LIC has changed the format of reassign-
them by SSI or other units. In response to the ment of LIC policy and accordingly our existing
representation from public sector banks, about format F-43 has been redesigned. The redesigned
their operational difficulty in enforcing the format is enclosed to the circular.
minimum prescribed percentage, RBI has now
(ADV.98/1999-2000 dt.06.12.99)
advised that the above mandatory stipulation
stands withdrawn.
Launching of loan schemes under 3T
(ADV.88/1999-2000 dt.20.11.99) concept
The concept of 3T - Trade, Tradition and
Priority sector advances - Loans for housing
Technology is gaining momentum world over. It
RBI has advised that direct housing loans has been decided to launch three new loan
upto Rs.10 lakhs by banks for construction of schemes with immediate effect under Trade,
houses by individuals in urban and metropolitan Tradition and Technology. The salient features of
areas will be eligible for inclusion under priority the scheme in a nutshell are as under:
sector. Further, all investments in bonds issued
1. Trade
by NHB/HUDCO exclusively for financing of
houses irrespective of the loan size per dwelling The target groups comprise of small
unit will be reckoned for inclusion under priority traders and other traders. For small traders
sector advances. advance upto Rs.2 lakhs could be considered for
working capital purposes. For other traders
(ADV.89/1999-2000 dt.20.11.99)
advance upto Rs.10 lakhs may be considered for
purposes including term loans for modernisation,
Availment of NABARD refinance equipment acquisition, construction of show-
Based on a cost benefit study, it has been rooms etc., as also working capital facilities.
decided that NABARD refinance could be 2. Tradition
confined to advances granted for the following
activities irrespective of the quantum of the loan: The target group includes artisans, tiny
enterprises and small service/business enter-
i. SHG prises. Advance upto Rs.50000 may be consid-
ii. Minor irrigation ered for purchase of equipment or working
For all other eligible activities, refinance capital or both.
shall be claimed only for advances sanctioned 3. Technology
upto Rs.25000. Branches are advised to report
disbursement details to RO/ZO only on the The target group will be educated youth
above categories. with computer education. Loans upto Rs.2 lakhs
may be considered for purchase of equipments
(ADV.91/1999-2000 dt.23.11.99) such as PC, software packages, etc. for establish-
Inclusion of enabling clauses in counter
ing cyber cafe, DTP centre, Autocad centre, etc.
guarantee agreements In regard to obtention of application forms,
The existing counter guarantee agreements photographs, terms and conditions, documenta-
F-44 and F-44C have been modified incorporat- tion, categorisation of the advance (as Retail
ing suitable enabling clauses so as to facilitate Trade, Professional & Self employed, etc.), the
recovery of enhanced commission from the existing procedures shall be adopted. The classi-
customers as and when the rates are revised. The fication of advances shall be done on the basis of
modified formats are enclosed to the circular. nature of advances such as term loan/OCC/OD

5
Volume 12 Issue 3 October - December 1999

etc. and shall be maintained in the existing chart, criteria for different levels of record
ledgers accordingly. However a separate register keeping etc., The detailed procedures for record
with details of date of sanction, purpose of loan, maintenance at branches and at offices other than
account number, category (trade/tradi- branches are also annexed to the circular.
tion/technology), amount, balance as on date,
The format of Branch Document Register,
cumulative balance, etc., should be maintained
Register of Movement of Old Records, list of
for statistical information and reporting. For
Branch Documents and the period of retention
comprehensive details on margin, rate of interest,
for various records have been appended to the
security, terms of repayment, etc., stipulated for
procedural guidelines. The policy has come into
each of the above schemes, the circular may be
effect from 1.4.99.
referred to.
(PRNL.38/1999-2000 dt.1.11.99)
(ADV.99/1999-2000 dt.06.12.99)

Extension of business hours in fully comput-

Linking of interest rates with PLR in DPN and
erised branches
loan agreements
The business hours for the public for all
The format of the DPNs and the interest
transactions including cash transactions at the
clause in the loan agreement forms have been
fully computerised branches have been extended
modified keeping in view of the fact that the
as follows with immediate effect:
interest rates on advances are in general linked to
PLR. The revised formats of DPN (D-1 and D-2) i. For days of full day working : by 1 hour
and the modified interest clause to be incorpo-
ii. For days of half day working : by 30 minutes
rated in the loan agreements are enclosed to the
circular. The extension of business hours will be
(ADV.101/1999-2000 dt.22.12.99) within the overall daily working hours of the
branch. Further, the extension of business hours
as stated above will be automatically imple-
PERSONNEL mented in the branches which are to become
Performance Appraisal system for Officers fully computerised in future. Branches are
advised to display prominently the availability of
IBA has advised that the Performance the above facility for the information of the
Appraisal reports of bank officers of different customers.
grades who actually deal with the development
and protection of SC/ST, i.e., in credit and (PRNL.43/1999-2000 dt.15.11.99)
administration should contain a column as
indicated below: Payment of salary to staff

‘Attitude towards SCs/STs/Weaker Sections of As per the existing guidelines, salary could
the Society’ be disbursed to staff members one day earlier to
the last working day of every month and if that
Branches/Offices are instructed to ensure day happens to be a Saturday or holiday, salary
that the performance appraisal reports submitted could be paid on the previous working day.
by all the officers from the year ending Branches may henceforth disburse the salary one
31.3.2000 onwards contain the above criterion. day before the last working day as at present with
The Appraising authority shall furnish his a modification that if that day falls on a Saturday
remarks in the above column. The relevant page or Friday, the salary may be disbursed on the
of the report where the above criteria is to be preceding day i.e. Thursday.
incorporated for various categories of officers has
been furnished in the circular. (PRNL.46/1999-2000 dt.22.11.99)

(PRNL.37/1999-2000 dt.22.10.99) Renewal of Group Personal Accident Policy

Policy on Record Maintenance The Group Personal Accident Insurance

Policy providing round the clock personal
The Bank’s policy on Record Maintenance accident cover with the sum insured at 48 times
as approved by the Board is enclosed to the
of salary (Basic + DA) covering all employees of
circular. The policy document inter alia contains
our bank has been renewed for one year from
the objective and scope of the policy, scope

6
Volume 12 Issue 3 October - December 1999

23.10.99 with United India Insurance Company Manual. The formats of notices to be sent to
Ltd., Divisional Office No.V, Catholic Centre, hirers at various stages have also been suitably
64, Armenian Street, Chennai - 600 001. The modified and appended alongwith the amend-
renewal policy number is 010504/-/42/07/11/ ments. Branches/controlling offices are advised
42421/99. The procedures to be followed for to implement the guidelines in letter and spirit
preferring claims in the unfortunate event of and ensure that there is no case of arrears of rent
on lockers.
death/accident has already been communicated
vide circular PRNL.43/98-99 dt.20.10.98. Prefer- (CRA.20/1999-2000 dt.21.10.99)
ence of claim alongwith the medical bill should
be made within a month from the date of Speed collection scheme
occurrence. The above scheme has been launched
w.e.f. 1.11.99 with a view to speed up the
(PRNL.48/1999-2000 dt.24.11.99)
process of collection of outstation cheques. The
scheme operates through Electronic Communica-
CRA tion System. Under the scheme, customers of our
bank instead of receiving cheques from their
Recovery of Rent on Lockers
clients in other centres towards receivables due,
The procedure for recovery of rent on the may request them to deposit such cheques with
due date and that for breaking open of lockers on our nodal branch at their place itself for credit of
account of non-payment of rent as outlined in the our customer’s account. As the cheques are
Manual of Instructions - Ancillary Services have drawn on the same place, it will be presented in
been modified. The salient features of the modifi- local clearing and the proceeds remitted to the
cation, inter alia include the following: branch where the customer maintains his
account. Funds will be made available to the
i. The time frame for sending registered
customer within two days from the date of clear-
notice as per Annexure 3.26 of the Manual
ance of the cheque. The scheme thus enables our
has been fixed as within one month from
customers to save the time spent in receiving the
the date of expiry of lease.
cheque and then getting it collected. The scheme
ii. Wherever feasible, the branch should is operated at select branches in nineteen centres
contact the hirer through phone or in listed in the circular.
person to impress on the need for payment
The detailed working procedure of the
of rent in arrears and the consequences of
scheme is given in the annexure to the circular.
non-payment thereof.
(CRA.21/1999-2000 dt.01.11.99)
iii. Final notice as per Annexure 3.28 of the
Manual should be sent within 3 months
Introduction of new GL head for ‘clearing’
from the expiry date of lease by registered
under the liability side of the weekly
post acknowledgement due and the statement
acknowledgements/returned notices should
be preserved along with the relevant locker Based on the feed back received from the
documents. branches, a new GL head for ‘clearing’ has been
introduced under the liability side of the existing
iv. If the party does not pay the rent in arrears weekly statement. The weekly code for the same
within 5 months from the expiry date of is 4.3.12. The balance under the above head
the lease, inspite of the above steps, should be shown under column ‘Others’ (4.3.0 +
permission from ZM/RM should be sought 4.4.0) in the liability side of Sec.42 statement.
for breaking open the locker. ZM/RM
should accord the permission within a (CRA.22/1999-2000 dt.24.11.99)
week.
Amendment to Manual of Instruction - IX -
v. Branch should ensure breaking open the Cash Handling and Management
locker within 6 months from the date of
expiry of the lease. The amendments made to the Manual of
Instructions - IX - Cash Handling and Manage-
The modified procedure is enclosed to the
ment based on the circulars issued from 1.7.94 to
circular in the form of amendments to the
31.3.99 are given in the annexure to the circular.

7
Volume 12 Issue 3 October - December 1999

Branches are advised to note the amendments in FCNRB Interest Rates

the Manual. Consequent to deregulation of interest
(CRA.23/1999-2000 dt.24.11.99) rates on FCNRB deposits, w.e.f. 22.12.97, the
rates on such deposits are fixed by our Bank,
subject to the ceiling prescribed by RBI. The
FX changes made in the rates in chronological order
from 22.12.97 to 02.08.99 are enclosed as annex-
Interest rates on NRE / NR-NR-RDS accounts ure to the circular for ready reference by
branches.
The rates of interest on NRE and NR-NR
Term Deposits stand revised w.e.f. 15.10.99 (FX.18/1999-2000 dt.06.11.99)

NRE Term Deposits (% p.a.) Advance against the security of deposits held
in EEFC accounts
6 months and above but less than 1 year 8.25
RBI has allowed authorised dealers to
1 year and above but less than 3 years 10.00 grant credit facilities according to their commer-
3 years and above 10.50
cial judgement against the security of balances
held in EEFC accounts. Branches can henceforth
allow loan/OD to account holders against their
NR-NR Term Deposits EEFC term deposits. The margin will be 10% on
Rs. 15 lakhs and the face value for FD/interest accrued value for
Less than
Period above and upto RIP. The advances may be designated in foreign
Rs. 15 lakhs
Rs. 2 crores currency or in Indian Rupees. However, repatria-
6 months and above tion of the proceeds of the advance shall not be
10.00 10.50
but less than 1 year permitted. For advances in foreign currency, the
1 year and above but rate of interest will be LIBOR + 2% + Interest
10.50 11.00
less than 2 years Tax and for advances in Indian rupees, the rate of
2 years and above but interest will be PLR + 0.5% + Interest Tax. The
10.75 11.25
less than 3 years advance can be repaid in foreign currency either
3 years only 11.25 11.75 out of foreign inward remittance or maturity
proceeds of the deposits. In respect of advance in
For high volume single NR-NR Deposits
Indian Rupees, repayment could also be made
of above Rs.2 Crores, branches are advised to from local rupee resources. The period of loan
refer to HO:International Division for quoting should not exceed the unexpired period of matur-
preferential rates. ity of EEFC term deposits. In respect of
(FX.14/1999-2000 dt.14.10.99) non-fund based facilities granted to customers,
Authorised Branches can accept their EEFC
Additions to Master Chart 1984 Term deposits as collateral security.
The Master Charts brought out by IBA in (FX.20/1999-2000 dt.27.11.99)
1984 are being used to calculate the maturity
Renewal of WTPCG and WTPSG of ECGC
values of FCNRD for interest rates ranging from
3% to 15% at 0.25% slabs. At present, the inter- The above guarantees have been renewed
est rates on FCNRB deposits are quoted at rates for a period of one year w.e.f. 1.7.99. Cover
finer than earlier slab of 0.25% and hence there is under WTPCG remains unchanged at 60%. In the
a need to work out the maturity values for inter- case of WTPSG, the cover will be to the extent
est rates as fine as 0.05%. To facilitate calcula- of 60% of the loss in case of policy holders and
tion for maturity values for such finer rates, a 50% in the case of others. The coverage remains
master chart for interest rates ranging from the same for all categories of exporters including
0.05% to 6.50% has been enclosed to the small scale exporters.
circular.
Prior approval of ECGC is required for
(FX.16/1999-2000 dt.05.11.99) covering
i. all accounts where the credit limit exceeds
Rs.100 lakhs.

8
Volume 12 Issue 3 October - December 1999

ii. accounts classified as substandard and branches and record their observations in the
doubtful irrespective of the limit workbook.
(FX.22/1999-2000 dt.28.12.99) (GENL.32/1999-2000 dt.16.11.99)

GENERAL Profit as a turnaround objective

Workbook for Branch Managers Profit is a need for survival. All the key
parameters including increased business
The system of providing diary-cum-
performance record to branch managers every turnover, interest and non-interest income,
year was reviewed and it was decided that a aggressive recovery and cost control measures
Workbook which can be used for three succes- have to be integrated to earn profit. NPAs have
sive years would be of greater use to branch to be contained. Low cost deposits, good quality
managers than a diary. Accordingly, a workbook assets, fee based income, forex turnover must be
has been designed which could be used by concentrated upon. Customer care should be our
branch managers for 3 years w.e.f. 1.4.2000. The priority. Our ability to retain customers in a
workbook should be treated as a branch choice situation is the test of our relationship
document and entered in the branch document marketing.
register as soon as it is received. While reviewing
the workbook, our CMD has observed that To emerge as a healthy bank, all our
Branch Managers should effectively use the branches should become profit centres. Perform-
workbook for the development of the branch and ance of branches/offices and every staff member
that during their branch visit, ZMs/RMs should must be integrated towards the profitability goal.
critically appraise the performance/functioning of We must build a true team and weld individual
efforts towards the common goal of early
turnaround and regain our past glory.
(GENL.39/1999-2000 dt.27.12.99)

9
 Volume 12 Issue 4 January - March 2000
Recollect
DEPOSITS 3. Preclosure
a. Preclosure before completion of 12 months
Opening of Savings Bank accounts in the will be allowed only if the depositor surrenders
names of certain Bodies/Organisations in full the commission paid to the Tiny deposit
RBI has permitted opening of Savings agent in respect of his account. No interest is
Bank accounts in the name of Collector/District payable in such cases.
Magistrate/District Commissioner/DRDA in b. In case of preclosure after 12 months,
respect of funds released for implementation of interest will be
Member of Parliament Local Area Development
Scheme (MPLADS). i. at 3% after 12 months but before 24
months
(DEP.19/1999-2000 dt.31.01.2000)
ii. at 5% after 24 months but before 36
Account Opening Procedures months
Reserve Bank of India has advised banks The commission paid to the agent need not
to enforce stricter control on account opening be recovered.
procedure and has issued instructions which Branches are advised to follow the instruc-
include the following: tions scrupulously particularly with regard to
i. The recent photograph of the customer monitoring the collections, obtention of confir-
should be obtained mation of balance, preclosure etc.
ii. Accounts should not be normally opened (DEP.22/1999-2000 dt.10.02 2000)
without a meeting between the bank official and
the customer. Preferential Interest Rates on Domestic Term
Deposits
iii. Letters of thanks should be sent both to the
customer and the introducer and their confirma- W.e.f 21.2.2000, the preferential interest
tion be obtained. rates on bulk deposits of Rs.1 Crore and above
will be fixed by Central Office, Accounts Depart-
The circular contains the detailed instruc- ment on daily basis instead of the existing
tions vis-a-vis the existing guidelines in the prescription of Rs. 2 crores and above.
Deposit Manual. Branches are advised to scrupu-
lously follow the RBI instructions as well as that (DEP.23/1999-2000 dt.15.02.2000)
are given in the Manual.
Opening of Savings Bank accounts in the
(DEP.21/1999-2000 dt.10.02.2000) names of certain Bodies/Organisations

Tiny Deposit Scheme RBI has permitted opening of Savings

Bank accounts in the name of Zilla Parishads/
The following modifications have been Gram Panchayats in respect of funds released for
made in the rules of the scheme: implementation of various rural development/
1. Ceiling on collection welfare programmes and/or subsidy/margin
For the purpose commission payable to the money linked programme sponsored by the State
Tiny Deposit Agent, the normal daily collection Governments and Government of India
will be Rs.200/- per account which is permitted (DEP.24/1999-2000 dt.21/02/2000)
to vary upto 5 times i.e. Rs.1000 with a ceiling
of Rs.30,000 per month per account. Amendment to rules for closure of accounts
in case of frequent return of cheques for
2. Commission
want of funds
Commission will be at the rate of 3% only
upto the modified ceiling as above. Any collec- Consequent to the instructions received
tion over and above the ceiling will not be eligi- from RBI and IBA for improving the cheque
ble for payment of commission. However, any payment discipline, branches are advised to
amount of deposit can be accepted under the incorporate the following clause under 17.3 of
scheme. Savings Bank Rules and 16.1 of Current Account
Rules.

1
Volume 12 Issue 4 January - March 2000

‘The bank reserves its right to take steps system will cover corporate/non corporate
to get the account closed, if frequent return of accounts which are standard assets and with fund
cheques for want of funds is observed’ based or non fund based limits of Rs.5 crores and
above.
The measures suggested by RBI/IBA
vis-a-vis the existing guidelines and the relevant (ADV.110/1999-2000 dt.18.01.2000)
amendments to the Manual of Instructions -
Deposits are given in the circular. In pursuit of Profit
(DEP.25/1999-2000 dt.23.02.2000) Turnaround is possible only with
improved profitability through operational
efficiency, cost control measures and increased
ADVANCES business turnover. The key parameters such as
interest income, non interest income and NPA
Signing of Letters of Credit and Guarantee recovery play a lead role in improving profit. The
Documents guidelines on improving the profitability covered
Henceforth, all bank guarantees and letters under various circulars are given in the annexure
of credit should be signed by to the circular.
i. Section Head alongwith Branch Manager (ADV.112/1999-2000 dt.19.01.2000)
in branches upto scale III and
Swarn Jayanthi Gram Swarozgar Yojana
ii. The SM/CM next below the Branch (SGSY)
Manager alongwith Section Officer/Head in
Scale IV and V Branches. All SGSY loans are to be treated as
medium term loans with minimum repayment
All the signing officials should ensure period of 5 years. Regarding pending proposals
affixing their specimen number below their under IRDP as on 1.4.99, RBI has clarified as
signature. under:
(ADV.105/1999-2000 dt.10.01.2000) a. If the pending applications fit into the
parameters of the key activities selected in the
Application form for advances upto Rs.10 block, loans can be sanctioned under SGSY.
lakhs to Trade and Services Sector.
b. In respect of loans sanctioned but not
A simplified application form for advances disbursed, if they fit into the basic criteria that it
upto Rs.10 lakhs to Trade and Services Sector would lead the assisted family coming above
has been designed and enclosed to the circular. poverty line, the loan can be disbursed.
The form also contains the appraisal memoran-
dum for the branch managers for sanction of the c. In case of loans partly disbursed under
advance. IRDP, the balance loan will have to be disbursed
under SGSY.
(ADV.107/1999-2000 dt.10.01.2000)
All loans disbursed under IRDP since
Credit Schemes - Suggestions for April 1999 may be treated as disbursed under
improvement SGSY. Formats for reporting progress under
SGSY are enclosed as annexures to the circular.
Branch Managers and other field level
functionaries may communicate their (ADV.114/1999-2000 dt.27.01.2000)
views/suggestions to HO:CPGD for improving
the content and strategies for effective implemen- PMRY - Affidavit on income of the applicant
tation of the various credit schemes of the bank. Applicants under PMRY can now submit
(ADV.108/1999-2000 dt.13.01.2000) the declaration regarding their income on a plain
paper incorporating the contents of the affidavit
Implementation of Fast Track System required to be submitted under the existing
guidelines. The affidavit on the relevant non
Fast Track System, a tool of faster credit
delivery, presently covering only corporate
borrowers has been extended to include
non-corporate borrowers also. Henceforth, the

2
Volume 12 Issue 4 January - March 2000

judicial stamp paper shall be submitted to the Once the amount is transferred to
bank only when the amount is sanctioned. ADOVEXBIR and subsequently adjusted by
rupee funds, interest should be charged at PLR +
(ADV.115/1999-2000 dt.28.01.2000)
4% +2% + Int.tax (from the date of advance). If
the bill is realised subsequently within 360 days,
Revision of investment ceiling for small
the penal interest recovered shall be refunded.
scale/ancillary industrial undertakings
The above rates will be applicable to all
As per the revised guidelines vide gazette
fresh and existing advances for the remaining
notification dt.24.12.99 the ceiling on investment
period of credit.
in plant and machinery for SSI/ancillary unit has
been reduced to Rs 1.00 crore from Rs.3.00 (ADV.117/1999-2000 dt.09.02.2000)
crore. The items to be included/ excluded for
computing value of plant and machinery, group Interest Rate on advances against deposits
concept etc., remain unchanged. The eligibility
criteria for refinance from SIDBI consequent to W.e.f. 01.03.2000, the interest rates appli-
the above revision are also furnished in the cable for advances against deposits are as
circular. follows:
No. Category Same Party Third Party
(ADV.116/1999-2000 dt.01.02.2000)
I. All Domestic / Deposit Rate + 2% Deposit Rate + 3%
NRE / NRNR + Int.Tax + Int.Tax
Export Credit - Revision of interest rates on deposits
overdue export bills or

W.e.f 29.10.99, the interest rates to be PLR + Int.Tax

charged for overdue exports bills have been whichever is higher
revised as under: (Existing - 20% for all) II. FCNR (B)

Classification of Overdue Export Bills Revised a. Denominated in Deposit Rate + 2% Not eligible for
Foreign Currency + Int. Tax sanction
1. Beyond Normal Transit Period in the
case of demand bills or beyond the Notional b. All Rupee Loans PLR + Int. Tax PLR + 1% - Int.Tax
Due Date in the case of usance bills
a. Upto first 15 days from the NTP/NDD (ADV.121/1999-2000 dt.21.02.2000)
(within the time allowed to transfer to
ADOVEXBIR) PLR + 1% HPCC advances - modified guidelines on
b. Beyond 15 days from the NTP/NDD and stipulation of the age of the vehicles
for ADOVEXBIR account / Other Hire purchase finance can now be allowed
PLR + 4%
Overdue Post-Shipment receivables like
Duty Drawback
against purchase of old vehicles also (four/six
wheelers) which are not more than 3 years old.
PLR + 4% + 2% + However, vehicles met with major accidents
2. If adjusted out of Rupee resources
Int.Tax should not be considered under HPCC.
3. Against incentive receivable from Govt
(ADV.122/1999-2000 dt.21.02.2000)
covered by ECGC guarantee for
post-shipment advances
a. beyond 90 days till date of payment PLR + 4% Launching of ‘Agricultural Consultancy &
Technical Services‘(ACTS)
b. if party is not eligible for incentives (from PLR + 4% + 2% +
the date of advance) Int.Tax A centralised consultancy services cell
4. Against underway balance - beyond 90 called ‘Agricultural Consultancy & Technical
PLR + 4% Services’ (ACTS) has been established at Head
days
Office to extend fee based consultancy services
5. Against retention money (for supplies
portion only) payable within one year from PLR + 4% in agriculture and allied services. The scheme
the date of shipment - beyond 90 days covers individuals, financial institutions, govern-
ment organisations, corporate/non corporate
6. Deferred credit for period beyond 180
days with or without refinance from EXIM PLR + 4%
bodies, non-government organisations etc. The
Bank (from the date of advance) consultancy offered is independent of any credit
appraisal/sanction by any financial institution.
Any consultancy proposal canvassed by

3
Volume 12 Issue 4 January - March 2000

ZOs/ROs shall be referred to ACTS at Head total compliance of all terms and conditions
Office. Normally projects with a limit of above prescribed by the sanctioning authorities.
Rs.5 lacs which are referred to the cell shall be
(ADV.128/1999-2000 dt.29.02.2000)
processed.
It is not mandatory on the part of
Consolidated guidelines for improving
branches/administrative offices to refer any outflow of credit
proposal to ACTS as a prerequisite for credit
sanction. Sanctioning authorities will continue to In order to improve the outflow of credit,
deal with loan proposals as per existing guide- several measures have been taken since Novem-
lines independent of project appraisal by ACTS. ber 1998 which inter alia include,
As regards SAFBs, they shall continue to offer
i. Restoration of discretionary powers to
consultancy services as permitted earlier. Any
Managers
proposal beyond their scope shall be referred to
ACTS. For other details on objectives, coverage, ii. Removal of in-principle approval for
product promotion, fee structure, etc. the circular non-priority proposals
may be referred. iii. Allowing purchase/discount of cheques
(ADV.126/1999-2000 dt.28.2.2000) iv. Allowing TODs on business consideration
v. Removal of prior sanction by HO for
Sanction of advances against jewels under release of unavailed credit sanctions
non-priority/non agriculture category -
vi. Allowing excess/ad hoc/one time facility
Modification in policy guidelines
on merits
In order to increase our lending under vii. Removal of the pre condition that the
jewel loan, the policy guidelines have been deposit target should have been reached
modified as under:
For full details of the various measures
1. The per borrower ceiling limit as well as initiated vis-a-vis the old regulatory instructions
discretionary powers for sanction has been please refer to the circular. Field level functionar-
revised ies are advised to be guided by the objectives of
a. For agriculture Rs.1.00 lakh for scale I to V Branches the corporate goal towards credit sanction and in
jewel loans improving bank’s income/profit.
b. For non-priority Rs.0.75 lakh for scale I, II and III (ADV.129/1999-2000 dt.01.03.2000)
jewel loan branches
Rs.1.00 lakh for scale IV and V Revision in ceiling limit of investment in
branches Plant and Machinery in respect of industry
related SSSBE
2. The appraiser fee for non-priority jewel
The ceiling limit for investment in Plant
loan shall be at Rs.3 per thousand with a
and Machinery for Small Scale Service Business
minimum of Rs.20 besides processing charges as
Enterprises (SSSBE) has been reduced to
per rules in force.
Rs.5 lacs from Rs.25 lacs. The items to be
3. W.e.f 1.3.2000, the rate of interest for non included/excluded for computing value of Plant
priority jewel loan is fixed at PLR +3%+Int tax and Machinery, group concept etc. remain
for both existing and new accounts. unchanged.
(ADV.127/1999-2000 dt.28.02.2000) (ADV.130/1999-2000 dt.6.3.2000)

Terms and conditions for credit sanction Swarn Jayanthi Gram Swarozgar Yojana
(SGSY) Scheme
The terms and conditions for sanction of
credit have been reviewed and revised and Reserve Bank of India has clarified certain
enclosed to the circular as annexures. While issues in the operationalisation of the SGSY
Annexure-1 contains the internal guidelines, an scheme which inter alia include selection of key
illustrative list of terms and conditions is activities, Self Help Group, training, disburse-
furnished in Annexure-2. Branches should ensure ment and asset creation, rate of interest, security,
subsidy, etc. For detailed clarifications, the

4
Volume 12 Issue 4 January - March 2000

circular may be referred. Branches are advised to Gazette of India is enclosed as annexure to the
include the clarifications in the existing guide- circular.
lines of the scheme and solve operational issues,
Branches are advised to bring to the atten-
if any, locally in the Block/District/State Level
tion of our DRT panel advocates the various new
Committee. The purpose/activity code numbers
provisions introduced by the above ordinance
allotted under SGSY scheme are furnished in the
and avail their services at the appropriate
annexure to the circular.
moment/cases wherever necessary without fail.
(ADV.131/1999-2000 dt.7.3.2000)
(ADV.132/1999-2000 dt.10.3.2000)

The Recovery of Debts due to Banks and

Booklet on Credit and Administrative powers
Financial Institutions (Amendment)
Ordinance 2000 In order to strengthen the field level
The President of India has promulgated functionaries with adequate powers so that they
Ordinance 1 of 2000 amending the provisions of would be able to decide on their own in all major
the Recovery of Debts due to Banks and Finan- areas, the discretionary powers for sanction of
cial Institutions Act, 1993 which has come into credit facilities and other administrative powers
force from 17.01.2000. The salient features of the have been reviewed and revised and approved by
amendment ordinance are: the Board. The revised powers have been brought
out in the form of a book titled, ‘Booklet on
1. Debt Recovery Tribunals (DRT) can Credit and Administrative powers’. Branches
adjudicate counter claims and claims of set off shall treat the book as a branch document and
made by the defendant borrowers. make an entry in the Branch Document Register.
2. DRTs can appoint Receiver, Commis- The book is a confidential document and shall be
sioner and can pass orders for attachment and held in the custody of the Branch
orders of sale through Receiver. Manager/Officer designated for the purpose at
Administrative Offices. The revised powers
3. Recovery Officer can direct Certificate delegated are effective from 9.2.2000. All the
Debtors to declare on affidavit details of their sanctioning authorities are advised to make use
assets. of the powers delegated judiciously towards
4. DRTs can direct the defendant borrowers achieving business growth and profitability. For
to furnish security any clarification on the instructions contained in
the booklet, branches may seek the guidance of
5. Appeal against orders of Recovery
their controlling office.
Officers will lie before DRT itself.
(ADV.133/1999-2000 dt.10.3.2000)
6. The judge of DRAT is designated as
Chairperson of Appellate Tribunal. More than
one DRAT can be established. PMRY - lease period of rented premises
7. DRAT will have the power of general In the case of PMRY beneficiaries carry-
superintendence and control over DRTs and ing on their activities in rented premises, the
transfer cases from one DRT to another. lease period as available may be taken subject to
8. More Recovery Officers can be appointed renewal. However, branches should ensure that
to DRTs. lease agreements are renewed at the expiry of
lease period during the currency of loan.
9. For effecting the recovery by sale of
properties located in other places, DRTs can send (ADV.134/1999-2000 dt.14.03.2000)
Recovery Certificate to DRTs of other places.
Launching of IB-SSI Card
10. When amounts are due to several banks &
FIs, the bank or FI which subsequently files On the lines of the recommendations of
Recovery Application should necessarily implead Kapur Committee, our bank has formulated a
the bank which filed Recovery Application scheme for issue of credit card to SSI customers
earlier. named as IB-SSI Card. All SSI borrowers
The action points to branches consequent banking with us for a period of not less than 2
to the above amendments are given in the circu- years and classified under Standard Asset
Category are eligible for the card. The SSI card
lar. A copy of the ordinance as published in the
holder is assured of credit limits for next 3 years

5
Volume 12 Issue 4 January - March 2000

with an in-built provision for an automatic for more than 6 months, the account shall be
increase of 15% in Working Capital facilities and treated as NPA.
30% in Term Loan. For other details of the (ADV.138/1999-2000 dt.20.3.2000)
scheme such as operational features, quantum of
loan, sanctioning authority, validity, etc. the Recovery of processing charges and Lead
circular may be referred. Bank charges - modification in guidelines
(ADV.135/1999-2000 dt.14.3.2000) Henceforth, processing/lead bank charges,
shall be recovered as under:
Modification in Indian Bank Customer Loan
Scheme 1. In case of operative accounts (irrespective
of asset classification) charges are to be recov-
With the view of making the scheme more ered on due date of renewal.
flexible and to bring new customers into our
fold, the following modifications have been 2. For non-operative accounts in substandard/
made to IBCLS. doubtful category, processing charges are to be
debited to the account whenever the charges are
1. W.e.f. 01.04.2000, interest rate for loans actually recovered.
will be PLR + 3% + Int tax which is applicable
for all existing accounts also. 3. In case of standard accounts (irrespective
of operative or not) processing/lead bank charges
2. For loans disbursed on or after 1.4.2000, should be recovered.
interest rate applicable will be at fixed rate as
prevailing on the date of disbursement. The rate 4. In respect of accounts recalled, legal action
of interest will not undergo any change conse- initiated and marked for adjustment, processing
quent to change in PLR during the pendency of charges need not be debited.
the loan. (ADV.140/1999-2000 dt.20.03.2000)
3. The monthly repayment is fixed in EMI
and should be rounded off to the nearest tens or Revision in the composite loan limit for SSI
hundreds. An EMI chart is enclosed to the circu- and exemption limit for obtention of collat-
lar for various interest rates and periods for a eral security for tiny sector
sum of Rs.10000. For improving the flow of credit to SSI
4. Maximum repayment period for purchase units, the following modifications have been
of vehicles (2/4 wheelers) shall be considered made.
upto 60 months instead of existing 36 months
i. The composite loan limit for providing
5. Sanction can be made for purchase of working capital and term loan through a single
second hand vehicles also, provided window has been raised to Rs.10 lacs in case of
i. the vehicle is not more than 3 years old SSI units.
ii. the vehicle is free from any major accident ii. The exemption limit of borrowal accounts
iii. minimum of 50% margin is retained. for obtention of collateral security has been
raised to Rs.5 lacs for the tiny sector.
iv. the vehicle is valued by a reputed
mechanic/ authorised dealer based on the model (ADV.142/1999-2000 dt.22.3.2000)
of the vehicle.
Credit-cum-Subsidy scheme for Rural
6. The quantum of loan/limit shall be
Housing
assessed based on the repaying capacity of the
borrower taking into account the other income A credit-cum-subsidy scheme for rural
received if any besides the net take home housing has been introduced w.e.f 01.04.99. The
salary/pension of the borrower. target group is rural households having an annual
7. The quarterly interest should be added to income upto Rs.32000 only. SC/ST and freed
the principal and vouched as income. Any varia- bonded labourers are to be given priority. The
tion in the loan balance vis-a-vis EMI should be target areas are solely the rural areas and should
adjusted during the last few instalments. For the be atleast 20 kms away from metropolitan and
overdue instalments, penal interest at 2% should large towns and 5 kms away from small and
be recovered. If EMI instalments are in arrears medium towns. The subsidy will be Rs.10000
per household and the upper limit of construction

6
Volume 12 Issue 4 January - March 2000

loan is Rs.40000 per household. For other details 3. Quarterly Information System
of the scheme, the circular may be referred. For advances of Rs.10 crores and above,
(ADV.143/1999-2000 dt.24.03.2000) QIS I is dispensed with and QIS II and III are
suitably modified. For advances below Rs.10
crores, QIS I will continue alongwith the
Amendments to Documentation Manual modified QIS II & III. However, the cut off level
The amendments made to the Documenta- of Rs. 1 crore and above for submission of the
tion Manual based on the circulars issued for the statements will continue.
period upto 31.12.99 are given in the annexure to 4. Turnover method
the circular. Branches are advised to note the
The available NWC or 5% of the turnover
amendments in the manual.
whichever is higher should be reckoned for
(ADV.144/1999-2000 dt.25.03.2000) assessing the extent of bank finance.

Calculation of drawing limit - Exclusion of

5. Norms for companies with liquidity
unpaid stocks constraints
Keeping in view the ability of the
Under the revised methodology for company to bring in long term sources/profit
working capital, while arriving at the drawing generating capacity, support by way of WCTL
power against stocks/book debts, sundry credi- may be considered especially when sufficient
tors for goods (including those under suppliers’ security of fixed asset is available. In all other
credit and co-acceptance) and stock under DALC cases where current ratio is below the required
are to be deducted from the value of stocks/book level, the sanctioning authority can take a
debts declared. The above procedure comes into decision for renewal in individual cases consider-
effect from 01.04.2000. ing the attendant circumstances including
(ADV.145/1999-2000 dt.28.03.2000) benefits to the bank.
(ADV.146/99-2000 dt.28.3.2000)
Review of revised methodology for assess-
ment of Working Capital to Industrial Recommendations of Kapur Committee on
Borrowers the flow of credit to SSI sector

Considering the need to overcome opera- In the first phase, out of the 38 recommen-
tional difficulties, to be flexible and to expand dations of the Kapur Committee accepted by
credit, our Board has approved modifications on RBI, our Bank has already implemented 35
certain aspects of the existing policy. The gist of recommendations. Now RBI has given directions
the modifications are given below: on 8 more recommendations. Our Bank’s
decision on 6 of them are given in detail in the
1. Net Working Capital: circular.
In deserving cases sanctioning authority
(ADV.147/1999-2000 dt.28.03.2000)
can consider relaxing the time frame for improv-
ing the current ratio to 1:20 or 1:33 as the case Complaints against transport operators
may be or relaxing the margin requirements. The under IBA scheme
additional net working capital required for the Branches may send their complaints (in
enhancement in limits can be allowed to be built triplicate) against the approved transport opera-
up gradually within the current year. tors to IBA through their controlling office
2. Application of financial parameters regarding:
Wherever TOL/TNW is more than 3, the 1. Issue of lorry receipts without receiving
sanctioning authority may decide on renewal/ consignments
enhancement/ fresh facility on a case to case
basis based on specific circumstances, the value 2. Delivery of consignments without the
of connections and other benefits that accrue to authority of the branch or in a manner not consis-
the bank. tent with the IBA scheme.
3. Non-delivery of consignment either to the
consignee branch or to the buyer after he has
retired the documents from the bank.

7
Volume 12 Issue 4 January - March 2000

4. Any other relevant matter CRA

The format in which the compliant is to be Affixing transparent stickers
lodged is enclosed to the circular.
Henceforth branches should affix transpar-
(ADV.148/1999-2000 dt.30.03.2000)
ent stickers over the amount in figure in Banker’s
Payment Orders and Mail Transfers in addition
PERSONNEL to Demand Drafts.
Payment of Halting Allowance to Officers
(CRA.29/1999-2000 dt.12.01.2000)
transferred from one place to another during
taking over charge
Income Recognition, Asset Classification,
It has been brought to the notice of the Provisioning and other related matters - NPA
Government of India that instead of halting
allowance, officers on transfer as branch manag- On a scrutiny of the NPA worksheets
ers are reimbursed the charges for hotel accom- submitted by branches, several irregularities have
modation during the period of taking charge. As been observed which include leaving columns
there is no provision in the Officers’ Service blank, furnishing wrong values/amounts etc. This
Regulations for reimbursement of lodging results in increased NPA provisioning and affects
charges during the period of taking charge,
the profitability of the bank. To avoid this,
branches/offices should ensure that reimburse-
ment of lodging charges is not made in any case various guidelines have been issued by Head
and only halting allowance is allowed to the Office from time to time. A gist of such guide-
eligible officers. lines are enumerated in the circular. Branches are
advised to meticulously follow the guidelines
(PRNL.63/99-2000 dt.21.02.2000)
and ensure accurate reporting in NPA
LFC - Change of place of domicile worksheets.

The criteria for accepting the change in the (CRA.31/1999-2000 dt.19.01.2000)

place of domicile/home town of an employee for
the purpose of LFC are given below: Service Charges

i. Whether the place declared by the In order to improve the non-fund based
officer/award staff is the one which requires business and thereby increase the non-interest
his/her physical presence at intervals for income, the service charges have been revised
discharging various domestic and social obliga- w.e.f. 25.2.2000 and enclosed to the circular. The
tions, and if so, whether after his/her joining in earlier prescription of levying additional service
the bank the officer/award staff had been visiting charge at 25% or 50% for issue of DDs etc.
the place frequently. against tender of cash has been withdrawn.
Hence normal service charges should now be
ii. Whether the officer/award staff owns levied uniformly for customers as well as
residential property in that place or whether non-customers. For services not covered in the
he/she is a member of a joint family having such circular, the existing charges as per circular
property there. CRA.20/98-99 dt.23.11.98 and the Handbook on
iii. Whether his/her near relatives are perma- Service Charges shall apply.
nently residing in that place. (CRA.33/1999-2000 dt.18.02.2000)
iv. Whether prior to his/her entry into the
service of the bank, the officer/award staff had Delegation of powers for concession in
been living there for some years. service charges for non-borrowal accounts
The criteria one after another shall be With a view to facilitate quick decision
applied in case where the immediately preceding making for extending concessions in service
criterion is not satisfied. charges, powers are now delegated to various
(PRNL.67/1999-2000 dt.26.02.2000)
authorities as below:

8
Volume 12 Issue 4 January - March 2000

Commission sacrifice beyond the above stipulated period, interest at

Authorities Criteria
per account per year rates applicable for fixed deposits of correspond-
ing maturity should be paid to the customer in
CMs of VLBs/RMs Net Benefit Upto to Rs.25,000
order to compensate for such delay.
AGMs of Net Benefit Upto Rs.50,000
ELBs/Regions ii. The monetary value prescribed for issue of
ZMs (DGMs) Net Benefit Upto Rs.2.00 lakhs duplicate DD on the basis of adequate indemnity
and without obtaining non-payment advice from
ZMs (GMs) Net Benefit Upto Rs.5.00 lakhs
the drawee branch is enhanced to Rs.5000.
GM, CO:Develop- Net Benefit Above Rs.2.00 lakhs
ment Dept and upto Rs.5.00 lakhs The consequent amendments to the
for zones headed by relevant paragraphs of the Handbook on Proce-
DGMs
dure for issue and payment of DDs are also
ED Net Benefit Above Rs.5.00 lakhs furnished in the circular.
Net Loss All proposals
(CRA.41/1999-2000 dt.31.03.2000)
The above delegation of powers comes
into effect from 25.2.2000.
FX
It should be ensured by the sanctioning
authorities that extending concessions does not Collection of foreign currency instruments
result in loss of income to branch. The discretion For collection of foreign currency instru-
to grant at par facility should be used selectively. ments, NOSTRO correspondent banks offer
The conditions subject to which the concession is either Cash Letter Service or Cheque Collection
to be sanctioned are furnished in the circular and Service/Final Credit Service. The reserve period
a suggestive format of cost-benefit analysis is is normally about 21 days which is to be
given as Annexure. mentioned in the credit advice. Branches are
(CRA.34/1999-2000 dt.21.02.2000)
expected to part with the amount only after the
expiry of the reserve period except for valued
Disclosure of information about the maturity customers. In order to streamline the procedures
pattern of deposits, advances, borrowings, and avoid non-recovery of amount when the
etc. in the Balance Sheet cheques were subsequently returned, the follow-
ing guidelines are given for strict compliance by
RBI has directed that banks should branches
disclose in their Balance Sheet certain important
business parameters such as maturity pattern of 1. Discretion to part with the amount before
deposit, loans and advances, investments, securi- the expiry of reserve period has to be used at the
ties, etc. from the financial year ending branch Manager level only for valued customers
31.3.2000 onwards. To facilitate such reporting, to the extent of delegated powers for purchase of
a format for collecting data from branches on such instruments. Prior approval of the appropri-
maturity pattern of deposits etc. has been ate authority should be obtained for exercise of
enclosed along with the closing returns (BS 1-4 powers beyond delegated level. However this
files) for the half year ending 31.3.2000. The restriction will not apply to DDs/Manager’s
guidelines for preparation of the data on the basis cheques/Bankers’ Payment Orders.
of residual maturity along with model 2. The discretion should be applied prefera-
worksheets are enclosed to the circular. bly for personal inward remittances to SB/FD
(CRA.35/1999-2000 dt.11.03.2000) accounts where the past experience is
satisfactory.
Issue of duplicate Demand Drafts - revised 3. Branches should exercise caution in the
guidelines case of newly opened/inoperative accounts and in
With a view to improve customer service, accounts where such transactions take place for
the following modifications in the issue of dupli- the first time.
cate Demand Drafts have been made. 4. Instruments should be in the name of the
1. Duplicate DD should be issued to the account holder and not endorsed in his favour.
customer within a fortnight from the receipt of 5. A photocopy of the instrument (both sides)
such request. For delay in issuing duplicate draft should be held by the branches.

9
Volume 12 Issue 4 January - March 2000

The extract from the FEDAI circular GENERAL

received in this regard is annexed to the circular.
Insurance policy for burglary cover for all our
For collection of foreign currency instru- properties
ments drawn on places in USA, First Union
National Bank has offered a new service called The above policy has been renewed for a
Final Credit Service. Branches opting to utilise further period of 1 year from 09.01.2000. The
this service are advised to take rate and give risks covered include terrorism and theft. The
report only to our OSB, Coimbatore branch as policy is extended to include arms and ammuni-
the NOSTRO account with First Union National tions kept at bank premises/offices for security
Bank is maintained by them. The salient features purpose. As the policy covers burglary risks for
of the service, eligibility, commission charged by all our assets, branches/offices need not obtain
the correspondent bank, address of the represen- insurance cover against burglary risk. For other
tative office of First Union National Bank and details of the policy/procedure for lodging claim,
the format of letter to be obtained from the please refer to the circular.
customer are given in the circular. (GENL.46/1999-2000 dt.14.01.2000)
(FX.24/1999-2000 dt.17.01.2000)
Fraud - Preventive measures
Simplified application form for export finance In order to ensure prevention of frauds in
As per directions of Reserve Bank of banks, Reserve Bank of India has advised certain
India, a simplified application form for export measures for implementation in banks which
finance has been designed and enclosed to the include the following:
circular. Branches should henceforth obtain data 1. Officers putting their initials on the loan
in the prescribed form only and should not insist papers should write their names and
for CMA formats in respect of request for export designations. They should indicate reasons for
credit limit upto Rs.50 lakhs. agreeing/disagreeing with the recommendations
(FX.27/1999-2000 dt.02.03.2000) made and also the reasons which weighed with
them in according the sanction.
Revision of interest rate on deposits held
2. Details of the deposit receipts above Rs.5
under FCNR(B)
lakhs retained by the branch on the client’s
W.e.f. 20.3.2000, the interest rates for instructions should be reported to their control-
deposits under FCNR(B) have been revised as ling office. Loans thereagainst to third parties,
follows: particularly on the basis of power of attorney,
should be approved by the controlling office
Period USD GBP DEM YEN EURO even if they fall under the discretionary powers
1 year and 6.00 5.80 3.00 0.25 3.00 of the branch manager, after fully satisfying the
above but less genuineness of the documents submitted.
than 2 years
3. Bearer securities like Indra Vikas Patra,
2 years and 6.00 6.00 * 0.25 3.00 Kisan Vikas Patra should be verified directly
above but less
from the concerned issuing authorities.
than 3 years
3 years only 6.50 6.20 * 0.50 3.25 The circular also contains the measures
suggested by RBI on release of credit facilities,
* As DM deposits can be accepted only for issuance of bank guarantees/LC, preventing
periods maturing on or before 31.12.2001, diversion of funds, exposure to corporate groups
interest rates for 2 and 3 year maturities have not
and development of early warning system.
been quoted.
(GENL.50/1999-2000 dt.07.02.2000)
(FX.28/1999-2000 dt.23.03.2000)
Safe, Furniture, Vehicle and Machinery
(SFVM) - Missing items

It is observed from inspection and audit

reports that there are several instances of missing
SFVM items which reveals that due care is not

10
Volume 12 Issue 4 January - March 2000

ensured by branch management in the main- Books Evidence Act to prove entries in the books
tenance/safety of SFVM. The Branch Managers of banks in legal proceedings before courts,
should personally ensure that all the items tribunals, consumer fora, etc. They should ensure
entered in the computer generated SFVM that original records/documents which are the
list/register are physically available at the subject matters of such legal proceedings are
branches. Broken/unusable items should immedi- preserved at their end till the final disposal of the
ately be repaired/disposed off with the permis- proceedings notwithstanding the provisions of
sion of appropriate authority. Inspectors and the rules on period of preservation of records.
auditors should verify and ensure the physical For the information of branches and administra-
existence of the items entered in the computer tive offices, the text of the Bankers’ Books
printed list and report any deviation. Evidence Act is enclosed as annexure to the
circular. For any clarification branches/offices
(GENL.54/1999-2000 dt.17.02.2000)
may contact their Zonal Office Legal Cell or
HO:Legal Services Department.
Bankers’ Books Evidence Act, 1891
(GENL.64/1999-2000 dt.29.03.2000)
Branches and administrative offices shall
be guided by the provisions of the Bankers’

11
 Volume 13 Issue 1 April - June 2000
Recollect
DEPOSITS Below
Rs.15 lakhs
NR NR Term Deposits to less than
Rs.15 lakhs
Revision of Interest rate on SB deposits Rs.2 croes
6 months to less than 1 year 9.00 9.50
Interest rate on Savings Bank deposit has
been revised to 4% (from 4.5%) effective from 1 year to less than 2 years 9.50 10.00
01.04.2000. The Revised rate of interest is to 2 years to less than 3 years 10.00 10.50
be allowed on Domestic Savings Bank 3 years only 10.50 11.00
deposits, ordinary non-resident SB (NRO),
Non-Resident (external) SB (NRE) and
Savings Bank accounts opened under Capital (DEP.3/2000-01 dt.10.5.2000)
Gains Scheme.
(DEP.1/2000-01 dt.17.04.2000) Stop payment instructions - deletion of
disclaimer clause
Settlement of claims in respect of deceased It has been decided to delete the
depositors’ accounts disclaimer clause incorporated in the format of
Henceforth, branches/Regional Offices acknowledgement for stop payment instruction.
shall not direct the claimants of deceased Consequent amendments to the Savings Bank
depositors to furnish succession certificate and Current Account rules have been given in
irrespective of the amount in deposit. In case of the circular. Branches should ensure that the
doubt or apprehension as regards the compe- disclaimer clause is deleted while giving
tency of claimants, branches/ROs should refer acknowledgement of stop payment instructions
the matter to ZO, Legal Cell or HO:Legal to customers.
Department for guidance/suitable instructions. (DEP.4/2000-01 dt.25.5.2000)
(DEP.2/2000-01 dt.25.04.2000)
Closing of SB/Current Accounts
Revised interest rates on deposits At present there is no prescribed format
Effective from 15.5.2000, the rates of for the letter of request to be obtained from
interest for Domestic, NRE and NRNR term customers for closure of Savings/Current
deposits have been revised as under: account. In order to have uniformity, a format
of the ‘Account Closure Request’ has been
Duration
Int. Rate % evolved and furnished as annexure to the circu-
p.a lar which contains interalia the details of
Domestic Term Deposits / Capital Gains Scheme cheques surrendered/ not surrendered and a
15 days to 45 days 4.50 clause of indemnity. Henceforth, branches
46 days to 90 days 6.00 should obtain the request letter for closure of
91 days to 179 days 6.50 accounts only as per the format.
180 days to less than 1 year 7.50 (DEP.5/2000-2001 dt.26.05.2000)
1 year to less than 2 years 8.50
2 years to less than 3 years 9.00 Mobilising Savings Bank and Current
3 years to less than 5 years 9.50 Account deposits
5 years and above 10.00
A review of the deposit-mix reveals that
NRE Term Deposits our Bank is not favourably placed in the
6 months to less than 1 year 8.00 mobilisation of low cost deposits, when
1 year to less than 2 years 9.00 compared to the industry level. To achieve the
2 years to less than 3 years 9.50 goal of increasing our profitability, our aim
3 years and above 10.00
should be to mobilise more low cost deposits
viz., savings and current account deposits.
Branches should draw suitable strategies in this
regard. The target set for the year 2000-01 for
each segment of deposits should be bifurcated
in terms of monthly targets and achieved
without any exception. Branches should report
the achievements on a monthly basis to

1
Volume 13 Issue 1 April - June 2000

Regional Offices as per the format enclosed to investment ceiling for SSI and ancillary indus-
the circular and ROs shall monitor the same. It trial undertakings, the clarifications received
should be noted that the performance of from the Government in this regard are given
branches will also be monitored on the basis of below:
number and amount of deposits mobilised.
a. The units which have obtained perma-
(DEP.06/2000-01 dt.01.06.2000)
nent registration based on the order dt.10.12.97
would continue to remain as SSI units in spite
ADVANCES of the order dt.24.12.99 reducing the invest-
ment ceiling limits to Rs.1 crore.
Application for Housing Finance
The existing application for housing b. Units which had switched over to the SSI
finance (individuals) has been reviewed and status based on order dt.10.12.97 would
redesigned to satisfy all the requirements of the continue to remain as SSI units.
present housing finance scheme. The proforma c. Units which have got provisional regis-
of the new application alongwith the declara- tration with the State authorities for their SSI
tion format to be obtained from borrowers is
enclosed to the circular. status would continue to remain as SSI units
provided the provisional registration had taken
(ADV.01/2000-01 dt.04.04.2000) place within the period of limitation of 180
days specified in order dt.10.12.97.
All purpose loan to SSI Customers
(ADV.4/2000-01 dt.10.04.2000)
A new loan product named ‘All purpose
loan to SSI customers’ has been introduced. All Extension of assistance under NEF scheme.
SSI borrowers who are banking with us for a
period not less than 2 years and classified The restriction on extending assistance
under Standard Assets category continuously under National Equity Fund Scheme (NEF)
are eligible for this loan to meet the needs of scheme for units in metropolitan areas has been
the unit/improving the performance of the unit. removed. Assistance under NEF scheme would
The minimum limit is Rs.5 lakhs and the now be available to all units which fulfil the
maximum is Rs.25 lakhs. For other details such specified eligibility criteria under the NEF
as interest rate, repayment schedule, margin, scheme irrespective of their location. All other
security etc., the circular may be referred. terms and parameters specified under the
scheme remain unchanged.
(ADV.2/2000-01 dt.04.04.2000)
(ADV.4/2000-01 dt.10.04.2000)

Payment of interest on the credit balance in

the IBKC accounts Timely filing of suit

Indian Bank Kisan Card Scheme (IBKC) Once suit filing permission is accorded,
envisages extension of credit facilities for 3 the suit is to be filed within 2 months. If
years in the form of cash credit limits to the compromise proposals are received in the
farmers. In order to encourage farmers in meantime, it should not preclude the branches
investing their surplus funds with bank, it has from taking legal action. Processing of compro-
been decided to offer interest at the rate and mise proposals should also be done simultane-
norms applicable to Savings Bank Accounts on ously. Suit filing should not be postponed
the minimum credit balances maintained in the merely on the assurance/promise given by the
IBKC account. However, interest for the credit party to submit compromise proposal/repay the
balance and debit balance should be vouched dues. Approval for deferment of suit filing due
separately. to whatever reason must be obtained within
two months from the date of sanction for suit
(ADV.3/2000-01 dt.08.04.2000) filing.
(ADV.7/2000-01 dt.18.04.2000)
Investment ceiling for Small Scale/Ancillary
industrial undertakings
Further to the circular ADV.116/99-2000
dt.1.2.2000 communicating the revision in the

2
Volume 13 Issue 1 April - June 2000

Annual Financial Inspection as on 31.3 99 - branches and as per HO guidelines. The

Deficiencies observed delayed reporting and non reporting of
excess/overdue will lead to staff accountability
From the Annual Financial Inspection
in general and particularly when the account
report as on 31.3.99 submitted by RBI, it is
becomes bad. Hence branches should ensure
noticed that the observations made by RBI are
prompt and immediate reporting of
repetitive in nature indicating the luke warm
excess/overdues to the next higher/sanctioning
attitude and lack of seriousness on the part of
authority. The circular also contains the proce-
branches/controlling offices particularly in the
dure for confirmation of excess/overdue by
area of credit portfolio. Even the extent of
various levels of authority.
compliance of rectification in respect of various
irregularities pointed out in the account are far (ADV.11/2000-01 dt.22.4.2000)
from satisfactory. The areas requiring
concerted attention and monitoring by branches Loan to salaried class customers
as well as controlling offices are given below:
A new product named ‘Loan to Salaried
a. Credit expansion Class’ has been launched to meet the credit
b. Adherence to delegated authority requirements of salaried persons for education,
c. Credit appraisal marriage or other family functions, medical and
d. Quality of credit supervision other unexpected expenditure. Employed
e. Review/renewal of credit limits persons whose salary is regularly disbursed by
For more details, branches/offices may credit to their account with our bank/ or
refer to the circular. producing an undertaking by the employer to
remit the instalments directly to Bank are eligi-
(ADV.8/2000-01 dt.18.04.2000) ble under the scheme. The minimum amount of
loan is Rs.5000. The maximum is
PMRY - guidelines for effective
implementation
i. 5 times the gross salary with a ceiling of
Rs.1 lakh for customers producing the letter
RBI has suggested various steps for undertaking from employer
improving the flow of credit, increasing the
ii. 5 times the gross salary with a ceiling of
recovery etc., under the PMRY scheme which
Rs.50000 for customers whose salary is
include the following:
credited regularly to the account with the
a. Sponsoring of applications by branches branch.
themselves in large numbers
The scheme is not applicable to the
b. Timely sanction spouse of staff members. However, the request
of other relatives of staff for loan under the
c. Issue of loan Passbooks to PMRY scheme may be considered on merits of the
borrowers in regional languages as in the case case subject to the extant guidelines with regard
of IRDP to staff related advances. For other details on
d. Recovery of dues under State Revenue interest, repayment, security, documentation,
Act sanctioning powers, other term and conditions
and the application cum appraisal format, the
For more details on each of the above, circular may be referred to.
the circular may be referred.
(ADV.12/2000-01 dt.24.04.2000 &
(ADV.10/2000-01 dt.20.04.2000) ADV.14/2000-01 dt.06.05.2000)

Reporting of Excess/Overdues Credit Rating system for Borrowal accounts -

Sanction of Finer Rates of Interest
The excess granted by the branches
should be immediately reported to the next In response to RBI’s direction on estab-
higher authority/sanctioning authority explain- lishing an effective Risk Management System,
ing the circumstances of the case and specify- our bank has revised the Credit Rating System
ing whether such excess is adequately covered which will serve as a single point indicator of
by primary/collateral security. It should be diverse risk factors and for taking credit
adjusted within a period of one month. These decisions in a consistent manner. The revised
powers are to be exercised sparingly by the system enclosed as annexure to the circular is

3
Volume 13 Issue 1 April - June 2000

designed to take into account all possible (ADV.24/2000-01 dt.19.5.2000)

factors which go into appraising the risks Abolition of Interest Tax
associated with the credit proposal broadly
classified under Management, Industrial, The existing interest tax of 2% has been
Financial and Operational parameters. Irrespec- abolished w.e.f. 1.4.2000. Hence branches are
tive of whether any con- cession in interest rate advised not to charge interest tax on all existing
is sought/ recommended or not, all borrowal and new borrowal accounts from 1.4.2000.
accounts with credit limits of Rs. 2 lacs and (ADV.27/2000-2001 dt.26.05.2000)
above should be rated every year. The circular
contains the modifications made to the discre-
Interest rate surcharge on Import Finance
tionary powers for sanctioning finer rate of
interest by different levels of authority, excep- Import surcharge at 50% of the actual
tions to the system, categories of advances not lending rate on bank credit for imports has been
eligible for finer rate of interest, consortium re-introduced w.e.f. 26.5.2000. This interest
accounts, etc. rate surcharge will be levied on all types of
The revised risk rating assessment will bank credit in the form of OCC, Term Loan
come into force with immediate effect and etc., for financing of imports inclusive of
replace the existing system. import of capital goods. The salient features
and the exempted categories are furnished in
(ADV.17/2000-01 dt.11.05.2000) the circular.
(ADV.28/2000-01 dt.30.05.2000)
Rate of interest for Housing Finance to public
The rate of interest for Housing Finance Revision of Interest Rate on Overdue Export
to general public has been revised with effect Bills
from 15.05.2000 as below:
With effect from 26.05.2000, the interest
Limit Rate of Interest rate applicable for ECNOS at Post Shipment
stage in respect of overdue export bills will be
Upto Rs. 2 lakhs PLR + Int. Tax
at 25% p.a. (minimum) from the date the bills
Above Rs.2 lakhs and upto PLR + 1% + Int. Tax fall due for payment. The rate of interest is
Rs.10 lakhs applicable to both the existing overdue
Above Rs.10 lakhs PLR + 2% + Int. Tax advances (for the remaining period till adjust-
ment) and to fresh overdues. In respect of sight
(ADV.19/2000-01 dt.13.05.2000) bills, the due date is to be calculated after
providing for the Normal Transit Period (NTP).
Revision of PLR/PTLR For usance bills, the Notional Due Date (NDD)
shall be reckoned for charging of overdue inter-
W.e.f. 15.5.2000, the Prime Lending est. The existing differential slab rates for
Rate (PLR) and Prime Term Lending Rate overdue bills have been dispensed with.
(PTLR) has been reduced to 12.5%. All loans
and advances including term loans of less than (ADV.29/2000-01 dt.30.05.2000)
3 years and loans and advances to staff carry-
ing interest rates linked to PLR will undergo Distribution of inputs for activities allied to
change on account of this revision. The agriculture
maximum spread on loans and advances of Advances upto Rs.15 lakhs (enhanced
over Rs.2.00 lakhs has been fixed at 4.00%. from Rs.5 lakhs) granted for financing distribu-
(ADV.20/2000-01 dt.13.05.2000) tion of inputs for allied activities to agriculture
such as cattle feed, poultry feed, etc. are eligi-
Finance to Agriculture through NBFCs ble for being reckoned as indirect finance to
agriculture.
Lending by banks to NBFCs for on
lending to agriculture may be reckoned for the (ADV.31/2000-01 dt.03.06.2000)
purpose of priority sector lending. Accordingly, Staff accountability
such advances shall be reported under indirect
finance to agriculture in the Regional Return In order to dispel the fear of staff
RR-1. accountability among field level functionaries,
a committee was formed at HO. Based on the

4
Volume 13 Issue 1 April - June 2000

recommendations of the committee, certain professional courses in private professional

finer aspects of the existing procedure on staff colleges in the following disciplines:
accountability (communicated vide circular
PRNL.15/98-99 dated 30.05.98) and additional a. Medical and Dental (all branches)
guidelines have been framed and enclosed as b. Engineering
Annexure 1 to the circular. c. Chemical Technology
d. Management
The following are the salient features of e. Architecture including interior decoration
the policy guidelines now framed:
f. Law
i. As and when the irregularities come to g. Computer Science and Applications
the notice of the controlling authorities through
various reports, study of staff accountability The student should submit a certificate to
should be undertaken then and there. the effect that he has secured admission against
either free/merit seat or payment seat from the
ii. The responsibility to study the staff principal /competent authority of the college
accountability is completely entrusted to Zonal concerned. The annual family income of the
Administration in respect of all credit accounts student should not exceed Rs.1 lakh from all
including HO sanctioned accounts and non sources and an affidavit should be produced to
credit areas. this effect. The loan amount will be Rs.15,000
iii. The involvement of Inspection Depart- for free/merit seat and Rs.50,000 for payment
ment is completely avoided. seat. The loan granted in each academic year
shall be treated as a separate loan for determin-
iv. The available information from credit ing the interest, security etc. However the
files, inspection reports, auditors’ report, visit student is not required to submit a fresh appli-
reports of RM/ZM, directions of ZAC should cation for loan every year but is required to
be the main source to identify the lapses. submit to the bank proof of his continuing to
fulfil the eligibility criteria. The rate of interest
v. ZM is empowered to identify the lapses, will be 12% p.a compounded quarterly.
fix up accountability and call for explanation Guarantee/collateral security shall be taken
from all officers upto one rank below the rank based on the merits of each case.
of ZM and close the reports if the explanations
are found satisfactory. A quarterly statement as per the format
enclosed to the circular is to be submitted by
The Staff Accountability report format branches through RO for submitting a consoli-
has been improvised by incorporating certain dated statement to RBI by HO. For complete
other information relating to the causes for details of the scheme including repayment,
failure of advance due to external reasons. The discretionary powers etc., the circular may be
revised format is furnished as Annexure 2 to referred.
the circular.
(ADV.38/2000-01 dt.08.06.2000)
The revised procedural guidelines have
the following advantages:
Modification to Indian Bank Consumer Loan
i. The process of identification of staff Scheme
accountability would be easier as it is initiated
at an early stage when all records are readily The maximum eligible loan amount for
available. purchase of 4 wheelers under IBCL scheme has
been modified as not exceeding 10 times of
ii. The scope for recovery/reduction of loss monthly gross salary income of the applicant
in certain cases is enhanced. and his/her spouse put together and other
(ADV.36/2000-01 dt.07.06.2000)
income, subject to a maximum of Rs.5 lakhs
with 40% net take home pay of the
borrower/spouse. The personal guarantee of the
RBI’s Educational Loan scheme - amended spouse is to be obtained in such cases. All other
guidelines terms and conditions of the scheme remain
The existing Educational Loan Scheme unchanged.
of RBI has been amended. The objective of the (ADV.40/2000-01 dt.12.06.2000)
amended scheme is to provide financial assis-
tance to meritorious and indigent students to
pursue the full time graduate/ post graduate

5
Volume 13 Issue 1 April - June 2000

Proceedings before the DRTs - Decision on iv. Term loans for activities like farm
vital issues mechanisation etc. should be encouraged.
In a case relating to Allahabad Bank Vs v. In co-ordination with local NGOs
Canara Bank, the Hon’ble Supreme Court of advance to SHG to be improved.
India had an occasion to decide on the follow-
ing vital issues relating to DRT proceedings: vi. Advances for activities under indirect
agriculture should be improved.
a. Jurisdiction of the DRTs and Recovery
Officers of DRT vii. Branches should ensure that the commit-
ted target under Government sponsored
b. Proceedings before the DRT vis-a-vis schemes are fully achieved.
winding up proceedings before Company
courts (ADV.47/2000-2001 dt.28.06.2000)

c. Stay of proceedings before Company

courts PERSONNEL
The excerpts of the judgement are given Performance Appraisal system for officers
in the circular for information and guidance to In order to obviate the difficulties
field level functionaries. encountered in the timely obtention of Perform-
(ADV.43/2000-01 dt.19.06.2000) ance Appraisal report of Officers and to
quicken the process at HO, the following
Guarantees issued by the bank procedure shall be adopted starting from the
reports relating to the year 1999-2000.
At times, our customers obtain injunction
orders restraining the bank from making i. All officers shall submit the performance
payment of guaranteed amount or staying the appraisal booklet to the concerned appraising
operation of the invocation letter received by authority before 30th April of every year.
the bank. To enable the bank to recover ii. The appraising authorities shall forward
commission for the extended period in such the reports to reviewing authorities within a
cases, a suitable clause has been incorporated week and in any case not later than 15th of
in F-44, F-44B, 44C and 44D and the modified May, marking a copy of the covering letter to
formats are enclosed to the circular. Branches HO:Personnel Dept besides sending acknow-
ledgement slip to the Officer concerned.
should incorporate the same in the Documenta-
tion Manual. iii. After review, the reviewing authorities
shall forward the reports to HO: Personnel
(ADV.46/2000-01 dt.26.06.2000) Department within a week and in any case to
reach not later than 31st May, besides sending
Lending to Agriculture
the acknowledgement slips to the appraising
To accelerate the disbursement in authorities.
agricultural advances, the following measures iv. ROs/ZOs should follow up with the
are suggested: appraising/reviewing authorities and shall
maintain a separate register to record the
i. Short term production loans should be
submission/movement of the reports.
sanctioned without delay and all STPL loans
should be covered under IBKC scheme v. The Officer should fill up the relevant
blanks in all the three tear-off acknowledge-
ii. Production loans with tie up arrangement ment slips to facilitate the appraising/reviewing
should be encouraged and term loans to authority to forward the same promptly on
farmers who have availed STPL on a tie up receipt.
should be considered liberally. (PRNL.2/2000-01 dt.17.04.2000)
iii. Jewel loan should to be sanctioned on all
days. JL limit should be utilised fully and
additional limits it required should be taken up
with ROs immediately.

6
Volume 13 Issue 1 April - June 2000

Customer segmentation, Branch segmenta- Appointment of CMD to our Bank

tion, organisational restructure
Smt. Ranjana Kumar has assumed charge
Based on the profile of the Bank’s as Chairperson and Managing Director of our
business, branches have been classified into the Bank on 29th June 2000.
following four distinctive segments:
(PRNL.15/2000-01 dt.29.06.2000)
1. Corporate Banking
2. Commercial Banking
3. Personal Banking CRA
4. Rural Banking Service charges for issue of solvency
Further it is observed that there is an certificate
overlap of the functions of Zonal Office and Service charges for issue of solvency
Regional Office and the repetitive processing certificate has been modified as under with
reduces the overall effectiveness of operations. immediate effect.
To reduce delays due to duplication of work
and to improve customer focus, reduction of For amount of Solvency
Service Charges (Rs.)
one administrative tier has been made with the Certificate
elimination of Zonal tier. Consequent to this, Upto Rs.1 lakh 500
Regional Offices assume an extremely impor- Above Rs.1 lakh and upto Rs.25 2,500
tant role in the turnaround process of the Bank. lakhs
The circular contains the features and thrust Above Rs.25 lakhs and upto Rs.50
5,000
areas of the segmentation of branches. lakhs
7,500
(PRNL.7/2000-01 dt.10.05.2000) Above Rs.50 lakhs
(Maximum)

(CRA.1/2000-01 dt.19.04.2000)
Review of categorisation of branches
In terms of the revised Govt guidelines, Implementation of second phase of study by
categorisation of branches as on 31.3.99 has ICRA
been reviewed, revised and approved by board.
The names of the branches falling under Consequent to organisational restructur-
Exceptionally Large, Very Large, Large and ing and switch over to HO-RO-Branch hierar-
Medium branches are furnished in Annexure I chy, changes in the reporting system to
to the circular. All other branches not included HO:Accounts Department have been finalised
in Annexure I are categorised as Small and operational instructions have been issued.
Branches. The classification of specialised Accordingly, Regional Offices shall ensure
branches is given in Annexure II to the circular timely submission of Sec.42 statements by
branches under their control. Henceforth, ROs
(PRNL.11/2000-01 dt.20.5.2000) have to report the Weekly quick data to
HO:Accounts Dept by phone/telex/fax/E-mail
Report of arrest/retention to superiors by so as to reach them by the succeeding Monday
officer employees followed by mail confirmation. The circular
It shall be the duty of an officer also contains in detail the instructions to
employee to intimate the fact of his Regional Offices on works pertaining to
arrest/detention (for any reason) and the accounts, balance sheet, annual statutory audit
circumstances connected therewith to his and other related matters
immediate superior or Branch in charge/Head (CRA.2/2000-01 dt.12.05.2000)
of the department even though he might have
been subsequently released on bail or Recovery in written off accounts
otherwise. Failure to do so will be regarded as
suppression of material information and may Branches are now permitted to the credit
render the officer liable to disciplinary action amount of recovery made in written off
apart from the action that may be called for on accounts to their income account. For this
the outcome of the police case if any. purpose, a new sub GL head ‘Recovery of Bad
Debts Written Off’ is to be opened by the
(PRNL.14/2000-01 dt.22.06.2000)
branches under Column no 9.17 of miscellane-
ous income in BS 4. Branches should ensure
that the proportionate DICGC share is remitted

7
Volume 13 Issue 1 April - June 2000

before crediting the amount to the income Period USD GBP DM YEN EURO
account and maintain a register as per the 1 year and above
format given in the circular to record the details 6.50 5.80 3.50 0.25 3.50
but less than 2 years
of recoveries made.
2 years and above 6.50 6.00 NA** 0.25 3.50
(CRA.03/2000-01 dt.20.05.2000) but less than 3 years
3 years only 6.75 6.20 NA** 0.50 3.75
FX ** As DM deposits can be accepted only for periods maturing on or before 31.12.2001,
interest rate for 2 and 3 year maturities have not been quoted.
Buyer-wise credit limits of the ECGC for the
There is no change in the preferential rate
Policy Holders
of interest for US dollars and GBP deposits.
ECGC has advised Banks to insist on (FX.04/2000-01 dt.16.06.2000)
production of ‘originals’ of the ‘credit limit
approvals’ issued by ECGC while discounting/
purchasing export documents of the exporters. GENERAL
In case of any doubt on the authenticity of the Art of Decision Making
approvals of buyer-wise limits, branches
should contact the concerned branch office of Decision making is intertwined with
the ECGC or the Buyer-underwriting Depart- every aspect of our lives both official and
ment at the Head Office of ECGC. personal. The focus of decision making should
be to attain efficiency by adopting the best way
(FX.01/2000-01 dt.10.04.2000) of performing the task. In this competitive
environment, a banker has to be adept in
Revision of interest rate on deposits under decision making to capitalise on opportunities
FCNR (Bank) Scheme that are rare to come-by. A concerted effort by
all of us in this direction is certain to lead our
W.e.f. 1.6.2000, the interest rates for bank in achieving the corporate goals. Every
deposits under FCNR Bank Scheme has been decision involves some kind of risk but that
revised as under: should not deter one from taking decisions. It
Period USD GBP DM YEN EURO should also be borne in mind that indecision is
worse than wrong decision and postponing
1 year and above 6.25 5.80 3.00 0.25 3.00 decisions will lead us nowhere.
but less than 2 years
2 years and above 6.25 6.00 NA** 0.25 3.00 (GENL.01/2000-01 dt.06.04.2000)
but less than 3 years E-mail address of valued customers
3 years only 6.75 6.20 NA** 0.50 3.25
Various steps towards technology
** As DM deposits can be accepted only for periods maturing on or before 31.12.2001,
interest rate for 2 and 3 year maturities have not been quoted.
adaptation have been taken in our bank which
include ATM, Electronic Funds Transfer,
Preferential rate of interest for US dollars
Electronic Clearing Service and Telebanking.
and GBP deposits of all maturities in addition
Internet banking is in the process of introduc-
to interest rate mentioned above is as under:
tion. For this purpose, a data base of the E-mail
Amount USD GBP addresses of our valued customers is proposed
to be created. Branches are advised to collect
50000 and above +0.15% +0.10%
the E-mail addresses of their valued constitu-
250000 and above +0.25% +0.20% ents and furnish the same to respective Zonal
offices as per the format given in the circular.
The above, preferential rates are applica-
ble only to a single deposit and not on a combi- (GENL.2/2000-01 dt.07.04.2000)
nation of two or more deposits.
Special Deposit scheme 1975
(FX.2/2000-01 dt. 01.6.2000)
With effect from 01.04.2000, the rate of
interest payable on deposits under Special
Revision of interest rate on deposits under Deposit Scheme 1975 has been reduced to
FCNR (Bank) Scheme 11%.
With effect from 19.06.2000 the interest (GENL.4/2000-01 dt.28.04.2000)
rates for deposits under FCNR Bank Scheme
has been revised as under:

8
Volume 13 Issue 1 April - June 2000

System for preservation and retrieval of print- products and to introduce new products at
outs in TBC branches cheaper cost. The staff members should be
aware of the products available in the market
A uniform procedure for preserving and
and should be in a position to counsel the
retrieval of printouts in TBC branches has been
customers on how they would gain by availing
formulated, details of which are given in the
our bank’s products and services. The deposi-
Annexure to the circular. The system envisages
tors are not mere savers of money but are
easy maintenance and retrieval of records as
investors and their sentiments must be under-
only numbers are used to identify the records.
stood and respected to serve them better.
The successful implementation of the system
Marketing is not an one time affair but a
mainly depends on timely binding of printouts,
continuous process. It must always be remem-
numbering and proper maintenance of the
bered that it is the customer who decides the
Register of Printouts. All TBC branches should
winners and losers.
meticulously follow the guidelines/procedure.
(GENL.7/2000-01 dt.11.05.2000)
(GENL.5/2000-2001 dt.08.05.2000)

Prevention of frauds in SB inoperative Renewal of Banker’s Indemnity Policy

accounts
Banker’s Indemnity Policy has been
Various circulars have been issued in renewed for the financial year 2000-2001
regard to security measures to be followed to commencing from 1.4.2000 with National
avoid frauds particularly in inoperative SB Insurance Company Limited. The circular
accounts. In spite of the instructions, the contains the details of the policy such as risks
following deviations have been noticed. covered, claim procedure, maintenance of
records, lodging of police complaint etc.
i. Passing of withdrawals/cheques by
single officer (GENL.8/2000-01 dt.20.05.2000)
ii. Non-keeping of ledgers under lock and
key Customer Relationship Management
iii. Password leakages Success of any organisation depends on
iv. Keeping terminals open even while the thrust given to effective customer service.
leaving the seats temporarily Relationship management helps an organisation
to focus on the lifetime value of customers and
v. Non-verification of sectional day book to enhance their relationship with profitable
by officers with physical vouchers on daily customers. With greater customer focus,
basis. emphasis on relationship marketing and effec-
vi. Dispensing with ‘token issued’ for tive customer retention plans, greater profitabil-
withdrawal ity can be achieved with the existing customer
vii. Non-authentication of cash scroll, day base. A satisfied customer becomes the ambas-
book, GL printouts on daily basis. sador of the bank and bring in more clients by
his influence. The first step towards relation-
Branches are advised to be vigilant and ship building is implementing recognition strat-
strictly adhere to the guidelines/preventive egy to make the customer feel special. Every
measures given in the Manuals of Instructions staff dealing with a customer should consider
and circulars to ensure prevention of frauds in himself a customer relationship manager and
future. take the bank to greater heights in both profit-
(GENL.6/2000-01 dt.08.05.2000) ability and customer satisfaction.
(GENL.9/2000-01 dt.01.06.2000)
Marketing of financial services
Today’s customers are demanding value Building winning attitudes
for their money and their priority is to find the The attitude of a person is the mirror of
most cost effective way of fulfilling their his mind and it reflects his current state of
needs. Marketing denotes customer orientation agitation. The success of an individual, organi-
and designing of products suitable to the sation or country depends on the quality of
changing requirements of the customers. Banks their people. The quality of the people is deter-
have to redesign the structure, products, mined by their attitude. The three primary
systems etc., to improve the quality of existing factors that determine our attitude are

9
Volume 13 Issue 1 April - June 2000

Environment, Education and Experience. The Payment of interest on delayed credit of

benefits of positive attitude increases produc- outstation instruments
tivity, fosters better relationship and teamwork.
Henceforth, interest for delayed collec-
Negative attitude leads to bitterness,
tion of outstation instruments should be paid at
resentment, high stress levels and ill health.
the rate as applicable for appropriate tenor of
There are several benefits in measuring the
fixed deposits for the period of delay beyond
attitude of the employees which have been
10 14 days as the case may be. Further, penal
detailed in the circular. A person with a
interest at the rate of 2% above fixed deposit
positive attitude is like a fruit of all seasons. He
rate applicable should be paid for abnormal
will be a sure winner.
delay in collection of instruments. The interest
(GENL.11/2000-01 dt.14.06.2000) is to be paid without the customer having to
claim it. Branches should ensure strict compli-
ance to the above changes with a view to
improve customer service.
(GENL.14/2000-01 dt.29.06.2000)

10
 Volume 13 Issue 2 July - September 2000
Recollect
DEPOSITS Duration Int. Rate % p.a
Domestic Term Deposits / Capital Gains
Interest rates on deposits Scheme
The rates of interest for domestic term 15 days to 45 days 5.00
deposits/capital gains scheme stand revised 46 days to 90 days 6.75
w.e.f 17.07.2000 as below: 91 days to 179 days 7.00
Duration Int. Rate % p.a 180 days to less than 1 year 7.50
1 year to less than 3 years 9.00
Domestic Term Deposits / Capital Gains 3 years and above 10.00
Scheme
15 days to 45 days 5.00 (DEP.16/2000-01 dt.14.09.2000)
46 days to 90 days 6.00
91 days to 179 days 6.50
ADVANCES
180 days to less than 1 year 7.50
1 year to less than 2 years 8.50 Review/Renewal of limits - Assessment of
2 years to less than 3 years 9.00 working capital
3 years and above 10.00 Review/Renewal of credit facilities
constitutes one of the monitoring tools of track-
(DEP.9/2000-01 dt.12.07.2000) ing a borrowal account. The exercise also
enables periodical reassessment of credit needs
Amendment to Manual of Instructions IV - of the borrower. With a view to toning up the
Deposits exercise of appraisal in review/renewal, certain
guidelines have been given to branches. For
A compendium of the amendments made details of the guidelines, the circular may be
to the Manual of Instructions IV - Deposits for referred.
the period from April 1999 to June 2000 has
been enclosed to the circular. (ADV.48/2000-01 dt.3.7.2000)

(DEP.10/200-01 dt.20.07.2000) Interest rate on loans and advances upto 2

lakhs
Current Account Deposits
W.e.f. 15.5.2000, uniform interest rate at
One of the strategies in the turnaround PLR (12.5% presently) for loans and advances
plan of our Bank is mobilisation of low cost upto Rs.2.00 lakhs is to be charged. This rate is
deposits. Branches should draw suitable strate- applicable for all advances under Agriculture,
gies like conducting various customers' SSI, Retail Trade, Small Borrowers, Profes-
fortnight etc., to increase current account sional and self-employed, Educational Loans,
deposits. Regular contacts with the local Housing loans and non-priority advances upto
trading/merchant associations should be estab- and inclusive of Rs.2 lakhs. However, it will
lished. Staff meetings and Joint Customer not be applicable for
Service Committee meetings should be
conducted regularly to redress the customers' i. loans for purchase of consumer durables
grievances. The monthly segmentwise deposit ii. loans to individuals against shares and
target set to branches should be achieved both debentures/bonds
in terms of number of accounts and amount
without fail. iii. other non priority personal loans (Non
agri JL, Pension loan, salaried class loans, loan
(DEP.13/2000-01 dt.21.08.2000) against UTI, IBMF, NSC, KVP, IVP, LIC
policies etc..)
Interest rates on Deposits
iv. export credit, DRI and various staff loans
The rates of interest for domestic term
deposits stand revised w.e.f. 18.09.2000 as
(ADV.49/2000-01 dt.05.07.2000)
below:

1
Volume 13 Issue 2 July - September 2000

Formation of DRT cell at HO:Legal dept officer looking after the concerned
A separate DRT Cell has been formed at account at HO will also be involved)
HO:Legal department to exclusively monitor ii. Copy of appraisal papers have to be sent
all cases before DRTs. The guidelines/instruc- in advance.
tions for the immediate action/compliance of
field level functionaries on the follow-up of iii. Officers taking up joint appraisal should
DRT cases are furnished in detail in the come well prepared. Understanding the
circular. industry/unit/product is a prerequisite.
(ADV.50/2000-01 dt.6.7.2000)
iv. The process will have to be completed
within 15 days of receipt of application at
Prevention of shifting of borrowal accounts
the branch.
from our bank
While canvassing for good accounts to v. The proposal should be sent to General
improve our Asset portfolio under standard Manager of respective credit desk at HO
category, the requirements of the existing specifically marked as Under Fast Track.
customers should also be taken care of. Branch
Though the eligible credit limit has been
Managers and field level functionaries are
fixed at Rs.5 crores, Regional Offices may
advised to ensure the following:
extend the coverage of fast track to more
1. Under no circumstances the borrowal accounts coming under their jurisdiction.
account under standard category be Branches/ROs should implement the Fast
allowed to shift to other banks. Track System in right earnest.
2. The tool of joint appraisal in vogue in (ADV.52/2000-01 dt.10.07.2000)
our Bank should be effectively utilised to
prevent the borrower from building up Modified Indian Bank Consumer Loan
relationship with another bank leading to Scheme
flight of advance accounts.
In order to make the existing consumer
3. If instances of borrowers' likelihood of loan scheme more flexible and to bring new
shifting to another bank come to their customers, a modified consumer loan scheme
knowledge, Branch managers should has been launched w.e.f. 14.07.2000 delinking
immediately contact the concerned it from vehicle loan. Some of the salient
officials of the borrower concern and features are:
report the same to the Regional Manager.
Necessary assistance should be sought i. Salaried class, professionals, self-
to meet the requirements of the borrower employed, business persons, pensioners
and if felt necessary, assistance of HO and other individuals having regular
can also be sought. income are eligible. (Employees of
banks, family pensioners, Malaysian
(ADV.51/2000-01 dt.10.07.2000) pensioners are not eligible).
ii. For salaried class/pensioners, the loan
Joint appraisal - Fast Track System amount shall not exceed 5 times of
monthly gross salary of applicant subject
Fast track system facilitates faster credit to a maximum of Rs.50,000. Income of
decisions by way of joint appraisal for all the spouse and other income can be
advances of Rs.5 crores and above. The included. For professionals and others,
process of joint appraisal includes the the maximum loan amount is Rs.50,000,
following: to be fixed based on the repaying capac-
ity of the individual.
i. assessment of the needs of the borrower
by a team consisting of Branch Manager iii. Minimum margin is 20% of the purchase
and official in charge of credit at price of the article.
Regional office along with the borrower. iv. Rate of interest is PLR+2% on fixed rate
(In respect of Chennai Region, the desk basis as prevailing on the date of
sanction.

2
Volume 13 Issue 2 July - September 2000

v. Repayable in 36 Equated Monthly Instal- Educational Loan Scheme - Modification in

ments (EMI). certain norms
vi. A front end service charge of Rs.250 The following norms of our Bank's
shall be collected. There will not be any Educational Loan Scheme for limits above
other service charge. Rs.25,000 are modified w.e.f. 5.7.2000.
For discretionary powers to identified i. The development fees collected by
focus branches and other branches, articles colleges, as permitted by AICTE, may be
eligible, security, documentation, EMI chart, included in the eligible amount within the
Application Form etc., the circular may be overall ceiling of Rs.2.00 lakhs
referred to.
ii. Additional security by way of EM of
(ADV.53/2000-01 dt.12.07.2000) immovable property/any other collateral
security need not be insisted provided the
Indian Bank Vehicle Loan Scheme student is able to offer the guarantee of
parent/guardian and a respectable third person.
The vehicle loan scheme, hitherto part of
the consumer loan scheme has been de-linked Wherever it is possible to obtain property
and an independent Vehicle Loan Scheme has as additional security, the same is to be taken.
been launched w.e.f. 14.07.2000. Some of the (ADV.55/2000-01 dt.12.07.2000)
salient features of the scheme are:
i. Professionals, Businessmen, Self- Credit Information System - Revision in the
employed, Salaried Class etc., are eligi- time schedule for submission of registers
ble for purchase of new or second hand
Henceforth, branches should submit CIS
two/four wheelers. (Pensioners and Bank
registers to EDPs within 7 days from the
employees are not eligible).
relevant date on which Register is due and
ii. The loan amount shall not exceed 20 EDPs should process the data and send the tape
times of monthly gross salary of appli- to HO:CPPD within 15 days from the relevant
cant subject to a maximum of Rs.50,000 date.
for 2 wheelers and Rs.5,00,000 for 4
(ADV.57/2000-01 dt.14.07.2000)
wheelers.
iii. Minimum margin is 10% for new Fraud by deposit of fake title deeds of
vehicles and 40% for second-hand property
vehicles.
RBI has stated that some unscrupulous
iv. Rate of interest is PLR+2% on fixed rate persons have been defrauding banks by arrang-
basis as prevailing on the date of ing fake title deeds and other property
sanction. documents as collateral security. Photocopies
v. Repayable in 60 Equated Monthly Instal- of sale deeds are dipped in water mixed with
ments (EMI). cow dung and then dried up to make them
appear as old documents. Branches are advised
vi. A front end service charge of Rs.250 per to be extra cautious while accepting sale deeds
Rs.1 lakh or part thereof shall be and other documents of properties as collateral
collected. There will not be any other securities and scrupulously follow the laid
service charge. down procedures as enumerated in the Conven-
For discretionary powers to identified tional Advances Manual. In addition, wherever
focus branches and other branches, security, third party's properties are accepted as collat-
documentation, EMI chart, response time, eral security, they should be insisted to open
application form and other features/guidelines, account with the branch. Branches should
the circular may be referred to. correspond with the owners through registered
post to confirm the proof of residence and their
(ADV.54/2000-01 dt.12.7.2000) willingness to offer the property as collateral
security.
(ADV.58/2000-01 dt.18.07.2000)

3
Volume 13 Issue 2 July - September 2000

Indian Bank Kisan Bike (IBKB) Scheme or Central Govt, for which the period of study
is not exceeding 5 years. Part time/full time
A new loan product called Indian Bank
computer courses in institutes approved by
Kisan Bike Scheme exclusively for farmers for
Government of India, Dept of Telecommunica-
purchase of two wheelers has been launched
tions, the duration of which shall be minimum
w.e.f. 15.8.2000. Some of the salient features
12 months and maximum 48 months.
of the scheme are:
Studies abroad :
Eligibility:
Any Graduate/Post Graduate course with
Farmers owning and cultivating
good employment prospects for which the
minimum of 5 acres of irrigated land. (Prefer-
period of study should not exceed 5 years.
ence may be given to IBKC holders).
Amount of Loan:
Loan amount:
Maximum of
85% of on-road cost for new vehicles
and 60% of value in case of second hand i. Rs.3.50 lakhs for studies in India
vehicle (valued by reputed automobile ii. Rs.10 lakhs for studies abroad
engineers/valuer acceptable to bank) subject to iii. Rs.1lakh for computer courses
a maximum of Rs.50,000.
The loan amount includes tuition fees,
Interest: exam fees, development fees, hostel fees, cost
At PLR with half yearly rests on fixed of books and instruments less
rate basis prevailing on the date of sanction. scholarships/grants etc., if any. For studies
abroad, one way economy class airfare may
Processing Charges:
also be included.
One time processing fee of 0.5% of the
total cost of the vehicle. Margin:
Repayment: Upto Rs.25,000 Nil
Repayable in 5 to 7 years; half yearly /
Above Rs.25,000 upto Rs.2 lakhs 10%
annual instalment depending on the crop
cultivated. Above Rs.2 lakhs upto Rs.5 lakhs 15%
Security: Above Rs.5 lakhs 25%
Hypothecation of the vehicle to bank. For
loan amount exceeding Rs.25000, third party Rate of Interest:
guarantee or mortgage of properties. Upto Rs.2 lakhs 12%
For other details such as documentation, Above Rs.2 lakhs upto Rs.3.5 lakhs PLR+1%
terms and conditions, sanctioning authority,
application form etc., the circular may be Above Rs.3.5 lakhs PLR+1.5%
referred.
Recovery of interest:
(ADV.60/2000-01 dt.25.07.2000)
Interest should be debited to the loan
account every quarter and recovered as and
Modified Educational Loan Scheme of our when charged.
Bank
Repayment of principal: (Maximum instalments)
Our Bank's Educational Loan Scheme
has been modified w.e.f. 24.07.2000. The Upto Rs.1 lakh 42 monthly instalments
salient features of the modified scheme are as Above Rs.1 lakh upto 60 monthly instalments
follows: Rs.5 lakhs
Above Rs.5 lakhs 96 monthly instalments
Eligibility:
Meritorious students having good earlier Repayment to commence 6 months after
academic record with marks 60% and above in the publication of final year's exam results or
the last preceding public examination (55% in immediately on getting a job whichever is
case of SC/STs). earlier.
Course of study: Branches should submit a quarterly state-
Studies in India - All full time profes- ment to their Regional Offices on the balance
sional courses recognised by outstanding and overdue position of the educa-
university/UGC/AICTE/ Medical Council/State tional loans within 10 days from the

4
Volume 13 Issue 2 July - September 2000

completion of the quarter to which it relates in iv. Mortgage of land for loans exceeding
the format enclosed to the circular as annexure. Rs.50,000
ROs shall submit a consolidated statement to
HO:DCAWS. v. Inter-se agreement - F-165 signed by all
the members
For other details such as deferment of
recovery of interest, Prime/additional security, vi. Agreement of Guarantee - D-57 signed
sanctioning authority, staff related proposals, by the authorised representatives
other terms and conditions etc.., the circular
may be referred. 3. Group lending (SHGs):
(ADV.61/2000-01 dt.24.07.2000) i. Resolution from all the SHG members
authorising their representatives to
borrow
Jewel Loan - increase in advance rate
ii. Inter-se agreement - F-165 signed by all
With immediate effect, the advance rate the members
against 22 ct. gold ornaments has been iii. Loan agreement - D-102 (Revised)
enhanced to Rs.275 per gram. signed by the authorised representatives
It has been decided to monitor the iv. Agreement for back end subsidy - D-107
performance under jewel loan on a fortnightly signed by the authorised representatives
basis. Hence, branches shall submit a
fortnightly flash report on jewel loans as on v. Mortgage of land for loans exceeding
2nd and last Friday to their Regional Offices as Rs.3 lakhs
per the format enclosed to the circular. ROs
shall submit a consolidated statement to Documents should be obtained separately
HO:AGFD before the succeeding Wednesday for each facility. Acknowledgement of debt -
of the fortnight under report. D-11 should be signed by the authorised repre-
sentatives.
(ADV.62/2000-01 dt.25.07.2000)
The format of the revised/new documents
are enclosed to the circular. The Inter-se Agree-
Documentation procedure for SGSY Loans ment F 165 and Term Loan Agreement D 102
(Revised) will supersede the documents
The existing inter-se agreement and term mentioned in the circular Adv.154/96-97 dated
loan agreement for advances under SGSY 3.3.97 in respect of SHG direct bank lending
group lending have been modified (F-165 and schemes.
D-102 Revised). A new agreement for back
end subsidy (D-107) has been introduced. (ADV.63/2000-01 dt.27.07.2000)
Branches are advised to obtain documents as
under with regard to SGSY loans:
Recovery in decreed accounts - Vacation of
1. Individuals: pending stay in DRT proceedings
i. Existing document according to activity - Hon'ble Supreme Court of India, in Sita
D-68 / D-101 Ram Singhania Vs Bank of Tokyo, Mitsubishi
ii. In case of loans for training, F-63 along- and others has held that High Courts should not
with DPN grant stay of DRT proceedings as a matter of
routine. Branches are advised to bring this
iii. Agreement for back end subsidy - D-107 decision to the knowledge of Panel advocates
for getting the stays vacated in DRT cases
iv. Mortgage of land for loans exceeding wherever stays are granted.
Rs.50,000
(ADV.64/2000-01 dt.27.07.2000)
2. A few individuals in a group:
i. Existing document according to activity - Writing off of bad debts/frauds and forgeries
D-68 / D-101 - revised procedure for claiming
ii. In case of loans for training, F-63 along- reimbursement
with DPN The procedure for claiming reimburse-
iii. Agreement for back end subsidy - D-107 ment by branches in respect of writing off of

5
Volume 13 Issue 2 July - September 2000

bad debts/frauds and forgeries has been Separate set of guidelines have been given for
modified w.e.f. 1.9.2000. Henceforth, branches recovery of NPAs upto Rs.5 crores and over
should submit the claim forms as under: Rs.5 crores. For details of the guidelines/
procedure, coverage, settlement formula
i. For sanctions made by Regional Heads - (amount and cut off date), payment, sanction-
To their Regional Offices ing authority, notice to be given to eligible
ii. For sanctions made by AGMs/CMs of borrowers, reporting by branches/ROs the
scale V/IV branches - To their Regional circular may be referred to.
Offices alongwith a copy of the relevant (ADV.69/2000-01 dt.18.08.2000)
note sheets
iii. For sanctions made by HO - To the Loan Policy 2000-2001
concerned department at HO
The loan policy 2000-2001 envisages
In respect of (i) and (ii) above, Regional 'qualitative expansion in credit with profit' and
offices shall send credit advices to branches enumerates strategies for branches/ROs to
and claim reimbursement from HO:Accounts improve lending, monitoring of standard assets
department on a fortnightly basis. and focus on recovery of NPA. The policy
For (iii) above, the concerned department document also includes the concept of risk
at HO shall forward the claims alongwith copy management in loan administration. The thrust
of note sheet to HO:Accounts Dept who in turn areas for deployment of credit have been
will send the credit advices to the branches outlined. A copy of the loan policy document
concerned. Branches should send the claim has been enclosed to the circular for the
forms to the respective authorities on the day of guidance and implementation by branches.
write off itself without fail. (ADV.70/2000-01 dt.19.08.2000)
The formats in which the claims are to be
submitted by branches/ROs, guidelines for Monitoring of standard assets
filling up of forms etc., are furnished in the
In improving the Profitability of our
circular.
bank, the major constraint is the large volume
(ADV.67/2000-01 dt.16.08.2000) of NPA portfolio which is the highest in the
industry. In order to bring about improvement
Format for Engineer's Valuation Report - in this situation, we have to
Summary i. reduce the existing NPAs through recov-
For the sake of uniformity and to have all ery, compromise settlements or by
relevant particulars of the property offered as upgradation
security to the bank, separate formats for ii. prevent slippage in standard assets
submission of valuation reports by the through effective monitoring and control.
approved engineers for land, building and plant
& machinery have been evolved and enclosed For effective monitoring of standard
to the circular. This report is to be furnished by assets, guidelines have been given in the
the engineer in addition to his report in the Annexure enclosed to the circular. Teams of
usual pattern showing the details of working. officials have to be formed at ROs/branches to
contact the borrowers on an ongoing basis to
(ADV.68/2000-01 dt.18.08.2000) recover the critical amount so that all such
accounts are maintained in standard assets.
Revised guidelines on compromise settle-
(ADV.71/2000-01 dt.04.09.2000)
ment for recovery of dues in NPA accounts
RBI vide its circular dt.27.7.2000 has Crop loans to sugarcane growers under tie
revised the guidelines for recovery of dues in up with sugar mills
NPA accounts providing a simplified non
discretionary and non discriminatory mecha- Consequent to delayering, powers for
nism to be implemented uniformly by all public sanction of loans by Regional Managers and
sector banks. The revised guidelines will cover branch Managers to sugarcane growers under
NPAs relating to all sectors including the small tie up with sugar mills have been modified as
sector. The guidelines will not, however, cover under
cases of wilful default, fraud and malfeasance.

6
Volume 13 Issue 2 July - September 2000

i. Regional Managers are authorised to fix Loans for repairs/renovation upto a

limits to branches handling sugarcane tie up maximum of Rs.5 lakhs will also be sanctioned
loans. at PLR. For other details of the scheme like
discretionary powers, terms and condition,
ii. Branches need not obtain separate ceiling EMI, security, documentation, insurance,
limit under tie up if the overall disbursement holiday period, response time etc., please refer
during the year/season is less than Rs. 25 lakhs, to the circular.
provided
(ADV.74/2000-01 dt.15.09.2000)
a. the branch is having sufficient allocation
for STPL in its service area credit plan
duly approved by the Regional Manager. Delegation of credit and credit related admin-
istrative powers to the Regional Heads
b. Recovery percentage of the tie up loans
in the earlier years is 90% and above. Consequent to delayering of Zonal
Offices and direct reporting to Central Office
iii. In respect of branches where the tie up by the Regional Offices, credit powers and
loan is introduced for the first time and in credit related administrative powers have been
branches where the overdue position is more modified. The details of the modifications are
than 10%, the branch should get the limit from dealt in detail in circular.
the ROs.
(ADV.75/2000-01 dt.18.09.2000)
(ADV.72/2000-01 dt.05.04.2000)
Recovery of quarterly interest
Home Loan Scheme for individuals
Allowing excess in an account beyond
The existing housing finance scheme has the limit/DL for periods exceeding 15 days due
been revised and renamed as ‘Home Loan to charging of interest is an irregularity and the
Scheme to individuals.' Some of the salient borrower should not be allowed this automatic
features of the revised scheme are given below: excess. Branches should report non recovery of
1. Purpose: interest
For purchase/construction of new house, i. to the Regional Offices for advances
flat (including additional construction) or above Rs.5 lakhs and upto Rs.1 crore
purchase of existing house/flat (second hand)
ii. to HO for advances above Rs.1 crore
2. Eligibility: mentioning therein the reasons for non
Applicable only for individuals (salaried recovery of interest and the probable date
class, business men, professionals and self- of recovery. The report should reach by
employed) who have put in a minimum period 20th of the succeeding month of the
of 3 years service/experience. quarter.
3. Amount: (ADV.79/2000-01 dt.28.09.2000)
30 times of gross monthly income or
Rs.25 lakhs whichever is lower. Loan to salaried class customers - Evaluation
4. Margin: study
20% on the total cost
In view of the evaluation process of the
5. Repayment: above scheme being undertaken
Maximum of 20 years including holiday
i. no further sanction will be done by
period
Regional Office/Branch
6. Charges:
ii. RO/branch shall be allowed to sanction
Processing fee of 0.5% of the loan
further loans on specific authorisation by
amount alongwith application form (non
HO.
refundable). On sanction of loan, administra-
tive fee of 0.50%. (ADV.80/2000-01 dt.28.09.2000)
7. Interest:
At PLR for loans upto Rs. 10 lakhs. For
loans above Rs.10 lakhs, PLR + 1%

7
Volume 13 Issue 2 July - September 2000

PERSONNEL Branches merged Merged with Region / w.e.f

Tiruchirapalli Town Rock Fort (T 101) Trichy
7th Bipartite settlement (T026) 14.08.2000
Varaganeri (T 102) Tiruchirapalli Market Trichy
Branches/offices are permitted to pay the (T 100) 14.08.2000
revised salary and allowances to workmen Main Bazaar (U 023) Uthagamandalam Coimbatore
employees with effect from 01.07.2000 as per (Ooty) (U 019) 14.08.2000
the 7th Bipartite Settlement. The salient V B Street (K 138) Kaveripatnam (K031) Dharmapuri
features of the settlement and clarifications 14.08.2000
issued by IBA are set out in the annexure Gem Stone Industrial Jaipur (J 003) MP-Rajasthan
enclosed to the circular. Park (G 055) 16.08.2000
(PRNL.17/2000-01 dt.15.07.2000) Thiruvatteeswaranpet Triplicane (T 055) Chennai
(T 066) 21.08.2000
G.A Road (W 012) Washermanpet Chennai
Salary Revision for officer employees (W009) 21.08.2000
SAFB, Chennai (S T Nagar (T 014) Chennai
Branches/offices are permitted to pay to 133) 21.08.2000
officer employees, effective from 1.7.2000 Veerapuram (V 081) Avadi ( A 079) Chennai
onwards, an adhoc amount approximately equal 21.08.2000
to the increase in the emoluments on the basis Kasukkadai (V 0 74) Virudhunagar Tirunelveli
of month to month calculations of old and (V 025) 21.08.2000
revised emoluments to the debit of P & L City Bazaar (A 102) Aruppukottai Tirunelveli
(A 030) 21.08.2000
account till formalities for amending the Indian
Focal Point Branch (F SSI, Ludhiana Chandigarh
Bank (Officers') Service Regulations 1979 are 005) (S 141) 28.08.2000
completed. For other details the circular may be
referred. (PRNL.24/2000-01 dt.14.8.2000
29/2000-01 dt.21.8.2000
(PRNL.18/2000-01 dt.15.07.2000) 32/2000-01 dt.2.9.2000)

Additional Sick Leave to officers - Commuta- Conveyance loan to award staff members
tion of half pay leave to full pay leave
Consequent upon revision of pay scales
W.e.f. 29.6.99, it has been decided to under 7th bipartite settlement, the eligibility
permit all eligible officers to commute the criterion relating to stipulation of PAY for
additional sick leave on full pay and grant of Conveyance Loan to Award Staff
allowances. However, the past cases will not be stands revised to Rs.3910 per month.
reopened.
(PRNL.26/2000-01 dt.17.08.2000)
(PRNL.20/2000-01 dt.26.07.2000)
Payment of Deputation allowance to Award
Rationalisation of branches Staff members
As part of the restructuring plan, the The rates of deputation allowance
following branches have been merged. payable w.e.f. 1.7.2000 to Award Staff
members are revised as under:
Branches merged Merged with Region / w.e.f
NRI Branch, Jalandhar Jalandhar (J012) Chandigarh i. 4% of Basic Pay - maximum Rs.250
(N102) 05.08.2000 p.m. to those deputed to BSRB
NRI Branch, Delhi Overseas Branch, Delhi ii. 4% of Basic Pay - maximum Rs.250 p.m.
(N091) New Delhi (O015) 07.08.2000 to those on deputation to RRBs, DIC at the
South Car Street Sankarankoil (S008) Tirunelveli same station. If such deputation is at an outsta-
(S101) 11.08.2000 tion, at 7.75% of Basic Pay - maximum Rs.500
Railway Feeder Road Palani (P014) Madurai p.m.
(P126) 11.08.2000
Nagal Nagar (N075) Nehruji Nagar Madurai (PRNL.30/2000-01 dt.02.09.2000)
(Dindigul) (D038) 11.08.2000

8
Volume 13 Issue 2 July - September 2000

Nomenclature of Zonal Inspectorates annexure meticulously and offer courteous &

efficient service to LIC of India.
Consequent to delayering of Zonal
Offices, the Zonal Inspectorates have been (CRA.10/2000-01 dt.21.07.2000)
renamed as Inspection Centres. The regions
covered by each inspection centre are furnished Amendments to Manual of Instructions -
below: Ancillary Services
Inspection
Centres
Regions covered A compendium of the amendments made
to the Manual of Instructions VIII - Ancillary
Calcutta Calcutta , Bhubaneshwar, Guwahati & Services for the period from 1.4.99 to
Patna
31.3.2000 (other than those relating to Govern-
Chennai Bangalore, Chennai, Hubli, Vellore, ment Transactions) are given in the Annexure
Kanchipuram & Thiruvannamalai.. to the circular. Branches are advised to note the
Coimbatore Coimbatore , Dharmapuri, Salem, amendments in the manual.
Ernakulam & Thiruvananthapuram. (CRA.11/2000-01 dt.27.7.2000)
Delhi Delhi , Chandigarh, Lucknow and MP
& Rajastan. Immediate Credit of Outstation Cheques
Hyderabad Hyderabad, Chittoor, Vijayawada & (ICOOC) and local cheques
Vishakpatnam.
The present maximum limit of Rs.5000
Mumbai Mumbai , Ahmedabad & Pune. in respect of ICOOC and immediate credit of
Thanjavur Pondicherry , Cuddalore,
local cheques has been enhanced to Rs.7500
Kumbakonam, Madurai, Thanjavur, with immediate effect. The other terms and
Tirunelveli and Trichy conditions enumerated in circulars
GENL.22/92-93 dt.28.7.92 and CRA.30/92-93
(PRNL.34/2000-01 dt.14.09.2000) dt.23.3.93 remain unchanged.
(CRA.13/2000-01 dt.10.8.2000)
Review of categorisation of branches
In terms of Government guidelines, Asset Liability Management System (ALM) -
categorisation of branches as on 31.3.2000 has Monthly statement of structural liquidity
been reviewed and the names of branches To strengthen the ALM information
falling under different categories (including system at HO, the format of monthly statement
specialised branches) are furnished in the obtained from branches has been modified. The
annexures enclosed to the circular. revised statement of structural liability should
(PRNL.35/2000-01 dt.19.9.2000) be submitted by branches as on the last report-
ing Friday of every month starting from
25.8.2000 to their Regional Offices within 5
CRA days from the date of statement. The EDPs
should consolidate and send the same to
Banking operations of LIC of India with our HO:Accounts within 10 days from date of the
branches statement. Detailed guidelines for preparing the
statement, worksheets and the format of the
W.e.f. from 01.08.2000, the terms and revised statement are enclosed as Annexures to
conditions governing the banking operations of the circular.
LIC of India with our branches have been
revised. A memorandum of understanding (CRA.14/2000-01 dt.16.8.2000)
(MOU) has been signed with them in this
regard, the details of which are furnished in the
annexure to the circular. Accordingly, branches FX
must get prior sanction for cheque BP limit
from their Regional Offices who in turn should Interest rates on NRE / NR-NR-RDS / FCNR(B)
consolidate the cheque BP facility requirements Deposits
of the branches where LIC is having their The rates of interest for the above depos-
accounts and take up with HO:Credit Division its stand revised with effect from 16.8.2000 as
for their sanction. Branches are advised to under:
follow the instructions contained in the

9
Volume 13 Issue 2 July - September 2000

NR NR RDS FCNR (B) USD GBP DM YEN EURO

6 months to less than 1 year 9.00 1 year and above
6.75 5.80 4.00 0.25 4.00
1 year to less than 2 years 10.50 but less than 2 years
2 years to less than 3 years 10.50 2 years and above
6.75 6.00 - 0.25 4.00
but less than 3 years
3 years only 10.50
3 years 7.00 6.20 - 0.50 4.25
Preferential Rates:
1. Rs.15 lakhs and above upto Rs.2 crores - 0.50% (FX.6/2000-01 dt.16.09.2000)
over card rate.
2. For over Rs.2 crores - Reference to be made to
HO:ID GENERAL
NRE Motivation - A Power drive for growth and
6 months to less than 1 year 8.00 success
1 year to less than 2 years 9.25
Employee motivation and job enrichment
2 years to less than 3 years 9.75 are two management techniques to improve
3 years and above 10.25 human behaviour and attitude towards work
Preferential Rates: with a view to utilise the available human
Rs.15 lakhs and over - 0.25% over card rate resources more efficiently. The performance of
FCNR (B) USD GBP DM YEN EURO an employee depends on his ability to work and
his willingness to work. It must always be
1 year and above remembered that an employee is a bundle of
6.75 5.80 3.50 0.25 3.50
but less than 2 years untapped energy and motivation is the key to
2 years and above tap the full potential of the human resources for
6.75 6.00 - 0.25 3.50
but less than 3 years the progress of the organisation and the nation
3 years 6.75 6.20 - 0.50 3.75 as well.
(GENL.16/2000-01 dt.03.09.2000)
(FX.5/2000-01 dt.16.08.2000)
Incorporating protective clause/Disclaimer in
Interest rates on NR-NR-RDS / FCNR(B) E-mail
Deposits
Branches/administrative offices provided
The rates of interest for the above depos- with E-mail facility should include a mandatory
its stand revised with effect from 18.9.2000 as protective clause/disclaimer as furnished in the
under: circular in all their outward E-mail messages.
NR NR RDS (GENL.18/2000-01 dt.18.07.2000)
6 months to less than 1 year 9.00
1 year to less than 2 years 10.50
Sundries Receivable and Sundry Deposit
2 years to less than 3 years 10.50 Accounts
3 years only 11.00
Branches/offices should monitor entries
Preferential Rates:
1. Rs.15 lakhs and above upto Rs.2 crores (over card
in the above accounts regularly and take all
rate)
efforts to reverse them at the earliest as this is
For 6 months and less than 3 years - 0.50% a fraud prone area. The Branch Manager/Asst.
For 3 years - 0.25% Branch Manager is responsible for proper
2. For over Rs.2 crores - Reference to be made to follow up of entries in Nominal accounts. For
HO:ID the guidance of branches, the detailed
instructions/procedure communicated already
through various circulars regarding Sundries
Receivable and Sundry Deposit account are
furnished in the circular.
(GENL.19/2000-01 dt.19.07.2000)

10
Volume 13 Issue 2 July - September 2000

Penal interest on delayed remittances and report in duplicate. The report will be sent to
excess/double reimbursements in respect of the branches in duplicate. The branch has to
Government Accounts furnish the reply on the right hand side in the
RBI, with a view to curtail the delay in same report and return one copy to its Regional
the remittance of revenue collected by the Office retaining the other for their files.
branches to Government, has revised the rates (GENL.24/2000-01 dt.08.08.2000)
of penal interest for the delayed remittances.
Nodal/Focal Point branches should pay the
penal interest to Govt immediately after verify- Reporting of Frauds by branches/Regional
ing the correctness of the particulars. The Offices
collecting branches, who made the remittance The format in which branches/ROs
with delay, should in turn send the penal inter- should report the actual/suspected frauds to
est to the respective Nodal/FP branch immedi- HO:Vigilance Dept has been modified and
ately. Staff accountability will be fixed by the enclosed as Annexure to the circular.
Regional Office concerned and the penal inter- Henceforth, branches/ROs should send their
est may be recovered from the officer responsi- report in the revised format only.
ble for the lapse. Details regarding the revised
penal interest are furnished in the circular. (GENL.34/2000-01 dt.13.09.2000)

(GENL.21/2000-01 dt.24.07.2000)
Our Bank's Home page on the Internet
Concurrent audit of branches
In order to increase the viewership of our
A comprehensive Manual of Instructions Bank's web site at www.indian-bank.com on
for the conduct of Concurrent Audit at the Internet, the following measures have been
branches has been brought out by HO:Inspec- introduced:
tion Dept. On receipt of the Manual, branches i. Inclusion of our web site address in our
should enter the same in the Branch Document letterheads (preferably at the bottom)
Register and keep in safe custody. Whenever
the branch is under concurrent audit, the ii. Giving the web site address in our visit-
manual is to be handed over to the concurrent ing cards, greeting cards, invitations, etc.
auditor under acknowledgement and received iii. Inclusion of the web site address in all
back on the expiry of their assignment/transfer. our correspondence, advices, pass books,
The reporting formats for the concurrent audit deposit receipts, etc., to customers.
have also been revised and two set of forms iv. Display of web site address permanently
have been introduced. One to be used for in the notice board at branches/offices
quarter ending months namely March, June,
September and December and the other for (GENL.36/2000-01 dt.19.09.2000)
remaining months. The branch will get the

11
 Volume 13 Issue 3 October - December 2000
Recollect
DEPOSITS to the bank from the respective Government
Departments certifying that the concerned dept
TDS from interest paid on term deposits / body has been permitted to open SB accounts.
The list of organisations/agencies for which the
Various circulars have been issued time prohibition for opening SB accounts will not
and again regarding Tax to be deducted at apply is furnished in the circular.
source from interest paid on term deposits.
Branches should familiarise themselves with (DEP.23/2000-01 dt.08.11.2000)
the provisions communicated through these
circulars and comply with the instructions. In
respect of RIP deposits, if the tax is deducted Opening of Current Accounts
from the deposit account, the maturity value of Branches can now open current account
RIP will stand reduced by the amount of tax for specific purposes like collection account for
and interest on such tax. To avoid such loss to customers having credit facilities with other
the customers, branches should convince them banks without insisting on No Objection
for recovery of tax from the running SB/current Certificate from other banks. However, other
account, so that the customer will have the instructions such as making enquiries, getting
benefit of getting the assured maturity value. introduction and confidential opinion etc. for
Branches should affix a rubber stamp reading opening of current accounts should be meticu-
“Subject to deduction of TDS and consequent
lously followed. A declaration from the
interest on TDS, as per rules” in all RIP receipts
prospective customers as to the details of credit
and also in the opening form, before opening facilities enjoyed by them with other banks
the account to avoid any dispute in future. along with the purpose of opening such account
Examples showing the exact method of should be obtained. In case any credit facilities
provision/calculation of interest on RIP are enjoyed with other banks, the fact of
accounts involving TDS are given in the annex- opening of the account should be informed to
ure to the circular. the financing bank to enable them to take
(DEP.19/2000-01 dt.09.10.2000) suitable precautionary measures.
(DEP.24/2000-01 dt.24.11.2000)
Abolition of Sec.54EB of IT Act, 1961
Section 54EB of the Income Tax Act Activising inoperative accounts
1961, which has specified that the deposits It has been decided to improve the share
placed for a period of not less than 7 years with of low cost deposits to at least 35% to the total
any of the nationalised banks shall be treated as deposits by the end of March 2001. Activising
long term specified assets to claim exemption the inoperative accounts is one of the strategies
from Capital Gains, has been abolished by the to improve low cost deposits. Branch Managers
Government of India with effect from should take necessary steps to activise the
01.04.2000. Hence branches are advised not to desirable inoperative accounts by personally
accept deposits under Sec.54EB of IT Act 1961 contacting the account holders. Such contacts
effective from 1.10.2000. However, the Capital are of great help in winning over lost business.
Gains Scheme 1988 continues to be operative
and branches are advised to accept deposits (DEP.27/2000-01 dt.10.12.2000)
under the scheme.
(DEP.21/2000-01 dt.13.10.2000) Interest rates on Domestic Term Deposits
The rates of interest for Domestic Term
Prohibition against opening of Savings Bank Deposits stand revised as below w.e.f.
accounts in the name of certain 27.12.2000
bodies/organisations
Duration Int. Rate % p.a
On a review, RBI has decided to allow Below Rs. 15 lakhs
Domestic Term Deposits
banks to open Savings Bank accounts in the Rs.15 to less than
/ Capital Gains Scheme
names of Government Departments / Bodies / lakhs Rs. 1 crore
agencies in respect of grants / subsidies 15 days to 45 days 5.00 5.50
released for implementation of various 46 days to 90 days 6.75 7.25
programmes / schemes sponsored by Central 91 days to less than 1 year 8.00 8.50
Government on production of an authorisation 1 Year only 9.25 9.75

1
Volume 13 Issue 3 October - December 2000

Over 1 year to less than 2 years 9.25 the circular for which specific powers have
2 years to less than 3 years 9.50 been delegated. For other details such as calcu-
3 years and above 10.00 lation of DP, application form, branch appraisal
memorandum, etc., please refer circular.
(DEP.28/2000-01 dt.22.12.2000)
(ADV.85/2000-01 dt.11.10.2000)

ADVANCES
Home Loan scheme for individuals
Delegation of powers relating to legal matters
The list of 50 branches identified as
Consequent to delayering of zonal focus branches for extending loans under
offices, modifications have been made in the Home Loan Scheme for individuals is annexed
delegation of powers to various authorities to the circular. The repayment period has been
relating to legal matters. The modified delega- modified as 15 years instead of 20 years.
tion of powers is enclosed as annexure to the Though the Managers of non focus branches
circular. Branches should replace the existing
pages L1 to L7 and Index in the Booklet on have been vested with discretionary powers,
Credit and Administrative Powers (2000 they have to get prior approval from their
edition) with the annexure. Regional Head.
(ADV.82/2000-01 dt.4.10.2000) (ADV.86/2000-01 dt.12.10.2000)

Launching of Trade Finance Loan for Maintenance of Tractors under tie

up with Sugar Mills
New schemes have been evolved for
meeting the credit needs of trade sector for A new loan scheme for maintenance of
Working Capital requirements upto a limit of tractors under tie up with sugar mills has been
Rs.50 lakhs and Term loan of Rs.5 lakhs for launched. Some of the salient features of the
scheme are:
meeting infrastructure requirements.
Purpose: To meet the maintenance expenses
The salient features of the schemes are on tractors
1. Breaking the methodology of assessment Eligibility: Those who own tractor and regis-
on consideration of quantum as tered with sugar mills for transporting cane to
a. advances upto Rs.10 lakhs the mills. They should not have any overdues
with us or with any other banks.
b. advances above Rs.10 lakhs and upto
Rs.50 lakhs Margin: 15% of the project cost
2. While advances upto Rs.10 lakhs will be Loan amount: Not exceeding Rs.25000
considered as secured OD, the quantum above Interest: PLR
Rs.10 lakhs and upto Rs.50 lakhs will be as
Open Cash Credit. Repayment: One year
3. Apart from Primary Security of Stocks For other details like security, documen-
and Book Debts, the advance will be covered tation, implementing branches, etc., please refer
by collaterals such as immovable property, circular
NSC, LIC Policy, Bonds etc., upto 100-125% (ADV.89/2000-01 dt.13.10.2000)
4. Assessment of the quantum will be deter-
Fixing accountability for inspectors of
mined at 20% of projected gross turnover.
branches, internal auditors
5. Drawing Power will be determined with
In terms of the recommendations of the
NIL margin for advances upto Rs.10 lakhs and Working Group on Internal Control and
with 15% Margin for over Rs. 10 lakhs and Audit/Inspection system in Banks (Jilani
upto Rs.50 lakhs. Committee) that banks should have a system of
fixing accountability on inspectors/auditors for
Initially advances under this scheme will their failure to detect and report serious irregu-
be made only by focus branches as identified in larities, our Bank has decided to implement

2
Volume 13 Issue 3 October - December 2000

certain guidelines which are given in the circu- the banking system), fix separate sub limits,
lar. The guidelines cover broad areas and are within the overall limits, specifically for
illustrative in nature. These guidelines are meeting payment obligations in respect of
supplementary to the acts of misconduct purchases from SSIs either on cash basis or on
defined in the Indian Bank Officer Employees' bill basis.
(Conduct) Regulations, 1976 as amended from
time to time. 2. The size of such sub limits may be
(ADV.93/2000-01 dt.25.10.2000) decided taking into account the projected
purchases by the corporate borrowers from the
Interest rate chart for various loans and SSIs during a year in relation to their total
advances purchases and other relevant factors.
Detailed charts of current interest rates 3. Further, with a view to ensuring the
on loans and advances (Domestic), export availability of adequate balance in the account
credit and staff loans have been enclosed as for meeting the payment obligation to SSI
Annexure I, II and III respectively to the circu- units, Banks may ensure that sale
lar. Annexure IV gives the PLR/PTLR of the proceeds/other receipts of the borrower are
bank since its introduction. The guidelines in
credited to this account on a prorata basis.
force and a glossary of interest rate related
terminology are appended to the circular. (ADV.97/2000-01 dt.01.11.2000)
(ADV.94/2000-01 dt.25.10.2000)
Personal Loans - EMI charts
Interest rate surcharge on Import finance A revised EMI chart with rate of interest
Bank finance for the following categories ranging from 6% to 26% at 0.25% slabs (inter-
of export related imports covered under EXIM est compounded quarterly) for periods from 3
policy 1997-2002 are exempted from the levy to 192 months is enclosed to the circular. This
of interest rate surcharge with immediate effect. chart may be used for fixing the EMI for
various personal loan products like vehicle
1. All bonafide imports under Duty Free loan, consumer loan, Home loan etc., where the
Replenishment Certificate (DFRC) Scheme, repayment is on EMI basis. The chart has been
Gem Replenishment Licence and Diamond worked out without considering holiday period.
Import Licence. The interest for the holiday period may be
collected separately as and when debited and
2. All bonafide imports including import of
thereafter recoveries may be made as per the
capital goods by units under Electronic
chart. For example, in case of home loans, if
Hardware Technology Park (EGTP). Software
the repayment period is 15 years with a holiday
Technology Park (STP) and Special Economic
period of 12 months, repayment will be in 168
Zone (SEZ) schemes.
months (180-12 months).
The above are in addition to the catego-
(ADV.99/2000-01 dt.01.11.2000)
ries of advances already conveyed by
HO:CPGD through circular ADV.28/2000-01
dt.30.5.2000. Takeover of Borrowal Accounts - Policy
guidelines
(ADV.95/2000-01 dt.28.10.2000)
It has been decided that take over of
Flow of credit to SSI Sector
borrowal accounts should be made with the
concurrence of ED and above. Take over may
With immediate effect, the following be considered for the following:
measures have to be taken to ensure the avail- i. Borrowers who have left our Bank due to
ability of adequate funds for making timely sudden credit embargo that was introduced
payment by the corporate borrowers to their during the early years.
SSI creditors.
ii. Borrowers who had left our Bank due to
1. Banks/Branches may, while sanctioning/ adverse publicity/press reports.
reviewing credit limits to their large corporate
borrowers (i.e. borrowers enjoying working The borrowal account should be under
capital limits of Rs.10 crores and above from standard category and there should not have

3
Volume 13 Issue 3 October - December 2000

been unsatisfactory dealing in the account or Ÿ Tyre re-treading activity and coffee
group accounts. However, referring of all curing/ processing have been recognised as
accounts to HO and concurrence of ED will not industrial activities under SSI.
be applicable to the recently launched Trade
Finance Scheme. Regional Heads shall approve Ÿ Any unit which has received
take over of credit facilities under this scheme provisional/permanent registration prior to
subject to the delegation of powers as given in 24.12.99 and has taken concrete steps for
the circular. For other details, please refer implementing the project would continue to
circular. enjoy the SSI status so long as investment in
(ADV.100/2000-01 dt.06.11.2000) plant and machinery does not exceed Rs.300
lakhs.
Interest rate for adhoc limits
The various revisions effected by
On a review, it has been decided that in GOI/RBI in respect of SSI sector have been
respect of adhoc limits tabulated in the circular to facilitate branches to
i. not to charge penal interest for all duly have a clear idea as to what constitutes an SSI
appraised/ sanctioned accounts unit.
ii. the interest rate shall be PLR+4% (ADV.106/2000-01 dt.23.11.2000)
irrespective of the finer rates accorded for the
regular limits. RBI Guidelines on compromise settlements
iii. the competent authorities can extend for recovery of dues in NPA accounts
finer rate for adhoc limits also on merits on a In order to reap maximum recovery
case to case basis, based on credit rating benefit out of RBI scheme for compromise
iv. if adhoc is continued without adjustment settlement policy, branches have been advised
on the stipulated date or the balance exceeded to comply with the instructions as given in the
the limit, penal rate shall be charged on such circular which include the following:
overdue adhoc portion from the date of i. Notices in vernacular languages should
overdue. be sent to all eligible NPA borrowers super-
The above directions are applicable to all scribing the cover as “Bank's offer under RBI's
existing as well as fresh adhoc limits scheme of OTS”
w.e.f.1.11.2000. ii. Wide publicity should be given in the
print media. Exhibition of slides in Cinema
(ADV.101/2000-01 dt.07.11.2000)
Theatres in the locality and display of banners/
posters in the villages and branch premises
Bill Finance - Inland Post Sale Credit should be done to create greater awareness
Facilities amongst NPA borrowers.
It has been decided to discontinue with iii. Borrowers' meeting should be arranged
immediate effect charging of additional interest in the branch in which Regional Head/senior
of 2% on the portion of the Book debt finance officers for RO should participate and counsel
which is in excess of the prescribed norm of the borrowers for settling the dues.
75% of the inland post sale finance to all
borrowal accounts enjoying working capital iv. Regional Heads during their branch visit
limits of Rs.5 crores and above. should meet the NPA borrowers of Rs.1.00
lakh and above. Branch Managers/Staff should
(ADV.102/2000-01 dt.10.11.2000) personally contact all the eligible borrowers.
v. Special task force should be formed with
SSI sector - Modifications announced by officials from RO and door to door campaign
Government/RBI alongwith branch staff should be undertaken.
Ÿ The investment ceiling for Small Scale vi. Recovery teams should be formed at
Service Business Enterprises (SSSBE) has each branch
been enhanced from Rs.5 lakhs to Rs.10 lakhs. vii. Out of court settlement wherever possi-
ble should be explored.
Ÿ The Composite Loan limit has been
increased from Rs.10 lakhs to Rs.25 lakhs.

4
Volume 13 Issue 3 October - December 2000

viii. Participation of Government officials in who have already filed nominations need not
loan settlement camps should be ensured and submit the Nomination forms again.
local MLAs MPs should be invited to partici-
(PRNL.39/2000-01 dt.05.10.2000)
pate in such camps
ix. In branches where there are large Interest on PF and PF loans
prospects for OTS, an officer should be
specially nominated for the purpose. It has been decided by the Trustees of
Indian Bank Staff PF to reduce the rate of inter-
(ADV.107/2000-01 dt.21.11.2000)
est allowed to PF accounts from 12% p.a. to
11% p.a. w.e.f. 01.10.2000. Consequently, the
Compromise settlement in NPA accounts - rate of interest on PF loans and refundable
write off powers withdrawals has been reduced from 13% to
With a view to consider the compromise 12% w.e.f. 01.10.2000.
settlements in small loans, as well as to hasten (PRNL.40/2000-01 dt.05.10.2000)
the process of recovery through compromise,
branches have to consider the proposals where Sabbatical Leave Scheme
even the book balance could not be recovered
due to genuine reasons. For this purpose, Our Board of Directors have approved
Branch Managers are delegated the following introduction of a scheme titled Sabbatical
powers for write off in the NPA accounts with Leave Scheme enabling the desirous
book balance upto 2.00 lakhs. employees/officers to avail leave on loss of pay
for longer period to attend to their personal and
Sanctioning Authority - Power delegated for
Branch Managers of write off
family requirements. All permanent
employees/officers with minimum of 15 years
Scale IV / V branches Rs.1.00 lakh of completed service or forty years of age are
Scale III branches Rs.0.50 lakh eligible. Specialist officers/employees who
Scale II branches Rs.0.25 lakh have executed service bonds and have not
Scale I branches Rs.0.10 lakh completed it, employees/officers serving
abroad under special assignment are not eligi-
The above powers are subject to the write ble. Specialist officers/workmen and highly
off amount not exceeding the provision avail- skilled and qualified employees who have been
able for the account as per the NPA master as sent abroad/given specialised training in the
on 31.3.2000 or 50% of the balance outstand- area of Foreign Exchange, Investment and
ing whichever is less. Information Technology etc., are also not
eligible.
Branch Managers can exercise these
powers in such of the accounts identified as The period of leave is minimum of 3
doubtful/loss accounts as on 31.3.97. These years which can be extended for a period of not
powers will be operative upto 31.03.2001 only. less than 1 year at a time and such extensions
For other details on the points to be observed in together should not exceed 10 years during the
considering write off, the circular may be entire service period of the employee/officer.
referred.
For terms and conditions governing the
(ADV.109/2000-01 dt.01.12.2000) scheme, method of applying, application form,
recall for duty etc., please refer circular.
PERSONNEL (PRNL.41/2000-01 dt.11.10.2000)

PF/Gratuity Nominations - revised simplified Rationalisation of branches

forms The following branches have been
The Nomination forms for PF and Gratu- merged with the branches as mentioned below:
ity have been simplified in accordance with Branches merged Merged with Region / w.e.f
Form 40A of IT rules and a specimen of the Gamparai (G 042) Madugula (M 003) Visakhapatnam
same is enclosed to the circular. Staff members 14.10.2000
who have not submitted nominations for PF NRI Branch, Kootha- Koothanallur (K 046) Kumbakonam
and Gratuity so far are requested to submit the nallur (N 092) 18.10.2000
same in the simplified formats. Staff members SAFB, Hosur Hosur (H 011) Dharmapuri
(S 130) 18.10.2000

5
Volume 13 Issue 3 October - December 2000

Branches merged Merged with Region / w.e.f Reporting Fridays as per Section 42 of RBI
SSI Branch, Ranipet Ranipet Industrial Vellore Act
(S 131) Complex (R 036) 23.10.2000
Pedavalasa (P 097) Sarabhannapalem Visakhapatnam The list of reporting Fridays for the year
(S 072) 28.10.2000 2001 is furnished in the annexure to the circular
SSI Branch, Punalur Kallumkadavu Tiruvananthapuram for the information of branches.
(S 134) (K 086) 28.10.2000
(CRA.26/2000-01 dt.8.12.2000)
(PRNL.43/2000-01 dt.28.10.2000)

Indian Bank Employees' Voluntary Retirement

Scheme 2000
FX
The Board of Directors of our Bank have Interest rates on FCNR(B) deposits
approved the Voluntary Retirement Scheme
(VRS) 2000 for the employees of the Bank. W.e.f.29.12.2000, the rates of interest on
The salient features of the scheme and applica- FCNR(B) deposits stand revised as under:
tion form are enclosed to the circular. The Period USD GBP DM JPY EURO
scheme was opened on 27.11.2000 and closed
1 year and above 6.50 5.80 4.00 0.25 4.00
on 26.12.2000. but less than 2 years
(PRNL.46/2000-01 dt.9.11.2000) 2 years and above 6.40 6.00 – 0.25 4.00
but less than 3 years
Appointment of ED to our Bank 3 years only 6.40 6.00 – 0.50 4.25

Shri.M.B.Nageswara Rao, GM(CIT) has (FX.10/2000-01 dt.27.12.2000)

assumed charge as Executive Director of our
Bank on 13.12.2000.
GENERAL
(PRNL.50/2000-01 dt.13.12.2000)
Procedure to protect the key combination
number in cash/jewel safe
CRA
Some of the branches are provided with
Revised transfer price mechanism safes fitted with number locking system in
The existing multiple transfer pricing addition to normal dual key locking system.
system has been modified into a Dual Transfer The system and procedure for safeguarding the
Pricing System facilitating interbank compari- key combination number used in such
son and also to adjudge the viability of the safes/doors is as follows:
branches. Accordingly, the format of AR-8 has i. The key combination number should be
been revised and enclosed to the circular. A noted down in a paper by the official holding
worked example in the revised AR-8 format is the joint custody of the safe/room keys, signed
also given in the circular for the guidance of by the official jointly with key holding shroff
branches. and the paper should be kept in a cover.
(CRA.19/2000-01 dt.05.10.2000) ii. The cover should be sealed immediately
in the presence of the joint custodians of the
Amendment to Manual of Instruction - Ancil- safe and their signature obtained on the face of
lary Services the cover also.
A compendium of amendments to the iii. The sealed cover should be kept by the
instructions contained in the chapter on branch manager in a cabinet outside the
Government Transactions, Ancillary Services safe/strong room after making an entry in the
Manual for the period from 1.4.98 to 31.3.2000 branch documents register.
has been enclosed to the circular.
iv. In case of need, the cover should be
(CRA.20/2000-01 dt.21.10.2000) opened by the joint custodians of the safe in the
presence of the branch manager.
v. After opening the safe, the key combina-
tion number should be changed and the same

6
Volume 13 Issue 3 October - December 2000

should be kept in a sealed cover as per proce- circular. The measures to be taken at branch
dure explained in (i) to (iv) above. level, Regional Office level and Inspection
Centre level in this regard are also given in the
The above procedure is applicable for circular.
safe doors/grill doors/main doors/other doors
provided with number locking system. (GENL.45/2000-01 dt.24.10.2000)
Branches provided with safes/doors fitted with
number locking system should send a compli- Entries in pass book for credits received in
ance report to their Regional Office for having ECS
taken necessary measures as above in protect- RBI has directed that the bank branches
ing the key combination number under copy to should record the credit details received
HO:Security Dept. through Electronic Clearing Services (ECS) in
the pass books/ statements as “ECS -
(GENL.39/2000-01 dt.3.10.2000) ...........(Company Name)”. Branches are advised
to ensure compliance of the RBI directions and
avoid customer complaints in this regard.
TDS - Surcharge on salary income
(GENL.48/2000-01 dt.01.11.2000)
CBDT has clarified that in the case of tax
deduction at source from salary income, the tax
payable will be increased by a surcharge of Rating of branches
10% if the income is between Rs.60,000 & The existing rating system of branches
Rs.1,50,000 and by a surcharge of 15% if the has been reviewed by the HO:Audit Committee
income is above Rs.1,50,000. Branches are and certain revisions have been made. The
advised to note the above change and comply overall rating chart in existence has not been
with the instructions meticulously. changed and the weightage to various key
(GENL.41/2000-01 dt.11.10.2000) functional areas have been realigned to make
the rating system more objective and respon-
sive to the corporate expectations. The grading
Booklet on Profit Planning
of 'unsatisfactory' has been removed and
To create awareness among the field branches will be graded based on the overall
level staff about profitability and the need for percentage of marks allotted as below:
increasing income and reducing expenditure, a
booklet on profit planning has been brought out 1. 80% and above Very Good
and enclosed to the circular. Various steps 2. 60% and above but below 80% Good
involved in profit budgeting, strategies to be
adopted for improving profitability are dealt 3. 40% and above but below 60% Satisfactory
with in the booklet. Important profitability and 4. Below 40% Poor
productivity indicators and a table giving
details of the key parameters of the bank are The revised rating chart with existing and
also given in the booklet. Branches are advised the revised marks is enclosed as annexure to
to discuss the various strategies for improving the circular which comes into effect from
the profit among all staff members 1.12.2000.
(GENL.43/2000-01 dt.23.10.2000) (GENL.53/2000-01 dt.23.11.2000)

Computer security and controls in Revised system for communication by

TBC/PBC/ALPM branches branches with HO
The various systems and procedures on Consequent to the delayering of Zonal
computer security and controls have been Offices and adoption of HO-RO-Branch struc-
detailed in several circulars issued by Head ture in our bank, the system of communication
Office. The continued indifference on the part by branches with HO has been reviewed and
of branches in adhering to the prescribed revised. The details of revised system are
systems and procedures is a matter of concern. furnished in the circular. Branches are advised
A list of common deficiencies relating to
security aspects observed from the computer
audit reports of the branches is furnished in the

7
Volume 13 Issue 3 October - December 2000

to scrupulously adhere to the norms laid down popularised as a mission by all branches. The
with immediate effect. following strategies are suggested in this
regard.
(GENL.55/2000-01 dt.08.12.2000)
i. Branches should concentrate on existing
All branch circular filing system SB depositors by personalised service
In the light of various developments in ii. Branches should focus attention on
the bank, the file list relating to 'Sub classifica- increasing the number of accounts
tion' of all branch circulars has been reviewed iii. Inoperative accounts should be studied
and revised. The revised list is enclosed as and the desirable/potential depositors should be
annexure to the circular. There is no change to contacted to activise the account
the list relating to 'Main classification'. Heads
of departments/Branch Managers should ensure iv. The quality of customer service should
that be further improved and made more personal-
ised and effective
i. a copy each of the circular is circulated to
all the staff members The circular also contains other measures
and instructions to branches for achieving the
ii. the white copies of the circulars are filed desired target.
in the Main Classification files and the yellow
copies in the Sub Classification files (CMD.1/2000-01 dt.28.10.2000)

iii. the Main classification files are bound at

Leadership qualities
the end of March every year along with the
index of the circulars. A leader is one who determines the
iv. the Sub classification files are bound as identity, purpose and direction of the organisa-
Sub File Circular Digest in every five years tion and successfully influences people
working therein to pursue and achieve the set
(GENL.58/2000-01 dt.18.12.2000) goals. Leaders are pro active and anticipate
possible changes in the environment and reori-
ent the strategies on an ongoing basis. A leader
ED/MD is expected to know himself well and have the
Growth in Savings Bank Deposits skill to understand others and should have the
ability to conceive and communicate a vision
Our Board has desired that the strength for the future. Everyone in our bank should
of the bank in mobilisation of SB deposits make a self introspection of strengths, identify
should be further manifested and Savings Bank weaknesses and endeavour to improve upon to
deposits should be doubled during the current become an effective leader.
half year both in number and outstanding
balance. To achieve this the message ‘Today's (CMD.2/2000-01 dt.06.11.2000)
Savings is for Tomorrow's Prosperity' should be

8
 Volume 13 Issue 4 January - March 2001
Recollect
DEPOSITS amendments to be carried out in the relevant
chapter/para of the Manual of Instructions on
Payment of interest on Term Deposit of a deceased Deposits are given in the annexure to the
depositor circular.
The rule pertaining to payment of interest (DEP.33/2000-01 dated 31.01.2001)
on the deposits of a deceased depositor has been
modified as under: Penalty on foreclosure of Domestic Term Deposits
In the event of death of the depositor The rules relating to payment of interest on
before the date of maturity of the deposit and the foreclosure of domestic term deposits opened on
amount of the deposit is claimed after the date of or after 31.01.2001 have been modified as under:
maturity,
Period within which
Eligible rate of interest
i. interest shall be paid at the contracted rate the deposit is foreclosed
till the date of maturity. Upto 14 days No interest

ii. from the date of maturity to the date of 15 days and above Applicable rate of interest
without penalty
payment, simple interest shall be paid at the
applicable rate operative on the date of maturity, Branches should carry out the amendments
for the period for which the deposit remained in the relevant chapter/ para of the Manual of
with the bank beyond the date of maturity. Instructions - Deposits as given in the circular.
However, in the case of death of the (DEP.34/2000-01 dated 31.01.2001)
depositor after the date of maturity of the
deposit, though interest shall be paid at the Interest Rates on Domestic Term Deposits
contracted rate till the date of maturity, the bank
With effect from 01.04.2001, the rates of
shall pay interest at savings deposit rate operative
interest payable on domestic term deposits have
on the date of maturity, from the date of maturity
been revised as follows:
till the date of payment.
Duration Int. Rate % p.a
Branches are advised to take note of the
above modification and pay interest on the Domestic Term Deposits /
Below Rs. 15 lakhs
deposit of deceased depositors accordingly. The Rs.15 to less than
Capital Gains Scheme
amendments to be carried out in the relevant lakhs Rs. 1 crore
chapter/para of the Manual of Instructions on 15 days to 29 days 5.50 6.00
Deposits are given in the circular. 30 days to 90 days 6.75 7.25
(DEP.31/2000-01 dated 22.01.2001) 91 days to less than 1 year 7.50 8.00
1 Year only 9.00 9.50
Interest Rates on Tiny Deposit Scheme
Over 1 year to less than 2 years 9.00
In order to reduce the cost of funds
2 years to less than 3 years 9.25
mobilised under the scheme, the interest rate
payable on Tiny Deposits is revised with 3 years and above 9.75
immediate effect as under:
(DEP . 39/2000-01 dated 14.03.2001)
1. For accounts that run for the full term 4.5% p.a.
of 3 years ADVANCES
2. Foreclosure of accounts
Revision of fee structure payable for Bank's approved
i. Upto 12 months No interest
engineers
ii. After 12 months but before 24 months 2.0 % p.a.
iii. After 24 months but before 36 months 3.0 % p.a.
The fee payable to approved engineers for
valuing properties viz., land, building or machin-
In case of foreclosure within 12 months, ery has been revised as under:
commission paid to the Tiny Deposit Agent in Fee payable (Rs.)
respect of that account will be recovered from the Fee, where the value
Fee percentage
of property is Minimu Maximu
depositor. The interest will be calculated at the m m
above mentioned rates on the minimum balance Upto and inclusive of 0.15% 200 750
between the 10th and last day of the month. The Rs.5 lakhs

1
Volume 13 Issue 4 January - March 2001

Above Rs.5 lakhs, upto 0.125% 750 1250 These branches should close the respective
and inclusive of loan accounts by debiting Write off Claims
Rs.10.00 lakhs
Account and forward their claim form (as per
Above Rs. 10 lakhs, 0.05% 1250 5000
Upto and inclusive of
Annexure I of Accounts Dept circular ADV.67/
Rs.1 crore 2000-01 dt.16.8.2000) alongwith a copy of Note
Above Rs.1 crore Rs.5000+ 0.025 % 5000 10000 Sheet to their Regional Office. Regional Office,
for every Rs.10 after verification of Claim Form/Note Sheet,
lakhs, subject to a should send its credit advice to the concerned
maximum of
Rs.10000.
branches and claim reimbursement from
HO:Accounts Dept by including the accounts in
The valuation fee shall be as per the above their consolidated claim form (as per Annexure
schedule or 0.5% of the total borrowal limit III of Accounts Dept circular referred above).
(fund + non-fund) whichever is lower. For
Other important guidelines to Branches
detailed guidelines and other conditions, please
and Regional Offices in submission of claims are
refer to the circular.
given in detail in the circular.
(ADV.115/2000-01 dt.2.1.01)
(ADV.120/2000-01 dt.17.1.01)
Coercive steps to be taken in suit filed accounts
Interest Rate Surcharge on Import Finance
wherein the borrowers do not agree to settle as per
revised guidelines on compromise settlement RBI has withdrawn the interest rate
In case of suit filed accounts in the lists surcharge on import finance effective from
prepared as per Annexure 1A and 1B of IRRD 6.1.2001. Accordingly, fresh drawals as well as
circular ADV:69/2000-01 dated 18.08.2000, if outstanding bank credit towards import finance
the borrowers do not agree to make payment as will not be subjected to the interest rate surcharge
per the revised guidelines, branches shall from that date.

i. if decrees have been obtained from courts (ADV.121/2000-01 dt.17.1.01)

or final orders have been obtained from DRTs, as Credit Linked Capital Subsidy Scheme for Technology
the case may be, take immediate steps to sell the Upgradation of Small Scale Industry
mortgaged properties and the hypothecae and
A new scheme in the above name to facili-
ii. if the matter is still pending disposal tate technology upgradation by SSI units in the
before court/DRT, explore the possibility of specified products/sub-sectors by providing 12%
getting the mortgaged properties sold/ hypothe- back-ended capital subsidy for induction of
cae disposed off during the pendency of the proven technologies has been introduced. SIDBI
proceeding. will act as Nodal Agency for sanction and disbur-
Branches should prepare and send separate sal of the capital subsidy.
lists of these cases to the respective Regional The other salient features of the scheme
Offices under copy to HO:Recovery and Legal are enumerated in detail in the circular alongwith
Departments furnishing the details of the assets a list of certain proven technologies approved
against which coercive steps are proposed to be under the scheme as annexure to the circular.
taken. Branches shall report the progress made in
taking steps to sell the mortgaged properties / (ADV.122/2000-01 dt.25.1.01)
hypothecae to the respective Regional Offices on
Verification of Assets purchased out of IB Consumer
weekly basis.
Loan, Computer Loan etc.
(ADV.116/2000-01 dt.5.1.01) After sanction/disbursal of loans under the
Writing off of bad debts/frauds and forgeries - Revised above schemes, the officer-in-charge of the loans
Procedure department should personally inspect the articles
financed and should record the particulars of
Branch Managers in Scale I, II and III inspection in the original invoice. The signature
were delegated powers for writing off of NPA of the borrower should be taken in the invoice for
accounts with book balance upto Rs.2 lakhs vide having taken possession of the articles in good
IRRD circular ADV.109/2000-01 dt.1.12.2000. working condition. Where assets created are
found to have been disposed off or otherwise

2
Volume 13 Issue 4 January - March 2001

misappropriated, the loan should be recalled and incentives (from the date of 2.0
followed up for recovery. Copies of invoice, advance)
stamped receipt and warranty card (after verify-
4. Against undrawn balance - beyond PLR + 4.0
ing with the originals) should be obtained and 90 days
kept alongwith the documents.
5. Against retention money (for PLR + 4.0
(ADV.124/2000-01 dt.7.2.01) supplies portion only) payable
within one year from the date of
Staff Accountability shipment – beyond 90 days.
Consequent to delayering of Zonal Offices, 6. Deferred Credit for period beyond PLR + 4.0
powers have now been delegated to Regional 180 days with or without refinance
Heads for the fixing up of staff accountability from EXIM Bank (from the date of
and to call for explanation from all officers upto advance)
one rank below Regional Heads and close the
matter at his level if the reply is found Branches are advised to charge above rates
satisfactory. not only to fresh advances but also to the existing
In case the Regional Head himself is advances for the remaining period.
responsible for the lapse in his present/earlier (ADV.126/2000-01 dt.7.2.01)
capacity, then such cases have to be referred to
the next authority. If the officer found responsi- Withdrawal against uncleared effects
ble for staff lapses is in a scale equal to or higher It has been decided to allow drawals
than the Regional Head, then Regional Head against uncleared effects upto 50% of credits
should list out the lapses and forward the same to made, without any charges/interest, to eligible
the next authority to enable him to call for the customers for the following purposes:
explanation.
i. Meeting the inward clearing cheques
(ADV.125/200-01 dt.7.2.01)
ii. Transfer transactions like issue of
Revision on interest rates on Overdue Export Bills TT/DD/MT/BPO, margin on LC/guarantee, IBC
W.e.f. 6.1.2001, the rates of interest to be payments etc.
charged for overdue export bills are as under: Before allowing such drawals, branch
should ensure that our clearing account has been
Classification of Overdue Export Bills Revised
credited. All credit sanctioning authorities shall
1. Beyond Normal Transit period in exercise discretionary powers as under:
the case of demand bills or beyond
the Notional Due Date in the case Reference to
of usance bills. Nature of instruments Booklet on Credit &
Admin. Powers
a. Upto first 15 days from the PLR + 1.0
NTP/NDD (within the time Against value paid instruments like Page C-24, Chart I,
allowed to transfer to DD/BPO etc., and Govt. cheques Column III.a
ADOVEXBIR) Against clean/third party cheques Page C-24, Chart I,
Column III.b
b. Beyond 15 days from the PLR + 4.0
NTP/NDD and for ADOVEXBIR Charges at 4 paise percent per day are to
account/ Other Overdue Post be levied (till clear funds are made available in
shipment receivables like Duty bank's account) for drawals against uncleared
Drawback. effects for genuine reasons in the following cases
2. If adjusted out of Rupee Resources PLR + 4.0 + for the entire amount drawn:
2.0
i. Withdrawals above 50%
3. Against incentive receivables from
Government covered by ECGC ii. Cash withdrawals
guarantee for post shipment
advances
iii. Drawals before instruments are sent in
clearing
a. Beyond 90 days till date of
payment PLR + 4.0
b. If party is not eligible for PLR + 4.0 +

3
Volume 13 Issue 4 January - March 2001

For other guidelines such as instruments of 1. Registration of NBFC

sister concerns, documentation etc., please refer 2. Bank Finance to Registered NBFCs
to the circular. 3. NBFCs Not requiring Registration
(ADV.127/2000-01 dt.7.2.01) 4. Bank Finance to Residuary Non-Banking
Companies (RNBCs)
Modified guidelines on charging of penal interest 5. Assessment of Working Capital
It has been decided to bifurcate the irregu- 6. Prohibited Loans
larities into Financial and Non-Financial catego-
For detailed guidelines on the above,
ries for the purpose of levying penal interest.
please refer to the circular.
Accordingly, branches shall charge penal interest
I. at 2% p.a. on the overdue/excess/irregular (ADV.132/2000-01 dt.15.2.01)
portion only in respect of the following Finan- Modifications to the National Equity Fund Scheme
cial Irregularities
SIDBI has effected certain modifications
i. Term Loans/instalments/EMI overdues, to the National Equity Fund scheme. The revised
interest arrears etc. guidelines with regard to eligibility, project cost,
ii. Devolved LCs/Guarantees/Trust Receipts promoters' contribution, extent of soft loan assis-
etc., from the date of becoming overdue tance, debt equity ratio, repayment period,
security, interest rate, service charge etc., are
iii. Excess over limit/drawing limit in case of furnished in detail in the circular.
working capital advances including trade
advances Branches are advised to claim refinance
from the refinance availing centres of SIDBI (as
iv. Non-payment/Non-acceptance of furnished in annexure to the circular) for term
Demand/Usance bills on presentation/due loan along with claiming soft loan assistance
date under NEF and MUN scheme by furnishing
II. at 1% p.a. for the delayed period only, on details of project cost and means of finance and a
the balances, in respect of the follow- copy of the relevant sanction ticket.
ing Non-Financial Irregularities (ADV.134/2000-01 dt.22.2.01)
i. Non-submission of stock statements, book
Bank financing of equities and investments in shares
debt statements, financial statements etc.
on time RBI has advised that the ceiling limit for
advances against equities and investments in
ii. Any other non-financial irregularity like
shares is 5% of the bank's total outstanding
default in borrowing covenants,
domestic credit (excluding interbank lending and
non-creation/non-registration of first
advances outside India) as on 31st March of the
charge etc.
previous year. The various modalities covering
Under genuine circumstances, the such financing by Banks are enumerated in detail
Regional Heads, based on branch recommenda- in the circular. All other existing guidelines
tions, may waive the penal interest on account of remain unchanged. Branches should report the
non-financial irregularities not exceeding two details of such advances on a quarterly basis in
occasions in a financial year. Q11A format to HO:CPGD. The existing Q11
statement stands withdrawn.
The overall ceiling on penal interest for
multiple irregularities of both financial and (ADV.135/2000-01 dt.24.2.01)
non-financial nature shall not exceed 2%.
Educational Loan Scheme of our Bank - Improvement
(ADV.128/2000-01 dt.8.2.01)
1. Multiple loans to one student
Master Circular on Lending to NBFCs Sanctioning authorities at the level of
In order to have all the current instructions functional General Manager at Head Office and
at one place, a Master Circular, incorporating all General Managers in charge of Regions can
the existing guidelines of RBI on lending to consider more than one Educational Loan to the
NBFCs has been issued. It comprises guidelines same student subject to the following conditions:
with regard to

4
Volume 13 Issue 4 January - March 2001

i. The combined limit of the proposed loan Ÿ All farmers who have overdue loans but
and the balance in the existing loan should classified under Standard category.
not exceed Rs.3.5 lakhs for studies in India Ÿ An account classified under Sub Standard
and Rs.10 lakhs for studies abroad. category but subsequently brought atleast to the
ii. The existing loan should be in order in all drawing limit of previous March so as not to
respects attract NPA norms.
iii. The borrower/guarantor should agree to Ÿ NPA accounts where rephasement has
service the interest then and there during been sanctioned provided the borrower adhered
the period of study. to the revised terms for a minimum period of 12
months.
iv. The repayment should commence six Ÿ Borrowers who have closed their loans
months after the completion of the entire under OTS or where part of the interest has been
course or immediately on getting a job or waived or written off.
seven years from the date of original
sanction whichever is earlier (Loans completely written off without borrower's
contribution are not eligible).
2. Computer Courses
Circumstances of Non-Wilful Default
Sanctioning authorities can consider
Ÿ Failure of monsoon.
computer courses with a duration of six to twelve
months also on merits. Ÿ Loss of crop due to reasons like outbreak
of disease/pest attack.
The above modifications come into effect
from 29.1.01. All other existing conditions Ÿ Loss of bread winner / disability due to
governing Educational Loan Scheme remain major accident.
unchanged. Ÿ Unforeseen event / major illness / social
functions happening in the family
(ADV.138/2000-01 dt.27.2.01)
Ÿ Fall in the prices of the produce due to
market fluctuations, economic and financial
Obtention of D-11 and keeping the documents
enforceable policies.
Ÿ Any other valid factors / reasons / circum-
Non renewal of DPNs in time will not
stances which might have made the farmers to
only jeopardise the enforceability of the debt in
default warranting assistance from the bank.
the court of law, but also have the impact on the
profitability of the Bank with the introduction of Forms of Assistance
prudential norms and capital adequacy in the
Ÿ Rephasement / reschedulement of existing
banking sector. The important guidelines issued
loan.
from time to time in this regard are summarised
in the circular. Branches are advised to strictly Ÿ Sanction of additional limits for
follow the instructions and ensure that all the production/investment.
documents are kept alive and legally enforceable.
For other details such as quantum of fresh
Inspectors of branches and concurrent auditors
loan, rephasing of existing loan, interest rate,
should comment upon this vital area in their
margin, repayment, discretionary powers etc.,
reports. Regional Heads visiting the branches
please refer to the circular.
should verify whether the instructions of HO on
obtention of D-11 are meticulously followed by (ADV.141/2000-01 dt.2.3.01)
branches.
Guidelines for continuance of existing credit facilities
(ADV.140/2000-01 dt.28.2.01) to retirees of Indian Bank under VRS
Requests from retirees under the Voluntary
Scheme for rehabilitation of overdue agriculture
Retirement Scheme of our Bank (both PF and
borrowers
pension optees) for continuing some of their
A scheme for helping overdue agriculture credit facilities may be considered on commer-
borrowers, who are not wilful defaulters, has cial terms under various schematic loan products
been evolved. Some of the salient features are: available for public. Branch managers should
Eligibility

5
Volume 13 Issue 4 January - March 2001

i. obtain a written application from the VRS excess granted beyond the tolerance level permis-
retiree for continuation of the loan facilities sible are given in the circular.
ii. obtain standing instructions to debit SB (ADV.146/2000-01 dt.14.3.01)
account on the dates of credit of pension/interest
on VRS bond etc. Extension of IBVL Scheme to Staff Members for
purchase of four wheeler
iii. ensure that there is enough income and
surplus cash flow to service the debt including The Indian Bank Vehicle Loan scheme,
interest. introduced during July 2000 for public, has been
extended to all staff members for purchase of
Detailed guidelines are given in the annexure to four wheeler only.
the circular for both PF and pension optees.
Purpose: For purchase of new/second hand
(ADV.144/2000-01 dt.8.3.01) four wheeler. Age of second hand vehicle should
not be more than 3 years and vehicle to be certi-
Granting of TOD and adjustment thereof fied by Automobile Association of India/reputed
It is observed that, of late, there is substan- Automobile Engineer/Valuer acceptable to Bank.
tial increase in the quantum of outstanding under Loan Amount: Maximum Rs.5 lakhs
Temporary Overdrafts as also in the number of
accounts outstanding for more than 3 months. Income: Minimum gross monthly income
The increasing number of long pending TODs in (including spouse income, rent etc.) should be
branches reveal lack of follow up on the part of Rs.20,000.
Branch Managers and controlling offices. There Security: Hypothecation of vehicle purchased
is a risk of such accounts turning out into poten- out of the loan amount. Guarantee of spouse to
tial NPAs if not recovered in time. All Branch be obtained.
Managers should review each outstanding TOD
account and follow up with the customer and Interest: PTLR + 2% (fixed)
ensure immediate adjustment of the dues. All
Margin: 10% for new vehicle; 40% for
TODs allowed should be reported to controlling
second hand vehicle.
office without fail. Regional Heads during their
visit to Branches shall scrutinise the Funds Book Repayment: 60 Equated Monthly Instal-
to ensure that TODs had not been allowed indis- ments (EMI)
criminately and for longer duration.
Sanctioning Authority: Regional Heads are
(ADV.145/2000-01 dt.14.3.01) empowered to sanction loan under the scheme to
members of staff/their spouse upto the maximum
Allowing excess over sanctioned limit- Timely Report- level of Rs.5 lakhs. For staff working in Head
ing to Appropriate Authority Office/Inspection Centres/Image/Staff College/
Subsidiaries and their spouses, AGM (DC) will
The observations by the inspectors of the be the sanctioning authority.
Bank/RBI, concurrent/external auditors,
comments in the LFAR/AFI indicate that For other terms and conditions for sanction
of loan under the scheme, please refer to the
Ÿ excess are permitted/allowed to continue circular.
for a long period
(ADV.147/2000-01 dt.15.3.01)
Ÿ there is undue delay in reporting/seeking
confirmation of sanctioning authority Extension of Home Loan Scheme to Staff Members
Ÿ compliance/strict adherence to the laid The Home Loan scheme to individuals,
down guidelines in this regard needs improve- introduced during September 2000 for public,
ment and streamlining has been extended to all staff members/their
While it is essential that the customers' spouse under certain terms and conditions.
needs have to be met on business considerations, Eligibility
the field functionaries must ensure that the estab-
lished systems and procedures are not diluted. i. For Officers: Completion of 5 years of
Guidelines to branches and Regional Heads on continuous service
allowing, reporting and seeking confirmation for

6
Volume 13 Issue 4 January - March 2001

ii. For Award Staff: Completion of 4 years of W.e.f. February 2001, it has been decided
continuous service to reimburse incidental/out of pocket expenses on
declaration basis, to the Branch Managers
The upper age limit is 53.
(Branch in charge only) every month, not
Quantum of Loan: Maximum Loan amount exceeding the following amounts to the debit of
(inclusive of balance outstanding in SHL, Loan residual expenditure:
against Title Deeds for housing, supplementary
Classification Reimbursement p.m.
loan from IBHL and other financial institutions)
is restricted to 30 times of gross salary subject to Rural Rs.250
a ceiling of Semi-Urban Rs.300
Urban Rs.350
i. Rs. 25 lakh for construction/acquisition of
Metropolitan Rs.400
ready built house/purchase of plot and construc-
tion thereon (PRNL.56/2000-01 dt.1.2.01)
ii. Rs. 5 lakh for additional construction/ Conducting test check by Branch Manager on certain
repairs/improvements delegated work
Margin: 20% for purchase/construction & 30% While reviewing the matter of conducting
for repairs, etc. test check by Branch Managers, the Top
Rate of Interest Management expressed concern over lack of
proper supervision in the following areas of
i. Upto Rs.10 lakh PTLR branch functioning:
ii. Above Rs.10 lakh PTLR + 1%
a. Maintenance of General Ledger
Security: EM/Extension of EM of the property.
b. Cash Management
Other guidelines with regard to applicabil-
ity of the scheme, sanctioning authority, c. Maintenance of Security items
documents, repayment, reporting of sanctions, With regard to GL, Branch Manager has to
take over of loans, determination of take home conduct test check as to the correctness of the
pay, etc., are enumerated in detail in the circular. Day Book and General Ledger in the following
periodicity:
(ADV.148/2000-01 dt.16.3.01)
Category of Branch Periodicity
Quoting of interest for term loans of 3 years and above
Small Twice a week
Rate of interest on Term Loan of 3 years
and above (including holiday period/moratorium) Medium Once a week
should be linked to PTLR only and not to PLR. Large Once a fortnight
All sanctioning authorities are to verify the term VL/EL Once a month
loan sanctions made effective from 12.5.2000
and issue amendments, if the rate of interest has A certificate to the above effect has to be
been erroneously linked to PLR. included in the AUM-1 statement.
(ADV.149/2000-01 dt.20.3.01) Surprise checking of cash has to be carried
out by the Branch Manager as per guidelines
Advance rate against pledge of gold ornaments
contained in para 1.16, page 12 of the Cash
With immediate effect, the advance rate Handling and Management Manual. At periodi-
against pledge of gold ornaments has been cal intervals, at least once a month, the numbered
reduced to Rs.250 per gram of 22 ct. items should be physically verified by the Branch
Manager.
(ADV .156/20001-01 dt. 31.3.01)
Regional Offices should henceforth check
PERSONNEL whether all Branch Managers have given a
certificate to the above effects in the AUM-1
Reimbursement of Incidental / Out of Pocket Expenses statement.
to Branch Managers
(PRNL.64/2000-01 dt.21.2.01)

7
Volume 13 Issue 4 January - March 2001

Indian Bank Employees' VRS - 2000 01.03.2001 and the revised rental rates are
IBA has informed that the last drawn furnished in Annexure I to the circular. To the
salary for the purpose of computing Ex-Gratia existing locker holders, the revised rates are
under the above scheme would include the applicable from the next renewal date on or after
following components only: 1.3.01. Branches should issue notice (as per
Annexure II to the circular) to individual locker
Officers : Basic Pay + Stagnation Increments + PQA + holders and obtain their acceptance for the
Increment component of FPA + DA thereon revised rate. A copy of the revised rental charges
Clerks/sub-staff : Basic Pay + Stagnation Increments + should be displayed in the public notice board.
Graduation Pay / PQP (as applicable) + Increment compo- The difference in caution deposit on account of
nent of FPP + DA thereon this revision should also be collected.
Branches/Regional Offices/other offices For lockers hired by staff/retired staff/
are requested to take note of the above and spouse of the deceased staff, the concession is
rework the Ex-Gratia payable to officers, who available only for one locker of minimum size
have already been relieved, as per the revised (Type A). For any other size/type or lockers in
worksheet enclosed to the circular and make excess of one, in the branch/any other branch,
payment of the balance portion of cash portion. normal rental rate should be collected.
The revised worksheet may also be used for
calculating eligible Ex-Gratia to officers who (CRA.32/2000-01 dt.8.2.01)
may be relieved under the IBEVRS - 2000 in
future. The revised claim should be submitted to Service charges for issue of Solvency Certificates
HO:Personnel Dept through ROs. With immediate effect, the rates for
issuance of solvency certificates are modified as
(PRNL.69/2000-01 dt. 05.3.01)
under:

CRA Slab Amount Service Charge

Upto Rs.1 lakh Rs. 500
Introduction of Cash Management Services Above Rs.1 lakh upto Rs.25 lakhs Rs. 2500
For speedy collection of cheques, a new Above Rs.25 lakhs upto Rs.50 lakhs Rs. 5000
scheme called Cash Management Services Above Rs.50 lakhs upto Rs.75 lakhs Rs. 7500
(CAMS) is introduced in our Bank. The Above Rs.75 lakhs Rs.100 per lakh,
proposed scheme will help our branches to offer subject to a
proceeds of outstation cheques on a predeter- maximum of
mined day of customer's choice, irrespective of Rs.25,000/-
realisation or after realisation.
(CRA.33/2000-01 dt.10.2.01)
Initially the scheme is introduced in 19
identified centres (list given in the circular). The Issue and payment of demand drafts - Punching of hole
identified branches / nodal branches have been in the numbered box
advised individually and the Regional Heads are While issuing demand drafts, computer-
advised to contact HO:Development Dept for ised branches and branches where DDs are
including any branch/centre. The details of the printed in continuous stationery, a hole should be
scheme have been sent to the concerned Regional punched in the relevant numbered box on the
Offices. As the success of the scheme depends on right side margin corresponding to the first digit
the time management, proper attention should be in the rupee amount, with the help of punching
given to ensure that the time norms given are pliers. This is in addition to the mark made
meticulously adhered to. Branches should (through the system) in the numbered box.
popularise this scheme effectively and use the
same as a marketing tool in mobilising more low Branches should note the amendment as
cost deposits and fee-based income. given in the circular in the Handbook on Proce-
dure for Issue and Payment of Demand Drafts
(CRA.29/2000-01 dt.13.01.01) enclosed to O&M Division circular CRA.34/97-98
Revision of Locker Rent
dated 06.02.98.

The rental rate structure of safe deposit (CRA.34/2000-01 dt.20.2.01)

lockers have been revised with effect from

8
Volume 13 Issue 4 January - March 2001

Payment of Stale Demand Drafts Where the Payee is Immediate Credit of Foreign Currency Cheques Payable
Govt. Dept / Govt. Body / PSU Overseas - ICOFC
Consequent to delayering of Zonal offices, A new forex product by name Immediate
the Regional Heads are now empowered to Credit Of Foreign Currency Cheques payable
permit branches under their control for payment Overseas (ICOFC) has been introduced. The
of stale Demand Drafts where the payee is a facility is applicable for personal cheques only,
Government department/Body/Public Sector drawn in USD, EURO & DEM and can be
Undertaking. Henceforth, branches are advised to extended by all branches except rural branches.
approach their Regional Offices alongwith the SB customers (individuals and joint) maintaining
request received from the Dept concerned for account with the branch at least for one year are
obtaining prior permission before making eligible to avail this facility for cheques drawn in
payment of such drafts. USD and payable in USA upto $500 and for
cheques drawn in other currencies upto Rupee
(CRA.38/2000-01 dt.20.3.01)
equivalent to 25000. An undertaking letter, as per
the format enclosed to the circular, has to be
FX obtained from the customer availing this facility.

Interest rates on FCNR (B) deposits

For detailed guidelines on the accounting
procedure, reporting, cheque returns, GL/Weekly
W.e.f. 12.1.01, the rates of interest on etc., please refer to the circular
FCNR (B) deposit stand revised as under:
(FX.18/2000-01 dt.21.3.01)
Period USD GBP JPY EURO
1 year and above Waiver of Penalty for foreclosure of NRI term deposits
6.00 5.75 0.25 4.00
but less than 2 years
The rules relating to foreclosure of NRI
2 years and above 5.90 5.60 0.25 4.00 term deposits are modified w.e.f. 1.4.01, as
but less than 3 years
under:
3 years only 6.00 5.60 0.40 4.00
Period within which the Eligible Interest
deposit is foreclosed.
Preferential rate of interest on FCNR (B)
deposits has been dispensed with. NRE, NRO, NRSR and NRNRRDS
Upto 6 months No interest
(FX.12/2000-01 dt.6.1.01)
6 months and above Applicable interest rate for
the period run without penalty
Interest rates on FCNR(B) deposits or the contracted interest rate
whichever is less without
W.e.f. 15.2.01, the rates of interest on penalty.
FCNR (B) deposits stand revised as under: FCNR (B)
Upto One Year No interest
Period USD GBP JPY EURO
One Year and above Applicable interest rate for
1 year and above 5.50 5.60 0.25 4.00 the period run without penalty
but less than 2 years
or the contracted interest rate
2 years and above 5.50 5.60 0.25 4.00 whichever is less without
but less than 3 years penalty.
3 years only 5.60 5.60 0.40 4.00
Interest rates on FCNR (B) deposits
(FX.15/2000-01 dt.8.2.01)
W.e.f. 1.4.01, the rates of interest on
Write off of Overdue Export Bills (GRs) FCNR (B) deposits stand revised as under:
Consequent to delayering of Zonal offices,
powers have been delegated to Regional
Offices/branches for writing off of overdue
export bill. Detailed guidelines for exercising
such powers are furnished in the circular.
(FX.16/2000-01 dt.9.2.01)

9
Volume 13 Issue 4 January - March 2001

Period USD GBP JPY EURO i. Deposit, payment of interest & standing
1 year and above 5.00 5.25 0.10 4.25 instructions
but less than 2 years
2 years and above
ii. Collection of outstation cheques/bills/
5.00 5.25 0.10 4.25 instruments
but less than 3 years
3 years only 5.25 5.25 0.10 4.25 iii. Disposal of loan applications

(FX.19/2000-01 dt.27.3.01) iv. Payment of pension/sanction of pension

loan
GENERAL Branch Managers are advised to take note
Maintenance and upkeep of branch/office premises
of the above and endeavour their best to extend
complaint free customer service, which will
It has been observed during the branch enhance the image of the Bank and pave way for
visits undertaken by executives that the premises a sustained growth of the Bank.
of branches are not maintained properly. A well
maintained premises will enhance the image of (GENL.68/2000-01 dated 10.1.01)
the branch in its area of operation. Towards this,
branches/ administrative offices are advised to IAPTD Account
ensure the following: It is observed from various Inspection/
1. The premises must be cleaned daily and Audit Reports that some branches are not follow-
kept neatly ing the instructions relating to maintenance of
IAPTD account and many branches are not
2. Ledgers and other records should be well
balancing it every quarter. Laxity on the part of
arranged and preserved carefully
branches in this area has led to many irregulari-
3. Keeping the records/files/other articles on ties including fraud and loss to the Bank.
the top of almirahs must be avoided
The various preventive vigilance measures,
4. Old records must be kept separately in a guidelines with regard to preparation/ passing of
room and maintained properly vouchers, checking of records, etc., and the role
5. All utilities like fans, lights, air condition- of Regional Heads, Inspection and Audit section
ers, clocks, etc., should be serviced periodically of RO, Internal Auditors, Inspectors of Branches
and kept in working condition. in this regard are given in detail in the circular.
The contents of the circular should be brought to
6. Old/unutilised/broken furniture and the notice of all staff members in the
fixtures, if any, which cannot be repaired and put branch/office/Dept, their signature obtained in
into use, may be disposed off after obtaining acknowledgement and such acknowledgement
approval from RO/HO maintained as office record for future reference.
7. The name boards/other notice boards A copy of the circular should be displayed in the
should be kept neatly and updated. staff notice board.
The security officers attached to ROs (GENL.70/2000-01 dt.11.01.01)
should inspect all the branches regularly, verify
the above and guide the branches suitably. House keeping - Balancing of Books of Accounts
Regional Heads, during their branch visits,
It is observed that despite repeated instruc-
should pay special attention in ensuring proper
tions, periodical balancing & timely tallying of
upkeep and maintenance of branch premises.
books at branches are not given due attention and
(GENL.67/2000-01 dt.6.1.01) thrust. For ready reference of branches, the perio-
dicity to be maintained in respect of balancing of
Review of Customer Service and Grievance Redressal various books of accounts at branches is
for the quarter ended September 2000 furnished in the annexure to the circular.
Branches are advised to balance books as per the
It is observed that the following areas
attracted large number of complaints and warrant
special attention of the Branch Managers.

10
Volume 13 Issue 4 January - March 2001

prescribed periodicity, tally them and report to Long Form Audit Report as on 31.03.2000
RO. The LFAR of the Bank submitted by the
(GENL.71/2000-01 dt.22.1.01) Statutory Auditors cautions us of the many
avoidable lapses and offers valuable
Insurance Policy for Burglary Cover for
suggestions/guidelines for effective functioning
all our properties
and overall improvement in the performance of
Bank has renewed the above policy for a the bank. It is imperative for the bank to ensure
further period of one year under policy number that all the systems and procedures devised are
710800/46/00/00298 with New India Assurance
meticulously followed. Many of the observations
Company Limited, 231, T T K Road, Alwarpet,
Chennai 600 018, valid upto and inclusive of made by the Statutory Auditors indicate that the
08.01.2002. Cover has been obtained against irregularities / deficiencies are persisting despite
burglary risk including terrorist cover for all the being pointed out during the earlier periods.
properties as detailed in the circular. The insur- Rectification has not been made seriously and
ance cover applies to both the offices and compliance is lacking to a great extent. Regional
residences already occupied and to be occupied Heads should ensure strict monitoring for
from time to time. The Policy covers the insured compliance.
items for the value of Rs.2,00,000 in each of
their offices and Rs.50,000 for residence at any The important observations / suggestions
one time. made by the auditors are given in detail in the
In case of any clarification/claim etc., annexure to the circular for immediate compli-
branches / offices may contact the New India ance. Branches are required to submit a Final
Assurance Company Limited, Phone No.044 Rectification Certificate furnishing details of
4997833 and 044 4997822. For any assistance in compliance with regard to the observations made
the case of claim, the nearest branch of The New
in the Branch LFAR to their Controlling Offices.
India Assurance Company Limited may be
approached. All the Regional Heads are to closely follow-up
the compliance by branches latest within 3
(GENL.74/2000-01 dt.24.01.01) months from the date of receipt of the report.
Contingency and Recovery Plans in Computerised
Branches (GENL.82/2000-01 dt.23.02.01)

Detailed guidelines have already been Rs.500 notes - clarification

issued to all the Branches vide CPPD Circular The guidelines on detection of forged 500
No. GENL.12/98-99 dated 11.06.98 on the rupee notes were earlier communicated to
security aspects in computerised environment branches vide circular Genl.18/99-00 dt.26.7.99.
and the various steps to be taken by the branches Fresh guidelines received from RBI on notice-
to protect the data and to ensure the availability able differences between a genuine note and a
of data at all times. Computerised Branches have forged note are furnished in the annexure to the
also to refer to the various systems and proce- circular for the reference and use of branches.
dures contained in the Manual on "Project TBC" Branches should note the guidelines and act
provided by HO:CPPD and the Manual on accordingly and avoid complaints in this regard.
Computer Security and Computer Audit provided (GENL.88/2000-01 dt.28.3.01)
by HO:Inspection Department. The contingency
planning for on-site and off-site backup of all MD/ED
files and the preventive measures in the event of
various disasters are given in detail in the Customer Service, Customer Sacrifice and Customer
circular. All the computerised branches/offices Satisfaction
are advised to adhere strictly to the guidelines on
contingency and recovery plans. In the present day scenario, customer
service is not only extending service at the
(GENL .81/2000-01 dt.19.02.01) branch level, but also reaching the doorsteps of
the customers. Hence, this area warrants
paramount importance and all out efforts be

11
Volume 13 Issue 4 January - March 2001

taken at every level in the branches/offices to sell Customers no longer settle for standardised
our products and services very effectively. goods and services, when they are able to get
exactly what they want. Therefore, it is impera-
It is described that Customer Sacrifice is tive that all our branches have to take every effort
the gap between what a customer settles for as to eliminate customer sacrifice by understanding
against what he wants exactly. It is felt that the and fulfilling the needs of the customers.
root cause of satisfied customers shifting their
(MD/ED.4/2000-01 dt.28.2.01)
loyalty is the sacrifice that they have to make.

12
 Volume 14 Issue 1 April - June 2001
Recollect
DEPOSITS Agasthya Deposit accounts as per procedure
outlined above.
Interest Rates on Domestic Term Deposits
(Dep.02/01-02 dt.07.05.01)
With effect from 07.05.01, the rates of
interest payable on domestic term deposits have Vidhya Nidhi Deposit Scheme
been revised as follows:
Vidhya Nidhi Deposit Scheme has been
Int. Rate % p.a
introduced in our Bank on 15.04.1998. For
Duration Below Rs. 15 lakhs
Rs.15 to less than
deposits opened under Plan A in 1998, the
lakhs Rs. 2 crore annual repayments would be commencing now.
7 to 14 days -- 5.00 As per the scheme, the maturity proceeds of the
Vidhya Nidhi Deposit are to be transferred to
15 to 29 days 5.50 5.75
Vidhya Nidhi Matured for Payment (VNMP),
30 to 90 days 6.75 7.00 from where the annual instalments are to be
91 days to less than 1 year 7.50 7.75 repaid to the customer. For this purpose, a new
1 year only 9.00 9.25 GL head has been introduced in the Assets and
Over 1 yr. to less than 2 yrs 9.00 Liabilities Statement with Serial number and
To be item code as given below:
2 years to less than 3 years 9.25 decided by
3 years and above 9.75 H.O. BS 1 – Liabilities:
1.2.32 - Vidhya Nidhi Matured for Payment 119
For deposits of Rs.2 Crores and above, The scheme is most suitable to middle and
branches shall contact their Circle Offices for the salaried class customers to plan their financial
rates to be decided by HO. commitments for meeting the educational
(DEP.1/ 01-02 dated 27.4.01) expenses of their wards and other specific needs
for investments. Similar scheme is not available
Agasthya Deposit Scheme in other banks and branches can take advantage
of the uniqueness. Branches are advised to take
As the Agasthya Deposit Scheme is
all out efforts to market the scheme vigorously
already withdrawn, no balance should be
among the targeted segment.
outstanding under this category. Those branches
that are still maintaining accounts under this (Dep.03/01-02 dt.16.05.01)
scheme are advised to follow the instructions
Introduction of Special Scheme for deposits made
given below:
by Senior Citizens w.e.f. 1.6.01
1. If the balance in the Agasthya Deposit In order to meet the expectations of senior
Account is less than Rs.15, the same shall be citizens for higher returns, our Bank has designed
taken to income account and the account closed.
a special scheme for deposits of Senior Citizens
2. Accounts with balance more than Rs.15 under which an additional interest of 0.5% over
shall be transferred to overdue deposit account. the normal rates is offered in our Fixed Deposit
and Re-investment Plan schemes. The scheme
3. Accounts with balance more than Rs.15
also offers some value-added services to the
which have completed 10 years from the due
senior citizens. Some of the salient features of
date, shall be transferred to unclaimed deposit.
the scheme are:
4. If frequent operations are observed in the
Eligibility - A person who has completed the age
account, such account may be closed and the
customer may be advised to open the Savings of sixty years shall be treated as a senior citizen
Bank account after completing other formalities. for getting the benefit under the scheme. Once
the age of the senior citizen is verified while
While doing so, the ledger sheets relating accepting deposits for the first time, branches
to accounts transferred from Agasthya Deposit should not seek proof of age for renewal of the
should be kept in a separate binder, ensuring upto deposit or for accepting subsequent deposits from
date housekeeping of ledgers. It should be the same senior citizen.
ensured that no balance is reported under
Agasthya Deposit under Assets and Liabilities Type of a/c - A senior citizen singly in his/her
statement. All Circle Heads are requested to own name or jointly with other persons in any
follow up with the branches for closure of all one of the following terms

1
Volume 14 Issue 1 April - June 2001

(i) Joint (ii) E or S (iii) F or S (iv) A or S a. Term Loans of 3 yrs and

above but less than 5 years - 12.25% p.a.
If other person is below the age of sixty, it
should be ensured that the name of the senior b. Term Loans of 5 yrs & above - 12.50% p.a.
citizen is given as the first named depositor.
Fixed rate for structured loan products
Minimum Deposit - Deposits can be accepted In respect of loans sanctioned w.e.f.
either as FD or RIP with a minimum of Rs.1000. 01.04.2001, at Fixed Rate of interest, it shall be
charged at 0.5% over the applicable rates, but
Rate of interest - Interest shall be payable at within the maximum spread. For existing loans
rates 0.5% over and above the card rate appli- covered under Fixed Rate concept, the already
cable for the period of deposit. agreed/contracted rates of interest should
Retired Staff - Our Bank's retired employees, continue.
who have completed the age of 60 years, can In respect of personal loan products
avail only one of the two benefits, either already sanctioned / to be sanctioned, in which
additional interest on account of staff status or the period of repayment is three years and
senior citizen status. above, the base rate should be PTLR with
For other details such as documentary relative spreads and not PLR. In this connec-
evidence of age proof, etc., the circular may be tion, branches should refer to HO: Credit
referred to. Division circular ADV.149/00-01 dated
20.03.2001 and fix the interest rates accordingly
(Dep.04/01-02 dt.16.05.01)
Note: A new interest rate Short tenor Prime
Deduction of Income Tax at source from Lending Rate (SPLR) introduced w.e.f.1.4.01
interest paid on Deposits vide this circular was subsequently withdrawn
through circular ADV.25/01-02 dt.31.5.01
The Finance Act, 2001 has amended and
reduced the quantum of interest payment liable
(ADV.02/01-02 dt.06.04.01 )
for tax deduction at source from Rs.10, 000 to
Rs.5,000 with effect from 01.06.01. The rate of Amendments to Manual on Agriculture
tax to be deducted at source on interest payment Advances
will be
For individuals and others 10% The amendments to Manual of Instructions
For Domestic Company 20 % I – Priority Sector Advances – Agriculture,
communicated through various circulars for the
In addition to the above, a Surcharge of 2% of period from 1.4.99 to 31.3.00, have been
Income Tax is to be deducted for both the cases. compiled and given in the annexure to the circu-
Branches are instructed to take note of lar. Branches are advised to note the amendments
above amendment and deduct tax at source as per in the relevant chapters/para of the manual, file
the revised norms. All other guidelines issued the circular in sub file number 101 and keep the
from time to time remain the same. This is a same alongwith the manual for future reference.
statutory obligation on the part of the bank /
branch and hence strict compliance of these (ADV.05/01-02 dt.07.04.01)
guidelines has to be ensured by branches without
any exception. Withdrawal against uncleared effects –
precautions
(Dep.06/01-02 dt.19.06.01)
In view of frauds reported by some banks
ADVANCES who had discounted Bankers Payment Orders
issued by some cooperative banks, branches are
Revision of PLR and PTLR w.e.f. 1.4.01 advised to strictly comply with the following
guidelines issued by HO from time to time on
PLR is revised downward to 12.00% w.e.f. allowing withdrawal against uncleared effects.
01.04.01 from the existing 12.50%. The follow-
ing are the revised PLR / PTLR, except where, 1. Branch Managers should extend the facil-
Fixed Interest Rate has been sanctioned. ity discretely and not in a routine manner.

PLR - Prime Lending Rate - 12.00% p.a. 2. The amount of withdrawals permitted
PTLR should not exceed the discretionary powers
delegated.

2
Volume 14 Issue 1 April - June 2001

3. Till further instructions from HO, branches Scheme is also attractive, Branches are advised
are advised not to allow this facility against to intensify their efforts further and market the
cheques drawn by sister / group concerns or product and show better performance.
against self-cheques.
(ADV.10/01-02 dt.19.04.01)
4. If the facility is requested frequently by a
customer, a regular limit could be considered on Timely Action for Recovering Shortfall in Drawing
merits by the appropriate authority, taking into Power
account the business turnover and nature of
business. The circular explains in detail the method
of arriving at the drawing power for advance
5. Interest should be charged wherever appli- against stocks/book debts. The various reasons
cable for such drawals and there should not be for occurrence of a shortfall in the DP and appro-
any leakage of income. priate action to be initiated by the Branch to
recover the shortfall are also discussed in detail.
6. It should be ensured that while allowing
Branches are advised to go through the circular
the facility, there is no kite-flying operation at
for acquiring a detailed knowledge on the topic.
all.
(ADV.11/01-02 dt.19.04.01)
(ADV.06/01-02 dt.09.04.01)
Identification of Corporate/Credit Intensive
New Loan Product - Professionals' Special (CI) Branches
Scheme
Our Bank has adopted the concept of
Our Bank has come out with a new Focussed Lending through specialised category
personal loan product viz. Professionals’ Special of Branches viz., Corporate Branches and Credit
Scheme targeting the segment of qualified Intensive (CI) Branches to service Large and
professionals in different fields. The eligibility Medium size advances (both Priority and
norms, purpose of the loan, quantum of assis- Non-Priority). These are in addition to the exist-
tance, security and documents to be taken, inter- ing specialised branches i.e. OSBs, SAFBs, IFBs
est rates, margin requirements, repayment and EPZ branches. These Branches will necessar-
schedule, service charges to be recovered, powers ily be advance-oriented. The lists of branches
of sanctioning authority and other terms and coming under the two new categories are given
conditions applicable to the scheme are given in in the circular. The circular contains detailed
information on the following:
detail in the circular alongwith the format of loan
application. i. Cut off limits for handling of borrowal
accounts
Branches are advised to strictly follow the
ii. Staffing at these branches
guidelines given in the circular and make all out
iii. Infrastructure to be provided
efforts to market the product effectively and
iv. Transfer of borrowal accounts from / to
ensure achievement of the targets fixed for each
these branches
branch.
v. Processing / obtention of sanction and
(ADV.08/01-02 dt.18.04.01) compliance with terms & conditions
vi. Documentation
Intensified marketing of Home Loan Products vii. Operations in the borrowal accounts
On a review, it is observed that Home viii. Monitoring
Loan Scheme has not gathered the required ix. Coordination between these branches
momentum, though it is relatively a safe advance x. Reporting
and demand for the same is also quite good. xi. Role of Circle Heads
Therefore, branches are advised to intensify their Corporate and CI branches will be
efforts and dwell upon the various positive networked with Head Office in due course.
aspects of our scheme, a gist of which - in Executive Director will be the authority to decide
comparison to the other Banks/Institutions - are on any addition/deletion/amendment to list of
given in the circular. As the concessions Corporate/CI Branches.
announced in the budget are expected to create a
(ADV.12/01-02 dt.21.04.01)
boom for the housing sector and our Home Loan

3
Volume 14 Issue 1 April - June 2001

Sanction of credit facilities against India statement will be submitted by HO to RBI, with
Millennium Deposits (IMDs) issued by SBI the approval of Board.
Advances shall be sanctioned against the (ADV.18/01-02 dt.14.5.01)
security of IMDs subject to the terms & condi-
tions and guidelines enumerated in the circular. Interest Rates for Export Credit in Foreign
Some of them are: Currency

a) Forex Authorised Branches and Circle W.e.f. 19.04.01, interest rates on Foreign
Heads can sanction - only to our bank's Currency Loan for exports have been revised as
customers. under:
b) The period of loan should not exceed the Category of Advance Interest Rates % p.a.
unexpired maturity of IMDs. I. Pre-shipment Credit
Upto 180 days LIBOR/EURO LIBOR/
c) The loan should be utilised for personal EURIBOR+ 1 %
purposes / for carrying on business activities Rate for initial period of
180 days prevailing at
other than agricultural / plantation activities or Beyond 180 days and upto 360 days
the time of extension + 2
real estate business. %
II. Post shipment Credit
d) Margin at 10%
On demand bills for transit period (as
e) Rate of Interest - for IMD holders - At specified by FEDAI)
PLR/PTLR; for third parties - At PLR+1% / Usance Bills (for total period compris-
PTLR+1% ing Usance period of export bills, LIBOR/EURO LIBOR/
transit period as specified by FEDAI EURIBOR+ 1.00%
For other terms and conditions, branches and grace period wherever applicable
may refer to the circular. ) upto 6 months from the date of
shipment
(ADV.13/01-02 dt.23.04.01) Export bills (demand or usance) LIBOR/EUROLIBOR/
realised after due date but upto date of EURIBOR + 3.00%
Disclosure of names of defaulters crystalisation.
III. Export Credit Not Otherwise Specified (ECNOS)
RBI has now clarified that obtention of the a) Pre-shipment Credit If adjusted out of domes-
undertaking/consent letter - F164 from the exist- b) Post shipment Credit tic funds and not out of
ing / fresh borrowers (with aggregate credit permitted method of
limits of Rs.25 lakhs and above) to disclose their Forex Remittance, as
specified for ECNOS in
names in the event of committing default in Rupees , that is
payment of their dues or inclusion of the said At PLR + 4% + 2 %
clause in borrowal agreements, is effective after
the issue of circular ADV.81/99-00 dt.11.11.99 (ADV.115/2000-01 dt.2.1.01)
for fresh sanctions/ enhancements/ renewals.
Indian Bank Pensioners Loan Scheme (IBPLS)
After obtention of F-164 or agreement in
which the disclosure clause is included, if the The existing scheme of loans to pensioners
borrower defaults in repayment of loan, decision has been improved upon and renamed as ‘Indian
to publicise the names of the such borrowers Bank Pensioners Loan Scheme (IBPLS)’ and
should be taken. For this purpose, a notice of 30 included in our Structured Loan Products. The
days is to be given to the borrower/company details of the revised scheme are:
intimating our intention to make public the infor- Eligibility: Central, State Govt., Defence
mation, unless the borrower rectifies the default pensioners, pensioners drawing under Pilot
within such period. In such cases, branches shall Scheme, Retired staff including family pension-
send notices to the borrower in Format-I and to ers drawing pension through our bank are eligi-
all the directors/partners/guarantors, etc in ble. However, for family pensioners guarantee
Format-II enclosed to the circular. should be obtained from co-pensioners/any other
After the notice period, Branches shall earning member of family/others acceptable to
report to their Circle Offices concerned. Circle branch manager. Re-employed pensioners and
Offices, on receipt of information from branches, Malaysian Govt. pensioners are not eligible.
shall report to HO: CPGD. A consolidated
Purpose: Family functions, Medical/Domestic
expenses, Education

4
Volume 14 Issue 1 April - June 2001

Amount of Loan: Five months’ Pension with a collected and kept in branch, after verification
maximum of Rs.25,000. Discretion is delegated with originals.
to Circle Heads to grant approval to BM, on a
8. Insurance of the articles purchased out of
case to case basis, for exceeding the limit of
Bank’s finance with Bank Clause is not ensured.
Rs.25000, but subject to the maximum of 5
months' pension. 9. Post-sanction follow up is not done after
disbursal of the loan, by contacting the
Rate of Interest: Fixed Interest Rate at PLR plus borrower/s, if the instalments are not paid
4% p.a. For Indian Bank Retirees under Superan- regularly.
nuation at PLR plus 0.50 %
The overdues in personal loan products are
Repayment: In EMI not exceeding 24 months not to be more than 0.50% to 0.75% of the
commencing from the month following the Loan balance outstanding under each scheme at any
disbursal. point of time. Branches are advised to take all
Staff related pensioners: Staff guarantee may not necessary precautions while lending and scrupu-
necessarily be insisted for loans sanctioned to lously adhere to the guidelines/terms and condi-
pensioners related to staff members. tions applicable for the product. Branches should
aim at ensuring the asset quality without giving
For other terms and conditions like obten- any scope for overdues and the advance
tion of undertaking letters from pensioner/legal portfolio, more particularly under the structured
heirs/eligible family pensioners, preclosure, loan products where recovery of dues is easy,
discretionary powers, etc., please refer to the carries only standard category loans. Field level
circular. The application form (including functionaries should give due weightage for the
columns for appraisal by the sanctioning author- quality of advance and follow all the
ity) is attached to the circular. pre-sanction/post-sanction stipulations.
(ADV.21/01-02 dt.19.05.01)
(ADV.20/01-02 dt.19.05.01)

New Loan Products – Quality of Lending Interest Rates on Export Credit

It is observed from the reports on personal Based on the directions from RBI to quote
loan products submitted by the Internal Auditors a minimum of 1.50% below the PLR for export
that there are instances of deviations from credit, the pattern of quoting Export Credit inter-
norms/guidelines stipulated for the respective est rates has been revised w.e.f. 05.05.01. The
schemes. Some of the areas where proper precau- revised pattern shall be applied to both the fresh
tions have not been taken by some branches are and existing export credits. Details of the exist-
listed out below: ing and revised rates are given in the annexure to
the circular. Branches are advised to refer the
1. The bonafides of the applicants were not circular and charge interest for export credit
verified thoroughly / satisfactorily. accordingly.
2. The repaying capacity of the (ADV.23/01-02 dt.31.05.01)
Applicant/Borrower is not properly verified.
Indian Bank NSC Loan (IBNSCL) - A Structured Loan Product
3. The suppliers are not reputed dealers/
familiar in the area.
The existing scheme of loan against
4. Management Consultants/Agents offer National Savings Certificates has been revamped
quotations and Loans are sanctioned based on and renamed as ‘Indian Bank NSC Loan
their Proforma Invoice/quotations/Bills. (IBNSCL)’ and included in our Structured Loan
Products. Some of the features of the revised
5. Borrowers themselves are unable to scheme are:
identify their guarantors.
Eligibility: Individual customers including staff,
6. The end use of the loan is not checked and their relatives, pensioners, IB retirees, VRS
physical verification of the articles purchased out Retirees. Certificates in joint names are
of the loan amount is not carried out. permitted, subject to obtaining cover documents
7. Copies of documents viz. Invoice, from both the joint holders. Third party NSCs
Stamped Receipt, Warranty Card are not will not be accepted as security.

5
Volume 14 Issue 1 April - June 2001

Loan amount & Margin: Loans are to be PERSONNEL

sanctioned based on the issue price of NSCs
only, depending on the date of purchase as given Renaming Regions as Circles
in the circular. The NSC issuing post office
should be within the local area / command area / W.e.f. 01.05.2001, it has been decided to
proximate area of the branch. In case of NSCs rename the Region as CIRCLE. Henceforth,
issued by other post-offices, the Certificates i. The Regional Offices will be referred to as
should be got transferred to the local area post Circle Offices (COs).
office before considering sanction of any loan.
Overdraft against NSC not permitted. ii. The Circle Heads will be referred by their
respective Scales viz. GM/DGM/AGM /CM
Rate of interest: Fixed rate of interest at of the respective Circle and will be
PLR/PTLR +3.00% prevailing as on the date of commonly referred to as Circle Heads
sanction of loan. Purpose: Education, functions, (CHs).
festivals, medical /personal expenses, etc.
iii. The Head Office will be referred to as HO
Repayment: Any periodicity either as EMI or as and not CO.
bullet payment from maturity proceeds suitable
to the borrower may be fixed. However, the (PRNL.05/01-02 dt.10.04.01)
maximum period shall not exceed 66 months or
beyond the date of maturity of NSC whichever is Indian Bank Officer Employees' (Conduct) Amendment
earlier. The circular may be referred to for other Regulations, 2000
details of the scheme. After Regulation 24, the following Regula-
(ADV.24/01-02 dt.31.05.01)
tion shall be inserted:
24A. Prohibition of sexual harassment of
Filing of suits in borrowal accounts - Recovery working women
proceedings under Local Acts/Special Acts
1. No Officer employee shall indulge in any
In some States, recovery proceedings are act of sexual harassment of any woman at her
allowed to be initiated under Local Revenue work place.
Recovery Act, Special Acts such as Public
Moneys (Recovery of Dues) Act in certain type 2. Every Officer employee who is in-charge
of borrowal accounts by filing Revenue Recov- of a work place shall take appropriate steps to
ery Certificates. Branches in those States, on prevent sexual harassment to any woman at such
initiating the recovery proceedings, should work place.
immediately transfer the balance in loan accounts For the purpose of this regulation, sexual
to Protested Bills account, since such legal action harassment includes such unwelcome sexually
is akin to recovery proceedings before Courts/ determined behaviour (whether directly or other-
Tribunals. On transfer to PB a/c, branches shall wise) as
report under CIS as per the instructions contained
in the booklet on CIS without fail. i. physical contact and advances
ii. a demand or request for sexual favours
Branches, which have not so far trans- iii. sexually coloured remarks
ferred the balance in loan accounts to Protested iv. showing pornography or
Bills account in which recovery proceedings had v. any other unwelcome physical, verbal or
been initiated under Local Acts/Special Acts, non-verbal conduct of a sexual nature.
should immediately do so and report compliance Branches/Offices are advised to bring the
to their respective Circle Offices. Circle Offices contents of this circular to the notice of all
shall follow up with branches and ensure that Officers.
branches comply with the above guidelines.
(PRNL.10/01-02 dt.15.5.01)
(ADV.26/01-02 dt.01.06.01)
Indian Bank Officer Employees’ (Acceptance of
Jobs in Private Sector concerns after retirement)
Regulations, 2000

The Government has replaced the existing

guidelines to the above Regulation (1979) and
our Board has adopted the amended Regulations.

6
Volume 14 Issue 1 April - June 2001

The details of the amended regulations like short Interest rates on Non-Resident External Rupee Deposit
title, its applicability, definitions of various terms Accounts.
used, explanations wherever needed, various In order to help the branches in knowing
guidelines on acceptance of employment after the interest rates on NRE deposits prevailing
retirement, etc. are given in detail in the circular. during various periods, a table containing the
Branches/Offices are advised to bring the interest rates for the period from 13.04.1991 to
contents of this circular to the notice of all 16.8.2000 is furnished in the Annexure to the
Officers. circular.
(PRNL.11/01-02 dt.15.05.01) (FX.04/01-02 dt.21.04.01)

Reorganisation of Circles Encashment of Foreign Currency Notes and Travellers

Towards reorganisation of circles, Cheques

§ Tiruvannamalai circle has been merged with Keeping in view the spirit of RBI guide-
Vellore circle with effect from 1.6.01. lines for improving the quality of services
provided for encashment of Foreign Currency
§ Chennai circle has been bifurcated into Travellers' Cheques / Notes, branches should
Chennai (North) and Chennai (South) with ensure that subject to verification of basic bonafi-
effect from 11.6.01 des, expeditious service is given with least incon-
venience and time delay to the person encashing.
(PRNL.16/01-02 dt.15.06.01)
The circular contains extant guidelines and
procedure to be followed by branches when
FX foreign currency notes and travellers cheques are
Withdrawal of Old style (Michael Faraday) £ 20 English tendered by
Currency Notes - Series E.
a. Non resident Indians already having
W.e.f. 28.2.2001, Bank of England has account with us
withdrawn from circulation the old style £20
notes (featuring Michael Faraday) and the legal b. Resident account holder (individual, shop,
tender status also stands withdrawn from that hotel, etc.,)
date. As there is a likelihood of foreign travellers c. Foreign Tourists
tendering such currency notes at any of our
branches for encashment, Branches are advised Branches should observe the stipulated
to exercise caution and not to accept such notes guidelines/safeguards to avoid risks associated
for encashment. Similarly, Branches holding with tendering of forged/stolen travellers'
such notes are advised not to reissue the same cheques/ forged currency notes.
and should take it up with the respective OSBs
for surrendering the same at their nominal value. (FX.05/01-02 dt.23.04.01)

(FX.01/01-02 dt.03.04.01) Revision of interest rates on FCNR (B), NRE and

NRNRRDS Deposits
Reasons attributed by ECGC for rejection of claims
On an analysis of claims preferred by The rates of interest on FCNR (B) deposits
branches, it is observed that claims are delayed / stand revised w.e.f. 15.05.01 and again revised
rejected by ECGC quoting various reasons. To w.e.f. 25.06.01. The rates of interest on NRE and
enable Branches to avoid such delay / rejections, NRNRRDS deposits stand revised w.e.f.
the guidelines already communicated through 15.05.01.
circulars, letters, etc., have been furnished in For details of the revised rates on different
detail in the circular. Branches should ensure currencies and on preferential rate of interest,
compliance of the guidelines and avoid rejection please refer to the circular.
of claims by ECGC.
(FX.06/01-02 dt.08.05.01& FX.07/01-02 dt. 20.06.01)
(FX.02/01-02 dt.09.04.01)
Amendments to Foreign Exchange Manual
The amendments to the guidelines/instruc-
tions contained in the Manual of Instructions XV
– Foreign Exchange for the period upto 31.3.99

7
Volume 14 Issue 1 April - June 2001

have been compiled and enclosed to the circular xii. Computer Audit
in the form of a booklet. (Genl.04/01-02 dt.16.04.01)

(FX.08/01-02 dt.25.06.01)
Renewal of Bankers' Indemnity Policy for the financial
year 2001-02
GENERAL
The Bankers’ Indemnity Policy has been
Special Deposit Scheme, 1975 – Change in rate of
renewed for the financial year 2001-2002
interest (commencing from 01-04-2001) with
W.e.f. 1.4.2001, RBI has reduced the rate M/s. National Insurance Company LTD,
of interest payable on the deposits under the Division I, Sterling Cinema Building,
above scheme to 9.5 % p.a. Branches maintain- 6th Floor, 65, Murzban Road,
ing deposit accounts under the above Scheme are Fort, Mumbai 400 001.
advised to make note of the change and pay Phone: 2074841-2074844
interest accordingly. The policy number is 260100/46/2001/7700035.
(Genl.01/01-02 dt.02.04.01)
The extent of various risks covered by this policy
and other guidelines with regard to the formali-
Computer Security and Monitoring of Controls in TBC ties to be adopted by branches in reporting and
Branches preferring claims are given in detail in the circu-
lar. Foreign Branches are excluded from this
All TBC branches should meticulously policy. The contents of the lockers of domestic
follow the prescribed computer security controls branches are also not covered under this policy.
for prevention of frauds, better work environment In respect of loss due to damage to an ATM (i.e.
and to reap the full benefits of computerisation in to its Hardware parts) the same is covered under
rendering better customer service. Periodically, Electronic Equipment Policy and Fire policy
the Branch managers/System manager shall separately taken by our HO: CPPD for all ATMs
convene staff meeting to assess the adequacy of
computer security controls in the branch and take (Genl.07/01-02 dt.20.04.01)
necessary steps to improve the controls/ obser-
vance of controls in the branch. In addition to Monitoring of Profit
this, Branch Manager or any other officer at the
Several steps have been initiated in our
senior level, other than the System Manager shall
Bank towards improving the profit which include
on a daily basis scrutinise the audit trails, trans-
action logs and other important scrolls to find out the following:
any procedural deviations and /or any unusual a. Emphasis on canvassing of low cost deposits
transactions of suspicious nature. Circle Heads b. Computerisation of 450 branches covering
during their visit may call for some of these logs over 72% of business of the Bank
on sample basis to find out any unusual pattern. c. Grant of adequate discretionary powers to
The circular also discusses in detail the field level functionaries
following vital computer security issues and d. Launching of several retail credit products
relevant controls for methodical observance at e. Abolition of Zonal Offices paving the way
TBC Branches. for a Three-tier structure
f. Increased focus on recovery of NPAs and
i. Inventory
prevention of slippage of 'Standard Assets'
ii. Data Management
g. Introduction of Monthly Budget and
iii. System Administration
iv. Numbered Items Monitoring of Business Plan
v. Data safety h. Strict budgetary control on capital expendi-
vi. Preservation of records/media ture
vii. Login/Logout controls i. Implementation of VRS
viii. Account maintenance i. Merger of unviable branches
ix. Disaster recovery management It is imperative that the branches and
x. Password controls Circles monitor very closely their performance in
xi. Vendor Management regard to generation of profit. All TBC branches
should, on a daily basis, review the Income and.
Expenditure of the branch and get themselves

8
Volume 14 Issue 1 April - June 2001

satisfied with the growth, particularly the 2. All the forged notes that are detected at the
non-interest income earned and wherever it is branches should be impounded and be affixed
found not satisfactory, take effective measures to with the stamp Forged Note. These notes
improve the same to the targeted or desired level. should be handed over to the local police authori-
As regards non-TBC branches, this exercise ties for further investigation by lodging FIR .
should be undertaken on a weekly basis. Branches shall take up with their Circle
(Genl.15/01-02 dt.21.05.01) Offices for the provision of ultra violet lamps, if
not already provided. Branches are also advised
Categorisation of transactions under IBGA to take note of the guidelines in CGT circular
w.e.f. 01.07.2001 Genl.88/2000-01 dated 28.03.01. All branches
should continue to accept all 500 Rupee notes
In order to comply with the directions of without asking the tenderers to write their name/
RBI our Bank has decided to introduce category address or serial number of the notes and avoid
codes for transactions under IBGA with effect inconvenience to members of public/customers.
from 01.07.2001. For this purpose, an additional
column named category should be inserted as the (Genl.20/01-02 dt.23.06.01)
first column in all the IBGA schedules till such
time the revised stationery is supplied. The MD/ED
following six codes should be used for the
purpose of categorisation: Performance of the Bank during 2000-01
Nature of transaction/category Code Our Bank has performed very well during
Government transactions (like Income the year 2000-01 and the highlights of the
06 Bank's performance are as under:
tax, Pensions, excise duty, etc.)
Funds transfer (FIT, TT discounting, i. The deposits have grown by over Rs.2500
05
etc.) and Investment in Govt. Securities Crores
BPFR transactions 04
ii. The growth of Savings Bank deposits is
All staff related transactions 03 estimated to be Rs.595 Crores
All customer related transactions 02
iii. NPA recovery of over Rs.482 Crores has
Others (like IL/OL transfer, P&L trans- been made in Indian Branches and Rs.67 Crores
01
fer, DDA balance transfer, etc.) overseas
Branches are advised to meticulously iv. Due to substantial recovery and writing off,
follow the guidelines given in the circular while NPAs (domestic) as proportion to total advances
reporting IBGA transactions under various is estimated to go down to around 22.50% as at
schedules. The introduction of category codes is the end of March 2001 (from 33.33% for end
only for the purpose of reporting to RBI and all March 2000)
other existing procedures with regard to reporting
The performance of overseas branches is
of IBGA transactions remains the same.
also commendable, as they have made substantial
(Genl.17/01-02 dt.200.620.01) Operating Profit. The Bank implemented, during
the year, several strategies for structural consoli-
Detection of forged notes dation such as merger of branches, branch
segmentation, implementation of VRS, introduc-
In view of increasing incidences of forgery tion of new structured credit products, empower-
notes being found during inspection of currency ing of Branch Heads, computerisation of 70% of
chests and branches, RBI has advised certain the Bank's business, etc. As per the provisional
guidelines for implementation and follow up. results, the Bank has surpassed the monitorable
These guidelines were conveyed to the branches targets set under the Restructuring Plan and is
through our various circulars. For the purpose of surging ahead with renewed enthusiasm and a
effective implementation, the guidelines as sense of achievement. This gratifying perform-
communicated by RBI are reiterated below: ance is made possible only by the committed
1. All notes of Rs.500 denomination received hard work done by one and all. The strenuous
should be subjected to quality examination on efforts put forth by every staff member deserve
day to day basis for detection of forged notes. appreciation.

9
Volume 14 Issue 1 April - June 2001

Let us continue the good work in larger Timely renewal of DPNs

measure in taking our Bank to greater heights. Branches should pay serious attention for
(MD/ED.01/01-02 dt.10.04.01) timely renewal of DPNs and obtention of D-11
every year, to keep the documents enforceable.
Ten commandments of customer service Apart from the HO circulars, the need for
keeping the documents alive is also reiterated
In the present competitive environment
during the review meetings at HO with the Circle
witnessed in the banking industry, the customer
Heads and in turn by the Circle Heads with the
has wide choice in choosing his bank and its
products. It should be understood that almost all branches. Non-renewal of the DPNs and
the banks have similar products and they are non-obtention of D-11 in time, will jeopardise
marketed more or less on the same terms and the enforceability, will have severe impact on the
price. Hence it is only the delivery of our product profitability of the Bank and will also attract staff
with efficient service, that makes all the differ- accountability. In spite of such specific instruc-
ence in winning and retaining the customer into tions, it is observed that there is lack of serious-
our fold. Certain basic areas where attention ness at the branch level and lack of monitoring at
needs to be paid by the branches to attract more Circle level, as is reflected by the increase in
customers, is given under as Ten command- time-barred DPNs and also the amount involved
ments of customer service and are as follows: thereof. This is a matter of serious concern and
needs to be addressed by proper and concerted
1. Keep the work place neat and tidy follow-up action at the branches immediately.
2. Receive the customer with a smile that In the light of the above, branches are
costs nothing instructed that
3. Greet the customer when they call you a. the number of DPNs that are time barred
over phone should be frozen at the level as on 31.05.01
4. Maintain a calm atmosphere in the branch b. no fresh DPNs should be allowed to get
premises time barred under any circumstances
5. Develop a service attitude towards c. immediate intensive and concerted efforts
customers should be taken to renew the time barred DPNs
6. Give no room for complaints by customers or by obtaining document (F-89) as per
Documentation Manual, in a time bound manner
7. Have thorough knowledge of job that is and bring the time barred DPNs to the barest
assigned to you minimum
8. Work as a team in your assignments to d. wherever it is not possible to renew the
have perfection documents for reasons beyond the control of the
branch management, such cases have to be taken
9. Dispose quickly of all the assignments up with the appropriate authorities for waiver of
made to you legal action or any other suitable action, well in
10. Display posters related to bank’s time.
deposit/loan schemes and various services e. each of the remaining time-barred DPNs
offered should be attended to and taken up with the
The growth of any organisation lies in appropriate authorities for further action and that
maximising the customers’ satisfaction. All staff none of the time barred DPN case remains
members should take efforts to improve customer unattended as on 31.03.2001
service and thereby increase our business in The above instructions are to be strictly
greater measure. complied with by the branch heads and closely
monitored by the Circle Heads. Inspectors of
(MD/ED.02/01-02 dt.10.04.01) Branches should comment on the compliance of
these instructions.
(MD/ED.05/01-02 dt.27.06.01)

10
 Volume 14 Issue 2 July - September 2001
Recollect
DEPOSITS Manual of Instructions IV – Deposits vide para
30, Chapter 4, page 4.28, a copy of which is
Production of Ration cards for identification purposes enclosed to the circular. In cases where cheques
As per directions received from Govern- drawn on other banks (deposited by our custom-
ment of India, branches are advised that produc- ers) are returned, proper records should be
tion of ration card should not be insisted for maintained and where frequency of such returns
identification purposes. Other valid documents are more, the same should be reported to the
like passport, driving licence, voter's identity bank/branch concerned under copy to the local
card or identity card issued by Income Tax clearing house. Branch Managers are requested
authorities, etc., can be considered for verifying to achieve NIL percentage in return of cheques
the identity of individuals. through clearing
(DEP.10/01-02 dt.7.8.01)
(DEP.7/01-02 dt.17.7.01)

Vidhya Nidhi Deposit Scheme Issue of due date notices of the deposit in advance to
customers
For the purpose of arriving at the monthly
Branches should, henceforth, obtain the
instalments and residual amount for deposits
depositor's mandate for sending due date notice
under the above scheme, Master Charts for inter-
for deposits. For this purpose, a rubber stamp
est rates from 8% to 14% in stages of 0.25%
containing the following clause shall be affixed
have been prepared and enclosed to the circular.
on the Account Opening Forms for Term Depos-
Branches are advised to make use of the master
its:
chart whenever there is a change of rate of inter-
est in the term deposits. 'Due Date Notice is to be sent to
(DEP.8/01-02 dt.24.7.01)
the address given above - Yes / No'
Interest rates on Domestic Term Deposits (DEP.11/01-02 dt.27.8.01)

With effect from 01.08.01, rates of inter- Interest Rates on Domestic Term Deposits
est for Domestic Term Deposits stand revised as
under. With effect from 12.09.01, rates of interest for
Domestic Term Deposits stand revised as under:
Int. Rate % p.a
Duration < Rs.15 Rs. 15 lakhs 2 Crores & Int. Rate % p.a
lakhs to < Rs. 2 above Below Rs. 15 lakhs Rs. 2
crore Duration
Rs.15 to less than Crores &
7 to 14 days -- 5.00 To be lakhs Rs. 2 crore above
decided by 7 to 14 days -- 5.00 As per
15 to 29 days 5.00 5.25
HO 15 to 29 days 5.00 5.25 schedule
30 to 90 days 6.25 6.50 To be 30 to 90 days 5.50 5.75 provided
91 to 179 days 7.00 7.25 decided by 91 to 179 days 6.50 6.75 to Circle
180 to 364 days 7.25 7.50 HO 180 to 364 days 7.25 7.50 Offices
1 year only 8.50 8.75 1 year only 8.50 8.75 from time
Over 1 yr. to < 2 8.50 to time
yrs Over 1 yr. to < 2 yrs 8.50 As per schedule
2 years to < 3 provided to Circle
9.00 2 years to < 3 years 9.00
years To be decided by H.O. Offices from time to
3 years and above 9.00 time
3 years and above
9.50
(DEP.13/01-02 dt.7.9.01)

(DEP.9/01-02 dt.28.7.01) Payment of interest on overdue deposits

Monitoring of Cheques Returned in Clearing With effect from 01.10.01, the guidelines
for payment of interest on renewal of overdue
Branches are advised to closely monitor term deposits are modified as under:
the cheque returns. Customers should be
persuaded not to issue cheques unless they have Where the overdue period does not exceed
adequate balances in their accounts. Detailed 14 days, the deposit should be renewed for a
instructions in this regard are available in the minimum period of 15 days from the date of

1
Volume 14 Issue 2 July - September 2001

presentation and the rate of interest to be applied ADVANCES

will be the rate ruling on the date of maturity of
Inspection of sick units
deposit relevant to the period of renewal.
Branches are advised to be regular and
Where the overdue period exceeds 14
days, the deposit should be renewed for a meticulous in carrying out the inspection of
minimum period of 15 days from the date of closed/inoperative units of sick industrial under-
presentation and the rate of interest to be applied takings. It should be ensured that insurance
shall be segregated into two parts. policy with burglary clause is taken to ensure the
safety of the assets. In case of sick and NPA
Part A - Upto the date of presentation accounts, the inspection of all assets charged
should be more frequent than stipulated for a
At simple interest only, at the rate which-
standard asset.
ever is lower of the following two:
(ADV.34/01-02 dt.2.7.01)
The rate prevailing at the time of maturity of the
deposit for the overdue period Model Educational Loan Scheme of IBA
Or A model Educational Loan Scheme
The rate prevailing at the time of presentation for evolved by IBA and recommended by Govern-
the overdue period ment of India is introduced w.e.f. 04.07.01 in
Part B. From the date of presentation to the addition to the existing educational loan schemes
future date of maturity of our Bank and RBI. Details of the IBA scheme
are furnished in the annexure to the circular. For
At the rate prevailing on the date of presentation relaxation of any of the norms, matter should be
for renewal at simple or compound at the option referred to Head Office.
of the depositor for the remaining period.
(ADV.35/01-02 dt.4.7.01)
On top of the receipt, it should be noted, prefera-
bly in red ink, as follows: Avoidance of overdues in Personal Loan Products

Issued towards renewal of Overdue Branches and Circle Offices are advised,
Deposit originally matured time and again, on the close monitoring of
on…......……. (date) borrowal accounts under Structured Loan
Schemes to avoid slippage in the asset quality.
Other details with worked out examples
The corporate goal in keeping the level of
are given in detail in the Circular.
overdues is less than 0.5%. Hence branches
(DEP.14/01-02 dt.14.9.01) should make a case by case analysis of their
Indian Bank Deposit Scheme for VRS Retirees
overdues in the structured loan accounts, tone up
their recovery measures and improve our interest
A new deposit scheme titled Indian Bank income.
Scheme for VRS Retirees has been introduced (ADV.36/01-02 dt.4.7.01)
with effect from 17.09.01. The product is similar
to our fixed deposit scheme and envisages Lending Policy for SSI
regular monthly/quarterly interest income in
The Bank's policy for lending to SSI sector
round sum of Rs. 800/2400 or in multiples of
has been explained in detail in the circular which
800/ 2400 a pre-decided principal amount loaded
includes simplified credit rating parameters,
with provision for monthly discount. The scheme
interest rate, delegation of powers, IBSSI card,
also provides the option to the depositor to have
all purpose loan etc.,
Group Personal Accident Insurance Policy cover
of 1.00 lakh for three years, a free ATM card and (ADV.37/01-02 dt.7.7.01)
a free Health plus Savings card wherever applica- Revision of Interest Rates on IB Consumer Loan,
ble. In order to have uniformity, the minimum Vehicle Loan and Home Loan
period of the deposit is fixed as three years. The
rules and procedures, details of insurance policy W.e.f. 16.07.01, the rate of interest to be
along with necessary forms are given in the charged in the above loan products stand revised
annexures to the circular. as under:
(DEP.15/01-02 dt.10.09.01)

2
Volume 14 Issue 2 July - September 2001

Scheme Revised Rates Minimum

Charging
Purpose amount Interest rate
IB Consumer Loan of interest
of loan
PTLR + 1.5% (Fixed)
IB Vehicle Loan Agri 25,000 Upto 2 lakhs at PLR Half
Home Loan Floating Rate Fixed Rate > 2 lakhs at PLR + 3 % yearly
Upto Rs.10 lakhs PTLR PTLR + 0.25% Non-Agri 50,000 PLR + 3% Quarterly
> Rs.10.00 lakh upto PTLR + 0.5% PTLR + 0.75%
Rs.25.00 lakhs For other details and terms and conditions
for both Agri and Non-agri purposes, the circular
Repairs/Furnishing etc. No change in the existing rate may be referred to.
(ADV.39/01-02 dt.14.7.01) (ADV.43/01-02 dt.28.7.01)

Consortium Advances Recovery in NPA Accounts coming under RBI policy

The Ground Rules for consortium of FIs Compromise proposals sanctioned under
and banks relating to the following issues are RBI policy have to be followed-up vigorously
enclosed to the circular and recovered fully in all cases before 28.2.2002.
w Time frame for sanction of facilities All the accounts where no OTS is sanctioned or
w Disciplining borrowers – Changing borrowers have not come forward for any settle-
management ment of dues despite effective steps taken,
w Levy of charges in the problem accounts branches should ensure suits are filed immedi-
w Group approach for Borrowers ately, if not already done. Where suits are filed,
w Sharing of Securities and Cash Flows cases should be vigorously followed-up with the
w Treatment of Restructured Accounts for advocates for obtention of Decree/Recovery
Asset Classification purposes Certificates. The Presiding Officers of the DRT
should be contacted for expeditious disposal,
The above will form Part II of the Ground Rules more particularly highlighting the need to
already circulated to branches vide circular ADV. dispose off high value cases on priority basis.
69/99-00 dt. 11.10.1999. Where Recovery Orders/Certificates are issued,
(ADV.40/01-02 dt.16.7.01)
the properties should be auctioned immediately
Consumer Loan to Rural Women by giving special thrust for this work
A new scheme "Indian Bank Gramin (ADV.44/01-02 dt.23.7.01)
Mahila Sowbhagya Scheme" to enable rural Jewel loan - Increase in advance rate
women to acquire consumer goods has been
introduced. For details of the scheme like The advance rate per gram on net weight
purpose, eligibility, articles to be purchased, loan of jewels for jewel loans has been enhanced to
amount, margin, other terms and conditions, etc., Rs.275. The circular also provides clarification
please refer to the circular. on calculation of net weight of jewels for arriving
(ADV.42/01-02 dt.23.7.01) at the advance value.
Secured OD against pledge of Gold Ornaments (ADV.45/01-02 dt.28.7.01)

Considering the demand for loans against Indian Bank Home Loan Scheme for NRIs (IBHLS - NRI)
gold jewels, it has been decided to provide
Secured OD against pledge of Gold Ornaments A new structured loan product "Indian
for both agri and non-agri purposes. Some of the Bank Home Loan Scheme for NRIs" has been
important features are: introduced. The details of the scheme alongwith
the list of focus branches identified for consider-
ing loan proposals under this scheme are
furnished in the circular. Branches other than
focus branches can also consider proposals under
this scheme subject to the guidelines given in the
circular.
(ADV.46/01-02 dt.31.7.01)

3
Volume 14 Issue 2 July - September 2001

Review of recovery performance in decreed accounts ii. Irregularities adopted by borrowers in valua-
On a review of recovery performance with tion of assets and stocks to make the shortfall
particular reference to Decreed Debts (Civil not to be clearly visible
Courts), it has been observed that because of lack iii. The warning signals
of proper follow-up and scant attention given to
this area of recovery, many decrees remain iv. Proactive measures required at the opera-
unexecuted/ not prosecuted further by filing of tional level
execution petitions to result in recovery. Field (ADV.53/01-02 dt.25.8.01)
level functionaries are advised to take stock of all
Guarantees – Issue/Monitoring/Invocation/Reversal
the decreed accounts and file execution petitions
immediately for early recovery; in respect of The circular refers to the guidelines and
decreed accounts of 10 years and above pursue procedure with regard to issue, monitoring,
them vigorously for out of court settlement invocation and reversal of guarantees contained
through compromise. It has been clarified in the in the Conventional Advances Manual. The
circular that if the amount due under a decree procedure for reversal of guarantees after the
passed by Civil Court is Rs.10 lakhs or above, expiry period has been given in detail for the
the DRT having jurisdiction has to be benefit of branches. Showing contingent liability
approached for issuance of Recovery Certificate in our books for expired guarantees affects our
and that in such cases, EP shall not be filed capital adequacy. Hence, branches are advised to
before the Civil Court. keep watch on the guarantees issued to take
(ADV.49/01-02 dt.6.8.01) immediate steps for reversal of expired guaran-
Bank Financing of Equities and Investments in Shares - tees within a maximum period of 3 months from
Revised Guidelines the date of expiry.
(ADV.55/01-02 dt.30.8.01)
Some of the guidelines for advance against
shares and debentures have been revised which New Loan Product "Ind Smart"
include the following :
A new loan product viz. "Ind Smart" for
A uniform margin of 40% shall be applied the Class I Officers in Administrative Services
on all advances/financing of IPOs/issue of (Central and State) has been introduced. Some of
guarantees,. However a minimum cash margin of the salient features of the scheme are:
20% (within the margin of 40%) shall be
maintained in respect of guarantees. Purpose

Fresh drawing limit should be arrived at To meet out expenses towards

the beginning of every week based on the avear- Education/Purchase of equipments/vehicles/
age weekly market value or the current market marriage/other family functions/ medical/
price whichever is lower Travel, etc. either as Term Loan or as
Overdraft facility.
Whenever a shortfall occurs on account of
fall in the value of shares, 15 days time be Loan Amount
allowed to the borrowers to regularise the Minimum Rs.50,000; maximum 10 times the
account gross monthly salary or Rs.3 lakh whichever
For other revised guidelines please refer to is less with NIL margin
the circular Interest Rate
(ADV. 52/01-02 dt.14.8.01)
Credit monitoring PTLR +1 %
The need for closer monitoring of all the For other details of the scheme including
borrowal accounts so that the accounts do not repayment terms, add on features, other terms &
slip into NPA is dealt at length in the circular. conditions and the format of application form &
Normally problems faced by the borrowers get undertaking letter to be obtained, the circular
reflected in the working capital by way of deple- may be referred to.
tion of current assets and erosion of liquidity.
(ADV.57/01-02 dt.31.8.01)
The circular lists out the following:
i. Some of the acts on the part of borrowers
that lead to liquidity crunch

4
Volume 14 Issue 2 July - September 2001

Matters pending before DRTs . RBI, are given in the annexures to the circular for
In a recent meeting with officials of DRT the guidance of branches.
and representatives of IBA, the difficulties faced (ADV.61/01-02 dt.8.9.01)
by DRT from banks were discussed and it was Consortium Advances – Ground Rules – Modification
felt that prompt action is required from the banks
to ensure that recoveries are effected without ant In accordance with RBI's direction, our
undue delay. Some of the points raised and Board has approved the following addition to
action to be taken by the Circle Heads/branches Ground Rules /Internal Guidelines in Consortium
are given in the circular. The circular also Policy (para 9).
discusses in detail other issues like If, in a consortium, 75% of the lenders
w Authentication of documents agree on rephasement and rescheduling (Corpo-
w Nomination of liaison/nodal officer and rate debt restructuring) other Banks will have to
their role fall in line and if the bank takes a decision to
w Nodal Banks take part in a consortium it cannot go back
unilaterally. In all such cases, our Bank's repre-
The performance of Bank's lawyers should also sentative should approach the appropriate author-
be monitored very closely and branches shall ity for confirmation of action.
inform the Nodal/Liaison Officer about any (ADV.63/01-02 dt.11.9.01)
shortcomings on the part of Bank's lawyer.
(ADV.58/01-02 dt.3.9.01) Introduction of a new loan product "IB RENTENCASH"

Norms for reckoning commencement of commercial

A new loan scheme IB RENTENCASH,
production -Treatment of restructured accounts which enables a property owner to avail a loan
on the future rentals, has been introduced. Some
The policy of the bank on the following of the salient features of the scheme are:
are spelt out in detail in the circular:
Purpose: Any purpose including repairs, renova-
i. Norms for reckoning commencement of tion, marriage, education, household festivals,
commercial production and achievement of medical, etc.
regular commercial production after stabilisation
Amount of Loan: 60 month's rent or rental
ii. Treatment of restructured accounts value for the unexpired period of lease (net of
A worked out example for calculation of advance received from the tenant + TDS) or 50%
future sacrifice in respect of restructured of the market value of property whichever is less
accounts is given in the annexure to the circular. - subject to a maximum of Rs.100 lakhs.
(ADV.59.01-02 dt.1.9.01) Interest: PTLR I/II + 2%
Repayment: 60 months in EMI. No holiday
Recovery in written off accounts period.
Branches shall reinforce their recovery Powers: All circle heads and above within their
efforts in the already written off accounts. They delegated powers under Secured OD/Title Deeds
should follow-up for recovery in the such as per booklet on discretionary powers
accounts and closely monitor recoveries as it For other features, guidelines, application
would straight away go into the income account format and terms & conditions, please refer to
of the Branch/Bank. the circular.
(ADV.60/01-02 dt.5.9.01)
(ADV.65/01-02 dt.14.9.01)
Guidelines for Issue of Commercial Papers (CPs)
Overdues in Personal Loan Products and their effect on
The standardised procedure and documen- NPA.
tation (with all the amendments issued till July
23,01), to be followed by the participants in In respect of Structured Loan Schemes, if
Commercial Paper Market, finalised by the Fixed six equated monthly instalments are in arrears,
Income Money Market and Derivatives Associa- the entire balance in the account should be
tion of India (FIMMDA), in consultation with treated as NPA and provision of 10% is to be
made on the entire balance outstanding. Since the
Bank has targeted for containing the accretion of
fresh NPA to less than 2%, we cannot afford to

5
Volume 14 Issue 2 July - September 2001

have overdue accounts and continue to lend iv. A staff member transferred under periodical
further. Any branch having overdues more than transfer, may come back to the same place /
stipulated level against balance outstanding as centre after two years, under the existing request
stated below should approach their Circle Heads transfer policy on the basis of 1:1:1 for periodical
for further lending under that scheme: Transfer, SJS and General Category respectively.
IB Consumer Loan Scheme 1.25% v. The existing system of "Request Transfer"
IB Salaried Class Loan 1.75% and "Redeployment of surplus staff from the
IB Home Loan Scheme 0.40% computerised branches" will be continued as per
IB Vehicle Loan Scheme 0.75% the guidelines already in vogue
The circle head should evaluate the reasons for For complete details such as exemptions,
overdues and give judicious permissions. staff drawing permanent allowance, etc., the
Wherever required, they may seek circular may be referred to.
advice/guidance of HO giving their views. (PRNL.22/01-02 dt.4.7.01)
(ADV.66/01 –02 dt.25.9.01)
Solace for Expired Employees' Dependants - SEED
Interest Rates on Export Credit.
The Bank with due consultation and
Interest rates on export credit have been consent of the Employees' Union as well as the
revised with effect from 26.09.01. The changed Officers' Association has introduced the above
rates are applicable to both existing and fresh scheme with voluntary contribution from staff
export credits. Details of the revised rates are members to provide relief to the bereaved family
given in annexure I to the circular. As per RBI's in the unfortunate event of death of any staff. All
directions, the revised rates are applicable only the confirmed staff members including part time
upto 31 March 2002. W. e f. 01.04.2002, the employees drawing scale wages are eligible to
rates of interest existing as at 25.09.01 would be become members of the scheme.
applicable unless otherwise communicated.
Rates of contribution for each eventuality shall
ADV.67/01 –02 dt.26.9.01) be as under:
PERSONNEL Executives (Scale VI & above) Rs.10

Transfer of clerical staff at periodical intervals Officers upto Scale V Rs. 7

Without prejudice to the Bank's right to Clerks Rs. 5

transfer an employee in terms of service condi- Sub-staff, PTE Rs. 3
tions and provisions in various industry level
settlements, a Memorandum of Settlement with Contributions will be collected from the
the FIBEU has been arrived at for periodical members of the scheme upon the unfortunate
transfer of clerical staff with immediate effect. death of member/s by intimating the same by
Some of the guidelines are: way of all branch circular and the amount so
collected from the members of the Scheme will
i. All staff members who have completed 5 be distributed to the family of the deceased
years of service in a branch / office would come member of the scheme as per rules. The staff
under the purview of the Periodical Transfer and members who become members of the SEED
the transfer will be considered on the basis of scheme cannot withdraw his / her membership
branch / office / centre seniority.. from the scheme. Membership shall automati-
ii. If at any centre where there are more than cally cease immediately upon one's death/retire-
one branch / office, the total combined stay of ment/ resignation/ termination/voluntary
any staff at all branches / offices put together in cessation/discharge or dismissal from the Bank's
the centre / place shall not exceed 10 years. service. Membership will also stand terminated
in the event of a member not contributing for
iii. Periodical Transfers are to be considered to a three consecutive circulars for the purpose of
needy branch / office in a distance of about contribution. On transfer of a staff, who is a
40/100 kilometres having regard to the cluster of member of the SEED scheme, the irrevocable
branches to meet the existing vacancies/potential letter of authority obtained in this regard should
needs within the State/Linguistic area, as far as be sent alongwith the LPC with a mention in the
possible. LPC.

6
Volume 14 Issue 2 July - September 2001

For other details of the scheme such as (Rs. in lakhs)

format for reporting the death of staff members, Asst. Managers Managers
Category of BMs, SMs,
modalities for deduction and transfer of contribu- branches Cash Clg/Tfr Cash Clg/Tfr CMs, AGMs
tion, etc., please refer to the circular.
(PRNL.24/01-02 dt.9.7.01) Small 0.50 1.00 1.00 2.00 Unlimited
Medium 0.50 1.00 1.00 3.00 Unlimited
Staff Housing Loan Scheme – Enhancement in
quantum Large 0.50 1.50 2.00 5.00 Unlimited
VLB/ELB 0.50 2.00 2.00 10.00 Unlimited
The quantum of Staff Housing Loan to
Award Staff and Officers has been enhanced as
under: In branches where an officer has been
designated as Asst. Branch Manager, he/she
shall, irrespective of the scale, exercise the
Award Staff
Particulars Officers powers of the Branch Head, viz., unlimited, with
Clerical Substaff regard to passing of instruments. The Circle
Heads are empowered to designate Assistant
Loan amount (In lakhs)
Branch Managers wherever required. The circular
i. for construction 4.50 3.00 7.50 also contains other instructions with regard to
ii. for repairs/ renova-
passing of instruments
1.20 0.80 2.00
tion/ enlarging (PRNL.35/01-02 dt.3.8.01)

Additional SHL Group Personal Accident Insurance Policy

1.50 1.00 2.50
(Maximum)
The above policy has been renewed for
Rate of interest (Simple)
period of one year from 02.08.01 with United
Upto Rs.1.10 lakhs 5% 5% 5% India Insurance Co. Ltd., Divisional Office No.
> Rs.1.10 lak upto 5 V, Catholic Center. 64 – Armenian Street,
11% 11% 11% Chennai – 600 001 (phone 5389793 & 5389794),
lakhs
under policy. No GPA . 010504 / 42 / 01 /
> Rs.5 lakhs - - 12%
00276.
For complete details of the modified SHL (PRNL.36/01-02 dt.6.8.01)
scheme, please refer to the relevant circulars.
Regulation 20(4) of Indian Bank Officer Employees'
(PRNL.31 & 32/01-02 dt.28.7.01) (Conduct) Regulations, 1976
Reorganisation of Circles Regulation 20(4) of Indian Bank Officer
The following 3 circles have been merged Employees' (Conduct) Regulations, 1976 has
with w.e.f 10.8.01 been amended as under:
Every Officer employee shall report to the
Circle Merged with Competent Authority every transaction concern-
Hubli Bangalore ing movable property owned or held by him
either in his name or in the name of a member of
Trivandrum Ernakulam
his family if the value of such a property exceeds
Delhi 9 branches Rs.25,000
MP & Rajasthan Bhubaneshwar 4 branches
(PRNL.46/01-02 dt 7.9.01)
Ahmedabad 8 branches

(PRNL.34/01-02 dt.1.8.01) CRA

Authority of officers for authorising payment of instru- Processing Charges for Credit Proposals - Personal
ments (other than DDs) Loans
The authority of officers for authorising It is clarified as under:
payment of instruments (other than DDs) by way
i. If any separate rate of processing charge is
of cash/clearing/ transfer is revised with immedi-
mentioned in any of the loan products/schemes,
ate effect as given below:
such rates are applicable for those products.

7
Volume 14 Issue 2 July - September 2001

ii. In respect of all schematic personal loan Payment of interest on overdue FCNR(B) deposits
products, processing charges are to be recovered W.e.f. 10.9.01, the guidelines for payment
only once, upfront at the time of sanction of a of interest on overdue FCNR(B) deposits stand
loan, unless otherwise mentioned. revised as under:
iii. If no stipulation is made, the usual process- Where the overdue period does not exceed 14 days
ing charges as specified in Circular Branches may renew overdue FCNR deposits or
No.CRA.20/98-99 dt.23.11.98 a portion thereof from the date of maturity at the
(CRA.6/01-02 dt.16.8.01) rate of interest as prevailing on the date of matur-
ity or on the date of presentation for renewal,
FX whichever is lower, for the period of renewal.
Revision of interest rates on FCNR (B), NRE and NRNR Where the overdue period exceeds 14 days
RDS Deposits At simple interest for the overdue period at lower
The rates of interest for FCNR (B) depos- of the rates set out at 'a' & 'b' below:
its stand revised w.e.f 27.8.01 and 24.9.01. For a. Overdue period Rate of interest
details, please refer to the circular. Interest rates 15 days to 45 days 2.00%
in FCNR (B) deposits are revised frequently due 46 days to 90 days 2.50%
to changes in the global interest rates and to 91 days and above 3.00%
comply with RBI guidelines. Branches are there-
fore advised to verify with Circle Heads or the b. The minimum rate of interest operative on
OSBs concerned for revised interest rates before the date of renewal for the currency concerned.
acceptance of fresh deposits or renewal of exist- (FX.13/01-02 dt.20.8.01)
ing deposits.
(FX.11 & 16/01-02 dt.20.8.01)
GENERAL
Study of large value Frauds by RBI
Discontinuance of Opening/Crediting RFC/EEFC
accounts A study conducted by RBI has revealed
that frauds are continued to be perpetrated mainly
It has been decided not to allow the facility on account of non-observation/laxity in the
of opening RFC/EEFC accounts to Pilots, Crew observance of the prescribed systems and proce-
Members, Flight Engineers, etc., of airlines dures. Furthermore, there has been inordinate
companies since the payments made to them are delay in detection, reporting and completion of
only reimbursement in nature and not earnings. the investigations for fixing staff accountability.
Branches are further advised Delay in completion of departmental action
within a reasonable time frame was also
i. not to credit the allowances received in observed. A copy of the findings of the study is
foreign exchange by the above personnel to RFC enclosed to the circular for information of
or EEFC accounts branches. Branches are advised to adhere
ii. not to open fresh RFC/EEFC accounts out of meticulously to the systems and procedures
flying allowances in those cases. prescribed by Head Office to avoid frauds.
(GENL.23/01-02 dt.19.7.01)
The balances in the accounts already opened may
be allowed to be kept till its maturity/ withdrawal Security Features of Bank Notes
and no fresh credits to that account should be
allowed With a view to strengthen the system for
detection of forged notes, their proper scrutiny
(FX.12/01-02 dt.5.9.01)
and to educate the staff members dealing with the
Revision of interest rates on NRE and NRNR RDS cash, RBI has communicated in the form of a
Deposits chart, the security features of bank notes in
various denominations. The chart containing the
The rates of interest for NRE & NRNR details of the year of issue, size, watermark and
RDS deposits stand revised w.e.f. 10.9.01. For other features in the front and back side in
details, please refer to the circular. respect of all denomination of currency notes is

8
Volume 14 Issue 2 July - September 2001

enclosed as annexure to the circular for reference our branches. Since there are only 66 specialised
and guidance of the branches. branches for the bank as a whole, these branches
(GENL.26/01-02 dt.9.8.01) alone may not be in a position to capture a
sizeable percentage of market potential.
Inter Branch Reconciliation - Corporate Expectations.
The other branches should continue to put
RBI has now reduced the period from two in efforts to get good borrowers into our fold and
years to one year for making 100% provisioning at no cost, good business be allowed to be taken
for the net debit balance in the inter-branch away by other banks. Branches who canvass
accounts from the year ending 31st March 2002. good borrowal accounts may be retained as
Therefore, to avoid provisioning, branches are channel branch for the customer and will have
advised to attend to the outstanding inter branch sub limits allocated for their branch which will
debit entries on top priority. The detailed guide- give them interest income, while the monitoring
lines to be followed by branches, Circle EDPs will be done through specialised branches.
and IBR cells in this regard are given in the
circular. In course of time, if some of these
(GENL.34/01-02 dt.17.9.01) branches are in a position to canvass several
accounts, HO could even consider to designate
MD/ED such branches as Corporate/Credit Intensive as
the case may be. Likewise the Corporate and
Intensified Credit Marketing Credit Intensive branches should canvass for the
"Personal Banking business" (Home loan,
Branches should intensify their marketing Salaried Class Loan, Vehicle loan. Consumer
efforts to bring into our fold credit worthy Loan etc) of the employees of their corporate
proposals. The Corporate and Credit Intensive clients. This business could be handled at the
branches will be scouting for new nearest Personal Banking Branches.
business/expanding the existing clientele, by
(MD/ED.6/01-02 dt.3.7.01)
virtue of having trained manpower, infrastructure
etc. Their efforts need to be supplemented by all

9
 Volume 14 Issue 3 October - December 2001
Recollect
DEPOSITS The revised interest rates and foreclosure
rules are applicable to fresh tiny deposit accounts
Senior Citizens Deposit Scheme - Rate of interest opened on or after 21.11.01. Loan against tiny
payable to nominee deposit account should be sanctioned only upto
In the event of death of the depositor under 75% of the balance keeping a margin of 25%.
the above scheme, if the nominee, who is not a
    
senior citizen, opts for waiting upto due date
either for encashment or renewal of the term Interest Rates On Domestic Term Deposits
deposit, benefit of additional rate of interest (it W.e.f. 15.12.01 the rates of interest on
being contracted rate) has to be extended till domestic term deposits stand revised as under:
maturity. If the deposit is renewed before the due
date by the nominee, benefit of additional rate of Int. Rate % p.a
interest applicable to senior citizens can not be Duration < Rs.15 Rs. 15 lakhs 2 Crores &
extended to such nominee/s. lakhs to < Rs. 2 above
crore

    7 to 14 days -- 5.00 As per sched-
ule provided
Interest Rates on Domestic Term Deposits 15 to 29 days 5.00 5.25
to Circle
30 to 45 days 5.50 5.75 Offices from
W.e.f. 15.11.01 the rates of interest on
46 to 90 days 6.00 6.25 time to time
domestic term deposits stand revised as under:
91 to 179 days 6.50 6.75
Int. Rate % p.a
180 to 364 days 7.00 7.50
Duration < Rs.15 Rs. 15 lakhs 2 Crores &
1 year only 8.00 8.25
lakhs to < Rs. 2 above
crore Over 1 yr. to < 2 8.00
7 to 14 days -- 5.00 As per sched- yrs
As per schedule provided to
ule provided 2 years to < 3
15 to 29 days 5.00 5.25 8.00 Circle Offices from time to
to Circle years
time
30 to 45 days 5.50 5.75 Offices from 3 years and 8.50
46 to 90 days 6.00 6.25 time to time above
91 to 179 days 6.50 6.75
     

180 to 364 days 7.00 7.50

1 year only 8.25 8.50 ADVANCES
Over 1 yr. to < 2 yrs 8.25
As per schedule provided Classification of loans to Food and Agro based
2 years to < 3 years 8.50 to Circle Offices from processing sector under priority sector
3 years and above 8.50 time to time
The following items within the food and

   
agro based processing sector with investment in
plant and machinery upto Rs.5 crores would be
Interest Rates on Tiny Deposit Scheme eligible for classification as priority sector:
W.e.f. 21.11.01, the rates of interest on i. Fruit and vegetable processing
Tiny Deposit accounts that run for the full term ii. Food grain milling
of 3 years stand revised to 2% p.a. The rate of iii. Dairy products
interest payable on foreclosure of accounts is as iv. Processing of poultry and eggs, meat
below: products
v. Fish processing
Upto 12 months vi. Bread, oilseeds, meals (edible), breakfast
foods, biscuits, confectionery (including
No interest will be paid and commission paid to
cocoa processing and chocolate), malt
the agent in respect of the account will be recov-
ered from the depositor extract, protein isolate, high protein food,
weaning food and extruded/other ready to eat
More than 12 months to less than 3 years
food products
vii. Aerated water/soft drinks and other
No interest will be paid. Commission paid to the processed foods
agent in respect of the account need not be viii.Special packaging for food processing
recovered industries

1
Volume 14 Issue 3 October - December 2001

ix. Technical assistance and advice to food Premium

processing industry It has been decided by our bank to opt for annual
premium instead of three year premium. Out of
While loans to units falling under SSI the annual premium of Rs.15 per KCC holder,
definition may be shown under advances to SSI Bank has to pay Rs.10 and Rs.5 has to be recov-
sector, loans to other units should be shown ered from IBKC holder. The amount may be paid
under other priority sector in all returns/ by debiting the SR II account.
statements.
All the existing IBKC holders whose

  
borrowal accounts are subsisting and all farmers
Festival offer - Reduction in rate of interest for IB to whom IBKC will be issued afresh have to be
Vehicle Loan and IB Home Loan provided with the insurance cover.
As a one time measure, the following For other details of the scheme such as list
reduction in the rate of interest has been offered of insurance companies, procedure for remittance
only for fresh loans sanctioned under the above of premium, nomination, claim procedure,
schemes during 11.10.01 to 31.12.01 formats, etc., please refer to the circular.
Scheme Rate of Interest

  
Indian Bank Vehicle Loan Applicable PTLR plus 0.50% -
(for new vehicles only) Fixed Credit Guarantee Fund Scheme for Small Industries
Indian Bank Home Loan
(CGFSI)
Floating Rate Applicable PTLR minus 1 %
Fixed Rate Applicable PTLR minus 0.50 % W.e.f 1.8.2000, Government of India and
SIDBI have jointly set up a new Guarantee
The salient features of the IB Home Loan
Corporation viz.,"Credit Guarantee Fund Trust
scheme and the frequently asked questions and
for Small Industries ( CGTSI )" to cover
model answers are furnished in the annexures to
advances to SSI units in place of the existing
the circular.
scheme operated by DICGC. The salient features

    of the scheme are classified under the following
  
heads and the details are enumerated in the
Personal Accident Insurance Scheme for Kisan Credit circular:
Card Holders
i. Credit facilities eligible under the scheme
Based on directions from Government of
India and RBI, NABARD in consultation with ii. Credit facilities not eligible under the scheme
representatives of Insurance Companies, and iii. Responsibilities of Bank under the scheme
Bankers has finalised the personal accident insur-
iv. Guarantee Fee & Annual Service fee
ance scheme for Kisan Credit Card holders for
uniform implementation by all banks. Some of v. Extent of Guarantee
the salient features of the scheme are as under: vi. Invocation of Guarantee
Scope of Cover vii. Subrogation of Rights and Recoveries on
This scheme covers all the Kisan Credit Card account of Claims paid
Holders upto the age of 70 years against death or
permanent disability resulting from accidents viii.Appropriation of amount realised by the
caused by external, violent and visible means and Bank in respect of guarantees invoked
occurring within the country. ix. Termination of Trust liability in certain cases
Risk coverage x. Modifications and exemptions
Death due to accident Rs.50,000
xi. Documentation
Permanent total disability Rs.50,000
Loss of two limbs or two eyes or one limb and Our Bank has joined the scheme so as to
Rs.50,000 cover all eligible credit facilities sanctioned with
one eye
Loss of one limb or one eye Rs.25,000 effect from 01/11/01. The operational guide-
Period of Master Policy lines will be conveyed to all branches on receipt
Valid for a period of 3 years effective from 2001
to 2004.

2
Volume 14 Issue 3 October - December 2001

of clarifications from the Trust pertaining to for some reason or other, resulting in avoidable
modalities in implementation of the scheme. delay, correspondence and expenditure. Hence,
detailed guidelines for submission of subsidy

   
claims under PMRY scheme are reiterated with
Personal Loans - EMI chart examples in the circular. A format of the applica-
tion for claiming the subsidy under the scheme is
An EMI chart for interest rates ranging also annexed to the circular for the use of
from 6% to 26% with 0.25% slabs and for repay- branches.
ment period from 3 to 240 months has been
enclosed to the circular for the benefit of 
    

branches. The chart has been prepared assuming

Prerelease Audit
the following:
Certain modifications have been done in
i. Interest compounded quarterly
the existing prerelease audit system as under to
ii. Products are taken on daily basis and make it more effective and to avoid time delay in
rounded off to the next higher rupee carrying out prerelease audit. Accordingly, prere-
lease audit be done either by an Inspector of
iii. Interest is calculated at the end of calendar
Branches or by an officer conversant with credit
quarters
portfolio. Branches provided with concurrent
iv. Interest is rounded off to the next higher auditors may ask them to conduct prerelease
rupee audit. Appropriate authority will permit release
of sanctioned limits if all the pre-disbursement
v. The repayment starts exactly on the same conditions are complied with. In the following
date of the next month after the loan disbur- cases, Branch/Circle Office should refer to
sal and subsequent instalments are made on sanctioning authority along with specific recom-
the same date of the respective months. mendations prescribing
vi. Repayments are made promptly every month i. Individual documentation pending finalisa-
on exact due dates. tion of joint documentation.
If there is delay in any month for recovery ii. Obtaining of NOC for ceding/extending
of instalment, the interest has to be collected for second charge instead of insisting on creation
delayed period in addition to this EMI. Branches of second charge.
should also ensure that overdue interest is
charged for remittance of instalments after the The disbursal of funds should take place
due date of instalments. only after the borrower completing the
document/s in all respects.

  

A separate declaration from all the borrow-

Treatment of restructured accounts ers be obtained henceforth to the effect that the
The instructions contained in Circular document/s were executed only after they are
ADV.59/01-02 dated 1.9.01 on the captioned duly filled in. The sanction communication
subject should not be applied to restructuring/ should clearly divide the terms and conditions
rescheduling of credit facilities extended to into
traders as trading involves only buying and a. Pre-disbursement conditions
selling of commodities and the problems associ- b. Post-disbursement conditions
ated with manufacturing units such as bottleneck c. Prerelease Audit should cover only
in commercial production, time and cost escala- pre-disbursement conditions.
tion etc. are not applicable to them. Branches are advised to follow the stipu-

   lated guidelines meticulously as contained in
various circulars issued from time to time, not
Disbursement of loans under PMRY and claiming of only to avoid adverse remarks in AFI/LFAR, but
subsidy also to safeguard the interest of the Bank so that
At HO: Rural Banking Dept., while Bank's dues are not in jeopardy in case of default
processing the claims for subsidy under PMRY, due to technicalities.
it is observed that nearly 50% of the applications 
    
received are returned to the branches concerned

3
Volume 14 Issue 3 October - December 2001

Master circular on interest rates for loans and advances permitted, to provide free comprehensive insur-
The circular contains the guidelines and ance cover for one year for vehicles purchased
rate of interest to be charged (duly updated) for under the IB Kisan Bike scheme during the
various types of advances period from 15.12.01 to 31.01.02 only.

    
Annexure I Domestic Credit
Annexure II Export Credit Revised Powers for Agricultural sector.
Annexure III Staff Loans/Advances W.e.f. 7.11.2001, delegation of powers for
Annexure IV Premises Loan agri sector have been amended for both working
capital and term loans, the details of which are
Annexure V Rates of PLR/PTLR I&II since its introduction
given in the annexure to the circular. The
Annexure VI List of important circulars on rate of interest complete amendments in the form of revised
on Loans & Advances charts are enclosed to the circular. Branches are
advised to replace the existing chart with the

    
revised chart at the appropriate places in the
Stock Inspection, Scrutiny of feedback statements Booklet on Credit and Administrative Powers
dated 19.02.2000.
Head Office has been issuing guidelines 
    
from time to time on the necessity and on the
techniques of effective utilisation of various tools D 110 - Tripartite Agreement
of monitoring of advances to ensure that the
assets are performing well and earning income to The format of Tripartite Agreement, D 110
to be obtained for loans sanctioned under IBRen-
the Bank. An exhaustive checklist on the follow-
tEncash scheme is enclosed to the circular. The
ing aspects are annexed to the circular:
same is to be duly indexed and kept as part of the
i. Scrutiny of stock statements. Documentation manual.
ii. Conducting of Stock Inspection.

    
iii. Scrutiny of Book Debt statement.
iv. Stock Inspection Reporting.
PERSONNEL
v. General Check List.
vi. Scrutiny of statements on QIS II and III. Reduction in the rate of interest on PF and PF loans
Field level functionaries especially the W.e.f. 1.10.01, the rate of interest allowed
Branch Managers/Credit Officers are advised to on PF has been reduced to 9.5% p.a. Conse-
take note of the vital elements analysed and quently, the rate of interest to be charged on PF
ensure the aspects covered are effectively utilised loans and RWL stands reduced to 10.5% p.a.
wherever applicable. When warning signals, if
any, are emanated, they should immediately be The Government of India has reduced the
taken note of for prompt corrective Action. tax free interest on Provident Fund from 12% to
9.5% w.e.f. from 1.4.2001.Therefore any interest

     above 9.5% on Provident Fund in the hands of
the employees is taxable. Hence, branches are
Policy on Stock Audit
advised to add the excess interest of 1.5%
The existing policy of the Bank on Stock credited to the employees' PF account during
Audit has been reviewed and revised. The salient 1.4.2001 to 30.9.2001 to the taxable income of
features of the revised policy vis a vis the exist- the employees and deduct tax accordingly. The
ing one, are given in detail in the annexures to amount of excess interest paid during the
the circular. Branches are advised to go through relevant period is being communicated to
the same and ensure that Stock Audit is branches separately.
conducted as per the revised policy.
   


    

CRA
Incentive for Loans availed under Kisan Bike Scheme
BPFR outstanding on account IBMF DW/RW
With a view to enhance the marketability
of the "Kisan Bike Scheme" and as a bonanza for It has been decided by IBMF to exit from
Pongal/Sankaranthi festival, all branches are Mutual Fund business and to hive off the live

4
Volume 14 Issue 3 October - December 2001

schemes to M/s. Tata Mutual Fund. Accordingly of the branches to recover rent on due date or
balances remaining unclaimed by the eligible initiate action for breaking open of lockers in
unit holders in the redemption warrant account of case of default affects the profitability of the
Ind Navaratna and dividend warrant accounts of Bank considering the huge cost outlay.
Ind Navaratna, Ind Shelter Plan A , Ind Tax
Branch Managers should chalk out a time
Shield Plan A, are also transferred by IBMF to
bound programme, recover all the arrears of
Tata Mutual Fund. Paying branches are advised
locker rent, bring the position of arrears of rent to
to take note of the proposal and to prefer claims
NIL and send a detailed action report to their
for all the outstanding entries under BPFR a/c
respective circle offices. Circle Heads shall send
related to IBMF, if any, with the controlling
a consolidated action taken report to HO:
branches viz., Harbour and Mumbai Fort.
Domestic Operations Dept.
While making any claim on these
    
accounts, branches should necessarily enclose the
warrants or in the absence of the same, quote the Electronic Funds Transfer (EFT) Scheme
12 digit warrant number, folio number, scheme
name and date of issue of the warrant, failing RBI introduced the Electronic Funds
which it will not be possible to reimburse the Transfer Scheme in 1996, by which customers
amount so claimed. Branches should continue to can transfer funds from one branch of a bank to
honour all warrants/cheques issued by IBMF "at another branch of any bank located in a different
par" on all other accounts maintained at Mumbai centre. The scheme is available at the following
Fort/Patullos Road/Harbour branches. centres:
   Ahmedabad Guwahati Mumbai
Revision of Service Charges Bangalore Hyderabad Nagpur
Bhubaneshwar Jaipur New Delhi
W.e.f. from 22.10.2001 the charges on
Chandigarh Kanpur Patna
some of the services offered by the Bank have
Chennai Kolkata Thiruvananthapuram
been revised. A comprehensive list of charges for
various services, as a ready reckoner, is enclosed W.e.f. from 1.10.01, the limit for an
to the circular for the benefit of our branches. individual EFT transaction has been increased to
The provisions of the circular will not apply to Rs.2.00 crore (from Rs.5 lakhs). Branches can
our staff members to whom the existing arrange- now charge normal DD commission plus an
ments will continue. additional charge of Rs.15 for an EFT
    
transaction.
   
Timely Recovery of Rent on Locker
With the introduction of 'Caution Deposit' Reporting Fridays - Section 42 Of RBI Act 1934
as mandatory for all lockers (refer circular The list of reporting Fridays for the year
CRA.17/97-98 dt.11.7.97), the recovery of rent 2002 is furnished in the annexure I and a brief
on lockers should have been an automatic note on DTL is given in Annexure II of the circu-
process eliminating the time, labour and the cost lar for the guidance of branches.
of follow-up by branches in this regard. As per
   
circular CRA.12/2001-02 dt. 12.10.2001, a
penalty of Rs. 5 per day has been prescribed for
FX
delayed payment of locker rent beyond the due
date. The due date notices to locker hirers should Revision of interest rates on FCNR (B), NRE and
indicate this penalty clause so that the customer NRNRRDS Deposits
grievance/complaint at a later date is avoided.
The rates of interest for the above deposits
Branches are advised to take advantage of stand revised as under:
the revised and simplified procedure (refer circu-
FCNR (B) w.e.f. 15.10.01, 15.11.01 and 03.01.02
lar CRA.20/99-2000 dt. 20.10.1999 for detailed
NRE, NRNRRDS w.e.f. 15.11.01 and 03.01.02
guidelines) for breaking open the lockers in
which the rent is overdue and reallot the same to The preferential rates of interest for NRE/NRNR
other prospective customers. Failure on the part Term Deposits for all maturities will be as under:

5
Volume 14 Issue 3 October - December 2001

Rs.15 lakhs and above - 0.25 % over card rate Encashment of legacy currency notes and coins after
introduction of Euro Currency
Rs.2 crores and above, reference to be made to
HO: International Division. The three year transition period allowed
for the use of the legacy currencies came to an
No preferential interest rate is applicable for end on 31.12.2001 and w.e.f. 1.1.2002, the
FCNR (B) deposits. legacy currencies will cease to exist as a legal
For details of revised rates and currencies, tender and will be replaced by Euro for all
please refer to the circulars wholesale as well as retail monetary transactions.
Henceforth, all bills, cheques or other instru-
      
ments will have to be drawn in Euro only. Instru-
     ments drawn in legacy currencies prior to
31.12.2001 will be paid in equivalent Euro at the
Rupee Draft Drawing arrangements by our Singapore fixed conversion rates as furnished in the
branch
circular. Reporting of such transactions should be
In view of the large number of DDs done in EURO only.
exceeding Rs.1 lakh being issued by way of
remittances from NRI clientele on our branches As per Notification No.FEMA
in India, Singapore branch has been accorded 11/2000-RB dt 3.5.2000, a person resident in
permission for waiver of affixing check cypher India may retain foreign currency notes, bank
code for DDs issued upto Rs.5 lakhs subject to notes and foreign currency traveller's cheques not
exercise of certain safeguards as enumerated in exceeding USD 2000 or its equivalent, in aggre-
the circular. For DDs exceeding Rs.5 lakhs, the gate. Authorised dealers may freely exchange
check cypher code will continue to be affixed such balances held by residents in any of the
and the same has to decoded before making the legacy currencies to the Euro. This facility is
payment. The change comes into effect from available only till 31.01.2002.
5.11.2001. Cheques/DDs/TCs in legacy currencies
    drawn prior to 31.12.2001 can be presented
through the normal clearing in the respective
International Banking Statistics (IBS) - Quarterly Data countries upto 15.2.2002 and they will be paid
To Be Submitted By Branches and cleared in equivalent Euro by 28.2.2002.
RBI is collecting a quarterly statement Beyond 15.2.2002, cheques/DDs drawn in legacy
from all Banks containing details of balances in currencies dated prior to 31.12.2001 will be
respect of specific external assets & liabilities as taken only on collection and will entail appropri-
it appears in the balance sheet of the bank. For ate commission apart from delay in collection of
the purpose of reporting the data to Circle Office, the instrument. Instruments in legacy currencies
computerised branches have been provided with
the required software developed by RBI. These dated 1.1.2002 and after should not be accepted
branches shall enter the details and send the data for purchase/collection.
floppy to their Circle Office. Non-computerised Authorised branches are advised to
branches shall manually prepare the data as per
the guidelines and format given in the annexures display EURO exchange rates for TCs and for
to the circular and submit the same to their EURO Currency Notes from 1.01.2002 for the
respective Circle Offices. On receipt of these information of visiting public.
data, Circle Offices shall consolidate the same
using the software supplied to them and send the      
floppy covering the data of the entire Circle to
HO: International Division. GENERAL
The statement should be prepared as on the
last day of each quarter and should be submitted Rationalisation of returns - Revised system of reporting
to Circle Office before 15th of the succeeding by branches
month. The floppy containing consolidated data The existing system of reporting data by
of all branches should reach HO:ID latest by
25th. branches through CIS, A&L, P&L, etc., have
been revamped and revised so as to derive the
      
maximum benefits of technology upgradation.
The scope of submission of data by branches has
been widened to Deposits, Non-Fund based
business, Foreign Exchange, Nominal accounts

6
Volume 14 Issue 3 October - December 2001

etc. The revised system covers the following important information has been called for from
applications: branches. Arrangements are made for despatch
of DSB 1 formats to branches with Annexures 1
1. Assets & Liabilities, Profit & Loss, Sec. 42
and 2 . The return should reach the circle offices
2. Foreign Exchange business (FX)
by 5th of succeeding month and the consolidated
3. Credit Information System (CIS-revised)
return from Circle Offices should reach
4. Deposit Information System (DIS)
HO:Accounts Dept by 12th.
5. Non-Fund based business (NFB)
6. Residual Control Returns (RCR)    

Under the revised system of reporting, Settlement of disputes between two Public Sector
branches have to submit copies of various regis- enterprises and between a PSE and Govt. Dept
ters, sectional daybooks and input statements to
the Circle EDPs, who in turn will enter the data A Permanent Machinery of Arbitration
in computers, process the same and generate (PMA) has been set up in Bureau of Public
various statements. Booklets containing the Enterprises to settle all commercial disputes
necessary guidelines and model formats on the between parties referred to above. Government of
following applications are enclosed to the India has advised all Banks to include an arbitra-
circular. tion clause in favour of PMA in all commercial
contracts/purchase orders/agreements with other
1. CIS 2. DIS 3. NFB 4. RCR Public Sector Banks, Public Sector Enterprises
As the success of the new system of and Government Departments. For draft of the
reporting depends on the correct, timely data clause to be included, please refer to the circular.
submitted by the branches, they should ensure     
that the copies of various registers/returns are
submitted as per prescribed periodicity without House Keeping - Balancing of Books
fail, Branch Managers should bestow their While going through the branch inspection
personal attention in this regard and ensure that reports, it is observed that certain branches do
all reports are submitted to Circle Offices /EDPs not maintain the periodicity in taking balances as
without fail as per time norms fixed. The Circle prescribed. This attracts adverse remarks from
Heads should monitor the smooth implementa- RBI and Statutory Auditors. Detailed guidelines/
tion of the revised system. procedure to be followed by branches in the
  
balancing of books and the periodicity to be
maintained are reiterated in the annexure to the
Change in the frequency on DSB Return 1 circular. Branches are advised to take it up in the
W.e.f. October 2001, branches should right earnest and balance the books as per the
submit DSB 1 return on a monthly basis as on prescribed periodicity. Circle Heads are
the last Friday except for March, June, Septem- requested to closely monitor housekeeping at
ber and December for which it shall be as on last branches.
day of the month. Alongwith the existing
   
Annexure 1, a new format viz., Annexure 2 to
DSB 1 has been introduced wherein certain

7
 Volume 14 Issue 4 January - March 2002
Recollect
DEPOSITS Over 1 yr. to < 2 8.00
yrs. As per schedule provided to
Strategies for improving SB Deposits 2 yrs. to < 3 yrs. 8.00 Circle Offices from time to
time
3 yrs. & above 8.50
The imperative need for constantly focus-
ing the attention of the Branches on the increase Interest payable on Foreclosure of Preferential
in the number of SB accounts and Savings Bank Domestic Term Deposits w.e.f. 20.2.2002
deposits has been reiterated time and again by the
Bank through various circulars. Every branch Period run Category I - Rs.15 Category II - Rs. 1
should draw their strategies to improve the SB lakhs to < 1 Crore crore and above
deposits. Some suggestive measures in this Upto 6 days No interest is payable on foreclosure of
regard are furnished in the circular for the deposits for both categories
guidance of branches.
7 days & Eligible rate will be the applicable Interest
(DEP.21 /01-02 dt. 18.1.02)
above rate for Rs.15 lakhs to less than Rs.1 Crore
slab for the actual period run ruling at the
Settlement of claims of deceased depositors' accounts
time of deposit without penalty for both
Branches were advised not to insist upon categories
Succession Certificate from the legal heirs of
deceased depositors for settlement of the deposit In respect of foreclosure of Term deposits of less
accounts vide circular DEP.2/2000-01 dt. than Rs.15 lakhs, refer circular DEP.34/2000-01
25.4.2000. However, they were advised to adopt dated 31.01.2001.
other safeguards as may be considered appropri- (Dep. 24/ 01-02 dt.14.2.2002)
ate including taking of indemnity bond from the
legal heirs. This measure is now extended in
respect of other assets/securities of the deceased ADVANCES
depositors, like articles kept in safe deposit Take over of Borrowal Accounts - Policy Guidelines.
locker, securities held against advances, etc.,
after adjustment thereof if any. It is observed that certain take over
proposals received at HO are not in conformity
Branches may however call for Succession with the extant guidelines issued from time to
Certificate from legal heirs of the deceased time. A consolidated list of the guidelines
depositors/customers where there are disputes
contained in various circulars with regard to take
and all legal heirs do not join in indemnifying the
over of borrowal accounts is furnished in the
Bank, or the Bank has reasonable doubt about
annexure to the circular for immediate reference.
genuineness of the claimant/s being the only
Branches/Circle Offices are advised to note these
legal heir/s of the deceased.
guidelines and exercise caution while considering
(DEP.23/01-02 dt.1.2.02) take over of borrowal accounts from other banks,
particularly from Private Sector Banks. Any take
Interest rates on Domestic Term Deposits and over proposal which may contain any deviation
Foreclosure of Preferential Deposits from the above set guidelines should be
The interest rates on domestic term depos- thoroughly analysed with details of benefit that
its is revised as under with effect from will accrue to the bank by such take over, before
20.2.2002: arriving at a decision in this regard.
Int. Rate % p.a (ADV.96/01-02 Dt. 05.01.2002)
Duration < Rs.15 Rs. 15 lakhs Rs. 1 Crore
lakhs to < Rs. 1 & above Negotiation of Bills drawn under Inland LCs (IBN)
crore
7 to 14 days -- 5.00 As per sched- Keeping in view the positive features and
15 to 29 days 5.00 5.25 ule provided advantages in advancing against Bills drawn
to Circle under Inland LCs, it has been decided to offer
30 to 45 days 5.50 5.75 Offices from competitive rates of interest at PLR + 1% with
46 to 179 days 6.50 6.75 time to time
effect from 1.1.2002 for Inland Bills Negotiated
180 to 364 days 7.00 7.50 facility against inland letters of credit opened by
1 year only 8.00 8.25

1
Volume 14 Issue 4 January - March 2002

prime banks. Bills should be in strict compliance 3. Any request for co-acceptance should be
with the terms of LC. taken up only in the form of Inland LC [for
purchase of materials] / DPG [for purchase of
All Circle Heads and above are accorded
capital goods].
powers to consider sanction of finer rate upto a
maximum of 1% subject to fulfilling the norms 4. Banks should not extend co-acceptance on
stipulated. Additional guidelines including the behalf of their buyers/ constituents under the
delegated sanctioning powers, permitted banks SIDBI Scheme.
and the reporting formats are furnished in the
5. Banks are precluded from co-accepting
Annexure to the circular. Field level functionar-
bills drawn under Buyers Line of Credit Schemes
ies are advised to make use of the attractive
introduced by the financial institutions like IDBI,
pricing to bring in good business under the bills
SIDBI, Power Finance Corporation Ltd. etc.
portfolio.
6. Banks should not co-accept bills drawn by
(ADV. 98/01-02 dt.7.1.2002))
NBFCs.
Scheme for financing farmers for purchase of land for Discounting bills co-accepted by other Banks
agricultural purposes
1. The discounting Banks should ascertain
A new scheme (formulated by IBA in from co-accepting Banks, the reason for such
consultation with RBI and NABARD) has been co-acceptance of bills instead of opening LC or
introduced for financing farmers for purchase of issuing DPG. Only after satisfying themselves of
land for agricultural purposes. The scheme aims genuineness of such transaction, they may
at providing term finance to small and marginal consider discounting such bills.
farmers including share croppers and tenant culti-
2. It is desirable for the discounting Bank to
vators to purchase agricultural land as well as
advise the Head Office/ Controlling Office of the
fallow and wasteland to develop and cultivate it
Bank, which has co-accepted the bills, whenever
with a view to increasing production and produc-
such transactions appear to be disproportionate or
tivity, to enable them to diversify their present
large.
activities and also to take up allied activities. The
details of the scheme and the guidelines for 3. Before discounting/ purchasing bills
financing are given in detail in the circular. co-accepted by other Banks for Rs. 2 lakhs and
Refinance from NABARD is available for the above from a single party, the Bank should
scheme. obtain written confirmation of the Controlling
Circle Office concerned of the accepting Bank
Branches are advised to market the product
and a record of the same should be kept.
in true spirit of the scheme guidelines and
enhance the performance under rural lending. 4. When the value of total bills discounted/
purchased (which have been co-accepted by other
(ADV.99/01-02 dt.11.1.2002)
Banks) exceed Rs.20 lakhs for a single borrower/
group of borrowers, prior approval of the Head
Co-acceptance of bills by our Bank and Discounting of
Office of the co-accepting Bank must be obtained
bills co-accepted by other Banks
by the discounting Bank in writing.
Safeguards to be observed and the opera-
tional instructions to ensure proper record 5. Discounting of bills co-accepted by
keeping in respect of co-acceptance bills/ co-operative banks requires prior approval from
discount of bills co-accepted by other Banks are Head Office.
already put in place in our Bank. Certain (ADV.100/01-02 dt.11.1.2002)
safeguards are recapitulated for the
information/adherence of branches/Circle offices.
One Time Settlement of NPAs in Small Accounts with
Extending co-acceptance by our Bank limits upto Rs.25000/-
1. Co-acceptance facilities can be sanctioned As per the directions of RBI, a policy for
only by head office. compromise settlement for Small NPA accounts
2. No power for co-acceptance facility is with sanctioned limits upto Rs.25,000 has been
delegated to field level functionaries evolved in our Bank and the same will be opera-
tional upto June 30,2002. This scheme will not

2
Volume 14 Issue 4 January - March 2002

be applicable to staff related accounts. The to Circle Offices / Head Office. The salient
detailed guidelines with regard to eligibility, features of the RBI scheme and the formats to be
coverage, the settlement formula, cut off date, used for informing/reporting are enclosed to the
sanctioning authority, reporting, etc. are given in circular.
the circular. The format for computation of the
Branches/Circle Offices are advised to
minimum recoverable amount, the format for
meticulously follow the guidelines in this regard.
reporting the sanctions made by branches to
For any clarification, Branch Managers shall
Circle Office and sanctions made by Circle
approach their Circle Office. If the Circle Heads
Office to Head Offices are annexed to the circu-
need any information, HO: CPGD will extend
lar.
the required support service.
All branches should clean up their books
(Adv.107/01-02 dt.8.2.2002)
from these small NPA accounts without any
omission / exception by implementing this
Long range loan policy for 2001-05 and
scheme. The accounts where OTS / write off has
Loan Policy for 2001-02
to be considered not conforming to the norms/
guidelines, can be taken up under the bank's Bank has framed the long range loan
existing Negotiated Settlement. policy for the period 2001-05 and loan policy for
2001-02. The long range policy contemplates
(ADV.101/01-02 dt. 11.01.2002)
creation of quality assets and meeting the
genuine needs of borrowers. There shall be
Scheme of assistance to set-up Agriclinics and
mutual appreciation of the requirements of both
Agribusiness Centres by Agricultural Graduates
the customers and the Bank for improving
A scheme (formulated by NABARD based quality asset and the bottom line of the Bank.
on the suggestions from Ministry of Agriculture The policy comprises standards for appraisal,
in consultation with Government of India and credit administration, documentation,
select banks) for financing setting up of Agriclin- monitoring, etc. It has built in flexibility to
ics and Agribusiness Centres by agricultural consider exceptional cases on business considera-
graduates has been introduced in our Bank. The tion. All the field level functionaries are advised
details of the scheme and procedural guidelines to go through the policy document carefully and
are given in the circular for the guidance of take note of the guidelines enumerated therein
branches and Circle Offices. The list of ventures while entertaining any loan proposals.
eligible for financing under the scheme is given
(Adv.113/01-02 dt.19.2.2002)
as Annexure to the circular.
(Adv.104/01-02 dt.17.01.2002) Master circular on guarantees and unsecured advances

Collection and dissemination of information on default-

For the information and guidance of
ing borrowers and wilful defaulters branches/Circle Offices, HO:CPGD has issued
RBI is disseminating among Banks and this master circular incorporating all the current
Financial Institutions the names of defaulting instructions including guidelines of RBI on
borrowers of Rs.1 crore and above every half- Guarantees and Unsecured Advances.
year and wilful defaulters of Rs.25 lakhs and (ADV.116/01-02 dt.26.2.2002)
above every quarter.
As the responsibility for reporting correct Review / Renewal of advances - Certificate by
information and also accuracy of facts and Branch Manager
figures rests with the Bank, there should not be
While submitting proposals for
any omission in reporting of the defaulting
review/renewal of advances falling under the
borrowers. As per the provisions of Section 45B
sanctions of Circle Office/Head Office, branch
of the RBI Act, 1934, it is the statutory duty cast
managers are required to submit a certificate
upon the Bank and the Bank shall be liable for
furnishing the details of certain vital areas like
action for any error/wrong reporting. Branch
validity of security documents, observations of
Managers/Circle Heads shall scrupulously verify
inspectors/stock auditors/CMOs during inspec-
the data as to the correctness of Name, Initials,
tion of the unit, insurance cover, etc. alongwith
the spelling, Address, etc., of the borrower and
their views. The format of the certificate is
the directors, guarantors etc., before submitting
enclosed to the circular. For accounts falling

3
Volume 14 Issue 4 January - March 2002

under the authority of the branch, as the Branch i. applicable for Non-SSI advance accounts
Manager will be the sanctioning authority, he with working capital limits of Rs.25.00 lacs and
should ensure that all the aspects covered under above and for SSI accounts with total limits of
this Certificate are incorporated in the Rs.25.00 lacs and above
review/renewal proposal.
ii. presently introduced in all Corporate
(Adv.117/01-02 dt.27.2.2002) Banking Branches and Credit Intensive
Branches.
Treatment of restructured accounts-prudential norms
The inspection of units needs to be done
RBI has now advised that in respect of on a monthly basis unless the periodicity of the
restructured accounts, the future interest due as same is specified otherwise in the sanction.
per the original loan agreement should be During the year between the renewals, an official
discounted to the present value, at a rate appro- of the branch who is not directly handling the
priate to the risk category of the borrower and account shall do one of the inspections.
compared with the present value of the dues
(ADV.120/01-02 dt.2.3.2002)
expected to be received under the restructuring
package discounted on the same basis. In short,
Master Circular on Prudential Norms
the discounted value of the entire cash flow
streams under the original terms and the resched- For the information and guidance of
uled terms are to be compared. branches/Circle Offices, HO:IRRD has issued
this master circular incorporating all the instruc-
(ADV.118/01-02 dt.28.2.2002)
tions/ guidelines issued by RBI on matters relat-
ing to income recognition, asset classification
Modifications in Indian Bank Pensioners Loan
Scheme (IBPLS)
and provisioning pertaining to advances.
Branches are advised to ensure that the norms are
The following changes have been made in followed meticulously and correct asset classifi-
the above loan scheme cation and provisioning is made, thus avoiding
any divergence in provisioning.
Criteria Category Revised
(ADV.121/01-02 dt.2.3.2002)
Quantum of All pensioners 6 months pension with a
loan maximum of Rs.40,000
Freezing of Bank Account
Superannuating PLR + 3% - Only for fresh
retirees of our sanctions from 01.04.2002 RBI had directed banks to freeze the
Rate of Bank accounts of 513 limited companies, their direc-
Interest tors and promoters. The list of the companies in
(Fixed Rate) All other PLR + 3% - Only for fresh
eligible sanctions from 01.03.2002 alphabetical order Statewise is given as annexure
pensioners to the circular. Branches are advised to go
Other guidelines as per circular ADV 20/2001-02 through the list meticulously and verify whether
dated 19.05.2001 remain unchanged any of the 513 companies, their directors and
promoters have any account in the branch. In
(ADV.119/01-02 dt.1.3.2002) case any account is maintained, after ensuring
that the details of registered office / address, etc.,
Report on unit inspection tally with the details furnished in the list,
Inspection of the units financed / securities branches should freeze the accounts. The details
charged on a regular basis constitutes a vital tool of the accounts frozen shall be reported through
in effective credit administration. Besides, during circle office to HO: CPGD.
such inspection, the signals forewarning the (ADV.123/01-02 dt.6.3.2002)
onset of any problems could also be detected.
Therefore, it is necessary that the unit inspection Review / Renewal of Loans and Advances -
report should spell out the areas the inspecting RBI guidelines
officials should focus on, so that report is
To strengthen the system of credit
submitted in a detailed manner. Accordingly, the
monitoring, RBI has advised that regular and
format for reporting unit inspection by the
inspecting official has been revised and enclosed adhoc credit limits need to be reviewed/regular-
ised not later than three months from the due
to the circular. The revised report is
date/date of adhoc sanction. In case of

4
Volume 14 Issue 4 January - March 2002

constraints such as non-availability of financial procedural aspects are given in the circular for
statements and other data from the borrowers, the the guidance of branches and circle offices.
branch should furnish evidence to show that
(ADV.129/01-02 dt.22.3.2002)
renewal/review of credit limits is already on and
would be completed soon. In any case, delay
Encashment of Mutual Fund Units / Certificates without
beyond six months is not considered desirable as
surrendering original certificates
a general discipline. Hence, an account where
the regular/adhoc credit limits have not been SEBI has given freedom to the Mutual
reviewed/renewed within 180 days from the due Funds / NBFCs etc. to devise their own system
date/date of adhoc sanction, will be treated as to repay / refund the repurchase price / maturity
NPA. value of their units / products to unit holders
without surrendering of the physical units / origi-
Based on the directions received from RBI, it has nal certificate / receipts etc. as the case may be.
been decided to adopt the following revised As a result, the unit holders can now encash the
procedure for review/renewal of borrowal units / Mutual Fund products by giving discharge
accounts: in the prescribed pre-printed repurchase applica-
Procedure for tion form. This renders the advance against the
No. Type of facilities/limits pledge of such units very risky, in case lien/trans-
review/renewal
fer in favour of the bank is not noted and
1 a. For jewel loans and
Government sponsored
confirmed before disbursal of the loan.
The record of review
loan accounts, may be entered in the In the light of this development, all Branch
irrespective of limit ledger itself. No Managers are advised to review all the loans /
b. For other borrowal separate review/ guarantees etc. where the pledge of Mutual Fund
accounts with limits upto renewal format Units / Products are taken without noting lien/
and inclusive of necessary
transfer as primary or additional security. In the
Rs.25,000 cases where lien have not been noted or trans-
2 For facilities other than The format as per ferred in Bank's name, branches besides initiating
OCC, BP, etc., for limits Annexure I to the the action for noting the lien / transfer of the
exceeding Rs.25,000 and circular shall be used security to the bank, should ascertain that the
upto Rs.1.00 lakh units have not already been encashed. In case the
3 For facilities like OCC, BP The format as per security offered has been encashed, the full
for limits exceeding Annexure II to the details of such loans are to be informed to the
Rs.25,000/- and upto and circular shall be used circle office immediately.
inclusive of Rs.1.00 lakh
For all the units / certificates held as direct
4 For all advances above The format as per or indirect security, the field level functionaries
Rs.1.00 lakh Annexure III to the
circular shall be used
are advised to write to the Registrar / Transfer
agent to the issue or to the Competent Authority
The review/renewal exercise should be a continu- and get our lien / rights noted.
ous one to achieve 100% and there should not be (ADV.130/01-02 dt.26.3.02)
any slackening of efforts in this regard.
(ADV.124/01-02 dt.9.3.2002) Charging of Interest on Withdrawals Against
Uncleared Effects (WAUCE)
Policy for Lending to Co-operative Banks RBI has stipulated that if withdrawal
Recent developments in the Urban against uncleared effects is allowed, it should be
Co-operative Banking Sector warrant cautious treated as unsecured advance and interest is to be
approach in lending to Co-operative Banks. charged accordingly. Only after the fate of the
Taking the same into account, fresh lending instrument is known, the amount shall be treated
policy for considering the credit proposals of the as clear balance. Therefore, Branches should
Co-operative Banks has been put in place in our calculate the interest from the date of allowing
Bank. Details with regard to the policy guide- withdrawal till the cheque return time is over /
lines, rate of interest, facilities extended under balance becomes clear. This revised guideline
different heads, sanctioning authority and other comes into effect immediately. The earlier
instruction that no charges shall be levied for
withdrawals upto 50% of the credits stands

5
Volume 14 Issue 4 January - March 2002

cancelled. The other guidelines for extending Special Area Allowance-Amendment to IB(O)SR, 1979
WAUCE are recapitulated in detail in the Payment of Special Area Allowance under
circular. Regulation 23 (ii) of IB(O)SR has been revised
(ADV.131/01-02 dt.26.3.2002) w.e.f. 01.11.1999, the details of which are
furnished in the annexure to the circular.
PERSONNEL
Branches / offices are advised to make payment
of Special Area Allowance as per revised guide-
Loan against Provident Fund lines to eligible Officers
The Trustees of Indian Bank Staff Provi- (PRNL.89/01-02 dt.20.3.2002)
dent Fund have approved inclusion of the follow-
ing purposes for which the loan against Provident Adhoc and temporary incentives to officers posted in
Fund can be availed. However, not more than North Eastern Region & Andaman & Nicobar Islands
one loan / withdrawal shall be outstanding at any W.e.f. 01.01.2002, Government of India
time for the same purpose against a subscriber. has revised the guidelines on payment of adhoc
1. For meeting the cost of higher education and temporary incentives to officers transferred
including, where necessary, the travelling from other parts of the country to North Eastern
expense of any child of the member actually Region as below:
dependent on him in the following cases.
a. Education outside India for academic, techni- At the rate of 12.5% of Basic Pay subject
cal, professional or vocational courses beyond to a maximum of Rs.1,500 per month for the
the High School stage. duration of their active duty These officers will
not be entitled to Special Area Allowance other-
b. Any medical, engineering or other technical
wise applicable to the Region.
or specialised course in India beyond the High
School stage, provided that the course of Government has further communicated
study is for not less than three years. that w.e.f. 01.01.2002, officers transferred from
2. To pay expenses in connection with other parts of the country to Andaman & Nicobar
marriages, funerals, or ceremonies which by the Islands will be entitled to adhoc and temporary
religion of subscriber, it is incumbent upon him incentives as above in addition to the Special
to perform. Area Allowance as applicable to these islands.
In order to ensure uniformity of PF loan (PRNL.90/01-02 dt.20.3.2002)
application, a revised format is enclosed to the
circular, which shall henceforth be used while Quantum of currency notes to be sorted and counted
applying for loan against Provident Fund. by clerical staff at Currency Chests
(PRNL.82/01-02 dt.6.2.2002)
As per the settlement reached with the
Modification in interest rate for Staff Housing Loan Federation of Indian Bank Employees Unions
to Officers (FIBEU) in respect of sorting and counting of
The interest rate structure on Staff Housing currency notes in currency chests, with effect
Loan sanctioned to officers on or after from 01.03.2002,
01.10.2001 stands revised as under:
1. Each clerical staff working in currency
Amount of Existing Rate Revised Rate chests will do sorting and counting of currency
Advance p.a. (simple) p.a. (simple) notes of 9,000 pieces a day - on a full day 6,000
Upto Rs.1.10 lakhs 5% 5% pieces in the first session followed by 3,000
Above Rs.1.10 pieces in the second session - and in the case of
lakhs upto Rs.5 11% 10% half working day 6,000 pieces.
lakhs
2. In the event of taking up straight counting
Above Rs.5 lakhs 12% 11% without sorting, each clerical staff would do
straight counting of currency notes of 27,000
Other details as contained in Circular No. PRNL
pieces a day - on a full day 18,000 pieces in the
32/2001-02 dt.28.07.2001 remain unchanged.
first session followed by 9,000 pieces in the
(PRNL.84/01-02 dt.20.2.02) second session - and in the case of half working
day 18,000 pieces.

6
Volume 14 Issue 4 January - March 2002

3. The note counting machines provided at NPA would be done on the same basis as non
the currency chests may also be utilised by the agricultural advances.
shroff for counting of sorted notes.
(CRA. 21 /01-02 dt.7.2.2002)
Special pay to clerical staff holding joint custody
of cash Drawing of DDs on Aluva Branch
W.e.f. 01.03.2002, clerical staff members
who are holding the joint custody of safe keys Aluva Branch has become a sub member
shall be eligible to draw higher category of of Ernakulam Clearing House and hence will be
Special Pay in relation to the scale of the branch covered by our Service branch Ernakulam.
as given under: Branches shall henceforth draw DDs on Service
Branch, Ernakulam whenever DDs are required
Category of Amount of Special Pay - to be drawn on Aluva Branch. Similarly all
Branch As applicable to Head Cashier cheques, drafts and other instruments drawn on
Scale I & II Category "A". (Presently Rs.460 p.m.) Aluva centre shall be sent to Service Branch
Ernakulam for realisation instead of routing
Scale III Category "C". (Presently Rs.585 p.m.) through Aluva Branch.
Scale IV & V Category "E". (Presently Rs.906 p.m.)
(CRA.28/01-02 dt. 28. 3.2002)

The assignment of post where the higher

category of Special Pay is agreed to be paid will
FX
also be on turn basis among the staff working in
the Cash Department as is being presently Revision of interest rates on FCNR (B) Deposits
followed. However, those staff members who
are holding the safe keys and drawing Special W.e.f. 28.01.2002, the rates of interest on
Pay on permanent basis prior to 01.02.1991 shall FCNR (B) are revised as under:
be eligible to draw higher category of Special Period USD GBP JPY EUR
Pay, till they are transferred out of the branch
either at their request or on promotion. 1 year and above but < 2.25 4.00 0.05 3.00
2 years
A custodian of cash (key holding shroff),
provided with computer node in cash department, 2 years and above but < 3.25 4.50 0.10 3.50
on account of his operating the computer, will 3 years
receive either the Special Pay applicable to 3 years only 3.90 5.00 0.10 3.75
computer operators or the Special Pay applicable
to the category of cashier/branch to which he No preferential interest rate is applicable
belongs, whichever is higher. All other terms for FCNR (B) deposits). The revised interest
conditions specified in circular PRNL.155/90-91 rates on deposits would be applicable only to
dt.31.1.91 remain unaltered. fresh deposits and on renewal of maturing
(PRNL.93/01-02 dt.26.3.2002) deposits.
(FX.25/01-02 dt.25.1.2002)

CRA
Export Credit to Processors / Exporters in
Relaxation of prudential norms for direct agricultural Agri-Export Zones
advances Government of India has decided to set up
RBI has advised that the relaxed delin- Agri-Export Zones to help Processors / Exporters
quency norms of two harvest seasons not exceed- of Agricultural products to integrate their activi-
ing two half -years, which is presently applicable ties. Agri Export Oriented units (processing)
only to short-term agricultural crop loans is now would be set up in these Zones. To promote
extended to all direct agriculture advances. A list such units, production and processing have to be
of such advances as extracted from the master integrated. The producer has to enter into
circular of RBI on lending to priority sector is contract farming with the farmers around the unit
given in the circular. In respect of loans other and has to ensure supply of quality seeds, pesti-
than those specified therein, identification of cides micro- nutrients and other material to the
group of farmers from whom the exporter would
be purchasing their products as raw-material for
production of the final products for export.

7
Volume 14 Issue 4 January - March 2002

Branches shall treat the inputs supplied to Alongwith the above, ECGC has taken up
farmers by exporters as raw material for export revision of claim form and delegation of more
and consider sanctioning of credit/export credit powers to ensure that the claims are decided by
to processors/ exporters. Other guidelines and their Regional and Branch Managers in majority
precautions for extending such advances by of the cases.. The coverage of the above schemes
branches are given in detail in circular. and the procedural aspects for branches and
Circle offices are given in detail in the circular.
(FX.26/01-02 dt.25.1.2002)
Branches are advised to make note of the facili-
ties introduced by ECGC and utilise the same
Crediting Rupee loans granted against security of
wherever applicable without fail. Further details
NRE/FCNR(B) deposits / maturity proceeds of
NRNR Deposits to NRE accounts can be obtained from the local ECGC offices.
The co-ordinating officers at Circle Offices and
Loans granted against the NRE / FCNR the Circle Heads are advised to guide the
(B) deposits are disbursed in Indian Rupees and branches to prefer the claims in compliance of
are not repatriable. Crediting such loans to the the guidelines given in the circular.
NRE accounts of the account holders violates the (FX.29/01-02 dt.19.2.2002)
provisions of Exchange Control. Such loans
granted to the account holders should be credited Opening of Accounts by Foreign Tourists
to only Non-Resident (Ordinary) (NRO) or
In terms of communication received from
Non-Resident (Special) Rupee (NRSR) account
RBI, Authorised Dealers are permitted to open
of the account holders. Further, under the
bank accounts for foreigners/ tourists on tempo-
Non-Resident (Non-Repatriable) Rupee Deposit
rary visits to the country. These tourists can
scheme, only interest accrued on NRNR Deposit
open Non Resident (Ordinary) Rupee Account
is repatriable. The principal amount of the
(NRO) with the funds remitted from outside
deposit which has matured should be credited to
India in a specified manner or by sale of foreign
NRO/NRSR account of the account holders.
exchange brought by them.
Therefore, branches are advised to adhere to the
above RBI guidelines strictly. Branches may also allow these foreign
tourists to convert the balance in the account at
(FX.28/2001-02 dt.13.2.2002)
the time of departure of the tourist from India
into foreign currency for payment to the account
New facilities introduced by ECGC for settlement of
holder provided the account has been maintained
claims
for a period not exceeding six months and
ECGC has introduced w.e.f Nov.2001 account has not been credited with any local
certain new facilities towards settlement of funds, other than interest accrued thereon.
claims as under: Repatriation of balance in the account maintained
for a period exceeding six months require prior
I. Simplified procedure for settlement of
approval from the concerned Regional Office of
claims under short term - packing credit and post
Reserve Bank of India. Branches are advised to
shipment guarantees for claims upto Rs.25
adhere to these guidelines while opening
lakhs. On advice from ECGC after initial
accounts for foreign tourists.
scrutiny of the claim, Circle Office concerned
will have to submit a certificate regarding proper (FX.30/01-02 dt.4.3.02)
conduct of the account as per Annexure I to the
Receipt of Foreign contributions by Associations /
circular. Organisations in India
ii. On account payment for settlement of With a view to provide better guidance,
claims under short term - packing credit and post the government has prepared a "Citizens charter"
shipment guarantees, where the claim amount is in respect of foreign contributions for being
in excess of Rs.25 lakhs. The branch concerned circulated among the commercial banks, a copy
is required to submit an application cum under- of which is furnished as Annexure to the circular.
taking as per Annexure II to the circular along Branches are advised to use the same as ready
with the claim. reckoner at the operational level and to guide the
iii. Provisional payment under post shipment public suitably.
(FX.31/01-02 dt.14.3.02 )
guarantee

8
Volume 14 Issue 4 January - March 2002

FIRRPRIA claims by branches on OSB Chennai f. In the event of premature closure of the
As a final attempt for reversal of the old term deposits, under both the schemes, the option
pending FIRRPRIA entries upto 31.3.99, of reinvesting the proceeds is restricted to the
Branches are advised to send details of pending NRO account of the depositor.
items to their Circle Offices along with copies of (FX.33/01-02 dt.20.3.02)
their FIRRPRIA claims and copies of DDs/MTs
paid. Circle Offices should send the consoli- Speedy Collection of Foreign Currency Cheques
dated statement to HO: International Division
who will take up with OSB, Chennai/ HO: From a review of the nature of complaints
Reconciliation Dept/Singapore Branch for received from Non-Resident Indians, it has been
arranging to send credit advices to the branches observed that one of the common reasons for
concerned. Branches are advised to send the complaints is the delayed realisation of
particulars immediately without fail, as no future cheque/draft sent by NRI for crediting to their
claims relating to FIRRPRIA prior to 31.3.99 SB accounts/Term Deposit Accounts. It has
shall be entertained by HO:ID or OSB, Chennai been brought the notice of HO that some of the
branches take as much as 6 weeks or more for
The circular also lists out some of the crediting the proceeds of the foreign currency
commonly observed irregularities committed by cheques to the NRI accounts.
branches while submitting FIRRPRIA claims to
OSB, Chennai. Branches are advised to avoid To mitigate the hardship caused to NRI
these mistakes and handle FIRRPRIA claims clients, branches should ensure that foreign
meticulously and ensure that items are reversed currency cheques/drafts should be handled
then and there. expeditiously without any delay at their end. The
(FX.32/01-02 dt.16.3.2002) instrument should be sent to the Nostro Banker
or "A" category Branch, invariably under Cash
Discontinuance of NRNRRD and NRSR Schemes Letter System only, under which our Nostro
correspondent gives immediate credit to our
With a view to provide full convertibility Nostro account, pending realisation. Branches
of deposit schemes for Non-Resident Indians and should obtain a declaration in the format
rationalising the existing Non-Resident deposit enclosed to the circular from the customer/his
schemes, Government of India has decided to representative in India authorising the branch to
discontinue NRNR account and NRSR account send the instrument under Cash Letter System.
schemes with effect from April 1, 2002. Accord-
ingly, For collections under Cash Letter System,
our Nostro Bank supplies separate stationery for
a. Branches shall not accept any fresh depos- forwarding the cheques. Branches in need of the
its or open any fresh account, by way of renewal stationery should contact the Nostro
or otherwise, under the above two schemes. Banker/respective "A" category Branch to whom
b. The existing accounts under NRNR they are reporting to, obtain the stationery and
account scheme may be continued only upto the send the instrument alongwith the stationery
date of maturity. The maturity proceeds of the meant for it. "A" category branches should
deposits under the scheme shall be credited to the obtain Stationery from Nostro correspondent and
accountholder's NRE account after giving due supply the same to all Authorised Branches
notice. reporting to them
c. The authorised dealers/branches may also Non-Authorised Branches should forward
permit the accountholder, on his request, to credit the cheque to OSB or "A" category branch
the maturity proceeds to his NRO account. without any delay and write in their covering
schedule that instrument should be sent under
d. The existing term deposits under the "Cash Letter Service" only. As immediate credit
NRSR account scheme may be continued till the is afforded for instruments sent under Cash
maturity and the maturity proceeds shall be Letter Service, it is possible for the "A" category
credited to the NRO account of the depositor. branch to send the credit advice within a week's
e. The existing NRSR account, other than time. However, it should be noted that the final
term deposit, shall not be continued after realisation of these instruments depend upon the
September 30, 2002 and the same should be cool-off period of about 2 to 3 weeks (depending
intimated to the account holder. on the country), before which there is a

9
Volume 14 Issue 4 January - March 2002

possibility that the cheque may be returned and procedural guidelines are enumerated in detail in
our Nostro Account may be debited. Such items the circular.
will be intimated to the branch by OSB or "A"
(GENL.62/01-02 dt.25.2.2002)
category branch, immediately on receipt of the
information from the Nostro Correspondent.
MD/ED
However, branches are authorised to allow
withdrawals of credits released under Cash Letter Right Person for the Right Job
System even before the cool-off period for
In the intense competitive environment in
account holders with good track record within
the Banking System, only the fittest will be able
the discretionary powers delegated to them. In
to compete with others, survive and grow.
this connection, branches may refer to circulars
Human Resources make a Bank strong or weak
FX 24/99-00 dt. 07 01 00 and FX 38/98-99 dt.
rather than all other financial and non-financial
26 03 99, wherein details of various collection
parameters. It is, therefore, necessary that Human
methods have been given. Branch Managers
Resources should be properly nurtured,
should ensure that NRIs are not put into any
adequately trained to further their skills, kept
inconvenience in collection of cheques for their
updated on the latest developments and above
account.
all, be able to face the challenges of the Banking
(FX.34/01-02 dt.23.3.02) Industry. For the past one and a half years since
the implementation of the Restructuring Plan,
GENERAL our Bank has initiated several measures on the
Human Resources Development front. It is now
Prevention of terrorism ordinance, 2001 felt desirable that those officers with necessary
aptitude be given the requisite placements
The President of India has promulgated the
keeping the motto "right man for the right job".
above ordinance on 24.10.2001 for the preven-
Accordingly, it is decided to seek directly the
tion of terrorist activities, for dealing with terror-
preference of staff for certain types of jobs, to
ist activities and matters connected therewith.
make full use of their skills, traits, educational
Under Sec.18 of the ordinance 23 terrorist
qualifications and aptitude. It has, therefore, been
organisations have been identified and listed in
decided to choose persons of different aptitudes
the schedule to the ordinance. Government has
in a systematic way, put them on training to
advised that banks should keep a watchful eye on
update their skills before deploying them for the
the transactions of the organisations listed in the
job to which they are interested/most suited. To
schedule, a copy of which is given as Annexure I
start with, the process of selecting marketing
to the circular. If something is found violative of
officers to market Bank's various deposits and
the extant Acts or normal banking operations, the
credit products has already been initiated.
concerned bank should report the matter to the
appropriate authorities under the ordinance under (MD/ED.9/01-02 dt.13.2.2002)
advice to RBI. A gist of certain relevant provi-
sions of the ordinance is furnished in Recapitalisation of our Bank - our duties and
Annexure-II to the circular for the ready refer- responsibilities
ence of branches. Our Bank has received Rs.1300 crores
from the Government of India towards recapitali-
(GENL.55/01-02 dt.23.01.2002) sation. The background in which this recapitali-
sation assistance was provided by the
Insurance Policy for Burglary Cover Government was explained in detail vide circular
The Burglary Insurance Policy including MD/ED.10/01-02 dt. 4.3.2002. Our Bank has
terrorist cover for all properties of the bank all committed to the Government for implementing
over India has been renewed for further period of monitorable reform measures which requires the
1 year from 10.1.2002 with New India Assurance total commitment by each and every one of us. In
Company Limited, 231, T.T.K. Road, Alwarpet, order to avail the recapitalisation support, our
Chennai 600 018. The policy covers various Bank has signed a Memorandum of Understand-
assets of the Bank in the branches/offices and ing (MoU) with the Government in certain
also at the residences of executives/officers. The specific matters which have a bearing on the
details of the policy, its coverage and other viability of the Bank. As stipulated by the
Government, a back-to-back agreement has been

10
Volume 14 Issue 4 January - March 2002

signed between the Management and all the Let us, therefore, concentrate on our
Employees' Unions and Officers' Associations. present. Let us realise that the competition
This has become necessary because the Govern- around is intense. Let every Threat be turned
ment had to assure itself that the turnaround of into an Opportunity. The goal ahead - that of
the Bank is on a sustainable basis. turning around the bank and removing the 'weak'
tag - should inspire and drive each one of us.
Under the circumstances, the Bank is
We have no time to sit and relax. We have to
accountable to the Government for performance
display tremendous discipline and commitment
under the Restructuring Plan which will be
to the goals of the organisation. The realisation
monitored on a monthly basis by both the
of our individual dreams and prosperity is
Reserve Bank of India and the Government of
entirely inter-twined with the success of the
India, as the Government wants to ensure steady
organisation.
and stable growth. Therefore, our Top Level
Profit being the yardstick of efficiency, our
Management and the Bank's Board would be
operations (both domestic and international)
closely and critically monitoring and reviewing
the overall performance of the Bank on a should be yielding sizeable profits, without
monthly basis commencing from April 2002. taking into account the income from the recapi-
talisation bonds. In other words, the Bank
Getting the recapitlisation funds has cast a should be able to support itself from its opera-
tremendous responsibility on all of us. Our tions which would be the main indicator of its
efforts should, therefore, be to encash this oppor- Viability and Strength. Only then, we would be
tunity to make an overall improvement in all the able to go for public issue to raise funds for
fronts - deposits, advances, recovery, income additional capital requirements for the future, as
generation, expenditure control and profitability. the Government has categorically stated that this
Especially, our Customer Service should be is the last time they extended recap support to a
exemplary and our Bank should become the Public Sector Bank.
“MOST PREFERRED BANK”.
Every staff member should keep himself /
It should be clearly understood that the
herself abreast of the various targets / sub-targets
conditions stipulated by the Government and the
and performance thereof for the branch in which
agreement signed with the Unions and Associa-
he /she is working and also for the Bank as a
tions are entirely in the interests of the Institution
and for its very survival and continuance. It whole. A communication would be sent on a
might appear that we are making certain sacri- monthly basis about the performance of the Bank
fices now, but these are absolutely essential for to keep all the staff informed of our Bank's
securing our future in this great Institution, progress on various fronts.
which might otherwise be uncertain and tumultu- Let each one of us look at the task ahead
ous. We have to grow at a much higher rate than as a challenging one. We are confident that OUR
the industry, as we have to make up for the lost TEAM is capable of overcoming all hurdles and
ground. It is, therefore, necessary that we work obstacles and prove to the Nation, in general, and
in a planned manner with more concerted efforts to the Government and RBI, in particular, that
to reach the set targets and thereby enjoy the we are worthy of the confidence reposed and the
fruits of success. Going by our performance
support extended to us by them.
during the last 21 months, we have no reason to
doubt our ability and capacity to perform. (MD/ED.11/01-02 dt.14.3.2002)

11
 Volume 19 Issue 1
a

For Private Circulation Only

April - June 2006 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”

CONTENTS OF THIS ISSUE Adv. 16 27.04.2006 Credit Card Operations - 6

Collections of Dues
Cir. No. Date Subject Pg.
20 03.05.2006 Credit Guarantee Scheme of 6
Dep. 01 04.04.2006 Banking facilties to visually 2 CGTSI - changes in
impaired Guarantee fee Structure

04 21.04.2006 Restriction on the use of 2 21 03.05.2006 Implementation of Rural 6

withdrawal slips Employment Generation
Programme (REGP)
06 05 05 2006 Issue of one free DD/BPO to 3
No frills accounts 25 12.05.2006 KVIC - Rural Employment 7
Generation Programme
12 22 06 2006 Variable RD – Revised 3
scheme (REGP)

13 22 06 2006 Quarterly reporting of TDS 3 26 15.05.2006 Bearing One Time 7

on TDs to ITO u/s 26QAA Guarantee fee on loans
covered under Credit
15 23 06 2006 Revised Account Opening 3 Guarantee Scheme (CGS) of
form for individuals
CGTSI
Adv. 01 03 04 2006 Debt Service Coverage 4
27 15.05.2006 NHB Scheme - Lock in 7
Ratio for Terms Loans
period of 3 years for subsidy
02 05 04 2006 Credit Risk Policy 2006-07 4
30 25.05.2006 Introduction of Credit 7
03 05 04 2006 Revised reporting system for 4 Scoring Model for entry level
SMA accounts decisions / sanction of SSI
advances with limits upto
05 06 04 2006 Revised Investment ceiling 4 Rs.25 lakh.
in SSI Sector - amendment
35 05.06.2006 Tractor finance under tie up 7
06 06.04.2006 Credit Linked Capital 4
arrangement with major
Subsidy Scheme (CLCSS)
tractor companies.
08 10.04.2006 Charging of interest on 5
Agricultural Accounts 36 07.06.2006 IndSMe Secure - 7
Amendments
10 10.04.2006 IBA Educational Loan - 5
Modifications 37 08.06.2006 Group Insurance coverage 8
to members of SHGs
11 10.04.2006 Cash credit facility for 5 financed by our bank
Produce Marketing
42 14.06.2006 Educational loan Scheme - 8
13 20.04.2006 Appointment of Recovery 5
Tracking of students
Agents in SARFAESI
proceedings and other 45 16.06.2006 Ready Reckoner for Interest 8
Recovery Processes Rates for Structured Loan
Products
15 25.04.2006 Launching of Bharat Card - 6
A Credit Card for the Prnl. 11 02.05.2006 Categorisation of Branches 9
Common Man as on 31.03.2006
 Recollect
& A written request indicating the details of loan
Prnl. 22 11.05.2006 SAMADHAAN Scheme 9
facility availed by them and the number of
30 30.05.2006 Incentives for Air Travel 9 instalments payable etc., shall be obtained. The
through Jet Airways under applicant should affix his LHTI / RHTI on the
"Corporate House Scheme"
request letter duly attested by a customer well
known to the bank.
CRA 10 13.05.2006 Conduct of Gocernmetn 10
& The cheque leaves should be drawn either by
Business - Agency the customer's aide or by an officer of the bank
commission - Revision of payable in favour of the Bank with amount,
Rates date, etc. duly filled in.
17 09.06.2006 Frauds - need for filing a 10 & The applicant’s LHTI / RHTI should be got
police complaint attested by the customer's aide or an officer of
the Bank in the cheque book issued register.
18 13.06.2006 Service Tax Amendments 10
& Details of the cheques including name of the
22 20.06.2006 Safe Deposit Lockers - 10 payee should be noted in the ledger.
Identification Code on
2. Safe Deposit Locker facility
Locker Keys
& The visually impaired person seeking the
Genl 01 03.04.2006 Printing of Indian Financial 10 facility should be a customer of the branch
System Code (IFSC) having a Savings Bank account.
09 22.04.2006 IndJet Remit - a remittance 11 & The hirer may be allowed to operate the locker
product under RTGS either `singly’ with the assistance of a reliable
person or jointly with another who is not
13 04.05.2006 ATM Service Centre _ 11 visually impaired. At no point of time, the
Centralised Reconciliation joint account holder, without the presence of
and Accounting of ATM the visually impaired account holder, be
Transactions permitted to operate the locker.

FX 02 13.04.2006 KYC Policy & Anti Money 11 & While allowing operation singly, the name,
Laundering Guidelines for
address and relationship and a photograph of
the person who is nominated for assistance
FX transactions
shall be obtained and kept on the branch
08 12.06.2006 Pre-shipment Export 12 records.
Finance - Ensuring End Use & Locker attendance register should bear the
signatures of both the hirer and the nominated
09 23.06.2006 Reduction in ECGC 12
person.
premium for Pre-shipment
Credit under WTPCG & For each operation, the same nominated person
alone should accompany the applicant.
10 28.06.2006 Integration of Forex 12
Treasury Operations at Other guidelines with reference to rent, renewal,
OSB, Chennai - Forex documentation, etc. shall be applied to these
Transaction of non customers also.
Authorised Branches.
(DEP. 01/2006-07 dt. 04.04.2006)
DEPOSITS
Additional guidelines on the use of withdrawal slips
Banking facilities to Visually Impaired Persons by SB account holders
1. Cheque book facility The use of withdrawal slips is restricted to
Rs.10000 for cash transactions and Rs.20,000 for
In order to enable the visually impaired customers transfer transactions subject to the extant
to issue post-dated cheque leaves towards guidelines on their use for all types of customers.
repayment of loans availed from other Banks/ Multiple withdrawals in an account in a day put
Financial Institutions, cheque book facility is together should not exceed the above limits.
extended to them with certain conditions as under:
Accounts, which are able to conform to the norms
for issue of a cheque book shall necessarily be

2
 April – June 2006
given a cheque book and those who do not want to available for NRIs. For other details refer the
possess a cheque book should be given a loose-leaf circular.
cheque when their withdrawals exceed the above
limits.. (DEP.12/2006-07 dt. 22.06.2006)
Quarterly Return under Section 206A of Income Tax
The BM/ABM/Officer-in-charge of extension Act in respect of Interest Paid on Term Deposits to
counters may relax any of the above norms Residents without deduction of tax
depending on genuineness of the transactions.
(DEP. 04/2006-07 dt. 21.04.2006, DEP. 05/2006-07 dt.
Every branch of a banking company, which is
28.04.2006 and DEP. 08 /2006-07 dt. 27.05.2006) required to make a quarterly return under sub-
section (1) of section 206A in respect of interest on
VIKAS SAVINGS KHATA – ‘NO FRILLS’ accounts time deposits without deduction of tax at source
It has been decided to permit branches to issue one shall keep and maintain the particulars of such
time deposits in Form No.26QA. Computerised
Demand Draft/BPO per month free of commission
branches should maintain the data on computer
to the account holders of this scheme to meet their
readable media.
requirements for payment to third parties. Further,
a cheque book can be provided to an account The quarterly return to be furnished by a banking
holder of this category provided the account company in respect of time deposits shall be in
migrates from `no frills' category to regular Form No.26QAA.
Savings Bank account after satisfying full KYC The quarterly return shall be furnished to the
norms. Director General of Income –tax (Investigation),
New Delhi on or before the last day of July,
(DEP. 06/ 2006-07 dt. 05.05.2006)
October, January and June following the respective
Variable Recurring Deposit Scheme quarter of the financial year.
A revised Variable RD scheme has been enabled For this purpose ‘time deposits’ means deposits
under CBS with certain modifications, which is repayable on the expiry of a fixed period excluding
more attractive than the existing scheme. recurring deposits.
As the old version of the Variable RD cannot be
(DEP.13 /2006-07 dt. 22.06.2006)
migrated to the CBS system, the accounts opened
Revised Account Opening Form for Individuals
manually earlier till the date of issue of the circular
will continue to be operated under the existing The revised Account Opening form for individuals
rules in manual system till their maturity or was communicated by circular DEP.20/05-06 dt
closure. No new accounts shall be opened by any 10.11.2005. It facilitates the customer in selecting
branch under the old version of the Variable RD in the various delivery channels offered by the Bank
the manual system henceforth. such as ATM Cards, Debit cards, Internet and
Phone Banking, Multi City Banking, Mobile
The modifications in the revised Variable RD
Banking, etc.
Scheme as against the existing one is given below:
Wherever the revised account opening form is
Features Existing Modified
used, separate applications need not be obtained
Maximum 10 times the A maximum of Rs.10 lakhs
amount Core Deposit in a calendar month (No
for ATM / Debit Cards and other delivery
per month with a restriction channels. Separate specimen signature cards need
instalment maximum of on the number of times the not be obtained.
Rs.10,000 initial core deposit can be All TBC/CBS branches should scan the signatures
varied)
of all account holders and link them to the
Core Minimum Rs.10 Minimum Rs.25 - & in
respective accounts in the system on the day of
deposit & in multiples of multiples of Rs.25 - Up to
Rs.10 upto a a maximum of Rs.1 lakh
opening of an account without fail to ensure the
maximum of availability of signatures for viewing/verification
Rs.1000/- in the system at the time of passing/ authorising
All persons who are eligible to open Term Deposit payments by other CBS branches.
with the Bank, can open a Domestic Variable
(DEP.15/2006-07 dt 23.06.2006)
Recurring Deposit Account. This scheme is not

3
 Recollect
ADVANCES & SMA of Rs.50 lakhs and above - Branches to
submit the data in SMA I Format to Circle
Debt Service Coverage Ratio(DSCR) for Term Loans
Office and Circle Office to submit the data
In the financial appraisal for Term loans, one of along with their comments on the proposed
the aspects involves study and analysis of plan of recovery to HO. Credit Division under
profitability estimates to determine the repaying copy to HO. Risk Management Dept.
capacity and tenor of the term loan at the agreed & Accounts with overdues more than 90 days-
rate of interest. It involves computing the DSCR Branches to report to Circle Office in SMA III
and the ratio should be calculated separately for format separately and Circle Office to report
each year of the repayment period and also as an the same in III (B) format separately.
average for the entire repayment period based on
the profitability projections. Other aspects remain unchanged.

A few examples for computation of DSCR is given (ADV. 03 / 2006-07 dt. 05.04.2006)
in the annexure to the circular. Enhancement in the investment limit in the
investment of Plant and Machinery
(ADV. 01/2006-07 dt. 03.04.2006)

Credit Risk Policy 2006-2007 Government of India has raised the investment
ceiling from Rs.1.00 Crore to Rs.5.00 Crores in
In terms of Reserve Bank of India’s respect of 69 items reserved for exclusive
guidelines on Credit Risk Management, banks manufacture in SSI sector and all the items
have to formulate their Credit Risk Policy. (whether reserved or not) in the Drugs and
Accordingly, the Credit Risk Policy of our bank Pharmaceuticals sector. The above items are in
has been evolved and is being reviewed annually. addition to the 71 items for which the investment
The main objectives of the Credit Risk Policy are ceiling was enhanced earlier.
to
A comprehensive list of these 140 items for which
& ensure that the operations are in line with the the investment ceiling has been enhanced is
expectations of the management and the annexed to the circular.
strategy of the top management is translated
into meaningful directions to the operating (ADV.05/2006-07 dt. 06.04.2006)
level.
Credit Linked Capital Subsidy Scheme (CLCSS)
& ensure compliance with regulatory
requirements. Government of India has made the following
& define the process so that the credit risk can be amendments to the Scheme for claiming subsidy
identified, measured and managed. from NABARD:
The units seeking subsidy under CLCSS would
The entire policy document focuses on improving
have to submit a certificate from a Chartered
the quality of the assets and healthy credit portfolio
Accountant regarding the value of plant and
so as to improve the Net Interest Income (NII)/Net
machinery (original price) and an affidavit that
Interest Margin (NIM).The policy document is
they are currently in SSI category for the purpose
annexed to the circular.
of determining their eligibility under the CLCSS.
(ADV. 02 / 2006- 07 dt. 05.04.2006) Certain additional sub-sectors / products /
technology have been brought under the Scheme
Special Mention Accounts (SMA) whose list is annexed to the circular.
In order to reduce slippage and ensure It has been clarified that the units availing subsidy
effective monitoring of SMA the reporting system under this Scheme are not eligible to avail any
has been modified w.e.f April 2006.The modified other subsidy for technology upgradation from the
guidelines are as under; Central / State / UT Government. It is further
& SMA Below Rs. 50 lakhs - Branches to clarified that even switching over from any other
submit data in SMA III Format for all Scheme to CLCSS to avail subsidy for technology
individual SMA accounts to Circle Office and upgradation is also not permissible.
Circle Office to submit the entire SMA of the
(ADV.06/2006-07 dt. 06.04.2006)
Circle in III (B) format to HO. Risk
Management Dept.

4
 April – June 2006
Charging of interest on Agricultural Accounts Introduction of cash credit facility and Fixing of limit
As per Reserve Bank of India directives, Banks for three years in Produce Marketing Loans
should give concessional treatment in charging It has been decided to extend Produce marketing
interest on agricultural loans. Guidelines on Loans in the form of Cash credit with the
charging of interest on Agricultural advances is
following terms:
reiterated for the guidance of branches:
& Interest on current dues in Agricultural Maximum Loan Amount: Rs.10 lakhs
advances should not be compounded Margin : 30% of the value of the produce.
& Interest on STPL/IBKC should not be
compounded till it becomes due. Limit: 70% of the value of the produce at current
market price or average of prices for the last three
& Interest on term loans should not be years whichever is less plus 20% of the value.
compounded during the holiday period.
& Interest on all agricultural loans should be Time Validity: Three years. Account should be
debited only at half yearly rests subject to the brought to credit once in a year.
above three points. Securities: Pledge of stock evidenced by
& Overdue interest should not be charged for all warehouse receipts.
loans with limits up to Rs.25,000/-
The other operational aspects of the scheme are
In respect of short-term loans advanced to small given in the circular.
and marginal farmers, total interest debited to an
account should not exceed the principal amount. (ADV.11/2006-07 dt: 10.04.2006)
Branches must, however, note that the above
situation will arise, only if the account is allowed Appointment of Recovery Agents in SARFAESI
to run for a long period. In the normal course, crop proceedings and other Recovery Processes
loans should be recovered immediately after Under SARFAESI Act, banks are entitled to issue
harvest. If the default is due to any genuine reason demand notice, take possession and effect sale of
like drought, cyclone etc., necessary relief
securities without the intervention of any Court or
measures should be provided.
Tribunal. For this purpose, the Authorised Officer
(ADV. 08 /2006-07 dt. 10.04.2006) can make use of the services of specialised
agencies/recovery agents in activities like taking
IBA Educational Loan - Modifications
possession, drawing inventory, making security
The following modifications have been arrangements, effecting sale, etc, and also in other
made in the IBA Educational loan scheme: process of recovery like suit filing, identification
& Interest rate rebate is withdrawn for both of other assets, co-ordination and liaison with
existing and new loan accounts. Govt. Agencies, Municipal authorities, the
registration authorities, Recovery Officer of DRT,
& If the account (including existing account) is
pre-closed, pre-closure charges @ 2 percent of Officials of the Court etc.
the balance outstanding or applicable drawing The recovery agent should be a private/ public
limit whichever is higher should be collected. limited company or partnership firm who satisfies
& A letter has to be sent to all existing the KYC Norms. The Circle Head should call the
educational loan borrowers/guarantors with Key Managerial Personnel of the recovery agents
regard to levy of prepayment charges as per identified, for a personal meeting. An agreement
format annexed to the circular and a notice on should be entered into between the Bank and the
similar lines has to be displayed in the Recovery Agents broadly defining the scope of the
customer notice board of the branch. work to be performed by the latter, terms of the
& Prepayment charges should be included as one offer, the obligations of both the parties.
of the terms in the sanction of new accounts as
also in the document (D 61) obtained. Fee structure and other terms and conditions are
given in the annexure to the circular.
(ADV. 10 /2006-07 dt. 10.04.2006)
(ADV. 13/2006-07 dt. 20.04.2006)

5
 Recollect
Launching of Bharat Card - A Credit Card for the The circular also contains the DOs and DON’Ts
Common Man for branches, while submitting the applications to
HO: CCC.
As part of our Financial Inclusion
Programme a Credit Card for the Common Man (ADV.16/2006-07 dt. 27.04.2006)
viz., Bharat Card, was launched on 24.03.2006 and
some of the important criteria of eligibilty and Credit Guarantee Scheme of CGTSI - changes in
limits are given as under: Guarantee fee structure

& Indian Nationals of 25-60 years age group, The existing provision under chapter III Clause 8
holding of Voter ID Card and having a (i) on guarantee fee structure has been modified as
satisfactorily operated Account with our Bank. follows:
An one time guarantee fee at specified rate
& Minimum Gross Income Rs.3000/- per month (currently 1.5%) of the credit facility sanctioned,
and above but not exceeding Rs 8000/- per (comprising term loan and / or working capital
month.
facility) shall be paid upfront to the Trust by the
eligible institution availing of the guarantee within
& Credit Card Limits: Rs. 10,000/- to Rs.
20,000/- (maximum) 30 days from the date of first disbursement of the
credit facility.
Bharat Card can be extended to customers with a The reduction in guarantee fee (from 2.5% to
no frills account (Vikas Savings Khata) also and 1.5%) would be applicable from April 01, 2006.
the credit limit could be fixed accordingly. All other provisions of the Credit Guarantee
Scheme will remain unchanged.
Branches may target people working in the State/
Central Government organisations in lower pay
(ADV. 20/2006-07 dt. 03.05.2006)
scales, teaching community working in aided/
Government / reputed private schools, members of Implementation of Rural Employment Generation
SHGs with excellent track record for marketing of Programme (REGP)
the product.
Re-verification of the REGP units should be taken
(ADV.15/2006-07 dt. 25.04.2006) up as an exception and not as a routine. Before
going to the unit for physical verification, the
Credit Card Operations – Collection of Dues
entrepreneur should be informed well in advance
HO: Credit Card Centre (HO: CCC) is maintaining about the visit of KVIC/KVIB and Bank’s staff so
a current account with our Nandanam Branch that he can be present in the unit and make
through which all remittances received by available the required records of the unit. The re-
branches from the card members shall be routed. verification should be proposed with full
In respect of non-CBS branches, HO: CCC will justification for approval to Head Office of KVIC.
receive the daily Schedule of Credit Card Bills
Own contribution amount of 5% or 10%, as the
Collection in the prescribed format along with
case may be, should be deposited in the Bank
remittances of collection of dues by way of IBGA
before disbursement of 1st instalment of the loan
credit advices under Schedule 8, verify the same
for its correctness and send them to Nandanam Under special circumstances, an entrepreneur may
Branch for credit of the current account of be allowed to shift his unit from one village to
HO:CCC. another village and also to transfer his bank
account from one bank to another bank with the
In CBS Branches, the aforesaid current account at
consent of both the banks subject to certain
Nandanam branch is directly credited with the
conditions as laid down in the circular.
collection amount and only the Schedule of Credit
Card Bills Collection is forwarded to HO: CCC. For further details, branches are advised to go
All the branches (both CBS and non-CBS) shall through the circular.
enclose the counterfoils of the Billing Statement
for entering the remittances into the respective (ADV.21 /2006-07 dt. 03.05.2006)
accounts of card members at HO: CCC.
6
 April – June 2006
KVIC - Rural Employment Generation Programme application for getting LOI sanction. The copy of
(REGP) the LOI sanction and the application shall then be
submitted to the bank by NHB.
The revised margin money claim format and the
revised time limits have come into force from The letter of intent received from NHB should be
01.04.2006. The specimen copy of the revised processed and disposed of immediately on receipt
claim format is enclosed to the circular and it and reported to Circle Office. Circle Office should
supersedes all the orders / format of margin money consolidate the list of LOIs received by the
claims prescribed by KVIC earlier. branches and report to HO: RBD on a monthly
KVIC has reduced the time limit for submission of basis. Branches should claim subsidy immediately
from NHB.
margin money claims from 3 months to 1 month.
As decided by KVIC the margin money claim (ADV.27/2006-07 dt. 15.05.2006)
must be submitted by the financing branch within
Introduction of Credit Scoring Model for entry level
15 days from the date of first disbursement of the
decisions/ sanction of SSI advances with limits upto
loan under each REGP Project to the Nodal branch
Rs.25.00 lakhs
of the Bank.
In order to provide timely and adequate credit to
(ADV. 25/2006-07 dt. 12.05.2006) SSI units, our Bank has simplified the procedure of
credit appraisal by introducing the Credit Scoring
Bearing One Time Guarantee fee on loans covered
Models for entry level decisions and sanction of
under Credit Guarantee Scheme (CGS) of CGTSI
loan proposals with limits upto Rs 25 lakhs. The
In view of our Bank’s enhanced performance two Scoring models of credit appraisals remove all
under the scheme, it has been decided to continue subjectivities at the appraising / sanctioning
bearing the one time guarantee fee on CGS authority and make the process simpler and easier.
covered loans based on the interest rates on the SSI Details of the models are annexed to the circular.
accounts as detailed below:
(ADV.30/06-07 dt. 25.05.2006)
Interest charged on the % guarantee fee to be borne
account Tractor finance under tie up arrangement with major
By the borrower By the Bank
tractor companies
Upto 10% 1.50% 0%
In view of the advantages in having tie-up with
Above 10 % to 11% 1.00% 0.5% manufacturers of tractor companies who offer
Above 11% to 12 % 0.5% 1.00%
discounted price, additional warranty for
maintenance and after sales service, our Bank has
Above 12% 0% 1.50% entered into MOUs with major tractor companies.
The annual service fee should be borne by the The salient features of the arrangement and the list
borrower as hitherto. of companies are furnished in the circular for the
information and guidance of branches.
(ADV. 26/2006-07 dt. 15.05.2006)
Tractor finance can also be extended to other
National Horticulture Board (NHB) Scheme leading brands of Tractor companies (which
"Development of Commercial - Horticulture through complies Commercial Test Report/Minimum
production and post harvest Management" - Lock in Performance Standards of Govt of India) with
Period of 3 Years for subsidy whom we do not have a tie-up arrangement.
NHB has clarified that subsidy amount kept in a
(ADV.35/2006-07 dt. 05.06.2006)
separate account (Subsidy Reserve Fund Account)
should be adjusted only as part of the recovery of IndSME Secure – Amendments
the last instalment with a minimum lock in period
of 36 months. This condition has been laid down The following amendments are made to
to ensure that the entrepreneurs do not avail the Ind SME Secure scheme of our Bank which is
loans, only for availing the benefit of subsidy. The meant for financing Small and Medium Industrial
adjustment of subsidy will be on the pattern of Units which now covers service sector also:
back-ended subsidy. & The scheme has been extended to fresh SME
Farmers should submit a duly signed application projects and for the existing customers with
for term loan in the prescribed format along with good track record and group affiliation. In case

7
 Recollect
of fresh SSI/SME units, as the assets have to country, migrating from place to place. In the
be created, project financing as followed by process, it is necessary for the branches to know
the bank can also be considered. their whereabouts. The Branch Managers/ staff
should therefore undertake immediately tracking
& Where term loan liabilities are outstanding, the
of students by
liabilities under the TL may first be deducted
from the value of securities keeping 25% & Contacting the college / institution from where
margin and the balance of assessed limit may the student has passed out the exams.
be given as SEC OD against the remaining
& Finding out from the student-alumni / old
assets
student’s association, about the present address
& Apart from the sanctioned limit, an adhoc limit / employment of the student.
to the tune of 20% can also be permitted for a
& Meeting the parents / guarantors / co-
maximum of 3 to 6 months with an additional
borrowers personally at their address to
interest of 2% over the applicable rate
ascertain the present where about of the
& NFB limits like guarantee and IBN will be student and his employment status.
outside the covered limits and LC limit will
& Writing letters to the student / parents / college
continue to be within the working capital limit.
seeking information on the status of
& The scheme has been amended for sanctioning completion of the course and the progress
fresh term loans subject to creation of assets report/ marks sheets.
under the new TL, availability of cash flow
& Meeting the student personally to ascertain
and DSCR for expansion of capacity or
about the present employment, his emoluments
purchase of machinery.
and arrangement for loan repayment etc.
& Margin on building reduced from 40% to 30%.
& Taking up re-phasement / re-shedulement of
& The interest rate structure is modified as given these loans to synchronise with the expected
in the circular. income generation. In case of genuine reasons
of non-employment or non-completion of the
(ADV. 36/2006-07 dt. 07.06.2006) course.
Group Insurance coverage to members of SHGs & Normally in premier institutions, campus
financed by our Bank selection takes place in the pre-final / final
year of the course. Branches should keep in
Jana Shree Bima Yojana (JBY) Scheme of LIC of
touch with the college authorities/officials in
India shall be utilised for providing group
charge of the placement cell and ascertain
insurance cover for the members of SHGs financed
details about the placement/selection obtained
by our Bank who are below the poverty line and
by student borrowers in companies /
in the age group ranging from 18 to 59.
organisations.
The insurance cover will be effective from the date
of receipt of premium at their end and not from the A follow-up format designed to keep record of the
day premium is collected/debited to the account of contacts made by the branch officials is annexed to
the SHG members. the circular. Branches are advised to record the
The details of benefits, salient features of the details of every periodical follow-up visit /contacts
scheme, role of branches, Circle Office and nodal / efforts made by them in the format and keep the
same along with the relevant loan documents/file.
office in collection and remittance of premium and
This will be helpful in following up for recovery.
the formats of applications are available in the A database can also be created for easy reference.
circular.
(ADV. 42/2006-07 dt. 14.06.2006)
(ADV.37/2006-07 dt. 08.06.2006)
Ready Reckoner of Interest Rates on Structured
Educational loan Scheme – Tracking of students Loan Products.
In the educational loan segment, tracking In order to facilitate branches / Circles, a Ready
of student borrowers, after completion of their Reckoner of rates of interest (w.e.f. 01.06.2006)
course of study, assumes greater importance in the applicable in respect of all Structured Loan
backdrop of the students seeking jobs/employment Products is given in the circular.
in various parts of the country and outside the

8
 April – June 2006
Regarding charging of interest on Structured Loan when taken up with their immediate superiors or
Products, branches shall follow the guidelines as which, they feel, require immediate cognizance of
below: the Top Management
& The revised rates are applicable for all existing a. Transfer requests and issues of routine nature
and fresh floating rate accounts. should not be sent under this channel.
& In respect of existing fixed rate advances, the b. The correspondence can be in any language
contracted rate will continue till the closure of
c. It may be sent either through proper channel or
such loan accounts.
directly to CMD’s Secretariat
& For fresh advances under fixed rate basis,
d. It may be in writing by normal mail or e-mail
branches shall charge revised rate of interest
[e-mail id: cmdsec@indianbank.in] or through
only as shown in the chart.
the Bank’s IntraNet.
The circular also contains some of the instructions
e. The staff member, while writing, must clearly
on the powers to sanction loans under fixed and
furnish:
floating rate options.
& His/her Name, SR No. Branch/Office and
(ADV.45/2006-07 dt 16.06.2006) Designation;
& Complete details of the issue with supporting
PERSONNEL documents, if any [In case documents are
Categorisation of Branches as on 31.03.2006 being enclosed, then the representation may
be sent by normal mail];
Business criteria approved by the Board
for categorization of branches is as under: & The specific request.
Category Business Criteria(Average Incumbe On receipt of the representation, a written
aggregate deposits and advances ncy acknowledgement will be sent to the staff member
during the last two years) Scale concerned and appropriate action will be initiated
Small Below Rs.5 Crore I on the same. The details of the action thus initiated
Medium Rs.5 Crore and above, but below II will also be informed to the staff member.
Rs.25 Crore
In case of issues which are sensitive in nature, the
Large Rs.25 Crore and above, but below III
Rs.75 Crore
entire details including the identity of the staff
Very Large Rs.75 Crore and above, but below IV
member will be kept confidential.
Rs.250 Crore Staff members may utilize the system in the best
Exceptionally Rs.250 Crore and above V interest of their self as well as the Bank.
Large
(PRNL.22/2006-07 dt 11.05.2006)
All Service Branches shall be categorized as Scale
III and other Specialised Branches as per the above Incentives for Air Travel through Jet Airways under
criteria. “ Corporate House Scheme”
The lists of the branches falling under different Our Bank had earlier entered into an agreement
categories / scales are furnished in the annexures to with Indian Airlines for availing the incentives
the circular. under the ‘Indian Airlines Corporate House
Scheme’. The incentives are available to our Bank
(PRNL.11/2006-07 dt 02.05.2006) based on the All India billing on account of Air
Samadhaan Scheme Travel undertaken by our Executives/Staff
members on duty / training / LFC, etc., as per their
To enable staff members to take up genuine issues eligibility, through Indian Airlines and Alliance
concerning both official as well as those personal Air.
in nature which have a bearing on their work, a
structured mechanism - “Samadhaan” has been Our Bank has now entered into a similar
introduced. agreement with Jet Airways for availing of
incentives under “Jet Airways Corporate House
Under this system, staff members can address the Scheme”. A deal code of ‘Indian' has been
issues directly to our Chairman and Managing assigned to our Bank under this agreement. The
Director which they feel have not been considered term of this agreement is from 1st May 2006 to 31st
9
 Recollect
March 2007 (both days inclusive). The salient Service Tax Amendments
features of the arrangement and conditions are
As per the Service Tax regulation, any turnover
furnished in the circular.
commission received from the Central/ State
(PRNL.30/2005-06 dt.30.05.2006)
Government towards collection of taxes, duties,
cess etc. are exempt from the Service Tax levy.
CRA To facilitate segregation in accounting of income
attracting Service Tax, new account heads have
Conduct of Government Business –Agency been created with the following weekly codes:
Commission- Revision of Rates.
6.1.8 Turnover Commission attracting Service Tax
RBI has reviewed the existing rates of Agency BS code – 145
commission on government business and revised 6.1.13 Turnover Commission not attracting Service Tax
the rate of commission as 9 paise per Rs.100 for BS code – 186
payments in Central Excise / Postal / Sub Treasury As per the new Valuation Rules, branches have to
/ Ministerial Department transactions etc.(other collect Service Tax on reimbursements and out of
than pension payments for which the commission pocket expenses collected from the customers like
is at Rs.60 per transaction). For receipts the recovery of postage, telephone/telegram charges,
commission continues as Rs.45 per transaction. credit guarantee fees, appraiser’s fees, etc..
The above rates shall be effective from July 1, (CRA. 18/ 2006-07 Dt. 13.06.2006)
2005.
Safe Deposit Lockers – Identification Code on
(CRA. 10 / 2006-07 Dt. 13.05.2006) Locker Keys
Frauds – Need for Filing a Police Complaint As per RBI directives, in respect of Safe Deposit
Lockers, to facilitate the identification of locker
Branches / Offices are advised to take following keys by the Income-tax officials an Identification
actions whenever a fraud is perpetrated involving a Code should be embossed on all locker keys,
staff member / customer / third party. which would indicate the name of the bank and the
branch, which had hired out the lockers.
& To file an FIR (First Information Report) with
(CRA.22 / 2006-07 Dt. 20.06.2006)
the local Police, if the amount defrauded is less
than Rs.1 crore. GENERAL
& To file a complaint with the CBI (Central Printing of Indian Financial System Code (IFSC)
Bureau of Investigation), if the amount is more
Whenever messages are routed through SFMS or
than Rs.1 crore or in cases involving inter-state funds are transferred through RTGS either intra-
ramification of very serious nature and direct bank or Inter-bank, branches have to furnish Indian
involvement of the staff even if the amount is Financial System Code of the destination branch.
less than Rs.1 crore. In all the cases of
complaints to be filed with CBI, prior The IFSC of a bank’s branch contains 11
permission of CVO/ CMD has to be taken. characters and first four characters are the SWIFT
code of the Bank, 5th character is reserved (it is 0)
& Even in a case where recovery is made or and remaining 6 characters are optional.
sought to be made, the Police / CBI
complaint is to be filed forthwith and that IDIB is our Bank's swift code and we are using the
these directions are non-discretionary. IBGA code of our branches as the last four
characters for furnishing the IFSC code of a branch
& However, as per Govt. of India guidelines and remaining characters in between are zeros. For
fraud cases upto Rs.25,000/- having example the IFSC Code of MGT branch is
involvement of an insider should not be IDIB000M002; IFSC of Ballygunj is
reported to police where recovery is not IDIB000B006.
doubtful.
RBI has suggested that all the branches should
Branches / Offices are required to strictly adhere to have IFSC code of the respective branches printed
these directions of the Board. on the cheque books issued to the customers. The
(CRA.17/2006-07 dt 09.06.2006) code should be above the MICR band preferably
above the serial number of the cheque.

10
 April – June 2006
Till such time the branches are provided with IFSC In order to take advantage of the core technology
printed cheques, they shall make arrangements to and to reduce the burden in the branches, an ATM
affix IFSC of the branch by using a rubber stamp. Service Centre has been opened under CBS with
(GENL.01/2006-07 Dt. 03.04.2006) effect from 27.04.2006 to have centralised
reconciliation and accounting of ATM
IndJet Remit - a remittance product under RTGS transactions.
All inward remittances will be automatically
Under the centralised settlement process, the role
credited to the Customers account and the branches
have only to inform the customer by verifying the of branches is limited to maintenance and
`Enquire' menu. All the incoming transactions adjustment of cash at ATMs and maintenance of
(R41) will be processed and the respective equipments for uninterrupted service to customers.
customer account will be credited, provided the The revised systems and procedure to be followed
beneficiary’s account number is correct i.e. New and the accounting entries to be passed by
account number allotted under CBS. The branches and ATM Service Centre, Chennai is
comparative chart showing the advantages of furnished in the annexures to the circular.
RTGS vis-à-vis conventional remittance is as
below: (GENL.13/2006-07 dt.04.05.2006)

Conventional Remittance RTGS FX

Beneficiary will have clear funds Beneficiary will have clear funds Know Your Customer (KYC) Policy and Anti Money
within a day (TTs) or maximum of within 2 hours
7 days (DDs) Laundering Guidelines for FX transactions
Our branch should be available at Our branch need not be present at
the drawee centre drawee centre Branches should adhere to the instructions on the
Remittance can be made between Remittance can be made to any
provisions of the FCRA, 1976. As per guidelines,
our branches only bank’s RTGS enabled branch branches should open accounts or collect cheques
(who has IFSC No)
for associations / organizations in India which are
Minimum service charge for all is For retail customers minimum registered under the Act with Government of India.
Rs.10/- with the maximum of service charge is Rs.10/- with the
Rs.10,000/- irrespective of the maximum of Rs.2000/- A copy of the registration certificate / letter from
status of the remitter Government of India in this regard should
For Corporate customers
minimum service charge of invariably be obtained while opening such
Rs.200 and maximum of
Rs.2500/- accounts. Branches should exercise due care to
ensure that no account is opened in the name of
banned organizations.
(GENL. 09 /2006-07 Dt. 22.04.2006)
RBI has been circulating lists of banned entities
ATM Service Centre - Centralised Reconciliation
and terrorist organisations / individuals notified by
and Accounting of ATM Transactions
the Government of India which in turn is circulated
Our customers have the facility to draw cash and to branches by HO from time to time. Branches
do balance enquiry in the ATMs of the following should exercise caution, if any transaction is
banks with whom we have entered into tie- detected with such entities.
up/sharing arrangements.
Adherence to KYC guidelines are all the more
Punjab National Bank, Oriental Bank of
MITR Commerce, UCO Bank, Karur Vysya important while opening NRE / FCNRB accounts
Bank, and Indus Ind Bank of NRIs. Proper introduction should be obtained
Bank of India, Syndicate Bank, Union from any of the following, while opening accounts
Bank of India, United Bank of India,
CashTree Dena Bank, Bank of Rajasthan, Indian for NRIs:
Overseas Bank, Bank of Maharastra,
and Karnataka Bank i. An existing account holder.
Bilateral Andhra Bank, State Bank of India and ii. A foreign correspondent / branch.
Arrangements their Associate Banks
iii. Notary public
At present they are acceptable in 12000 ATMs (in
addition to the 9000 ATMs under sharing as iv. Foreign Embassy / Consulate officials.
mentioned above) and in 1,50,000 point of sale (FX. 02/2006-07 Dt. 13.04.2006)
(POS) terminals in India.
11
 Recollect
Pre-shipment Export Finance - Ensuring End Use shipment credits (other than FBN) covered under
WTPSG.
Attention is invited to the master circular on export
credit ADV.26/2004-05 dated 21.09.04. On receipt (FX. 09 / 2006-07 Dt. 23.06.2006)
of request from the borrower for release of Packing
Credit (PC), the LC/firm order is to be scrutinised Integration of Forex Treasury Operations at OSB,
with regard to the commodity, value, due date, etc. Chennai – Forex Transactions of Non Authorised
For running PC account facility also, the LCs / Branches
firm orders as per the declaration / statement
As per extant guidelines, non-Authorised branches
furnished should be produced within a reasonable
were advised to route all their Forex transactions
time/ as permitted by sanctioning authorities.
through the select Authorised branches
The advance is to be disbursed in stages according (coordinating Branches). Now, it is modified that
to the need of the party, which should be carefully the non-Authorised branches may also contact the
scrutinised by the branch. nearest Forex Authorised branch for their
requirements in respect of clean outward
The export procedure and usage of PC funds of the
remittances (issuance of DD/MT/TT) and travel
applicant borrower is to be understood at the time
related services like issuance and encashment of
of preparation / appraisal of the proposal itself and
Travellers Cheques.
necessary approvals are to be sought in the initial
stage itself to comply with specific needs / For all other Forex related transactions such as
operational requirements of the exporter. Branches collection of cheques / bills and other trade related
are directed to ensure the end use of the PC transactions, the non-Authorised branches would
amount drawn backed by proper records / continue to utilise the services of the Coordinating
statements / declarations by exporter. branches as per circular FX 24/2005-06 dated
04.01.06. While forwarding the requests to the
(FX. 08 /2006 – 07 Dt. 12.06.2006) Forex Authorised branches for issuance of DDs,
MTs and TTs, non-Authorised branches shall
Reduction in ECGC premium for Pre-shipment
provide all relevant documents (retaining a copy
Credit under WTPCG
for their files) along with the Credit Advice.
With effect from 01.07.2006, the premium rate
In case of branches under CBS, the required
applicable for all outstanding Pre-shipment
amount shall be earmarked in the customer
advances including deemed export accounts has
account and the same may be mentioned in the
been reduced to 8 paise from the existing 10 paise
covering letter along with the customer account
for Rs.100/- per month on the average daily
number authorising the Forex Authorised Branch
product. The premium is to be debited to the
to debit the customer’s account directly with the
exporter’s account and remitted to the nearest
relevant amount. Non-Authorised branches should
office of the ECGC by the branches on or before
take necessary approval from the customer to that
the last working day of the subsequent month
effect.
along with the report in the forms prescribed by
ECGC. There is no change in the existing premium (FX.10/2006-07 Dt. 28.06.2006)
rate of six paise per Rs.100 per month on all post

Last numbers of circulars issued as on 31.06.06 Though due care has been taken in the preparation of Recollect,
the version given in the circular is final.
DEP ADV PRNL CRA FX GENL MD/ED Compiled by HO: O&M Division

15 52 45 25 10 37 02 Printed & circulated by HO: Circular Issue Cell

12
 Volume 15 Issue 4 Jan - Mar' 2003

DEPOSITS ADVANCES
Recollect
Take over of Home Loan accounts from
Opening of Saving Bank Accounts in the
Co-op Banks and Co-op Housing Societies
name of Certain Bodies / Organisations
RBI has permitted banks to open Savings it has been decided to consider sanction of
Bank accounts in the name of State Government home loans by take over of accounts from Co-
departments/bodies/agencies in respect of grants/ operative Banks/Co-operative Housing Societies.
subsidies released for implementation of various The proposal should be sanctioned at the level of
programmes/ schemes sponsored by State Gov- Circle Head and above only. Before considering
ernments on production of an authorization to the such take over, Circle Head should study the
bank from the respective Government depart- standing/reputation of the Co-operative Banks/
ments certifying that the concerned Government Co-operative Societies as their appraisal quality
department or body has been permitted to open and valuation standard may have limitations. For
savings bank account. Branches should keep on other guidelines to be followed in this regard,
their record a copy of the authorization issued by please refer to the circular.
the respective State Government departments. ADV.124/02-03 dt.07.01.03
DEP.15/02-03 dt.03.01.03 Loan against 8% RBI Relief Bonds Scheme
2002 and 7% Savings Bond
Minimum Balance for SB Accounts
In respect of 8% relief Bonds 2002, RBI
In view of the RBI directions received, has clarified that
branches are advised to
i. Bonds transferred to the Bank as Collateral
i. inform the customers about the require- cannot be sold in the secondary market by the
ment of minimum balance at the time of opening Bank
of the account and
ii. In case of non-repayment of the loan
ii. display the minimum balance requirements against such bonds, the lending bank has to hold
and also service charges for non - maintenance of it till maturity. On due date only, by giving a
minimum balance in the Customer Notice Board certificate that the Borrower / bond holder has
for the information of our customers. not repaid the loan, the bank can encash the
Since our products and service charges are bonds transferred as security.
already displayed in our web site, the address of iii. Upon repayment of the loan before the
our web site may also be placed in the notice maturity date, the Bonds should be transferred
board with a request to the customers to view the back only in the name of the Original holder.
same .
Margin for advance against 8% Relief Bonds
DEP.16/02-03 dt.07.01.03
Vidhya Nidhi Deposit Scheme In view of RBI's stipulation that banks can-
not dispose off the 8% relief bonds in the secon-
For the above deposit scheme, to arrive at dary market, the margin for loan / advance
the monthly instalments and residual values for against these bonds shall be suitably hiked from
rate of interest of 6.00% to 7.75% p.a. in stages the present level of 15% so as to avoid over runs.
of 0.25%, a master chart A and B for Division Branches are advised to review periodically the
and Multiplication factors respectively has been existing loans granted against the security of 8%
given in the annexure to the circular. relief Bonds. Wherever the loan is likely to over-
DEP.17/02-03 dt.20.01.03 run the security value, they should take necessary
and adequate follow up / safety measures to
Interest Rate on Savings Bank Deposits
avoid such overruns.
W..e.f. 1.3.2003, interest rate on Savings In respect of 7% savings Bond, RBI has
Bank deposits has been reduced to 3.5% per clarified that no lien will be noted in respect of
annum. The reduction also applies to Ordinary these bonds since these are not transferable.
NR Savings Bank Deposits (NRO), Non Resident Hence, for any loan/ advance, these Bonds can-
(External) Savings Bank Deposits (NRE) and not be taken as an encashable security.
Savings Bank Accounts opened under Capital The other clarifications received from RBI
Gains Scheme 1988. for loan/advance against 8% Relief Bonds are
DEP.18.02-03 dt.17.03.03 furnished in the circular.
ADV.125/02-03 dt.07.01.03

1
Volume 15 Issue 4 Jan - Mar' 2003

Annapoorna and Aroghya Scheme - A new post dated cheques from the parties for repay-
loan product ment of dues by Compromise settlement towards
A new loan product viz. Annapoorna and future instalments / interest as per terms of sanc-
Aroghya has been launched targeting Mid sized tion, wherever the parties are unable to pay the
Hotels / Restaurants / Food joints / Bakeries / entire OTS amount in one lumpsum. This will
Fast Food outlets catering to the growing Middle have the following twin advantages
Class segment of the population and Motels/ 1. The parties will be under pressure to make
Highway Inns / Restaurants/Kiosks/ Mess/Can- payments within the deadline set
teens and Tea Stalls located within 6 to 7 Km
radius from the branch, which are catering to 2. They will be liable for penal action under
commuters on the highways. section 138 of the N.I. Act, in case the cheques
are returned for want of funds on due
To start with, the scheme is being intro- presentation.
duced only in Urban and Metropolitan areas. ADV.133/02-03 dt.08.02.03
Branches located in Tourism Centres, Temple
towns, National High way areas etc. have better Competitive Pricing of SSI Advances
scope to market the product. Scale I and II W.e.f 1.3.2003, interest rates for SSI
Branch Managers are not empowered to accord advances of above Rs 2.00 lakhs will be deter-
credit sanction under the Scheme. For these mined as below based on credit rating done as
branches, Circle Head may accord credit sanc- per HO: Credit Division circular ADV.17/00-01
tions selectively, if there are good proposals. dated 11/05/00 (The existing simplified credit
For other details of the product such as rating system as enumerated in circular
purpose, eligibility, security, loan amount, inter- ADV.37/2001-02 dated 07.07.2001 is dispensed
est, margin, etc. please refer to the circular. with)
ADV.126/-02-03 dt.09.01.03 Rating Interest Spread
Credit Guarantee Fund Scheme for Small Prime PLR/PTLR Nil
Industries (CGTSI) - Minimum credit limit for
Guarantee Cover AAA PLR/PTLR 1.00%
AA PLR/PTLR 1.75%
W.e.f. February 01, 2003, guarantee cover
of the CGTSI shall be available for eligible A PLR/PTLR 2.00%
collateral-free advances over Rs.5.00 lakhs and
BBB and Others PLR/PTLR 2.25%
upto Rs.25.00 lakhs, extended by the member
banks to SSI borrowers. All the sanctioning authorities should rate
ADV.130/02-03 dt.27.01.03 the accounts based on the latest audited balance
Switch over from NSC Staff Scheme (I and II) sheet for determining the interest rate. If the lat-
to IBNSC loan scheme est audited balance sheet is not available, interest
should be charged only at PLR/PTLR + 2.25 %
Branch Managers and above can sanction / i.e. maximum rate
allow transfer of liability from Staff NSC Scheme
(I & II) to IBNSC Loan Scheme. The switch over The sanctioning authorities at all levels,
is optional and shall be permitted upto the revised are empowered to fix the interest rates on the SSI
eligible drawing limit after obtaining request let- advances as stipulated above based on the rating
ter, fresh documents from the concerned staff of the accounts.
member and completion of the noting of lien etc. In case the Circle Head / Branch Manager
as per the terms and conditions stipulated for is convinced that the account is to be given still
IBNSC loan scheme. Sanctioning authorities finer rate of interest for any valid reason beyond
shall exercise power upto the delegated level for rating parameters, the same must be taken up
IBNSC Loan scheme as Structured Loan Product. with Head Office specifying the reasons in detail.
ADV.132/02-03 dt.06.02.03 Inspectors of branches should verify that
the credit rating and interest fixation pertaining to
Obtention of Post dated cheques towards SSI advances have been done in accordance with
compromise settlement of dues HO directives.
While according sanction of compromise ADV.134/02-03 dt.10.02.03
proposals, Branch Mangers/ Circle Heads are
advised to stipulate the condition of obtaining

2
Volume 15 Issue 4 Jan - Mar' 2003

Guidelines of RBI for Compromise Settle- increased to 9% w.e.f the year ending
ments of Chronic NPAs 31.03.2000. A detailed account of the CRAR in
RBI has made a review of the existing relation to credit expansion is furnished in the
scheme of compromise settlement of NPAs circular to highlight the relevance of management
which has revealed that the progress of recovery of loan assets towards keeping adequate CRAR.
of NPAs through this mechanism has been mod- The range of risk weightages for off balance
erate. In consultation with Government of India, sheet and on balance sheet items is given in the
RBI has issued revised guidelines giving one Annexure to the circular. Field level functionar-
more opportunity to the borrowers to come for- ies should bear in mind the aspects in credit
ward for settlement of their outstanding dues. expansion / management so as to earn an opti-
This fresh guidelines provide a simplified, non- mum return on the advances with lower impact
discretionary and non-discriminatory mechanism on capital allocation.
for compromise settlement of chronic NPAs ADV.140/02-03 dt.22.02.03
below the prescribed value ceiling. The revised Modification in Rate of Interest / spread for
guidelines will cover NPAs upto Rs. 10 Crore Export Credit
relating to all sectors including the small sector.
The guidelines will not, however, cover cases of W.e.f. 1.2.2003, the card rate for eligible
wilful default, fraud and malfeasance. The sali- export credit (i.e. PC advances upto 180 days,
ent features of the RBI circular dated 29.1.2003 Post shipment advances upto 90 days etc.,) has
are given in detail in the circular for the guidance been reduced from the existing rate of PLR
of branches. minus 2.75% to PLR minus 3.25% (resulting in
reduction of effective ROI from 9% to 8.5% p.a..
All Branches are advised to utilise this as on date) This revision is applicable for the out-
opportunity and recover substantially the dues in standing as well as fresh advances. The revised
all eligible NPAs within the time schedule pre- interest rates and the rates for overdues / ECNOS
scribed by the Reserve Bank of India. under Pre-shipment Credit and Post Shipment
ADV.136/02-03 dt.15.02.03 Credit are reproduced in the annexure to the cir-
cular for easy reference by branches.
Indian Bank Artisan Credit Card (ACC)
In such cases where the exporter has
A new scheme viz. Artisan Credit Card
repaid/prepaid packing credit from rupee
(ACC) to meet the short-term working capital
resources of the exporter to the extent exports
needs of the artisans is introduced in our Bank.
have actually taken place, the ROI applicable is,
To start with it is proposed to be implemented at
as applicable to PC adjusted out of export pro-
branches in TamilNadu, Pondicherry, Andhra
ceeds as per the time slab in Para 1 of the chart
Pradesh, Kerala and Karnataka. Office of the
annexed to the circular.
Development Commissioner Handicrafts South-
ern Region, Chennai will identify the beneficiar- ADV.141/02-03 dt.24.02.03
ies and sponsor application from eligible Artisans Negotiation of Bills under Inland Letter of
to our bank. Required credit limit will be jointly Credit (IBN)
appraised by the bank and the Handicrafts Corpo-
ration. Marketing support will be provided to the The validity period of discretion for sanc-
artisan by Handicrafts department. Banks will be tion at finer rate of interest for IBN facility as per
assisted by the Handicraft department in the the existing guidelines has been extend upto
recovery of loans as well. This is an informal tie 30.06.2003. RBI has issued certain revised guide-
up. Credit will be provided in the form of over- lines on discounting / negotiation of bills by
draft to individuals and artisan SHGs. The salient banks. Hence in addition to the existing guide-
features of the scheme are given in the annexure lines, branches should adhere to the following
to the circular also:
ADV.139/02-03 dt.21.02.03 1. Branches should negotiate bills under LC
Significance of Capital Adequacy (CRAR) in
strictly in respect of genuine commercial and
Credit Expansion trade transactions of their borrower constituents
who have been sanctioned regular credit
Banks are required to maintain a minimum facilities. Hence, permitting IBN facility for
capital as a percentage of Risk Weighted Assets some select non-customers stands withdrawn
(RWA) on an ongoing basis and RBI sets the immediately. Henceforth branches can extend
minimum capital level. Upto the year ended IBN facility only to our borrower customers.
31.03.1999, minimum Capital to Risk Weighted
Assets Ratio (CRAR) was 8% which has been

3
Volume 15 Issue 4 Jan - Mar' 2003

2.. In the case of entities having multiple Other guidelines

banking arrangement/consortium arrangement,
i. During the period from April to
IBN facility can be extended if only our bank
September, if any proposal for review / renewal
joins the lending arrangement.
etc. is submitted, provisional statement for the
3.. Branches should not negotiate bills/LC completed financial year shall be obtained.
bearing the without recourse clause. Henceforth,
ii. Proposal for adhoc/excess/enhancement
branches should negotiate bills against LCs with
shall be entertained by calling for the audited
the clause with recourse to drawers.
statements if such requests are received after 6
4. For CRAR purpose, the risk weightage for months of the financial closure of the company /
IBN exposure shall be as appropriate to borrower firm as far as possible. Otherwise the reason for
constituent i.e., 100% for firms, individuals, cor- delay may be ascertained and satisfied. However
porates, etc. in such cases provisional balance sheet should be
called for.
All other terms / conditions / guidelines
given earlier for IBN facility remain the same. iii. Non submission of statement beyond the
ADV.142/02-03 dt.24.02.03
cut-off date/extended date if any, shall attract
levy of applicable penal interest. An intimation
Relief to farmers in drought affected districts shall be sent to the borrowers to this effect.
Based on guidelines received from RBI, Field level functionaries are advised to
branches are advised to provide relief to all farm- take note of the above guidelines and ensure
ers who were given crop loans from 01.04.2002 compliance.
to 30.09.2002 for cultivation of Kharif crops in
the districts notified by the respective State Gov- ADV.148/02-03 dt.04.03.03
ernment as drought affected. Branches may con- Feed Back report on compliance of terms and
tact local Lead Bank for details in this regard. For conditions of sanction
guidelines on relief measures, methodology, sub-
In order to bring in discipline with regard
mission of statements, etc., please refer to the cir-
to compliance of terms and conditions of credit
cular. Circle offices may provide necessary
sanction and conduct of accounts, a system of
guidance to the branches in this regard.
submission of Feedback Report by branches on
ADV.144/02-03 dt.27.02.03 compliance of terms and conditions of sanction
Submission of audited financial statements for advances below Rs.50 lakhs sanctioned (fresh
alongwith credit proposals / enhancement / renewal) by Circle Office/Head
Office is now introduced. However this system is
In regard to the periodicity for submission not applicable for loans sanctioned under MDL
of financial statements along with the credit pro- powers and for Loan against deposits, Staff
posals, following guidelines are issued with Loans and Jewel Loans
immediate effect.
Submission of Feed back Report
Limited Companies
Feed back report (as per annexure to the
Audited statements shall be submitted circular) has to be submitted by the branches as
within six months from the date of financial clo- below to the sanctioning authority within a
sure. If permission has been obtained for exten- month from the part/ full disbursement of the
sion of the financial year from the Registrar of sanctioned facilities.
companies, the period for submission may be
extended to that extent. i. For HO sanctions, the report has to be sub-
mitted to HO through the Circle Office. Circle
Business Concerns other than Limited Office has to submit their considered views on
Companies the report to HO within 15 days from the date of
Audited statements for the concerns shall receipt of the report.
be submitted within six months from the date of ii. For Circle Office sanctions, the report has
financial closure. The period of submission shall to be submitted only to Circle Office.
be extended by three more months on case to
case basis based on justifiable reasons by the Sanctioning Authority shall peruse the feed
respective credit sanctioning authority. back report and issue appropriate instructions to
the branches on non-compliance reported by
them.

4
Volume 15 Issue 4 Jan - Mar' 2003

The above system is in addition to the Asset Monitoring Committee (SAMC) set up at
existing procedure viz., preparing a note on com- Risk Management Department will monitor the
pliance of terms and conditions of sanction SMA accounts. The committees at Circle Office
before disbursal and endorsement of an order by and Head Office should meet once in a month
the branch manager clearly permitting the release before 15th and 20th of the succeeding month
of limit as stipulated in Chapter 14, Para 2.1.1 of respectively.
the Conventional Advances Manual.
The gap between two successive meetings
ADV.153/02-03 dt11.03.03
of the above-referred Committees should not be
Special Mention Accounts (SMA) - New cate- more than 35 days.
gory of Assets
Slippage of Standard Asset to Non- Reporting System
Performing Asset category has a major impact on On identification of an account as SMA,
profitability of the Bank. This is more important the branches will report the same in SMA-I to IV,
in view of the delinquency norms being reduced the formats of which are enclosed to the circular.
from 180 days to 90 days from the year ending
31.3.2004. In this context, RBI has suggested that Branches and Circle Offices are advised to
banks introduce a new asset category viz., Spe- implement the above guidelines immediately.
cial Mention Accounts (SMA) between 'Standard' Branches will review all standard asset accounts,
and 'Sub-standard' for their own internal monitor- identify SMA accounts from 31st March 2003
ing and follow up. This will help banks to look at onwards and submit the report to respective Cir-
accounts with potential problems in a focused cle Offices.
manner right from the onset of the problem, so ADV.155/02-03 dt.15.03.03
that monitoring and remedial actions can be more Modification of nomenclature of HPTLR and
effective. other conditions under Home Loan Scheme
The identification of an account as SMA Hitherto, interest on Home Loans is
will be done at branch level, based on the con- charged keeping the HPTLR as the base rate. In
duct / status of the account and the information tune with RBI guidelines, it has been decided that
about the performance, capability and integrity of hereafter for Home Loan, the base rate will be
the borrower available to the branch. Based on our PTLR. The Bank will from time to time
the objective assessment, the branch should announce the rate of interest for Home Loans by
decide as quickly as possible to categorise the varying either the PTLR or the spread or both.
account as SMA. Further monitoring and instruc- The rates so arrived will be applicable to all our
tions for appropriate corrective measures includ- existing customers who opted for floating rate
ing restructuring etc., and follow up thereof, will and new customers.
be done by the authorities / Department as per the
cut-off limits given hereunder: W.e.f. 17.2.2003, for fresh loans, the rate
of interest on Home Loans, irrespective of the
Branch Rs. 1 lakh and Respective loan amount, is revised as below.
above upto Rs.10 Branch Manager
lakhs For New Houses/Flats Rate of Interest
Circle Office Above Rs.10 CRMC at Circle i. Repayment upto 5 years PTLR minus 3.5%
lakhs and upto Office
Rs.50 lakhs ii. Repayment above 5 years upto 10 PTLR minus 3%
years
HO Above Rs.50 lakh RMD at HO
iii. Repayment above 10 years upto
PTLR minus 2.5%
At branches, a Committee consisting of 20 years
minimum three members, headed by the Branch For Repairs and Renovation
Manager and comprising of ABM / Officer-in- i. Repayment upto 5 years PTLR minus 3.5%
charge of Credit Department / CMO / IDO shall
analyse the reasons for the accounts showing sig- ii. Repayment above 5 years upto 10
PTLR minus 3%
years
nals and take action to prevent any slippage. The
Committee should meet on or before 5th of the For all existing Home Loan accounts (to
succeeding month. all category of borrowers like Public, Staff
At Circle Office, the CRMC will monitor Accounts, VRS Optees having Home Loan, NRI
the SMA accounts besides the designated func- Home Loan, Repairs and Renovation Loan), the
tions of CRMC. At Head Office, the Standard

5
Volume 15 Issue 4 Jan - Mar' 2003

revised rate shall be extended w.e.f. 01.03.2003, Number of branches in a Circle eligible for
irrespective of amount. the incentive is as under:
Revision in Fixed Rate of interest is as under: No. of Rural Branches
No. of eligible branches
in a Circle
Interest rate at 0.5% over the applicable
floating rate depending upon the tenor. The revi- Less than 5 branches Scheme not applicable
sion is applicable to new accounts to be sanc- 5-20 branches One best performing rural
tioned based on the PTLR prevailing on the date branch
of sanction. For existing fixed rate Home Loan
Above 20 branches Two best performing (first &
borrowers, there is no change in the interest rates second) rural branches
Refixing of EMI
ADV.162/02-03 dt.31.03.03
For existing borrowers who opted for
floating rate, EMI amount shall be refixed based PERSONNEL
on the outstanding amount as on the date of
applying revised rate of interest for the residual Conveyance Loan to Staff Members
period.
Based on the revised guidelines received
Revised norms for switch over from fixed rate from Government of India, w.e.f. 18.01.2003 the
to floating rate scheme of Conveyance Loan to Officers and to
Switch over is permitted from fixed to Award Staff in our Bank has been revised as
floating rate after the account has run for a mini- under:
mum period of 3 years from the date of sanction, Two Wheelers - To Officers and Award Staff
by charging one time fee of 1% on the balance
outstanding in the loan account. If switch over is Eligibility - All confirmed officers in the Bank's
sought after 5 years, one time fee need not be service and Workmen employees drawing pay of
charged. Rs.3910 p.m. or more as per VII Bipartite
Settlement.
Prepayment charges
Max. Loan Amount - Rs.60,000 Margin - 10%
Henceforth, no prepayment charges is to
be levied in case of foreclosure of the accounts. Rate of interest
ADV.156/02-03 dt.19.03.03 i. upto Rs.15,000 at 7.5% p.a.. simple
Incentive to Branch Staff working in Rural ii. exceeding Rs.15,000 at Bank Rate or 12%
centres p.a.. (simple) whichever is higher
With a view to encouraging healthy com- Repayment - in 84 months, Principal and Interest
petition among rural branches and recognizing in the ratio of 5 : 1
the branches which perform better, a new scheme
providing suitable incentive to all the staff work-
ing in rural branches has been approved by our Four Wheelers - To Officers
Board. The incentive scheme will be in force
commencing from 2003-04. Eligibility - All confirmed officers drawing Basic
Pay of Rs.9820 p.m. or more
Performance of Branches will be evaluated
by the respective Circle Offices by applying the Max. Loan Amount - Rs.3,50,000
dynamic matrix, the details of which are given in Margin - 20%
the circular. The incentive will be that all the
chosen permanent staff members of the branch Rate of interest
will be permitted to spend two days in a year at i. upto Rs.80,000, at 8.5% p.a.. simple
the nearest holiday resort at a cost not exceeding ii. exceeding Rs.80,000, at Bank Rate or 12%
Rs.1000 per person. No cash will be paid in lieu p.a.. (simple) whichever is higher
of the above incentive. Circle Offices concerned
shall submit the consolidated grading sheet to Repayment - 200 equal monthly instalments.
HO: Rural Banking Department. After taking Principal and Interest in the ratio of 3 : 2.
necessary approval of HO: RBD of the grading For Repair of Motor Car to Officers
done, Circle Offices will permit the branches for
availing the incentive. This incentive is apart Eligibility - All confirmed officers drawing Basic
from the cash incentive being in force. Pay of Rs.9,820 p.m. or more and having

6
Volume 15 Issue 4 Jan - Mar' 2003

subsisting liability under Conveyance Loan (Four For 2 wheelers

Wheeler) Scheme to Officers For 4 wheelers
Award (Officers Only)
Officers
Purpose - Repair of motor car including cost of Staff
spares and repair charges New Vehicle to
5 years 7 years 7 years
New/Old Vehicle
Loan amount - Rs.10,000
Old Vehicle to
Periodicity - Once in every five years New/Old Vehicle
3 years 7 years 4 years

Rate of interest - Bank Rate or 12% p.a.. (simple)

whichever is higher There is no change in the Conveyance
Loan (Bank's) Scheme in terms of circular
Repayment - 60 months. Principal and interest in 200/88 dated 15.12.1988 available to staff mem-
the ratio of 5:1 bers who are confirmed in the services of the
Sanctioning Authority Bank on or before 17.09.1989 and the Moped
Loan Scheme available to sub-staff members
Sanctioning who are covered in terms of circular
Category of Staff
Authority PRNL.112/94-95 dated 25.10.1994. For other
1 Staff members in Small/ Circle Head terms and conditions of the revised scheme, the
Medium/Large Branches, Circle concerned circular may be referred to.
Offices, Staff Training Centres, PRNL.82/02-03 dt.31.01.03
In-charge of VLBs & ELBs and
staff members on deputation to Group Savings Linked Insurance Scheme
Regional Rural Banks
Group Insurance Scheme for all officers of
2 Staff members of Very Large/ CM/AGM-in-charge our Bank who are on rolls as on 31.03.2003 has
Exceptionally Large Branches of the Branch been introduced providing cover from
3 Staff members of Inspection AGM/DGM in- 01.04.2003. This is basically self-contributory
Centres charge of the Inspec- premium by way of deduction from the monthly
tion Centre salary through Bank to ensure financial relief to
the bereaved family in the unfortunate event of
4 Circle Heads, AGM/DGM in- AGM, HO:Credit death of an officer while in service. The relief
charge of Inspection Centres, Division shall be provided by way of Insurance cover,
staff members of Head Office, with accumulation of savings together with appli-
Subsidiaries and IMAGE cable interest accrued thereon. Officers who join
the Bank after the introduction of the Scheme
Dispensing with the System of Funds shall compulsorily become members of the
Allocation Scheme on the next annual renewal date of the
As there will not be any loan part carrying policy. The monthly contribution is eligible for
commercial rate of interest, the system of alloca- tax relief under Sec.88 of the IT Act.
tion of funds to the Circle Offices and HO:Credit The monthly premium payable depending
Division for each financial year by CMD for upon the sum Assured is as under:
sanction of loan part carrying commercial rate of
interest, hitherto followed, is dispensed with Monthly Premium per member
Sum
Withdrawal of Charging of Commercial Rate Category Assured Risk Savings
Total
of Interest (Rs.) (100%)
(33.34%) (66.66%)
Consequent to the enhancement in the loan
1 4,00,000 196 392 588
amount under Conveyance Loan to Staff Mem-
bers and continuation of other terms and condi- 2 3,00,000 147 294 441
tions regarding repayment period and rate of 3 2,00,000 98 196 294
interest as per Government guidelines, the prac-
tice of charging commercial rate of interest Under this Scheme, out of the monthly
(PLR) on a certain portion of the existing loan contribution received from each officer, 33.34%
accounts shall stand withdrawn will be utilised for insurance premium and the
Time gap for availing second and subsequent balance of 66.66% will be taken as savings. The
loans contribution utilised for savings is returned to the
officer with interest at the time of retirement,
Category of the Time Gap (years) death or exit from the service by any other mode.
The rate of interest payable on savings amount is

7
Volume 15 Issue 4 Jan - Mar' 2003

variable from time to time. The present rate of basis to officers has been upwardly revised. The
interest is 10%. details of the revision are furnished in the
Annexure to the circular. The circular also con-
In the case of death during service, in addi-
tains the details on eligibility norms and other
tion to the accumulated amount of savings por-
terms and conditions.
tion of contribution with interest, the amount of
insurance cover will also be paid to the deceased PRNL.96/02-03 dt.12.03.03
employee's family by L.I.C. of India through
Bank under the arrangement. For the operational
CRA
Service charges and inspection charges for
modalities, application for enrolment , the annex-
priority sector loans
ure to the circular may be referred to.
PRNL.84/02-03 dt.07.02.03 Based on directions received from RBI, it
has been decided that henceforth no service
Maintenance of Branch Documents Register charges or inspection charges shall be levied for
Branch Documents Register is one of the priority sector loans upto Rs.25000.
very important and permanent registers to be CRA.20/02-03 dt.01.02.03
maintained by every branch. Some of the impor-
Modification in service charges for EM
tant documents of the branch which do not per-
tain to advances, guarantees, etc., are to be With immediate effect, when the total
entered in the Branch Documents Register imme- credit limits (both fund based and / or non-fund
diately on their receipt at the branch. The format based) are Rs.25 lakhs and above and where the
of Branch Documents Register is given in value of all immovable properties offered as
Annexure 1 to the circular. Proper maintenance security / additional security is also Rs.25 lakhs
of this register will enable and above,
i. easy location of the important documents/ a. For creation of EM, Rs.10,000 per bor-
records whenever required at a future date. rower is to be recovered as EM charges irrespec-
tive of the number of properties offered as
ii. verification of important documents/
security.
records of the branch by incoming branch man-
agers, inspecting officials, etc. b. For extension of EM, charges are to be
recovered @ 0.40% of the enhanced/additional/
iii. The list of documents to be entered in
adhoc limit sanctioned subject to a maximum of
Branch Documents Register is furnished in
Rs.10,000 per occasion of such enhancements
Annexure 2 to the circular.
involving extension of EM.
Documents which are recorded in Branch
If the limit already sanctioned is less than
Documents Register should be kept under lock
Rs.25 lakhs, for any extension of EM consequent
and key in a place of safety in the custody of the
to sanction of additional/enhanced/adhoc limit,
Branch Manager/Asst. Branch Manager/Officer-
subject to total limit reaching Rs.25 lakhs and
in-charge. Branch Manager/Asst. Branch
above, EM charges of Rs.10000 is to be recov-
Manager/Officer-in-charge, at the end of every
ered provided the total value of the properties
calendar quarter must make a physical verifica-
offered as security/additional security is Rs.25
tion of documents enlisted in the Register and
lakhs and above.
certify to that effect in the remarks column by
their signature. Whenever there is change in the EM charges are exempted for the follow-
Branch Manager, the incoming Manager should ing categories:
verify the entries in Branch Documents Register i. If the value of the properties offered as
with the documents/records and certify in the securities or the total limits (fund and Non fund
Register itself. During the course of branch based) availed is less than Rs.25 lakhs.
inspection, the Inspecting officials shall scruti- ii. Home Loans irrespective of value of
nise this aspect and make a record of their obser- assets/ loan limit.
vations in their report. CRA.21/02-03 dt.08.02.03
PRNL.90/02-03 dt.27.02.03
FX
Provision of Residential Accommodation to
Officers on lease basis - Revision in rental Facilities to NRIs / PIOs and Foreign Nation-
ceilings als -Liberalisation
W.e.f. 1.4.2003, the rental ceiling for pro- As per the existing guidelines, authorised
vision of residential accommodation on lease dealers are permitted to repatriate funds held by

8
Volume 15 Issue 4 Jan - Mar' 2003

NRIs /Persons of Indian Origin (PIOs) in their Resident Foreign Currency (Domestic)
NRO accounts, for the following purposes. Account
i. Education upto USD 30,000 per academic Resident Foreign Currency (Domestic)
year. Account may also be credited with or opened out
of foreign exchange earned and / or gifts received
ii. Medical Expenses upto USD 1,00,000. from close relatives (as defined in the Companies
iii. Sale proceeds of immovable property, held Act) and repatriated to India through normal
for a period of 10 years, upto USD 1,00,000 per banking channels by resident individuals. For-
calendar year. eign exchange earnings could be through export
of goods and / or services, royalty, honorarium,
iv. Remittance of assets of foreign nationals, etc.
including retired employees / widows of Indian FX.28/02-03 dt.27.01.03
citizens resident outside India and assets in India Errata
acquired by NRIs / PIOs by way of inheritance / The amount mentioned in page No.8 para No.2 of Circular No.
legacy upto USD 1,00,000. FX21/2002-03 dt.26.12.02 is to be read as USD 500 instead of
In modification of the above, RBI has USD 1,000
removed the fixing of different amounts for dif-
ferent purposes and also to enhance the overall
limit to USD 1 million per calendar year.
GENERAL
Accordingly now authorised dealers can allow Incorporating Disclaimer clause in E-mail
remittance(s) upto USD 1 million, out of the bal-
ances held in NRO accounts / sale proceeds of The Disclaimer clause to be incorporated
assets, on production of an undertaking and a cer- in all outgoing E-mail messages has bee revised
tificate by the person making the remittance. The as under:
existing prohibition regarding repatriation of This e-mail message and attachments is for the named
assets to a citizen of Pakistan, Bangladesh, Sri addressee's use only and are confidential, proprietary and legally
privileged. If you are not the intended recipient but receive it
Lanka, China, Afghanistan, Iran, Nepal and Bhu- through oversight or error, please destroy this mail and all copies
tan will continue. and inform the sender immediately. Unauthorised use,
FX.24/02-03 dt.27.01.03 distribution, transmission, printing, copying or dissemination of
this information in any manner is strictly prohibited and is punish-
FEMA - Liberalisations able under the relevant law. The Bank does not accept any
responsibility whatsoever for changes in the nature of modifica-
With the introduction of Foreign Exchange tions, additions, deletions made to the message once it is sent
Management Act, 1999 (FEMA) w.e.f.
01.06.2000, Reserve Bank of India has The above clause should be in small font
announced various liberalisations and simplified so as not to occupy precious space.
procedures relating to foreign exchange transac- GENL.61/02-03 dt.25.01.03
tions which have been circulated to branches by
Tips for Branch Managers and staff for mar-
HO: ID through A.P. (DIR Series) circulars. For
keting our products and services
the benefit of the branches, a gist of major liber-
Branch is the ultimate point for selling our
alisations in the areas of services to Non-
products and services where the customer comes
residents, Residents, Exporters, Importers, etc.
into contact on a one to one basis. Therefore it is
effected from 1.6.2000 to 31.12.2002 is enclosed
very essential that the highest degree of expertise
to the circular as a ready reckoner.
is developed in marketing at the branch level
FX.25/02-03 dt.27.01.03 itself. Some of the marketing strategies are pro-
FEMA, 1999 - Advance Remittances for Serv- vided below which are very simple and easy to
ices to be Rendered practice.
Based on the directions received from RBI, 1. Make customer satisfaction your number one priority
2. Develop service attitude
the existing ceiling of USD 25,000 or its equiva-
3. Develop a Systematic marketing approach
lent for advance remittance of any current 4. Develop team spirit
account transaction has been enhanced to USD 5. Care for customer
1,00,000 or its equivalent without guarantee from 6. Listen to customers
a bank of international repute situated outside 7. Encourage team work between the organisation and the clientele
India or a guarantee from an authorised dealer in 8. Act fast and respond quickly
India from the overseas beneficiary. 9. Try direct method of communication
10. Make word-of-mouth selling a systematic approach
FX.27/02-03 dt.27.01.03 11. Know your area of operation
12. Study the economic activity in your command area

9
Volume 15 Issue 4 Jan - Mar' 2003

13. Involve yourself fully in your area of operation b. Fraudulent encashment through forged
14. Popularise the schemes in your area of operation instruments, manipulation of books of accounts
15. Identify market opportunities or through fictitious accounts and conversion of
16. Know your own branch
17. Make a complete analysis of your customer
property.
18. Know the competition c. Unauthorised credit facilities extended for
19. Do a better job than your competitors reward or for illegal gratification
20. Sell existing schemes to the new customers
21. Sell new schemes to your existing customers
d. Negligence and cash shortages
22. Diversify by selling new schemes to new customers e. Cheating and forgery
23. Activate customer service committee and quality circle at the f. Irregularities in foreign exchange
branch
transactions
24. Develop innovative approaches to marketing
25. Develop knowledge based marketing g. Any other type of fraud not coming under
26. Serve your existing customers better the specific heads given as about
27. Revive broken relationship
28. Ensure prompt supply of stationery RBI advised banks to submit the report on
29. Display prominently the various schemes of the Bank actual or suspected frauds on banks in FMR-1
30. Improve your telephone calling skills (the format of which is enclosed to the circular)
31. Adhere strictly to the time norms on customer service within 3 weeks from the date of detection. In
32. Provide basic facilities to the customers respect of frauds in borrowal accounts involving
33.Display name plates/boards indicating service rendered at an amount of Rs.5 lakhs and above additional
various counters
34. Make special arrangements to meet the customer rush during
information as prescribed under Part B of FMR-1
peak hours may also be furnished.
35.Tap existing customers for introduction of more customers to Branches/Circle Heads are advised to
the Bank
36.Take special care in rendering personalised services to
report the frauds within a period of seven days
customers belonging to various segments from the date of detection in FMR-1 to HO: Vigi-
37. Fix a suitable target to individual staff based on their potential lance Department so as to enable them to report
38. Conduct door to door canvassing to RBI in time. For other details on classification
39. Redress the customer's grievances early. of frauds the circular may be referred.
It is needless to say that the Branch Man- GENL.64/02-03 dt. 31.01.03
agement should take the lead in planning and
RBI's Clean Note Policy - Discontinuance of
promoting marketing strategies with the involve-
stapling the currency note sections
ment of all staff members.
GENL.62/02-03 dt.29.01.03 Reserve Bank of India has clearly advised
the banks to stop the stapling of currency note
Frauds - Classification and Reporting sections. If banks continue to issue / accept notes
RBI in their Master circular on frauds have in stapled condition and also deposit them in Cur-
observed as under. rency Chests, it will be considered as a gross vio-
lation of RBI's directive. Hence, it is advised as
1. It is essential that banks report to RBI full follows for immediate implementation :
information about frauds and take follow up
action thereon At branches
1. Branches should forthwith stop stapling of
2. Banks should ensure that the reporting sys- note packets.
tem is suitably streamlined so that frauds are
reported without any delay to RBI. 2. The sections must be in unstapled condi-
tion only, with rubber / paper / polythene bands /
3. Staff accountability must be fixed by thread.
banks for delays in reporting fraud cases to RBI.
3. Branches should issue clean and good
4. Non-adherence by banks to the time frame sorted notes only to the customers as per RBI's
fixed by RBI in reporting fraud cases will attract Clean Note Policy and remit the soiled notes to
penal action as prescribed under Sec.47 (A) of the Currency Chests in unstapled condition.
the Banking Regulation Act, 1949
RBI, in order to have uniformity in report- 4. Branches should forthwith stop writing of
ing, has advised banks to classify frauds as under any kind on watermark window of bank notes.
based on the provisions of Indian Penal Code. At Currency Chests
a. Misappropriation and criminal breach of 1. To accept / issue notes in unstapled condi-
trust tion only from / to the branches.

10
Volume 15 Issue 4 Jan - Mar' 2003

2. Not to re-issue soiled or mutilated notes to important for our future growth and, above all,
the branches and also not to re-issue Ashoka Pil- they are aware that the amount of recapitalisation
lar series notes which are being phased out. has come from public money, and hence the need
to be very courteous, understanding in dealing
3. To ensure that the entire cash holdings with them, and to timely respond to their
including the remittances received after 1st Janu- requirements.
ary 2003 is kept in unstapled condition with rub-
ber / paper / polythene bands / thread. The infusion of capital by the Government
has cast tremendous responsibility on each one of
All branches and the Currency Chests are us. The Government has made it clear that this is
advised to strictly implement the above directions the last time that any capital is being provided to
of RBI. Circle Offices should follow up for the Bank. Therefore, it is now our responsibility
immediate implementation. to gear up ourselves to improve our profitability
GENL.66/02-03 dt.27.02.03 and generate adequate profit to contribute to
capital fund, and also to, in time, service the capi-
Sepcial Deposit Scheme, 1975 - Change in
tal that would be required to be mobilised from
rate of interest
the market.
W.e.f. 1.4.2003, deposits held under the The Bank has to build up, in future, capital
Special Deposit Scheme for non-Government required for the Risk Weighted Assets, on its
Provident Fund, Superannuation and Gratuity own. Needless to mention here that our working
Funds shall bear interest at 8% per annum. results will have to be attractive enough, for ade-
GENL.71/2002-03 dt.28.03.03 quate market response to our capital / bond issues
when we decide to go to the market. We should,
MD/ED therefore, keep carefully and continuously watch-
ing profit generation, level of NPA/ Provisioning,
Recapitalisation of Rs.770 Crore - Our Bank
accretion of quality asset, etc. We should
achieves CRAR norm
improve our overall productivity.
With the infusion of second tranche of We should not be complacent with the
recapitalisation of Rs.770 crore by the Govern- infusion of the required capital. We should prove
ment on 07.02.2003, our Bank has achieved the to the Government, Reserve Bank, every one of
Capital to Risk Weighted Assets Ratio (CRAR) our Customers and public/media that the Bank is
norm (presently 9%), after a long gap of 8 years. capable of achieving much higher growth, given
A sense of achievement is in the air. It is a the right climate and level playing field.
moment of joy for all of us in the Bank. Now, the
Bank is placed on a level playing field. We are We are now turning a fresh leaf towards
extremely thankful to the Government and the strengthening our Bank and at this point of time
RBI for their support in recapitalising our Bank the expectation all around is quite high, and
rightly so. We have to act with greater responsi-
We should all think in retrospect as to how bility with a vision to scale new heights. A Long
this has become possible. This has not happened Range Plan for the next seven years named
by any miracle. We were determined to become Vision 2010 is in the advanced stage of prepara-
strong and by planned and committed work put tion, which will provide the necessary road map
in, we could achieve the goal set. for the future. The team of Staff in our Bank is
The recapitalisation of the Bank has capable of achieving their goal, and we look for-
enhanced the image of the staff at all levels in the ward to every member of staff in the Bank to
Bank and has further improved the confidence forge ahead for a prosperous future for the Bank
level among the staff. We should now be much and its people.
more humble and should respond to customers'
MD/ED.6/02-03 dt.20.02.03
demands with greater concern, as they stood by
us in our difficult times. They are also very

11
a Volume 32 Issue 1

For Private Circulation Only

Apr – Jun 2019 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

Contents of this issue Contents of this issue

Cir No Date Details Pg Cir No Date Details Pg
DEP Introduction Of “IB – Digi” - Online Mahindra Life Insurance Company
06.05.2019
02 Savings Bank Account Limited
04 21.06.2019 Death Claim Monitoring System Master circular on “Arogya Raksha
Educational Loan – Integration of Group Health Insurance Policy” by
ADV Vidya Lakshmi Portal with interest 03 02.04.2019
arrangement with M/s. United India
02.04.2019
02 subsidy and credit guarantee Insurance Co.Ltd (UIIC) offered
templates exclusively to the customers of our
Recovery Recovery Recovery – Bank
03 04.04.2019
Action Points During 2019-20 04 21.05.2019 Adherence Of KYC NormS
Scheme for Extending soft loans to Guidelines to be followed while
sugar mills to facilitate payment to 07 14.06.2019 soliciting Insurance policies as per
05 04.04.2019
cane dues of the farmers for the IRDA guidelines
current sugar season 2018-19 Rationalisation and Revision of
Linking of Aadhaar number at CIF 08 28.06.2019 Agency Commission Payable to
level for availing Short Term Crop Banks on Government TransactionS
11 29.04.2019
loans under Interest Subvention Country Risk Management Policy –
FX
Scheme 04.04.2019 Changes in the risk rating of
02
12 02.05.2019
IB Home Advantage – Modification countries as of 31.03.2019
in norms Caution Listing of Entities under
Loans Against Negotiable Regulation 16(1) of Foreign
Warehouse Receipts/ Agri Produce 04 21.05.2019 Exchange Management (Exports of
Marketing Loans (Pmls) – Goods and Services) Regulations,
17 17.05.2019
Modification Of Guidelines & 2015
Adherence To Systems And Reconciliation of Nostro entries –
Procedures 05 03.06.2019 roles and responsibilities of
Directions of DFS for obtaining branches
18 20.05.2019 GSTIN while extending credit Overseas Direct Investments –
facilities 06 03.06.2019 Statutory and Regulatory
20 21.05.2019 Adhering of General Prudence Compliance – Issue and Concerns
Sharing Of Copy Of Sanction Letter Country Risk Management Policy –
24 19.06.2019
With Sponsoring ULB 09 28.06.2019 Changes in the risk rating of
Standard Operating Procedure for countries as of 01.06.2019
25 03.06.2019
Corporate Branch HRM Categorisation of Branches as on
01.04.2019
Healthy growth under Educational 03 01.04.2019
28 19.06.2019
Loan portfolio for the year 2019-20 Declaration of Banking Industry to
Master Circular on IB HOME be a Public Utility Service under the
SURAKSHA Group Life cover to 13 26.04.2019
provisions of Industrial Disputes Act,
Home Loan, Loan Against Property, 1947
CRA
02 Top up Loan Borrowers (General Reconstitution of Women Cell at
Public Policy No: GA000290) and 23 31.05.2019
Corporate Office
Staff Home Loan Cover (Policy No: Reconstitution of Internal
GA000380) from M/s Kotak 24 31.05.2019
Complaints Committee at Corporate
 APR - JUN 2019

Contents of this issue Contents of this issue

Cir No Date Details Pg Cir No Date Details Pg
Office Act, 1934
Nomination of Disciplinary Inclusion of “Kookmin Bank” in the
32 04.06.2019 Authority/Appellate Authority/ 15 10.06.2019 Second Schedule of Reserve Bank
Reviewing Authority of India Act, 1934
Nomination of Disciplinary Right to Information Act, 2005 RTI
ADMIN
10.04.2019 Authority/Appellate Authority/ applications/appeals sent to the
08
Reviewing Authority 16 14.06.2019 official emails of departments at
09 10.04.2019
Renewal Of Burglary And House Corporate Office, Zonal Offices and
Breaking Policy 2019-20 Branches
Annual Programme for the Procedure For Communicating With
18 18.06.2019
11 08.04.2019 implementation of Official Language GOI
for the year 2019-20 Caution Against Opening Of Bogus
19 28.06.2019
Opening / merging / closing / Accounts
renaming / shifting of Branches /
14 20.04.2019
Offices during Quarter IV FY 2018-
19
Incentive for improving service to DEPOSITS
17 03.06.2019
non-Currency Chest branches
Organisational Restructuring – Introduction Of “IB – Digi” - Online Savings Bank
18 29.05.2019 Formation of the Office of Field Account
General Manager
Dispensation of Fake Indian
Currency Note (FICN) from ATMs – In continuation of technology driven initiatives, our bank has
19 12.06.2019
Adoption of stringent control introduced ‘IB- DIGI” - Online Savings Bank Account
Mechanism opening facility through Bank’s website /Mobile App using
22 18.06.2019
SECURITY MEASURES FOR Aadhaar Based OTP aimed at mobilizing the accounts of
ATMs
tech-savvy customers and provide them the experience of
24 28.06.2019 Acceptance of coins
convenient, secured, anywhere and anytime banking.
Comprehensive Centralised
Insurance Policy for (1) Safe, The following are enclosed to the circular for the guidance
Furniture and Machinery (SFM), (2) of the branches:
25 29.06.2019
Books forms stationery (BFS) and
(3) Electronic Equipments (EE) kept
Process Flow for opening through
at Bank’s premises all over India
1. IB Customer App Annexure I
GENL Upgrade/Downgrade Pension
02.04.2019
04 Amount under APY 2. Website Annexure II
Exclusion of “DBS Bank Limited” Standard Operating Procedure (SOP) Annexure III
05 22.04.2019 from the Second Schedule of the
Reserve Bank of India Act. 1934
Submission of APY Exit through Separate product code has been assigned for “IB-DIGI” -
06 04.05.2019
Online Online Savings Bank Account and branches are requested
07 13.05.2019
Enrollment for PMJJBY, PMSBY to verify the daily reports pushed for further follow up to
and APY through Internet Banking complete the KC formalities.
Introduction of “On-line Accounting
08 20.05.2019 procedure for ATM / BNA cash
operations and transactions DEP.02/2019-20 dt.06.05.2019
09 24.05.2019
Financial Inclusion - A Happy
Journey Death Claim Monitoring System.
10 30.05.2019
RTGS System - Extension of
Timings for customer transactions
Reserve Bank of India is advising Banks to settle the death
11 04.06.2019 Right to Information Act, 2005
Inclusion of “Fincare Small Finance claims expeditiously (i.e) within 15 days from the date of
14 10.06.2019 Bank Limited” in the Second the claim. With a view to facilitate early settlement of
Schedule of Reserve Bank of India claims received in deceased depositors’ accounts, CO/Legal

16
 APR – JUN 2019

Department enhanced the powers of various authorities at Field Level functionaries are advised to make use of the
various levels ad for easy understanding of field level “Education Loan - Integrated VidyaLakshmi Portal”.
functionaries and customers, has communicated the detailed
Check list and guidelines. However it is observed that, ADV.02/2019-20 dt.02.04.2019
customer complaints are increasing day by day.
Recovery Recovery Recovery – Action Points During
An online tracking system “DEATH CLAIM MONITORING 2019-20
SYSTEM” has been made available under in-house
application. Branches are advised to register the death Indian Bank team had done remarkable performance in
claim applications in the portal. ensuring all time high cash recovery, up gradation and AUC
recovery during 2018-19.
Please refer to the circular for the Process flow of the
death claim monitoring system. However, containment in Fresh Slippages and improving
AUC Recovery where action points/ strategies to be
All other guidelines pertaining to settlement of claims in adopted require further improvement to accomplish the
deceased depositors’ accounts as enumerated in the Booklet Corporate Objectives for 2019-20.
on ‘Recognition and settlement of claims’ relating to
deceased depositors account’ and in various Circulars remain Branches are advised to go through the circular to
the same and continue to be applicable. accomplish the goal and also for effective NPA Management
are given in detail.
All Zonal Offices and Branches are advised to make use of
the Portal and ensure for settlement of the claim within the All the Zonal Managers/Branch Managers are requested to
stipulated time to avoid customer complaints. call for a meeting immediately and enlighten the staff on
these action points.
DEP.04/2019-20 dt.21.06.2019
ADV.03/2019-20 dt.04.04.2019
ADVANCES
Scheme for Extending soft loans to sugar mills to
Educational Loan – Integration of Vidya Lakshmi facilitate payment to cane dues of the farmers for the
Portal with interest subsidy and credit guarantee current sugar season 2018-19
templates
Government of India, Ministry of Finance, Department of
As per the, all education loan applications are to be routed Financial Services,) had notified a scheme namely “ Scheme
through Vidyalakshmi Portal only. for Extending soft loan to sugar mills”. Vide notification
dated 02.03.2019
To simplify Loan proposal processing time and comply with
the GoI guidelines, “Integrated Vidyalakshmi Portal” is NABARD has been appointed as Nodal agency for
enabled in our Bank with additional features interacting with DFPD and managing interest subvention.
Our South Extension branch has been nominated as Nodal
The navigation is: Branch under scheme.
 Helpdesk other website
 In house Application Branches shall refer the circular for operational
 Education Loan - Integrated VidyaLakshmi Portal guidelines of the scheme and the various formats.
Annexures and other details.
For details regarding features of the portal , Process flow
for processing education loan, etc., please refer the ADV.05/2019-20 dt.04.04.2019
circular.

3
 APR - JUN 2019

Linking of Aadhaar number at CIF level for availing Existing Norms Revised norms
Short Term Crop loans under Interest Subvention The limit can be permitted The limit can be permitted
Scheme upto 50% of the Original upto 30% of the Original
Home Loan (Term Loan Home Loan (Term Loan
RBI,while communicating the details of Interest Portion) upon completion of Portion) upon completion of

Subvention Scheme for short term crop loans has 3 years, subject to 3 years, subject to
repayment capacity and repayment capacity and
advised to ensure hassle-free benefits to farmers under
maintenance of LTV as per maintenance of LTV as per
Interest Subvention Scheme, Banks are advised to make
the extant guidelines and the extant guidelines and
Aadhaar linkage mandatory for availing short term crop total Term Loan total Term Loan
loans in 2018-19 and 2019-20. outstanding portion with outstanding portion with
OD Limit portion not OD Limit portion not
exceeding the Original exceeding the Original
Bbranches were advised to seed the Aadhaar Number with
Home Loan Limit. Home Loan Limit.
the savings Bank account of all crop loan beneficiaries and
make Aadhaar linkage mandatory for availing short term
ADV.12/2019-20 dt.02.05.2019
crop loans during 2018-19 and 2019-20. RBI has advised
Banks to capture and submit category wise data of Loans Against Negotiable Warehouse Receipts/ Agri
beneficiaries under the scheme and report the same on ISS Produce Marketing Loans (Pmls) – Modification Of
portal individual farmer wise once it is launched to settle Guidelines & Adherence To Systems And
Procedures.
the claims arising from 2018-19 onwards.

It has been noticed that serious irregularities in respect of

In order to ensure that details of Aadhaar are captured, a Loans against Warehouse Receipts/ Agri Produce Marketing
control measure is built in CBS at CIF level, where accounts Loans (PMLs) are taking place in the area of management of
under Interest Subvention product codes can be opened inventory at warehouses located in various parts of the
only for the CIF linked with Aadhaar through e-kyc process. country.

Branches are advised to capture Aadhaar data of Individual Warehouse receipt financing is growing in popularity and

Farmers at CIF level through e-kyc for extension of DBT therefore field level functionaries need to be aware of

benefits under Interest Subvention Scheme/ Coverage of various malpractices taking place in the industry. Frauds are

loanee farmers under the PMFBY. being committed by collateral managers with or without the
connivance of borrowers. The modus operandi of some of

Please refer the circular for the navigation to capture the frauds in this area are mentioned in the circular.

aadhar for other details.

Hence, Branches/ Zones are advised to review their existing
ADV.11/2019-20 dt.29.04.2019 portfolio under the pledge finance and ensure that all the
systems and procedures are followed scrupulously to keep
IB Home Advantage – Modification in norms these accounts standard at all time and also that each of
the accounts is fully secured by adequate stock.
Reference is invited to Circular ADV-176/2018-19 dated
21/03/2019 on Modification in guidelines to Retail Asset Henceforth, branches are advised to extend such Pledge
Products. The following modification in norms relating to IB Finance only against Negotiable Warehouse Receipts
(NWRs) issued by warehouses registered with WDRA.
Home Advantage is to be followed with immediate effect

16
 APR – JUN 2019

Branches shall not extend Pledge Finance against any other Non receipt of information related with SEP loans
type of store receipts, commodity arrival reports, sanctioned by banks creates problem for the ULB to capture
warehouse receipts or non-negotiable warehouse receipts
relevant data while claiming interest subvention through
etc.
Portal for Affordable Credit and Interest Subvention

Branches shall refer the circular for further guidance and Access (PAISA portal).

details.
In this regard, the branches sanctioning loans under SEP

ADV.17/2019-20 dt.17.05.2019 component of the DAY – NULM are requested to :

 Mark a copy of the sanction letter directly to the
concerned ULB.
Directions of DFS for obtaining GSTIN while
extending credit facilities
Department of Financial Services, Ministry of Finance, GOI  Open the loan accounts sanctioned under DAY
NULM in the specific products created for DAY NULM.
has observed that banks, while extending credit facilities,
are not obtaining GSTIN in all eligible cases. Refer Circular ADV_164/2017-18 dated 27.12.2017 for

Hence,all branches to ensure strict compliance of obtaining products under DAY NULM.

TIN/GSTIN in all eligible cases while considering credit

facilities. The interest subvention under DAY NULM is claimed by:

Non-compliance of the above directions will attract staff CO:MSME for NULM loans under SEP – Individual (SEP –I)
and Group SEP – G)
accountability
CO:RBD for loan under SEP – Self Help Groups (SEP – SHG)

ADV.18/2019-20 dt.20.05.2019
NULM loans opened under the specific products for NULM
only will be taken for claiming interest subvention under SEP
Adhering of General Prudence
component of the DAY – NULM and this will also help us to
share Statewise summary of loans sanctioned under NULM
Vigilance cell of Department of Financial Services,
to the respective states.
Ministry of Finance Government of India has informed
All branches are advised to follow the guidelines
that it has come to their notice that, general prudence is
scrupulously.
not observed while permitting substitution of properties.
In the light of the above, credit sanctioning authorities at
ADV.24/2019-20 dt.19.06.2019
Zonal Office/Branches are hereby advised to adhere to
general prudence while permitting the substitution of Standard Operating Procedure for Corporate Branch
property without dilution of security level.
Board at its meeting held on 08.01.2019 approved opening of
ADV.20/2019-20 dt.21.05.2019
Corporate Branches at Chennai, Mumbai and New Delhi to
begin with. These branches will be handling borrowal
Sharing Of Copy Of Sanction Letter With Sponsoring
accounts with exposure of Rs.50 crore and above (initially)
ULB
and will be reporting direct to Corporate Office. MD & CEO

Government of India, Ministry of Housing and Urban Affairs has been authorized to approve opening of branches at

(UPA Division) have stated that under the Self Employment other centres and to approve Standard Operating

Programme (SEP) component of the Deendayal Antyodaya Procedure.

Yojana – National Urban Livelihoods Mission (DAY – NULM),

Please refer the circular for the SOP for Corporate
interest subvention is provided to urban poor on bank loans
Branches.
on the recommendation of the Urban Local Bodies (ULB).
ADV.25/2019-20 dt.03.06.2019

5
 APR - JUN 2019

Healthy growth under Educational Loan portfolio for Branches are advised to make best use of this Insurance
the year 2019-20 Scheme to attract more customers to avail Home Loans
from our Bank. Please ensure coverage of all Home Loan,
Education Loan during the period from June to September, Loan Against Property, Top up Loan Borrowers (General
when admission for Professional Courses for the academic Public Policy No: GA000290) and Staff Home Loan Cover
year happens, is the high time for sourcing Proposals. (Policy No: GA000380) related borrowers under the
Insurance Scheme.
Creation of quality assets is also a paramount importance
while selecting of Educational Loan borrowers. Branches are It should be ensured that Officers involved in covering
requested to identify institutions of repute in the area of eligible loan borrowers are transparent in explaining the
operation and canvass maximum number of applications from features of the products available to the customers so as to
these institutions. enable them to take a considered decision and avoid any
complaints at a later date.
The suggestions, action points are given in the circular Focus
Target Group: CRA.02/2019-20 dt.02.04.2019
i. Existing standard loan borrowers (enjoying FB / NFB
facilities) with good track record. Master circular on “Arogya Raksha Group Health
ii. Education loans backed by tangible security. Insurance Policy” by arrangement with M/s. United
iii. Students securing admissions in Prime institutions like India Insurance Co.Ltd (UIIC) offered exclusively to
IITS, IIMs, NITs, ISB, overseas colleges and so on. the customers of our Bank.

Branches are requested to put forth all out efforts and “Arogya Raksha Group Health Insurance Policy” has been
canvass maximum number of quality applications under IB one of the popular co-branded Bancassurance products
Educational Loan Prime Scheme. offered exclusively to the a/c holders of our Bank by
M/s. United Insurance Co.Ltd (UIIC) with whom we have
All the Zones / branches are advised to take a note of the Corporate Agency Arrangement (CAA) for Non-life
suggestions, have focussed / pragmatic approach on insurance business.
Educational Loan and ensure the target is reached with
quality assets. The Latest MOU with UIIC has been renewed up to
31.03.2020, with few changes / improvements i n the
ADV.28/2019-20 dt.19.06.2019 Arogya Raksha Group Health Insurance Policy keeping in
view of extant IRDA guidelines and group health
Master Circular on IB HOME SURAKSHA Group Life insurance products offered by other public sector banks
cover to Home Loan, Loan Against Property, Top up as on date.
Loan Borrowers (General Public Policy No: Please refer the circular for the scheme details.
GA000290) and Staff Home Loan Cover (Policy No:
GA000380) from M/s Kotak Mahindra Life Insurance Branches are entitled to a commission @ 15% on basic
Company Limited. premium ( net of GST ) collected on all Arogya Raksha
policies ( Fresh & Renewal policies ) and thereby increase
On the lives of Home Loan borrowers, Group Insurance their non-interest income.
Scheme in the name of “IB HOME SURAKSHA” is being
offered by our Bank by arrangement with M/s Kotak Branches are advised to canvass ATLEAST FIVE
Mahindra Life Insurance Company Limited (Kotak Life) since FRESH POLICIES EVERY MONTH to enable our Bank
23.10.2009. surpassing corporate target of mobilising One Lakh
Arogya Raksha Policies during current year.
Full details of this “IB HOME SURAKSHA” Procedure &
Operational guidelines are detailed in the Circular. CRA.03/2019-20 dt.02.04.2019

16
 APR – JUN 2019

Adherence Of KYC Norms Guidelines to be followed while soliciting Insurance

policies as per IRDA guidelines
Reference is invited to the master circular GENL-
10/2018-19 dated 29.05.2018 issued by IRDA has issued guidelines to be followed while soliciting
CO: AML Cell regarding Know Your Customer (KYC) / Anti Insurance business. As per IRDA guidelines, that the
Money Laundering (AML) / Combating Financing of following aspects are to be meticulously followed by
Terrorism (CFT) for guiding the branches in the area of branches while soliciting insurance business:
KYC/AML procedures.
1. Map every branch to Specified Person
Branches are advised to prevent / complaints regarding 2. Every Branch has to maintain all records including KYC
usage of our bank accounts by criminal elements for money records of the clients, copy of the proposal form, customer
laundering or other illegal activities by strictly adhering to register, complaint register, Specified Person register etc.
KYC norms and procedures for opening of bank accounts. and a a register for policies logged in.
Some of the important points to be followed by branches 3.Branches should not procure General insurance policies
while opening bank accounts are reiterated below where sum insured exceeds Rs. 5 crores
4. Staff members involved in mobilizing insurance business
 Adhering to KYC norms - collecting and verifying should be suitably advised to ensure
the prescribed documents and entering all the data in the i. Adopting fair practice and ensuring no mis-sale
system ii. Adequate steps for timely redressal of customer
 Identifying walk-in-customers by obtaining grievances
Officially Valid Documents depending on the customer type iii. Prospect/customer are not compelled to buy insurance
 Applying enhanced due diligence measures for high products being offered along with the Bank’s productsand iv.
risk customers Providing due support and guidance to policy holders at the
 Monitoring transactions which give rise to a time of soliciting of the Policies and servicing, claims and
reasonable ground of suspicion grievance related matters.
 Enquiring sources of funds regarding suspicious
transactions/unusual operations Branches have to take note of the above guidelines while
 Fixing threshold limit and monitoring transactions dealing in Insurance business. Zonal Officers have to ensure
which exceed this limit that the above guidelines are followed and ensure that
 Reporting suspicious transaction, if any, to higher sufficient number of Specified persons are available in the
authorities Zone
 Scrutinizing high value transactions and unusually CRA.07/2019-20 dt.14.06.2019
large number of transactions
 Pursuing utmost customer due diligence while Rationalisation and Revision of Agency Commission
opening agency accounts in the name of proprietary concerns Payable to Banks on Government Transactions
for purposes appearing illegal or highly risky
RBI has advised regarding revision in the rates of agency
Branches are also required to take up verification of commission payable to agency banks with effect from July
customer information with independent data sources. 01, 2019.
Branches are advised to be proactive at the time of
entering into account based relationship by obtaining the Existi
SL.N Type of Revised
mandatory information from the customer to avoid any such Unit ng
o Transaction Rates
complaints and ensure that the Bank is not being used for Rates
the purposes of financial crime. Receipts - per
1 ₹ 50/- ₹ 40/-
Physical transaction
Receipts – e- per
CRA.04/2019-20 dt.21.05.2019 2 ₹ 12/- ₹ 9/-
mode transaction

7
 APR - JUN 2019

Pension per Reserve Bank of India has communicated the List of

3 ₹ 65/- ₹ 75/-
Payments transaction Exporters who have been caution listed.
Payments other Per ₹ 100 ₹ 5.5 ₹ 6.5
4
than Pension turnover paise paise
Further Reserve Bank of India has directed that, in
pursuance of Regulation 16 (1) of the Foreign Exchange
For eligible government transactions done with effect from Management (Export of Goods and Services) Regulations,
July 01, 2019, agency banks shall submit the agency 2015, the said exporters shall, prior to the export of any
commission claims, including applicable GST amount, as per goods/software to any destination, comply with the
revised agency commission rates, to RBI at respective following conditions, namely:
Regional Offices / CAS, Nagpur as per the extant
instructions issued by RBI in this regard. TDS on GST shall a) The exporters shall receive advance payment or arrange
be deducted as applicable by RBI at the time of making for an irrevocable letter of credit to the satisfaction of the
agency commission payment. Authorised Dealer, covering the full export value of goods /
software proposed to be exported and produce the
However, for eligible government transactions done by documentary evidence to the concerned Authorised Dealer.
agency banks upto June 30, 2019, agency banks shall
continue to submit agency commission claims as well as the b) The exporters shall, before submitting any declaration to
claims for ST/GST reimbursement as hitherto. the Specified Authority submit the same to the concerned
The revised rates will remain valid till the next review. Authorised Dealer for its prior approval as prescribed in
Foreign Exchange Management (Export of Goods and
CRA.08/2019-20 dt.28.06.2019 Services) Regulations, 2015

Branches are advised to comply with the above directions

FX while handling transactions pertaining to the additionally
Caution Listed Exporters (List Enclosed in the circular).
Country Risk Management Policy – Changes in the
risk rating of countries as of 31.03.2019 FX.04/2019-20 dt.21.05.2019

Branches are aware that our Bank has adopted the ECGC Reconciliation of Nostro entries – roles and
classification of countries in respect of Country Risk responsibilities of branches
Ratings
ECGC of India has released the revised Country Risk Reserve Bank of India has issued strict guidelines on
Classification list on 01.04.2019, which is reproduced in the reconciliation of Nostro Statement debits and credits which
Annexure to the circular in our Bank is handled by Treasury Branch, Mumbai.
Branches to take note of the change in Country Risk It is observed that Treasury Branch is following up with the
Classification of “Pakistan” from B1 to C1. branches who are not responding. To address these issues,
Branches are advised to take note of the rating as of operational guidelines were introduced.
31.03.2019, while taking fresh exposures and to take prior
approval from appropriate authorities as per country risk Please refer the circular for these operational guidelines on
management policy. Nostro Statement Debits and Nostro Statement Credits.

FX.02/2019-20 dt.04.04.2019 The directions contained therein shall be followed

scrupulously. Any non-adherence will lead to regulatory
Caution Listing of Entities under Regulation 16(1) of violation and shall be viewed seriously.
Foreign Exchange Management (Exports of Goods
and Services) Regulations, 2015 FX.05/2019-20 dt.03.06.2019

16
 APR – JUN 2019

Overseas Direct Investments – Statutory and as of 01.06.2019, while taking fresh exposures and to take
Regulatory Compliance – Issue and Concerns prior approval from appropriate authorities as per country
risk management policy.
Direct investments by Residents in Joint Venture (JV) and
Wholly Owned Subsidiary (WOS) abroad are allowed in FX.09/2019-20 dt.28.06.2019
accordance with the guidelines contained in Foreign
Exchange Management (Transfer or Issue of Any Foreign HRM
Security) Regulations, 2004, as amended from time to time.
Reserve Bank of India has observed that the following Categorisation of Branches as on 01.04.2019
deficiencies have been causing utmost concern from
Regulatory point of view and that the Banks are not In order to accelerate business growth, align
exercising due diligence while processing these Overseas appropriate business levels to Scales (both at Zonal
Investment transaction. and Branch levels), Board in its meeting has approved the
following revised norms for categorization of Branches. The
a) Allowing remittances without obtaining duly filled in ODI revised norms of business criteria for categorisation of
Form and without obtaining or mentioning UINs Branches were furnished in the annexure.
b) Reporting of ODI transactions beyond the stipulated
time lines The categorization of Branches (except Scale I branches)
c) Forwarding documents to RBI without fully scrutinizing will be reckoned by taking into account both the average
the transaction. total Business and average total advances. Further it is
clarified that if a branch fulfills the norms by having
The lapses were in contravention of extant FEMA average total business but not having the average advance
Regulations / Directions exposing the Indian Party to as stipulated above, then it will be classified based on the
compounding and also exposing the Bank to penal action. advance figures only. The Average total advances will be
inclusive of jewel loans. The list of Branches with their
To address these issues, the operational guidelines are respective scales were given in the annexure to the
issued. Branches shall refer the circular for detailed circular.
operations guidelines.
The circular calls upon all our employees to work as a team
Authorised Branches are instructed to exercise due with renewed vigour for improvement of Business level and
diligence while processing Overseas Direct Investment and for upgradation of Branches
follow the above directions meticulously to avoid penal
action by the Regulator. HRMD.03/2019-20 dt.01.04.2019

FX.06/2019-20 dt.03.06.2019 Declaration of Banking Industry to be a Public Utility

Country Risk Management Policy – Changes in the Service under the provisions of Industrial Disputes
risk rating of countries as of 01.06.2019 Act, 1947.

Branches are aware that our Bank has adopted the ECGC Vide Circular No. HRMD:99/ 2018-19 dated 31.10.2018
classification of countries in respect of Country Risk issued by the HRM Department, it had been informed that
Ratings.. Government of India vide notification dated 18.10.2018 has
ECGC of India has released the revised Country Risk declared Banking Industry to be a Public Utility Service
Classification list on 01.06.2019, which is reproduced in the under Industrial Disputes Act, 1947 for a period of six
Annexure to the circular. months with effect from 21.10.2018.
ECGC of India has made many changes in the rating of Now, Government of India vide Gazette Notification
countries w.e.f 01.06.2019 as furnished in the No.S.11017/5/97-IR(PL) dated 18.04.2019, has
annexure. Branches are advised to take note of the rating communicated that the services engaged in the banking

9
 APR - JUN 2019

industries to be a public utility service for a period of six

months wef. 21.04.2019 Role Name Designation Phone number
This circular is issued for the information of all staff Presiding Ms Hema Assistant 7010456072
members. Officer Malathi E General
Manager
HRMD.13/2019-20 dt.26.04.2019 Member Ms Chief 9940432740
Shenbagavalli Manager
Reconstitution of Women Cell at Corporate Office Jagadeesan (Law)
Member Ms Kavi Ezhil Manager 9176036178
Women Cell has been functioning at Corporate Office to TA
take care of the special needs of the women employees External Ms Revathi G Advocate 9840466700
Member Mohan
working at Branches / Offices and to seek redressal of
their grievances that could not be represented to the
All Women employees at Corporate Office are free to
officials of the Bank directly. approach the above Committee for redressal of their
Women Cell at Corporate Office has been reconstituted and grievancens (if any).
the composition of the same is as follows HRMD.24/2019-20 dt.31.05.2019

Nomination of Disciplinary Authority/Appellate

Role Name Designation Phone
Authority/ Reviewing Authority.
Number
Presiding Ms Hema Assistant 7010456072
Managing Director & Chief Executive Officer in exercise of
Officer Malathi E General
Manager the powers conferred on her as per Regulation 5 (1) of the
Member Ms Chief 9940432740 Indian Bank Officer Employees’ (Discipline & Appeal)
Shenbagavalli Manager Regulations, 1976 (as amended from time to time) and clause
Jagadeesan (Law)
14 of Memorandum of Settlement – Disciplinary Action and
Member Ms Shanthi Clerk 9629021772
Procedure therefor, dated 10.04.2002 has effected the
Priya
following nominations
All Women employees are free to approach the above Cell
for redressal of their grievances (if any). S. To Function as Name of the
No Official
HRMD.23/2019-20 dt.31.05.2019 1 Disciplinary Authority for
Officers in Scale V, for
Reconstitution of Internal Complaints Committee at Corporate Office cases and
Corporate Office Zonal cases
Shri Paresh Chandra
Appellate Authority for
Dash
Internal Complaints Committee constituted under the Policy Officers in Scale IV, for
General Manager
Corporate Office cases and
for Prevention of Sexual Harassment of Women at (HR)/
Zonal cases.
Workplace has been functioning at Corporate Office with an ES to Board
Reviewing Authority for
objective to handle complaints of Sexual Harassment of Officers in Scale I, II &
Women at workplace. III, for Corporate Office
cases and Zonal cases.
Internal Complaints Committee has been reconstituted and
the composition of the same is as follows:

16
 APR – JUN 2019

2 Disciplinary Authority for PERIAMET, CHENNAI 600 003

Officers in Scale IV, for PHONE NO.044-23458232, 233
CO cases and Zonal cases HAND PHONE NO.9486565946
Disciplinary Authority for
Officers in Scale IV at The New Policy Number is : 411104/11/2020/26
Overseas Centers (Residential Buildings)
Appellate Authority for 411104/11/2020/25 (Commercial Buildings)
Award Staff, for CO cases Please refer the circujlar for the policy details, assets
Appellate Authority for covered etc.
Award Staff, for Zonal
cases ADMIN.08/2019-20 dt.10.04.2019
(where the Disciplinary Shri K Sridhar
Authority is an Deputy General Renewal Of Burglary And House Breaking Policy
AGM or CM at Zonal Manager 2019-20
Office) CO: International
Appellate Authority for Division Burglary and House Breaking Policy for the Bank has been
Officers in Scale I, II & renewed for the financial year 2019 – 2020. The period of
III, for CO cases Insurance is from 01/04/2019 to 31/03/2020 with
Appellate Authority for
Officers in Scale I, II & M/s. United India Insurance Company Ltd.
III, for Zonal cases 64, Catholic Centre, Armenian Street,
(where Disciplinary Chennai-600 001.
Authority is AGM at Ph:044-25386298
Zonal Office)
Appellate Authority for The New Policy Number is 0105001219P100260117
Officers in Scale I, II &
III at Overseas Centers Please Note: Branches/Offices should mention the above
The nomination shall be effective from 28.05.2019. number whenever claims are reported to the above company
Branches are advised to bring the contents of this circular during the period from 01/04/2019 to 31/03/2020.
to the notice of all the officers / staff members and a print For details regarding Assets Covered, Exemption Clause,
out of this circular shall be displayed in the Staff Notice Broad features of the Policy, for Initial reporting on the
Board. occurrence of loss, submission of claim documents,
HRMD.32/2019-20 dt.04.06.2019 Insurance broker etc please refer the circular.

ADMIN Branches/Offices need not take a separate burglary and

House Breaking policy for the assets notified herein.
Renewal Of Standard Fire And Special Perils Policy
Of The Bank’s Own Buildings ADMIN.09/2019-20 dt.10.04.2019

The Standard Fire and Special Perils Policy for the Bank’s Annual Programme for the implementation of Official
Owned Buildings all over India has been renewed for the Language for the year 2019-20.
financial year 2019 – 2020 for the period 01/04/2019 to
31/03/2020 with Department of Official Language, Ministry of Home Affairs
(Government of India) has fixed the targets for Annual
THE ORIENTAL INSURANCE CO. LTD., Programme for the year 2019-20. The detailed Annual
BRANCH OFFICE NO.CBOIX, Programme is available on our bank’s CBS Helpdesk (Menu >>
NO.1, PERIA ANNA MAISTRY STREET, Bank >> Interanet >> Hindi Section) and the website

11
 APR - JUN 2019

www.rajbhasha.gov.in of the Department of Official the revised charge of R8/- per packet can be paid after
Language, Ministry of Home Affairs. ensuring that the CC is a large modern CC and that the CC is
authorised to charge maximum of R8/- per packet by the
Zones/Branches are requested to take necessary action in respective Regional Office of RBI .
respect of the points given in the circular and targets given 3. Please put in proper mechanism to ensure that the above
in the annexure. instructions are meticulously followed by the Currency
Chest attached branches / non – Currency Chest branches
All out efforts should be made to achieve the targets fixed
by Govt. of India.
ADMIN.17/2019-20 dt.03.06.2019
ADMIN.11/2019-20 dt.08.04.2019
Organisational Restructuring – Formation of the
Opening / merging / closing / renaming / shifting of Office of Field General Manager
Branches / Offices during Quarter IV FY 2018-19
In order to drive business growth of the Branches / Zones,
Details of Branches / Offices which were opened / a Four Tier structure is being adopted by introducing an
merged / closed / renamed / shifted during Quarter IV of additional layer i.e Office of Field General Manager. This,
FY 2018-19 are furnished hereunder for information and besides ensuring better follow up and monitoring, would
the details thereof provided in the Annexure to the circular drive business gains by maintaining high level relationship
Opening of Branches / Offices : with clients.
54 Branches opened - Annexure I Field General Managers will be stationed at Chennai,
Closure/Merger of branches 1 Branch closed and 20 Coimbatore, Delhi, Hyderabad, Kolkata and Mumbai.
branches merged - Annexure II The functions of the Field General Manager are broadly
Renaming of Branches/Offices 1 Branch renamed - classified under the following heads:
Annexure II  Strategizing for achievement of Business
Shifting of branches 5 Branches and 3 Zonal Offices objectives (Improve retail business i.e Deposits and
shifted - Annexure II Advances, structure initiatives for cross selling etc.,).
Number of Domestic branches as on 31.03.2019 is 2872  According credit sanction.
comprising of 737 Rural, 824 Semi Urban, 633 Urban and  Co-ordination with Corporate office, Corporate
678 Metropolitan branches. Branch (wherever present).
 Monitoring & Control.
ADMIN.14/2019-20 dt.20.04.2019  Marketing and lead generation for Corporate
Branches.
Incentive for improving service to non-Currency  Human resources management.
Chest branches  For Detailed operational guidelines in respect of
their roles, responsibilities and reporting structure please
As per Reserve Bank of India, Department of Currency refer the annexure to the circular.
Management, Mumbai letter, Zonal Offices / link branches
of CC are advised to take note of the following: ADMIN.18/2019-20 dt.29.05.2019

1. All our existing CCs do not fit into the definition of large Dispensation of Fake Indian Currency Note (FICN)
modern CC. Hence, our existing charge of R5/- per packet from ATMs – Adoption of stringent control
of 100 pieces, being charged from other Bank branches Mechanism
having account with our branches under RBI linkage scheme,
continues. Reserve Bank of India, Department of Currency
2. In the case of our Bank branches having account with Management, Mumbai has informed that
other Bank CC linked branches under RBI linkage scheme,

16
 APR – JUN 2019

that a few ATMs of a bank have recently dispensed some deter attempts of burglary, fire accidents and untoward
counterfeit notes..It is imperative that banks put in place incidents.
adequate safeguards / checks before loading ATMs with (a) As per recent RBI communiqué, all ATMs / BNAs
notes. Dispensation of Counterfeit Notes through the ATMs must be grouted to a structure (wall, pillar, floor) by
would be construed as an attempt to circulate the 30.09.2019 except for ATMs installed in highly secured
Counterfeit Notes by the bank concerned”. premises such as airports etc., which have adequate CCTV
coverage and are guarded by State / Central Security
2. Outsourcing of any activity by the bank does not diminish personnel. Non adherence of timelines shall attract
its obligations, and those of its Board and senior regulatory action including levy of penalty.
management, who have the ultimate responsibility for the (b) ATMs / BNAs must be provided with CCTV systems
outsourced activity. with 90 days back up recording.
(c) CCTV must have atleast 2 High Definition Infra
3. RBI reiterates that instances of such serious lapse must Red Cameras – one inside ATM cabin and the other covering
be avoided by banks at all costs. In view of the aforesaid, peripheral area. The number of cameras inside the cabin
banks are advised to ensure that stringent control may be commensurate to the number of ATMs / BNAs to
mechanisms are adopted by them in respect of all their provide seamless coverage.
ATMs, in order to obviate occurrence of such incidents at (d) CCTVs should be maintained under Annual
their ATMs Maintenance Contract.
(e) ATM officials should check for the proper
Zonal Offices / Branches / Currency Chests are advised to functioning of security systems – including verification of E-
follow the guidelines meticulously as any non-compliance will surveillance machinery, periodically.
be construed as violation of the instructions issued by the (f) Air-Conditioners in ATM cabin should be connected
Reserve Bank. to individual stabilisers and routed through Timer for
automatic changeover and thereby prevent fire incidents.
ADMIN.19/2019-20 dt.12.06.2019 (g) ATMs must be provided with rolling shutter with
the provision for locking the shutter in the ‘OPEN’ position
SECURITY MEASURES FOR ATMs to prevent unauthorised pulling down of shutters by
miscreants.
1. ATMs / BNAs are lucrative targets and prone to
attempts of burglary by anti-social elements. Such attempts 5. Effective Security systems act as a deterrent and
can be thwarted to a large extent by adhering to procedural thereby help prevent financial / reputational loss to the
safeguards. Bank.
ADMIN.22/2019-20 dt.18.06.2019
2. With the implementation of Electronic Surveillance
in our ATMs, Bank has migrated to 24 x 7 electronic Acceptance of coins
security through centralised monitoring by empanelled RBI has issued a circular on acceptance of coins by bank
service provider. However, it does NOT completely absolve
branches. It is stated that Reserve Bank continues to
the Bank of its obligation to safeguard its assets.
receive complaints about non-acceptance of coins by bank

3. Banking Ombudsman directive regarding a disputed branches.

ATM transaction states that, the onus rests with the Bank
to produce CCTV footage, failing which, the ‘benefit of RBI has once again advised to immediately direct all our
doubt’ would be given to the complainant and Bank will be
branches to accept coins of all denominations tendered at
liable to reimburse the disputed amount.
the counters for transactions or exchange and ensure strict

4. In view of the above, please ensure the following compliance in the matter.
physical security arrangements in our ATMs / BNAs to

13
 APR - JUN 2019

Zonal Offices / Branches / Currency Chests are advised to Branches are requested to forward all such requests to our
nodal branch i.e., Govt Business Service Branch Chennai
follow the guidelines on acceptance of coins meticulously, as
(CBS: 1719) for successful Upgrade/Downgrade.
any non-compliance will be construed as violation of the
instructions issued by the Reserve Bank. This feature should be popularised among the APY
customers to improve the persistency.
ADMIN.24/2019-20 dt.28.06.2019 APY subscribers can exit voluntarily from the scheme
before attaining age of 60 years due to unavoidable
Comprehensive Centralised Insurance Policy for (1) circumstances. However, it is advisable that the
Safe, Furniture and Machinery (SFM), (2) Books subscribers continue the account till 60 years to avail
forms stationery (BFS) and (3) Electronic Equipments guaranteed pension benefits offered by GoI. Exit
(EE) kept at Bank’s premises all over India. applications are available in In-house Applications 
Software for Atal Pension Yojana (APY) website and are to
The Comprehensive Centralised Insurance Policy has been be forwarded to Govt Business Service Branch Chennai
taken for Safe, Furniture and Machinery (SFM), Books (CBS: 1719).

forms stationery (BFS) for the period from 01.07.2019 to

GENL.04/2019-20 dt.02.04.2019
30.06.2020 & Electronic Equipments (EE) for the period
from 02.07.2019 to 01.07.2020 kept at Bank’s premises all Exclusion of “DBS Bank Limited” from the Second
over India with Schedule of the Reserve Bank of India Act. 1934.
The New India Assurance Company Limited,
(DO-710300), No.603, 3rd Floor, Rani Seethai Hall, We have been informed by Reserve Bank of India that
Anna Salai, Chennai –600006 consequent upon setting
Telephone Nos. : 044 – 23456766 up of the ‘DBS Bank India Limited ‘ as a Wholly Owned
E-Mail Id: ch71@newindia.co.in Subsidiary of ‘DBS Bank
Email Id: (Cc): ramkumar.j@newindia.co.in Ltd ‘ it has been decided to exclude ‘DBS Bank Ltd ‘ from
Email Id: (Cc): n.shyamala@newindia.co.in the Second Schedule
of the Reserve Bank of India Act ,1934 and published in
Please refer the circular for features of the policy. the Gazette of India
( Part III - Section 4) dated April 06, 2019—April 12,
ADMIN.25/2019-20 dt.29.06.2019 2019.

GENL GENL.05/2019-20 dt.22.04.2019

Upgrade/Downgrade Pension Amount under APY Submission of APY Exit through Online

Pension Fund Regulatory and Development Authority Pension Fund Regulatory and Development Authority
(PFRDA) has enabled a unique feature to (PFRDA) has enabled several features to facilitate
upgrade/downgrade of pension amount.once in a year subscribers for ease of maintaining the APY account.
during the month of April only.
APY subscribers can exit voluntarily from the scheme
Higher amount needs to be deposited in case of upgrade and before attaining age of 60 years due to unavoidable
additional contributions with returns would be credited to circumstances. However, it is advisable that the
the subscribers savings bank account directly in case of subscribers continue the account till 60 years to avail
down grade. guaranteed pension benefits offered by GoI.

16
 APR – JUN 2019

Branches should collect the APY account closure Branches are advised to popularize the availability of this
(Voluntary/Death exit) form from the customer and enter in online facility to our customers and educate them to enrol
the Software for Atal Pension Yojana (APY) website  through internet banking facility.
Home Make voluntary exit entry.
GENL.07/2019-20 dt.13.05.2019
 Enter the SB a/c number of the customer and click
on fetch details. Introduction of “On-line Accounting procedure for
 Select customer (CIF). ATM / BNA cash operations and transactions”
 Select Voluntary Exit reason from the drop down
(Voluntary Exit/Death Exit) and verify the details. To automate the accounting of cash loaded in ATMs / BNAs,
 Click on Stop APY. to account the Cash withdrawal transactions in our ATM s /
BNA s in the respective mapped BGLs to reflect machine
For APY related forms: Visit Software for Atal Pension cash balance on real time basis in the branch BGLs and for
Yojana (APY) website  APY Documents  APY forms. better cash management, an improved accounting is designed
to implement across all our ATMs and BNA s.
Branches are advised not to forward the physical forms to The salient features of the new Online accounting
either CO: FID or GBSB branch (CBS: 1719). procedure are detailed in the circular..
For annexures regarding SOP, screen shots etc, branches
In voluntary exit cases, the closure proceeds of APY shall refer the circular.
accounts are credited into savings bank account linked Branches are instructed to follow the procedures /
for auto debit only. Therefore branches are advised not accounting / CBS screens / ATM BNA Admin screens
to close the linked SB a/c or link the existing SB a/c to meticulously as per the SOP.
other SB a/c of the subscriber linked to same CIF. Branches are advised to go through all the annexure to
familiarise with the procedures to ensure smooth migration
GENL.06/2019-20 dt.04.05.2019 to the new online accounting of transactions and cash
operations in ATMs / BNAs.
Enrollment for PMJJBY, PMSBY and APY through
Internet Banking GENL.08/2019-20 dt.20.05.2019

As per the directions of Department of Financial Services, Financial Inclusion - A Happy Journey.
Ministry of Finance, Government of India, Social Security
schemes namely Pradhan Mantri Jeevan Joyti Bima Yojana Government of India is implementing various schemes
(PMJJBY), Prandhan Mantri Suraksha Bima Yojana (PMSBY) through banks.
and Atal Pension Yojana (APY) are being implemented by With the introduction of PMJDY during August 2014, aiming
banks to enlarge Insurance and Pension coverage in the at comprehensive financial inclusion in the country, Indian
country. Bank is recognized as one of the best banks in many
parameters.
At present, customers can enrol under the schemes by Our Bank’s per branch achievement under APY during FY
visiting the branch. Now, a new online facility is enabled in 2018-19 is 86 against the target of 60 fixed by PFRDA and
our Indian Bank’s internet banking website. Our customers our Bank emerged No 1 among all banks.
who availed the internet banking facility can login with their
credentials and enrol under these schemes. In order to further accelerate the momentum to maintain
our lead role, the following action points are suggested.
The user manuals along with screenshots (PMJJBY/ lized. In this regard, please
PMSBY/ APY) are enclosed to the circular. refer the policy on use of BCs vide circular: ADMIN-
03/2018-19 dated 02.04.2019.
 BC transactions should be monitored.

15
 APR - JUN 2019

 APY performance should be from all the zones. Some of the areas related to Deposits, Loans and other
 PMJJBY and PMSBY should be further popularised. issues can be addressed at branch level itself instead of
 Bank should aim to improve the income earned out getting escalated and redressed at RTI level by providing
of FI, i.e, DBT transactions, commission from Micro the details which has been received from branches.
insurance and pension schemes etc.
Branch Managers are advised to take note of the points
All field level functionaries should redouble their efforts to given in the circular and sensitise staff members to handle
achieve the expectations of policy makers in this regard. the customers with utmost care without giving any room for
escalation.
GENL.09/2019-20 dt.24.05.2019
GENL.11/2019-20 dt.04.06.2019
RTGS System - Extension of Timings for customer
transactions Inclusion of “Fincare Small Finance Bank Limited” in
the Second Schedule of Reserve Bank of India Act,
Reserve Bank of India, has informed that it has been 1934.
decided to extend the timings for customer transactions
(initial cut-off) in RTGS from 4.30pm to 6.00 pm. We have been informed by Reserve Bank of India
Accordingly,the RTGS time window with effect from June that the “ Fincare Small Finance Bank Limited “ has been
01,2019 will be as under: included in the Second Schedule to the Reserve Bank of
Sl.No. Event Time India Act ,1934 and published in the Gazette of India (
01. Open for Business 08.00 hours Part III-Section 4) dated April 13--April 19, 2019.
02. Customer 18.00 hours
transactions(Initial Cut-off) GENL.14/2019-20 dt.10.06.2019
03. Inter-bank 19.45 hours
transactions(Final Cur-off) Inclusion of “Kookmin Bank” in the Second
04. IDL Reversal 19.45 hours – Schedule of Reserve Bank of India Act, 1934.
20.00 hours
05. End of day 20.00 hours We have been informed by Reserve Bank of India
that the “ Kookmin Bank ” has been included in the
All the branches are advised to display the timings for Second Schedule to the Reserve Bank of India Act,1934
RTGS transactions prominently in the banking hall / notice and published in the Gazette of India ( Part III- Section
board immediately. 4) dated April 27- May 03, 2019.

GENL.10/2019-20 dt.30.05.2019 GENL.15/2019-20 dt.10.06.2019

Right to Information Act, 2005 Right to Information Act, 2005 RTI

applications/appeals sent to the official emails of
The RTI queries received during last year, queries from our departments at Corporate Office, Zonal Offices and
own customers have increased many fold. Most of these Branches.
queries are for seeking account related information / copies
of documents / Loan sanction details / Jewel loan related The applications/appeals received under RTI Act at
details / Non execution of standing instructions / ATM card Corporate Office were forwarded along with a covering
related issues / Various service charges etc., which should letter to the concerned departments at Corporate Office,
be addressed to at the branch level itself. Zonal Offices and Branches to provide the information
sought by the applicant/appellant.

16
 APR – JUN 2019

As a green initiative, from April 2019 the manufacturing, procurement, processing, packaging, sale,
applications/appeals received are scanned and sent along supply, distribution and marketing of various food articles
with our covering letter to the official email-id of the including milk & milk products under brand name “Mother
concerned departments at Corporate Office, Zonal Offices Dairy”, frozen fruits, fresh vegetables, fruit products
and Branches. The departments at Corporate Office, Zonal under the brand name “SAFAL”, edible oils under the brand
Offices and Branches are requested to check your official name “DHARA” and other food articles in the NCT Delhi and
email-id regularly for RTI applications/appeals and send other parts of the country.
your reply to the RTI Desk within a week’s time to comply
with the time limit specified in the Act. In recent times, it has come to light that some fraudsters,
under the guise of this company, used the brand names,
It is also brought to your notice that the applications are logos and address to defraud the public through false/fake
sent as per Section 5 (5) of the Act, wherein the concerned websites purporting to be that of the company or having a
official who receives the application/appeal is a Deemed relationship with the company and sought for their personal
Public Information Officer and will be liable for any penalty information and deposits in the bank accounts opened in
imposed by the Central Information Commission as per various Banks.
Section 19 and 20 of the RTI Act, for deemed refusal of
information, delay in providing the information or providing In this regard, the company has published Fake Website
wrong information to the CPIO. Caution Notice in the leading newspapers on 22.05.2019 and
also filed a complaint before Cyber Cell-East & Deputy
GENL.16/2019-20 dt.14.06.2019 Commissioner of Police, Delhi on 16.05.2019 and 30.05.2019.

Procedure For Communicating With GOI In order to avoid any unhealthy situation, branches are
advised to exercise utmost caution if any request is
Department of Financial Services, Ministry of Finance, has received for opening bank accounts in the full or part name
informed that several instances of correspondence have of ‘Mother Dairy Fruit & Vegetable Private Limited’.
come to their notice which are being directly addressed by
bank branches to the Government of India. GENL.19/2019-20 dt.28.06.2019

Branches should report matters to the supervisory

administrative offices i.e. to Zonal Offices and Zonal Though due care has been taken in the
Offices, in turn, to Corporate Office, if required. In case, preparation of Recollect, the version given in the
Corporate Office wants to seek any clarification from circular is final.
Government of India, it should take up the matter with the
appropriate Government authority, after taking MD & CEO’s Compiled by CO: O & M Division
approval.

We reiterate that any matter should not be referred to the

Government of India directly. Only Corporate Office may
refer the matter with Government of India after examining
the issue and obtaining approval from MD & CEO.

GENL.18/2019-20 dt.18.06.2019

Caution Against Opening Of Bogus Accounts

Mother Dairy Fruit & Vegetable Private Limited, having its

registered office at Delhi, is engaged in the business of

17
a Volume 31 Issue 1

For Private Circulation Only

Apr – Jun. 2018 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

Contents of this issue Contents of this issue

Cir No Date Details Pg Cir No Date Details Pg
DEP Change in Nomenclature of Reinvestment 2 Introduction of New Agreement giving 8
08.06.2018 Plan Deposit consent for submitting and authenticating
04 32 13.06.2018 of Financial Information to Information
Nomination Facility - Death Claim 2 Utilities – D134
05 05.06.2018
Statement - reg.
Modified Account Opening Form for all 2 Continuation of Interest Subvention 9
10 12.06.2018 Domestic Deposits Accounts (Individuals 34 18.06.2018 Scheme for short-term crop loans on
either single or joint) interim basis during the year 2018-19
Introduction of Card Rate product for 2 RBI Master Directions – Priority Sector 9
11 14.06.2018 Deposits above `5 crores and treatment 37 21.06.2018 Lending classification under Housing
for Preferential Deposits on maturity. Loan
Revamping of Term Deposit Products in 3 Modification in Legal Scrutiny Report to 10
12 14.06.2018 40 26.06.2018
CBS system be obtained from Bank’s approved lawyer
ADV Linking Of Subsidy To Loan-OCC - OD 4 Revision of Interest rates for Small 10
09.04.2018 Accounts CRA Savings Schemes (5 year Senior Citizen
05 05.04.2018 Savings Scheme, Public Provident Fund
Loan against Negotiable Warehouse 4 05 1968, Kisan Vikas Patra and Sukanya
06 18.04.2018 Receipts (NWRs) under MOU with Ms Samriddhi Account Scheme)
CGRCML Submission of Life Certificate-Mandatory 11
Revision of Standardized Credit Appraisal 5 06 09.04.2018 issue of acknowledgement to pensioners
12 07.05.2018 Format for advances of Rs.1.00cr and on submission of Life Certificate.
above. AMFI Certification for sale of Mutual 11
Collateral free loans to Micro and Small 5 08 18.04.2018
13 08.05.2018 Funds-Reimbursement of fees.
Enterprises Guidelines to be followed while soliciting 11
New MSME Structured Loan Product – 5 09 18.04.2018 Insurance business as per IRDA
17 10.05.2018
Ind Tourist Homestay guidelines.
Master Circular – Home Loan Plus 6 Extension of Basic Banking services to 11
18 11.05.2018
Scheme (Product Code: 4505 0016) 10 08.05.2018 Sick, paralysed and bedridden pensioners
Enhancing Credit Supply for Large 6 / family pensioners.
Borrowers through Market Mechanism – Doorstep Banking services to Senior 11
22 01.06.2018
Prudential measures for Specified Citizens of above 70 years old and
Borrowers. 14 25.06.2018
Differently abled or infirm persons
23 04.06.2018 RAM Rating – Reiteration of Guidelines 6 including those who are visually impaired
Loan Products Handled By Retail Assets 6 FX Routing of Foreign Exchange 12
24 05.06.2018 & Deposits Department 25.04.2018 Transactions of Non Authorised Branches
02 through Forex Authorised Branches.
Resolution of Stressed Assets - Revised 7
25 05.06.2018 GENL List of Operative Circulars as on 01st April 12
Framework 02.04.2018
01 2018
Financing Under IB-BYST Scheme 7
Digital Empowerment Tools for Atal 12
30 08.06.2018 (BYST- Indian Bank Entrepreneurship 02 02.04.2018
Pension Yojana (APY) Subscribers.
Development Program)
Implementation of Atal Pension Yojana 13
Educational Loan –IB Education Loan 7 07 04.05.2018
(APY) through eNPS.
31 12.06.2018 Prime Scheme – Amendments and
Change in the name of “The Mahanagar 13
Revision of List of Educational Institutions 12 18.06.2018
Co-operative Bank Limited, Mumbai” to
 APR – JUN 2018

Contents of this issue Nomination Facility - Death Claim Statement - reg.

Cir No Date Details Pg In spite of enhancement of powers of Zones/Branches for
“GS Mahanagar Co-operative Bank early settlement of claims, claims of deceased depositors
limited, Mumbai” in the Second Schedule are settled beyond the timeline of 15 days stipulated by
to the Reserve Bank of India Act, 1934 Reserve Bank of India and some claims are returned owing
Alteration in the name of “ The Bank 13 to technical factors, legal complications etc.,
of Tokyo- Mitsubishi UFJ, Ltd ” to
13 18.06.2018 “MUFG Bank, Ltd “ in the Second Further, the number of settlement in deceased depositors
Schedule to the Reserve Bank of India
is in increasing trend, which shows that Branches are not
Act, 1934.
encouraging the Customers for availing nomination facility.
Guidelines to branches for handling 13
14 27.06.2018
Personalised Cheque book returns The rate of Customers using the nomination facility is
declining.
Revision of Income criteria to exclude 14
socially advanced persons/ sections
HRMD Branches are advised to cover all the existing as well new
09.05.2018 (Creamy layer) from the purview of
15 reservation for Other Backward Classes accounts under nomination facility for the purpose of early
(OBCs) settlement of claims in the event of death of Customers.
Revision of Rental Charges for Holiday 14
18 11.05.2018 Dep.05/2018-19 dt.05.06.2018
Homes
Dearness Allowance payable for 14 Modified Account Opening Form for all Domestic
22 17.05.2018 Workmen and Officer Employees for the Deposits Accounts (Individuals either single or
Months May, June and July 2018.
joint)
Nomination of Disciplinary Authority/ 14
26 07.06.2018
Appellate Authority/ Reviewing Authority
One of the directions of the PSB Reforms Agenda
Staff Welfare Scheme –Admission To B.E 15
34 27.06.2018 (MANTHAN) is simplification of Account Opening Form
And MBA Courses At Kanchi University
consisting of TWO Pages only (including Form 60 and
ADMIN Central Fraud Registry- enquiries to be 15
11.04.2018 made by branches through respective Nomination Request).
03 Zonal Offices before granting of loan.
Prohibition on dealing in Virtual 15 Accordingly, the existing Account Opening Form has been
04 13.04.2018 redesigned and will come into force with immediate
Currencies (VCs)
Fake Indian Currency Notes (FICN) – 15 effect
07 26.04.2018 Providing of inputs for NCRB database by
Banks and recovery of FICN. Specimen of the modified Account Opening Form for
11 16.05.2018
Appraisal in the sanction of multiple credit 15 Individual Domestic Term Deposit holders (either Singly
facilities to Companies or Jointly) is enclosed to this circular and also ported in
Release of jewels pledged – adherence to 16 the Intranet, for the use of branches.
13 16.05.2018
systems and procedures
Reorganization of Zones and formation of 16
20 14.06.2018
New Zones Dep.10/2018-19 dt.12.06.2018

DEPOSITS Introduction of Card Rate product for Deposits

above `.5 crores and treatment for Preferential
Deposits on maturity.

Change in Nomenclature of Reinvestment Plan Presently card rate for term deposits of less than `1
Deposits crore and `1 crore to ` 5 crore are published by CO:
ALCO, has approved change in nomenclature of Development Department with due approval from
competent authority. For amount more than `.5 crore, the
Reinvestment Plan Deposit as MONEY MULTIPLIER
rates are hosted on the Intranet by Treasury Branch,
DEPOSIT (MMD)
Mumbai. All such deposits accepted at such card rate are
All the staff members are requested to take note of the classified as Core deposits. As per extant guidelines,
Branches are required to obtain approval and interest rate
same and bring it to the notice of customers.
from Treasury branch for opening deposits in the name of
Dep.04/2018-19 dt.08.06.2018 a individual depositor where the aggregate amount of

2
 APR – JUN 2018

deposits on any given day exceeds `5 crore and the said Preferential deposits being in the nature of a special
stipulation shall continue to be adhered to. contract between the Bank and the Depositor/s on
account of payment of interest above the card rate, the
As per Board approved “Deposits Policy” for the Bank, said contract stands terminated on the date of maturity
“Preferential Deposit” is defined as any Term Deposit of of the deposit. Hence it is imperative that Depositor/s
`1 crore and above accepted at a rate higher than the approach the branch either on or before the date of
prevailing card rate. Rate of interest higher than the maturity of the deposit and provide a fresh mandate.
card are offered after obtaining approval from Funds
In case no mandate for disposal of the maturity process is
and Investment Committee on a given day based on the
received, such deposits would be rolled over to ‘Overdue
request from field level functionaries and depending upon
Deposits’ product category and would earn simple interest
the demand and supply position.
at rate applicable to Savings Bank Deposits i.e. 3.50%
Card rate product for Deposits above `5 crore: p.a. till closure of the deposit.

S eparate products with card rate for amount exceeding Branches are advised to affix the Circular on the
`.5 crores have been parameterized in the CBS system notice board for the information of the Depositors.
for which rate of interest would be provided by Treasury The existing products viz. Preferential Deposit – Banks,
Branch, Mumbai on a periodical basis. Preferential Deposit – NRE, Preferential Deposit - NRO
In respect of Preferential deposits, the following are hereby dispensed with.
products alone shall be operational henceforth where
Dep.11/2018-19 dt.14.06.2018
the user would be required to manually input the interest
rate. However in case of card rates for bulk deposits, Revamping of Term Deposit Products in CBS
the deposit can be opened normally by selecting the system
appropriate product codes uploaded in our Help Desk. Branches would be aware that any Term Deposit account
opened in the CBS system is identified by a product code
Product Product Min Max Amt in A Min Max
derived from the value populated in the fields viz. Product,
code particulars amt term Term
Type, Customer category, Location/Term and Currency
0165 FD – PD 1 CR 99999999999 180 1 year
etc. To ensure that minimum number of products are
1101 1CR AND days
maintained in the system, revamping of Term Deposit
0265 ABV
STD – PD 1 CR 99999999999 7 180
Products has been carried out. The options for opening a
1101 1CR AND days days
0365 RIP
ABV – PD 1 CR 99999999999 180 1 year term deposit account is restricted to bare minimum in
1101 1CR AND days respect of the fields viz., Product, Type, Customer
ABV category, Location/Term and the same is pictorially
The existing system of obtaining approval from depicted in Annexure I attached.
Treasury Branch while accepting Deposits above `. 5.00
The revamping of term deposit products would be
crore, either at Card rate (or) at a rate higher than the
effective from 16 06 2018. As the new product codes
card rate shall be duly followed in order to arrive the
under the methodology envisaged would be effective from
Funds position by the Treasury Branch. However rates to
this date only and the options available under the relevant
be quoted for Preferential deposit for r 1 crore and above
field for e.g. Deposit Type would only be made active
may be obtained from Retail Assets and Deposit
thereafter, for any back date opening, branch would be
Department at Corporate Office.
required to use the old product codes for the relevant
deposit and enter the same manually instead of using the
Please refer circular for details on treatment for
drop down menu. Thereafter in a phased manner the old
Preferential Deposits on the date of maturity and other
product codes would be gradually withdrawn.
guidelines
Dep.12/2018-19 dt.14.06.2018

3
 APR – JUN 2018

warehouse receipts) i.e. Loans to farmers up to `. 50 lakh

against pledge/hypothecation of agricultural produce
(including warehouse receipts) for a period not exceeding
ADVANCES 12 months, irrespective of whether the farmers were
given crop loans or not. IBA has also advised Banks to
Linking Of Subsidy To Loan / OCC / OD Accounts improve their role in promoting loan against NWRs.
Further the performance of banks under this category will
Reference is invited to O & M Circular ADV 72/2011-12
be monitored by RBI.
dated 27.07.2011 on Management of Subsidy in Core
Baking Solutions. The above mentioned circular details the Produce Marketing Loan can be extended in the following
procedure for linking Subsidy to respective loan/ OD/OCC two modes:
accounts in CBS for proper management. Direct Finance to farmers who keep their produce in the
approved go down/warehouse/cold storage.
The subsidy received will be kept separately either in
Subsidy Reserve Fund or specially opened Fixed Deposit Indirect Finance to farmers through cold storage owners
against stock of agricultural produce.
accounts, and during the tenure of the loan account,
interest will not be charged for these loan accounts to the Under this type of financing, Collateral Management
extent of the subsidy amount. The subsidy portion will be
Company plays a vital role in rendering basic collateral
credited to the loan account once the bank loan portion
management services such as storage of commodities in
(excluding subsidy) is liquidated.
warehouses/ go downs/ cold storages, quality certification,
preservation, providing commodities price fluctuation
During the recently conducted RBS, RBI has observed reports, margin percentage, disposal services, etc. to the
that several loan accounts which are having subsidy Banks.
portion are overcharged due to Non receipt of subsidy
amount / Non-linking to the respective loan About CGRCML:
account.
CGR Collateral Management Ltd. was established in 2012
with a motive to provide complete Agri Business Solutions
Branches were advised to ensure that subsidy is linked to
the corresponding loan accounts and interest is charged under one roof and also to safeguard the interest of the
excluding subsidy portion in the accounts. Branches can farmers to provide modern scientific method enabling
provide the Routing Account (98741XXXXXX) to external them in implementing better farm practices to improve
Government agencies for receiving subsidy under farm productivity and avoiding distress selling of their
Government sponsored schemes and the same should be produce to providing them commodity finance, warehousing
linked with respective loan/OD/OCC accounts without time services and CGR Labs commodity testing & certification
lapse. services.

Zones were advised to follow-up with branches and ensure Collateral & Warehouse Management Services, Commodity
that subsidy is linked to the respective loan accounts in testing & Certification services are the key business
respect of existing accounts as well as new accounts activities where they are providing end to end risk free
opened on regular basis so that overcharging in loan solutions to the banks and other institutes to improve Agri
accounts is avoided. sector lending. CGR Collateral Management Ltd is one of
the leading Warehousing, logistics
Adv.05/2018-19 dt.09.04.2018
CGR is looking to ramp up its operations significantly in
Loan against Negotiable Warehouse Receipts
order to provide end to end solutions to the different
(NWRs) under MOU with M/s CGR Collateral
Management Ltd (CGRCML) banks along the supply chain from farmers to Agri
processors. CGR has informed that it is also setting up to
RBI has given the positive signals by revising the ceiling
undertake the following activities:
under Produce Marketing Loan category (including

4
 APR – JUN 2018

Handle export / import of agricultural commodities Adv.12/2018-19 dt.07.05.2018

Set up / create warehousing infrastructure by setting up Collateral free loans to Micro and Small Enterprises
‘District Centers’ to cover all Mandies in the various As per extant guidelines of RBI, Banks are mandated not
states. to accept collateral security in the case of loans up to
`.10.00 lakhs extended to units in the Micro and Small
Deal in high yielding and quality seeds, fertilizers and
Enterprise (MSE) Sector – (Both manufacturing and
pesticides for the benefit of the farmers in the state.
Service Enterprises), as defined under MSMED Act, 2006.
Liaison with State Agriculture Dept. (PAC) for
However RBI has observed that Banks are still
introducing/implementing better farm practices to
accepting/demanding collaterals for MSE loans upto
improve farm productivity in the state. `.10.00 lakhs, in spite of instructions to the contrary.

The Company Executives/Officials will provide business We reiterate that the guidelines on collateral free loans
leads to the branches. After satisfying with the upto Rs.10.00 lakhs to MSEs should be followed in letter
credentials/KYC of the borrowers/customers, branches and spirit. Non adherence of the above will be treated as
can process the loan proposals, based on merits. violation of RBI mandatory guidelines.

Branches are advised to strictly adhere to the guidelines Adv.13/2018-19 dt.08.05.2018

regarding inspection of goods. (Refer circular for NEW MSME STRUCTURED LOAN PRODUCT – Ind
guidelines ) Tourist Homestay

Branches have to ensure that our Bank’s advances against Home stay tourism is an emerging concept which offers
the NWRs are adequately secured by the goods stored in enormous business potential especially at our tourist
the godowns. destinations due to its multi-faceted potentialities like

For detailed guidelines of the scheme and MOU , refer to sprawling natural beauty, seasonal diversities, cultural
Annexure I and II of the circular. richness, ethnicity & hospitality of its communities.

Adv.06/2018-19 dt.18.04.2018 The scheme basically aims at promoting entrepreneurship

and private investments in the Tourism sector. In order to
Revision of Standardized Credit Appraisal Format
for advances of Rs.1.00cr and above. motivate Micro Entrepreneurship, the bank has come out
with a unique product considering the vast potential
Reference is invited to our Circular No Adv/98/2017-18
available in this segment.
dt. 24/08/2017 wherein Credit Appraisal format for
credit proposals (for limits of Rs.1.00 cr. and above) was The salient features of the Scheme are enumerated in the
revised by replacing the earlier format. circular.

Based on the feedback received, further modification / The product is for implementation at tourist destinations
improvements have been made in the format in order to
detailed in annexure and in areas approved by ITDC &
enhance the quality of the Credit Appraisal, Due diligence
State Tourism Departments.
of the borrower, Pricing and Risk Management.
All field level functionaries are advised to make use of
For the salient features of changes incorporated in the
this unique scheme for improving the MSME portfolio.
revised format branches shall refer the circular.
Branches shall sanction the loans strictly within their
Strict adherence to the format has to be ensured for Discretionary powers and the proposals falling beyond the
maintaining uniformity, transparency and quality of the branch powers shall be referred to Zonal Office for
appraisal.

5
 APR – JUN 2018

sanction. The detailed guidelines of the scheme are All Branches / Zones concerned were advised to follow the
furnished as Annexure to the circular.. guidelines meticulously.

Adv.17/2018-19 dt.10.05.2018 Adv.22/2018-19 dt.01.06.2018

Master Circular – Home Loan Plus Scheme (Product RAM Rating – Reiteration of Guidelines
Code: 4505 0016)
Branches have the primary responsibility of ensuring that
“IB Home loan plus” is a retail loan product to cater to the correct Rate of Interest is applied on all loans & advances.
financial needs of the existing home loan customers. As The Rate of interest is linked to credit risk associated
per the scheme, existing home loan customers with regular with the particular borrower. The Bank’s approach for
repayment may be sanctioned loan amount of up to Rs credit appraisal facilitates assessment of credit risks
underlying both funded and non-funded exposures. All
20.00 lakhs against extension of Equitable Mortgage.
credit proposals are subject to a rigorous credit risk
Subsequent changes made in the scheme, issued through rating/scoring process to support credit approvals and
various circulars thereafter were summed up and their decision making as well as to enhance risk management
capabilities for portfolio management, pricing and risk
salient features were also consolidated and up-dated (up
based capital measurement.
to 31.03.2018) in this Master Circular.
Software driven rating (Risk Assessment Model – RAM) /
All the Branches, Zonal Offices, Marketing Officers and scoring models for different segments are in place since
all other field level functionaries were requested to go 1st April, 2008.
through this Master Circular meticulously to achieve
As per CRM Policy, No credit Fund based /Non fund based
‘Knowledge-updation’ and ‘Skill-upgradation’, which shall
proposal (fresh) will be taken up without rating/scoring
lead to quicker and healthier build-up of our bank’s Home and no proposal (enhancement / review / renewal /
Loan Plus Loan Portfolio. reduction) will be taken up without rating (other than the
exempted segments). Further details like the confirmed
Adv.18/2018-19 dt.11.05.2018
rating, date of confirmation, approving authority should be
Enhancing Credit Supply for Large Borrowers incorporated in the Credit proposal. A copy of final
through Market Mechanism – Prudential measures Borrower rating report (RAM) should be available with the
for Specified Borrowers.
branch for verification by the Inspecting Officials.
The absence of an overarching ceiling on total bank
However, it is observed that in spite of repeated
borrowing by a corporate entity from the banking system
instructions to ensure Rating of Borrower before sanction
resulted in banks collectively having very high exposures of credit facilities, branch / sanctioning authorities are
to some of the large corporates in India. Reserve Bank of sanctioning credit facilities without having confirmed
India, issued guidelines under framework, for addressing rating on hand, which is clearly violation of policy
concentration risk of the banking system, arising out of its guidelines.
exposures towards a single counterparty. The Framework
Branches / sanctioning authorities were advised to
has been introduced with a view to mitigate the risk posed
sanction credit facilities (including Review / Renewal), only
to the banking system on account of large aggregate
after having confirmation of valid rating on Hand.
lending to a single corporate.
Adv.23/2018-19 dt.04.06.2018
The framework already came into effect from the
financial year 2017-18 and is applicable to all banks in Loan Products Handled By Retail Assets &
India and as well as branches of Indian banks abroad,
Deposits Department

In order to have a focused approach towards Retail Loan

The important terms and salient features issued by RBI
segment & Deposit, it has been directed by the Top
have been described in the circular and its annexure.

6
 APR – JUN 2018

Management to bring all the retail loan products (other RBI has further directed that
than Agricultural & MSME) and Deposit Products under
CRAs shall be ineligible to accept ICE mandate for RP of a
single department ‘Retail Assets & Deposits (including
borrower entity in default if the bank credit facilities of
Bulk) Department’ (CO:R A& D).
the borrower entity carried an investment grade rating
Please refer circular for details of products handled by (i.e. BBB- or better) from the particular CRA at any time
the department and the contact details of the officials. during a period of one year prior to

The reference date (i.e. March 1, 2018), if the entity was

Adv.24/2018-19 dt.05.06.2018 in default as on that date or

Resolution of Stressed Assets - Revised Framework The date of default occurring after the reference date

Attention of Branches is invited to our Circular Adv that triggered the RP

205/2017-18 DT. 31.3.18 communicating the revised The mandate for CRA with regard to ICE shall be
guidelines issued by RBI for resolution of Stressed Assets
restricted to providing the ICE for the residual debt
.
under the resolution plan submitted by the bank. The CRA
Resolution Plans (RPs) involving restructuring/ change in or its group entities shall not take part in the formulation
ownership in respect of ‘large’ accounts (i.e. accounts or re-formulation of the resolution plan, or any other such
where the aggregate exposure of lenders is Rs.100 crore advisory roles in this context.
and above), shall require independent credit evaluation
The period of authorisation by RBI shall be valid for a
(ICE) of the residual debt by credit rating agencies
period of three years subject to annual reviews.
(CRAs) specifically authorized by the Reserve Bank for
this purpose. While accounts with aggregate exposure of
Rs.500 crore and above shall require two such ICEs, Adv.25/2018-19 dt.05.06.2018
others shall require one.
Financing Under IB-BYST Scheme (BYST- Indian
RBI has authorized the following CRAs for the purpose of Bank Entrepreneurship Development Program)
undertaking ICEs in respect of resolution plans and size of
We are pleased to inform all our Branches/Zones that our
the ICE assignments each CRA is authorized as under:
Bank has entered into a Memorandum of Understanding
(MoU) with BYST (Bharatiya Yuva Shakthi Trust) on
Sl Name of the CRA Maximum size of 20.04.2018, to promote entrepreneurship for the youth
No. the residual debt for financing under BYST- Indian Bank Entrepreneurship
under the RP for Development Program Scheme.
accepting ICE
mandate The Scheme details, the salient features, the detailed
1 Brickwork Ratings India P No Limit contents of the MOU and Guidelines for ground level

Ltd (Brickwork) operations as per the MOU were detailed in the Circular
2 CARE Ratings Ltd No Limit and its Annexures.

3 CRISIL Limited No Limit Adv.30/2018-19 dt.08.06.2018

4 ICRA Limited No Limit
5 Educational Loan –IB Education Loan Prime
India Rating and Research No Limit
Scheme – Amendments and Revision of List of
P Ltd (India Rating) Educational Institutions
6 SMERA Ratings Limited Rs.2000 crore
(SMERA)

7
 APR – JUN 2018

IB Educational Loan Prime product is revised with addition Category of Without With
Educational collateral collateral
and deletion of institutions based on ranking, placement Institution security security
etc. for the year 2018-19. (for limit (for limit
Security upto) above)
The revised guideline of IB Educational Loan Prime is very (RSV equal
to the loan
attractive. We advise the Branches/ Zonal Offices to limit &
aggressively market the product among the students above)
Rs. 30.00 lakh
securing admission in the premier institutions and ensure Rs. 30.00 lakh
(Rs.40.00
List ‘A’ (Rs.40.00 lakh
that quality portfolio is built under IB Educational Loan for ISB only)
lakh for ISB
only)
Prime.
Parameter Norms List ‘B’ Rs.7.50 lakh Rs.7.50 lakh

Courses Any approved course offered by the premier List ‘C’ Rs.7.50 lakh Rs.7.50 lakh
Colleges/ Institutions  Parents/spouse/ guardian will be co-
Benefici- Students joining the targeted premier institutions obligant.
aries (including wards of staff, with existing terms and  For institutions under List ‘A’ ‘B’ and ‘C’, all
Loan Limit Need based limit.
conditions) the accounts upto limit of Rs.7.50 lakh, are to be
Category of Collateral free loan mandatorily covered under Credit Guarantee Fund
Educational amount upto Scheme for Educational Loans (CGFSEL).
Institution Product
5718 0011
Rs. 30.00 lakh Code
List ‘A’ (Rs.40.00 lakh for ISB
only) Educational Institutions/ Universities for studies abroad
List ‘B’ Rs.7.50 lakh with ranking upto 500 as per www.webometrics.info falls
under List B of IB Education Loan Scheme (subject to
List ‘C’ Rs.7.50 lakh
change every year).
Category of the Educational Institution is annexed.
All other terms and conditions are as per Revised IBA
Category of Rate of Interest Scheme guidelines 2015.
Educational
Rate of Institution
List ‘A’ MCLR 1 year Adv.31/2018-19 dt.12.06.2018
Interest
List ‘B’ MCLR 1 year + 0.60%
Introduction of New Agreement giving consent for
List ‘C’ MCLR 1 year + 1%
submitting and authenticating of Financial
Interest
concession Information to Information Utilities – D134
Nil
to girl
students Reserve Bank of India has directed Banks & Financial
Margin Nil Institutions to submit Financial Information to
Information Utilities and advised to adhere to the
Moratorium
Course period + 1 year relevant provisions of Insolvency and Bankruptcy Code
Repayment Upto 180 EMIs, commencing immediately after (IBC) and Insolvency and Bankruptcy Board of India –
completion of the moratorium period
Information Utilities [IBBI(IUs)] Regulations and to put in
Processing
Nil place appropriate systems and procedures to ensure
Charge
Insurance As per Revised IBA Scheme guidelines 2015 compliance to the provisions of IBC and Regulations.

They also informed that the model duly approved by

Indian Banks’ Association’s Managing Committee to be
incorporated in Loan/ Guarantee/ Security Agreements to
be executed by the Borrower/ Guarantor/ any
person(parties) who has created security interest without
giving guarantee, recording its/ his/ their consent for
disclosure of financial information by the Bank/ Creditor
to any Information Utility established under IBC.

8
 APR – JUN 2018

IBA had circulated the model clauses to Member Banks cash’ basis and all loans processed in 2018-19 are required
for incorporating the same in Loan/ Guarantee/ Security to be brought on ISS portal/DBT platform, once it is
Agreements along with a letter to be obtained from a launched.
third party creating Security Interest by way of EM, but
without giving any Guarantee and without executing any Govt. of India has stated that the Interest Subvention
other document. The said clauses contain specific consent Scheme as Plan-Non plan categorization of schemes will be
by the parties concerned in favour of Bank/ Lender for dispensed with and Interest Subvention Scheme 2018-
disclosing/ submitting and authenticating financial 19 will be required to be settled as applicable in Plan
information to any Information Utilities. Scheme viz. Scheduled Caste (SC), Scheduled Tribe
(ST) and North East Region (NER) etc.
CO: Legal Department has informed to obtain the same as
separate undertaking/ consent letter from the parties
Therefore, Branches are advised to enter the correct
concerned, till such time the said clauses are incorporated
details in social attributes screen in CBS while opening
in all the agreements at the time of revising the Manual.
accounts eligible under Interest Subvention so that
The draft of the new Agreement is Named as – “Letter to Bank will capture category-wise data (General,
be given by Borrower/ Guarantor/ any Person who has not Scheduled Caste (SC), Scheduled Tribes (ST), North
given his Guarantee for securing the Credit Facilities Eastern Region (NER)-General, North Eastern Region
availed by the Borrower creating Security Interest/ (NER)-SC, North Eastern Region (NER)-ST) of
Without giving Guarantee when Security is created by way beneficiaries under the Scheme for reporting of the
of Equitable Mortgage where no Other Document is same on ISS portal individual farmer wise to settle
Executed” - is provided as Annexure. This new the claims arising from
Undertaking letter is numbered as D134. Branches are 2018-19 onwards. Till such time the DBT portal
advised to note the modifications and obtain this newly becomes functional branches are requested to submit
introduced Undertaking Letter from all the relevant their claims, category-wise as indicated above.
borrowers / guarantors, with immediate effect.
Reserve Bank of India in consultation with Govt. is
Adv.32/2018-19 dt.13.06.2018
working on the detailed modalities regarding
Continuation of Interest Subvention Scheme for short- categorisation of loans. Till such time the modalities
term crop loans on interim basis during the year 2018-19 are finalised, Branches may obtain the category-wise
data on self-declaration basis. There should however be
Reserve Bank of India communicated about continuation
no cap on the loans given under each category.
of Interest Subvention Scheme for Short- term Crop
Loans 2018-19. Ministry of Agriculture & Farmers
All Branches are, therefore, advised to take note of the
Welfare, Government of India (GoI) has informed that
above and implement the Interest Subvention Scheme for
they have initiated the process for continuation of
2018-19 accordingly.
the Interest Subvention Scheme 2018-19.
Adv.34/2018-19 dt.18.06.2018
As advised by GoI, as an interim measure, the Interest
RBI Master Directions- Priority Sector Lending classification
Subvention Scheme will be implemented in 2018-19 till under Housing Loan
further instructions are received, on the terms and
conditions approved for the Scheme for 2017-18, as Reserve Bank of India, Mumbai, vide their Circular have
contained in Our Circular ADV-90/2017-2018 dated issued master directions on the above subject.
16.08.2017
Gist of the changes pertaining to revised priority housing
classification is presented in the table below:
Further, as advised by GoI, from 2018-19 the ISS is being
put on DBT mode on ‘In kind/services’ basis and not on ‘In

9
 APR – JUN 2018

Existing guidelines New guidelines (w.e.f submitted by the borrower for the LSR for its
19/06/2018) correctness.
Loans to individuals up to Loans to individuals up to
Rs.28 lakhs in metropolitan Rs.35 lakhs in metropolitan No objection certificate and other documents issued by
centres (with population of centres (with population of builders or other organizations / department/ institutions
ten lakh and above) and ten lakh and above) and are carefully examined for their genuineness.
Rs.20 lakhs in other Rs.25 lakhs in other
centres, are eligible to be centers, are eligible to be Certificate from the advocate - that the actual search

classified under priority classified under priority was conducted on the date of the ‘Search Certificate’.
sector, provided that the sector, provided that the
The above clauses have been added as new point No.19 (d),
cost of dwelling unit does overall cost of dwelling unit
(e), (f) and part of Certification respectively in the
not exceed Rs.35 lakhs does not exceed Rs.45
existing Legal Scrutiny Report. A copy of the revised
and Rs.25 lakhs, lakhs and Rs.30 lakhs,
Legal Scrutiny Report (LSR) is enclosed.
respectively. respectively.
Branches are advised to ensure that henceforth, the Legal
 Furthermore, the existing family income limit of Scrutiny Report (LSR) is submitted by the panel advocate
Rs.2 lakhs per annum, for loans to housing in the revised format only.
projects exclusively for the purpose of
Adv.40/2018-19 dt.26.06.2018
construction of houses for Economically Weaker
Sections (EWS) and Low Income Groups (LIG), is CRA
revised to `.3 lakh per annum for EWS and `.6
lakh per annum for LIG, in alignment with the
income criteria specified under the Pradhan Revision of Interest rates for Small Savings
Schemes (5 year Senior Citizen Savings Scheme,
Mantri Awas Yojana. Public Provident Fund 1968, Kisan Vikas Patra and
 All other terms and conditions specified under Sukanya Samriddhi Account Scheme)
the Master Direction shall remain unchanged
 The revised guidelines shall come into effect from
Branches handling PPF/SCSS/SSA/KVP – Other Branches –
19.06.2018 For Compliance for information
 All Zonal offices and Branches are requested to
(branches authorized for collection of Direct
strictly adhere to these guidelines. Taxes (OLTAS) are authorized for opening
and operating PPF/SCSS/SSA accounts)
Adv.37 / 2018-19 dt. 21.06.2018
Government of India has stated that the interest rates on
Modification in Legal Scrutiny Report to be Small Savings Schemes for the first quarter of the
obtained from Bank’s approved lawyer financial year 2018-19 starting 1st April, 2018 shall remain
unchanged from those notified for the fourth quarter of
Please refer to the CO:O&M Circular ADV.74/2010-11
financial year 2017-18.
dated 23.08.2010 on the above subject. It has been
decided to add the following in the Legal Scrutiny Report The interest rates applicable for the various Small Savings
(LSR) format Schemes are reproduced below:

Whether any Revenue Authority attachment / Statutory Scheme Rate of Rate of Compoun
Interest Q4 Interest ding
Dues Attachment / court attachment is reflected
(Jan - Mar Q1 frequency
2018) (Apr –
Certified copy of the title deeds and parent document Jun 2018)
tracking back to at least last 13 years from the title 5 Year Senior 8.30 % 8.30 % Quarterly
Citizens Savings and paid
document are obtained from the Sub-Registrar’s office by Scheme (SCSS) @
the panel advocate and compared with the original one Public Provident 7.60 % 7.60 % Annually
Fund 1968

10
 APR – JUN 2018

Sukanya Samriddhi 8.10 % 8.10 % Annually Staff members who are engaged in selling of Mutual Fund
Account Scheme
(SSA Scheme) products under the Bank ARN are required as per
Kisan Vikas Patra 7.30 % 7.30 % Annually regulations of SEBI to have passed NISM (AMFI) Mutual
(KVP) Fund Distributor’s Certification Examination. To tap the
high potential available in the market, we need to have a
@ Please Note that the Rate of Interest payable for 5
year SCSS deposits is the rate at which the deposit is pool of officers with NISM(AMFI) certificate for selling
opened. i.e., the date of opening of that particular account Mutual Fund Products.
will determine the ROI payable till maturity. (SCSS
On successful completion of online exam, exam fee and an
accounts opened between 01.04.2018 and 30.06.2018 will
amount of Rs.2000/- towards cost of books will be
earn interest at 8.30% till maturity)
reimbursed to the candidates.
All the branches handling PPF 1968, SCSS 2004, KVP,
Sukanya accounts are advised to strictly adhere to the Zones have to utilize this for increasing the number of
Government Notification with regard to payment of AMFI certified persons to improve their contribution
interest and other directions and avoid customer towards Mutual Fund business
complaints. CRA.08/2018-19 dt.18.04.2018
Please display a copy of the above rates on the Notice Guidelines to be followed while soliciting Insurance
Board for information of the public and customers. business as per IRDA guidelines.
CRA.05/2018-19 dt.05.04.2018 IRDA has issued regulations called as IRDA(Registration
Submission of Life Certificate-Mandatory issue of of Corporate Agents) Regulations,2015 and refer to our
acknowledgement to pensioners on submission of earlier Circular CRA 21/2016-17 dated 30.04.2016 on the
Life Certificate. guidelines to be followed while soliciting Insurance
business as per IRDA guidelines.
Government of India, Ministry of Finance, Department of
Expenditure, Central Pension Accounting Office (CPAO) Branches have to take note of the above circular and
New Delhi, informed that in spite of extant instructions guidelines given therein to be followed meticulously while
branches are still not providing the acknowledgement of dealing in Insurance business. Zonal Officers have to
Life Certificate to the pensioners / family pensioners and ensure that the above guidelines are followed and ensure
do not forward the same to their CPPCs, resulting in that sufficient number of Specified persons are available
stoppage of pension / family pension. in the Zone.

In view of the CPAO direction, we advise all Branch CRA.09/2018-19 dt.18.04.2018

Managers to issue a duly signed acknowledgement with
branch seal (as per format given in the circular) to the
Extension of Basic Banking services to Sick,
paralysed and bedridden pensioners / family
pensioners on receipt of the life certificate from them in pensioners.
physical form and forward the same to our Central Pension
Processing Centre (CBS-1721) CPPC. Government of India, Ministry of Finance, Department of
Expenditure, Central Pension Accounting Office (CPAO)
CRA.06/2018-19 dt.09.04.2018 informs that
AMFI Certification for sale of Mutual Funds- “It has been observed that number of grievances are
Reimbursement of fees.
being received in CPAO regarding deficiency in services
We are pleased to inform that our Top Management has rendered by banks to pensioners / family pensioners.
approved to reimburse fees for AMFI certification along Pensioners / family pensioners especially those who are
with cost of study materials. sick, paralyzed and bedridden are facing problems while
withdrawing their money from their respective pension
accounts”.

11
 APR – JUN 2018

In view of the difficulties faced by the pensioners / Attention is invited to FX-24/2005-06 dated 04/01/2006
family pensioners, all Zonal Offices / branches are advised and FX-10/2006-07 dated 28/06/2006 wherein tagging of
to make sincere efforts to provide door step basic all “C” Category branches to “B” Category Branches
banking facilities through Staff / Business consequent to integration of Dealing Room Operations at
Correspondents like delivery of cash against withdrawal
OSB, Chennai was detailed.
from account, delivery of cheque book / DD, collection of
life certificate, collection of remittance to the credit of Since issuance of the above circular, many operational
a/c, accepting fund transfer request etc at the premises / changes including formation of a centralised Treasury
residence of such customers. branch to handle the consolidated treasury operations of

A record with details of such door step banking rendered the branches have taken place. Many of the Nostro
may be kept so that a data on the same may be culled out Correspondents have exited from collection of USD
whenever required. Cheques through their nostro accounts. More number of
branches have been authorised to handle the Foreign
The above instructions are to be implemented
Exchange Operations as “B” Category branches. The
meticulously.
foreign exchange turnover has increased substantially and
CRA.10/2018-19 dt.08.05.2018 many of the non authorised branches are also maintaining
the accounts of customers who are also exporters /
Doorstep Banking services to Senior Citizens of importers.
above 70 years old and Differently abled or infirm
persons including those who are visually impaired In the light of the above and taking in to consideration
Reserve Bank of India, has reiterated that in view of creation of new zones and reorganising the reporting

difficulties faced by senior citizens of more than 70 years branches, the list of branches to act as coordinating
of age and differently abled or infirm persons (having branches for NABs has been revisited and the revised list

medically certified chronic illness or disability) including is given in the circularThese branches have been identified

those who are visually impaired, banks are advised to make as Coordinating branches considering the volume of
concerted effort to provide basic banking facilities, such transactions handled by them, availability of trained man-

as pick up of cash and instruments against receipt, power on continuous basis, etc. However, the list is not

delivery of cash against withdrawal from account, delivery rigid and Non Authorised branches may also utilise the
of demand drafts, obtention of Know your customer(KYC) services of the nearest forex Authorised branches for

documents and Life Certificate at the premises / their requirements in respect of clean outward

residence of such customers. remittances such as issuance of DD/MT/TT and travel

Vide our Bank’s Policy on Doorstep Banking the services of related services like issuance & encashment of Travellers

BCs can be utilised in branches wherever BCs are available. Cheques and Currencies.

Branches are advised to display the information in their The Authorised Branches which are routing their USD
Branch notice Board. transaction through Wells Fargo Branch will continue to

Please refer Circular CRA-10/2018-19 dated 08.05.2018 use their services for collection USD denominated
and the instructions contained therein to be implemented Cheques. All other AD branches will be forwarding the

meticulously. USD denominated cheques to OSB, Chennai which will be

the nodal branch. For other currencies, the services of
CRA.14/2018-19 dt.25.06.2018 respective Nostro Correspondents shall be utilised for
collection of cheques.
FX
All branches are advised to take note of the above
guidelines simultaneously ensuring that the customer
Routing of Foreign Exchange Transactions of Non services are not hampered.
Authorised Branches through Forex Authorised
FX.02/2018-19 dt.25.04.2018
Branches.
List of Operative Circulars as on 01st April 2018

12
 APR – JUN 2018

that anyone wishing to open an APY account can do so

without having to visit the branch.
The List of Operative Circulars as on 01st April 2018, as
furnished by each Department, is given as Annexure to This feature is available under the link
this circular with a view to facilitate the staff members https://enps.nsdl.com/eNPS/ in the internet.
to use the same as ready reference. The list is provided
department-wise and subject-wise. Branches should strive for 100% persistence of APY
accounts which will help to get substantial non-interest
Staff members are advised to make use of the same.
income @ Rs 100/- every year per APY sourced till
GENL.01/2018-19 dt.02.04.2018 persistency is ensured.

Digital Empowerment Tools for Atal Pension Yojana Branches shall refer the circular for the process flow and
(APY) Subscribers. further guidelines.

PFRDA informed that several online features, as described GENL.07/2018-19 dt.04.05.2018

below, were introduced to facilitate subscribers to access
Change in the name of “The Mahanagar Co-
their Account without visiting the bank branch.
operative Bank Limited, Mumbai” to “GS
Grievance Module Mahanagar Co-operative Bank limited, Mumbai” in
APY Upgrade View/Downgrade View the Second Schedule to the Reserve Bank of India
APY ePRAN card /Statement View Act, 1934
Aadhaar Seeding
Reserve Bank of India informed that the name of “
APY@eNPS
The Mahanagar Co-operative Bank Limited, Mumbai” has
Mobile Application
been substituted with “ GS Mahanagar Co-operative Bank
These features are available under the link limited, Mumbai” in the Second Schedule to the Reserve
https://npslite-nsdl.com/CRAlite/ in the internet. Bank of India Act, 1934
Field level functionaries are advised to educate all GENL.12/2018-19 dt.18.06.2018
existing/prospective APY subscribers about the online
features introduced by PFRDA for easy access of Alteration in the name of “ The Bank of Tokyo-
information and convenience.
Mitsubishi UFJ, Ltd ” to “MUFG Bank, Ltd “ in the
Second Schedule to the Reserve Bank of India
For brief overview of the online features branches are Act, 1934.
advised to refer the circular.
Reserve Bank of India informed that the name of “
GENL.02/2018-19 dt.02.04.2018 The Bank of Tokyo- Mitsubishi UFJ, Ltd,” has been
changed to “MUFG Bank , Ltd “ in the Second Schedule
Implementation of Atal Pension Yojana (APY)
to the Reserve Bank of India Act, 1934
through eNPS.
GENL.13/2018-19 dt.18.06.2018
Atal Pension Yojana (APY) regulated by Pension Fund
Regulatory and Development Authority (PFRDA). came out Guidelines to branches for handling Personalized
Cheque book returns
with a paperless method of enrolling for APY through
electronic channel, eAPY is Aadhaar based and enable a Reference is invited to CO:O&M Circular Genl.17/2013-
subscriber having a bank account to join APY without 14 Dt. 17.04.2013 wherein the Cheque Personalization
having to visit the bank branches. and Cheque book ordering through CBS is detailed for the
guidance of branches.
All our branches are advised to publicise and promote
Issuance of Personalised Cheque books is centralised at
about the availability of eAPY among the customers, so
CDPC, Chennai. The cheque books sent to customer’s

13
 APR – JUN 2018

address through speed post, if not delivered for the to Rs. 8 lakhs with effect from 01.09.2017. Branches shall
reason like , addressee not found , inadequate address etc, refer the circular and annexure for complete details.
are being delivered to the Home Branches directly for
HRMD.15/2018-19 dt.09.05.2018
further delivery to the customer. The practice of
returning the undelivered Cheque book back to CDPC, Revision of Rental Charges for Holiday Homes.
Chennai for sending to Home branch has been dispensed Bank has set up 6 holiday homes at Ooty, Kodaikanal,
with.
Darjeeling, Tirumala, Guruvayoor and Puri. At present the
Updation of Despatch Address in Cheque Personalisation holiday homes are provided to staff members on payment
menu of Rs 10/- per day. Since, most of the Holiday homes are

The name and address shown as default in Cheque taken on a lease basis, over the years the lease rentals

personalisation menu will be the primary CIF name and have undergone enhancements and the same are paid out

his/her address. of staff welfare fund. Further the maintenance expenses

of our own holiday home at Ooty have also increased
If there is any change in despatch address from the
substantially over the years.
address originally furnished by the customer, incorporate
the same in cheque personalisation menu in the system for Hence, with effect from 01.06.2018 it has been
the limited purpose of sending the cheque book. decided that the rental charges payable by the

The branches should preserve the letter/requisition slip, employees for availment of holiday homes is revised and

for future reference if any. the circular may be referred for the revised rents:

Please note that such despatch address given for cheque No refund shall be made in case of cancellation I
book delivery should not be amended at CIF level or reschedule. All other existing guidelines for the Holiday
Account level unless otherwise requested by customer Homes remain the same.
with necessary documentary proof.
HRMD.18/2018.19 dt. 11.05.2018
Please refer the circular for the procedures /
Dearness Allowance payable for Workmen and
Adherence of KYC norms to be followed by the
Officer Employees for the Months May, June and
branches on receipt of Cheque book returned July 2018.
undelivered and its further delivery to the customer

Zonal Office / Branches have to take note of the above The confirmed All India Average
guidelines and follow meticulously. Consumer Price Index Numbers for
Industrial Workers (Base1960=100)
for the quarter ended December
Genl.14/2018-19 Dt. 27.06.2018 2017 are as follows:-
January 2018 6573.86
February 2018 6551.03
HRMD/HRDD
March 2018 6551.03

Revision of Income criteria to exclude socially HRMD.22/2018-19 dt.17.05.2018

advanced persons/ sections (Creamy layer) from
the purview of reservation for Other Backward Nomination of Disciplinary Authority/Appellate
Classes (OBCs) Authority/ Reviewing Authority.

Government of India / Ministry of Personnel, Public Please refer our Circular No.137/2008-09 dated
Grievances and Pensions has informed that the income 18.03.2009, giving a list of designations of Disciplinary
limit for determination of creamy layer amongst the Other Authority / Appellate Authority / Reviewing Authority and
backward Classes (OBCs) has been raised from Rs. 6 lakhs

14
 APR – JUN 2018

subsequent circulars on the subject with the latest being Reserve Bank of India has implemented the Central Fraud
HRMD-104/2017-18 dated 27.11.2017. Registry (CFR) which contains information pertaining to
frauds involving an amount of Rs.1.00 lakh and above. The
Managing Director & Chief Executive Officer in exercise
of the powers conferred on him has effected the following access to the CFR has been provided to Zonal Offices.

nomination: Branches may take up with respective Zonal Offices, by

furnishing name of the individual /party/ associate
S. To Function as Name of the
concerns/ Company who have submitted application for
No Official
availing credit facility, for enquiries to be made in the
1 Disciplinary Authority for
CFR, before granting of loan under Branch Manager’s
 Officers in Scale IV, for CO
cases and Zonal cases discretionary powers as a part of pre sanction due
 Officers in Scale IV at diligence.
Overseas Centers
Shri Seetharama ADMIN.03/2018-19 dt.11.04.2018
Appellate Authority for
 Award Staff, for CO cases Naik,
Prohibition on dealing in Virtual Currencies (VCs)
 Award Staff, for Zonal cases
Deputy General
(where the Disciplinary
Manager 1. Reserve Bank has repeatedly through its public notices
Authority is an AGM or CM at
Zonal Office) cautioned users, holders and traders of virtual currencies,
(Ind Retail Vertical) including Bit coins, regarding various risks associated in
 Officers in Scale I, II & III for
CO cases Corporate Office dealing with such virtual currencies.
 Officers in Scale I, II & III for
Zonal cases (where 2. Reserve Bank shall not deal in VCs or provide services
Disciplinary Authority is AGM for facilitating any person or entity in dealing with or
at Zonal Office)
settling VCs.
 Officers in Scale I, II & III at
overseas centres
3. Regulated entities which already provide such services
shall exit the relationship within three months from the
The nomination shall come into effect immediately. date of this circular.

HRMD.26/2018-19 dt.07.06.2018 All branches and Zonal Offices shall take note of the
above communication of RBI for strict adherence of the
Staff Welfare Scheme –Admission to B.E and MBA guidelines issued.
Courses at Kanchi University
ADMIN.04/2018-19 dt.13.04.2018
Arrangements have been made by the Bank with the
Kanchi University (Sri Chandrasekharendra Saraswathi Fake Indian Currency Notes (FICN) – Providing of
inputs for NCRB database by Banks and recovery
Viswa Mahavidyalaya) Enathur, Kancheepuram for
of FICN.
admission for the Wards of staff members for the four
year Engineering Degree Course (B.E) and two year MBA RBI, has informed that banks, in spite of trainings
courses for the academic year 2018-19. provided to them, were not providing inputs for the NCRB
database. Further, recovery of FICN was being shown by
The staff members desirous of applying for the course for
private banks but not public sector banks. It was clearly
their wards shall refer the circular for details.
enunciated in the Circular that wherever counterfeit notes
HRMD.34/2018-19 dt.27.06.2018 are detected but not impounded and reported, it will be
construed as willful involvement of the bank concerned in
Central Fraud Registry- enquiries to be made by
branches through respective Zonal Offices before circulating counterfeit notes and may attract penal
granting of loan. measures”.

15
 APR – JUN 2018

Please refer our circular No:Admin:57/2017-18 closed, this near miss event highlighted the non-adherence
dt.25.09.2017 and Admin:86/2017-18 dt.30.12.2017 on the to systems and procedures by these branches. Such
captioned subject, events could result in potential loss to the Bank and may
also lead to action against the erring officials. Branches
Branches / Zonal Offices shall follow RBI guidelines are advised to adhere to the systems and procedures of
meticulously. the Bank while handling jewel loans and ensure that the
loan accounts are closed before release of the jewels.
ADMIN.07/2018-19 dt.26.04.2018
ADMIN.13/2018-19 dt.16.05.2018
Appraisal in the sanction of multiple credit facilities
to Companies Reorganization of Zones and formation of New
Zones
Central Vigilance Commission has made the following
observation while examining a case regarding sanction of As an effort towards improving the operational efficiency
multiple credit facilities wherein the Company had of the Bank, organizational restructuring as approved by
submitted forged financial statements year after year for Board is being carried out i.e. Reorganizing the Zones to
several years and the Bank allegedly did not detect the form new Zones by carving out branches and realigning
same: branches amongst existing Zones.

Branches shall refer the circular for list of

“The Commission has suggested systemic recommendation
Reorganized/Realigned Zones which were placed as
to all Banks that in the case of companies, before
annexure to the circular
accepting the loan application for further processing, it be
made mandatory to compare the Balance Sheet, Profit and ADMIN.20/2018-19 dt.14.06.2018
Loss Account filed along with application with the Balance
Sheet, Profit and Loss Account filed with Ministry of
Though due care has been taken in the preparation of
Corporate Affairs (MOCA) website and the officer
Recollect, the version given in the circular is final.
concerned should certify that aspect on file, along with a
copy of at least Balance Sheet, Profit and Loss Account Compiled by CO: O & M Division
pages as downloaded and printed from the official website
of MOCA”

All the field level functionaries are exhorted to strictly

ensure compliance of the above recommendation.

ADMIN.11/2018-19 dt.16.05.2018

Release of jewels pledged – adherence to systems

and procedures

Jewel loan is a simple and secured loan product of the

Bank contributing large share of business under priority
sector advances. Even though jewel loans are fully secured
and easily realizable, adequate precautions as stipulated in
the Jewel Loan Policy of the Bank are to be adhered to
avoid possible loss to the Bank.

Recently, it has come to the notice that jewels pledged

were released without ensuring closure of the jewel loan
account, in two of our branches. Even though the amounts
were recovered subsequently and the loan accounts were

16
a Volume 31 Issue 4

For Private Circulation Only

Jan – Mar. 2019 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

Contents of this issue Contents of this issue

Cir No Date Details Pg Cir No Date Details Pg
Modifications in guidelines on Retail Asset
DEP Opening of Term Deposit Accounts in the names 176 21.03.2019 8
10.01.2019 2 products
32 of Joint Hindu Families (HUF)
Administrative Approval for sanction of Loans
178 27.03.2019 8
under Mudra (PMMY) Scheme
Launching of IB - Surabhi - Savings Bank
36 07.03.2019 2
Account - only for HER New MSME Structured Loan Product – IND
179 30.03.2019 9
Procedure for preferring claim in respect of MSME VEHICLE
37 12.03.2019 amount transferred to RBI under DEAF – A 2 IB Home Suraksha Group Life Insurance Cover
reiteration CRA to Home Loan Borrowers under tie up with Kotak
ADV Authorisation for accessing information from 28.01.2019 9
04.01.2019 3 43 Life Insurance – Separate policies for staff and
131 Income Tax and other authorities public with reduced premium rates
Interest Subvention Scheme- Adherence to Aadhaar – Not a mandatory ID proof for opening
138 25.01.2019 systems and procedure for Crop Loans including 3 44 31.01.2019 10
Bank accounts
Agri Jewel loan Country Risk Management Policy – Changes in
Operational Guidelines of New Agricultural FX
02.01.2019 the risk rating of countries with effect from 10
Marketing Infrastructure (AMI)-Sub Scheme of 24
145 04.02.2019 3 31.12.2018
Integrated Scheme for Agricultural Marketing
Opening of accounts of exporters – Compliance
(ISAM) 25 29.01.2019 10
of KYC norms
Status Of MOUs With Various Tractor
146 05.02.2019 Companies For Financing Tractors And Other Liberalised Remittance Scheme (LRS) for
4
Farm Machineries 28 20.02.2019 Resident Individuals – Monitoring of adherence 11
to limits
147 05.02.2019 Operation of SHG CC accounts 4
GENL Advanced Certification Course for Business
05.01.2019 11
149 07.02.2019 Kisan Credit Card Saturation Campaign 4 32 Correspondents(BCs)
Filing of Charge with CERSAI – Enforcement Exclusion of “SBM Bank (Mauritius) Ltd.” from
152 15.02.2019 5
under SARFAESI Act 2002 33 21.01.2019 the Second Schedule to the Reserve Bank of 11
India Act, 1934
153 20.02.2019 Pradhan Mantri Kisan Samman Nidhi 5 Term Loan Review Charges on Loans and
34 12.02.2019 12
Advances
Credit Flow To Agriculture- Collateral Free & Nil Pradhan Mantri Jan Dhan Yojana (PMJDY) and
154 20.02.2019 6
Margin To Agricultural Loans Upto Rs.1.60 lakh 35 07.03.2019 relevent exact guideleines of RBI on KYC - 12
Misutilisation of Bank loans with fake compliance
158 27.02.2019 6
bills/invoicing/bogus business activities
36 08.03.2019 Mobile Seeding in APY Accounts 12
PMEGP Guidelines for 2nd loan to existing units
159 28.02.2019 6
and disbursement of margin money claims HRMD Introduction of new Transit Home at Egmore,
31.01.2019 13
Sanctioning Loans Without Confirmed Internal 135 Chennai under Staff Welfare Scheme
160 28.02.2019 7 Nodal Officer for customer service/ Principal
Ram Rating
code Compliance Officer (BCSBI) and Public
138 01.02.2019 13
167 08.03.2019 Review of MCLR 7 Information Officer under Right to information
act 2005
Reduction Of Rate Of Interest For Jewel Loan
169 11.03.2019 (Non-Priority) And Interest Concession To 7 139 01.02.2019 Joining of New Chief Vigilance Officer (CVO) 13
Women Borrowers Under Retail Products
Unique Document Identification Number (UDIN) - Sexual Harassment of Women at Workplace -
157 01.03.2019 14
173 14.03.2019 Way to authenticate attested documents by 7 Regarding
Chartered Accountants Enhancement of Festival Advance/Interest Free
166 21.03.2019 14
Salary Advance limit-reg
174 14.03.2019 Loan System for Delivery of Bank Credit 8 Comprehensive revised policy on provision of
172 30.03.2019 14
Cell Phone / Telephone to Executives and field
 JAN– MAR 2019

Contents of this issue Launching of IB - Surabhi - Savings Bank

Cir No Date Details Pg Account - only for HER
level functionaries
In recognition of the contribution made by today’s
ADMIN Renaming of Zones and Branches in State of modern women to the society and their remarkable
04.01.2019 15
76 Karnataka
achievements in various spheres of life, Bank takes
1. 7
Opening / merging / renaming / shifting of great pride in launching an exclusive Savings Bank
07.01.2019 7
Branches / Offices during quarter III FY 2018-19
Account for Women “IB – Surabhi” in 2 variants 6
78 08.01.2019
RBI Note Refund Rules (NRR) 2018 and
15
viz., Regular & Premium with bouquet of offers, on
Essential & Security Features of Bank Notes
par with peer banks, on the 9th of March, 2019 in
Acceptance of Coins – Coins not being taken by
83 13.03.2019 15 commemoration of “International Woman’s Day”, which
branches
is being celebrated world over on the 8th of March,
every year.
DEPOSITS

Detailed features about the Scheme are given as

Opening of Term Deposit Accounts in the names
of Joint Hindu Families (HUF) Annexure to the Circular

The Karta of the Hindu Undivided Family cannot be All field level functionaries are advised to visit
offered higher rate of interest, even if he is a Corporate firms, IT sector, ITES, State and Central
resident Indian Senior Citizen, as the beneficial owner Government Departments, Public Sector Undertakings,
of the deposit is the HUF and not the Karta in his Educational Institutions, Hospitals, Hotels besides
individual capacity. Residential Apartments/Gated Communities and
canvass maximum woman accounts to be opened under
It is observed that branches have opened Term the new product.
Deposit accounts under Senior Citizen category for
Hindu Undivided Family (HUF), attracting higher rate DEP.36/2018-19 dt.07.03.2019
of interest despite specific advice and the same is a Procedure for preferring claim in respect of
clear violation of the guidelines of RBI and the Bank. amount transferred to RBI under DEAF – A
Branches are advised to comply with the under reiteration
mentioned instructions, without fail:
The navigation of the guidelines and procedure for
 CIF of the Karta is to be opened under Non claiming unclaimed deposits amount transferred to RBI
Personal – HUF category only. The deposit opened under DEAF scheme and the usage of the dedicated
thereafter will not be afforded higher rate of template created for this purpose in claiming amount
interest, even if the Karta is a resident Indian senior
is as under:
citizen for the aforementioned reasons.

 Customers have to be informed that Menu >> Other Websites >>MIS Dash Board
additional interest cannot be extended in case of their >>Development Department>> DEAF Claim.
existing deposits as they are not eligible for the same For ready reference of the branches, the workflow for
in terms of RBI guidelines. preferring claim is attached as annexure to Circular
 Upon rollover, the existing deposits would be Dep-16 2017-18 dt 12.12.2017.
converted to General Public Product, which is to be duly
conveyed to the customers. Branches are advised to refer the circular for points
The contents of the circular may be brought to the to remember while submission of the claim form ,
notice of the dealing staff members.
settlement at Corporate Office , Procedure for
preferring claims in the case of Overdue Deposits
DEP.32/2018-19 dt.10.01.2019

2
 JAN– MAR 2019

(Manual) and the documents to be submitted along with end-use of crop loans/ not adhering to scale of finance
the claim form . to decide the quantum of loan/not getting relevant land
documents as proof while advancing Jewel loans @7%.
Despite clear guidelines, it is observed that there are
certain shortcomings in the claims submitted by Branches/Zones are therefore advised to ensure that
branches leading to delay in settlement of claim. all crop loans including Agri Jewel loan against which
Interest Subvention is claimed should satisfy, the
It should be the endeavour of the branches to retain criteria. Please refer the circular for the criteria.
the deposits by explaining the products and services
available to the customers and seek their patronage, ADV.138/2018-19 dt.25.01.2019
instead of paying the amount mechanically. Operational Guidelines of New Agricultural
Marketing Infrastructure (AMI)-Sub Scheme of
DEP.37/2018-19 dt.12.03.2019 Integrated Scheme for Agricultural Marketing
ADVANCES (ISAM)
Authorisation for accessing information from
Income Tax and other authorities Ministry of Agriculture & Farmers’ Welfare, GOI have
issued the operational guidelines for the new
Based upon suggestion by banks, IBA suggested that Agricultural Marketing Infrastructure (AMI) sub-
bank may obtain at the time of lending, an scheme of Integrated Scheme for Agricultural
authorization from the borrower and guarantor to marketing (ISAM).
enable the bank approach Income Tax and other
authorities to access the information submitted by the The erstwhile Grameen Bhandaran Yojana (GBY)
borrower and guarantor to Income Tax and other implemented since 01.04.2001 and Scheme for
authorities, so as to cross verify the information Development/ strengthening of AMI, Grading &
submitted by the borrower and the guarantor at the Standardisation (AMIGS) implemented since
time of lending as genuine. 20.10.2004 were subsumed into AMI sub scheme of
ISAM since 01.04.2014. The AMI scheme was for XII
A draft of the authorization letter is annexed to this plan (2012-17) and the scheme was discontinued.
circular. It is advised that the letter of authorisation,
shall be obtained as an independent document in all the The new scheme has been approved for implementation
accounts henceforth. from 22nd October 2018 for the period conterminous
ADV.131/2018-19 dt.04.01.2019 with the 14th Finance Commission i.e. upto 31st March
Interest Subvention Scheme- Adherence to 2020. Accordingly, the revised guidelines for the sub
systems and procedure for Crop Loans scheme, AMI will be effective for new credit linked
including Agri Jewel loan projects for which term loan is sanctioned by the FIs
on / after 22 October 2018 to 31.03.2020.
The Government of India, through its budget The sub-scheme AMI lays special focus on developing
announcement for the year 2006-07, introduced an and upgrading of Gramin Haats as GrAms through
interest subvention scheme with a view to ensure strengthening of infrastructure. These GrAMs may
availability of short term crop loans up to Rs. 3.00 lakh function as farmer-consumer market (retail market)
to farmers at a reduced rate of 7% p.a. This scheme
and collection/ aggregation points (spokes) with
has continued ever since with minor variations.
linkages to secondary market (hub) with participation
Currently, with 3% additional subvention for timely
repayment, the effective cost of short-term crop loan of FPOs and other eligible promoters. Enhancement of
comes to 4% for farmers. farmer’s income is central to the scheme.

In this connection, RBI has observed that Branches are The AMI scheme envisages back-ended capital subsidy
not complying with the Instructions on Monitoring of for credit linked investment in eligible storage and

3
 JAN– MAR 2019

marketing infrastructure projects. The eligible subsidy Branches may continue to lend for tractors and other
is 25% or 33.33% of the capital cost depending upon farm machineries manufactured by these companies
the area and category of beneficiary. under the extant Bank guidelines on lending to Farm
Machineries, without extending benefits of MOU.
NABARD will release subsidy under the scheme to all
We reiterate that Branches should ensure that cost of
the institutions which are eligible for NABARD
tractor indicated in the proforma invoice/ quotation
refinance and to such other institutions GOI may
submitted to the branch shall in no case be more than
approve for the purpose. It may be noted that time
MRP of that model. Branches shall also make sure that
limits have been prescribed in the guidelines for each
the copy of invoice submitted to the Branch by dealer
stage from submission of documents by FI to release
is verified with the copy of invoice submitted to RTOs,
of final subsidy. On receipt of subsidy by FI, the
for each farm mechanization loan extended.
Utilization Certificate should be submitted by the FI
within 60 days of receipt of final subsidy.
ADV.146/2018-19 dt.05.02.2019
Operation of SHG CC accounts
NABARD is in the process of developing software for
submission of application details, processing and
It is observed that more than 65000 SHG CC accounts
release of subsidy claims. The same is expected to be
are due for renewal. In this regard reference is
operational within 60 days. In the interim applications
invited to our Master Circular on SHG - ADV 10/2016-
may be submitted in physical form to the regional
17 dated 04.04.2016 wherein the guidelines on
offices of NABARD as per the formats prescribed in
operation of SHG CC accounts are detailed and this
the new guidelines. Once software is rolled out the
circular reiterates the guidelines to be followed for
relevant data will have to be entered in the system.
SHG CC accounts

The operational guidelines of the scheme are provided

Zones were requested to advise the branches to renew
as Annexure to the circular
all the eligible SHG CC accounts and ensure that all the
eligible SHG CC accounts were renewed.
ADV.145/2018-19 dt.04.02.2019
Status Of MOUs With Various Tractor
ADV.147/2018-19 dt.05.02.2019
Companies For Financing Tractors And Other
Kisan Credit Card Saturation Campaign
Farm Machineries.

Ministry of Finance, GOI, has informed that ,the

Reference is invited to different MOUs entered
Department of Agriculture, Cooperation & Farmers
between Indian Bank and various tractor companies for
Welfare (DAC&FW), Government of India has decided
Financing Tractors and other Farm Machineries.
to launch a special drive in campaign mode with an
Specific schemes were formed for financing Tractors
objective to saturate the farmers under KCC scheme.
and other farm machineries under each MOU. These
DAC & FW is requesting state governments to organize
MOUs were communicated by all Branch Circulars .
village wise/ Bank Branch wise camps to facilitate
Please refer the circular for the status of MOU with
farmers in completing KCC application forms with
different Tractor companies , the date of MOU,
supporting documents including land records and
validity period and the original circular reference
handing them over to respective Bank Branches. Banks
number.
are requested to extend all support to the state /
It is evident that the MOUs with M/s John Deere District administration and field level development &
India Pvt Ltd and M/s Kerala Agro Machinery revenue functionaries in this campaign.
Corporation Ltd have expired and benefit of MOU
schemes are not available to applicants from the date The guidelines to be ensured by Zones/ Branches are
of expiry of MOU till further notice. However, detailed in the circular

4
 JAN– MAR 2019

In view of the above, Zonal Managers are advised to

All Branches are advised to actively participate in the sensitize Branch Managers to complete filing of all
camps, and ensure that all the eligible farmers are charges with CERSAI, in relation to all outstanding
covered under KCC and saturation of farmers under loans immediately and keep it updated on an ongoing
KCC is achieved. basis.

All Zonal Managers are requested to report the details ADV.152/2018-19 dt.15.02.2019
of action initiated and proposals Pradhan Mantri Kisan Samman Nidhi
canvassed/sanctioned/disbursed including number of
camps conducted with photographs to CO: RBD Ministry of Finance, Government of India, have
communicated about the implementation of PM-KISAN
ADV.149/2018-19 dt.07.02.2019 Scheme, with a view to provide income support to all
Filing of Charge with CERSAI – Enforcement Small and Marginal landholding farmer families having
under SARFAESI Act 2002. cultivable land.

Indian Bank Association, has communicated that Benefits under this scheme will be provided to all Small
Central Government is in the process of notifying and Marginal landholder farmer families across the
Chapter IV (A) of the SARFAESI Act 2002 which country as under:
deals with Registration of Charges by Secured
Creditor and Other Creditors with CERSAI. Landholder Farmer families with total cultivable
holding upto 2 hectares shall be provided a benefit of
After notification of Chapter IV (A) the implications Rs.6000 per annum per family payable in three equal
will be as under: installments, every four months.

(a) A Bank/FI/Notified FI will NOT be able to enforce The first installment to eligible beneficiary during this
security under SARFAESI Act in relation to charges financial year 2018-19 shall be paid shortly.
not filed with CERSAI and Modalities for Fund transfer to the Beneficiary
(b) A Bank/FI/Notified FI holding security but not Account
having filed charge with CERSAI may lose priority over
security, if some other party files a charge with Benefit under the Scheme, is to be paid directly into
CERSAI. the beneficiary Bank account through the mechanism
of Direct Benefit Transfer (DBT). The amount will flow
However IBA has made a representation to the Central to the account of the beneficiaries, held in destination
Government stating the concerns on the above and Banks, through the accredited Bank of Department and
requesting to: Sponsoring Bank of the State, Using Public Financial
(i) keep in abeyance the notification for bringing in Management System (PFMS) portal.
force Chapter IV(A) of SARFAESI until such time the
charge filing with CERSAI in relation to all outstanding In this regard, The Government of India has requested
loans is completed by banks; and that while implementing PM-KISAN Scheme, The
(ii) declare that the charges files by banks with any following may be ensured:
other public, registry (including registries under
Registration Act, Companies Act, Merchant Shipping Under no circumstances, the money transferred from
Act, Patents Act, Motor Vehicles Act, Designs Act, e- PM-KISAN Scheme should be adjusted against any
VAHAAN etc) shall be deemed to have been filed by outstanding loan. This money is meant for specific
banks with CERSAI. purpose and cannot be made available for loan
adjustment.

5
 JAN– MAR 2019

The farmers must have unqualified right to withdraw

this amount after it has been transferred to his RBI has addressed to IBA and informed that
account. There should be no denial from withdrawal on discounting/rediscounting of bills is a common method
account of any outstanding adjustment. of bank financing through which borrowers fund their
working capital requirements. Like any other loan
Hence Branches are advised not to adjust/ not to auto products, discounting/rediscounting of bills by the
debit/not to carry out standing instruction if any on banks are also subject to certain inherent risks. In
the income support scheme fund received directly from the recent past, there has been significant increase in
Government of India through Direct Benefit Transfer bank frauds wherein the bank loans were availed based
(DBT) Mode. on bills/invoices, which were generated without the
actual supply of goods, and the borrowed funds were
Zones are requested to monitor the adherence to diverted for other purposes. The concerns in such
instructions by the Branches and ensure that the bank financing for discounting/rediscounting of bills
objective of the Scheme is achieved without fail and to and the related risks were flagged in the meeting of
avoid possible complaints. Economic Intelligence Council chaired by the
honourable Finance Minister, Government of India.
ADV.153/2018-19 dt.20.02.2019
Credit Flow To Agriculture- Collateral Free & Nil Further IBA sensitised banks regarding the prevalence
Margin To Agricultural Loans Upto Rs.1.60 lakh of such discounting/rediscounting of bills, wherein the
invoices/bills are bogus or inflated so that the
The Reserve Bank of India has, from time to time, instances of frauds/NPA in such financing are
issued a number of guidelines/instructions/directives prevented and the banks are protected against losses.
to banks on credit flow to agriculture. As per recent
notification from RBI, keeping in view of the overall ADV.158/2018-19 dt.27.02.2019
inflation and rise in agriculture input cost over the PMEGP Guidelines for 2nd loan to existing units
years since 2010, the existing Norms regarding and disbursement of margin money claims
collateral and margin are revised as follows.
Existing Norms Revised Norms We invite reference to PMEGP guidelines for on line
process flow of application and disbursement of Margin
As per circular As per revised circular
Money directly to financing bank branches.
RBI/2009-10/499/ RBI/FIDD.CO.FSD.BC.N
Guidelines for Second Financial Assistance under
RPCD.PLFS. BC. No. 85 o.13 / 05.05.010/2018-
PMEGP for expansion of existing successful
/05.04.02/ 2009-10 19 dated February 7,
PMEGP/MUDRA Units has been issued by Directorate
dated June 18, 2010, - 2019 - Upto r1.60 lakh
of PMEGP, KVIC, Ministry of MSME,, branches can
Upto r1.00 lakh no no collateral, no Margin
claim the margin money subsidy for 2nd loan through
collateral, no Margin should be insisted from
PMEGP online e–portal after sanction and disbursement
should be insisted Borrowers for the
of first instalment of the loan as per existing
from Borrowers for purpose of Agricultural
procedure.
the purpose of loans.
Agricultural loans.
Separate online module for submission of applications
Branches are advised to take note of the above
for 2nd loan by the successful PMEGP/MUDRA
changes and extend the agricultural loans adhering to
entrepreneurs is available in the existing PMEGP e-
the revised norms with immediate effect.
portal and the guidelines were issued for compliance.

ADV.154/2018-19 dt.20.02.2019
Role of Implementing Agencies, 2. Role of Financing
Misutilisation of Bank loans with fake Banks 3. Documents to be uploaded for 2nd loan for
bills/invoicing/bogus business activities.

6
 JAN– MAR 2019

upgradation of PMEGP/MUDRA units 4. Claim Validation All loans/advances linked to MCLR reset on or after
procedures were available in the circular. 08.03.2019

The main objective of 2nd PMEGP loan is to assist the Please refer circular no. ADV – 42 /2016-17 dated
successful entrepreneurs for up gradation of their 02.06.2016 and ADV - 35 /2017-18 dated 25.05.2017
units. Branches should ensure that second financial for clarifications related to application of correct
assistance is provided only for expansion/upgradation interest rate for loans and advances.
of well-performing PMEGP/MUDRA units.
Please refer circular no. ADV – 22 /2017-18 dated
All field level functionaries are advised to take note of 04.05.2017 for clarification related to switchover of
the above guidelines. ROI from Base Rate / BPLR to MCLR based on specific
request of the borrower(s) enjoying term loan
ADV.159/2018-19 dt.28.02.2019 facilities. Please ensure to recover one time switchover
Sanctioning Loans Without Confirmed Internal charges of 0.50% of the balance outstanding plus
Ram Rating unavailed limit (if any) subject to a maximum cap of
Rs.10,000+Service Tax as applicable.
During scrutiny of ZLCC sanction it is observed that
fresh loans/enhancements are being sanctioned In case of working capital facilities, accounts should be
without confirmed RAM Rating. This is against policy renewed only with MCLR linked interest rate and no
guidelines and Top Management expressed concern switchover charges are applicable for the same.
over such violation.
ADV.167/2018-19 dt.08.03.2019
Hence we advise all the field level functionaries not to
sanction any fresh loans/enhancements without Reduction Of Rate Of Interest For Jewel Loan
confirmed Internal RAM rating. Any lapse in this (Non-Priority) And Interest Concession To
regard will be viewed seriously. Women Borrowers Under Retail Products

ADV.160/2018-19 dt.28.02.2019 Exclusively for women borrowers, additional concession

Review of MCLR in ROI is extended under JL, Salary Loan, Home Loan
Products .
ALCO has approved the following Marginal Cost of Please note that Rate of Interest for JL under Non
Funds based Lending Rate (MCLR) benchmarks with Priority Products has been considerably reduced, All
effect from 08.03.2019 till next review – Branches are advised to expand business under Jewel
Loan - Non Priority Portfolio and grab maximum market
Tenor MCLR (in %) share.
Overnight 8.10 % Branches shall refer circular for rate of interest and
1 month 8.25 % other details.
3 months 8.45 % ADV.169/2018-19 dt.11.03.2019

6 months 8.55 % Unique Document Identification Number (UDIN) -

1 year 8.65 % Way to authenticate attested documents by
Chartered Accountants
The revised Interest rate shall be applicable to –
All new loans/advances sanctioned/first disbursement Attention of branches is invited to our circular Adv-
made on or after 08.03.2019 90/2018-19 dt 10.10.2018 about development of UDIN
. Unique Document Identification Number (UDIN) is an
18 digit number randomly generated through the UDIN

7
 JAN– MAR 2019

portal on a predefined algorithm . The portal is 5. Risk weights for undrawn portion of cash credit
available at https://udin.icai.org/ with exhaustive limits
FAQs. Various Regulators/ Banks/ Authorities / Other The guidelines will be effective from April 1, 2019
stakeholders will be able to verify the authenticity of covering both existing as well as new relationships. The
the documents issued by practising Chartered 40 percent loan component will be revised to 60
Accountants by cross checking the financial figures percent, with effect from July 1, 2019.
and its details displayed on the UDIN Portal against
that UDIN with the certificate issued, as the access Field level functionaries are requested to note the
to UDIN Portal is restricted only to full time above guidelines and to take up with their borrowers
practising Chartered Accountants. well in advance for strict compliance

ICAI has now made UDIN mandatory in the following ADV.174/2018-19 dt.14.03.2019
phases :
Modifications in guidelines on Retail Asset
All certifications done by practising CAs w.e.f. 1st products
February 2019. ll GST and Tax Audit Reports w.e.f. 1st
April 2019. All other attest functions w.e.f. 1st July As part of strategies to increase growth under Retail
2019. Asset Segment and in tune with the ever changing
market dynamics to remain competitive, many
In the first phase i.e. from 1st February 2019, it is changes/modifications have been approved by
mandatory to obtain UDIN by all practising Chartered competent authority under our Retail Asset Products
Accountants for all certificates issued by them where with effect from 25.03.2019. These modifications will
the Financial information/ related contents is certified make our product more competitive, market friendly
as True and Fair / True and Correct. and will facilitate the field level functionaries for
increasing the exposure under this segment without
All field level functionaries are requested to make use any sacrifice on asset quality.
of the UDIN facility which will enable the bank to
verify the attested documents on the UDIN portal. The details of the modifications approved are given in
the circular.
ADV.173/2018-19 dt.14.03.2019
Loan System for Delivery of Bank Credit. Branches are advised to refer the circular for details
of modifications approved.
Attention of branches is drawn to our circular
Adv.183/2014-15 dt.02.03.2015 communicating the ADV.176/2018-19 dt.21.03.2019
revised IBA guidelines on Rationalisation of Cash Administrative Approval for sanction of Loans
Credit Facilities. Reserve Bank of India, now, has under Mudra (PMMY) Scheme
brought out guidelines on Loan System for Delivery of
Bank credit. Branches have to obtain prior Administrative Approval
from Zonal Office before sanction of Loans under
Details of the following Guidelines on Loan System for Mudra (Pradhan Mantri Mudra Yojana) Scheme, with
Delivery of Bank Credit are given in the circular. effect from 01.04.2019.
1. Minimum level of ‘loan component’ and Effective
date Mudra Loans includes the following category of loans
2. Sharing of Working Capital Finance and Up to Rs.10.00 lakhs per borrower.
3. Amount and tenor of the loan a. Loans sanctioned under Government sponsored
4. Repayment/Renewal/Rollover of Loan schemes viz. Prime Minister Employment
Component

8
 JAN– MAR 2019

Guarantee Programme, TAHDCO, National ADV.178/2018-19 dt.27.03.2019

Urban Livelihood Mission (NULM),EBC/ BC / SC New MSME Structured Loan Product – IND
/ST action plan etc. schemes for Non farm Sector MSME VEHICLE.
and allied Agriculture.
b. Loans to Self Help Groups at urban centres for It is observed that many MSME customers avail loans
non-agri purpose, for purchase of vehicles from NBFCs though they are
c. OD under Pradhan Mantri Jan Dhan Yojana enjoying credit limits from our Bank. In order to
(PMJDY), arrest this trend, a new product has been developed
d. Loans to MSMEs outside Government exclusively to cater to the needs of our existing MSME
Sponsored Schemes without collateral, Clients.
e. IB Weavers credit card,
f. Swarojgar credit card etc. A new product “IND MSME VEHICLE” for financing
LMV and HMV Vehicles based on future cash flows for
However the obtention of administrative approval is Existing MSME customers (with or without credit
exempted for the following: facilities) maintaining satisfactorily operated account
a. Loans to Self Help Groups at urban centres for atleast for the last one year has been launched.. This
non-agri purpose, product is distinctly different from IBVL from the
b. OD under Pradhan Mantri Jan Dhan Yojana point of appraisal. But it is a competitive product with
attractive pricing to build healthy MSME portfolio.
For obtaining Administrative Approval, Branches have
to submit basic details about the loan proposal, as per
The salient features and the product details are
the format in the Annexure to the circular , to Zonal
annexed to the circular:
Office. Zonal Managers should put in place a
mechanism so that the approval is accorded within T+1
day on receipt of the request from branches. The Field level functionaries are advised to make use of
approval should also be in line with MoU /Annual action this Loan Product for building up healthy vehicle loan
plan approved for the branch concerned. portfolio under MSMEs.

Zonal Audit Committee of Executives (ZACE) may ADV.179/2018-19 dt.30.03.2019

review the number of approvals, adherence to timelines
etc. under this mechanism for better monitoring in CRA
their monthly meetings.
IB Home Suraksha Group Life Insurance Cover
To automate this work flow, our existing Loan Tracking to Home Loan Borrowers under tie up with Kotak
System template (Help Desk >> other websites >> Loan Life Insurance – Separate policies for staff and
tracking) will be enabled for submission of details by public with reduced premium rates.
Branches to Zonal Office and communication of
administrative approval by Zonal Office to the Reference is invited to our Master Circular
Branches concerned. The reference number generated CRA/02/2018-19 dated 02.04.2018 on ‘IB HOME
in this administrative approval, is to be utilized by the SURAKSHA’-Provision of group life cover to Home loan
Branches while opening the loan account in Core Borrowers from M/s. Kotak Mahindra Life Insurance
Banking System. Company Limited (Kotak Life).

All field level functionaries are advised to adhere to We are happy to inform that Kotak Life has revised
the above procedure meticulously for quality growth the product and given a separate policy to cover home
under the MUDRA portfolio without any adverse loan for staff/SHL with reduced premium rates of up
effect on Turn Around Time (TAT).

9
 JAN– MAR 2019

to 25% for interest rate up to 10%, bearing policy FX

number GA 000380.
Country Risk Management Policy – Changes in
Apart from this our existing policy GA 000290 has also the risk rating of countries with effect from
been modified with premium reduction of up to 10%, 31.12.2018.
which now covers Home loan/mortgage loans/top up
loan of existing and future borrowers with interest ECGC of India has released the revised Country Risk
rate up to 15%. The revised premium rates effective Classification list on 01.01.2019, which is reproduced in
from 30.01.2019 for Staff Loans and General public the Annexure I to the circular.. Branches are advised
are given as Annexure to this circular. Declaration of to exercise caution and take exposure accordingly.
good health form (revised) to be obtained is also
attached as Annexure 3 to the circular. Branches to take note of the change in Country Risk
Classification of “Turkey” from B1 to B2.
It should be ensured that Officers involved in
covering the eligible Home loan/mortgage Loan Branches are advised to take note of the rating w.e.f.
borrowers under the Insurance Scheme are also 31.12.2018, while taking fresh exposures and to take
transparent in explaining the features of the product prior approval from appropriate authorities as per
available to the customers so as to enable them to take country risk management policy.
a considered decision in order to avoid any complaint at
a later date. FX.24/2018-19 dt.02.01.2019

CRA.43/2018-19 dt.28.01.2019 Opening of accounts of exporters – Compliance

Aadhaar – Not a mandatory ID proof for opening of KYC norms
Bank accounts
We are informed by Department of Financial Services
We invite reference to our earlier Circulars CRA- 79 / (DFS) that Enforcement Directorate (ED) has come
2017-18 dated 01.03.2018 and CRA-85 / 2017-18 dated across various cases wherein Indian parties having
21.03.2018 wherein Aadhaar ID was insisted as a large export outstanding are not traceable. It is
mandatory ID proof for new CIF creation. further stated that due diligence is not taken and KYC
norms were not followed while opening accounts of
As per Supreme Court judgement dated 26.09.2018, exporters and importers.
Aadhaar is mandatory only for DBT beneficiaries who
are availing subsidies/benefits/services covered by In this connection, all branches handling Import Export
Section 7 of the Aadhaar Act, and Banks are entitled transactions are hereby advised to meticulously follow
to seek authentication of these beneficiaries for the the instructions as detailed below:
purpose of transfer of any monetary subsidy or benefit
to the Bank account. All accounts opened for Import / Export transactions
are fully KYC complied & due diligence has been done as
Therefore, Branches can now open accounts with other per the extant guidelines of the bank from time to
KYC documents also as enumerated in KYC/AML time.
guidelines. Necessary modifications have already been
effected in our CBS menu and enabled for use by No transactions of Export / Import are undertaken for
Branches. partially complied/non compliant accounts.
Please be guided accordingly.
Advance against Import payments can be made only
CRA.44/2018-19 dt.31.01.2019 from accounts which are in existence with the branch

10
 JAN– MAR 2019

at least for a period of 6 months with satisfactory GENL

operations. Advanced Certification Course for Business
Correspondents(BCs)
Branches to visit the units of Export/Import clients
before undertaking any transaction with them to IBA has communicated the Reserve Bank of India
specifically ascertain line of activity and scale of guidelines regarding the mandatory certification
operations. Visit report is to be kept on-record for course for Business correspondents (BCs).
future verification.
In this regard, the following instructions are issued for
Branches to follow all other existing guidelines strict compliance.
meticulously on KYC/AML, issued by Bank from time to
time. The BCs joined prior to 01st June 2018 should be
required to obtain BC certification by 30th June 2019.
FX.25/2018-19 dt.29.01.2019 The BCs, who have joined during the period 01st June
Liberalised Remittance Scheme (LRS) for 2018 to 31st December 2018 should be required to
Resident Individuals – Monitoring of adherence obtain the certification by 30th September 2019.
to limits
From 01st July 2019, branches are advised to engage
AD Branches are currently undertaking transactions BCs, who are duly certified by IIBF, before
under Liberalised Remittance Scheme (LRS) based on commencement of operations.
the declaration made by the customer. Instances of
breach of LRS limits by individuals have come to light Branches should obtain the copy of BC certificates and
and are due to branches confining themselves to the keep them safely in branch document register after
declaration given by the customer without taking an duly attested by Branch Managers. Zonal offices
overall view. should also keep the copy of the certificates for
verification by RBI officials.
In order to improve monitoring and also to ensure
compliance with the LRS limits, it has been decided to Zonal Managers/Branch Managers should ensure
put in place the system of seeking permission from CO: timelines for mandatory certification of BCs, as
International Division to undertake LRS transactions if instructed by RBI.
the amount of a single remittance is more than USD
50,000 per individual. The AD Branches are required to Genl.32/2018-19 dt.05.01.2019
provide the Name and PAN details of the customer to Exclusion of “SBM Bank (Mauritius) Ltd.” from
CO: International Division through Corporate Mail the Second Schedule to the Reserve Bank of
(hoid@indianbank.co.in) for transactions exceeding India Act, 1934.
USD 50,000 before effecting the transaction and
obtain approval. In the interest of prompt customer We have been informed by Reserve Bank of India
service, the mail may be followed up by a phone call to that “ SBM Bank (Mauritius ) Ltd.“ has been
044-28134346 for immediate processing. excluded from the Second Schedule to the
Branches are advised to strictly adhere to the Reserve Bank of India Act, 1934 vide Notifivation
guidelines and regulations notified by Reserve Bank of dated December 03, 2018
India vide Master Directions.
Genl.33/2018-19 dt.21.01.2019
FX.28/2018-19 dt.20.02.2019

11
 JAN– MAR 2019

Term Loan Review Charges on Loans and

Advances. Any PMJDY account could be converted into regular
savings bank account only in case where the PMJDY
Our Board has approved Levy of Term Loan Charges account-holder after understanding the requirement of
with the following directions: maintaining minimum balance and related charges for a
regular savings bank account, specifically requests for
Continuation of levy of term loan review charges as per such conversion.
circular No.Genl/59/2016-17 dated 17.08.2016, with
effect from 01.09.2016. In this regard, branches should follow the above
guidelines on PMJDY accounts so that PMJDY account
Wherever renewal of accounts is falling due, a holders can continue to avail the banking services
condition shall be stipulated for the recovery of term following the extant regulatory position.
loan review charges. However, waiver/concession in
respect of review charges shall be extended by the Genl.35/2018-19 dt.07.03.2019
Credit Sanctioning Authority as per discretionary Mobile Seeding in APY Accounts
power booklet, Chart AP4.
Pension Fund Regulatory and Development Authority
The sanction ticket should include a clause that the (PFRDA) informed that in the event of premature
term loan review charges will be subject to review, voluntary exit under APY, the closure proceeds of APY
including upward revision at the time of next renewal accounts are credited into savings bank account linked
of limits. for auto debit.

Zonal Offices / Branches are hereby advised to In view of above, the following instructions are
incorporate recovery of Term Loan Review charges as reiterated:
one of the terms and conditions in the sanction letter
issued to the borrowers.  Branches should verify for APY account
linkage before processing the closure request
Automation of recovery of Term loan review charges is of the SB account.
in process. Meanwhile, Branches are advised to recover  The customers should be educated for
the charges manually without fail and ensure NIL continuing APY as well as linked SB account.
leakage of income.  In case customer relocating to other
geographical locations, possibility of shifting
the SB a/c along with APY is to be explored.
Genl.34/2018-19 dt.12.02.2019
 In case of an APY account is linked to the SB
Pradhan Mantri Jan Dhan Yojana (PMJDY) and
a/c, the closure of SB a/c should not be
relevent exact guideleines of RBI on KYC - processed till the time the APY a/c is linked to
compliance other SB a/c of the subscriber.

Department of Financial service, Ministry of Finance, Also PFRDA has observed that multiple PRANs are
Government of India has reiterated that PMJDY generated with same mobile number i.e mobile numbers
envisages opening of Basic Savings Bank Deposit provided are correct however they are registered
(BSBD) accounts with RuPay card and overdraft against multiple subscribers and dummy mobile
facility. Only to facilitate account opening for persons numbers like 00000000001, 9999999999 etc. are
not having required KYC documents at the time of captured against multiple subscriber PRANs.
opening the account, under PMJDY, “small accounts“ The subscribers’ mobile numbers are used by PFRDA
could be opened. These accounts should be converted and Central Recordkeeping Agency (CRA) to send
into KYC-compliant BSBDA accounts within stipulated important SMS on PRAN Generation, Contribution
timeframe. Details, NIL Credit, Non Persistent PRANs Govt. Co-

12
 JAN– MAR 2019

contribution Withdrawal fund transfer/fund returned, HRMD/HRDD

Other Promotional emails etc
Introduction of new Transit Home at Egmore,
The subscribers whose PRANs are not persistent or
Chennai under Staff Welfare Scheme.
who have not contributed to their PRANs at all are
We are happy to inform that a Transit Flat will be
informed vide several SMS. If the mobile numbers made available at Egmore, Chennai for use of all staff
registered against these subscribers are not correct, members and retirees on superannuation subject to
they are not aware of the status of the contribution stipulated terms and conditions.
towards their PRAN due to which the chances of
converting these subscriber PRANs to persistent Please refer the circular for the details of the Transit
remain low. Please note that the incentives to the Flat at Egmore, Chennai , booking procedure and the
branches will be shared only for the subscribers with application format..
persistent contributions. It would help the subscribers HRMD.135/2018-19 dt.31.01.2019
making persistent by updating their correct mobile Nodal Officer for customer service/ Principal
numbers. code Compliance Officer (BCSBI) and Public
Information Officer under Right to information
These updates and information may not reach the act 2005.
subscribers if dummy mobile numbers are registered
Consequent to the changes in the functional
against their PRAN. responsibilities of Executives at Corporate Office,

Further, please note that providing same mobile Shri Sri. Praveen Kumar Dangi, Deputy
number for multiple PRANs may result into fraud as General manager, Inspection Department is designated
the messages for all such PRANs would be sent to the as Public Information Officer under RTI Act.
single Mobile number. In view of the above, capturing
and registering the correct subscriber mobile number Shri. Nagarajan M, General Manager (P&D/CSC/CCD)
is necessary for passing on correct information to the continues as First Appellate Authority (FAA) under
subscribers related to their APY PRAN. RTI Act, Nodal Officer for Customer
Service/Grievance Redressal, Principal Code Compliance
In this regard, Branches are requested follow the Officer (BCSBI) and Nodal Officer under Banking
below steps for updation (for accounts where updation Ombudsman Scheme.
or fresh seeding is required).
Shri V Venkateswarlu, Deputy General Manager &
Update the mobile number in their Savings Bank Chief Compliance Officer continues as the
account linked for auto debit of APY contribution Transparency Officer.
amount.
HRMD.138/2018-19 dt.01.02.2019
On the next working day, go to Helpdesk Other Joining of New Chief Vigilance Officer (CVO).
websites  In house applications Software for Atal
Government of India / Ministry of Finance /
Pension Yojana (APY) site  Update Modification 
Department of Financial Services has appointed Mr.
enter SB a/c number  click on “fetch details” 
Sudhakar R Iyer as Chief Vigilance Officer of our
check the mobile number  click on “update” button.
Bank, on deputation from Syndicate Bank and has
All branches are advised to take note of the above for
assumed charge as Chief Vigilance Officer (CVO) of
compliance.
our Bank on 01.02.2019.
Genl.36/2018-19 dt.08.03.2019

HRMD.139/2018-19 dt.01.02.2019

13
 JAN– MAR 2019

Comprehensive revised policy on provision of

Sexual Harassment of Women at Workplace - Cell Phone / Telephone to Executives and field
Regarding level functionaries

Our Bank has framed the “Policy on the Sexual Board has approved certain improvements /
Harassment of Women at Workplace” in line with modifications in the policy on provision of Cell Phone /
Sexual Harassment of Women at Workplace Telephone to Executives and eligible field level
(Prevention, Prohibition and Redressal) Act and Rules functionaries.
2013. The same was circulated to all Branches /
Offices vide CO HRM Circular HRM-17/2015-16 on The details of the following were given in the circular.
15.05.2015 and is presently in force. 1. Enhancement in the ceiling of the cost of
mobile handset inclusive of all accessories
Clause 17 of the above mentioned policy requires 2. With immediate effect , all officers in Scale
display of the penal consequences of sexual harassment III, II and I are eligible for purchase of mobile
and the constitution of the Internal Complaints handsets
Committee at any conspicuous place in the workplace. 3. The period for replacement for Cell Phone, if
continued in the same Scale is 3 years.
In this regard, the Notice as enclosed in the Annexure 4. Reimbursement of call charges have been
shall be displayed in all the Branches at a conspicuous modified as under with effect from
place accessible to the Staff Members and General 01.04.2019 (both residential landline (Scale V
Public. and above) and Cell phone) :
5. Monthly call charges reimbursement for
HRMD.157/2018-19 dt.01.03.2019 Officers in Scale III, Scale II and Scale I
Enhancement of Festival Advance/Interest Free (other than Branch Managers) (with effect
Salary Advance limit-reg. from 01.04.2019)
The Policy shall come into force with effect from
Board has approved removal of ceiling on Festival 13.02.2019.
Advance to Award Staff /Interest Free Salary
Advance to Officers applicable to employees who CO : Premises & Expenditure Department is in the
joined the Bank on or after 06.12.1990. Henceforth, process of negotiating tariffs with Service Providers
the eligible quantum of Festival advance stand revised for corporate tie up keeping the availability and
as follows for all employees irrespective of date of presence of Cell Phone operators / service providers,
joining in the Bank. pan India.

For Officers – Maximum eligible amount - Sum of one The Standard Operating Procedure and implementation
month’s Basic Pay, DA, PQP and FPP. of the Policy shall be done by CO : Premises &
Expenditure Department.
For Award Staff – Maximum eligible amount - Sum of
Basic Pay, DA, PQP, FPP and Special Pay Branches / Offices are advised to go through the
Policy on “Comprehensive Cell Phone / Telephone”
All other terms and conditions as per Circular HRMD carefully and adhere to the guidelines/instructions
159/2017-18 dated 23.03.2018 remain unchanged. contained therein.

HRMD.166/2018-19 dt.21.03.2019 HRMD.172/2018-19 dt.30.03.2019

14
 JAN– MAR 2019

ADMIN RBI Note Refund Rules (NRR) 2018 and Essential

& Security Features of Bank Notes
Renaming of Zones and Branches in State of
Karnataka RBI has now released the amendments for Note
Refund Rules - 2009 on 28.12.2018 containing further
Government of Karnataka vide Gazette Notification directions on Facility for Exchange of Notes and Coins.
dated 03.12.2014 had renamed the districts in the
State of Karnataka. Consequently, Zonal Offices / The faciity for exchange of soiled,mutilated and
Branches in the said Districts have been renamed and imperfect notes is to be provided by all banks at all
the detailed list is given in the circular. their branches. The bank branches should play an
active role and ensure that the facility is operated for
Please note that the IBGA code of the branches / the benefit of the members of public at large and is
offices shall remain the same. not pre-empted by a group of persons.

The names of the respective districts also undergoes a RBI booklet contains Essential & Security Features of
change and hence may be marked suitably. The details Bank Notes and amended RBI Note Refund Rules 2018
of the changes made in nomenclature and published in of Issue Department, RBI,Chennai. The procedure
Gazette by the Government of Karnataka is enclosed as required to be followed by the branches for
annexure to the circular for reference. acceptance, adjudication, and maintenance of records
of mutilated notes is also laid down in this booklet.
ADMIN.76/2018-19 dt.04.01.2019
Opening / merging / renaming / shifting of A link has been provided in CBS HELPDESK under Bank
Branches / Offices during Quarter III FY 2018-19 >> Intranet >> Home >> External Links >> RBI Notes
Refund Rules, where the details are available.
Details of Branches / Offices which were opened /
merged / renamed / shifted during Quarter III of FY Branches and Currency Chests are advised to refer the
2018-19 are furnished hereunder for information and amended guidelines of RBI for adjudication of notes
the details thereof provided in the Annexure. and avoid complaint from customers / general public.
Branches and Currency Chests are also advised to
Opening of Branches / Offices / Extension Counters refer the booklet on “Essential & Security Features of
opened : Bank Notes” issued by RBI for identifying the genuine
18 Branches, 1 Zonal Office and 1 Extension Counter Notes.
were opened.
Merger of branches The above guidelines come into force with immediate
1 Branch and 5 Service branches were merged. effect.
Renaming of Branches/Offices
1 Branch and 1 Zonal Office were renamed. ADMIN.78/2018-19 dt.08.01.2019
Shifting of branches
Acceptance of Coins – Coins not being taken by
8 Branches and 1 Zonal Office were shifted.
branches

Number of Domestic branches as on 31.12.2018 is 2839

We invite attention regarding the facility for exchange
comprising of 729 Rural, 799 Semi Urban, 630 Urban
of notes and coins where it has been advised that none
and 681 Metropolitan branches.
of our branches should refuse to accept small
denomination notes and / or coins tendered at their
ADMIN.77/2018-19 dt.07.01.2019
counters. However, Reserve Bank continues to receive

15
 JAN– MAR 2019

complaints about non-acceptance of coins by bank

branches. Such denial of service has led to refusal on
the part of shopkeepers and small traders, etc., to
accept coins as payment, causing inconvenience to the
public at large. Therefore, we once again advise all our
branches to accept coins of all denominations tendered
at the counters either for exchange or for deposit in
accounts.

Further to the above, Department of Financial Service

(DFS), Ministry of Finance, GOI addressed a letter to
all Scheduled Commercial Banks on “Acceptance of
coins – coins not being taken by branches” and branches
can refer the circular for the details

Zonal Offices should advise and ensure that all

branches / Currency Chests should adhere to RBI
guidelines on acceptance of coins strictly without any
customer complaints.

ADMIN.83/2018-19 dt.13.03.2019

Though due care has been taken in the

preparation of Recollect, the version given in the
circular is final.

Compiled by CO: O & M Division

16
 Volume 19 Issue 2
a

For Private Circulation Only

July - Sep 2006 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
CONTENTS OF THIS ISSUE Cir. No. Date Subject
Pg.
Cir. No. Date Subject PRNL 57 13.07.2006 Maintenance of Diary and 7
Pg.
Contact Register by
DEP. 28 12.09.2006 IB Tax Saver Scheme 2 Branch Managers
29 12.09.2006 Ind Double Centenary Tax 2 61 20.07.2006 Disposal of old / obsolete 7
Saving Certificate SFVM items
ADV. 53 04.07.2006 Grameen Bhandaran 3 67 28.07.2006 Formation of Official 7
Yojana - Capital Language Implementation
Investment Subsidy Committee in Branches /
Scheme for Construction / Offices
Renovation - Expansion of 73 11.08.2006 Renewal of Group 7
Rural godowns Personal Accident
54 07.07.2006 IB-Bala Vidya - to meet the 3 Insurance Policy
Educational expenses at 82 01.09.2006 Exemption to staff 7
School level - LKG to XII members from Hindi
Std exams conducted by Hindi
57 20.07.2006 Quality of data to be 3 Teaching Scheme.
submitted to CIBIL 85 11.09.2006 Scheme of 8
59 02.08.2006 Modification to Credit Risk 4 Reimbursement of fees to
Policy 2006-07 - Officers who acquire
Enhancement of Industry- CISA/CISSP Certification.
wise Exposure and Term 91 16.09.2006 Scheme of 8
Loan Exposure ceiling Reimbursement of fees to
61 05.08.2006 Rural Industries 4 Staff for Certificate Course
Consultancy Services in Anti Money Laundering
(RICS) of Khadi village & know Your Customer.
Industries Commission CRA 26 05.07.2006 Encashment of Demand 8
(KVIC) Draft Exceeding
62 07.08.2006 Acknowledgement of SSI 4 Rs.50,000/-
application & timely 30 11.07.2006 Provision of Cheque Drop 8
disposal Boxes at Branches
64 23.08.2006 Master Circular on Loans 4 32 26.07.2006 Nomination of minor for 8
and Advances - Statutory safe deposit locker facility
and other restrictions - 35 28.07.2006 Accounting of Expenditure 9
Directions of RBI attracting service Tax –
67 29.08.2006 KVIC - Rural Employment 4 modifications regarding
Generation Programme Service Tax paid (input
(REGP) - gist of scheme credit)
details and certain 36 02.08.2006 Renewal of “Arogya 9
clarifications Raksha”- Co-Branded
68 30.08.2006 Guidelines for financing 5 group Mediclaim policy for
joint liability groups of our account holders in
tenant farmers association with United
70 31.08.2006 Revision in Benchmark 5 Ins.co.ltd. wef 12.08.2006
Prime Lending Rate 39 07.08.2006 Refund of pension amount 9
74 15.09.2006 RBI Master Circular on 6 credited into Pensioners’
wilful defaulters Bank account after the
76 19.09.2006 Master Circular - Priority 6 death of the pensioner or
Sector Lending - Credit in -operative for over six
facilities to Minority months
Communities 46 02.09.2006 Categorisation of Pension 9
78 30.09.2006 Obtention of encumbrance Accounts
6
certificates (ECs) for the 52 28.09.2006 Safe Deposit Lockers – 9
pro-perties mortgaged to Allot -ment of Vacant
bank, at regular intervals – Lockers and recovery of
reg. arrears of rent
 Recollect
Cir. No. Date Subject 7. PAN number should be printed in the deposit
Pg.
FX 13 20.07.2006 Country Risk Management
receipt. Signature of the depositor should be
9
Policy – Changes in the obtained in the deposit receipt.
risk ratings of countries. 8. “No loan / no foreclosure are allowed before
14 24.07.2006 Penal Action against the 10
Associations violating
the expiry of 5 years” should be stamped on the
Foreign Contribution receipt.
(Regulation) Act, 1976 9. Branches should issue the deposit receipts
17 26.09.2006 Foreign Contribution 10
(Regulation) Act, 1976 –
super scribing in red ink as under:
Obligations of Banks “BANK TERM DEPOSIT SCHEME 2006 AS PER
GENL. 41 18.07.2006 Telephone Etiquette NOTIFICATION NO.203 OF 2006 DATED
10 28.7.2006 BY THE CENTRAL GOVERNMENT”
47 26.07.2006 Maintenance of Cash and 11
Bank balances 10. Rate of interest, Nomination facility is as per
65 05.09.2006 Levying of Cash Handling 11 norms and the detailed terms & conditions are
Charges at branches given in the circular.
75 29.09.2006 Complaint/Grievance 11
Redress Mechanism In the CBS branches, system will not
MD/ED 04 31.08.2006 Launching of Centenary 12 restrict the opening of account only to individuals
Celebrations in our Bank and HUF category of customers and hence the same
05 18.09.2006 STRATEGIC ALLIANCE 12 has to be controlled by the branches manually. The
minimum deposit of Rs.100 will be controlled by
the system and the system does not have facility to
DEPOSITS ensure deposits in multiples of Rs.100/- and hence
IB Tax Saver Scheme the same has to be controlled manually. Foreclosure
facility/ Loan facility are not allowed in the scheme
Central Government vide notification 203 and hence to be controlled manually.
of 2006 dated 28.7.2006 has formulated the Bank
Term Deposit Scheme, 2006 which would be (DEP.28/2006-07 dt.12.09.2006)
eligible for deduction from income under Section Ind Double Centenary Tax Saving Certificate
80C of Income Tax Act upto Rs. 1,00,000 made in
a year in the scheme by individuals and (HUF) is The scheme is similar to IB TAX Saver
launched. Accordingly “IB TAX SAVER Scheme except the following terms & conditions.
SCHEME “with the following terms and conditions 1. Minimum amount: Rs.1000 or in multiples of
was launched. Rs.100/-. Maximum amount of deposit in a
1. Minimum amount of deposit is Rs.100 or in financial year is Rs.100000/-. Joint holder type
multiples of Rs.100 and the Maximum amount certificate may be issued payable to either of
of deposit in a financial year is Rs. 1,00,000/- the holder or survivor. The deduction from
income under section 80C of the Act shall be
2. Eligibility: Individual or HUF, having Income
available only to the 1st holder of the deposit.
Tax PAN. The account can be opened in joint
names including minor as a joint holder, 2. It is a Reinvestment plan for fixed tenure of
provided that in the case of joint holder type 100 months @ 8.42% p.a interest.
deposit, the deduction from income under 3. No additional rate of interest for Senior
Section 80C of the Act shall be available only Citizens or staff members of our Bank
to the first holder of the deposit.
4. No Certificate shall be encashed before the
3. Type of account: Account can be opened as expiry of 100 months from the date of its
FDR or RIP and the payment of interest will be receipt.
as per extant guidelines of FDR & RIP.
5. Value Added Service: The customers with the
4. Tenure: Not less than 5 years i.e., 5 years to 10 Certificate of Rs.50,000 and above are eligible
years except 100 months. to get the bank’s Credit Card free of initial /
5. Pledge: Term deposit shall not be pledged to renewal fee. Branches are advised to ensure
secure loan or as security to any other asset for issue of Credit Cards to all the eligible
a period of five years from the date of deposit Certificate holders. The other details of the
schemes are given in the circular.
6. Premature Closure: No term deposit shall be
encashed before the expiry of five years from (DEP.29/2006-07 dt.12.09.2006)
the date of its receipt.
2
 July – Sept 2006
ADVANCES loan amount should be reduced to the extent of
amount of Scholarship / Sponsorship.
Grameen Bhandaran Yojana - Capital Investment
5. Margin is 5% and rate of interest is BPLR -
Subsidy Scheme for Construction /Renovation -
2.00% (floating) and Repayable in 10 EMI s to
Expansion of Rural godowns
commence from the following month of
All the directors/partners of company/ disbursement. Monthly DL to be fixed.
partnership firm engaged in construction of godown 6. Security: Employers’ Sponsorship / Salary
should be farmers to avail 25% subsidy and the account with our Bank / Authorisation to debit SB
bank has to satisfy itself regarding agriculture as account / 10 Post Dated Cheques.
the main source of income of the farmers while The other details of the scheme like entry level
sanctioning the loan. Branches should note the scoring model etc are given in the circular.
changes while forwarding schemes to NABARD
(ADV.54/2006-07 dt.07.07.2006)
for release of subsidy.
Capital Investment Subsidy Scheme for Rural Quality of data to be submitted to CIBIL
Godowns/Cold Storages - Take over of loan To improve the quality of loan portfolio
accounts. and to draw the Credit information reports from
In case of take over of loan accounts, the CIBIL branches should submit error free credit
transferee Bank has to submit an undertaking to information of all borrowal accounts in CIBIL
NABARD Regional Office to the effect that it shall formats. Furnishing information on Borrowers and
abide by the scheme guidelines in respect of Guarantors on i) Date of birth ii) Gender iii) Name
keeping the subsidy in the “Subsidy Reserve Fund of the State and iv) PIN code was made mandatory.
A/c" of the borrower. After take over of loan For all accounts opened / disbursed and for
accounts, the transferee bank should inform the enquiries to be made on or after 01.05.2006, any
Regional Office, NABARD that they have received ONE of the under noted fields, which were earlier
the subsidy amount from the transferor bank. 'when available' will now have to be provided and
will become ' Required' fields
(ADV.53/2006-07 dt.04.07.2006)
i) Income Tax ID Number (PAN Number)
“IB – Bala Vidya” –to meet the Educational expenses ii) Passport Number , iii) Voter ID Number
at school level - L K G to Standard XII. iii) Telephone Number
A new scheme 'IB - Bala Vidya’ has been Borrowal accounts opened / disbursed and
developed for providing credit assistance for the CIR enquiries to be made on or after 01.05.2006
middle class to meet the educational expenses of without at least one of the above fields will be
their wards in classes from LKG to Std. XII. The rejected by CIBIL. In respect of records for
salient features are as under. accounts prior to 01.05.2006, capturing these fields
1. Target Group: Salaried Class/ Employees in over a period of time is encouraged.
Public Sector/Reputed Companies, Professional / (ADV.57/2006-07 dt.20.07.2006)
Self-employed with minimum 3 years of
Modification to Credit Risk Policy - 2006-07-
satisfactorily operated SB A/c with our Branch.
Enhancement of Industry-wise Exposure and Term
2. Purpose: To meet the cost of admission fees
Loan Exposure ceiling.
and term fees, cost of books, uniforms, computer
fees, transportation cost (if provided by the School) Considering the business potential, our
and duly certified by the respective School CMD has approved for enhancing the exposure-
Authority on yearly basis. Donation / Capitation ceiling limit for the following industries as
Fee is not eligible. mentioned below: (Rs. in Crores)
3. Eligibility: LKG to Standard XII in any No Industry Existing Limit Enhanced Limit
recognised School /Govt. aided Schools / approved 1. Ports and Roads 300.00 1400.00
2. Other 1200.00 2000.00
by the Board of Education. Bonafide student Infrastructure
Certificate from the School where the student is 3. Term Loan 40% of Global 50% of the Global
studying to be produced as per the Format enclosed Exposure Net Credit Net Credit based
to the circular. (excluding based on the on the previous
4. Loan Amount: Actual expenses with maximum Structured outstanding year-end or
Products)- as on the subsequent
of Rs.30000/- per family. Wherever the Balance previous year- quarters whichever
Scholarship / other Sponsorship is available the outstanding end. is higher.

3
 Recollect
Exposure ceiling for other industries / application with complete particulars should be
categories as mentioned in the circular ADV. 02 / recorded in the application received/disposed off
2006-07 dt.05.04.2006 remains unchanged. register. The applications should be disposed-off in
(ADV.59/2006-07 dt.02.08.2006)
time as per RBI norms on merits
(ADV.62/2006-07 dt.07.08.2006)
Rural Industries Consultancy services - (RICS) of
Khadi Village Industries Commission (KVIC) Master Circular on Loans and Advances - Statutory
and other Restrictions- Directions of RBI
As the rural entrepreneurs are finding it
difficult to prepare viable village industries projects RBI has, from time to time issued a number
on their own to obtain financial assistance from of circulars containing guidelines / instructions,
Banks, to maintain the quality of the product and directives to banks on Loans and Advances. These
market their goods in the present highly guidelines on the aspects of eligible borrowers,
competitive market, KVIC has launched Rural eligible securities, bankable purposes, margin
Industries Consultancy Services (RICS) manned by stipulations, creation of charges over securities etc.,
suitable officers who are trained with the were codified in our Manuals, Circulars, and
functioning and operationalisation of the Rural ICS Booklet on delegation of credit powers etc. The
Cells to provide support services to the first segments of Loans and Advances, which are
generation entrepreneurs. These cells will mainly regulated/ restricted, have been communicated
focus, on the Project requirement upto Rs.5.00 through, internal circulars and in our Loan Policy/
lakhs with the target groups; Rural artisans, SHGs, Credit Risk Policy. For the guidance of branches /
Rural youth already trained in the training institutes field level functionaries, a summary of statutory
of KVIC/KVIB and other Government agencies restrictions / regulations issued by RBI are
and Weaker sections of the Society viz., SC/ST/ recapitulated in the annexure to this circular.
OBC/Minority/Physically Handicapped / Ex- (ADV.64/2006-07 dt.23.08.2006)
Servicemen and Women rural artisans/
entrepreneurs. Consultancy Fee: No fee in advance KVIC - Rural Employment Generation Programme
will be charged from the entrepreneur. After (REGP) - gist of scheme details and certain
sanction of the project, 1%of the total project cost clarifications
will be charged from entrepreneur as Consultancy
Further to our Circular No. ADV 25/2006-
fee, which is included in the Project Cost.
07 dt.12.05.2006 regarding introduction of revised
Operational procedures, Agencies eligible Margin Money Claim Formats and Based on the
for consultancy, Centres of RICs are given in the discussions at the Top Level Bankers, meeting on
circular. Field Level functionaries are advised to REGP convened by KVIC recently. Some action
educate our customers / new entrepreneurs points at presanction stage, Post sanction stage
including SHGs and artisans to take advantage of including submission of REGP Claims and
the RICS Scheme of KVIC under REGP and achievement of REGP target has been evolved and
finance all eligible units falling under the details are given in the circular.
Micro/Tiny/Agro Rural Industries to augment (ADV.67/2006-07 dt.29.08.2006)
growth of our SSI portfolio.
(ADV.61/2006-07 dt.05.08.2006) Guidelines for financing joint liability groups of
tenant farmers
Acknowledgement of SSI Application & Timely
On the lines of the model scheme prepared by
Disposal
NABARD and RBI/IBA, the Joint Liability Group
The norms of RBI/GOI/our Bank should be (JLG) scheme has been evolved to augment flow of
followed and the time frame for disposal of SSI credit to tenant farmers cultivating land either as
applications is also adhered to meticulously. oral lessees or share croppers and small farmers
Acknowledge the letters received from applicants who do not have proper title of their land holding.
requesting SSI application forms. The main purpose of JLG is to extend collateral
Acknowledgement for the loan application received free loans to target clients and to build mutual trust
from customer with the date of receipt should be and confidence between banks and tenant farmers.
given. The conversations/discussions that follow The salient features of the scheme are as under:
should be recorded and the minutes should be
1. Size of the JLG: For effective functioning,
signed by party and the Branch Manager and copies
the group should be formed preferably with 4 to
should be held by both. The date of receipt of
4
 July – Sept 2006
10 members to enable the group members to which could be combined credit requirement
offer mutual guarantee. While informal group of all its members. The credit assessment of
of upto 20 members could also be considered. the group could be based on the available
2. Formation of JLGs: Branches may form JLGs cultivable area by each member of the JLG.
on their own or through the facilitation of 9. Purposes of credit: The finance to JLG is
intermediaries like NGOs, MFIs etc., and State expected to be a flexible credit product
Government Departments like Agriculture addressing the credit requirements of its
Department also could form JLGs of tenant members including crop production,
farmers and small farmers not having clear land consumption, marketing and other productive
title. purposes.
3. Members should be of similar socio economic 10. Type of loan and the Limit: Branches may
status and background carrying out farming consider cash credit, short-term loan or term
activities of similar type like crop production loan depending upon the purpose of loan and
and who agree to function as a joint liability against the mutual guarantee offered by the
group. The groups must be organised by the group, a maximum amount of loan may be
likeminded farmers and not imposed by the restricted to Rs.50, 000/- per individual both
bank or others under Models A & B.
4. The members should be residing in the same 11. Rate of interest and margin is as per existing
village/ area and should know and trust each norms applicable to agricultural advances. No
other well enough to take up joint liability for collateral security is insisted upon against loans
group/individual loans and is engaged in to JLGs. It may however, be ensured that the
agricultural activity for a continuous period of mutual guarantees offered by the JLG members
not less than 1 year within the area of are kept on record. Lendings to JLGs are to be
operations of the bank branch. treated as direct agricultural advances under
5. JLG should not be formed with members of the priority sector advances segment.
same family and more than one person from the 12. Details of insurance coverage to members of
same family should not be included in the JLG the groups and the crop insurance coverage
and member should not be a defaulter to any under NAIS are given in the circular.
other formal financial institution. (ADV.68/2006-07 dt.30.08.2006)
6. The selection of a good/able/active leader for
Revision in Benchmark Prime Lending Rate
the JLG is an essential need, which will
ultimately benefit all the JLG members. In the light of the increase in cost of
However, care should be taken to ensure that Deposits, tightening money market situations, trend
the group leader does not corner benami loans. in the industry etc., and also keeping in view of the
7. Savings by JLG: The JLG is intended cost structure, with effect from 01.09.2006, our
primarily to be a credit group. Therefore, Bank’s Board has approved the increase of
savings by the JLG members are voluntary. All Benchmark Prime Lending Rate by 0.50% from the
the JLG members may be encouraged to open existing rate of 11.50% to 12.00% per annum. The
an individual “no frills” account. However, if Spread (Maximum 4.0%) / tenor Premium (0.50%)
the JLG chooses to undertake savings as well as / Penal interest (Maximum 2.0%) are applicable as
credit operations through the group mechanism, per extant guidelines. This rate is applicable for all
such groups should open a savings account in existing and new advances under floating rate
the name of JLG with at least two members sanctions. Tenor premium will be applicable on all
being authorised to operate the account on term loans with contracted maturity of 36 months
behalf of the group. and above. Crop loans including Agri Jewel Loan
upto Rs. 3 lakhs will continue to be priced @
8. JLG Models: Branches can finance JLG by 7.00% p.a. For Export advances the rate of interest
adopting any of the two models. will be 300 bps below BPLR.
Model A – Financing Individuals in the
(ADV.70/2006-07 dt.31.08.2006)
Group: The group would be eligible for
accessing separate individual loans from the RBI Master Circular on wilful defaulters
financing bank branch.
RBI issued a master circular by
Model B – Financing the Group: The group incorporating all the instructions / guidelines issued
would be eligible for accessing one loan,
5
 Recollect
on the matters relating to wilful defaulters at one Master Circular - Priority Sector Lending - Credit
place, which are operational as on date and the facilities to Minority Communities
same has been placed on the RBI web-site (http://
To enable banks to have current
www.rbi.org.in). Field level functionaries may
instructions with regard to providing credit
follow the guidelines on wilful defaults of Rs.25
facilities to Minority Communities at one place, a
lakhs and above meticulously for Identifying the
Master Circular incorporating all the existing
wilful defaulters in our Bank for reporting to
guidelines/instructions/ directives till date has been
RBI/CIBIL, Submission of the prescribed
prepared and brought out a master circular for
statements as per time schedule and in strict
information of the branches. Branches are advised
compliance of the guidelines for reporting,
to ensure that within the overall target for priority
Initiating criminal action against wilful defaulters
sector lending and the sub - target of 10 per cent for
and for Making use of the list of wilful defaulters of
the weaker sections, sufficient care is taken to
all Banks / Financial Institutions, disseminated by
ensure that the minority communities also receive
RBI / CIBIL while processing proposals.
an equitable portion of the credit. Branches are also
As per the instructions of the central Vigilance advised to refer to our circular ADV: 52/2006-07
Commission for collection of information on wilful dated 30.06.2006 regarding disposal of applications
defaults of Rs.25 lakhs and above by RBI, a scheme under Priority Sector and ensure that the loan
was framed with effect from 1st April 1999, under applications received are properly recorded and
which the banks and notified all India financial disposed off within the time limit. Any rejection
Institutions were required to submit to RBI the should be in accordance with the guidelines
details of the wilful defaulters. Wilful default contained in the circular.
broadly covered the following: (ADV.76/2006-07 dt.19.09.2006)
a) Deliberate non-payment of the dues despite
Obtention of encumbrance certificates (ECs) for the
adequate cash flow and good net worth;
properties mortgaged to bank, at regular intervals –
b) Siphoning off of funds to the detriment of the
reg.
defaulting unit;
c) Assets financed either not been purchased or As mortgage is only transfer of an interest
been sold and proceeds have misutilised; in immovable property the owner of the property
d) Misrepresentation / falsification of records; still has the right to deal with the property. To
e) Disposal / removal of securities without bank's confirm the property is free from encumbrance ECs
knowledge; are obtained for certain number of years and legal
f) Fraudulent transactions by the borrower. opinion is obtained before EM is created. As per
Registration Act any document has to be registered
A Committee of higher functionaries
within four months from the date of execution and
headed by the Executive Director and consisting of
if registered it will take effect from the date of
two GMs/DGMs should examine all cases of wilful
execution. That means in case party executed
defaults of Rs 1.00 Crore and above for filing of
registered mortgage prior to the EM favouring bank
suits and also consider criminal action wherever
but registered after the mortgage-favouring bank,
instances of cheating/fraud by the defaulting
the registered mortgage will take effect from the
borrowers were detected. In case of consortium
date of execution i.e. it will have the priority over
/multiple lending, banks and FIs were advised that
EM. Hence, another EC should be obtained
they report wilful defaults to other participating/
4months immediately after the creation of
financing banks also. Cases of wilful defaults at
mortgage. Besides above, ECs shall be obtained
overseas branches were required to be reported if
every year to find out the mortgaged property
such disclosure is permitted under the laws of the
continues to be free from encumbrance except the
host country. The above scheme was in addition to
mortgage-favouring bank. Branch should apply for
the Scheme of Disclosure of Information on
EC independently to fix the responsibility on the
Defaulting Borrowers of banks and FIs introduced
sub registrar in case EC turns out to be not correct.
in April 1994. The detailed guidelines are given in
The main purpose of obtention of ECs periodically
the circular.
is to confirm that the mortgaged property continues
(ADV.74/2006-07 dt.15.09.2006) to be free from other encumbrances and in case
there are any further encumbrances, the subsequent
purchasers/mortgagees are to be made as party/ies

6
 July – Sept 2006
to the legal proceedings initiated or to be initiated all the Branches/Offices and meetings are to be
by bank. held once in every quarter. The Agenda and
(ADV.78/2006-07 dt.30.09.2006) minutes are to be prepared in Hindi. All the
Branches/Offices are therefore requested to comply
PERSONNEL with this directive and conduct quarterly meetings
Maintenance of Diary and Contact Register by without fail and send the minutes to the concerned
Branch Managers Circle Offices.
‘Branch Manager’s Diary’ facilitates the (PRNL.67/2006-07 dt.28.07.2006)
Branch Managers to note down important meeting Renewal of Group Personal Accident Insurance
dates, reminders in follow up of critical activities, Policy
list of important customers useful in identifying
business prospects, recovery, follow-up, product Our Bank has been obtaining an annual
preferences, etc. The diary is useful for the visiting Group Personal Accident Insurance Policy
Executives to have quick glimpse of the important providing round the clock Personal Accident Cover
statistics of the branch, ascertain the trends in with the sum insured at 48 times of salary (Basic +
business growth, and assess the potential and steps DA), covering all the employees of our Bank. The
to be taken for further development. Branch said policy has been renewed for a further period of
Managers are advised to maintain the Diary and one year from 02.08.2006 with ‘United India
Contact Registers neatly and promptly. The Diary Insurance co. ltd’ and the policy No is:
should be made available to Executive and his GPA Policy No. 010500 / 42 / 06 / 05/ 00000003
signature obtained with his remarks.
The salient features of the Policy have been
(PRNL.57/2006-07 dt.13.07.2006) made known in Circular No.36/2002-03 dated
Disposal of old / obsolete SFVM items 05.08.2002. For any further details / clarification
over the terms of policy, and all correspondence
The item purchased should be served for its may be referred to the UNITED INDIA
purpose, failing which it becomes redundant and INSURANCE CO. LTD., at the address mentioned
should be essentially disposed off by observing the in the circular.
following guidelines for getting best salvage value.
(PRNL.73/2006-07 dt.11.08.2006)
1. The probable sale value of the asset may be
ascertained to have a bench mark Exemption to staff members from Hindi exams
2. If numbers of items to be disposed off in a conducted by Hindi Teaching Scheme.
branch are few, they may take up the exercise If the staff members in non-Hindi States /
with the other nearby Branches, with the help Union Territories have taken Hindi as a subject in
of the CO. their Matric exam and secured 33% or more marks
3. For small value items, publicity for the sale in the same then it is deemed that they possess
may be given in the notice Board of Branch / Hindi knowledge upto Praveen level and they have
Office or bit notices. to appear for Pragya exam. Hindi Textbooks will be
4. More number of offers may be collected. made available free of cost to the employees
5. For bulky equipment/ many items with high appearing for the Hindi examinations based on the
book value, the help of a public auctioner could letter from the concerned Head of the Department.
be taken.
As a one time exercise, ‘small value items’/ (PRNL.82/2006-07 dt.01.09.2006)
‘items with lesser shelf life’ like locks, lamps, Scheme of Reimbursement of fees to Officers who
folders, door mats, curtains etc. may be written off acquire CISA/CISSP Certification.
with the permission of the competent authority. It
should be ensured that such items are not To protect the information assets
capitalised. effectively in a computerised information system,
RBI has suggested utilising the services of
(PRNL.61/2006-07 dt.20.07.2006)
CISA/CISSP qualified people for the purpose of
Formation of Official Language Implementation Information Systems Audit and Information
Committee in Branches / Offices Systems Security. The Certified Information
As per the directives of Government of Systems Auditor (CISA) issued by Information
India and Reserve Bank of India, Official Language Systems Audit and Control Association, USA and
Implementation Committee has to be constituted in Certified Information Systems Security

7
 Recollect
Professional (CISSP) issued by International the name of the bank and branch as given below
Information Systems Security Certification and keep it duly tied to a string.
Consortium Inc., USA are professional
Certification Programmes recognized A stamp pad may also be kept by the side of the
internationally. Vide Circular PRNL/ 79 /2003-04 box so that the customer can affix the stamp on the
dated 24.12.2003, provided a scheme for instrument, before dropping the same in the drop
box to prevent likely misuse of the instruments
reimbursement of various fees to the officers who
deposited through drop boxes. Branches are advised
acquire CISA/CISSP certification. The main to display the notice near the cheque drop box.
objective of the scheme is to encourage more
officers to acquire the certification. i. No Branch should refuse to give an
acknowledgement, if the customer tenders the cheque
(PRNL.85/2006-07 dt.11.09.2006) at the appropriate counter.
Scheme of Reimbursement of fees to Staff for ii. Where the instrument(s) is/are deposited by a
Certificate Course in Anti Money Laundering & customer in the drop box alongwith the counterfoil,
know Your Customer. branches should arrange to keep those counterfoils
duly acknowledged by an officer in a spike at the ‘May
To enhance the awareness among staff I Help You’ counter so as to enable the customer to
members the Indian Institute of Banking & Finance collect the same later – either on the same day or next
(IIBF), Mumbai have recently launched an on-line day.
Examination for Bank employees in Anti-Money The other instructions/guidelines as
Laundering and Know Your Customer. The conveyed in our above circular remain unchanged.
examination will be held twice a year in May / June
(CRA.30/2006-07 dt.11.07.2006)
and November / December. The fees shall be
reimbursed for first 500 staff members, on first Nomination of minor for safe deposit locker facility
come first serve basis, who pass the said Certificate
Section 45Z (E) of the Banking
Examination by May-June, 2007 upto a maximum
Regulations Act, 1949 does not preclude a minor
amount of Rs.1000/- .The details of exam are given
from being a nominee for obtaining delivery of the
in the circular.
(PRNL.91/2006-07 dt.16.09.2006)
contents of a locker. Hence, "A Minor can be
appointed as a nominee for delivering contents of a
CRA hired locker / receive articles kept in safe custody.
In such a case, however, the bank has to ensure
Encashment of Demand Draft Exceeding Rs.50,000/-.
that when the contents of the locker are removed on
RBI as a special case allowed, that the behalf of the minor nominee, the articles are
banks may encash DDs above Rs.50,000/- handed over to a person who, in law, is competent
purchased by Ministries/Departments of to receive the articles on behalf of the minor.
Government of India in favour of their own “Branches are advised to take note of the revised
outstation units /Field Offices where no Drawing guidelines, while accepting nominations for locker
and Disbursing Officer is posted, for making facility.
genuine cash disbursements. These instructions are (CRA.32/2006-07 dt.26.07.2006)
not applicable to any payees of DDs, MTs, and TTs
other than Government Departments. Accounting of Expenditure attracting Service
(CRA.26/2006-07 dt.05.07.2006)
Tax – Modalities regarding Service Tax Paid
(Input Credit)
Provision of Cheque Drop Boxes at Branches
As per Service Tax regulations, bank is
As an additional facility to the customers eligible to take the Input Credit in respect of
and to ensure speedier customer service for deposit Service Tax paid by it on various services availed
of instruments for clearing /transfer/collection, in like telephone, courier, AMC charges etc. upto a
addition to Metro and urban centres the facility of maximum of 20% the amount of Service Tax
‘Cheque Drop Boxes’ are extended to customers collected from the customers during the month.
of semi-urban and rural branches also. Branches The availment of Service Tax Paid (Input Credits)
should provide a special crossing stamp containing is done through the netting off against payment of
the Service Tax collections from the customers.
Indian Bank But, some of the branches / Circle Offices are not
……………Branch reporting all the entries of the Service Tax Paid
(Input Credits). Consequently, our bank is losing
8
 July – Sept 2006
the benefit of availing input credits to the eligible 3. The Telecom pensioners PPOs will have prefix
level of 20%: Hence, HO: Accounts Department as TCMTD or DOTCELL and so on.
has introduced a new revised procedure/accounting The PPOs, which are not having similarity,
of service tax paid (input credits) which comes into can be spotted out and those PPOs may be verified
operation on transactions from 01.08.2006. The with the originals to ascertain the correctness of the
details of which are given in the circular. classification. In the case of branches not having
(CRA.35/2006-07 dt.28.07.2006) large number of pension accounts, the individual
PPOs may be checked with the scroll to ensure
Renewal of “Arogya Raksha”- Co-Branded group correct classification. Branch Managers are advised
Mediclaim Policy for our Bank Account holders to undertake the above task and ensure the correct
Our Bank has renewed the ‘Arogya categorisation of pension payments in their branch.
Raksha’- group Mediclaim insurance policy for our (CRA.46/2006-07 dt.02.09.2006)
banks account holders and staff members for a
further period of one year from 12.08.2006. Safe Deposit Lockers – Allotment of Vacant Lockers
and recovery of arrears of rent
(CRA.36/2006-07 dt.02.08.2006)
Wherever branches have vacant lockers and
Refund of Pension amount credited into Pensioner’s rent in arrears, Branch Managers should resort to
Account after the death of the pensioner or effective marketing among the customers and
inoperative for over six months. Banners should be displayed informing the
Branch should intimate the death of availability of vacant lockers, and the numbers of
pensioners to the Pension Paying Officer/Treasury vacant lockers to be brought down substantially.
Officer/Sub Treasury Officer concerned for stop In absence of the caution deposit Branches
payment of pension immediately on receiving the should recover the rent to the debit of their accounts
intimation. The undrawn pension amount credited (SB/CA) with due authorisation. The branch should
after the date of death of the pensioner should be try to contact the hirer in person or otherwise and
refunded to the pension authorities concerned and it impress upon him/her the need for paying the rent
should not be adjusted towards any amount/loans on the due date and the consequences that may arise
due to the Bank from the pensioner. If the in case of non payment and recover the locker rent
Pensioner receiving pension under pilot scheme and arrears. If there is no response, steps enumerated in
his pension SB account remain inoperative for more our circular CRA.36/2003-04 dt. 17.1.2004 and
than 6 months, the fact shall be intimated to the CRA.37/2006-07 dt.2.8.2006 should be resorted to
pension authorities concerned for stop payment of for recovery of rent. Branch Manager/ Asst. Branch
pension. If any excess payments are noticed, the Manager to ensure that the rent on lockers leased to
branches should immediately refund such excess staff, be recovered on the due dates and should not
amounts to the pension authorities concerned after be allowed to fall in arrears.
due verification. (CRA.52/2006-07 dt.28 .09.2006)
(CRA.39/2006-07 dt.07.08.2006)
FX
Categorisation of Pension Accounts
Country Risk Management Policy – Changes in the
The pension paying branches are advised to risk ratings of countries.
thoroughly verify the categorisation of the pension
ECGC has revised the ratings of countries
payments and ascertain that the reimbursement
as of 30.06.2006. The latest ratings of ECGC are
claims are submitted only to the appropriate
furnished in the annexure to this circular. As our
authorities. Branches should submit the category
Bank has adopted the ECGC classification of
wise scrolls received from CEDP every month for
countries in respect of Country Risk Ratings,
claiming reimbursement from pension authorities
Branches are instructed to take note of the latest
concerned. The PPO number for any category will
ratings, while taking fresh exposures.
follow a specific pattern in most of the cases. For
example, (FX.13/2006-07 dt.20.07.2006)

1. The PPOs of Post 1990 pensioners of Central Penal Action against the Associations violating
Civil will be 12 digit all numeric. Foreign Contribution (Regulation) Act, 1976
2. The Southern Railway pensioners PPOs will be As per the provisions of Foreign
10-digit numeric. Contribution (Regulation) Act, 1976 (FCRA 1976),
Associations /Organisations which are receiving
9
 Recollect
foreign contributions / donations on a regular basis (FX.17/2006-07 dt.26.09.2006)
need to have a registration number from the
Ministry of Home Affairs, Government of India GENERAL
before affording credits and are required to furnish Telephone Etiquette
intimation about the acceptance, source, manner
It is essential to pick up the phone within
and utilisation of foreign contribution in the
three rings. Otherwise, the callers turn frustrated
prescribed manner within the prescribed period.
when they feel that their call is not important to the
GOI has published the list of associations, person or organisation dialled. It is not necessary
who have failed to furnish accounts pertaining to that the calls have to be always attended to by a
previous three years vide Gazette notification dt. particular staff member/department. In absence of
26.10.2005 and ordered that the associations listed BM the phone can be attended by any of the staff
therein the notification, shall not accept any foreign and message noted down to convey on his arrival.
contribution, except with prior permission of the
Central Government. From telephone culture, we move on to
telephone etiquette. Whether answering the phone
A list containing 8673 associations/ or making calls, adhering to proper etiquette is a
organisations has been made available to Circle must, in order to maintain a certain level of
Offices. Branches are advised to furnish the details professionalism expected of us. Using phrases such
of the accounts of association/organisations as “May I help you?”, “Please”, “Thank you”,
registered under the FCRA 1976 Act to their “Sorry for the inconvenience”, “Could you kindly
respective Circle Offices and ascertain whether any hold on for a minute?”, “You are most welcome!”
of them are listed in the Govt. Notification. In case etc are essential in displaying a professional, yet
any account is listed therein, Branches should stop pleasant atmosphere. Of course, any response to a
receiving any credit in the account in the form of call has to invariably begin with a “Good morning”
foreign contribution/donation and communicate the or “Good afternoon” or “Good evening” or “Good
same to the account holder for necessary action by day”. In the late evening, the conversation has to
them. Further such credits can be permitted only end with a polite “Good night”. Ultimately, as long
with the prior permission of Ministry of Home as one is sincere and polite over the telephonic
Affairs, Government of India. conversation, the caller is generally bound to end
(FX.14/2006-07 dt.24.07.2006) the call on a note of personal satisfaction. This is
the beginning of Goodwill, if he/she is getting
Foreign Contribution (Regulation) Act, 1976 –
acquainted with the Bank and, it is the first step in
Obligations of Banks
our journey of Building Relationships Beyond
Provisions of Foreign Contribution Time. So, the next time telephone rings at the
(Regulation) Act, 1976 impose certain obligations Branch let the import of this circular ring a bell.
on banks in respect of receipt of foreign donations. (GENL.41/2006-07 dt.18.07.2006)
A Master Circular has been brought out by Reserve
Bank of India on the Provisions of Foreign Maintenance of Cash and Bank balances
Contribution (Regulation) Act, 1976 regulating
Cash balances held in excess of the limits
receipt of foreign contributions by Associations /
need to be remitted to the currency chests, as cash
Organisations in India. Branches are advised to
held at branches is an idle asset, which does not
ensure that the instructions contained therein are
earn any income for the bank. In general, the
strictly complied with.
following aspects should be given particular
Branches maintaining accounts of various attention in cash management:
associations / organisations registered under the Act 1. All Unremunerative business should be
should furnish the details of the contributions reviewed and discouraged. Where currency chest
received for crediting into such accounts as per the facility is not available Branches should maintain a
format given in the Master Circular. Branches are constant rapport with the chief cashiers of local
advised to submit the details as called for to Circle State Bank of India Branches and also with RBI
Offices, positively before 31st October and 30th Officials for disposing of excess cash and to get
April every year and Circle Offices in turn submit periodical diversion for reissuable notes and soiled
the consolidated details to HO:ID, so as to enable note remittances to RBI from our currency chests.
HO: International Division to consolidate and Needy banks to be identified for disposal of excess
submit the details to Home Ministry within the cash with branches
stipulated time.
10
 July – Sept 2006
2. Wherever Currency Chests available the Bankers Fair Practice Code, we give a commitment
possibility of providing additional bins should be to the customer to furnish information on the
looked into and action initiated if the bins are redressal of complaint and particulars of various
insufficient to store cash. As RBI will issue forums for redressal of his/her grievance. Every
diversion orders for the cash only if they are branch has been provided with a perforated
properly sorted, the sorting must be given utmost complaint book for the benefit of the customers.
importance. The soiled notes should be segregated Reserve Bank of India has given a direction that
and be taken up with RBI for immediate Branch is the first point of redressal of complaint
remittances. Currency chest vans should be
and the complaint format should indicate the same
effectively utilised to lift the cash from branches.
and the complainant has to approach the Banking
Payment of small denomination notes of Rs.10 &
Rs.20 regularly as part of payment to customers Ombudsman only if the complaint remains
may be adopted to dispose of the heavy unresolved at the bank level within a month. Hence,
accumulation. In case of need, arrangements can be a revised procedure for complaint/grievances
made through our near-by branches or branch of redress mechanism has been furnished below:
other banks for recouping cash balances 1. Customer has to lodge his/her complaint to the
Huge cash balances will have adverse Branch Manager who is the first point of
effect on the profitability and also not advisable redressal of complaint.
from the point of security angle, hence, branches 2. If the complaint has not been redressed
should maintain minimum cash balances during /attended to his/her satisfaction with in a week
normal times. by Branch Manager, the complainant can
Bank Balance: Similarly, the management forward his/her complaint to the concerned
of bank balances also should be given utmost Circle Head. If the complaint has not been
importance by the branches maintaining bank redressed/ attended to by the Circle Head to
accounts. Branches should ensure that the balances his/her satisfaction with in a week, the
maintained are to cover day-to-day needs and complainant can forward the complaint to
excess balances must be transferred to RBI. Nodal Officer of our Bank at the address given
in the circular.
(GENL.47/2006-07 dt.26.07.2006)
3. If the complaint is not redressed by the Bank to
Levying of Cash Handling Charges at branches the complainant’s satisfaction within a period
of 30 days from the date of submission of the
Levy of cash handling charges has been complaint to the branch, he/she could approach
introduced from 01.04.2006 on the cash
the Office of Banking Ombudsman of the
remittances from the following type of customers
jurisdiction at the address displayed in the
at the following rates:
Type of account Amount of charges on cash remittance Branch for redressal.
Current account / For first 10 sections (one bundle) in a day 4. Branches are advised to display a board
OD / OCC account in any denomination-FREE. containing the above information in the
From 11th section onwards in a day in any banking hall and the modified complaint form
denomination – Rs. 5 /- per section
(service tax to be collected separately) as per enclosed format should be put into use
with immediate effect.
These charges should be charged uniformly
to all the above customers without any exemption. (GENL.75/2006-07 dt.29.09.2006)
This circular should be brought to the notice of MD / ED
all the staff members at the branch for strict
compliance. Any staff member found violating the Launching of Centenary Celebrations in our Bank
guidelines will be held responsible for the loss of When our great Bank had its genesis on 15th
income on account of the lapse. August 1907, the prophecy would have been that
(GENL.65/2006-07 dt.05.09.2006) the sapling planted on that auspicious day would
grow into a mighty institution to serve the people
Complaint/Grievance Redress Mechanism for centuries to come. True to this prophecy, our
A customer cares to complain because Bank entered its Centennial Year on 15th August
he/she wants to continue with the Bank and a 2006, which also coincides with the beginning of
complaint gives the feedback on Bank’s services. the Diamond Jubilee Independence celebrations of
As such, every complaint is an opportunity to our great nation. To commemorate the Centenary
reinforce our commitment to the customer, which Year, Celebrations will be formally launched by
results in greater customer loyalty. In terms of His Excellency the President of India on 4th
11
 Recollect
September 2006, at Chennai. Befitting the with operational guidelines to be put in place in a
momentous occasion, celebrations will be held all coordinated manner.
over the country as per the programmes finalized The success of any new effort or activity in
by respective Circle Heads in coordination with an organization will depend on the collective and
Head Office. Our customers, the greatest strength wholehearted involvement of all the staff members.
for our growth, should be involved in all the (MD/ED.05/2006-07 dt.18.09.2006)
celebrations so that they feel that along with “A
Century of Care” we owe them more than a share, C B S CIRCULARS
our happiness on this joyous occasion. The best Cir. No. Date Subject
way to acknowledge and express gratitude to these Dep. 19 26.07.06 Introduction of IAPTD(payout)
Account
great personalities at this moment of happiness is to
22 07.08.06 Transfer & Closure of deposit accts
rededicate ourselves wholeheartedly with (Guidelines to CBS & Non CBS Brs)
commitment, sincerity, honesty, integrity and work 25 10.08.06 Noting of Form 15 G/H for TDS at
as a team to scale greater heights in the days to CBS Branches – TDS/Issue of
come so as to take our Bank to a prime position Certificate – Form 16A
Adv. 58 31.07.06 Loan against deposits – needs for
among the comity of Banks. proper scrutiny of documents
(MD/ED.04/2006-07 dt.31.08.2006) 77 27.09.06 Charging of Correct int. in Loan Accts
– Need for immediate verification
STRATEGIC ALLIANCE Cra 40 08.08.06 Reversal of Remittances entries by
CBS branches
In the competitive environment among Genl 43 20.07.06 Creating customer awareness on ATM
Banks, “Only the fittest can survive and the Security
progressive can move forward to scale greater 44 20.07.06 ATM Security
heights”. Only long-term strategies will help us to . 45 24.07.06 Guidelines for calculation & payment
of service tax in CBS branches
combat the situation effectively and lift ourselves to
49 28.07.06 Procedure to be followed for issue of
face the competition. As a first step in this ATM cards/Debit cards
direction, after taking into consideration the 51 01.08.06 Adjustment/Balancing of various
inherent strengths, the Bank has entered into a clearing heads in CBS environment
strategic alliance with Oriental Bank of 52 04.08.06 Negative Balance in A&L and P&L in
Commerce and Corporation Bank for business the Core Banking System
57 26.08.06 Better Customer Service Mgmt - CBS
association in identified areas for mutual benefit of 58 26.08.06 Clearing of Data for migration to CBS
the three banks and all our customers. and after Migration to CBS
59 29.08.06 Centralised Operations in Core
The strategic alliance will help in sharing Banking environment need to put the
the rich expertise available in the three banks in customers on prior notice
operational areas such as, Business syndications 60 01.09.06 Transactions restricted to Home
and sharing, Build e-payment system, branch in CBS
Bills/Cheques collections, Sharing I T resources, 66 06.09.06 Improvement in Transactions under
Indjet Remit
Sharing Treasury resources and Sharing of 70 08.09.06 Claiming of cash loaded in ATMs
Training resources/infrastructure at the initial through ISG software - Nonobservance
stage. Through this strategic alliance with of prescribed guidelines by ATM brs
individual identities, the three banks will be in a 71 18.09.06 Importance of checking voucher
position to synergize their inherent strengths and verification report in CBS branches on
a daily basis
move forward by sharing the resources, expertise, 72 19.09.06 Adjustment/Balancing of various
infrastructure and specializations and not clearing heads in CBS environment
undercutting one another or poaching one another’s 74 25.09.06 Importance of updation of cheque
clients. This alliance should not therefore be books issued and capturing of
construed as a step towards merger etc. signatures in the system

The legal identity of each of the institutions shall Though due care has been taken in the preparation of Recollect,
Last numbers of To
be maintained. circulars
make issued as on 30.09.06
this strategic alliance a the version given in the circular is final.
success, a Working Group will be set upMD/ED by the Compiled by HO: O&M Division
DEP ADV PRNL CRA FX GENL
three banks. This group will work out in detail the Printed & circulated by HO: Circular Issue Cell
29 of78
areas 94 and52chalk a18detailed
operations 75 action5plan

12
a Volume 31 Issue 2

For Private Circulation Only

Jul – Sep. 2018 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

Cir No Date Details Pg Cir No Date Details Pg

DEP New Opportunities Galore For Improving Continuation of comprehensive Financial
18.07.2018 2 25 24.09.2018
Inclusion Mission (PMJDY) 8
16 Term Liability Portfolio
Offer of additional interest to Senior Citizen FX Country Risk Management Policy –
17 03.08.2018
under Variable Recurring Deposit Scheme
2 12.07.2018 Changes in the risk rating of countries with 9
8 effect from 30.06.2018
Opening of Current Account by Branches-
22 29.09.2018
Need for Discipline 3 Agreement with M/s. Weizmann Forex
10 28.08.2018 Limited for receiving remittances through 9
Closure of Deposit Accounts at Host Ria Money Transfer
23 29.09.2018
Branches 3
Foreign Contribution (Regulation) Act 2010
ADV Improving the Educational Loan portfolio for - Receipt of Foreign Contribution by
10.07.2018
the year 2018-19 4 13 19.09.2018 9
47 Individuals/NGOs/Organisations from donor
Long Form Audit Report 2017-18 – agency.
49 16.07.2018 Observations made by the Central Statutory 4 GENL Modifications in Bancs- Opening of
Auditors 11.07.2018 Accounts of Entity customers and Minor 9
15 customers
Revised Exposure Levels to Single / Group
54 25.07.2018
Borrowers
4
18 24.07.2018 Risk categorisation of new customers 10
Proper Due Diligence On Retail Segment
61 07.08.2018
Loan 5
19 01.08.2018 Claim settlement under PMSBY/PMJJBY 10
Increase in the carpet area of houses
eligible for interest subsidy under the Credit 21 03.09.2018 Atal Pension Yojana (APY) Mobile App 11
63 13.08.2018 Linked Subsidy Scheme for the Middle 5
Income Group (MIG) under Pradhan Mantri HRMD
Awas Yojana (Urban) – reg
18.07.2018 Improvements in Staff Welfare Schemes 11
43
Discontinuation Of Loan Against Negotiable Group Personal Accident Insurance Policy -
Warehouse Receipts (NWRs) Under MOU 57 02.08.2018 For All Our Staff Members Under Staff 12
67 29.08.2018
With M/s CGR Collateral Management Ltd 6
Welfare Scheme
(CGRCML) Until Further Notice.
Nomination of Disciplinary
Sanction Of Mudra Loans - Irregularities 60 13.08.2018 Authority/Appellate Authority/ Reviewing 12
68 29.08.2018
Observed 6
Authority.
Extending Credit facilities to Minority ADMIN Importance of seeding GST Number of
72 31.08.2018 Community & Updating of Social Attributes 6 42 30.07.2018 customer in CBS and implications of not 12
in CBS seeding it before transaction.
IB H and T Loan – New Loan Product For
Standard Operating Procedure (SOP) for
Contractors/ Transport Operators Who 45 03.08.2018 13
74 03.09.2018
Undertake Sugarcane Harvesting And 6 reporting Cyber Frauds
Transportation From The Field To Factory. Extension of Limitation period in accounts
46 16.08.2018
referred under IBC
13
Sale of Properties through Private Treaty
84 29/09/2018
under SARFAESI Act 7 Comprehensive Centralised Insurance
Policy for (1) Safe, Furniture and Machinery
Contactless Banking Platform For MSME
85 29.09.2018
Loans
7 47 20.08.2018 (SFM), (2) Books forms stationery (BFS) 13
and (3) Electronic Equipments (EE) kept at
CRA RBI Policy On Business Correspondent Bank’s premises all over India
21
09.07.2018
Certification 7
100% Verification of Jewels pledged to the
Obtaining Life Certificate of Pensioners
49 21.08.2018
Bank 14
22 16.08.2018 Through Jeevan Pramaan Application using 8
Amendments to Reserve Bank of India
Android Mobile 51 10.09.2018 14
(Note Refund) Rules, 2009
23 04.09.2018 Caution Against Bogus Account Opening 8 Renewal Of Burglary And House Breaking
55 19.09.2018
Policy 2018-19 14
 JUL – SEP 2018

to mobilize deposits through time bound action.

DEPOSITS Zones/Branches may make use of the presentation
on Bank’s Performance available under
New Opportunities Galore For Improving intranet/internet to project our image and
Term Liability Portfolio strength. It is high time that serious thought is
In the present juncture interest rates have given to identify profitable customer profile and
started firming up and have reduced banks behaviour and service them by offering a
maneuverability, which in turn impacts the differentiated experience viz., advanced
profitability adversely. technology, quick turnaround time, paperless and
New opportunities have emerged which presents fully automated workflow solutions, which would
excellent avenues for augmenting Term Deposit benefit the Bank in the long run.
portfolio of the Bank by mobilizing fresh deposits Dep.16/2018-19 dt.18.07.2018
on a sustainable basis instead of sudden increase in
Offer of additional interest to Senior Citizen
deposits at the quarter ends which is not
under Variable Recurring Deposit Scheme
sustainable and has wider implications in funds
management, including maintenance of higher The Bank is offering additional interest of 0.50%
CRR/SLR on such deposits and premium for deposit for fresh deposits placed by Senior Citizens and
insurance. 1.50% for Senior Citizen Ex-staff for Variable
One such source is Fixed Deposits from Deposit Scheme also , for amounts up to ₹2 crore
Commissioner of Provident/Pension & Gratuity Fund with immediate effect. The above ceiling is
which reads as: applicable to all types of term deposits standing in

Directive from Government of India through the name of the Senior Citizen/ Ex-staff Senior

Gazzette Notification dated 02.03.2015 to Citizen as the principal account holder at one or

Provident Fund Commissioners for placing up to more branches put together.

45% of the corpus in PF/Pension/Gratuity as Fixed All other terms and conditions outlined in Circular
Deposits with Scheduled Commercial Banks Dep.12/2006-07 dated 22.06.2006 shall continue.
satisfying certain criteria viz., having declared Additional product codes created for the above
profit in the immediately preceding last 3 financial were annexed to the circular.
years; maintaining a minimum CRAR of 9% or
Branches are advised to place the above details in
mandated by prevailing RBI norms, whichever is
the notice board immediately and also make the
higher; having a minimum Net Worth of not less
than A200/- crores and whose net NPA is not more same known to all the Ex-staff members so as to

than 4 of the net advances. make use of this opportunity to increase Variable
Recurring Deposits portfolio. The same is also
In the current banking environment the
being displayed in our website for the information
commanding position which the Banks enjoy gives
of customers.
an edge over the others in respect of
canvassing/garnering business. As our esteemed Dep.17/2018-19 dt.03.08.2018

Bank is in an enviable position satisfying all the

qualifying criteria, all the Zonal
Managers/Marketing Officers /Branch Managers
are requested to adopt a very aggressive approach

2
 JUL – SEP 2018

Opening of Current Account by Branches- Closure of Deposit Accounts at Host

Need for Discipline Branches

Reference is invited to the following circulars Reference is invited to the following circulars,
wherein clear cut guidelines of Reserve Bank of wherein instructions on Closure of deposit accounts
India and IBA with regard to opening of Current
by Host branches in CBS environment were dealt,
Accounts by Branches have been communicated
with

Circular No. Date Subject Circular Date Subject

no.
Opening of Current
ADV- 13-07- DEP.22/2 7.8.2006 Transfer and Closure of
Account by Branches-
73/2015-16 2015
Need for Discipline 006-07 Deposit Accounts
GENL.60/ 1.9.2006 Transactions restricted
Diversion of funds by 2006-07 to Home Branch in CBS
Dep-25/2016- 27-10- borrowers though
DEP.12/20 8.9.2012 Closure and Transfer of
17 2016 Current Account with
Other Banks 12-13 Deposit Accounts

We have vide our circular dated 08.09.2012,

RBI informed that “The NPA related frauds in
informed that hard copy of documents pertaining
banks have seen large increase in recent times.
One of the major reasons contributing to this has to a deposit account are available only at the Home

been the diversion of funds by borrowers through Branch to account for any general lien that needs
misuse of multiple current accounts opened by to be applied to a particular deposit account and
them with different banks. As discipline in credit hence ALL DEPOSIT ACCOUNTS SHOULD BE
transactions is required to be maintained by both CLOSED ONLY AT THE HOME BRANCH.
borrowers and lenders, the need for banks to
exercise due diligence while opening current The prohibition of Closure of Deposits by Host
accounts and also use the information available in Branches in CBS system itself is not made to
the Central Repository of Information on Large facilitate closure of deposits in the emergency
Credits(CRILC) for the purpose”. needs of the customers.
Banks are advised to strictly follow the
In spite of our clear instructions prohibiting
instructions in the aforesaid circular in letter and
closure of deposits at a branch other than Home
spirit and that non-compliance to these
branch, some branches are violating the rule.
instructions would make the bank liable for
enforcement action by RBI “. In such extraordinary circumstances, and if the
customer insists, the Host Branch should get the
Branches should make use of the information
available in the Central Depository of Information concurrence of the Home Branch by means of IP or
on Large Credits ( CRILC ) set up by the Reserve EMAIL, and such record should be kept along with
bank of India, with a view to have credit discipline the Deposit receipts for verification in future.
and shall not limit Due Diligence to merely seeking
Dep.23/2018-19 dt.29.09.2018
NOC from the lender Bank with whom the applicant
is enjoying credit facility.

Dep.22/2018-19 dt.29.09.2018

3
 JUL – SEP 2018

ADVANCES The list of deficiencies pertaining to credit as

pointed out by the Statutory Central Auditors in

Improving the Educational Loan portfolio for the LFAR for the year 2017-18 are furnished in

the year 2018-19 the Annexure to the Circular. Branches are advised
to take effective steps for rectification wherever
Our Educational Loan products are at par with the required besides ensuring that such cases of
peer Banks of the country and highly competitive in deficiencies/discrepancies do not recur.
the market. Detailed scheme guidelines are
Adv.49/2018-19 dt.16.07.2018
enlightened in the circular ADV 01/2017-18 dated
Revised Exposure Levels to Single / Group
01.04.2017. Major developments in the Educational
Borrowers
Loan products and certain strategies to canvass
more business under this portfolio were mentioned The Board in its meeting held on 10.05.2018
in the circular. approved the balance sheet as on 31.03.2018

We request you to put forth all out efforts and and the capital funds of the Bank as on 31.03.2018

canvass maximum number of quality applications is as under:

under IB Educational Loan. Educate the student

borrowers that loans should be applied through Capital Funds of the Bank as
VLP (www.vidyalakshmi.co.in ) only and branches on 31.03.2018 (in Crore)
must update the status of the applications Tier I 17315.35
(HelpdeskOther websitesIn-House
Tier II 1868.17
Applications Vidya Lakshmi - Educational Loan
Total 19183.52
Applications) within the stipulated time norms.

Branches/ Zones to ensure that the Turnaround

SINGLE AND GROUP BORROWER LIMITS
Time for disposal of Educational Loan applications
Exposure levels are reviewed from time to
is minimal and hassle-free, so that substantial
time vis-à-vis the Regulatory capital funds of
business is garnered under this segment
the Bank and the prudential exposure ceilings
Adv.47/2018-19 dt.10.07.2018 prescribed by RBI/Our Bank’s Internal Policy.
Long Form Audit Report 2017-18 – Based on the capital funds as on 31.03.2018, the
Observations made by the Central Statutory exposure ceilings for Single / Group Borrowers (as
Auditors per the extant CRM Policy guidelines) as proposed

Statutory Central Auditors of our Bank during the in, have been re-worked and the revised limits are

course of Annual Audit of the Bank as on given in the circular.

31.03.2018 observed certain deficiencies in

Monitoring of Credit borrowal accounts, Branches/Controlling offices are advised to take
Documentation and Internal Control. LFAR Report note of the aforesaid revision while maintaining
for the year 2017-18 reveals inadequacies related the copy of Credit Risk Management Policy
to certain accounts in adhering to established document, approved by the Board.
systems, procedures and guidelines.
Adv.54/2018-19 dt. 25.07.2018

4
 JUL – SEP 2018

Proper Due Diligence On Retail Segment Middle Income Group (MIG) under Pradhan Mantri
Loans Awas Yojana (Urban) as below:

Recently Banking industry has witnessed spurt in

MIG-I MIG-II
NPA in their credit portfolio, which calls for
immediate corrective action in many of the SCBs. Param
Existing Revised Existing Revised
eter
Creation of quality assets would help banks avoid Norms Norms Norms Norms
increase in NPA.
Carpet Upto 120 Upto160 Upto Upto
Stronger Due Diligence of personal loans and
Area* sq.mt Sq.mt 150 200
Housing Loans with strict adherence to KYC norms Sq.mt sq.mt
are called for particularly in - establishing
customer identity, acceptability of customer and *Carpet Area is defined as the area enclosed
verification of genuineness of the salary
within the walls, actual area to lay the carpet. This
certificates / income proof of the borrower.
area does not include the thickness of the inner
Conduct of due diligence will certainly avoid such
borrowal accounts slipping to NPA. walls.

The guidelines/remedial measures for prevention The above modifications in Carpet Area are
of NPA & frauds related to Home Loans have been effective w.e.f. 01.01.2017 i.e., date of launch of
reiterated time and again through various CLSS-PMAY for MIG. Under MIG I & MIG II, if
circulars. Despite this some Home Loan frauds are the Carpet area of the dwelling unit / house
on the rise. It is observed from frauds reported
property (acquired/to be acquired, constructed/to
in the recent past that proper independent
be constructed) is beyond the above prescribed
verification of all related documents submitted and
securities obtained were not done before norms then the loan will not be eligible for subsidy.
sanctioning the loan which led to perpetration of Branches/Zones are advised to revisit the two
fraud by the borrowers.
templates namely
The circular reiterates certain remedial measures
“Pradhan Mantri Awas Yojana (PMAY-CLSS) for
to be put in place to prevent such frauds.
accounts sanctioned from 01/01/2017 to
Field level functionaries should ensure that quality
31/07/2017 “ &
assets are created in order to protect Bank’s
interest “Home Loan Accounts opened under Ind Awas
product codes – MIG I/II”
Adv.61/2018-19 dt.07.08.2018

Increase in the carpet area of houses eligible and identify the accounts which were earlier
for interest subsidy under the Credit Linked marked as ineligible based on earlier criteria.
Subsidy Scheme for the Middle Income
Group (MIG) under Pradhan Mantri Awas For extant guidelines of the scheme, the circular
Yojana (Urban) – reg.
may be referred.
Keeping in view the overall intent of the CLSS for
Staff of our Bank can avail the subsidy under Ind
MIG Scheme to support the dream of the
Awas Schemes at par with general public and not
deserving family in owning a house, the Union
under Staff Housing Loan (SHL).
Cabinet has approved the increase in the carpet
area of houses eligible for interest subsidy under Adv.63/2018-19 dt.13.08.2018
the Credit Linked Subsidy Scheme (CLSS) for the

5
 JUL – SEP 2018

Discontinuation Of Loan Against Negotiable Extending Credit facilities to Minority

Warehouse Receipts (NWRs) Under MOU Community & Updating of Social Attributes
With M/s CGR Collateral Management Ltd in CBS
(CGRCML) Until Further Notice.
An important objective of “Prime Minister’s new
In view of certain issues pertaining to Loans 15-Point Programme for the Welfare of Minorities”
against NWRs, all the Branches and Zonal Offices is to ensure that an appropriate percentage of the
are advised not to sanction any fresh priority sector lending is targeted for the minority
loans/exposure against NWRs issued by M/s CGR communities and that the benefits of various
Collateral Management Ltd (CGRCML) until further government sponsored schemes reach the under-
instructions from CO: RBD. privileged, which includes the disadvantaged
sections of the minority communities. All Public
It may also be noted that Loans against NWRs
Sector Banks are required to maintain a level of
under MOU with M/s Star Agri warehousing and
15% credit flow to Minority Communities out of
Collateral Management Ltd (StarAgri) and M/s
their Priority Sector Lending.
National Collateral Management Services Limited
An illustrative list of Action Points for the Zones /
(NCML) have already been discontinued until
Branches for appropriate action was given in the
further notice vide CO:RBD circulars “ADV-
circular.
187/2017-18 dated 15.02.2018” and “ADV-
Updation of Social Attributes filed in CBS
53/2018-19 dated 23.07.2018” respectively
It was observed that our branches are not
Adv.67/2018-19 dt.29.08.2018 selecting social attributes fields in CBS with due
care at the time of account opening.
Sanction Of Mudra Loans - Irregularities
As a result of wrong classification of community
Observed
and caste level entry in social attributes field at
MUDRA loans are micro credits, which need CBS, we are unable to show our real progress in
pragmatic approach, careful analysis and very close Minority Community Lending (MCL) to DFS and
RBI.
/ constant follow up. However such micro loans are
Branches are advised to select appropriate fields
handled without much care, floating basic credit
in social attributes at CBS for existing and new
dispensation policies. Our reviews of MUDRA
loan customers and provide correct information
portfolio and inspections by inspecting officials relates to them.
observed with concern that there are Branches/ Zones are advised to do the exercise on
irregularities / discrepancies during identification Top Priority and ensure 100% correct classification
of borrowers, sanction and subsequent follow up in social attribute fields of customers.

measures: Adv.72/2018-19 dt.31.08.2018

A few of common irregularities/discrepancies

IB H and T LOAN – New Loan Product For
observed are listed in the Circular. Contractors/ Transport Operators Who
Undertake Sugarcane Harvesting And
All field level functionaries are advised to take Transportation From The Field To Factory.
adequate precautions and adhere to laid down
procedures / guidelines strictly and ensure A new loan product viz. “IB H& and T Loan” has
been introduced by the Bank to extend finance to
creation of healthy assets.
Contractors/ Transport Operators identified by
Adv.68/2018-19 dt.29.08.2018 the sugar factory, who undertake sugarcane
Harvesting and Transportation from the field to
factory.

6
 JUL – SEP 2018

Contactless Banking Platform For MSME

The loan is extended to meet their “advance Loans
payment" required to engage labourers for cutting,
Our Bank, in line with recommendations of PSB
loading and unloading work exclusively for
Manthan, has become a member of a consortium
transportation of sugar cane from farmers’ field to
where SIDBI is leader and four other Public
the sugar factories and fuel expenses for
Sector Banks viz. State Bank of India, Bank of
tractors/trolleys involved for this purpose only.
Baroda, Punjab National Bank and Vijaya Bank are
The loan amount will be utilized to meet the
members. This consortium has acquired majority
expenditure incurred in labour payment and
stake in M/s Capita World Platform Private Ltd., a
towards fuel consumption for transporting canes
FinTech company, to digitize MSME lending.
only.
The FinTech company, M/s. Capita World Platform
The detailed product guidelines are furnished in Private Limited has developed a digital contactless
the circular. banking platform – a web portal - for enabling
MSME entrepreneurs to submit his/her loan
Branches are advised to canvass IB H and T loans, application for MSME unit online and get in-
while observing the strict adherence to the principle approval, from a Bank of his/her choice
product guidelines. available in the platform, within 59 minutes.
Presently the platform is designed for MSME
Adv.74/2018-19 dt.03.09.2018 proposals for limits above Rs. 10 lakhs and up to Rs.
100 lakhs, which may be increased to Rs. 200 lakhs
Sale of Properties through Private Treaty
in future.
under SARFAESI Act
The Hon’ble Union Minister of Finance and
SARFAESI Sale through PRIVATE TREATY mode Corporate Affairs launched the platform on
was recognized as a mode of sale under SARFAESI 25.09.2018 and our Bank is also on-boarded in the
Act. The detailed policy of the bank for Platform.
SARFAESI Sale through Private Treaty mode was
The URL – website address: Process flow and other
given under Chapter 16 of the Recovery Policy
annexures are detailed in the Circular.
2018-19. In spite of clear guidelines, it is observed
All field level functionaries are advised to take all
that the Authorised Officers/Branch Managers
steps to popularize the contactless Banking
are not adopting the Private Treaty Mode for sale
platform among MSMEs, so as to reach out all
of properties under SARFAESI Act.
segments with specific focus on MSMEs which are
For salient features of the scheme, please refer still away from formal banking channels.
circular and its annexures.
Adv.85/2018-19 dt.29.08.2018
All the Authorised Officers/ Zonal Managers may
adopt the private Treaty mode without any CRA
hesitation, adhering to the above guidelines and RBI Policy On Business Correspondent
maximize recovery in all SARFAESI cases, where Certification
sale through public mode of auction failed twice or
Reverse Bank of India (RBI) had communicated the
more.
monetary policy on BC certification framework, in
Adv.84/2018-19 dt. 29.09.2018 order to ensure the competence of BCs and
promote quality delivery of financial services and a
graded certification /training programme was

7
 JUL – SEP 2018

introduced in collaboration with Indian Institute of of bogus Bank Accounts to get undue refund
banking and Finance (IIBF) from July 2016, for claimed illegally in bogus e-returns filed. It is
this purpose. observed by Income Tax Department that some

Based on this, BCs who were not certified were Income Tax practitioners in connivance with bank
employees opened bogus Bank accounts in which
required to get themselves certified within six
undue refunds, claimed illegally in bogus e-filed
months and in any case latest by 30.06.2018. RBI
returns, were being deposited.
has now relaxed the requirement of mandatory
certification for new BCs for a limited period up to In this connection, please refer the Master
30.09.2018. Existing BCs who are not yet certified Circular No. Genl 10/ 2018-19, dt.29.05.2018

should be certified before 31.12.2018, issued by AML Cell on Know Your Customer (KYC)/
Anti Money Laundering(AML) / Combating
compulsorily.
Financing of Terrorism(CFT) wherein detailed
Please be guided accordingly.
guidelines to be followed for opening of Bank
CRA.21/2018-19 dt.09.07.2018 Accounts have been provided.

Obtaining Life Certificate of Pensioners

Through Jeevan Pramaan Application using
DFS has also informed that severe action may be
Android Mobile
taken against Bank officials found involved in such
With Android Mobile and Biometric device, activities.
pensioner life certificate can be obtained at
Hence all branches are advised to adhere to KYC
pensioners’ place of residence or during their visit
guidelines and ensure that Bogus Bank accounts are
to branch for any transactions.
not opened under any circumstances.
We advise all Branch Managers and Assistant
CRA.23/2018-19 dt.04.09.2018
Branch Managers to down load the Jeevan Pramaan
Application in their Android mobile and familiarise Continuation of comprehensive Financial
in the process of using Android mobile for Inclusion Mission (PMJDY)
obtaining digital life certificate of pensioners.
Government of India has decided to continue the
One of the action points of PSB Manthan is to National Mission on Financial Inclusion (PMJDY)
provide priority services to Senior Citizens by beyond 28.08.2018, with modified features.
offering service at their doorsteps. Hence with Department of Financial Services (DFS) vide letter
the Jeevan Pramaan Application copied in Branch dated 07.09.2018 has communicated the changes
Managers’ and Assistant Branch Managers’ mobile, to be made by the banks under the PMJDY scheme
Branches can easily obtain pensioners’ life with immediate effect were given in the circular.
certificates and earn their goodwill
The modifications/ amendments are implemented
Branches are advised to ensure compliance in this by our Bank with immediate effect as directed by
regard. DFS. We advise all the branches to take note of
the above modifications and publicise the changes
CRA.22/2018-19 dt.16.08.2018
through brochures, pamphlets, displays at
Caution Against Bogus Account Opening prominent places in all bank branches.
Government of India, Ministry of Finance,
CRA.25/2018-19 dt.24.09.2018
Department of Financial Services, and Vigilance
MIS Cell has cautioned all Agency Banks on opening

8
 JUL – SEP 2018

in the case of other arrangements under Money

FX Transfer Service Schemes.

Country Risk Management Policy – Changes The process involved is similar to what the
in the risk rating of countries with effect from
branches are presently following in respect of
30.06.2018.
other Money Transfer Service Schemes.
Branches are aware that our Bank has adopted the
ECGC classification of countries in respect of For detailed Overview of the Process (At Branch),
Country Risk Ratings. In this connection, we refer Role of the nodal branch, guidelines of Reserve
to our circular No.FX-01 / 2018-19 dated Bank of India and Other benefits branches were
13.04.2018, wherein the ECGC Group wise, country advised to refer the circular and make better use
wise ratings were furnished. of the scheme and increase their business.
ECGC of India has released the revised Country
FX.10/2018-19 dt.28.08.2018
Risk Classification list on 02.07.2018, which is
Foreign Contribution (Regulation) Act 2010
reproduced in the Annexure I to the circular. - Receipt of Foreign Contribution by
Individuals/NGOs/Organisations from donor
Branches are advised to take note of the rating
agency
w.e.f. 30.06.2018, while taking fresh exposures and
to take prior approval from appropriate authorities RBI has informed t h a t all banks to ensure any
as per country risk management policy. fund flow from donor agency “Stitching
Greenpeace Council, Netherlands” to any
FX.8/2018-19 dt.12.07.2018
person/NGO/Organizations in India, should be
Agreement with M/s. Weizmann Forex brought to the notice of Ministry of Home
Limited for receiving remittances through Ria Affairs so that the funds are allowed to be
Money Transfer.
credited to the account of the recipient only
Our Bank has entered into sub-agency agreement after clearance / prior permission of the Ministry.
with M/s. Weizmann Forex Limited for handling Further, Government Organizations can avail of
international remittances under Money Transfer foreign funding only with clearance of Department
Services Scheme through ‘Ria Money Transfer’ of Economic Affairs and any funds, which a
offered by M/s. Ria Financial Services, USA. Government organization is receiving directly from

Under the arrangement personal remittances made the above mentioned donor agency, may be
withheld and brought to the notice of Ministry of
by individuals from countries across the Globe
Home affairs.
through Ria Money Transfer will be paid instantly
Please ensure that information contained in this
to the beneficiary at all branches of our Bank.
circular is kept confidential
Money Transfer Service Scheme (MTSS) is a quick
FX.13/2018-19 dt19.09.2018
and easy way of transferring personal remittances
from abroad to beneficiaries in India. Only
GENL
remittances towards family maintenance and
remittances favouring foreign tourists visiting Modifications in Bancs- Opening of Accounts
India are permissible. A cap of USD 2500 has been
of Entity customers and Minor customers.
placed on individual remittance under the scheme. Beneficial Owners of Entity Customers

As per the scheme all our branches will be acting Beneficial Owner/s of an entity is the natural
as “Point of Sales (POS)” and handle the person/s, who, acting alone or together or through
remittances received through Ria Money Transfer one or more juridical person, has/have a controlling
while Treasury Branch will act as Nodal Branch as

9
 JUL – SEP 2018

ownership interest or who exercise control through opening of accounts for entity customers and minor
other means. customers.

As per the extant guidelines on KYC, Banks are Genl.15/2018-19 dt.11.07.2018

supposed to have with them the details of
Risk categorisation of new customers
Beneficial Owner/s of entity customers. To comply
with these directions, the branches have been As per the Master Directions of RBI on Know Your
educated through circulars and other messages in Customer, customers shall be categorised as low,
Help Desk to obtain the details of Beneficial medium and high risk category.

Owners for entity customers, create a Personal It has been noticed that the migration of risk
CIF for them and create relationship to the Non-
rating is more in the case of new customers. To
Personal CIF as Beneficial Owner (Relationship
mitigate this branches have to be more realistic
Code:0043). But in practice, it was observed that
while giving input in mandatory fields such as
the branches are not doing this in Bancs, even
though they would have obtained the information annual income in case of personal customers and
from the customers. annual turnover in case of non-personal customers.
Branches should have a regular monitoring of
Minor Customers
transactions in the new accounts to ensure that
Normally an account in the name of a minor should
they are consistent with the customers’ profile and
be opened and operated by his natural guardian or
source of funds. Any amendment in annual
by the guardian appointed by a Court. So, whenever
a CIF for a minor customer is created, branches income/annual turnover, if required at any later
should necessarily obtain the details of the stage should be made. Any transaction breaching
guardian, create a CIF and create relationship to the threshold limit should be looked into with
that of the minor’s CIF through the relationship extra caution and the accounts should be
menu in Bancs (Relationship code: 9428). But in
monitored by branches for suspicious transactions,
practice it is found that, in many cases, the
if any. All branches are advised to follow the above
branches are not doing this step before going for
guidelines meticulously to ensure proper risk rating
opening of an account in the name of the minor
customer. of new accounts at the time of opening itself.

As per the directions of Central CKY Registry Genl.18/2018-19 dt.24.07.2018

(CKYCR), Banks have to upload the details of Claim settlement under PMSBY/PMJJBY
customer records of individual customers opened
from 01.01.2017. CKYCR requires that when a Pradhan Mantri Jeevan Jyoti Bima Yojana
record of a minor customer is uploaded, we have to (PMJJBY) and Pradhan Mantri Suraksha Bima
necessarily upload the data of the related person Yojana (PMSBY) were launched by the Hon’ble
i.e. guardian of the Minor also. In the absence of
Prime Minister on 9th May 2015 to move towards
availability of Guardian details in the system, the
creating a universal social security system
customer records of minors are being rejected by
especially for the poor and under- privileged.
CKYCR.
In order to ensure that benefits of the scheme
Please refer the circular for the two changes that
reach the intended beneficiaries Govt. of India,
have been brought into effect in Bancs.
Ministry of Finance has advised the banks to
Branches are advised to take note of the above ensure the following,
guidelines and meticulously follow the same while
Premium is to be debited / auto debited from bank
accounts of eligible subscribers only, so that no

10
 JUL – SEP 2018

claim is denied on grounds of ineligibility to features in the “APY and NPS Lite” mobile app and
subscribe to a scheme. its ease of access without visiting the branch or

In this regard, branches should ensure that the https://npslite-nsdl.com/CRAlite/ website and
date of birth available in the CBS data base, is popularise the scheme for sourcing maximum
correct and tally with Aadhaar card/ Pan Card / number of APY subscribers.
any other officially valid documents. This will
Genl.21/2018-19 dt.03.09.2018
facilitate settlement of claim if arises, with ease
and quickly.
HRMD
On receipt of intimation about the death of an
account holder from his/her legal heir with a Improvements in Staff Welfare Schemes
request to close and settle the said account,
I. For all staff members who are aged above
Branch should check whether premium of
40 years for reimbursement of cost of spectacles
PMJJBY/PMSBY has been debited / auto debited
and eye check-up (with interval between two
from the said account. In case premium for the
reimbursements being three years and with no limit
schemes PMJJBY/PMSBY has been debited from st
on the number of availments) with effect from 1
the account, legal heirs of the account holder
July 2018, the following improvement/
should be informed of the same and should be
enhancement come into force.
provided claim intimation forms for the relevant
schemes. Cadre/Scale Revised Eligibility (Rs)
Zonal Offices / Branches have to take note of the ED/MD & CEO 6000
above directions of the GOI and contribute for Scale VII/VI 5000
Scale V/IV 4500
proper implementation of the scheme for the
Scale I,II,III 4000
benefit of the intended beneficiaries
Clerical 3500
Genl.19/2018-19 dt.01.08.2018 Sub Staff 3000

Atal Pension Yojana (APY) Mobile App. II. Memento to the staff retiring on
Please refer our circular:GENL-02/2018-19 dated superannuation:
02.04.2018 on Digital Empowerment Tools for Atal Staff members retiring on superannuation were
Pension Yojana (APY) Subscribers. presented with a memento. The improvement/
enhancement is as follows:
National Securities Depository Limited - Central
Record Keeping Agency (NSDL CRA) have launched Cadre/Scale Revised Eligibility (Rs)
a mobile application named as “APY and NPS Lite” ED/MD & CEO 50,000
for the convenience of subscribers under APY. The (on superannuation /
mobile application hosted on Google Play Store will Elevation)
Scale VII/VI 40,000
enable the subscribers to remain informed about Scale V/IV 30,000
their APY account. Scale I,II,III 25,000
Clerical 20,000
The presentation enclosed to the circular
Sub Staff 15,000*
describes how to download or login to the mobile
application and the flow of the usage of features * Permanent Part time employees drawing scale
wages are entitled for an amount proportionate to
available through the mobile application.
their scale wages
All branches are advised to educate the APY
subscribers about the availability of online
HRMD.43/2018-19 dt.2018

11
 JUL – SEP 2018

Group Personal Accident Insurance Policy -

For All Our Staff Members Under Staff
Welfare Scheme ADMIN
Importance of seeding GST Number of
Our Bank has been providing round the clock customer in CBS and implications of not
Personal Accident Insurance cover to all employees seeding it before transaction.
under “Group Personal Accident Insurance Policy”. Reference is invited to the Circular ADMIN-
We are pleased to inform that the Group Personal 33/2017-18 regarding Seeding of GST No. of

Accident Insurance Policy has been renewed with customers in CBS, Navigation for GST No. at CIF
and Account levels, various Helpdesk Messages
THE ORIENTAL INSURANCE COMPANY LTD for
since 06.10.2017, with the last being dated
one year, effective from 02.08.2018.
11.07.2018 and our Important Message dated
The procedure to be adopted in reporting the 12.07.2018 on GST Invoices.
claims and the documents to be enclosed with the
The Goods and Services Tax (GST) has been
claim forms are given in annexure to the circular
effective from 01.07.2017. Under GST regulations,
HRMD.57/2018-19 dt.02.08.2018 the Bank has to ensure seamless flow of Input Tax

Nomination of Disciplinary Credit (ITC) to the customers from whom GST is

Authority/Appellate Authority/ Reviewing collected for the banking services, if the
Authority. customers provide their GST Nos. to the Bank.

Please refer our Circular No.137/2008-09 dated In this regard, the importance of seeding of GST
18.03.2009, giving a list of designations of No. of customers has been emphasised on a number
Disciplinary Authority / Appellate Authority / of occasions. A transaction will be considered as
Reviewing Authority and subsequent circulars on “Business to Business (B2B)” only when the income
the subject with the latest being HRMD-26/2018- is received from customers for whom GST No. has
19 dated 07.06.2018. been seeded in CBS, otherwise it will be considered
as “Business to Consumer (B2C).” Please note that
Managing Director & Chief Executive Officer in we cannot generate invoices to customers for
exercise of the powers conferred on him has transactions which fall under B2C category. As per
effected the following nomination: guidelines issued by GST Council and displayed by
the Central Board of Indirect Taxes and Customs
S. To Function as Name of the
(CBIC), "A transaction once reported as B2C
No Official
cannot be amended later to add GST No. and
Disciplinary Authority
1 for Shri K Sridhar convert the transaction as B2B."

 Award Staff for Asst. General Manager We once again reiterate that GST Invoices can be
Corporate Office cases generated only after seeding of GST No. of the
CO: International
 Officers in
customer in CIF, Account and Updation of details
Scale I, II & III, for Division Corporate
Corporate Office cases
in MIS Portal.
Office
Also, please note that GST invoices are generated
centrally by our department and pushed to the
The nomination shall come into effect immediately.
month end folder of CDC reports. Instances have
HRMD.60/2018-19 dt13.08.2018 come to our notice that some branches are issuing
manual GST invoices to customers for whom GST
Nos. has not been seeded in CBS. In such cases,
the transactions will be reflected only as B2C and

12
 JUL – SEP 2018

hence, ITC will not be passed on to them. Branches CO: Legal Department will take up with Project
are advised not to issue manual GST Invoices to Office for doing the needful in this regard in
any customer. respect of accounts wherever proceedings against
the Company before NCLT has been initiated as of
Field level functionaries are hereby requested to now; since Part III of the Code is yet to be
obtain GST No. of their customers and ensure that notified.
it is seeded in CBS before effecting transactions
for issuance electronic GST invoices and thereby All field level functionaries are advised to take
avoiding customer complaints. Otherwise, note of the above guidelines and ensure to comply
customers will lose the input credit which may lead with the same
to loss of patronage to the Bank
Admin.46/2018-19 dt.16.08.2018
Admin.42/2018-19 dt.30.07.2018 Comprehensive Centralised Insurance Policy
Standard Operating Procedure (SOP) for for (1) Safe, Furniture and Machinery (SFM),
(2) Books forms stationery (BFS) and (3)
reporting Cyber Frauds Electronic Equipments (EE) kept at Bank’s
premises all over India.
In the Standard Operating Procedure for FRM
Policy 2018-19, the fraud reporting process and The Comprehensive Centralised Insurance Policy
adherence to time norms are clearly enumerated. has been taken for Safe, Furniture and Machinery
(SFM), Books forms stationery (BFS) for the
However, the need for a separate SOP for period from 01.07.2018 to 30.06.2019 & Electronic
reporting cyber frauds is felt necessary to avoid Equipments (EE) for the period from 02.07.2018 to
delay in reporting the incident as fraud to RBI as 01.07.2019 kept at Bank’s premises all over India
customers are not reporting /lodging complaint with
through branch in many cases and inform the
National Insurance Company Limited,
matter directly to ATM Service Centre/ Corporate
Chennai Divisional Office No. – 3,
Office. Also system breaches on large scale,
Corporate Business Servicing Office,
technical glitches/software bugs leading to frauds
No.35, 2nd Floor, 1st Main Road,
in any of the e channels are known to ITD/
Gandhi Nagar, Adyar,
Information System Security Cell, and such
Chennai –600020
incidents, if any, are to be shared to CO:
Telephone Nos. : 044 – 24410013, 14, 15, 16
Inspection Department with details of modus
operandi, branch wise customers affected,
E-Mail IDs: Shanthi.ramkumar@nic.co.in;
quantum of loss and steps taken to plug the
kanuj.paul@nic.co.in; m.krithika@nic.co.in;
loophole in the system etc.
A.Karunakaran@nic.co.in
Branches shall refer the circular for details of Risk Policy Period of
SOP. Covered Certificate Insurance
Number
Admin.45/2018-19 dt.03.08.2018 Safe , 50030011181 01/07/2018 To
Furniture & 0000118 30/06/2019
Extension of Limitation period in accounts
Machinery (
referred under IBC.
SFM )
Queries are being received in respect of accounts Books , Forms 50030011181 01/07/2018 To
which are pending for resolution before NCLTs and , Stationery ( 0000119 30/06/2019
are being reported under Time barred accounts. BFS )
We have taken up the matter with CO: Legal Electronic 500300/44/1 02/07/2018 To
Department and the clarification received from Equipments ( 8/10000031 01/07/2019
EE )
them are reproduced in the circular for the
benefit of all the field level functionaries.

13
 JUL – SEP 2018

Overseas Branches will continue the existing offices, which are smaller in size compared to the
system for insuring their assets. earlier series. These rules have come into force

Please refer the circular for details of Policy with immediate effect.

Admin.47/2018-19 dt.20.08.2018 There is a change in the minimum area of the single

largest undivided piece of the note required for
payment of full value for notes of rupees fifty and
100% Verification of Jewels pledged to the above denominations, which is detailed in the
Bank amendments.”

As part of precautionary measures for confirming Zonal Offices are advised to ensure / put in place
the quality of security pledged to the Bank, it has proper mechanism for monitoring the Branches and
been decided to introduce a system of 100% Currency Chests in implementing the above
verification of jewels pledged to the Bank.
guidelines immediate effect.
The procedure to be adopted for 100% verification
Admin.51/2018-19 dt.10.09.2018
of jewels were detailed in the circular
Renewal Of Burglary And House Breaking
The verification of 100% of jewels in branches is Policy 2018-19
being introduced as a regular exercise and will be
on a quarterly basis for all loans sanctioned during Burglary and House Breaking Policy for the Bank

every quarter, to be completed by the end of the has been renewed for the financial year 2018 –
2019. The period of Insurance is from 01/04/2018
first month of the next quarter.
to 31/03/2019 with
Zonal Offices shall obtain compliance certificate
M/s. United India Insurance Company Ltd.
from all branches and the consolidated certificate
64, Catholic Centre, Armenian Street,
to be submitted to CO: Inspection Department
Chennai-600 001.
within 15 days.
Ph:044-25386298
In case any irregularity/ inadequacy are detected
at the time of verification, the same shall be The New Policy Number is 0105001218P101675088

reported immediately to the concerned Zonal For Broad features of the Policy like assets
covered, exemption clauses and other details
Office, under copy to the respective Inspection
please refer circular:
Centre and CO: Inspection Department.
Foreign Branches are excluded from this policy.
Admin.49/2018-19 dt.21.08.2018
Admin.55/2018-19 dt.19.09.2018
Amendments to Reserve Bank of India (Note
Refund) Rules, 2009
Though due care has been taken in the
Further to our Circular: CO:CGT, Admin:83/2012- preparation of Recollect, the version given in the
13, dated 25.02.2013. in connection with the circular is final.
captioned subject, Reserve Bank of India, Mumbai
has advised that Compiled by CO: O & M Division

“amendments are made to the Reserve Bank of

India (Note Refund) Rules, 2009 to enable the
public to exchange mutilated notes in Mahatma
Gandhi (New) series at bank branches and RBI

14
 a Volume 21 Issue 2

For Private Circulation Only

July – Sept 2008 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
CONTENTS OF THIS ISSUE 46 14.08.08 Implementation of Performance 9
Based Incentive
Cir Date Subject Pg 48 02.09.08 Mobile phones-rendering customer 10
No. service immobile
DEP 15.07.08 Special Domestic Term Deposit 1 54 09.09.08 “Health checkup” for all the staff 10
17 Scheme for Senior Citizens members who are above 45 years of
18 30.07.08 Sensitizing depositors about 2 age and their spouse
provisions of IT Act on TDS 55 09.09.08 “Reimbursement of Health Insurance 10
21 09.08.08 Movement “BANYAN VRIKSH” - New 2 Premium” to retired staff members
business campaign from 18.08.2008 57 16.09.08 Computer Loan to Staff Members. 11
to 26-11-2008 61 23.09.08 Harmony at work place- Key to 11
24 13.08.08 Assessment of level of customer 2 success
service in branches by RBI officials FX 16.07.08 Revised Service charges on Forex 11
32 30.08.08 Risk Categorisation of Customers – 3 9 Transactions
Compliance under KYC norms 11 26.07.08 Loans to Non-Residents / third 11
ADV 05.07.08 Modification to Credit Risk 4 parties against security of NRE /
56 Management Policy 2008 - 09 -- FCNR (B) deposits
Single / Group Exposures 20 17.09.08 Renewal of ECIB (WT-PC) and ECIB 12
57 07.07.08 Credit Card Operations - Sharing of 4 (WT PS) by ECGC upto 30.06.09
Net Income Surplus with branches GENL 30.08.08 Levying of cash handling charges at 12
59 07.07.08 Modifications to Scheme of financing 5 31 branches – Revised rates.
Trade – ‘TRADEWELL’ 32 12.09.08 MIS Policy 2008-09 12
60 08.07.08 Introduction of IB CATERER, SLP 5 ADM 18.07.08 Master Circular - 2008 on Detection 13
under SME for financing Caterer 29 and Impounding of Counterfeit Notes
Enterprises 30 18.07.08 Master Circular – Facility for 13
61 08.07.08 Introduction of IB TRAVEL TOURS, 5 Exchange of Notes and Coins
SLP under SME for financing 31 21.07.08 Right to Information Act, 2005 13
TRAVEL AGENTS
32 23.07.08 Maintenance of Visitors Book at Brs 13
64 16.07.08 General Terms And Conditions For 5 34 26.07.08 Inspection and Audit Policy 2008-09 13
Credit Sanction
38 31.07.08 Integration of HO: Credit Policy & 13
66 21.07.08 Union Budget 2008-09 - Short Term 6 General Department (CPGD) with
Credit to Farmers at concessional HO:Credit Division
rate of interest of 7 % per annum
49 11.09.08 Scheme of Incentives and Penalties 14
71 08.08.08 Modification to Credit Risk 6 for Bank Branches (Including
Management Policy 2008 - 09 -- currency chests)-Based on the
Industry-wise Exposure
Performance in rendering Customer
72 09.08.08 Revision in B P L R 6 Service to Members of Public.
77 13.08.08 Loan Review Mechanism (LRM) 7
88 06.09.08 7% Savings Bonds 2002, 6.5% 7 DEPOSITS
Savings Bonds 2003 (Non -taxable) Special Domestic Term Deposit Scheme for Senior
& 8% Savings (Taxable) Bonds 2003
- Collateral facility Citizens
89 08.09.08 Revision in Margin for Loan against 7 Special Deposit Scheme for Senior Citizens
NSCs and IB Rent Encash
97 26.09.08 Fresh Lending to Beneficiaries of 8
stands modified as under with immediate effect:
Agricultural Debt Waiver and Debt EXISTING MODIFIED
Relief Scheme 2008 Special Deposit Schemes for Special Deposit Schemes for
99 27.09.08 Proposal Received/Disposed register 8 Senior Citizens (Short Term Senior Citizens (Short Term
CRA 02.07.08 Annual Skill Building Programme 8 Deposit, Fixed Deposit and Re- Deposits, Fixed Deposit and
14 (SBP) for 2008-09 investment Plan Deposit Re-investment Plan Deposit
33 27.09.08 Co branded Mediclaim Policy 9 Scheme) additional rate of Scheme) - Additional rate of
“Arogya Raksha “ – Improved interest of 0.50% p.a is payable interest of 0.50% p.a is
features to make it more attractive. for 15 days to 10 years over the payable for 15 days to 10
HRM 11.08.08 Renewal of Group Personal 9 card rate of less than Rs.15 years, over the card rate only
45 Accident Insurance Policy for all our lakhs. (not applicable to preferential
staff members under staff welfare deposits).
scheme
 Recollect
The revised guidelines are applicable only The various strategies outlined in our CMD’s
to fresh deposits and on renewal of maturing circular No. MD/ED – 04 dated 7th August 2008
deposits. are to be followed to make a success of the
All other terms and conditions of circular campaign. Innovative measures are to be used to
DEP.39/2004-05 dated 18.10.2004 remain reach our products and services to our customers to
unchanged. significantly improve our Current Account and
Savings Bank deposits through a burst in marketing
(DEP.17/2008-09 dated 15.07.2008) activity.
Sensitizing depositors about provisions of IT Act on All other Add-ons like Personalized cheque
TDS Books, ATM Cards, Credit cards, Internet Banking
As per Section 194A of IT Act 1961 Banks etc. as may be sought by the customers and as are
are required to deduct tax on interest paid on term eligible should reach them on time.
deposits when the total interest paid during a year Suitable incentives will be given for
to a depositor by a bank branch exceeds the outstanding performance of Staff members, the
prescribed limit (Presently, Rs.10,000/- during a details of which are being informed separately.
Financial Year). Targets have been assigned to all circles for
According to the provisions of Section mobilizing fresh Current Account and Savings
197A of the IT Act, Banks are not required to Bank deposits.
deduct TDS in respect of persons who submit the It has to be a movement with the
declaration in Form 15 H (for Senior Citizen) and involvement of all staff members irrespective of
Form 15 G (for other individual depositors) afresh cadre to achieve the desired results.
at the beginning of every financial year.
(DEP.21/2008-2009 dated 09.08.2008)
The following is reiterated for meticulous
compliance by branches: Assessment of level of customer service in branches
by RBI officials
1. Display of TDS provisions prominently on
branch premises. The list of notices which have to be
2. Educate the customers about TDS invariably displayed by the branches in their
provisions while accepting the Term banking halls for information of Public is given
below.
Deposits.
3. Advise depositors about requirement of Boards/Stickers to be displayed in the
submission of Form 15G/15H afresh at the respective counters/places:
beginning of every financial year. 1. Business hours/working hours and weekly
4. Make Form 15G/15H available at the holiday of the branch.
branches.
5. Issue at the end of the financial year, a 2. Details of Nodal Officer of the Bank at Head
Office (General Manager in charge of
consolidated certificate giving individual’s Customer Service) and the details of the
tax deducted during the year. concerned Circle Head (Viz., name, contact
(DEP. 18/2008-09 dated 30.07.2008) address, phone numbers, FAX number, E-mail
IDs) in a prominent place in the banking hall.
Movement “BANYAN VRIKSH” (BANYAN TREE) -
New business campaign from 18.08.2008 to 26-11- 3. ‘May I Help You’ counter.
2008 4. Interest rates on deposits.
Chairman and Managing Director of our 5. Commission on remittances.
Bank have initiated a movement – ‘Banyan Vriksh’,
to commemorate Bank’s 101st year of 6. Complaint/Suggestion box.
establishment to commence from 18th August 2008 7. Facility of exchange of soiled/ mutilated Notes.
for 101 days. This has been termed a movement and
8. Complaint form with redressal mechanism.
not a mere campaign and is aimed at improving our
CASA (Current Account and Savings Bank 9. Exchange rates (FX authorised branches)
account) by adding 1.1 million accounts. 10. Cheque Drop Box with time of clearance and
The accounts added should average the date of presentation of the cheque/
instrument in clearing.
Rs.5000/- per Savings Bank and Rs.25000/- per
Current account, in order to add volume to deposits.
2 2
 JULY-SEP 2008
11. Counter for collection of local/outstation not complied by the branch, the Circle Head has to
cheques/instruments for those who require take immediate steps for rectifications and their
acknowledgement. observations should be sent to the Nodal Officer of
12. Display of TDS provisions and advising the the Bank.
customers about requirement of Form 15G/15H (DEP.24/2008-09 dated 13. 08. 2008)
afresh at the beginning of every financial year.
Risk Categorisation of Customers – Compliance
Folders supplied to the branches contain the under KYC norms
following notices:
Detailed guidelines have been issued by
These are to be furnished to customers/ Head Office, O&M Division on Risk
Inspecting officials for reference. Categorisation, fixing of threshold limit for
1. Bank’s Policy on Collection of Cheques/ transactions, etc., under KYC norms for customer
Instruments. accounts, vide the following Circulars

2. Nomination Rules. ¾ Genl.3/05-06 dt.08.04.05 Know Your Customer

(KYC)Policy –Revised and AML standards
3. Time norms for certain services in normal
circumstances. ¾ Genl.051/05-06 dt.10.12.05 Revised parameters
for Risk Categorisation of customers under
4. Availability of “Citizens’ Charter” KYC Policy
5. Availability of “Bankers’ Fair Practice Code” ¾ Genl.041/2006-07 dt.16.12.06 Observance of
6. Availability of “Code of Bank’s Commitment KYC norms in opening of accounts
to Customers” ¾ Genl.116/2006-07 dt. 02.01.07 Noting of Risk
7. Notice about the Joint Customer Service categorisation in CBS system
Committee meeting on 15th of the month at Branches should have prepared customer
4.00 pm and if 15th happens to be holiday, the profile for each customer based on risk
meeting would be conducted on the next categorisation. The customer profile contains
working day. information relating to customer’s social / financial
8. Authentication of pass book entries status, nature of business activity, information
about his client’s business and their location etc.
9. Bank’s Policy on Compensation to Customers Provision is available in CBS environment for
for deficiency in services rendered. marking the following on risk categorisation of the
10. 3 Tier service charges for 27 basic banking customer and branches should have carried out the
services. same as per the extant guidelines issued by HO:
O&M.
11. Savings Bank account rules.
1. Risk Categorisation for new as well as
12. Gist of Know Your Customer (KYC) norms. existing accounts
13. Current Account Rules. 2. Threshold limit for transactions – for
14. Fair Lending Practices Code new as well as existing accounts
15. Salient features of genuine Currency Notes as 3. Annual Income / Turnover – for new as
circulated by RBI. well as existing accounts
16. RBI’s Clean Note Policy – Notice to public for During the recent RBI inspection of select
verification of currency sections before leaving branches, RBI has pointed out the following
due to non-stapling of notes as per RBI deficiencies in compliance to KYC, in some of the
guidelines—Facility of exchange of soiled accounts
notes. ¾ Photo of the applicant was not held;
17. Banking Ombudsman Scheme 2006. ¾ PAN / Form 60 not obtained.
Branches to ensure compliance and note ¾ In case of minor a/c, parents had not signed the
that any non-compliance reported by RBI officials
application as Guardian.
would be viewed very seriously and action would
be initiated against the erring officials. ¾ In case of NRE a/cs, copy of valid Passport &
Circle Heads should also verify the visa, documentary evidence for local and
compliance of mandatory directives of RBI during foreign address not held.
their visit to the Branch. If any direction of RBI is

3
 Recollect
¾ Photocopies of the documents held, are not The substantial exposure remains at 250%
kept certified for having verified with originals of the capital funds of the Bank (i.e. Rs 13000
¾ Address given in the application differs with crore – rounded off to lower thousand).
the documentary proof given Loan segments exempted:
¾ No authorisation of BM/ABM for opening of The loan segments exempted from the
SB/CA accounts. purview of prudential exposure norms as per RBI’s
¾ Risk categorisation, Fixing of Threshold limit Master Circular No. DBOD No.
for transactions not done Dir.BC.11/13.03.00/2007-08 dated 02.07.2007 are:
Attention of Branches is invited to circular a) Rehabilitation of sick / weak industrial units
Dep.15/2008-09 dated 11 07 2008, reiterating (i.e. existing / addional credit facilities including
relevant guidelines for compliance. Branches are funding of interest and irregularities to weak / sick
advised to ensure compliance to KYC/AML industrial units under rehabilitation packages);
guidelines for all accounts, as per the extant norms.
b) Food Credit (i.e. borrowers to whom limits
Any deviation will be viewed seriously.
are allocated directly by RBI, for food credit)
Inspecting officials should verify the level
c) Loans and Advances (both funded and non
of adherence to KYC norms and report deviations
funded) against the Bank’s own term deposits to
noticed, if any, immediately to the Circle Head
concerned and the respective Inspection Centre. the extent the bank has specific lien on the deposit;
Circle Heads are advised to verify KYC compliance and
at branches from the Concurrent Audit Reports / d) Advances of both principal and interest fully
Inspection Reports etc during their visits and also guaranteed by the Central Government.
test check some opening forms on a random basis
and initiate necessary corrective measures, Branches/Offices to keep a copy of this
wherever deficiencies are observed. circular along with Credit Risk Management
Policy circular for reference / record.
(DEP.32/2008-09 dated 30.08.2008)
(ADV.56/2008–09 dated 05.07.2008)
ADVANCES
Credit Card Operations - Sharing of Net Income
Modification to Credit Risk Management Policy 2008 - Surplus in credit card business with branches.
09 -- Single / Group Exposures
With a view to capitalise the opportunities
Reference is invited to ADV / 020 / 2008-
and enlist the active cooperation of Branches and
09 dated 08 05 2008 on Single / Group borrowers
bolster their fee based income, 50% of Net Income
exposure limits based on the Capital Funds of Rs.
surplus i.e., Operating Profit, generated out of the
5301.67 crore as per the financials as at 31st
credit cards canvassed by the Branches and
March 2008.
pertaining to them in Credit Card Operations will
In line with the revision of the exposure be transferred to Branches on a half yearly basis
ceiling by RBI to Oil Companies who have been i.e in September & March .
issued Oil Bonds (which do not have SLR status),
and also the revision in the capital funds of the The following additional parameters are
Bank (i.e Rs 5251.38 crores) based on the included for ranking Branch Performance in
additional dividend payout of 10%, the Single / achievement of various Business Targets given to
Group exposure limits have been revised. the Branches:
The revised exposure ceilings are as given • Target achievement in card issuance
in the circular. during the year will be one of the
additional parameters for rating the
For reckoning the rating of the group, the
performance of the Branch. (as in other
lowest of the rating grade assigned to borrowers
areas such as deposits advances etc)
who are with in the group shall be treated as the
rating grade for the group.
4 4
 JULY-SEP 2008
• Management of NPAs and recovery The scheme details are annexed to the
performance based on circular.
i) no fresh slippage of NPAs and Monthly performance report as per format
ii) extent of recoveries made annexured to the circular should be submitted to
HO/SMEDD before 5th of the ensuing month.
will also be taken into consideration for
ranking the performance of the Branches. (ADV.61/2008-09 dated 08.07.2008)
Branches should capitalize on the above General Terms And Conditions For Credit Sanction
and enhance their non interest income by achieving
the targets given for card issuance at the earliest. BOARD on 23.04.2007 has approved the
modification in Fair Lending Practices Code
(ADV.57/2008-09 dated 07.07.2008 ) (FLPC) for our Bank and FLPC is made applicable
Modifications to Scheme of financing Trade – to all categories of loan irrespective of the amount
‘TRADEWELL’ of loan sought by the borrower from 30.04.2007.
(HO CPGD circular adv 10/2007-08 dated
To achieve the Corporate goals and based 30.04.2007.) FLPC circular defined the general
on the feed back and representations from field terms and conditions to be given to the customer
level functionaries and competitive market along with application.
conditions, certain modifications were approved
on a recent review of the TRADEWELL scheme, As the original terms and conditions are
which are detailed in the Annexure to the circular. designed and circulated during 1999-2000, the
modified general terms and conditions are given as
The modified Trade well Scheme is per annexure-2 to this circular.
attractively packaged and needs to be marketed by
the branches actively to reach the targets specified. The gist of the major modifications
approved are as below:
(ADV.59/2008-09 dated 07.07.2008)
1. Introduction of simple loan application
Introduction of IB CATERER, Structured Loan for Non priority advances of Rs. one crore and
Product under SME for financing Caterer Enterprises above (as per annexure 1 to the circular) (not
In order to tap the potential available in applicable for the project loans sponsored by
the catering industry, a Structured Loan Product syndicators).
for financing the industry by name IB CATERER 2. The application shall contain the details
is introduced. The scheme details are annexed to of relevant terms and conditions for the proposed
the circular. loan in line with our fair lending practices
Financing to caterers IS REMOVED from guidelines.
the purview of Annapoorna & Aroghya Scheme. 3. List of undertakings to be obtained as
The other target group of Annapoorna & Aroghya part of documentation and that can be attached as
Scheme will continue as hitherto. The caterers annexure to the application for information of the
would be financed under the captioned scheme applicant (as per annexure 3 to the circular).
only.
4. List of specific financial covenants
Monthly performance report as per format proposed to be stipulated as specific condition by
annexure to the circular, should be submitted to the Branch/Circle office. (as per annexure-4 to the
HO/SMEDD before 5th of the ensuing month. circular) This should be discussed with the
(ADV.60/2008-09 dated 08.07.2008) applicant before incorporating in the proposal.
5. HO/CO/Branch should convey only the
Introduction of IB TRAVEL TOURS, Structured Loan
relevant terms and conditions as part of the
Product under SME for financing TRAVEL AGENTS
sanction letter and not all the general terms and
With the booming travel industry the conditions (annexure 2). The practice of enclosing
business of travel agents is also booming and is all terms and conditions and ticking applicable
poised for higher growth. terms and conditions must be dispensed with.
In view of the above a Structured Loan 6. Internal guidelines need not be
Product is introduced for financing Travel Agents conveyed as general terms and conditions to the
engaged in Flight/Train Ticketing and obtention of customer (as per annexure-5 to the circular).
Passport and Visa.

5
 Recollect
Branches to ensure total compliance of all refer Annexure V of the said Policy for the list of
terms and conditions prescribed by sanctioning existing industries for which exposure ceilings
authorities. have been prescribed).
(ADV.64/2008-09 dated 16.07.2008 )
Ceiling (As % of Gross
Sl
Union Budget 2008-09 - Short Term Credit to Farmers Industry Domestic Credit as on the
No
at concessional rate of interest of 7 % per annum previous quarter)
1 Printing and Publishing 1%
According to RBI guidelines, Branches are 2 Aviation 3%
advised as below: 3 Media and Entertainment 2%
To charge interest @ 7 % per annum on 4 Logistics 2%
all crop loans including jewel loans given for 5 Ship Building 2%
agriculture production purpose upto Rs. 3.00 lakhs, 6 Trade (including retail trade) 8%
which are disbursed during Kharif and Rabi 2008- Branches to append the correct IB-CODE
09 ie from April 08 to March 09 as against the in the CBS to enable extraction of the Industry-
prevailing card rate. wise exposure directly from the CBS environment.
Crop loans disbursed in Kharif 08 ie (ADV.71/2008–09 dated 08.08.2008)
between 01.04.08 to 30.09.2008 are eligible for 7 %
concessional rate of interest from the date of Revision in Benchmark Prime Lending Rate
disbursement / drawal upto the date of payment or Bank’s Board has approved the increase of
upto the date beyond which the outstanding loan Benchmark Prime Lending Rate by 75 basis points
becomes overdue ie March 31, 2009, whichever is (bps) from 13.25% to 14.00% per annum, in the
earlier. light of the increase in cost of Deposits, tightening
Crop loans disbursed in Rabi 08 ie between money market situation, trend in the industry etc.,
01.10.08 to 31.03.2009 are eligible for 7 % and further keeping in view, the over all increase in
concessional rate of interest from the date of resources cost for the Bank.
disbursement / drawal upto the date of payment or
upto the date beyond which the outstanding loan 1. This revision will be EFFECTIVE FROM
becomes overdue ie June 30, 2009, whichever is 11.08.2008 for all existing and new advances linked
earlier. to BPLR under Floating Rate method including
Export Credit / Gold Card Scheme, Advances to
Branches are advised to charge card rate of THIRD PARTIES against our Deposit, Rupee Loan
interest as applicable to the respective size of loan to third parties against FCNR Deposits etc. Personal
amount which are not repaid on the due date or the Banking Department, SME Department and Rural
cut off date i.e. March 31, 2009 for Kharif and June Banking Department shall be issuing separate
30,2009 for Rabi whichever is earlier. Circulars for changes in the interest rate structure,
All branches to submit 2 % interest where applicable for the products handled by them
subvention claim for the disbursement made during and on receipt, please be guided by those
2008-09 to their respective Circle Office in the instructions.
format enclosed to the circular, as per time frame.
2. Crop loans including Agri Jewel Loan upto Rs.
The claims for the half year ending March 3 lakhs will continue to be priced @ 9.00% p.a less
31, 2009 should be accompanied by a Statutory interest subvention.
Auditor’s certificate certifying that the claims for
the subvention for the entire year March 31, 2009 3. For Export advances the rate of interest will be
as true and correct. 250 bps below BPLR.
(ADV.66/2008-09 dated 21.07.2008) 4. The existing guideline to quote not more than
BPLR for credit limits (of all Working Capital and
Modification to Credit Risk Management Policy 2008 - Term Loans) to a single borrower enjoying a
09 -- Industry-wise Exposure consolidated / Total credit limits upto Rs.2.00 lakh
Reference is invited to HO/RMD circular should continue to be complied. This ceiling of “not
ADV.09/2008-09 dated 23.04.2008 on Credit Risk more than BPLR” is NOT applicable for consumer
Management Policy for 2008-09, wherein and personal loans.
exposure ceilings for different segments have been 5. All advances above Rs.2.00 lakh and consumer
furnished and one among them is industry-wise / personal loans irrespective of size are to be priced
exposure. with the applicable full spread except where finer
pricing is part of the scheme or sanctioned /
Exposure ceilings for the following approved by the competent Authority.
industries also have been prescribed afresh:(please
6 6
 JULY-SEP 2008
6. The existing Fixed Rate advances will continue ¾ Salient features of Loan Review
at the contracted rate till the contracted period or Mechanism (as per Credit Risk Management
reset date whichever is earlier. Policy 2008 -09) – Annexure I of the circular.
7. Under Fixed Rate wherever re-set clause is ¾ Shortcomings noted in submission of LRM
stipulated as per terms of sanction the repricing review. – Annexure II of the circular.
may be reviewed sufficiently in advance and taken
¾ Changes / modification incorporated in the
up with sanctioning Authority.
existing format as approved by HO:LRMC. –
8. Fixed Rates for new advances will be Annexure III of the circular.
determined based on the revised BPLR, prevailing
(ADV.77/2008-09 dated 13.08.2008)
on the date of DISBURSEMENT unless the
Sanction Ticket stipulates that the ROI prevailing 7% Savings Bonds 2002, 6.5% Savings Bonds 2003
on date of sanction is applicable. (Non -taxable) & 8% Savings (Taxable) Bonds 2003 -
9. For all general advances other than Structured Collateral facility
Products the delegation to price at Fixed Rate As per extant guidelines and terms of
continues to be at the level of Executive Director relevant Government of India Notifications,
and above upto their credit sanctioning powers. Savings Bonds like 7% Savings Bonds 2002, 6.5%
10. TENOR PREMIUM (TP): Tenor Premium (TP)
Savings Bonds 2003 (Non -taxable) & 8% Savings
of 0.50% should be added to all Term Loans with (Taxable) Bonds 2003 issued by Reserve Bank of
total contracted maturity of 36 MONTHS AND India are presently not eligible as collateral for
ABOVE inclusive of holiday / moratorium period, loans from Banks, financial institutions and non
if any. For term loans upto 35 months maturity, banking financial companies etc.
Tenor Premium will not be loaded. Government of India has now decided to
11. SPREAD: The maximum spread continues allow for pledge or hypothecation or lien of the
to be 4.0% (above the BPLR) for general advances bonds issued under the captioned schemes as
and 2.00 % (above the BPLR) for Agri. advances collateral for obtaining loans from scheduled banks.
above Rs.3 lakhs/SSI/SME (priority advances) as Accordingly, the holders of the said bonds
hitherto. The penal interest rate continues to be the will be entitled to create pledge or hypothecation or
same as per the extant guidelines. For various lien in favour of scheduled banks in accordance
products, the existing product specific spread will with section 28 of the Government securities Act,
continue. 2006 (the G S Act) and regulations 21 and 22 of the
(ADV.72/2008-09 dated 09.08.2008)
Government Securities Regulations,2007(The G S
Regulations). The relevant provisions of Sec 28 of
Loan Review Mechanism (LRM) Government Securities Act 2006 (the G S Act) and
Regulations 21, 22 of the Government Securities
The main objective of the review under
Regulations 2007 (the G S Regulations) is enclosed
Loan Review Mechanism (LRM) is to pick up
as annexure of this circular for reference which
warning signals and suggest remedial measures,
gives the details of the systems, controls and
providing information on credit administration to
procedures at the issuing offices for recording
the Top Management.
pledge or hypothecation or lien as also invocation
Review under LRM is to be carried out with regard to the above bonds.
with risk perception, with main emphasis on
Collateral facility is available only for the
possible movement of the risk factors under
loans extended to the holders of the bonds and, as
management, financial, industry and Government
such, the facility is not available in respect of the
Policy.
loans extended to third parties.
Credit Risk Management Policy (2008-09)
(ADV.88/2008-09 dated 06.09.2008)
circulated by HO:Risk Management Department
vide circular No.Adv. 009/2008-09 dt.23.04.2008 Revision in Margin for Loan against NSCs and IB
(M-2, S-211) Annexure X (P.50) deals with the Rent Encash
guidelines on Loan Review Mechanism. For
immediate guidance to the Circle Offices/ Branches The margin requirement of 20% for Loan
on Loan Review Mechanism the following is against NSC and 25% on net rent receivables for IB
annexed: Rent Encash Schemes was stipulated when interest

7
 Recollect
rate for Loan against NSC was at 11.00% and IB ¾ Grievances received from farmers should be
Rent Encash at 9.50%. The existing margin attended to immediately, on the date of receipt
stipulation may not suffice and there is a possibility itself.
of the liabilities exceeding the maturity value of Our timely fresh lending and quick action
NSC and so also the net rent receivables may not on redressal of complaints will help in retaining our
match with the liability. customers from switching over to other financial
The margin requirements has been enhanced institutions.
with immediate effect, as under, to ensure that (ADV.97/2008-09 dated 26.09.2008)
liability to Bank is always less than the value of
Proposal Received / Disposed Register
Security/Net Rent Receivables:
As per Fair Lending Policy of our Bank,
Product Existing Revised
Margin Margin proposals have to be disposed off within 30-45 days
Loan against Own NSC/KVP/LIC of the receipt of all papers at the branch.
20% 25%
Policy/RBI Relief Bonds
In order to eliminate a number of proposals
Overdraft against Own NSC/KVP/LIC
Policy/RBI Relief Bonds
20% 25% getting unduly delay at branches/Circle
Loan against NSC/KVP/LIC Policy/RBI Offices/Head Office and also to have a data on
Relief Bonds, availed by entities other 20% 50% pending proposals, HO / TMD had prepared a
than individuals programme and loaded in the intranet. All offices
IB Rent Encash 25% 40% should fill in the details like date of receipt, date of
(on net rent receivables) disposal and how disposed. However, details of
Branches should apply the same in respect very few proposals are being entered in the intranet
of all advances under the Schemes with immediate and even physical register is not being maintained.
effect and review the accounts sanctioned from This is being commented by RBI in their inspection
15.05.2008 onwards. report year after year.
(ADV.89/2008-09 dated 08.09.2008) All the Branches / Circle Offices / Credit
Desks in Head office should enter the details in the
Fresh Lending to Beneficiaries of Agricultural Debt intranet on the day a proposal is received or
Waiver and Debt Relief Scheme 2008 disposed off. This is mandatory since this data will
Agricultural Debt Waiver and Debt Relief be the base to decide on the speed and efficiency of
Scheme 2008 announced by the Government of all credit officers and will be available to Circle
India have been implemented by our Branches and Heads / General Managers and ED/ CMD for
there is a need for focussed attention to the viewing and giving necessary directions.
following few functional areas. (ADV.99/2008-09 dated 27.09.2008)
¾ The exercise of issue of waiver certificates to CRA
beneficiary farmers should be taken up on war
footing and completed immediately, if not done Annual Skill Building Programme (SBP) for 2008-09
already. HDFC SLI has rolled out the Annual Skill
¾ Steps are to be taken up to obtain undertaking Building programme for the current year (2008-09)
letters and first instalment of their share of effective from 7th April 2008 to 31st March 2009
payments from the farmers eligible for relief and the same has been approved by our Bank. On
under the scheme. achieving the targets the winners will be eligible for
an offsite Skill Building Programme. There are two
¾ The entire exercise of Waiver/OTS is a policy annual SBPs for the current year:
initiative of the Government to mitigate their
1. Annual SBP for Circle Heads & Nodal Officers.
debt burden. Branches should extend fresh
credit to all eligible waiver beneficiaries as well 2. Annual SBP for Branch Managers & Specified
as OTS beneficiaries. Notwithstanding the Persons.
above, it should be our endeavour to scout for
fresh farmers also in the process. Full details of the SBP and annual targets
are given in the Annexure A & B to the circular,
¾ To ward off any possible erosion in repayment respectively. Branches should aim to surpass both
ethics amongst non beneficiary farmers, they Premium as well as Commission Targets (net of
should be properly counseled. Their credit Clawback Commissions, if any).
requirements should also be assessed and
(CRA.14/2008- 09 dated 02.07.2008)
addressed simultaneously.
8 8
 JULY-SEP 2008
Co branded Mediclaim Policy “Arogya Raksha “ – Cover with the sum insured at 48 times of salary
Improved features to make it more attractive. (Basic + DA), covering all the employees of our
The MOU with the United India Insurance Bank has been renewed for a further period of one
Company governing the issue of Arogya Raksha year from 02.08.2008 with UNITED INDIA
Policies has been renewed for a further period of INSURANCE CO. LTD and the policy No is :
one year from 01.10.2008 up to 30.09.2009 GPA Policy No. 010500 / 42 / 08 / 05/ 00000007
incorporating major improvements as given below
(Fresh/Renewal proposals received at the Branch on The salient features of the Policy are
or after 01.10.2008 up to 30.09.09 will be covered mentioned in HO/PRNL. Circular No.36/2002-03
under this Renewed MOU). dated 05.08.2002. For further details / clarification
regarding the terms and conditions in the policy, the
1. Premiums: Premiums have been reduced by matter may be referred to the Insurance Company.
amounts up to 7.25% for Plan B.
The full address of the Divisional Office of
2. No increase: Premiums in respect of Plan A &
Plan C remain unchanged. the United India Insurance Co. Ltd., to whom
requests for claim forms and all correspondence
3. Increased coverage: Sum Insured under Plan C should be addressed, is as follows :
from the existing level of Rs. 3.00 lacs stands
increased to Rs.5.00 lacs as follows: UNITED INDIA INSURANCE CO. LTD.,
• Policyholders migrating from Plan B to Plan C on DIVISIONAL OFFICE NO. 010500,
completion of 65 years will continue to have the “CATHOLIC CENTRE”
same amount of Sum Insured , even if it (as was in
Plan B) in Plan C also. 64 ARMENIAN STREET,
•For existing Policyholders in Plan C, enhancement Chennai- 600 001
on renewal is allowed as in the case of other Plans 2538 9793 & 2538 9794
(to the next higher slab- e.g. . from Rs.3.00 lacs to
3.50 lacs) CRA /33 /2008-09 dt. 27.09.08. Fax : 2538 6298
4. Maximum eligible age of Son for coverage In the case of any unfortunate event of our staff
increased to 25 years (from the existing 21 years). members meeting with accident, the procedure as
Daughters continue to be covered in the detailed in the circular may be adopted.
Parent’s policy till their employment/marriage (HRM.45/2008-09 dated 11.08.2008)
irrespective of their age.
Implementation of Performance Based Incentive
5. In case of treatments on Package Deal basis,
policyholders have to bear 20% of the cost if he/she The PERFORMANCE BASED INCENTIVE
is above 65 years of age. All insured persons above Scheme was formulated for the first time, which
60 years but below 65 years of age will be will be implemented from the year 2008-09, with
benefited. the objective of identifying and motivating the key
6. Personal Accident Death (PA) cover continues to contributors of growth for the Bank. Considering
be available for all Policies as follows: various suggestions and responses received from
the field level functionaries, it was felt that a
@100% of Sum Insured Policyholder; @ 50% of Scheme could be implemented only after making it
Sum Insured for Spouse and @ 25% of Sum more transparent giving weightage for key /
Insured for each child. essential aspects.
The Premium rates given in the Annexure to this The criteria and methodology for selection
circular are inclusive of PA premiums. of staff for award of cash incentive are as given in
7. Policyholders migrating from Plan B to Plan C the circular.
on completion of 65 years , will continue to enjoy Branches which achieve 80% of the target
the same benefits in Plan C also as was in Plan B.
in (1) Deposits & (2) Advances and any one of
(CRA.33/2008-09 dated 27.09.2008)
(a) NPA management,
HRM (b) Gross profit and
Renewal of Group Personal Accident Insurance (c) Non interest income
Policy for all our staff members under staff welfare
scheme will be eligible for consideration of incentive
subject to growth in core deposits, which should not
Annual Group Personal Accident Insurance be less than 10%.
Policy providing round the clock Personal Accident

9
 Recollect
From the Branches selected as above, top one being engaged over mobile phone, could lead to
Branch in each Circle in each of the following possible loss or perpetration of frauds. Thus usage
seven parameters will be eligible for award of cash of mobile phones at work place is against the basic
incentive: tenets of Preventive Vigilance which we are bound
to follow in letter and spirit.
1. Weekly average Core deposit
(HRM.48/2008-09 dated 02.09.2008)
2. Weekly average CASA (Current deposits and
SB put together) “Health checkup” for all the staff members who are
3. Weekly average gross advances above 45 years of age and their spouse

4. Weekly average agriculture advances The staff members who are above 45 years
of age and their spouse are eligible for Health
5. Weekly average SME advances Check up with a maximum amount of Rs.1500/- for
6. Disbursement under Structured Loan Product self and Rs.1000/- for spouse, every Calendar year.
7. Non interest income Reputed health checkup laboratories, like
M/s Ehrlich Laboratory (at Chennai and
The maximum incentive payable for the best Hyderabad) & DOC Medical services Pvt. Ltd (at
performing Branches is:
Chennai) are willing to offer the package of
Rural Branches Rs.50,000 medical checkup. Circle Offices to have tie up with
Semi urban Branches Rs.75,000 reputed hospitals/diagnostic centers for the purpose.
Urban Branches Rs.1,00,000
Metropolitan Branches Rs.1,50,000
The names of such approved hospitals / Diagnostic
Any clarification or resolution of disputes centers will be intimated.
shall be referred to Chairman & Managing Director Staff members may avail the health
and his decision will be final. checkup facility from such hospitals/laboratories
Cash incentive Scheme itself is a new by obtaining an authorization letter from
concept to motivate the performance involving all HO/concerned CO and the Bank will make the
members of the Staff. It is therefore expected that payment directly.
Branch will compete wholeheartedly to become In centers where there are no tie up
eligible under the Scheme. arrangements, the staff members may undergo
(HRM.46/2008 -09 dated 14.08.2008) health checkup in any other reputed diagnostic
center covering all the medical tests given in the
Mobile phones-rendering customer service immobile annex and they will be required to produce the
Being part of service industry, direct relevant bills in original with medical reports
contact and communication with customers/general thereof.
public form an integral facet of our work. Our work Staff and spouse have to undergo the
environment, unlike in some sectors, is under
diagnostic test simultaneously. No piecemeal test
constant open surveillance and every action of ours
or part payment will be considered. The bill shall
is bound to have its effect on the overall image of
be for the package only. The checkup can be
the Bank and public goodwill for us.
undertaken on holidays or by availing sanctioned
One of the factors that impede customer leave.
service and also is a source of distraction is the
(HRM.54/2008-09 dated 09.09.2008)
usage of Mobile Phones at work place. Mobile
Phone, as an important channel for communication “Reimbursement of Health Insurance Premium” to
is not disputed, but its usage, especially when we retired staff members
are engrossed in work warranting utmost focus,
may prove to be a deterrent. The Bank will reimburse health insurance
premium amount to a maximum of Rs.2516/- up
Since we work in an open office to the age of 65 years and Rs.5336/- above the
environment, it must also be understood that when age of 65 years, annually (for a cover of Rs.1.00
we use mobile phone during office hours, it is a Lakh as in the case of “Arogya Raksha Policy” of
source of distraction to fellow staff members too. M/s United India Insurance Co Ltd., presently),
Taking into account the sensitiveness of our work, to all staff members retired on superannuation
especially when we deal with monetary
subject to the following conditions:
transactions, even a slight distraction due to our
1010
 JULY-SEP 2008
9 The scheme is effective from 29.08.2008 for essentials, leading to aberrations which can be
the following: otherwise avoided.
¾ Taking fresh Health insurance policy. It is not mere work that will lead us to
results. It is working with a team spirit and
¾ Existing Health insurance policy renewed on cohesion that will help us reach the unreachable.
or after 29.08.2008. Let us work together, with cheer and congeniality
9 A retired staff member along with his/her so that nothing shall deter us from reaching the
unreachable.
spouse is free to take a common health
insurance policy from any of the public or Success is not determined by how we work,
private insurance company. but how well we work together.

9 Reimbursement of Rs.2516/- / Rs.5336/- (HRM.61/2008-09 dated 23.09.2008)

towards Annual premium will be made subject FX
to production of proof of health insurance
Revised Service charges on Forex Transactions
policy newly taken / renewed.
In view of the present increased cost of
9 Retired Staff are free to take insurance services and to augment our income, the services
coverage of higher amount by paying charges have been revised as given in Annexure I to
differential amount beyond Rs.2516/- / III for all Forex Services. Branches shall implement
Rs.5336/- as the case may be. the revision with effect from 1st September 2008.
9 The present annual medical aid of Rs.1500/- Branches may take note of the following
per annum will continue to be paid for all the major changes in the structure of revised service
staff members retired on superannuation. charges.
The retired staff members need to apply o The revised charges are inclusive of
for reimbursement of insurance premium in the Service Tax and Educational Cess
prescribed format furnished in the annex to this o A three-tier system of Service Charges for
circular to HO/HRM Department through the Individuals, non-individuals and special
nearest branch to their residence. The eligible category of customer for basic services
amount, on sanction, will be credited to their SB such as Remittance facilities and collection
account directly. facilities has been newly introduced, in line
with RBI suggestion to ensure
(HRM.55/2008-09 dated 09.09.2008) reasonableness of bank charges for the
identified 27 basic banking services.
Computer Loan to Staff Members.
(FX.09/2008-09 dated 16.07.2008)
A Scheme for sanctioning Computer Loan
to staff members was introduced by HO:CPGD Loans to Non-Residents / third parties against
vide circular no. Adv/29/95-96 dated 30.05.1995 security of NRE / FCNR (B) deposits
and Adv/68/99-2000 dated 05.10.1999. The
Many branches are still sanctioning /
Scheme is made applicable to all Employees for the
renewing existing loans against NRE and FCNR
purpose of purchase of new personal computer with
(B) deposits in excess of Rs. 20 lacs, which is in
or without application software, printers, modem
contravention of RBI guidelines. Some of the
and other electronic accessories from established
branches are using the product codes assigned for
dealers.
loans against domestic deposits while sanctioning
It is decided to include Laptop also under loans against NRE / FCNR (B) deposits.
the existing Computer Loan Scheme. Please note
Specific product codes have been assigned
that the other terms and conditions remain in the CBS with cap of Rs. 20 lacs on the amount
unaltered. and loans against NRE / FCNR(B) deposit should
(HRM.57/2008-09 dated 16.09.2008) necessarily fall within these product codes.
Branches should use only the related product codes
Harmony at work place- Key to success specified for the type of transaction while
Togetherness at work place and an overall disbursing loan against NRE / FCNR (B) deposits.
compatibility are the fundamentals of many success Using general LAD product for domestic
stories. It is unfortunate that in some of our deposit is prohibited for disbursal of loans against
branches/offices scant respect is given to these

11
 Recollect
NRE / FCNR(B) deposits. Circle offices are The above are only select guidelines. Field
advised to monitor and ensure strict compliance. level functionaries are advised to peruse the Export
(FX.11/2008-09 dated 26.07.2008)
Credit Insurance Renewal Letters and Export Credit
Insurance Bonds, which contain the features of the
Renewal of Export Credit Insurance for Banks ECIB Export Credit Insurance and also the important
(WT-PC) No.5029 and ECGC for Banks ECIB (WT PS) procedural steps that the Bank has to take in respect
No.119 by ECGC from 01.07.2008 to 30.06.2009 of handling export accounts, enclosed to this
circular.
Export Credit Guarantee Corporation of
India Ltd. (ECGC) has renewed the captioned ECIB (FX.20/2008-09 dated 17.09.2008)
(WT-PC) and ECIB (WT PS) for a further period of
GENL
one year from 01.07.2008 to 30.06.2009. The
salient features / terms and conditions of the Levying of cash handling charges at branches –
renewed ECIB (WT-PC) and ECIB (WT PS) for the Revised (Enhanced) rates.
current year are abridged in the circular. For full A cost benefit analysis was done on the cost
operational details, please be guided by the terms of cash handling and our Bank has decided to
and conditions contained in the Renewal Letter and enhance the levy of cash handling charges for bulk
Export Credit Insurance Documents of ECGC, receipts as follows.
copies enclosed to this circular.
Cash remittances from Current Account /
Claims coverage under ECIB (WT-PC) for OD / OCC customers @ Rs.10/- per section from
the current period 11th section onwards.
The normal percentage of loss payable by the Corporation as a Cash handling charges are inclusive of
claim is:
75% for PC default upto Rs.488.12 lakhs; and service tax and will be effective from 01 October
65% for PC default above Rs.488.12 lakhs 2008.
However, in respect of packing credit advances granted to Small
Scale exporters (Annual Export turnover not exceeding Rs.50 lacs) These charges should be uniformly
the cover available will be 90%. followed in respect of all customers. Under
Claim coverage under ECIB (WT PS) for extraordinary circumstances when exception is
the current period warranted, Circle Head should take up with HO /
Banking Operations Department justifying the case
Policy Holders* – 90% Non-Policy Holders – 60%
Associates of Policy Associate of Non-Policy Holders – with cost benefit analysis.
Holders – 60% 50%
Branches should display the schedule of
Some of the Salient features:
charges prominently in the Banking Hall near cash
1. As per Whole-turnover principles of ECGC, no account should counter for the information of all customers.
be excluded without the prior permission of ECGC.
2 Premium rates: (GENL.31/2008-09 dated 30.08.2008)
(i) For Pre-shipment advances (PCs):- Premium rate applicable
for all outstanding advances including deemed export credit will MIS Policy 2008-09
be 6 paisa per Rs.100/- per month on the average daily product. The objective of the MIS is to meet the
This premium is to be debited to the Exporter’s Account.
information requirements of the Bank and also
(ii) For Post-shipment advances (PS):- Branches shall remit the
premium at the rate of 5.5 paisa per Rs.100/- per month on the
support decision making. The MIS Policy is
average daily product. The premium under ECIB (WTPS) designed to cater to the information requirement of
payable by the Branches for our FBP Advances (FBN is not the Bank without burdening the branches to furnish
covered under ECGC) should be debited to the expenditure Head the information already available in the CBS server.
“Guarantee Fee Paid Account”. This should not be recovered
from the exporter’s account. MIS Policy has been formulated with the
3. Our Bank has also covered post-shipment credits (FBP- objectives of auto generation of returns,
DP/DA) against bills drawn on the Associates of the exporter rationalization of existing formats wherever
customer under ECIB (WTPS). Associate means an overseas necessary, helping the concerned departments to
subsidiary or an associate of the exporter client of the insured in mitigate the risk element, etc.
which the exporter client has financial interest and / or
operational / managerial control. Premium for the bills drawn The duties and responsibilities of the
on associates of the Exporter (FBP-DA/DP) be also debited to user/supervising Departments at Head Office,
the expenditure head, “Guarantee fee paid A/c”. Like other post- Circle Offices, Branches and administration of MIS
shipment advances, the premium should not be recovered from are codified under Policy Document on MIS, as
the exporter’s account. detailed in the enclosed Policy to the circular.
(GENL.32/2008-09 dated 12.09.08)
1212
 JULY-SEP 2008
ADMN who received the application at the initial stage,
whether the Branch Manager or the Circle Head
Master Circular - 2008 on Detection and Impounding will be responsible and action will be initiated
of Counterfeit Notes against him.
Master circular 2008 on Detection and (ADMN.31/2008-09 dated 21.07.2008)
Impounding of Counterfeit Notes is a compilation
of the instructions contained in the circulars issued Maintenance of Visitors Book at Branches
by RBI on the above subject, which are operational Branches / offices should introduce a
as on 01.07.2008 and is given as annexure to this separate Visitors Book to enable the visiting
circular. Executives / Officials / VIPs to record their
All branches / currency chests should comments / observations.
adhere to the RBI guidelines on Detection and Branches/Offices shall also make a record
Impounding of Counterfeit Notes. of the action taken by them on the
(ADMIN.29/2008-09 dated 18.07.2008) comments/observations made by the Executives
/Officials/Dignitaries. It may also facilitate the
Master Circular – Facility for Exchange of Notes and Circle Heads during their Branch Visits to record
Coins their observations for their follow-up for
The master circular on Facility for compliance during the next visit.
Exchange of Notes and Coins is given as annexure The Book should be put to use by the
to the circular. branches immediately on receipt from their Circle
All branches / currency chests are advised Office. The Visitors Book shall form part of the
to adhere to the RBI guidelines while extending the permanent document/record of the branch and be
facility for exchange of notes and coins. made available to the visiting Executives/Officials/
Dignitaries.
(ADMN.30/2008-09 dated 18.07.2008
(ADMIN.32/2008-09 dated 23.07.2008)
Right to Information Act, 2005
Inspection and Audit Policy 2008-09
The important aspects of the Right to
Information Act 2005 and consequences thereof for Main objectives of the inspection and audit
non-adherence of the provisions of the Act policy are:
pertaining to disposal of applications as given 1. Ensuring timely adherence to systems and
below: procedures.
• Applications received by PIO directly are to be 2. Adoption of Risk Based Rating in
disposed in 30 days from the date of its receipt. implementation of Risk Based Internal
Audit (RBIA)
• Applications received by Circle 3. Review of control mechanism
Offices/Branches are to be disposed off by the 4. Adoption of separate IS Audit policy for
PIO at Head Office within 35 days from the system (computer) related process/technical
date of initial receipt by circle office/Branch. audit.
The branches/ Circle Offices receiving the The revised Inspection and Audit Policy
applications shall ensure that the applications approved by the Board on 17 05 2008 comes into
reach PIO within 5 days from the date of its force and will be valid up to 31 03 2009.
receipt at their end and non compliance of the
above, the penal provisions of the Act would The policy document approved by the
attract penalty @ Rs.250/- per day over the Board along with “Internal Guidelines” is given in
prescribed period for disposal of applications the Annexure to this circular and the flow chart
subject to a maximum of Rs.25000/-. mentioning the periodicity, follow up and closure of
various inspection reports, is placed in the intranet.
Central Information Commission, New
Delhi in one of its recent decisions has categorically (ADMIN.34/2008-09 dated 26.07.2008)
stated that they are not concerned with the internal
Integration of HO:Credit Policy & General Department
arrangement regarding the receipt of applications.
(CPGD) with HO:Credit Division
As far as RTI is concerned, wherever the
applications are received they have to be transferred In tune with the reforms and competition in
to the PIO within 5 days, failing which the person Financial Sector and to avoid redundancy in

13
 Recollect
functioning, with effect from 01.08.2008, HO: CBS CIRCULARS
CPGD is merged with HO: Credit Division with the Protection of our information
approval of Chairman and Managing Director. 1 ADMIN 28 10.07.08 assets and adherence to ISS
Hence the functions of erstwhile CPGD are Guidelines
distributed to other departments at Head Office like 2 ADMIN 42 07.08.08
Prevention of Fire-Fire fighting
RMD, CMD, ID, Inspection and Credit Division as measures
Availability of credit card
given in this circular. 3 ADV 70 06.08.08
receivables data in CBS help desk
All Circles / Branches have to send the Importance of Updating / Tracking
4 ADV 80 18.08.08 of Security Details of immovable
necessary statements relating to the above to be sent properties in CBS
to the respective departments. 5 ADV 81 21.08.08 NPA module implementation
(ADMIN.38/2008-09 dated 31.07.2008) Change in the accounting
procedure for Demand Drafts Paid
6 CRA 19 22.07.08
Scheme of Incentives and Penalties for Bank through “Inward Clearing Batch”
Process
Branches (Including currency chests)-Based on the
Marking Mode of Operations in
Performance in rendering Customer Service to 7 DEP 12 08.07.08
the CBS System Correctly
Members of Public. Deposit of cash/clearing cheques
8 DEP 13 08.07.08
through our on-site ATMs
Reserve Bank of India, vide its letter DCM Waiver of manual submission of
(CC) No. 1748/03.39.01/2008-09 dated September 9 GENL 21 07.07.08
statements
4, 2008 announced Introduction a ‘scheme of 10 GENL 22 08.07.08 Popularising RTGS and NEFT
incentives and penalties for bank branches based on 11 GENL 23 08.07.08
ATM – efficient management and
customer service provided by them to members of improved performance
12 GENL 25 21.07.08 RTGS and NEFT
public’. RBI had discussions with the RTGS-Smooth flow of cross
representatives of IBA and select banks having border funds to NRE Accounts-
major presence in terms of branches / currency 13 GENL 26 25.07.08
Compliance with wire transfer
chests and introduced a scheme of Incentives and guidelines
Penalties for banks (as given in the Annexure to 14 GENL 27 11.08.08 Increase In ATM Card Base
15 GENL 32 12.09.08 MIS Policy 2008-09
this circular with effect from October 01, 2008).
Hosting of Exclusive website for
All the branches / currency chests/circle 16 HRM 59 19.09.08 HRM Dept. with online facility for
PF/RWPF/Spl. Clean loans/NRW
offices should take note of the salient feature of the
17 MD/ED 5 09.08.08 Checklist for Scrutiny of VVR
scheme. Circle offices should ensure that all
branches / currency chests are adhering to the
directions of Reserve Bank of India.
Currency chests should take utmost care in
detecting forged / counterfeit notes while sorting Last numbers of circulars issued as on 30.09.2008
and preparing soiled note sections / bundles for
ADMN ADV CRA DEP FX GEN HRM MD/ED
remittance to RBI. It should be ensured that no
shortage / defective notes are allowed in the 52 102 33 34 21 37 62 5
soiled note remittances to RBI. Wherever forged /
counterfeit notes detected, FIR should be filed
immediately.
As the penalty proposed is very heavy and
since it is proposed to put the same in the public Though due care has been taken in the preparation of
domain, all the staff members dealing in currency Recollect, the version given in the circular is final.
are advised to follow the procedures as per RBI Compiled by HO: O&M Division
guidelines and avoid penalty.
Printed & circulated by HO: Circular Issue Cell
(ADMIN.49/2008-09 dated 11.09.2008)

1414
 a Volume 30 Issue 3

For Private Circulation Only

Oct – Dec. 2017 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

Contents of this issue Contents of this issue

Cir No Date Details Pg Cir No Date Details Pg
DEP Minimum Balance Requirement in Savings New Product Codes for Loans Advanced
09.10.2017 2 164 27.12.2017 6
13 Bank Account of Pensioners under DAY NULM
Procedure for preferring claim in respect of Insolvency & Bankruptcy Code-Further
15 11.12.2017 2 166 29.12.2017 delegation of powers and further 6
amount transferred to RBI under DEAF
amendments to IBC
New Savings Bank and Current Account
17 21.12.2017 product for Government Departments 2 Revision of Interest rates for Small Savings
(Central/State) and Consular Offices Schemes (5 year Senior Citizen Savings
CRA Scheme, Public Provident Fund 1968,
Deduction of Charges for non- Maintenance 12.10.2017 7
19 22.12.2017 3 51 Sukanya Samriddhi Account Scheme, Kisan
of Monthly Average Balance (MAB) in
PMJDY Accounts Vikas Patra and Special Deposit Scheme
1975)
ADV Introduction of New Product Code for IB
09.10.2017 3 National Pension System (NPS) – A
125 Clean Loan to Salaried Class (IBCLS) 54 30.10.2017 7
Contributory Pension Scheme
127 11.10.2017 Modified "IB-RENTAL" Product 3 Public Provident Fund Scheme-1968 (PPF)
55 01.11.2017 7
accounts – clarifications
Financing to Food and Agro Processing
Industries under Priority Sector – Banking Facility for senior Citizens and
128 13.10.2017 3 60 14.11.2017 7
Introduction of New Product codes, Differently abled persons
Guidelines and Clarifications Government Transactions Reporting by
67 04.12.2017 8
Interest Subsidy on Educational Loans - Agency Banks to RBI
129 16.10.2017 4
Studies Abroad Revision of Interest rates for Small Savings
Insolvency & Bankruptcy Code-the Schemes (5 year Senior Citizen Savings
134 03.11.2017 4
Mechanism applicable for Corporate Debtor 68 29.12.2017 Scheme, Public Provident Fund 1968, 8
Sukanya Samriddhi Account Scheme and
Introduction of Legal Entity Identifier for
142 15.11.2017 4 Kisan Vikas Patra)
large corporate borrowers
Fx Changes in Importer Exporter Code (IEC)
Modifications in guidelines of carpet area of 25.10.2017 8
houses eligible for interest subsidy under 15 with the introduction of GST
150 11.12.2017 5
the Credit Linked Subsidy Scheme for the Renewal of Export Credit Insurance for
Middle Income Group (MIG) under PMAY Banks - Whole Turnover Packing Credit
IBA Model Educational Loan Scheme for (ECIB-WT-PC) and Whole Turnover Post-
16 26.10.2017 9
Pursuing Higher Education in India & shipment credit (ECIB WT- PS) by ECGC -
155 13.12.2017 5 Insurance Policy period starting from
Abroad – Asset Classification of restructured
Education Loan Accounts – Clarification 01.07.2016 to 30.06.2017
GENL Incentive to Staff Members & Business
156 13.12.2017 Discount Rate for NPV and NPV working 5 11.10.2017 9
50 Correpondents (BCs) for sourcing APY
New Product Codes for Loans advanced to Issue of Non-Personalized Instant Chip
158 18.12.2017 6 54 06.11.2017 9
Joint Liability Groups (JLG) Cards
Compliance of Credit Approval Committee Modification of CIF opening screen to
160 21.12.2017 directions for stipulation of specific terms 6 58 15.11.2017 capture annual income/annual turnover and 9
and conditions fixing of threshold limit
 OCT – DEC 2017

Contents of this issue Name of the Branch, Zone, IBGA code & CBS code
Cir No Date Details Pg etc., should be entered in full

Reporting of fraud cases to Police/State Correct customer name should be given and
61 22.11.2017 CIDs/Economic Offences Wing of State 10 incorrect/blank customer name should not be
Police provided.
Revised procedure for attending to AML All the columns should necessarily be filled in and no
65 15.12.2017 10
alerts column should be left blank. Specific
Amendments in Prevention of Money recommendation from the Branch Manager for
Laundering (Maintenance of Records) closure of the account and settlement through C2C
67 28.12.2017 10
Rules, 2005 – Obtaining Aadhaar Number in the requisite column should be provided and the
for opening of Bank accounts
recommendations must not be vague. For e.g.
HRM/
HRD Cancellation / Modification of Leave duration Account may be permitted to be operated
03.10.2017 11
78 in Staff Self Service Portal
Transfer the account to the branch
Removal of Ceiling on Loan Against Claim form has to be signed by both ABM & BM
Deposits to Staff Members (both Serving
93 26.10.2017 11 under their seal (with SR.No.) and branch seal
and Retired) and Reimbursement of Outfit
and Dress Maintenance Expenses affixed. Claim form sent without signature/seal
would not be accepted.
Centralisation of sanction and disbursement
113 28.12.2017 of Festival Advance to Award Staff and 11 Claim above `.1 lakh has to be necessarily
Interest Free Salary Advance to Officers forwarded through Zonal Office with their specific
Encouragement to employees to acquire recommendation.
Professional Qualification / acumen in Only the claim form needs to be forwarded to the
107 16.12.2017 12
Information Technology as part of Skill
Department. KYC documents with request letter
Upgradation
from customer and any other documents required
Mandatory Certification for Employees
108 16.12.2017 12 for the satisfaction of the branch should be
working in Specialized areas
retained for future verification and need not be
sent to CO: Development Department.
DEPOSITS
Utmost care and due diligence should be exercised
Minimum Balance Requirement in Savings Bank
in settlement of DEAF claims and hence claims are
Account of Pensioners
to be forwarded after proper appraisal about KYC.
The requirement of maintaining any minimum
Dep.15/2017-18 dt.11.12.2017
balance in the account in which their Pension is being
credited on a monthly basis has been spared. This New Savings Bank and Current Account product
stipulation shall apply to accounts where pension of any for Government Departments (Central/State) and
Consular Offices
nature is being credited and the Pensioner is the first
named account holder, irrespective of age. In as much as Rule 114 B is not applicable to The
Central Government, The State Government and The
Dep.13/2017-18 dt.09.10.2017
Consular Offices, a separate product for Savings Bank/
Procedure for preferring claim in respect of amount
Current Account has been created with certain
transferred to RBI under DEAF
concessions in service charges. This in turn would obviate
The points to be followed by the Branches and the difficulty faced by these Departments in remitting
Zones while preferring DEAF claims to ensure processing
the collections in their accounts on account of non
the same without any delay, is appended hereunder:
availability of PAN No. The features of the product with
Only Home branch should lodge the claim. Host
terms and conditions are attached as Annexure to this
branches should not forward the claim directly to
circular.
CO: Development Department. Instead they should
redirect the same through Home branch. Dep.17/2017-18 dt.21.12.2017

2
 OCT – DEC 2017

Deduction of Charges for non- Maintenance of pertaining to the residual/unexpired period of lease
Monthly Average Balance (MAB) in PMJDY (certain period only).
Accounts
In case the property has been leased out to our
The account holder should necessarily provide Bank/ other Nationalized Banks/ PSUs/ Central/ State
consent for converting the small account into regular Govt. Undertakings/ Reputed companies, the option period
account. Hence, Banks should ensure that the application of lease may also be reckoned for the purpose of
form for account type conversion includes a specific determining the eligible loan quantum on a case to case to
option to convert small account into BSBD account after basis.

KYC compliance. Otherwise all existing small accounts Repayment:

opened under PMJDY, after KYC compliance, should be Maximum repayment period of 144 months. The
repayment shall be on Equated Monthly Instalment basis”
converted into BSBD account in general, with consent.
monthly compounding terms. Ballooning repayment can be
Dep.19/2017-18 dt.22.12.2017 considered based on cash flows during the tenor of the
loan.
ADVANCES
Security:
Introduction of New Product Code for IB Clean
Loan to Salaried Class (IBCLS) Wherever properties have been leased to Trust,
Societies, Schools, Colleges, Orphanages, Hospitals, Old
New Product codes as per the revised Rate of Interest Age Homes, Nursing Home or any other Social Sector
for IB Clean Loan to Salaried Class Scheme (IBCLS) are Infrastructure, in lieu of such properties which are
furnished below: difficult to realize in case of need, alternate property
Product CBS Default with realizable sale value of not less than 125% of the loan
Description
Code Interest Rate
amount can be obtained. Such collateral should be Non
4507 0005 CLN SAL LN CHECKOFF – MCLR 10.40%
Industrial /Non Agricultural and SARFAESI Compliant.
4507 0006 CLN SALLN NO-CHECKOF MCLR 11.00%
Authority to approve relaxations:
3302 1107 OD CLEAN SAL LOAN MCLR 1Y 12.10%
Any modification / relaxation in norms in
Adv.125/2017-18 Dt.09.10.2017 individual cases shall be permitted / approved by COLCC
(ED) for sanctions falling up to the powers of COLCC(ED)
Modified "IB-RENTAL" Product and CAC/MC for the sanctions made within their powers.
The following modifications have been made to IB Adv.127/2017-18 Dt.11.10.2017
RENTAL to make the product more attractive. Financing to Food and Agro Processing Industries
under Priority Sector – Introduction of New Product
Target Group:
codes, Guidelines and Clarifications
Owners of Freehold Property/Leasehold
property* (Commercial/ Residential) who have let out or Food & Agro Processing industries to be classified
propose to let out the property to eligible lessee/Tenants. under Agriculture – Ancillary Activities, upto a

*Lease hold property may be considered if it is owned by Central maximum limit of `.100.00 Crore per borrower from
Government/ State Government/Other Government bodies, Banking system, to be covered under Agriculture Category
subject to satisfactory legal opinion on the original lease deed are as follows:
which conveys the leasehold rights.NOC/Mortgage permission
from these authorities, is to be obtained, wherever necessary. Processing and preserving of meat.
Accepting of such lease hold property may be restricted to TIER
Processing and preserving of fish, crustaceans
I cities.
and molluscs.
Quantum of loan:
Processing and preserving of fruit and
Quantum of loan is subject to Maximum of 144
vegetables.
times of monthly rental value net of TDS (NPV base)
Manufacture of vegetable, animal oils and fats.

3
 OCT – DEC 2017

Manufacture of dairy products. Resolution and Liquidation Process for Corporate Debtors.
Manufacture of grain mill products, starches In fact Ministry of Finance / Reserve Bank of India is also
and starch products. earmarking certain high value accounts, specifically
Manufacture of other food products. advising the lenders to invoke IBC for resolution. The main
Manufacture of prepared animal feeds.
features of the IBC and vital provisions which have
The list of Agro Processing activities to be practical implications are enumerated in the Annexure as
classified under Agriculture Ancillary Activities, subject Part I, with policy guidelines in Part II, Standard
to overall exposure upto `.100.00 Crore per borrower from Operating Procedures in Part III of this circular.
the Banking System, is as per Annexure I of this circular.
Adv.134/2017-18 Dt.03.11.2017
Branches shall refer this circular for further details in
Introduction of Legal Entity Identifier for large
this regard.
corporate borrowers
Adv.128/2017-18 Dt.13.10.2017
In terms of RBI directions, Legal Entity
Interest Subsidy on Educational Loans - Studies
Identifier (LEI) code, LEI system, it is mandatory for all
Abroad
borrowers of banks, having total fund based and non-fund
Government provides interest subsidy based exposure of ₹ 5 crore and above to obtain LEI
Dr.Ambedkar Central Sector Scheme of Interest Subsidy registration which will be captured in Central Respository
on Educational Loan for Overseas studies for Other of Information of Large Credits(CRILC). This will
Backward Classes (OBCs) and Economically Backward facilitate assessment of aggregate borrowing by
Classes (EBCs). corporate groups, and monitoring the financial profile of
The claim for subsidy on educational loan for an entity/group.
studies abroad upto the moratorium period under two Hence it is imperative that branches have to
schemes namely, Padho Pardhesh Scheme and sensitize their existing large corporate borrowers having
ACSISOBCEBC has to be submitted to Government total exposures of ₹ 5 crore and above to obtain LEI as
through Nodal Bank on quarterly basis. Templates for per the time frame given by RBI as below:
both the schemes are available in Help Desk > Other
Schedule for implementation of LEI
Website > In-house Applications > Educational Loan
To be completed
>Educational loan subsidies > ACSISOBCEBC and PADHO Total Exposure to SCBs
by
PARDESH.
₹ 1000 crore and above Mar 31, 2018
The template will be opened immediately after
Between ₹ 500 crore and ₹ 1000 crore Jun 30, 2018
the end of every quarter. Branches should enter the
Between ₹ 100 crore and ₹ 500 crore Mar 31, 2019
details in the template without any reminder.
Between ₹ 50 crore and ₹ 100 crore Dec 31, 2019
Basic details regarding both the subsidies are
Borrowers who do not obtain LEI as per the
given below as ready reckoner to this circular.
schedule shall not be granted renewal / enhancement of
Adv.129/2017-18 Dt.16.10.2017 credit facilities. It is also necessary that large borrowers
Insolvency & Bankruptcy Code-the Mechanism have to obtain LEI for their parent entity as well as all
applicable for Corporate Debtors subsidiaries and associates.

The Insolvency and Bankruptcy Code (IBC) was Entities can obtain LEI from any of the Local
notified on 28.05.2016. Now since August 2016 various Operating Units (LOUs) accredited by the Global Legal
provisions have been notified and our Bank has started Entity Identifier Foundation (GLEIF) – the entity tasked

using this effectively in High Value Accounts. As on date to support the implementation and use of LEI. In India,
LEI code may be obtained from Legal Entity Identifier
only NCLT have been notified to deal with the Insolvency
India Ltd (LEIIL), a subsidiary of the Clearing Corporation

4
 OCT – DEC 2017

of India Limited (CCIL), which has been recognised by loan, taking into account spells of unemployment /
Reserve Bank as issuer of LEI under the Payment and underemployment, without treating the exercise as
Settlement Systems Act, 2007 and is accredited by the restructuring, subject to appropriate inclusion of the
GLEIF as the Local Operating Unit (LOU) in India for same in terms and conditions of the loan
issuance and management of LEI. agreement. However, banks would be required to
maintain a higher provisioning of 5% during the said
The rules, procedure and documentation
additional moratorium period and one year thereafter.
requirements may be ascertained from LEIL. (https://
Any other concession or moratoriums (exceeding those
www.ccilindia-lei.co.in)
specified in the original sanction) for a borrower under
Adv.142/2017-18 Dt.15.11.2017 financial difficulty would be treated as restructuring
Modifications in guidelines of carpet area of houses and attract the prudential norms thereof.
eligible for interest subsidy under the Credit Linked The facility of extended repayment period and
Subsidy Scheme for the Middle Income Group increased number of moratoria for repayment may be
(MIG) under PMAY extended to existing borrowers whose accounts are
To further enhance the scope, coverage and classified as ‘standard’, subject to a Board approved
outreach of the CLSS-PMAY Scheme, Union Cabinet has non-discriminatory policy in the matter and the
approved the increase in the carpet area of houses conditions stipulated above. Banks may arrange to
eligible for interest subsidy under the Credit Linked disclose the features of the Scheme to all the existing
Subsidy Scheme (CLSS) for the Middle Income Group borrowers who have availed such loans.
(MIG) under Pradhan Mantri Awas Yojana (Urban) as
Adv.155/2017-18 Dt.13.12.2017
below:
Discount Rate for NPV and NPV working
MIG-I MIG-II
Parameter
Revised Norms Revised Norms Reduction in the rate of interest and/or
reschedulement of the repayment of principal amount, as
Carpet Area* Upto120 Sq.mt Upto 150 Sq.mt
part of the restructuring, will result in diminution in the
*Carpet Area is defined as the area enclosed within the walls,
actual area to lay the carpet. This area does not include the
fair value of the advance. Such diminution in value is an
thickness of the inner walls. economic loss for the Bank and will have impact on the
bank’s market value of equity. It is, therefore, necessary
The above modifications in Carpet Area are
for banks to measure such diminution in the fair value of
effective w.e.f. 01.01.2017 i.e., date of launch of CLSS-
the advance and make provision for it to the debit to
PMAY for MIG. The CLSS for MIG is effective upto
Profit and Loss account. Such provision should be held in
31.03.2019.
addition to the provision as per existing provisioning norms
Adv.150/2017-18 Dt.11.12.2017 on advances and in an account distinct from that for
IBA Model Educational Loan Scheme for Pursuing normal provisions.
Higher Education in India & Abroad – Asset
Classification of restructured Education Loan For this purpose, the erosion in the fair value of
Accounts – Clarification the advance should be computed as the difference
between the fair value of the loan before and after
The “Revised IBA Educational Loan Scheme” for
restructuring. Fair value of the loan before restructuring
Pursuing Higher Education in India & Abroad to member
will be computed as the present value of the cash flows
banks for adoption and implementation by banks, is as
representing the interest at the existing rate charged on
under:
the advance before restructuring and the principal,
Quote: discounted at a rate equal to actual interest rate charged
to the borrower before restructuring. Fair value of the
Banks may allow upto three spells of moratorium (not
loan after restructuring will be computed as the present
exceeding six months each) during the life cycle of the
value of cash flows representing the interest at the rate

5
 OCT – DEC 2017

charged on the advance on restructuring and the principal, Min & Maximum limit amount :
discounted at a rate equal to actual interest rate charged Min. 1 and Max 500000/-
to the borrower before restructuring. Rate of Interest :
Thus NPV calculation involves 3 interest rates viz., MCLR 1Yr + Spread (2.75 %) At present 11.10%

Pre restructuring interest rate: The interest rate Processing charges : NIL
which prevailed just before restructuring with impact on Compounding / Capitalization :
subsequent changes in the BPLR/Base Rate/ MCLR, as the Half yearly for JLG Agri and JLG Allied Agri
case may be. This is done on the principle that had the
Repayment frequency :
account been not restructured and continued as per
Monthly for JLG Non Agri
original terms, what would be the applicable interest rate
based on the present scenario. Adv.158/2017-18 Dt.18.12.2017
Compliance of Credit Approval Committee
Post restructuring interest rate: The interest rate directions for stipulation of specific terms and
applicable after restructure, with subsequent changes to conditions
the interest rate.
All the specific terms and conditions should be
Discounting rate: Both pre restructure and post discussed with the client and finalized before
restructure cash flow will be discounted at the same rate, recommending the proposal to the sanctioning authority.
ie rate equal to actual interest rate charged to the Accordingly a Term Sheet should be obtained with due
borrower before restructuring. In cases where the acknowledgement of the customer and submitted along
existing credit facilities to a borrower carry different with the proposal.
rates of interest, the weighted average interest rate
Adv.160/2017-18 Dt.21.12.2017
(with share of each credit facility in the total outstanding
NEW PRODUCT CODES FOR LOANS ADVANCED
of the borrower as on the date of restructuring being UNDER DAY NULM
used as weights) may be used as the discounting rate.
At present we have a product only for NULM to
This discount rate may be used to discount both the pre-
individuals namely 5717 0001. NULM to groups and SHGs
restructuring cash flows as well as post-restructuring
are generally opened under SHG Non Agri. With a view to
cash flows.
identify accounts opened under DAY NULM new products
Branches shall refer this circular for further have been developed for NULM to groups and SHGs as
details in this regard. detailed below:
Adv.156/2017-18 Dt.13.12.2017 Capitalization/
Product Code & Product Loan Loan Amount in
ROI Repayment
Name Type Term `.
NEW PRODUCT CODES FOR LOANS ADVANCED Frequency

TO JOINT LIABILITY GROUPS (JLG) 5717 0001 Term Min 12 Min 1.00
Loan Max 74 11.10 Monthly
NULM NON AGRI Max 2.00
lakh
JLG loans sanctioned under all categories namely INDL MCLR 1YR

Agri, Allied Agri and Non Agri are opened under the 5717 0002 Term Min 12 Min 1.00
11.10 Monthly
NULM SHG MCLR 1YR Loan Max 74 Max 10 lakh
Product code 5707 0001 (RYOT MITRA TFG MCLR 1YR).
5717 0003 Term Min 12 Min 1.00
Separate products for JLG Agri, JLG Allied Agri and JLG NULM GR MCLR 1YR Loan Max 74 Max 10 lakh
11.10 Monthly

Non Agri have been developed as detailed below: 12 Max limit

5808 0003 months 10 lakh
PRODUCT CODE PRODUCT NAME NULM SHG MCLR 1YR
CC
renewable
11.10 Monthly
annually
5707 0002 JLG AGRI MCLR 1 YR
5707 0003 JLG ALLIED AGRI MCLR 1 YR Adv.164/2017-18 Dt.27.12.2017

5707 0004 JLG NON AGRI MCLR 1 YR Insolvency & Bankruptcy Code-Further delegation
of powers and further amendments to IBC
Other features of the products:
Pursuant to IBC and The Banking Regulation
Maximum & Minimum Term month :
(Amendment) Act 2017, RBI has earmarked high value
Min 6 months and Max 60 months
NPA accounts and advised the Lender Banks to invoke IBC

6
 OCT – DEC 2017

for resolution. This is being implemented by Banks as National Pension System (NPS) – A Contributory
Leader of Consortium or as individual Bankers.
Pension Scheme
Branches being first point of interaction to the
Formation of JLF/CAP etc., are for the purpose
subscribers of National Pension System (NPS) are
of rectification, restructuring and/or recovery to
required to assist them by accepting the request, issuing
optimize the results. In the guidelines dated 05.05.2017,
receipt number and forward the same to Government
RBI has clarified that CAP may also include resolution by
Business Service Branch (GBSB) for completion of the
way of flexible structuring of project loans, change in
request in Central Record Keeping Agency system.
ownership under SDR (Strategic Debt Restructuring),
S4A (Scheme for Sustainable Structuring of Stressed Wide publicity shall be given among the
Assets) and/or other recovery mechanism. Lenders have prospective subscribers by following the below mentioned
to adhere to the time lines prescribed in the frame work strategies and generate awareness about the same:
for finalising and implementing CAP. All Corporate MSME units to be contacted and their
RBI has categorically made it clear that the workmen/staff enrolled under NPS Scheme
Banks, while voting on final proposal before JLF should be All PMJDY account holders and SHG group members
should be closely followed up for enrolment under this
unambiguous and unconditional and the Board of respective
Scheme
Banks have to empower their Executives to implement the
Local Offices of the Private Companies, Corporate,
JLF decision without requiring further approval from the
Schools/Colleges, Traders and their employees to be
Board, in order to ensure that timely decisions are taken
contacted regularly to achieve 100% success of the
and implemented. Scheme
Adv.166/2017-18 Dt.29.12.2017 Exhort to adopt local strategies applicable to their
environment and implement the same for registering
CRA large number of enrolment under NPS.
Revision of Interest rates for Small Savings The salient features of NPS are given on PFRDA
Schemes (5 year Senior Citizen Savings Scheme, website www.pfrda.org.in, NPS Trust website
Public Provident Fund 1968, Sukanya Samriddhi www.npstrust.org.in and CRA website
Account Scheme, Kisan Vikas Patra and Special https://npscra.nsdl.co.in/index.php.
Deposit Scheme 1975)
CRA.54/2017-18 Dt.30.10.2017
The interest rates applicable for the various
Public Provident Fund Scheme-1968 (PPF)
Small Savings Schemes are reproduced below: accounts – clarifications
Rate of Rate of
Compoundi “Government of India has notified that:
Interest Interest Q3
Scheme ng
Q2 (July - (Oct – Dec
frequency provided that if a resident who opened an account under
Sep 2017) 2017)

5 Year Senior Citizens 8.30 % 8.30 % Quarterly

this scheme, subsequently becomes a non Resident during
Savings Scheme (SCSS) @ and paid the currency of the maturity period, the account shall be
Public Provident Fund 1968 7.80 % 7.80 % Annually deemed to be closed with effect from the day he becomes
Kisan Vikas Patra (KVP) 7.50 % 7.50 % Annually a non-resident and interest with effect from that date
shall be paid at the rate applicable to the Post Office
Sukanya Samriddhi Account 8.30 % 8.30 % Annually
Scheme (SSA Scheme) Saving Account up to the last day of the month preceding
the month in which the account is actually closed”.
@ Please Note that the Rate of Interest payable for 5 year
SCSS deposits is the rate at which the deposit is opened. CRA.55/2017-18 Dt.01.11.2017
i.e., the date of opening of that particular account will Banking Facility for senior Citizens and Differently
determine the ROI payable till maturity. (SCSS accounts abled persons
opened between 01.10.2017 and 31.12.2017 will earn interest
at 8.30% till maturity). Branches are required to put in place appropriate
mechanism with the following specific provisions for
CRA.51/2017-18 Dt.12.10.2017

7
 OCT – DEC 2017

meeting the needs of such customers so that they are of the succeeding month and those pertaining to earlier
able to avail our services without difficulty. months should be reported to RBI through a separate

(A) Branches are advised to provide a clearly identifiable statement for accounting, after being confirmed by the
dedicated counter which provides priority to ‘Senior competent authorities of concerned state government.
Citizens’ and people who are differently abled For Central Government transactions (electronic
including visually impaired persons. as well as in physical mode) if the transactions or any
(B) In addition to the facility of Digital Life Certificate adjustments thereof are reported after a gap of 90 days
under “Jeevan Pramaan” Scheme, pensioners can from the date of transaction, agency banks have to obtain
submit physical life certificate form at any other prior approval from concerned ministry/department and
branch other than the home branch. ensure that submit the same to RBI separately at the time of reporting
when a life certificate is submitted in any branch,
such transactions for settlement.
including a non-home branch, of the pension paying
CRA.67/2017-18 Dt.04.12.2017
branch, the same is updated/uploaded promptly in Revision of Interest rates for Small Savings
CPPC website by the receiving branch itself, to avoid Schemes (5 year Senior Citizen Savings Scheme,
any delay in credit of pension. Public Provident Fund 1968, Sukanya Samriddhi
(C) Cheque Book facility Account Scheme and Kisan Vikas Patra)
(i) Branches shall issue cheque books to The rate of interest on SCSS 2004, PPF 1968,
customers, whenever a request is received, Sukanya Samriddhi Account and Kisan Vikas Patra Scheme
through a requisition slip which is part of the for the fourth quarter of financial year 2017-18 i.e.,
st st
cheque book issued earlier. effective from 01 Jan 2018 to 31 Mar 2018 shall be as
(ii) Branches shall provide minimum 25 cheques under:
leaves every year, if requested, in savings bank Revised Rate of
Compounding
Scheme Interest Q4
account, free of charge. frequency
(Jan - Mar 2018)
(iii) Branches shall not insist on physical presence
5 Year Senior Citizens Savings Quarterly
of any customer including senior citizens and Scheme (SCSS) @
8.30 %
and paid
differently abled persons for getting cheque Public Provident Fund 1968 7.60 % Annually
books. Sukanya Samriddhi Account
8.10 % Annually
(iv) Branches may also issue cheque books, on Scheme (SSA Scheme)
requisition by any other mode as per bank’s laid Kisan Vikas Patra (KVP) 7.30 % Annually
down policy.( for example through Net Banking @ Please Note that the Rate of Interest payable for 5 year
facility. SCSS deposits is the rate at which the deposit is opened.
(D) Facilities provided to sick/old/incapacitated persons i.e., the date of opening of that particular account will
(regarding operations of accounts through determine the ROI payable till maturity. (SCSS accounts
opened between 01.01.2018 and 31.03.2018 will earn interest
identification of thumb/toe impression/mark by two
at 8.30% till maturity).
independent witnesses and authorising a person who
CRA.68/2017-18 Dt.29.12.2017
would withdraw the amount on behalf of such
Fx
customers) shall also be extended to the visually
Changes in Importer Exporter Code (IEC) with the
impaired customers. introduction of GST
(E) Branches shall provide senior citizens and
With the implementation of the GST and as a
differently abled persons form 15G/H once in a year
measure of ease of doing business, henceforth PAN of an
(preferable in April) to enable them to submit the
entity will be used for the purpose of IEC, i.e. IEC will be
same, where applicable, within the stipulated time.
issued by DGFT with the difference that it will be an alpha
CRA.60/2017-18 Dt.14.11.2017
numeric (instead of 10 digit numeric at present) and it will
Government Transactions Reporting by Agency
Banks to RBI be the same as PAN of an entity.
State government transactions (electronic as well Fx.15/2017-18 Dt.25.10.2017
th
as in physical mode) of previous month reported after 8

8
 OCT – DEC 2017

Renewal of Export Credit Insurance for Banks - The incentive for BCs will be paid by corporate office
Whole Turnover Packing Credit (ECIB-WT-PC)
through FI service provider.
No.5029 and Whole Turnover Post-shipment credit
(ECIB WT- PS) No.119 by Export Credit Guarantee The incentive may be paid for all enrollments canvassed
Corporation of India Ltd. (ECGC) - Insurance Policy from 1st August 2017, commemorating with our Bank’s
period starting from 01.07.2016 to 30.06.2017 111th Founding year.
The current ECIB (WT-PC) and ECIB (WT PS) Genl.50/2017-18 Dt.11.10.2017
Insurance policies have been renewed for a further period Issue of Non-Personalized Instant Chip Cards
of one year starting from 01.07.2017 to 30.06.2018 with Our Bank has introduced non-personalized instant
Export Credit Guarantee Corporation of India Ltd. (ECGC). EMV chip cards. The non-personalized debit cards are
The salient features and the important procedural aspects similar to debit cards issued to our customers through the
of the ECIB WT-PC and WT-PS insurance policies are welcome kit, which can be delivered to the customer
abridged hereunder and for full operational guidelines, immediately over the counter by mapping the customer’s
Branches/Zonal offices are advised to refer ECIB-WTPC, account number to the debit card number. This will reduce
WTPS renewal Letter dated 03.10.2017, ECIB Bond & the time taken for delivery of cards, as these debit cards
Schedule dated 03.10.2017 along with the annexure can be delivered instantly to the customers over the
attached to this circular. counter at the branch level itself based on the request
Branches shall refer this circular for further from the customer, cutting short the processing time for
details in this regard. personalised cards.
Fx.16/2017-18 Dt.26.10.2017 Genl.54/2017-18 Dt.06.11.2017
General Modification of CIF opening screen to capture
annual income/annual turnover and fixing of
Incentive to Staff Members & Business threshold limit
Correpondents (BCs) for sourcing APY New field has been introduced in the CIF opening
An incentive scheme has been approved to staff
screen so as to mandatorily capture annual income in case
members & BCs for mobilizing APY subscribers and the of personal customers and annual turnover in case of non-
details of the Scheme are as follows:
personal customers.
PROPOSED INCENTIVE CIF Opening:
`.50/- per enrollment after receipt of In the CIF Opening screen for individual
BCs
incentive from PFRDA normally after one customers, branches should enter the ‘Annual Income’ as
year of enrolment, plus `.25/- per APY declared by the customer in the CIF opening form.
enrollment after subscriber making payment For non-personal customers, branches should
of minimum two installments or one enter the annual turnover declared by the customer.
quarterly/half yearly installment. CIF Amendment:
`.25/- per APY enrollment after subscriber Amendment of annual income/annual turnover, if
Branches required at any later stage, should be made on obtaining
making payment of minimum two installments
declaration from the customer. The amendment should be
or one quarterly/half yearly installment.
done through the Navigation Customer Amend
Branches eligible for incentive may incur the Customer . Enter the CIF Number and select ‘Financial
expenditure by debiting the BGL 97369 XXXXX X. Details’ from the dropdown. Amend the annual
income/annual turnover, as the case may be.
Branch Managers may distribute it to staff members
The screen shots for CIF opening and amendment
as per their contribution/efforts by presenting a
are given in Annexure to this circular.
mementos /gifts. The expenditure must be debited Revision has been brought out in the Standard
only once before 10th of every month for the Operating Procedure on fixing of threshold limit, as below,
subscriptions canvassed during the previous month. taking into account the risk category and annual
income/annual turnover of the customer.

9
 OCT – DEC 2017

Customer Risk The language used in the complaint should be simple,

Threshold Limit
Type Category lucid and easily understandable without diluting the
25% of annual income with a facts.
Individuals Low minimum of `.50,000 and maximum The complaint should be specific to the incident.
of `.20.00 Lakhs. The facts and figures of the incident given in the
25% of annual income with a complaint should be authentic.
Individuals Medium minimum of `.50,000 and maximum The relevant copies of supporting documents on the
of `.15.00 Lakhs incident should be given with the complaint.
25% of annual income with a The Name and Designation of the Official who is
Individuals High minimum of `.50,000 and maximum lodging the Complainant to be furnished.
of `.10.00 Lakhs The complainant should state in the Complaint that he
1/12th of the annual turnover with is authorised to file the complaint on behalf of the
Entities Low a minimum of `.5,00,000/- and Bank.
maximum of `.50,00,000/-
The complaint on the incident of fraud should be
1/12th of the annual turnover with preferred without delay.
Entities Medium a minimum of `.4,00,000/- and
In case the Officer in-charge of the police station
maximum of `.50,00,000/-
refused to record the information, send the substance
1/12th of the annual turnover with
of such information, in writing and by Registered Post
Entities High a minimum of `.3,00,000/- and
(with A/D) to the Superintendent of Police (SP)
maximum of `.50,00,000/-
concerned.
The threshold limit will be calculated by the The relevant RBI guidelines / Bank’s Fraud Risk
system as per the table above. Account level entering of Management Policy and other circulars issued by the
threshold limit is dispensed with. Bank in this regard have to be meticulously followed.
Any transaction breaching the threshold limit Genl.61/2017-18 Dt.22.11.2017
should be looked into with extra caution and the accounts Revised procedure for attending to AML alerts
should be monitored by branches for suspicious New AML software, OMNI Enterprise AML
transactions, if any. Solution has been implemented in our Bank. Branch
Genl.58/2017-18 Dt.15.11.2017 Manager/Assistant Branch Manager can confirm the AML
Reporting of fraud cases to Police/State CIDs/
alerts by logging into the application through the URL
Economic Offences Wing of State Police
http//10.100.6.205:8080/AML. The login user ID will be
Central Vigilance Commission has informed that
“Taking into account the practical difficulties faced by SR Number of the user without check digit. Users may
PSBs in reporting such categories of cases has decided contact Zonal Office/ CO: AML Cell for the first time login
that only if staff of the Bank is involved in the fraud password. The system will prompt for the change of
cases of below `.1 lakh and above `.10000/- would need to password. The user should change the password
be reported/file complaint to the local police station by immediately after logging in.
the Bank branch concerned”. A list of such Behavioural Alert Indicators is
Certain important points which need to be taken given in Annexure-1 and the detailed procedure with screen
into account while filing FIR with the Police is enumerated shots on the new AML application is given in Annexure-2 of
below: this circular.
Complainant should go to the Police Station having Genl.65/2017-18 Dt.15.12.2017
jurisdiction over the area in which, the Branch is Amendments in Prevention of Money Laundering
situated. (Maintenance of Records) Rules, 2005 – Obtaining
The Complaint should be filed in writing with the Police Aadhaar Number for opening of Bank accounts
Authorities. Central Government has issued a Gazette
The complaint should consist the facts relating to the Notification dated 13.12.2017 extending the timeline for
incident such as: what happened, when happened, who
submission of Aadhaar number and Permanent Account
did it, what is the probable loss etc,.

10
 OCT – DEC 2017

Number till 31st March 2018, beyond which the account wages, either singly or jointly with any other
will cease to be operational till the customer submits the member(s) of his/her family.
Aadhaar number and PAN. 2. Employees retired on superannuation either singly or
Genl.67/2017-18 Dt.28.12.2017 jointly with any other member(s) of his/her family.
HRMD/ HRDD
Cancellation / Modification of Leave duration in Staff 3. Spouse of the deceased employee.
Self Service Portal 4. Spouse of the deceased retired employee (on
New facility for Cancellation of leave or superannuation)
modification of leave duration has been introduced. This Concessional Rate of Interest (half a percent
includes leave/ OD which have been authorized by the over the rate payable on the deposit) on Loan Against
sanctioning authority and the leave / OD entry which is Deposits (LAD) has been extended for Employees (both
applied and pending for sanction. Serving and Retired) without any ceiling provided the
Navigation for leave cancellation or modification: deposits are eligible for preferential rate of interest under
Staff self service portal - > Leave Management ( menu ) - > staff category.
Cancel/Modify leave (sub menu). Reimbursement of Outfit and Dress Maintenance
Expenses for all Officers in Scale VII, VI, V and Branch

Description of the functionalities: Managers in Scale IV / III / II and I has been modified as
detailed below:
1 Modification of This option can be exercised when an
Cadre Amt In `. per month
Leave duration employee wants to join the branch
General Managers 1500
/office before the completion of leave.
This option will be available for those Deputy General Manager 1000

leave records where leave start date is Assistant General Manager 800
in the past and end date is greater than Branch Managers in Scale IV 625
or equal to the current date. 500
Branch Managers in Scale III / II / I
Cancellation of This option can be exercised when an
2
Leave employee wants to cancel the leave The reimbursement shall be on a declaration
record of current or future date. basis. The above specified amount shall be paid to the debit
of Revenue Expenditure on a monthly basis, for which a new
Note :. It is reiterated that all the sanctioning authorities GL head in the name of “Reimbursement of Outfit and
act upon the leave application request immediately to avoid Dress Maintenance Expenses” will be provided. The existing
marking of Unauthorized absence. amount of `.375/- per month being paid from Welfare Fund
The detailed workflow for Modification of leave will be withdrawn for above category of Officers.
duration and cancellation of leave is annexed to this
HRMD.93/2017-18 Dt.26.10.2017
circular. Centralisation of sanction and disbursement of
HRMD.78/2017-18 Dt.03.10.2017 Festival Advance to Award Staff and Interest Free
Removal of Ceiling on Loan Against Deposits to Salary Advance to Officers
Staff Members (both Serving and Retired) and With effect from 01-01-2018, sanction and
Reimbursement of Outfit and Dress Maintenance
disbursement of Festival Advance to Award Staff and
Expenses
The concessional rate of interest in respect of Interest Free Salary Advance to Officers shall be done

advances against deposits, i.e. half a percent over the rate centrally at CO: HRM department.
payable on the deposit is available to the following The online application for sanction of Festival
categories: Advance / Interest free salary advance may be submitted
by the concerned staff by logging in into HRM Online
1. Employees of bank (confirmed or probationary)
Portal.
inclusive of permanent part-time employees on scale

11
 OCT – DEC 2017

The terms and conditions prescribed for 8. Certified Associate in Project Management (CAPM) -
FA/IFSA will be verified and valid applications will be Project Management Institute.
accepted by the system. The submitted applications are to Upon successful completion, Course fee, Cost of
be approved by ABM/BM of the branch. In case of study materials, Membership, Registration fee (if
branches manned by single officer, the IFSA application applicable) shall be reimbursed and Incentive of `.3500
submitted by the Branch Manager is to be authorized at shall be paid.
Zonal Office. HRDD.107/2017-18 Dt.16.12.2017
The approved applications will be processed at CO: HRM Mandatory Certification for Employees working in
Specialized areas
and after sanction, the amount will be disbursed to the
RBI has informed that as per recommendations of
salary account of the employees.
the “Committee on Capacity Building”, Banks should identify
The status of the submitted application and
specialized areas for certification of the staff manning key
statement of account of FA/IFSA can be viewed online
responsibilities.
through HRM online portal.
Accordingly, a policy on mandatory certification
Monthly recovery from salary will be uploaded
for officers working has been formulated in the following
centrally for the FA/IFSA disbursed at CO: HRM. Hence,
areas:
branches need not give recovery input in CPP for FA/IFSA
1. Treasury operations –Dealers, mid office operations,
accounts sanctioned at CO: HRM. However, for the
foreign exchange.
FA/IFSA sanctioned up to 31/12/2017 by
2. Risk Management – Credit risk, Market risk,
branches/offices, necessary inputs for recovery shall be
operational risk, enterprise - wide risk, information
entered by the concerned branches/offices.
security, liquidity risk.
Officers approving the FA/IFSA applications are
3. Accounting-Preparation of financial results, audit
advised to ensure that all previous outstanding amount
function.
under FA/IFSA accounts in CBS is recovered.
4. Credit Management – credit appraisal, rating,
HRMD.113/2017-18 Dt.28.12.2017
Encouragement to employees to acquire monitoring, credit administration.
Professional Qualification / acumen in Information A copy of the policy on mandatory certification is
Technology as part of Skill Upgradation annexed to this circular.
To encourage officers working in ITD/DBD to HRDD.108/2017-18 Dt.16.12.2017
acquire latest trends, skills and keep themselves abreast of
the happening in the area of their operation, Bank has
identified the following courses wherein employees can
enroll themselves and get themselves accredited.
1. Oracle Certified Associate (OCA) -Oracle

2. CCNA Routing and Switching-CISCO

3. Certified Information Security (CISM) and CRISC

(Certified in Risk and Information System Control)-
ISACA

4. Red Hat Certified System Administrator (RHCSA)-Red

Hat
Though due care has been taken in the preparation of
5. VMware Certified Associate - VMware
Recollect, the version given in the circular is final.
6. Developing ASP.NET MVC web applications-Microsoft
Compiled by CO: O & M Division
7. Microsoft Certified professional (MCP) Microsoft

12
a Volume 31 Issue 3

For Private Circulation Only

Oct – Dec. 2018 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

Cir No Date Details Pg Cir No Date Details Pg

Revamping ‘IB I-Freedom Current 5613 0002)
DEP
26
15.12.2018 Account’ - ‘Smart Account For Smart 2 NPA accounts-Valuation of Security
People 125 31.12.2018 Assets on receipt of OTS /Part Release 9
Registration of Mobile Number for SMS of Securities Proposals.
28 15.12.2018 3
Alerts CRA
nomination Facility – Introduction of the 28
06.10.2018 Aadhaar – Consent Form for linking 10
29 29.12.2018 facility online & Simplified Nomination 3
Opening of PMJDY (BSBD) accounts
facility in CBS in line with online mode 31 12.11.2018 10
without minimum balance
Unique Document Identification Number
ADV Enrollment of Pradhan Mantri Jan Dhan
90
10.10.2018 (UDIN) - Way to authenticate attested 3
Yojana(PMJDY) account holders under
documents by Chartered Accountants
34 26.11.2018 Pradhan Mantri Suraksha Bima Yojana 10
Review of SHL Accounts prior to
93 25.10.2018 4 (PMSBY) and Pradhan Mantri Jeevan
Retirement of the Employee
Jyoti Bima Yojana (PMJJBY)
Revised Guidelines of Overdraft facility 36 07.12.2018 Timely Reversal Of C2c Entries 11
96 30.10.2018 4
under PMJDY
Co-branded “Arogya Raksha Mediclaim
Capturing Aadhaar data of indvidual
Policy” with United India Insurance
farmers for extension of DBT benefits 38 12.12.2018 11
97 02.11.2018 4 Co.Ltd (UIIC) - Renewal of MOU for the
under Interest Subvention Scheme/ RBI
period upto 31.03.2020
Study on KCC sanctioned by Banks
FX Country Risk Management Policy –
Introduction of New OD Agreement to 15 05.10.2018 Changes in the risk rating of 12
99 03.11.2018 be obtained from IB CORP SB account 5
countries with effect from 30.09.2018.
holders – D135
Renewal of Export Credit Insurance for
102 22.11.2018 Review of advances under Retail Assets 5 Banks - Whole Turnover Packing Credit
(ECIB-WT-PC) No.5029 and Whole
Modification in guidelines relating to Turnover Post-shipment credit (ECIB
Retail Assets Loan Products - Specific 16 29.10.2018 12
WT- PS) No.119 by Export Credit
103 26.11.2018 exemption from submission of IT returns 5 Guarantee Corporation of India Ltd.
– sanctioning of loans to people in (ECGC) - Insurance Policy period
Sikkim starting from 01.07.2018 to 30.06.2019.
Modifications in Credit Guarantee Transmission of SWIFT outward
108 05.12.2018 6 20 13.11.2018 12
Scheme announced by CGTMSE messages
Deendayal Antyodaya Yojana – National Automation of GST on conversion of
Rural Livelihoods Mission (DAY-NRLM) 22 29.12.2018 foreign currency transactions in EXIM 12
110 07.12.2018 6
– Aajeevika – Interest Subvention Bills module w.e.f. 01.01.2019
Scheme
GENL Payment Of Pro-Rata Premium For
Deendayal Antyodaya Yojana – National 05.10.2018 13
111 07.12.2018 7 22 Enrolment Under PMJJBY
Urban Livelihoods Mission (DAY-NULM)
Interest Equalization Scheme on Pre Alteration in the name of “Qatar
115 15.12.2018 7 National Bank SAQ “ to “Qatar National
and Post Shipment Rupee Export Credit
NPAs in Staff Related Education Loans 25 05.11.2018 Bank( Q. P.S.C.) in the Second 13
117 17.12.2018 –Ensuring CIF linkage and other 8 Schedule to the Reserve Bank of
Recovery measures India Act,1934
Payment of Fees to Recovery Agents- 100150 Companies struck off from the
120 18.12.2018 Vouching procedure in CBS System- 8 Register of Companies u/s 248(5) of
reg the Companies Act, 2013- Effect on
26 26.11.2018 14
New MSME Structured Loan Product – operation of Bank Accounts of such
123 19.12.2018 9 Companies – Exercise enhanced
“IND-SME Mortgage”(Product Code -
diligence-reg
 OCT – DEC 2018

Cir No Date Details Pg DEPOSITS

27 01.12.2018 Business Correspondent (BC) Registry 14
Revamping ‘IB I-Freedom Current Account’ -
Inclusion of “SBM Bank (India ) ‘Smart Account For Smart People’
28 13.12.2018 Limited “ in the Second Schedule to the 14
Reserve Bank of India Act, 1934
Alteration in the name of “ Doha Bank A flagship product “IB i-FREEDOM” – ‘Smart
Qsc ” to “ Doha Bank Q.P.S.C” in the Account for Smart people’ with three different
29 13.12.2018 15
Second schedule to the Reserve
Bank of India Act, 1934 flavours viz., IB i-Freedom Cool, IB i-Freedom
Inclusion of “ESAF Small Finance Bank Plus and IB i-Freedom Prime with 3 sub-variants
30 29.12.2018 Limited “ in the Second Schedule of the 15 in each, providing customers the flexibility to
Reserve Bank of India Act, 1934
Re-allocation of responsibilities among choose the product relevant to their specific
31 31.12.2018 Information Technology Department 15 business needs were launched on 25.11.2015.
and Digital Banking Division
2ND option to join the Pension Scheme For a better understanding, merger of variants
HRMD to Compulsorily Retired Employees
93
26.10.2018
under the Indian Bank (Employees’)
15 under each group has been carried out and the best
Pension Regulations, 1995 of the features made available under each product
Mandatory Certification for with different average monthly balances viz.,
94 24.10.2018 employees working in Specialized 15 `50000, `100000 and `500000.
Areas
Reconstitution of Women Cell at
119 19.12.2018 16 Consequent to the revamping, the following products
Corporate Office
alone would be available for further account opening
Help Line For Dependants Of Deceased
107 03.12.2018 16 and the rest of the sub-variants would be subsumed
Employee / Pensioner
Reconstitution of Internal Complaints in the main variant. Current account products as
120 19.12.2018 17
Committee at Corporate Office mentioned here below:
ADMN Reorganization of Zones and formation
57
09.10.2018 17
of New Zone Product variant MAB @ Product
Modification in Master Circular on the
code
59 11.10.2018 Detection and Impounding of Counterfeit 17
Notes IB i-Freedom Cool `50000 2311 1361
Opening / closing / renaming / shifting of
62 15.10.2018 Branches / Offices during Quarter II 18 IB i-Freedom Plus `100000 2311 1331
FY 2018-19
Shifting of Zonal Office, Ghaziabad to
63 15.10.2018 Noida and renaming as Zonal Office, 18 IB i-Freedom Prime `500000 2311 1301
Noida
Reiteration of important guidelines on
65 24.10.2018 18
ATM / BNA Operations @ Monthly average minimum balance
TDS Rates applicable for the Financial
69 13.12.2018 Year 2018-19 – In respect of Payments 18
made by Banks All other terms and conditions as per the Circular
Reporting exceptions by ABM/Second Dep. Dep.19/2015-16 dated 25.11.2015 have been
71 14.12.2018 19
officer of the Branch retained.
Online submission of Appraisal Note/
Sanction Letter for MDL sanctions of The products being comprehensive with value added
Rs.10.00 lakhs and above to ZO
74 31.12.2018 19 services, would be available effective from
through Loan Automation Processing
System (LAPS) and online scrutiny of 19.12.2018 and field level functionaries should
sanctions by ZO capitalize on the attractive features, market
MD/ED Profit First' - directions on steps to be aggressively and garner maximum business.
01
29.11.2018 20
taken

Dep.26/2018-19 dt.15.12.2018

2
 OCT – DEC 2018

The detailed workflow for Registration / Viewing

Registration of Mobile Number for SMS Alerts / Cancellation of Nomination is furnished as
Annexure III.
Reserve Bank of India, has issued directions to the
Banks as under. All other terms and conditions as spelt out in
Circular Dep.10/2009-10 dated 23.04.2009 remain
While opening of an account banks must insist on the same.
the mobile number of the account holder. If the
account holder does not have or does not want to As Nomination facility is intended to facilitate
disclose his mobile number, the account should be expeditious settlement of claims and to minimize
opened and the fact of non disclosure of mobile hardship caused to the family members on the
number may be recorded in the Account Opening death of the depositors, all field level functionaries
Form. should endeavor to explain the benefits of
nomination to their account holders and ensure that
Branches are advised to provide only ATM cards nominations are registered in all the Deposit
facility for cash withdrawals to such customers who Accounts.
do not provide mobile numbers to the bank and not
to provide the facility of electronic transactions viz Online Nomination facility would be made available
Internet Banking, Mobile Banking etc, effective from 15.01.2019. However, the
simplified nomination facility in CBS system would
For further details please refer the circular. be effective from 31.12.2018.

Dep.29/2018-19 dt.29.12.2018
Dep.28/2018-19 dt.15.12.2018

Nomination Facility – Introduction of the ADVANCES

facility online & Simplified Nomination facility
in CBS in line with online mode Unique Document Identification Number
(UDIN) - Way to authenticate attested
documents by Chartered Accountants
As per RBI directions, the nomination should be a
rule and not an exception.
The Professional Development Committee of THE
INSTITUTE OF CHARTERED ACCOUNTANTS OF
For the ready reference of the Field level
INDIA (ICAI), has conceptualized the Unique
functionaries, a quick recap of the salient Document Identification Number (UDIN). The
features were given in the circular. committee has developed an UDIN Portal that would
facilitate a practising Chartered Accountant to
The facility of online nomination has been register the documents / certificates/ reports
introduced and consequently the process of certified / attested by him and prevent it from
nomination in CBS environment also undergoes a being used by third person(s) misrepresenting as CA
change, while registering nomination both online and members.
CBS, the need for creating CIF for nominee has
been dispensed with. On registering the certified document/ certificate/
report by the practising Chartered Accountant on
Online Nomination Facility Module, Salient the UDIN portal, a unique number called Unique
features of the Workflow, Simplified Nomination Document Identification Number(UDIN) will be
Facility in CBS (in line with Online Module) and generated for that document and the same will be
Terms and conditions for online nomination were quoted to the Banks who would be relying on the
given in detail in the circular. same.

3
 OCT – DEC 2018

Banks may verify the authenticity of the attested are not available, it should be ensured that the
documents by visiting UDIN portal at staff is advised to adjust the excess amount of SHL
https://udin.icai.org. At the home page of the said liability out of the terminal benefits and SHL
portal, there is an option of search UDIN, wherein outstanding upon such adjustment will be serviced
on stating the UDIN of the certificate/ document by the post retirement income without any default.
to be verified, the key values mentioned in the Branches shall refer the circular for full details.
documents will be generated and the same can be
matched with that certificate / document. Adv.93/2018-19 dt.25.10.2018
Revised Guidelines of Overdraft facility under
All the Branches are requested to make use of the PMJDY
said portal by insisting UDIN in all certificates/
documents/ reports certified by CAs At present, Please refer our all branch circular CRA-25/2018-
registering of documents at UDIN by the practicing 19 dated 24.09.2018 on Continuation of
CAs is recommendatory so that the end users may comprehensive Financial Inclusion Mission (PMJDY)
get familiarised with portal. It is proposed to make after 28.08.2018, with amendments in the PMJDY
the UDIN mandatory with effect from January 1, scheme.
2019.
Copy of the revised IBA guidelines and common loan
The efforts made through UDIN would prove to be application for sanctioning overdraft facility to
helpful in controlling the cases of forgery and false PMJDY accounts is annexed to the circular. The
documentation branches are advised to make note of above revised
Adv.90/2018-19 dt.10.10.2018 guidelines and proactively sanction the overdraft
facility to the eligible PMJDY account holders
Review of SHL Accounts prior to Retirement
Adv.96/2018-19 dt.30.10.2018
of the Employee

In order to ensure uninterrupted repayment of Capturing Aadhaar data of indvidual farmers

for extension of DBT benefits under Interest
the SHL post retirement of the employee, the
Subvention Scheme/ RBI Study on KCC
circular has stipulated certain condition which read
sanctioned by Banks.
as follows:

Department of Agriculture, Ministry of Agriculture

"at the time of retirement, the employee's repaying
and Farmers Welfare, has informed to capture
capacity and left over income after servicing the
Aadhaar data of individual farmers for extension
loan commitments, to be critically assessed based
DBT benefits under Interest Subvention Scheme
on verifiable income flow after retirement. If the
income is found to be insufficient to service the and for coverage of loanee farmers under the
SHL instalment after ensuring 'left over' flagship scheme of Pradhan Mantri Fasal Bima
income, the excess SHL liability (over the Yojna.
repaying capacity) has to be repaid / liquidated out
of the terminal benefits". Zones/ Branches are requested to ensure that
Aadhaar no is seeded to the Savings Bank
All the Zonal Offices have to review / revisit the account of all crop loan beneficiaries and also for
SHL Accounts of the employees falling under their all crop loans sanctioned henceforth.
purview, who are all about to retire in 3 months in
which Zonal Offices need to critically analyse
RBI has communicated their report findings on loan
the repaying capacity of the Employees post
sanctioned by Banks under Kisan Credit Card (KCC)
retirement and repayment of the loan as per
scheme and has highlighted that the operational
original sanction ticket is ensured. Wherever
flexibility of the scheme is not being utilized. Hence
sufficient pension / verifiable source of income
Branches are advised to strictly adhere to the

4
 OCT – DEC 2018

operational guidelines of KCC scheme and to ensure enable us to rectify the deficiencies as mentioned
that KCC advances are operated as per ‘Sub limits’ above including the correctness of DL of the
fixed as per cropping pattern for five years. account. The non-rectification may lead to NPA.
Hence, all Branches are requested to revisit the
term loan accounts under Retail Assets namely – IB
Adv.97/2018-19 dt.02.11.2018
Home Loan, IB Home Loan Plus, Plot Loan, HL for
Repairs and Renovations, IB Home Improve, IB
Introduction of New OD Agreement to be Home Advantage, Ind Awas, Ind Mortgage, IB
obtained from IB CORP SB account holders – Rentencash, IB Rental, Educational Loan, IB Vehicle
D135 Loan, IB Pension Loan, IB Clean Loan to Salaried
Class, Staff Housing Loan, Staff Vehicle Loan and
A new Overdraft agreement which is to be obtained other loans to Staff, ensure compliance of all terms
while sanctioning overdraft limit to the IB Corp SB and conditions of sanction ticket and carryout
customers has been prepared and the draft of the review of the accounts in time.
new Agreement named as –“Overdraft Agreement
Further it should be noted that the review has to
– IB Corp SB “ is provided as Annexure. This new
be done by the respective sanctioning authorities. A
Overdraft Agreement is numbered as D135.
compliance certificate in this regard has to be
Branches are advised to note the modifications and
submitted to the Zonal Offices by the respective
obtain this newly introduced Overdraft Agreement
Branches. Zonal Offices in turn are advised to
whenever the OD limit is sanctioned to IB Corp SB submit a consolidated certificate in respect of all
customers with immediate effect. the branches (including IRPCs) and also for the
sanctions made under the powers of ZLSCC and
Adv.99/2018-19 dt.03.11.2018 ZLCC to CO:R A&D.
Branches & ZO shall make use of following reports
Review of advances under Retail Assets available in BBMIS Site for list of accounts due for
Review / Renewal.
Reference is invited to our Circular
BBMIS > A/c Validation > Report No.639 - Review /
No.ADV/98/2018-19 dated 03/11/2018 enumerating
Renewal due within 4 month &
the need for timely review of Retail Advances.
Report No.371 – Review / Renewal Validation.
The review process would enable the Branch /
Sanctioning authority to ensure / revisit the
Adv.102/2018-19 dt.22.11.2018
following:

1) Compliance of sanction terms & conditions Modification in guidelines relating to Retail

2) Proper documentation Assets Loan Products - Specific exemption
3) Security – EM Creation / Registration of from submission of IT returns – sanctioning
MOTD (wherever applicable / mandatory) / CERSAI of loans to people in Sikkim
registration
4) Rectification / Correction of inspection To increase growth under Retail Assets Segment,
irregularities if any the following modification in the norms pertaining
5) Whether repayments in the accounts are as to obtention/scrutiny of Income Tax Returns in
per sanction terms, etc respect of people of Sikkim has been made as
6) Insurance coverage / Credit Guarantee below:
Specific exemption from submission of IT
coverage
returns – sanctioning of loans under Retail
7) Claim of Subsidy wherever eligible /
Assets to people in Sikkim:
applicable.
8) Correctness of DL wherever required.
As per Sec.10, Sub-section 26AAA of the Income
Tax Act 1961, any income which accrues or arises
Term Loan may not be classified as NPA due to Non-
a) from any source in the State of Sikkim or
review of the account. The review process will

5
 OCT – DEC 2018

b) by way of dividend or interest on securities According to the revised guideline all the women
is exempt from tax for individual, being a Sikkimese SHGs in the 250 Category I districts will be
(other than Sikkimese Woman who, after subvented to the extent of the difference between
31/03/2008, marries an individual who is not a 7% and Weighted Average Interest Charged
Sikkimese) (WAIC), subject to a maximum of 5.5%. The WAIC
for our bank for the year 2018-19 is 11.27% as
While processing proposals of products under communicated by MoRD.
Retail Assets of the applicants covered under the
above section of the Income Tax Act, it is All women SHG loan / CC accounts for limit upto Rs
permitted to accept Audited Balance Sheet-ABS 3.00 lakh in the 250 Category I NRLM districts,
(for business people) and Salary/Income certificate should be opened in the 7% product code. Branches
issued by competent Authorities (for salaried in all other districts should not open SHG loan /
class) as an alternate proof of income instead of
CC accounts in 7% product codes. If any account is
IT Returns. In addition to these, Statement of
opened in 7% product code wrongly, the same should
Bank account of the applicant(s) to be obtained for
be converted to non subvention product. Interest
verifying Business Income / Salary credit / other
subvention will be claimed only for Women SHG
income.
accounts in the 250 Category I most backward
districts.
All field level functionaries are advised to refer the
circular for complete guidelines.
Further, the SHGs will be provided an additional 3%
Adv.103/2018-19 dt.26.11.2018 subvention on prompt repayment of loan. For the
Modifications in Credit Guarantee Scheme purpose of interest subvention of additional 3% on
announced by CGTMSE prompt repayment, an SHG account will be
considered as prompt payee if it satisfies the
Recent modifications announced by CGTMSE is criteria as specified by RBI:
furnished in the circular on the following:
A template “NRLM - INTEREST SUBVENTION
1. Modification in guarantee coverage limit
SCHEME TO SHGs - (Template No.12) has been
for Retail Trade Segment
2. Modifications in Interest Rate Cap under ported in Branch MIS site.
Credit Guarantee Scheme
3. Modified Annual Guarantee Fee Structure All SHG accounts opened during the period from
4. Charging fee for using Search History 01.04.2018 to 30.09.2018 in the branches operating
Module in system in the 250 Category I most backward NRLM
5. Capturing financial data in Guarantee districts are ported in the template. Branches are
Application form
advised to mark whether the accounts are eligible
All field level functionaries are advised to take note for 7% NRLM Interest subvention. The NRLM
of the above modifications and are advised to SHGs will also be eligible for additional 3% Interest
ensure that wherever needed, claims are preferred subvention for regular repayment.
in time and adequate follow up is made to ensure
higher ratio of claim settlement. CO: RBD will claim subsidy from the nodal bank
based on the data fed by the branches in the
Adv.108/2018-19 dt.05.12.2018 template mentioned above.

Deendayal Antyodaya Yojana – National Rural Branch Managers of the concerned branches are
Livelihoods Mission (DAY-NRLM) – Aajeevika
advised to ensure that all eligible accounts are
– Interest Subvention Scheme
marked in template 12 of branch MIS. Zonal
Offices are requested to follow up with the
RBI has communicated the modified clauses for the
branches for completion of the exercise within the
year 2018 - 19 on Interest Subvention Scheme
stipulated time and report compliance to CO:RBD.
under DAY – NRLM.
In case the branches feel that any eligible accounts
are not found in the template, details of such

6
 OCT – DEC 2018

accounts should be furnished to CO.RBD in the Branches / Zones are requested to ensure that all
format through their respective Zonal Offices: accounts eligible for interest subvention under DAY
– NULM are opened under NULM products. Please
S. Name of Bran Name Loan SB refer circular ADV 164/2017-18 dated
No the Zone ch of the Accou Accou 27.12.2017 for products under NULM. If any
SHG nt No nt No account eligible for interest subvention under
NULM is not opened in the products mentioned in
the circular, branches are requested to change the
All requisite care should be taken to ensure that no
product to NULM product.
eligible account is left out.
Adv.111/2018-19 dt.07.12.2018
Adv.110/2018-19 dt.07.12.2018
Interest Equalization Scheme on Pre and Post
Deendayal Antyodaya Yojana – National Shipment Rupee Export Credit
Urban Livelihoods Mission (DAY-NULM)
Attention is drawn to our CO Circular FX-54/2015-
Reference is invited to the circular CIR-17- 16 dated 14/12/2015 wherein, we have
18/ADV_62_ANNEX.pdf on Deendayal Antyodaya communicated the extension of Interest
Yojana – National Urban Livelihoods Mission (DAY- Equalisation Scheme on Pre and Post shipment
NULM). Rupee Export Credit effective from 1 st April 2015
RBI, has communicated the guidelines on DAY – for 5 years based on RBI’s Circular –
NULM which have been amended by Ministry of DBR..Dir.BC.No. 62/04.02.001/2015-16 dated
Housing and Urban Affairs, Government of India, 4.12.2015.
and the changes in the relevant clauses are as
follows: The operational procedure for claiming
reimbursement states that “Bank shall reduce the
Sl No. of the interest rate charged to the eligible exporters as
Clause in the per the extant guidelines on interest rate on
Master advances by the rate of Interest equalization
Modified guidelines 2018 - 19
Circular on provided by Government of India”.
DAY – NULM
(2017) It is observed that some branches are charging ROI
5.1 All Scheduled Commercial Banks as per the sanctioned rate without reduction in the
(SCBs) and Small Finance Banks rate of Interest equalization provided by
which are on the core Banking Government of India and reimbursement is given to
Solution (CBS) platform would be the eligible customers as and when the claim is
eligible for getting interest reimbursed by Government of India.
subvention under the scheme.
7.1 The group enterprises should have We invite your attention to our circular ADV 107 /
minimum of 3 members with a 2018 -19 dated 04/12/2018 on Interest Equalization
minimum of 70% of the members Scheme on Pre and Post Shipment on Rupee Export
from urban poor families. Credit. As per RBI guidelines, Banks have been
7.3 Project Cost (PC): The group will advised to furnish additional particulars as per
be eligible for a maximum loan of format enclosed on monthly basis along with the
Rs 2 lakh per member or Rs 10 claim submission
lakh, whichever is lower. In view of the above, field level functionaries are
advised to adhere to the RBI guidelines for
NULM Interest Subvention: All claims for charging ROI to the eligible exporters and submit
interest subvention under DAY NULM are uploaded the details required by RBI on monthly basis along
in the PAISA portal (The web portal for claiming with the claim in the format furnished vide
interest subvention under DAY NULM) at Corporate
Annexure to the circular.
Office.

Adv.115/2018-19 dt.15.12.2018

7
 OCT – DEC 2018

retirement of the staff member for appropriate

NPAs in Staff Related Education Loans – decision.
Ensuring CIF linkage and other Recovery
measures. Zonal Managers are advised to study their
education loan portfolio and to give proper
Education loans are liberally sanctioned by the bank treatment for all the staff related education loan
under IBA and Non IBA Schemes for pursuing accounts on the above lines before 31.12.2018.
graduation/post graduation to the wards of the
staff members. For all the Education loans, the Adv.117/2018-19 dt.17.12.2018
concerned staff member (Mother or Father), will be
the co borrower as the loans are sanctioned in the Payment of Fees to Recovery Agents-
joint names of student and staff. Vouching procedure in CBS System- reg.
Instances have come to our notice that the
Education loan account is not opened in the joint In the backdrop of introduction and implementation
names and not linked to the CIF of the concerned of Goods and Service Tax (GST) with regard to
staff, thereby the branches are not able to identify payment of fees to the Recovery Agents our CO/
the Staff accounts for regular follow up and Accounts Department has clarified that payment of
recovery, in cases of transfer of staff from one fees to Recovery Agents continues to be under
place to another. It is observed that sizable Reverse Charge Mechanism (RCM). Bank has to pay
numbers of Educational loan accounts are irregular the tax under Reverse Charge Mechanism.
and are slipping to NPA category due to lack of
follow up by the branches, not knowing that the In order to have uniformity for payment of fees
loans are staff related. relating to Recovery Agents, a common BGL with a
specification for payment of fees to Recovery
In order to streamline the education loan portfolio Agent, a new BGL-97452 has been created and it is
and to avoid NPAs in staff related education loan named as “Fee-Paid-Recy-Agent”. In this regard,
accounts, branches are advised to strictly comply it is clarified and instructed that the payment of
with the following immediately. fees to the Recovery Agent to be made only
through this BGL 97452 and as GST has to be
1. Education loan to be opened in the joint names of paid under Reverse Charge Mechanism, GST
Student and the related Staff member. For existing amount should not be paid to Recovery Agent.
loans also, wherever it is omitted, name of the staff
member to be added immediately. Further, it is informed and clarified that for
2. All the Staff related Education loan vouching of such expenditure in CBS, a separate
accounts to be linked to the CIF of the staff Vendor Master for each of the Recovery Agent has
member immediately.
to be created without putting their GST No.
3. For fresh accounts, CIF should be linked
Thereafter, while debiting expenditure under
before disbursement of the loan.
4. After disbursement of all installments, the Vendor Screen, the system will automatically take
home branch of the loan account to be transferred GST number of Recovery Agent concerned. If GST
to the new branch, where ever the staff is Number of the vendor is not available in the Vendor
presently working. Master, then Bank has to pay GST on the cost price
5. Interest and installments to be recovered of the goods / services at the applicable rate for
on due dates without any deviation. Input Credit. For accounting the RCM GST
6. Overdues if any towards
payments, system generated entries are made in
interest/installments to be recovered from the
CBS.
concerned staff, duly informing the same to ZO/CO.
7. All efforts should be taken to recover the
loans during the service period of the staff. The With regard to approval of payment of fees for the
position of outstanding education loans has to be recoveries effected through the Recovery Agent,
informed to CO/HRM Dept at the time of we reiterate that it is delegated to Zonal Managers.

8
 OCT – DEC 2018

Branch should report the details of recovery made loans from private financiers / NBFCs or sometimes
through the Recovery Agent to Zonal Manager and they tend to divert their working capital for such
seek permission for payment of fees. requirements.
Hence to support MSME in these scenarios, our
bank has come out with an unique mortgage loan
All staff members concerned to be sensitized on
product for MSMEs, namely “IND-SME
the above guidelines and Branches/ Zonal offices to MORTGAGE”. The detailed guidelines/salient
ensure that the above procedures are meticulously features of the product are furnished in Annexure
followed. to the circular..
All field level functionaries are advised to make use
For debit of other expenditures in NPA accounts of this unique product for improving the MSME
Branches/ Zonal offices are advised to refer portfolio.
Circular No. ADV-69/2012-13 Dtd.24.09.2012.
Adv.123/2018-19 dt.19.12.2018
Adv.120/2018-19 dt.18.12.2018
NPA accounts-Valuation of Security Assets
on receipt of OTS /Part Release of Securities
New MSME Structured Loan Product – Proposals.
“IND-SME Mortgage”(Product Code - 5613
0002) Valuation of Assets:
Reserve Bank of India, has advised that Banks,
during compromise settlements , should ensure that
Micro, Small and Medium Enterprises (MSME)
OTS amount should generally be not less than the
sector is a key part of the Indian economy and has Net Present Value (NPV) of the realizable value of
emerged as a highly vibrant and dynamic sector. It available securities. Whenever OTS proposals are
contributes significantly in the economic and social received in NPA Accounts, all properties/assets
development of the country by fostering charged should be valued properly by Bank’s
entrepreneurship and generating large employment approved panel engineers/valuers to enable the Bank
opportunities. to negotiate in a better way to maximize recovery.

However, there is no need to value the properties at

The MSMEs avail finance in the form of Term Loan
the time of OTS in respect of the following NPA
for creation of assets and in the form of OCC / OD
accounts since as per our Recovery Policy, Net
/ PC for their working capital requirements. At Present Value of Securities not to be considered in
times these MSMEs request for a Term Loan for such cases.
following needs:
1. Educational Loans with Limit up to Rs.7.50
 Undertaking minor changes in factory layout / lakhs
godown without any creation of additional asset, etc. 2. Agricultural Loans (Except Agri Jewel
Loans) with Limit up to Rs.10.00 lakhs
 Meeting the cost involved for improving the
3. Micro and Small Enterprises Loans with
workflow in the factory.
limit up to Rs.10.00 lakhs.
 Meeting the cost for upgrading the existing 4. Other NPA accounts wherein Real Balance
machinery or improving the technology to unblock (Book balance +MOI/MLE/MOX) is up to Rs.10.00
the bottlenecks in production. lakhs.
 purchasing used machinery, which are in working
condition but original invoices are misplaced by Valuation Reports:
seller or not held by the seller. While considering OTS proposals, the Sanctioning
Authorities should ensure that valuation of
securities is not more than one year old. It is
In most of the above requests we couldn’t consider
also to be ensured that the Approved Engineers are
them as Term Loan, even though they are backed by
collateral security. These MSMEs prefer to avail

9
 OCT – DEC 2018

providing Market Value, Realisable Value and use this format. The branches are complying with
Distress Value in the valuation reports. the instruction, and consent form as above is being
obtained from customers, whenever their Aadhaar
Guidelines as per our Recovery Policy regarding numbers are seeded to accounts.
valuation of securities:
For the benefit of field level functionaries, the We reiterate that the revised consent form has to
guidelines to be adhered by the Branches/Zones be obtained from the customers without fail, and in
with regard to valuation of securities at the time of case the branch has omitted to obtain the consent
OTS is given in the circular. form in any of the instances, to obtain it and
regularise the records. All the branches are
Precautions to be exercised by the field level requested to accord top priority to the matter in
functionaries while valuing the property: order to avoid any customer complaint in this
In some of the proposals received at our Corporate regard at a future date.
Office level, it is observed that there is a huge
variation between the value of properties at the CRA.28/2018-19 dt.06.10.2018
time of sanction of loan and at the time of Opening of PMJDY (BSBD) accounts without
considering OTS, due to various reasons. minimum balance.

In some cases, as the valuation is left to the sole Department of Financial services (DFS) has
discretion of the valuer, they are undervaluing the expressed their concern on complaints received
property on the pretext that the account is already from the beneficiaries, that they are being
NPA. At times, due to this casual approach, when penalized by the banks for not maintaining minimum
staff accountability is pursued by bank, the huge balance in their accounts which causes huge
decline in valuation triggers Staff Accountability on inconvenience.
the BM/Officer who has previously given the visit
report of property/accepted the valuation report of Jhan Dhan accounts are Basic Savings Bank Deposit
Engineer. (BSBD) accounts in nature without the requirement
of maintaining minimum balance. DFS has directed
As value of securities is one among the important all banks to encourage opening PMJDY accounts to
factors to decide the OTS amount, the field level the beneficiaries receiving subsidies through DBT
functionaries should exercise the precautions without insisting on minimum balance.
enumerated in the circular.
All the branches are advised to strictly adhere to
Apart from the given precautions which are the directions of DFS to enable DBT beneficiaries
illustrative, the field level functionaries should take to avail benefits under Government schemes in a
all care and ensure that the securities are valued seamless manner.
properly and OTS amount is negotiated for the
benefit of the Bank. CRA.31/2018-19 dt.12.11.2018

In case of SARFAESI action, similar approach Enrollment of Pradhan Mantri Jan Dhan
regarding valuation may be adopted. Yojana(PMJDY) account holders under
Pradhan Mantri Suraksha Bima Yojana
Adv.125/2018-19 dt.31.12.2018 (PMSBY) and Pradhan Mantri Jeevan Jyoti
Bima Yojana (PMJJBY)
CRA Department of Financial services, Ministry of
Finance, Government of India (GOI) has reiterated
Aadhaar – Consent Form for linking the following:

A revised application / consent format has already All eligible PMJDY account holders (both existing &
been annexed to the circular CRA- 72 / 2017-18 new) should be encouraged to get enrolled under
dated 29.01.2018 and the Branches were advised to PMSBY & PMJJBY. PMJDY account holders could be

10
 OCT – DEC 2018

taken on board under these two insurance schemes

The procedure for lodging the claims in case of any Co-branded “Arogya Raksha Mediclaim
eventuality should also be explained to customers so Policy” with United India Insurance Co.Ltd
as to provide them a certain degree of comfort (UIIC) - Renewal of MOU for the period upto
level, while enrolling for PMSBY & PMJJBY. 31.03.2020

Zonal Offices / Branches have to take note of the Arogya Raksha offers a huge scope to our
above directions of the GOI. Zonal Managers and branches to bring maximum number of our clients
Branch Managers are requested to ensure that the & their family members under health insurance
vision of moving towards a financially included and umbrella by selling these policies and safe guarding
insured society is facilitated. their financial resources from unplanned medical
expenses. Branches must be aware of t h e
CRA.34/2018-19 dt.26.11.2018 f o l l o w i n g rebates available under Sec. 80D of
Income Tax Act to policy holders for Mediclaim
TIMELY REVERSAL OF C2C ENTRIES Premium paid besides Rs.1.50 lakhs rebate available
under Sec. 80 C of IT Act.
As per our Corporate Office guidelines, reversal of all C2C
entries are to be done on daily basis.
Persons Covered Exemption Limit
Despite repeated reminders from Corporate Office
Self and family Rs. (25,000 + 30,000)
through IPs, e-mail etc., many C2C entries are pending
+ senior citizen = Rs. 55,000
beyond the stipulated time. It is observed that the
parents
pendency is predominantly on account of
Self (senior citizen) Rs. (30,000 + 30,000)
and family + senior = Rs. 60,000
1. Want of details for the credit / debit C2C
citizen parents
entries
2. Non-verification of all the three BGL heads
The MOU for Arogya Raksha Mediclaim Policy with
(86903, 86911 & 86904) before EOD
UIIC has since been renewed up to 31.03.2020
Non-reversal of C2C entries may lead to customer
complaint for not crediting the beneficiary’s Following significant changes / improvements in
account in time. Similarly, subsidy received for our existing Arogya Raksha Scheme have been
various loan accounts, not linked to the account introduced as per extant IRDA guidelines:
immediately, will result in charging of more interest
in the loan account, leading to customer complaints  The maximum entry age for subscribing
The following measures are suggested to ensure timely Arogya Raksha Health Policy stands revised to 70
reversal of C2C entries. years from the existing 65 years effective from
15/12/2018.
1. Emanating Branch / Office should send the  The premium rates for Arogya Raksha
details first before crediting/debiting Health Policy stand increased by 17.5% on the
2. Verification of all the three BGL heads (86903, existing premium structures effective from
86911 & 86904) before EOD 15/12/2018.
3. Controlling office should monitor to C2C pending Arogya Raksha Policy – Revised Premium Rates
consistently applicable & Scheme Details are annexed to the
4. BM/ABM should monitor High value transactions in circular.
Bancs periodically during the day.
The branches are entitled to a commission @ 15%
Any violation of the norm or delay in reversing C2C entries
on basic premium (net of GST ) collected on all
would lead to Staff Accountability with attendant action.
Arogya Raksha policies ( Fresh & renewal policies )
Hence, Branches / Zonal Offices / CO Departments are
and thereby increase their non-interest income.
advised to ensure timely reversal of C2C entries in their
own interests.
CRA.38/2018-19 dt.12.12.2018
CRA.36/2018-19 dt.07.12.2018

11
 OCT – DEC 2018

FX for any rejection of claim on account of non-

adherence of the insurance policy guidelines
Country Risk Management Policy – /conditions.
Changes in the risk rating of countries with Branches are advised to refer the circular for the
effect from 30.09.2018. salient features, importanct changes and the claim
coverage period in the renewed policy.
Bank has adopted the ECGC classification of
countries in respect of Country Risk Ratings. In this FX.16/2018-19 dt.29.10.2018
connection, we refer to our circular No.FX-08 /
2018-19 dated 12.07.2018, wherein the ECGC Group Transmission of SWIFT outward messages
wise, country wise ratings were furnished.
CO International Division has issued various
ECGC of India has released the revised
guidelines/instructions to “SWIFT” user branches
Country Risk Classification list on 01.10.2018,
which is reproduced in the Annexure I. on the safety precautions to be taken.

Branches are advised to take note of the rating The list of additional measures to be implemented
w.e.f. 30.09.2018, while taking fresh exposures and
to tighten control over SWIFT environment, from
to take prior approval from appropriate authorities
15th November 2018 to centralise all outward
as per country risk management policy.
messaging of SWIFT, irrespective of Message
Type were detailed in the circular .
FX.15/2018-19 dt.05.10.2018
This is a major step in enhancing SWIFT security.
Renewal of Export Credit Insurance for This replaces the verification and authorisation
Banks - Whole Turnover Packing Credit
function at branches with a simple reporting to
(ECIB-WT-PC) No.5029 and Whole Turnover
Post-shipment credit (ECIB WT- PS) No.119 by SWIFT Centre on the details of transactions for
Export Credit Guarantee Corporation of India the day. Branches are advised to ensure full
Ltd. (ECGC) - Insurance Policy period starting compliance and also to judiciously utilise the man
from 01.07.2018 to 30.06.2019. hours released on simplification of the process, once
the system stabilises.
The current ECIB (WT-PC) and ECIB (WT PS)
FX.20/2018-19 dt.13.11.2018
Insurance policies have been renewed for a further
period of one year starting from 01.07.2018 to
30.06.2019 with Export Credit Guarantee Automation of GST on conversion of foreign
Corporation of India Ltd. (ECGC). The salient
currency transactions in EXIM Bills module
w.e.f. 01.01.2019.
features and the important procedural aspects of
the ECIB WT-PC and WT-PS insurance policies are
Please refer circular no. FX.06/2011-12 dated
abridged hereunder and for full operational
21.04.2011 on applicability of service tax on FX
guidelines, Branches/Zonal offices are advised to
conversion and circular no. FX.10/2017-18 dated
refer ECIB-WTPC, WTPS renewal Letter dated
19.09.2018, ECIB Bond & Schedule dated 19.09.2018 19.08.2017 on GST applicable to transactions
along with the annexure attached to this circular. relating to conversion of foreign currency.

Branches are advised to adhere to all terms and Calculation of GST on conversion of foreign
conditions of the insurance policy while handling the currency transactions in EXIM Bills module has
pre shipment and post shipment advances and avoid been automated. Branches / Offices concerned are
rejection of claims by ECGC for non adherence to advised to take note of the automation with effect
any of the terms and conditions laid down in the from 01.01.2019. For other modules like Base leg
policy document. Branches will be held responsible

12
 OCT – DEC 2018

transactions, Remittance module at Treasury Branch Department of Financial Services vide their letter
Mumbai, development is in progress. Ref F.No.H-12011/2/2015-Ins.II dated 12.06.2018
have suggested to implement pro-rata premium for
enrolment under PMJJBY Scheme.
Branches/Offices are advised to take note of
following steps for reporting GST on FX conversion: (i) In order to encourage eligible account
EXIM Module: holders to join the scheme at a later stage payment
of pro-rata premium for enrollment under PMJJBY
1. For transactions carried out in EXIM Bills, would be allowed, with the minimum premium of Rs
System will calculate the applicable GST amount 86/- for one quarter required to be paid even if a
w.e.f. 01.01.2019. Branches to verify on real-time person enrolls under the scheme one or two months
basis the correctness of a) GST Amount b) related before the end of the policy year (i.e. if he enrolls
CBS accounting entries. in March, April or May).

2. Wherever GST is calculated by the system, Enrolment period Premium payable

branches need not report the entries to CO:ID at June, July & August Annual premium of Rs. 330/-
end of the month. September, 3 quarters of premium @ Rs
October & 86x3 i.e. Rs. 258
3. Transactions where GST is not calculated November
by the system (Ex.Cross Currency Transactions), December, January 2 quarters of premium @ Rs
branches have to deduct the applicable GST amount & February 86x2 i.e. Rs. 172/-
manually and report at the end of month to CO: ID. March, April & May 1 quarterly premium © Rs
86.00
Base Leg:
Branches have to deduct the applicable GST amount
Branches shall refer the circular for full details
manually and such transactions are to be reported
regarding administrative charges , BC commission
to CO:ID on monthly basis as per the existing
etc.
format.

Branches are advised to make use of this

Remittance Module at Treasury branch:
Branch to deduct the applicable GST amount amendment to source more applicants under this
manually and such transactions are to be reported scheme.
to CO:ID on monthly basis as per the existing
format. Genl.22/2018-19 dt.05.10.2018

Each transaction routed through EXIM Bills will Alteration in the name of “Qatar National Bank
generate a credit under BGL 97357. To ensure SAQ “ to “Qatar National Bank( Q. P.S.C.) in
accuracy of figures, branches are advised to verify the Second Schedule to the Reserve Bank
on a daily basis that the number of transactions of India Act,1934.
routed through EXIM Bills and those routed
through Base Leg are all reflected under the said
Reserve Bank of India informed that the name
BGL.
of “ Qatar National Bank SAQ “ has been
changed to “ Qatar National Bank (Q.P.S.C)” in
Screen shots of sample transactions are annexed to
the Second Schedule to the Reserve Bank of
the circular for ready reference and easy
India Act, 1934 by
understanding of users.
NotificationDBR.IBD.No.191/23.03.032/2018-19
FX.22/2018-19 dt.29.12.2018 dated July 06, 2018 published in the Gazette of
India ( Part III-Section 4 ) dated August 18,
GENL
2018—August 24, 2018.
Payment Of Pro-Rata Premium For Enrolment
Under PMJJBY Genl.25/2018-19 dt.05.11.2018

13
 OCT – DEC 2018

100150 Companies struck off from the (LLP) Master Data, view public documents, Register
Register of Companies u/s 248(5) of the of Directors, Register of Charges etc., should
Companies Act, 2013- Effect on operation of
be proactively used in each case as required
Bank Accounts of such Companies – Exercise
while dealing with companies and LLPs.
enhanced diligence-reg.

Indian Banks Association informed that Genl.26/2018-19 dt.26.11.2018

Department of Financial Services, Ministry of
Finance, Government of India, has conveyed that Business Correspondent (BC) Registry
the Registrar of Companies have struck off 100150
companies as at 24.10.2018 u/s 248(5) of the IBA has developed the BC Registry Portal
(www.bcregistry.in) and gone "live" wherein banks
Companies Act, 2013. The ROC-wise lists of
should upload data pertaining to the BCs deployed
such 100150 companies are available in the website
by them based on the framework provided by RBI
of the Ministry at link:
and in consultation with stakeholders.
http://mca.gov.in/MinistryV2/stk7publicnotices5.ht
The Registry will cover all BCs, both existing as well
ml
as new and will capture basic details including
The provisions of Section 250 of the Act, location of BCs, nature of operations, etc. Further,
the BC Registry Portal shall also enable members of
prescribe that where a company stands dissolved
public to find the necessary details of the BCs in
under section 248, it shall on and from the date
their vicinity to avail financial services by using the
mentioned in the Notice under Sub-section(5) of
BC Tracker facility.
that Section cease to operate as a company and the
Certificate of Incorporation issued to it shall be Action points to branches and Detailed process
deemed to have been cancelled from such date . flow for selecting the villages is annexed to the
circular
Such struck off companies cease to exist as legal
entities. Accordingly, existing Directors and Branches are advised to complete this process for
authorized signatories of bank accounts of such existing BCs before 07.12.2018 and thereafter on a
non-existing legal entities would become ex- continuous basis for new BCs at the time of
directors or ex-authorized representatives / engagement.
signatories and thus would not be able to operate
Genl.27/2018-19 dt. 01.12.2018
bank account(s) of such companies till such
companies are legally restored under Section 252
Inclusion of “SBM Bank (India ) Limited “ in
of the Act by an order of National Company
the Second Schedule to the Reserve Bank of
Law Tribunal (NCLT). The restoration as and India Act, 1934.
when happens, shall be reflected in the website of
the Ministry by changing the present status of the We have been informed by Reserve Bank of
company in Master data from “Struck-off” to India that the “SBM Bank (India) Limited ” has
“Active”. been included in the Second Schedule to the
Reserve Bank of India Act, 1934 vide
Notification DBR. IBD.No.3645 / 23.13.043 /
Branches / Zonal Offices / Corporate Office
2018-19 dated October 30,2018 and published in
Departments should exercise enhanced diligence
the Gazette of India (Part III –Section 4) dated
while dealing with companies in general and use all December 01 – December 07, 2018.
the facilities available in the web-site of MCA, as
the status gets updated with each filing. The Genl.28/2018-19 dt.13.12.2018
information provided in various Government sites
like view Company / Limited Liability Partnership

14
 OCT – DEC 2018

Alteration in the name of “ Doha Bank Qsc ” date) Opens closing date) accrued thereon,
to “ Doha Bank Q.P.S.C” in the Second on Closes on along with the
schedule to the Reserve Bank of India Act, additional stipulated
1934. contribution for
funding the gap
We have been informed by Reserve Bank of (Last date for
India that the name of “ Doha Bank Qsc,” has refund)
been changed to “Doha Bank Q.P.S.C “ in the 31.10.2018 29.12.2018 28.01.2019
Second Schedule tothe Reserve Bank of India Act, Indian Banks’ Association (IBA) vide its letter No.
1934 vide Notification DBR.IBD.No.2963/ HR&IR/CIR/G2/BRK/4684 dated 16.03.2018 has
23.03.029/ advised all Public Sector Banks to extend the
2018-19 dated October 11, 2018 published in second option of pension to compulsorily retired
the Gazette of India ( Part III – Section 4) employees/officers on same terms and conditions as
dated November 10 –November 16, 2018. mentioned in Bipartite Settlement/Joint Note
dated 27.04.2010.
Genl.29/2018-19 dt.13.12.2018 Bank’s Board has given its approval to adopt and
implement the guidelines received from IBA in
Inclusion of “ESAF Small Finance Bank terms of Bipartite settlement/Joint Note dated
Limited “ in the Second Schedule of the 27.04.2010 for extending second option of pension
Reserve Bank of India Act, 1934. for compulsorily retired officers/employees.

We have been informed by Reserve Bank of For details of Terms of Settlement, please refer
India that the “ESAF Small Finance Bank the circular.
Limited ” has been included in the Second
Schedule to the Reserve Bank of India Act,
HRMD.93/2018-19 dt.26.10.2018
1934 vide Notification DBR. NBD (SFB-ESAF)
No. 4083 / 16.13.216 / 2018-19 dated November Mandatory Certification for employees
12, 2018 and published in the Gazette of working in Specialized Areas.
India (Part III –Section 4) dated December 22 –
December 28, 2018. Bank is in the process of engaging Moody's
Analytics on the subject of Mandatory
Genl.30/2018-19 dt.29.12.2018 Certification.

Re-allocation of responsibilities among Our Bank has entered into an Agreement with
Information Technology Department Moody's Analytics to offer certification courses
and Digital Banking Division for our Bank employees in the area of Credit. The
operative details regarding
The functional responsibilities are re-allocated 01. Course,
among ITD and DBD with effect from 31.12.2018 02.Registration Period and
and are given in the circular. Branches shall refer 03.Subscription Period are given in the
the circular for further details. circular.

Genl.31/2018-19 dt.31.12.2018 All officers are requested to take note of the

above, utilize this golden opportunity and enroll for
Second option to join the Pension Scheme to the above course through the "Staff Self Service
Compulsorily Retired Employees under the
Portal".
IndianBank (Employees’) Pension
Regulations, 1995.
A copy of the circular may be displayed in the Staff
Notice Board for information of all staff members.
Offer to join the Pension Refund of Bank’s
Scheme on Second option Contribution to PF HRMD.94/2018-19 dt.24.10.2018
(Offer (Offer with interest

15
 OCT – DEC 2018

Reconstitution of Women Cell at Corporate HELP DESK has been constituted at CO: HRM to
Office liaison with the branch and the concerned
settlement desk to expedite the settlement
Women Cell has been functioning at Corporate
process.
Office to take care of the special needs of the The aim of setting up the HELP DESK is
women employees working at Branches / Offices and
to redress their grievances.
01)To assist family members of the deceased
employee in speeding up the process of obtaining
The objective of the formation of Women Cell at
the eligible terminal benefits.
Corporate Office is to facilitate women employees
to freely approach the women cell to seek redressal 02)To assist the family pensioner in case of death
of their grievances that could not be represented to
of pensioner.
the officials of the Bank directly. Reference may be
drawn to HO: HRM: Circular No.44/2010-11 dated The key features of the HELP DESK are as follows:
14.06.2010.
01)The name of the help desk is proposed as SEED
Women Cell at Corporate Office has been - HELP DESK. (Based on the Solace for Expired
reconstituted and the composition of the same is as
Employees' Dependents" Scheme) - To assist the
follows:
families of the deceased employee / pensioner.

Role Name Designation Phone

02)The mission of the HELP DESK is to bring down
Number the Turn Around Time (TAT) in settlement matters
Member Ms Gayathri Assistant General 9500046318 to legal heirs in respect of an employee who has
S Manager
expired while in service and in case of death of
Member Ms Chief Manager 9940432740 pensioner to assist the surviving spouse in the
Shenbagavalli (Law) matter of family pension.
Jagadeesan
Member Ms Shanthi Clerk 9629021772 03)In the unfortunate event of death of an
Priya employee/pensioner, Branch/Office/Department
concerned need to inform the HELP DESK about the
All Women employees are free to approach the same.
above Cell for redressal of their grievances (if any).
04)HELP DESK would arrange to send the necessary
HRMD.119/2018-19 dt.19.12.2018 forms to the concerned branch / office /
department and follow-up for submission of the
Help Line For Dependants Of Deceased same. The desk would also follow-up for leave
Employee / Pensioner regularisation, settlement of medical bills, if any of
the deceased employee.
For every employee, the Bank and the co-employees
are an extended family. At the time of death of an 05)A separate mail id (i.e.)
employee in service, the members of the family are cohrmhelpdesk@indianbank.co.in has been created
to enable the branches/offices to communicate
under severe stress and look upon the extended
effectively with CO: HRM.
family for support. While the moral support is often
extended by the branches and offices where the
Branches / Offices are requested to effectively use
deceased employee worked, the financial settlement
the services of the HELP DESK in resolving the HR
in the form of legitimate dues like PF, Gratuity,
matters relating to the deceased
SEED, GSLI, Leave Salary, family pension of the
employee/pensioner.
deceased employee are met by CO: HRM
department. With a view to speed up this process, a
HRMD.107/2018-19 dt.03.12.2018

16
 OCT – DEC 2018

Modification in Master Circular on the

Reconstitution of Internal Complaints Detection and Impounding of Counterfeit
Committee at Corporate Office Notes

We invite attention to our Circular CO: BOD Admin-

Internal Complaints Committee constituted under
32/2018-19 dated 04.07.2018 regarding RBI
the Policy for Prevention of Sexual Harassment of
Master Direction on Detection and Impounding of
Women at Workplace has been functioning at
Counterfeit notes.
Corporate Office with an objective to handle
complaints of Sexual Harassment of Women at
workplace. RBI informed that the modification in Master
Circular on the Detection and Impounding of
Internal Complaints Committee has been Counterfeit notes as follows:
reconstituted and the composition of the same is as Para 10 – Reporting of Data to RBI/ NCRB /FIU-
follows:
IND “By all Bank branches.
Role Name Designatio Phone
n number
Presiding Ms Gayathri S Assistant 9500046318 Data on Counterfeit Notes detected by all the
Officer General
branches of the bank shall be reported in the
Manager
Member Ms Chief 9940432740 prescribed format, on a monthly basis. A statement
Shenbagavalli Manager (Annex VI) showing the details of Counterfeit
Jagadeesan (Law)
Notes detected in the bank branches during the
Member Ms Kavi Ezhil Manager 9176036178
TA month shall be compiled and forwarded to the Issue
External Ms Revathi G Advocate 9840466700 Office of Reserve Bank concerned so as to reach
Member Mohan
them by 7th of the next month. A “nil” report may be
sent in case no counterfeit has been detected
All Women employees are free to approach the
above Committee for redressal of their grievances during the month.
(if any).
Under Rule 8(1) of Prevention of money laundering
HRMD.120/2018-19 dt.19.12.2018
(Maintenance of Records) Amendment Rules, 2013,
Principal Officers of banks are also required to
Reorganization of Zones and formation of
New Zone report information on cash transactions were
forged notes have been used as genuine note to The
As an effort towards improving the operational Director, FIU-IND, Financial Intelligence Unit –
efficiency of the Bank, organizational restructuring India, 6th Floor, Hotel Samrat, Chanakyapuri, New
is being carried out.
Delhi – 110 021, by the 15th day of the succeeding

In continuation of the above exercise, new Zone at month, by uploading the information on the FINnet
Nagpur (Maharashtra) has been formed by Portal. Similarly, data on FICN detection is also to
reorganizing branches in Bhopal and Pune Zones. be uploaded on the web-enabled software on
With the formation of the new Zone, the Bank will National Crime Records Bureau, New Delhi at their
now have 50 Zones.
website.”
Branches to refer the annexure to the circular for
Zonal Offices / branches / Currency Chests are
the list of Reorganised/Realigned Zones and the
advised to make note of the above modification in
branches.
RBI Master Circular and act accordingly
ADMN.57/2018-19 dt.09.10.2018
ADMN.59/2018-19 dt.11.10.2018

17
 OCT – DEC 2018

Opening/closing/renaming/ shifting of
branches during quarter II FY 2018-19.  Loading of cash in the ATM and
EOD/ADMIN functions should be done jointly by
Details of Branches / Offices opened / closed the shroff and the officer who have been assigned
/ renamed / shifted during Quarter II of FY with the task. In the absence of the designated
2018-19 are furnished in the Circular. For shroff, the designated ATM officer should be
information and the details thereof furnished accompanied by another shroff / officer.
in the Annexure.
 Even if no additional cash is loaded for the
Opening of branches / Offices/Extension
day, EOD in ATM is compulsory.
Counters :
15 branches, 4 Zonal Offices and 1 Extension
 The cash loaded in the ATM has to be
Counter were opened.
recorded chronologically in the FIT Register which
Closure of branches
has to be signed by the Joint custodian of the ATM
7 Non customer interface branches were
closed. keys or ATM Safe (Electronic) Password, as the
Shifting and Renaming of branches/offices case may be and authenticated by the BM/ABM.
1 branch and 1 Zonal Office were shifted and
renamed.  ATM Branch should tally physical cash
Renaming of branches balance in the ATM with the JP log balance and
5 Non customer interface branches were ADMIN Card balance. Difference if any, should be
renamed. noted and located and rectified in consultation with
Shifting of branches ATMSC.
4 branches were shifted.
Number of branches in India as on 30.09.2018  Once in a week, the cash balance in ATM /
is 2827, comprising of 728 Rural, 788 Semi BNA should be verified by an officer, other than
Urban, 632 Urban and 679 Metropolitan the officer holding the key(s) in joint custody.
branches.
 All ATM related passwords should be kept
ADMN.62/2018-19 dt.15.10.2018 secret and should never be disclosed to others.
ATM custodians should change the password at
Shifting of Zonal Office, Ghaziabad to Noida frequent intervals and mandatorily when a new
and renaming as Zonal Office, Noida. custodian has taken charge or when custodian
returns back to job after availing leave.
Zonal Office, Ghaziabad has been shifted to Bank’s
own premises at Noida and functioning from D-
 Surprise verification of ATM / BNA cash
211/2, 2nd, 3rd and 4th floors, Sector 61, Noida
shall also be done by any of the officials working in
201301, Uttar Pradesh, with effect from
the neighbouring / nearby branches / offices once
17/10/2018. Consequently, the Zone has been
in a quarter.
renamed as Noida Zone.

This is for information of all the Branches/Offices Branches shall ensure strict compliance of the
with an advice to make a note of the same in their guidelines given in the circular to avoid any possible
records for future correspondence/communication loss to the Bank.
ADMN.65/2018-19 dt.24.10.2018
ADMN.63/2018-19 dt.15.10.2018
TDS Rates applicable for the Financial Year
Reiteration of important guidelines on ATM / 2018-19 – In respect of Payments made by
BNA Operations. Banks

Some of the important guidelines on ATM/BNA As per the latest notification of GOI on Direct
operations which are to be followed scrupulously by Taxes, the TDS rates applicable for FY 2018-19, u/s
the branches / Zonal Offices are reiterated below. 194A to 195 of IT Act 1961 and the surcharge are

18
 OCT – DEC 2018

furnished in the circular for the information/

necessary action of Branches/Zonal Offices/Other At branch level ABM/Second officer of the branch
Administrative offices. can report exceptions on daily basis. If there is
nothing to report, NIL report is to be submitted
Branches are advised to refer the circular for the
after month end, before 5th of next month.
details.

Further, branches / offices are advised to follow At Zonal office level, monitoring officer should
the guidelines given by Corporate Office through collect data from branches through the above
various circulars issued from time to time on the template on daily basis and arrange to take up the
major aspects of TDS, in order to ensure strict issues with concerned officials for rectification of
compliance to the provisions of TDS under the the irregularities/ violations. Details of ‘Report
Income Tax Act, 1961. For further guidelines on
Submitted Branches’ and ‘Report Pending Branches’,
this matter please refer the circular.
month wise can be viewed at Zonal level for their
ADMN.69/2018-19 dt.13.12.2018 follow up.
At Corporate office level, zone wise details of
Reporting exceptions by ABM/Second officer report submitted and pending branches can be
of the Branch viewed.

Reference is invited to our earlier circular Zonal Offices are advised to monitor the reports
No.Admin-91-2015-16 dated 05.03.2016, wherein generated by branches in their zone on daily basis
the procedure and guidelines for reporting of and take suitable remedial measures to rectify
irregularity/ exception if any.
exceptions by ABM/Second officer of branches
were detailed. For the sake of convenience and to
ADMN.71/2018-19 dt.14.12.2018
standardise the process for submission of report a
new template has been designed and provided in the
Online submission of Appraisal Note/
Help desk. As clearly spelt out in the HRM Manual
Sanction Letter for MDL sanctions of Rs.10.00
under “Job Role of the Asst. Branch Manager”, the lakhs and above to Zonal Office through Loan
Asst. Branch Manager normally reports to the Automation Processing System (LAPS) and
Branch Manager. Additionally, in his / her capacity online scrutiny of sanctions by ZO
as Compliance Officer at branch level, he/ she has a
Branches are required to submit copy of the
responsibility to report to Zonal / Corporate Office
appraisal note (AN) / sanction letter (SL) for MDL
in regard to the proper conduct of the Bank's
sanctions of Rs.10.00 lakhs and above to Zonal
business. At branches where there is no Asst.
Office for scrutiny (other than JL & LOD).
Branch Manager, this responsibility devolves on the
Officer who ranks next to the Branch Manager.
The quality of appraisal of MDL sanctions and the
ZO scrutiny of the MDL sanctions needs
Indicative list of omissions which cannot be
improvement. The automated and mandatory
captured by CBS and need to be reported by
submission of AN / SL by branches was identified
ABM/Second officer of the branches were given in
as remediation and branches will be required to
the circular.
mandatorily submit through Loan Automation
Processing System (LAPS), the scanned copy of AN/
The template is available in the helpdesk and could
SL in respect of MDL sanctions of Rs.10.00 lakhs
be accessed through the Link MENU >>Other
and above, before opening of loan account in CBS.
websites>>In-house Applications>> Exception
Zonal Offices will be required to download the AN /
report by ABMs. AD Login ID and password is to
SL submitted by branches on daily basis for
be used to log in the template.

19
 OCT – DEC 2018

scrutiny. The following documents are provided as

Annexure to the circular:
Though due care has been taken in the
preparation of Recollect, the version given in the
Annexure 1: Navigation for submission of
circular is final.
AN/SL by branches and
downloading by ZO
Compiled by CO: O & M Division
Annexure 2: Standard Operating
Procedure (SOP) for the
scrutiny of MDL sanctions
Annexure 3: Template for scrutiny of MDL
sanctions by ZO

The mandatory submission of AN / SL through

LAPS will come into effect from 1st Jan 2019.

ADMN.74/2018-19 dt.31.12.2018

MD/ED

Profit First' - directions on steps to be taken

The status and standing of any business entity is

judged by the quantum of profit generated by it and
the confidence of the public is dependent upon the
sustainability of profit. Our Bank cannot be an
exception to this. Comparison of Q2 results of our
Bank with that of select Public Sector and Private
Sector Banks indicates that we need to pay greater
attention to augmenting profit. The important
aspects where effective initiatives are to be taken
at every level were elaborated in the circular.

a) Recovery of NPAs and in AUC

b) Arresting slippages
c) Business Growth
i) CASA deposits
ii) Expansion of quality credit
d) Eliminating avoidable/wasteful expenditure
e) Increasing Fee-based income, i.e. Non
Interest Income

Every Branch/ Office should take these priorities in

the right earnest, discuss in monthly staff meetings,
work out strategies involving every member of staff
and the results achieved are to be deliberated .

MD.01/2018-19 dt. 29.11.2018

20
 Recollect April-June 2003 Volume 16 Issue 1

Negotiable Instruments Act 1881 - Recent Amendments

DEPOSITS During the course of time the existing pro-
visions of Chapter XVII of Negotiable Instruments
Recollect

Settlement of Claim in respect of accounts standing in the Act were found to be inadequate in dealing with
names of deceased depositors / account holders cases of dishonour of cheques. Further with the ad-
In the absence of nominations in respect of vent and advancement of electronic technology,
deposit accounts, lockers etc, on the demise of de- transactions through electronic media are also to be
positors/account holders, the legal heirs/successors covered. Hence by way of The Negotiable Instru-
in interest have to submit a claim in the prescribed ments (Amendment and Misc. Provisions) Act
format. The claims are being settled as per the 2002, Negotiable Instrument Act 1881 has been
guidelines contained in Manual of Instructions – amended once again mainly to cover the above as-
Deposits. In the claim form, the claimants are to pects..
sign in the presence of two witnesses and if any of Some of the salient aspects of the amend-
the claimants is illiterate or sign in a language other ments are given below:
than the language in which the claim form is I. Relating to dishonour of cheques (Chapter
printed, their signatures in the claim form should be XVII- Sec. 138 - 147)
attested by Magistrate or Notary Public. Vouching Position prior to 2002 Position after 2002
letters from two respected persons are also to be amendment amendment
submitted. To prove the demise of the deposi- 1 The punishment for The punishment for issuing
tor’s/account holder’s death, certificates are being issuing cheque without cheque without sufficient funds -
sufficient funds - one year two years .
produced. To prove that the claimants are the legal 2 Notice period for issuing Notice period for issuing notice
heirs of the deceased depositor/account holder, or notice of dishonoured of dishonoured cheques by the
the claimants are entitled to receive the amount/take cheques by the payee to payee to the drawer - 30 days
the contents of the locker etc., Legal Heirship Cer- the drawer - 15 days
3 If the defaulting party is a Nominee director of a company
tificate, Succession Certificate, etc., are being pro-
company then the person (from Government, Financial
duced. in charge/responsible to Institutions owned by Central /
Therefore, it is necessary that on receipt of the company are also State Government) shall not be
liable for prosecution for liable for prosecution.
claim papers, the branch should verify the genuine- dishonour of cheque
ness of the supporting papers and make independ- issued by the company.
ent enquiries and verify the correctness of the de- 4 Complaint to be filed Delay in filing complaint after
tails in the format. The identity of the claimants within one month from the the limitation period can be
date of cause of action. condoned if sufficient reasons
may also be checked independently. are shown
In this context, it is proposed to devise a 5 New section Trial of cheque dishonoured
cases to be conducted as
new format of claim form making provisions for
expeditiously as possible and
affixing photographs of the claimants. Till new endeavour shall be made to
format is devised, the photographs may be got af- conclude the trial within 6
fixed in a separate sheet of paper (as per Annexure months from the date of filing of
complaint
to the circular) and signatures/thump impressions of
6 New section Serving of summons / notices
the claimants may be obtained over the photographs through speed post / courier
as well as in the space (box) provided and en- services has been permitted
dorsement of the attesting witnesses may be ob- 7 New section The evidence of the complaint
tained at the bottom. The Manager while giving his may be given by way of affidavit
8 Official from the bank has Court can presume the fact of
report in the format should specifically state which to give evidence in person dishonour of cheques on
claimant has contacted him in person and submitted as to the return/dishonour production of bank's slip or
the claim form. If claim is signed by Power of At- of cheque for want of memo having thereon the
torney holder, the photograph of the Power of At- funds official mark denoting that the
cheque has been dishonoured
torney holder should also be affixed. If the claim 9 The offence is non- The offence is compoundable
amount does not exceed Rs.10, 000 or if the value compoundable ie., even if ie., if subsequently cheque
of the jewels does not exceed Rs.10, 000, branches subsequently cheque amount is received and matter
need not insist for photographs. amount is received and compromised with the drawer,
matter compromised with the criminal proceedings can be
Branches are advised to follow the above the drawer, the criminal withdrawn
guidelines meticulously. proceedings cannot be
withdrawn
Dep.01/03-04 dt.08.04.03 (M-1 S-15)

1
Recollect April-June 2003 Volume 16 Issue 1

II Introduction of electronic cheques/ truncated ers (by value), the same would be treated as Stan-
cheques in the definition of cheques and connected dard / Sub-Standard, only for the purpose of judg-
provisions (Sec. 6, 64, 81, 89 & 131) ing the account as eligible for CDR, in the books of
Normally bankers are dealing with cheques the remaining 10% of lenders.
in physical form i.e. paper cheque. With the present Category 2 : Restructuring of accounts classified
amendment, cheques in electronic form and trun- as Doubtful.
cated cheques are also included in the definition of
Accounts classified as ‘Doubtful’ would be
cheques. Section 6 of the Act which defines
eligible for restructuring, if minimum of 75% (by
‘cheque’ is given below: value) agree for such restructuring subject to that it
Previous would not be binding on the lenders to sanction
Position after 2002 amendment
Position additional finance envisaged in the package. The
A cheque is A cheque is a bill of exchange drawn on a
existing loans will only be restructured and it would
a bill of specified banker and not expressed to be payable be the responsibility of the promoter to arrange ad-
exchange otherwise on demand and includes the electronic ditional assistance with new or existing lenders
drawn on a image of a truncated cheque and a cheque in the separately.
specified electronic form.
banker and 2. The accounts, where recovery suits have
not been filed, may also now be eligible for CDR, pro-
expressed to vided the initiative to resolve the case is taken by at
Explanation 1 – For the purposes of this section,
be payable
otherwise on
the expression- least 75% of the lenders (by value) and the account
demand meets the basic eligibility criteria.
a. ‘A cheque in the electronic form’ means a
cheque which contains exact mirror image of 3. BIFR cases are not eligible for restructur-
a paper cheque and is generated, written and ing under CDR system. However, large BIFR loans
signed in a secure system ensuring the
will also now be eligible if specifically recom-
minimum safety standards with the use of
digital signature (with or without bio-metric mended by CDR Core Group, subject to approval
signature) and asymmetric crypto system from BIFR before implementing the package.
b. ‘A truncated cheque’ means a cheque which 4. All banks /FIs should review all eligible
is truncated during the course of a clearing cases where exposure of the financial system is
cycle, either by the clearing house or by the more than Rs.100 Crores and decide about referring
bank whether paying or receiving payment, to CDR system or proceed under SRFAESI Act
immediately on generation of an electronic
image for transmission, substituting the further 2002 or file suit in DRT, etc.
physical movement of a cheque in writing. 5. A chart of comparison of original and re-
Explanation II- For the purposes of this section, vised scheme under CDR mechanism is enclosed as
the expression ‘clearing house’ means the Annexure to the circular. As advised earlier, as in
clearing house managed by Reserve Bank of the case of BIFR accounts, CDR referred cases will
India or a clearing house recognised as such by be handled by Head Office.
the Reserve Bank of India.
Branches /Circle Offices should be fully
DEP.03/03-04 dt.06.05.03 (M-1 S-12) conversant of the revised guidelines and should
contact the related Credit Desk at Head Office im-
ADVANCES mediately whenever any reference or matter related
to CDR mechanism comes forth in connection with
Corporate Debt Restructuring (CDR) System -Revised any of corporate borrower accounts with them.
guidelines
Based on the recommendations of the High ADV.01/03-04 dt.02.04.03 (M-2 S-27)
Level Group and in consultation with Government
of India, Reserve Bank of India has finalised a re- Bank’s financing of equities and investments in shares
vised scheme of Corporate Debt Restructuring RBI has advised Scheduled Commercial
Notable modifications in the Scheme Banks to review their risk management systems
1. The revised guidelines provide two catego- pertaining to capital market exposure. On review,
ries of debt restructuring under CDR System. our Board has approved the continuation of existing
guidelines on financing of equities and investment
Category 1 : Restructuring of accounts classified in shares
as Standard and Sub-Standard.
Within the existing ceiling individual credit
If the account is classified as Standard / exposure ceiling to any single stock broking entity,
Sub-Standard in the books of at least 90% of lend- ceiling on credit exposure against shares of any

2
Recollect April-June 2003 Volume 16 Issue 1

single company to any one borrower as primary PTLR floating rate (at present 12%) with half
security are now put in place. yearly rests
The modified / reiterated guidelines are Repayment
enclosed to the circular. While financing against In 36 equal monthly instalments with no holiday
equities, branches are advised to strictly adhere to period
the guidelines laid down. Security
Hypothecation of Vehicle and Guarantee from a
ADV.04/03-04 dt.08.04.03 (M-2 S-25)
suitable thrid party acceprtable to the Bank
Indian Bank Kisan Bike Scheme- Modifications and Documentation
Introduction of IB Agri. Vendors Bike Scheme • D.68, D-19A, B, C, D, D-20, F-13, F-74
Indian Bank Kisan Bike Scheme - Modifications • All other documents as per documentation
Considering the merit in the suggestions of manual
the Branch Managers and in order to reach more
Other terms and conditions
number of farmers, the following relaxations are
made in the land holding norms. • Vehicle should be registered with Regional
Transport Authority
Family land holding: 2 acres of irrigated land (or) 4
Credit acres of rainfed land. • Lien should be entered in the RC book
Limits - (or)
Upto Family land holding:1 acre of agricultural land and • Copy of RC book and duplicate key should be
Rs.25,000/- income of not less than Rs.2,500/- per month from Deposited with the branch
vending in agri or allied commodities (like milk
vendors,vegetable vendors) petty shop running or • Comprehensive insurance of the vehicle in-
other assured income of not less than Rs.2500/- cluding bank clause and renewable every year
per month subject to production of documents. at borrower's cost.
More than Family land holding: 3 acres of irrigated lands (or) Implementing branches
Rs.25,000/- 6 acres of rainfed land. All branches throughout the country
but upto (or)
Rs.50,000/- Family land holding:1 acre of agricultural land or Sanctioning Authority
income from vending in agri or allied commodities All Branch Managers irrespective of the scale
or other assured income of not less than
Rs.5000/- per month subject to production of
Classification of advances
documents. Such advances to be classified as indirect credit to
agriculture, as the asset created helps in Marketing
IB Agri.Vendors Bike Scheme
of agricultural produce.
Objective
To facilitate the small vendors or SHGs in rural/ ADV.06/03-04 dt.11.04.03 (M-2 S-20)
semi- urban / urban/metropoliton areas engaged in
vending Agricultural & allied produces - to carry Master Circular on IB Home Loan Scheme
produces to the nearby market centres for selling. This Master Circular on IB Home Loan
Eligibility schemes is brought out incorporating all amend-
• Age: 18-55 years at the time of availing the ments made upto date for easy reference of the
loan. branches / field functionaries as under:
Annexure 1 : Home Loan Scheme to Public.
• Should possess a permanent valid driving li-
cense issued by appropriate authority Annexure 2 : Home Loan for Repairs / Renovation.
• Should be a permanent resident of the village. Annexure 3 : Extension of the Revised Home Loan
Scheme to Staff members.
• Monthly income of the family as per Branch
Manager's Assessment should be Rs.2500 per Annexure 4 : NRI Home Loan Scheme.
month (minimum). Branches are advised to exercise utmost
Purpose care while processing the application and ensure
To acquire any type of motorised two wheelers that the advances under the scheme remain as stan-
dard assets through proper appraisal/monitoring of
Loan Amount
the account, duly taking into account the following:
Maximum of Rs.25000/- (road price inclusive of
Registration, road tax and insurance) • Repayment capacity of the borrower
Margin • All necessary approvals are obtained (such as
10% of total on-road price (new vehicles only) Building Plan, Clearance from Town Planning
Interest Rate

3
Recollect April-June 2003 Volume 16 Issue 1

Department, Approval from Housing Society As per the extant guidelines, the staff can-
etc). not avail an educational loan at the branch where
• The legal opinion is clear as to title and mort- he/she is working. Henceforth, the staff who is
gageability of the property. guarantor / co-borrower, can avail his/her
son’s/daughter’s loan at the branch where he/she is
• No subsisting encumbrances. working at present. Staff working at administrative
• Valuation of the property is comparable with offices are permitted to avail the educational loan
prevailing market rates. through the branch where the other loans are
availed and salary drawn.
ADV.11/03-04 dt.30.04.03 (M-2 S-38) Service charges for issue of capability certificate
Risk weight on Home Loan to Individuals For educational loan under IBA schemes,
sanctioning authorities at the level of Circle Head
With a view to further improve the flow of can issue capability certificates (as per format F-
credit to Housing Sector, RBI has decided to liber- 173 enclosed to the circular) for students going
alise the prudential requirement on risk weight for abroad for higher studies. Circle Heads are permit-
Housing Finance by Banks. Accordingly, Banks ted to issue non exceeding five originals by mark-
extending Housing Loan to individuals against the ing them as “Original set I,II,III,IV and V. All such
mortgage of residential properties would be per- certificates to be issued at a time and not as when
mitted to assign risk weight of 50%, as per exhaus- the students may require.
tive details given by RBI. Loans against the secu-
For such certificates, service charges shall
rity of Commercial Real Estate would continue to
be levied at the same rate at which fees for issue of
attract 100% risk weight as hitherto. solvency certificates are charged. Branches should
Branches are advised to take advantage of also follow the other guidelines prescribed for issue
the lower risk weightage stipulated for Housing of solvency certificates while issuing capability
Finance and enlarge the asset portfolio under the certificate.
category and improve the standard assets portfolio Undertaking letter to be obtained on the minor
of the Bank. borrower attaining majority
The existing undertaking ketter F-162 to be
ADV.12/03-04 dt.03.05.03 (M-2 S-38) obtained by branches from the student borrower
Master Circular on Priority Sector Advances and the parent/guardian as guarantor, on the minor
borrower attaining majority, has been suitably
Based on guidelines received from RBI, modified for educational loans under IBA schemes
branches were advised through various circulars on also. The modified format of F-162 is enclosed to
classification of advances under various segments the circular.
of Priority Sector. Correct classification of advance
and proper reporting under the appropriate heads Branches are advised to take note fo the
will only facilitate us in projecting the performance above modifications and scout for good educational
of the Bank in proper limelight, lest the good work loans during the ensuing academic year.
may go unnoticed. ADV.16/03-04 dt. 20.05.03 (M-2 S-19)
Now, to enable branches to source one cir-
cular in regard to guidelines governing classifica- Monitoring of LC / Guarantee limits
tion of priority sector advances, this master circular Letters of Credit
updated upto March 2003 is brought out. The frequent devolvement of LCs and de-
lay in getting the AB adjusted have been attracting
All the members of staff are advised to go
adverse comments of RBI Inspecting officials /
through the circular, be familiar with the guidelines
Statutory Auditors. It is imperative that even at the
and properly classify the advances in the various
time of assessing LC limits / Opening of LCs,
statements submitted to Circle Office / Head Of- branches should carefully analyse the lead-time for
fice, RBI, Lead Bank etc. LCs / Cash flow / operating cycles / manufacturing
ADV.14/03-04 dt.08.05.03 (M-2 S-20) time etc., to ensure that documents will be met on
due date.
Educational Loan – Modifications
It should be appreciated that a letter of
The guidelines on Educational loan scheme credit is a payment instrument and not a financing
stand modified with immediate effect as under: instrument. DA LCs require in depth monitoring
Parking of staff related loans since the goods purchased / imported are in posses-

4
Recollect April-June 2003 Volume 16 Issue 1

sion of the borrower and if close supervision is not explained above would serve as early warning sig-
ensured, chances of diversion of funds / default on nals as to whether is a possibility of devolvement of
due date are likely to be higher. Wherever possible, guarantees issued so that timely proactive correc-
stocks received under LC may be kept under tive action can be initiated.
Bank’s lock and key and released on pro rata pay- Branches are advised to closely monitor the
ment basis. In cases, where the goods are in the outstandings in L/C, Guarantee and follow up for
possession of borrowers, further margin may be the reversal of expired guarantees as well.
built up over a period of time to ensure that docu-
ments will be met on due date. ADV.18/03-04 dt.26.05.03 (M-2 S-26)
If there is default in meeting the commit- Credit Risk Rating Models- CRM 1 to CRM 4
ment, resulting in devolvement of LC, it must be
External Risk Rating Model
taken as a warning signal requiring closer follow Credit Risk Rating is one of the important
up. Causes for the shortfall in cash flow to meet the tools put in place by the Banks for assessment /
LC commitments must be analysed. Frequent de- measurement of risk in respect of exposures to
volvements may be indicative of the borrower not counter party ie., borrowers. Assessment of risk in
being able to collect debtors, incurring loss, diver- the exposure also is utilised as a tool for appraisal,
sion of funds etc. We should not be content with decision making and also pricing the facilities by
mere regularisation of devolved commitments, as it adding risk premium as decided in the Loan Policy
is likely that there could be devolvement with other of the Bank. The Bank at present is utilising an in-
banks, while the cash flows are used in a cyclical ternal model approved by the Board on 22.3.2000
way to meet existing devolved liabilities. Hence it for rating all the borrowal accounts with credit lim-
is necessary to call for the position of all liabilities its of Rs. 2.00 lakhs and above. However, in the
of other working capital lenders under consortium / existing internal model, Industry Risk has not been
multiple banking, so that the realistic position could factored for scoring for want of data and hence the
be ascertained. If devolvements are repetitive, a scoring is made only out of 80. Also there are cer-
detailed action plan should be initiated including tain risk factors weighed more and there is no com-
infusion of funds by the promoters / steps must be parison parameters for industry average, peer group
taken to restructure the account as per guidelines. with bench mark and the scoring is done only on
Guarantees unit’s performance as a stand alone factor without
Once Guarantees are issued, most of the any comparison.
branches do not have any Monitoring system. In To set right this deficiency, an External
fact several branches do not appreciate the under- Risk Rating Model (acquired from M/s ICRA Advi-
lying Risk in respect of Guarantees issued and in- sory Services) is now introduced. . This model can
stead merely bank on the margin money/ additional be applied only to borrowal accounts under manu-
securities for comfort. At the time of assessment / facturing sector with an exposure of Rs.100 lakh
issue of Guarantees, branches should analyse the and above. This model is having two parts viz.,
possibilities / circumstances under which an invo-
cation is likely to take place and such possible areas Moody’s Financial Analyst (MFA) and
must be closely monitored. Moody’s Risk Adviser (MRA).
After the guarantee is issued, branches This model has already been put in use by
should periodically inspect / call for progress re- HO : Credit Department. Other select Circle Of-
ports to satisfy the progress of construction. Like- fices having large exposures and large borrowal
wise, in the case of financial guarantees (like ad- accounts have been provided with MFA software
vance payment/ mobilisation of advance/ Bid Bond/ package for analysing the financial data and gener-
Retention Money guarantee), mere assessment of ating relevant reports. These reports can be utilised
the quantum of guarantees needed, based on the at appraisal stage also. The final scoring is made at
likely strike rate (success rate) in the case of bids, Credit Department, HO on receipt of MFA data by
percentage of contract value for which advance scoring on other qualitative risk factors like, Indus-
payment will be available etc., will not suffice. In try risk, Management risk, Business risk, etc on
addition, the cash flows must be called for, for each applying MRA.
contract, to assess whether there will be profit in Internal Risk Rating Model
such ventures. With a view to cover other segments of
Thus there is always a need to closely credit portfolio of the Bank i.e., Trade, NBFC, SSI
monitor the financial progress / physical progress in Sectors and small borrowers, internal risk rating
respect of guarantees issued. The monitoring tools models (Credit Risk Models-CRM) have been de-

5
Recollect April-June 2003 Volume 16 Issue 1

veloped by the bank for each segment of borrowal • Legal opinion certifying clear and marketable
accounts separately as under: title to the property is obtained
CRM 1: Simple Credit Rating (Risk Rating) Model • Lay-out and the Plan of the building is ap-
for credit limits of Rs.2 lakhs and above and upto proved by the appropriate Authorities
Rs.25 lakhs.
• Legal Opinion and Valuation Certifi-
CRM 2: Credit Risk Assessment Model for Trade cate/Estimate are from our approved Law-
Segment for working capital limits of Rs.25 lakhs yer/Engineer at the place where the property is
and above located
CRM 3: Credit Risk Assessment Model for NBFC • Adhesive stamp is affixed on the document and
sector for working capital limits of Rs.25 lakhs and cancelled by the Branch Manager/Stamp Of-
above fice/Treasury
CRM 4: Credit Risk Assessment Model for SSI • Text of the document is typed on non-judicial
sector for working capital limits of above Rs.25 Stamp Paper of requisite value, completed in all
lakhs and upto Rs.100 lakhs respects and signed by the customer
The features of the above models, parame- • If EM is created at a place other than where the
ters, marks, instructions for filling up the Models, property is located, stamp duty is paid as would
etc., are furnished in detail in the circular. be applicable for the loan amount had the mort-
Utility of the Models gage been created in the centre where the prop-
With the introduction of above 4 internal erty is situated (for example, property located
risk rating models and also the Moody’s Risk Rat- in Mumbai and EM created in Chennai)
ing Model (MFA/MRA), it is possible for the Bank
to assign risk rating for exposures under all seg- • 30 days after creation of EM, one more En-
ments in the Credit portfolio. This approach will cumbrance Certificate is obtained
enable us to comply with the directive of RBI under • In respect of accounts taken over from other
Credit Risk Management System i.e. subjecting all Banks/Institutions, the original documents are
borrowal accounts with the credit limits of Rs.2 obtained within a reasonable time (maximum
lakh and above in all category / segments under risk 15 days) and mortgage formalities are com-
rating exercise. pleted. Acknowledgement received from the
The credit risk models are to be applied for Bank/ Institution be kept with the documents
rating of the borrowal accounts by the Branches • Inspection of the property is done meticulously
immediately. The first such rating exercise is to be both prior to the disbursement of the loan and
done for the year 2002-03 and continued thereafter during the post-disbursement period and record
on yearly basis. be maintained. Branch Manager should satisfy
himself/herself about the actual ownership and
ADV.19/03-04 dt.27.05.03 (M-2 S-37) occupancy of the property taken as security by
making proper enquiries and keep a record of
Home Loan Scheme – Documentation and Security
aspects the same.
There is a perceptible improvement in our ADV.20/03-04 dt.31.05.03 (M-2 S-38)
Bank in the overall marketing of Personal Loan
products, especially in the Home Loan segment and Guidelines for issue of Commercial Paper
we need to further intensify our efforts to sustain In order to provide further flexibility to
and accelerate the progress. both issuers and investors in the Commercial Paper
While focussing attention on achievement Market, the following amendment is made with
of targets under different Credit Schemes, it is im- effect from 29 .04.2003.
perative that the quality of the assets is maintained Existing Amended
throughout and the security taken by us is enforce- Stand - By Facility Stand - By Facility
able at any point of time. In view of CP being a In view of CP being a 'stand alone'
'stand alone' product, product, it would not be obligatory in any
In view of this, branches are advised to it would not be manner on the part of the banks and FIs
verify the following aspects regularly/ensure their obligatory in any to provide stand-by facility to the issuers
compliance and set right any irregularities/ defi- manner on the part of of CP. Banks and FIs have, however,
banks and FIs to the flexibility to provide for a CP issue,
ciencies in documentation: provide stand-by credit enhancement by way of stand-by
• EM is properly created with all the listed out facility to the issuers of assistance / credit, back-stop facility etc.
documents CP. Banks and FIs based on their commercial judgement,

6
Recollect April-June 2003 Volume 16 Issue 1

would, however, have subject to prudential norms as rowers who have not yet submitted application for
the flexibility to provide applicable and with specific approval of compromise settlement of their dues and dispose of
for a CP issue, credit their Boards. Non - bank entities
enhancement by way including corporates may also provide the applications on merits at the earliest. Circle Of-
of stand-by unconditional and irrevocable guarantee fices / Branches must make all out efforts to ensure
assistance/credit for credit enhancement for CP issue obtention of maximum number of applications and
backstop facility, etc., provided: thus augment recovery of NPA under the extended
based on their
commercial judgement i. the issuer fulfils the eligibility criteria RBI scheme.
and as per terms prescribed for issuance of CP
prescribed by them. ADV.24/03-04 dt.07.06.03 (M-2 S-18)
ii. the guarantor has a credit rating at
However, these least one notch higher than the
should be within the issuer given by an approved credit
Data Format for reporting to CIBIL
prudential norms as rating agency and As per RBI guidelines, branches have al-
applicable and subject
iii. the offer document for CP properly ready been advised to obtain consent letter from all
to specific approval of
the Board. discloses the networth of the the existing borrowers/guarantors as well as from
guarantor company, the names of all new advances disbursed from Oct 2002 on-
the companies to which the wards. The deadline set by RBI for submission of
guarantor has issued similar
guarantees, the extent of the information/data to Credit Information Bureau of
guarantees offered by the guarantor India Ltd (CIBIL) was also conveyed to branches.
company, and the conditions under For the purpose of reporting, CIBIL has devised
which the guarantee will be invoked. two formats as under:
RBI further advised that Banks are allowed
1. Commercial Data Format
to invest in CPs guaranteed by non-bank entities
This format is to be used for submission of
provided their exposure remains within the regula-
data for all borrowal accounts in the name/title of
tory ceiling as prescribed by RBI for unsecured ex-
non-individual names (all commercial names like,
posures.
ABC Ltd, Ahmed & Sons, Rama Associates, etc),
ADV.22/03-04 dt.05.06.03 (M-2 S-24) irrespective of the purpose, security, quantum, the
nature of advance. The format is given in Annexure
Home Loan Scheme - Checklist for Do’s and Don'ts I to the circular.
The inspecting officials have pointed out 2. Consumer Data Format
certain areas where due care has not been exercised This format (Annexure II to the circular)
by certain Branches resulting in dilution of the should be used for reporting data on all accounts in
quality of assets under Home Loan Scheme. A the name/title of individual persons, including loans
checklist by way of Do’s and Don'ts has been pre- sanctioned in joint and several names.
pared and given in the annexure to the circular
which would be a useful tool for the Branches for It is important to note that in the formats
easy reference. The list covers major parameters for fields with the option ”Required”, the data
and it is highly illustrative, though not fully ex- should be compulsorily furnished. For fields with
haustive. option “When available”, the data element is not
compulsorily and submission of report relating to
Branches are advised to meticulously fol- the account need not be held up.
low the guidelines given in the checklist so that the
safety and quality of our Home Loan portfolio will The circular contains the action plan of our
be well taken care of. In addition to these, branches Bank to comply with the RBI guidelines on sub-
have to comply with the other safeguard require- mission of credit data CIBIL and role of Circle
ments applicable for any advance portfolio. EDPs in this regard. All branches/ CEDPs/ Credit
Desks/ HO: Legal dept are advised to undertake the
ADV.23/03-04 dt.05.06.03 (M-2 S-38) process of data updation immediately and meticu-
lously.
Guidelines of RBI for compromise settlements of chronic
Non- Performing Assets upto Rs.10 Crore ADV.25/03-04 dt.11.06.03 (M-2 S-75)
RBI vide their circular DBOD. No BP.BC. Revision in PLR and applicable Rates of Interest [card
108/21.04.117/2002-2003 dated 23.05.2003 has rate] for Loans and Advances
conveyed extension of time period for receipt of With effect from 01.06.2003, PLR is re-
applications under the OTS scheme to 30.09.2003 duced from 11.75% to 11.50%. This revision is ap-
and date of processing applications to 31.12.2003. plicable for all the outstanding and fresh advances
In view of above extension, branches are linked to PLR. PTLR remains unchanged at
advised to closely follow-up with the eligible bor- 12.00%. With this reduction, the Rate of interest

7
Recollect April-June 2003 Volume 16 Issue 1

linked to PLR for various loans and advances, mia, should be at PLR plus 4.00% or PTLR plus
structured loan products (SLPs) under Float- 4.00%.
ing/Variable mode will stand reduced by 0.25%. Monthly charging of discounted interest
The effective ROI will not undergo any In respect of loans and advances brought
change in the following cases: under monthly charging of interest, branches shall
refer to HO: CPGD circular ADV.56/02-03 dated
• existing advances linked to PLR under Fixed
31.07.02 to arrive at the applicable / corresponding
Rate Concept
discounted ROI and apply the same monthly.
• in advances where the spread over or below the Pricing Chart
PLR is modified For advances linked to Bank's PLR / PTLR,
• where finer rates are accorded in absolute the current pricing chart (master chart), after giving
terms, without linkage to PLR. effect to the revised PLR, is given in Annexure 1 to
For future credit sanctions under Fixed the circular. For any clarification on the applicable
Rate concept with linkage to PLR the effective Rate of Interest, the Branches shall seek clarifica-
Fixed ROI shall be determined based on the current tion from their Circle Offices. For any support
PLR of 11.50% with the stipulated spread, if any. service, Circle Office may contact H.O.CPGD.

Advance against Third Party Deposits ADV.28/03-04 dt.16.06.03 (M-2 S-34)

The ROI for loan/OD sanctioned against Rationalisation of Interest Rate on Agricultural Loans
third party peposits will have to be reviewed on
case to case basis as the ROI is "PLR" or "Deposit In tune with the policy of Government of
Rate + 3%" whichever is higher. India and to ensure percolation of the full benefits
of declining rates of interest to Agriculture Sector,
Export Credit
our Board has permitted further reduction in the
The reverse spread applicable for export interest rate on agricultural advances as detailed
credit is modified from 3.25% to 3.00% p.a. from below.
PLR. Hence revised ROI for export credit shall be
as under: Interest Rate structure for all Agricultural advances
Revised ROI
EXISTING REVISED Net effect Limit Facility
(w.e.f.1.4.2003)
PC WC PLR
PLR less 3.25% PLR less 3.00% No Upto and inclusive of Rs.2 lakhs
upto180 = 8.50% = 8.50% change TL PTLR
days
PS upto PLR less 3.25% PLR less 3.00% STL & WC PLR+2%
No Over Rs.2.00
90 days = 8.50% = 8.50% TL PTLR+2%
change
FBP/ FBN The revised rates are effective from
For all other categories of export credit / 01.04.2003 and applicable to all existing and fresh
ECNOS, the revised PLR and the existing spread agricultural advances under “Standard Category”
over PLR are applicable. where review/renewal is in force.
For the purpose of reckoning the applicable
Fixed Rate Option
rate only, agriculture short term as well as term
Fixed Rate premia in structured loan prod-
loan have to be clubbed and the applicable rate of
ucts will continue as stipulated in the respective
interest charged.
structured loan products.
Finer Rate of Interest
For other advances, wherever the Fixed
For sanction of finer rate of interest for ag-
Rate option is made available as per the policy of
ricultural advances, where the limit is more than
the Bank, the risk premia for such fixed rate option
Rs.2 lakhs, guidelines communicated vide HO:
shall be added over the applicable card rate, as un-
Credit Division Circular ADV.17/2000-
der: 01dt.11.05.2000 will continue to be adopted with-
Category of credit facility Fixed Rate Premia out any modification in the rating parameters.
Short term/Demand Loans with However, considering the fact that the maximum
0.50% over the card rate
repayment less than 3 years spread is now proposed to be reduced to two, for
Loans with repayment of 3 years each grade/slab, rate of interest will be reduced by
1.00% over the card rate
and above
half a percentage point instead of one percentage as
Excluding the penal interest, the maximum was done hitherto.
ROI quoted, but inclusive of fixed rate option pre-
The rate of interest applicable for various
categories based on grading will be as under:

8
Recollect April-June 2003 Volume 16 Issue 1

Grade Term Loan Working Capital However, Circle Offices should arrange for submis-
Prime PTLR to PTLR +0.5% PLR to PLR+0.5%
sion of hard copy.
AAA PTLR + 0.5% to PTLR +1% PLR+0.5% to PLR+1%. ADV.33/03-04 dt.24.06.03 (M-2 S-18)
AA PTLR + 1% to PTLR + 1.5% PLR+ 1% to PLR+1.5%
A PTLR + 1.5% to PTLR + 2% PLR+1.5% to PLR +2% PLR / PTLR Linkage to ROI for loans and advances
BBB & In cases of working capital and other de-
others
PTLR + 2% PLR + 2%
mand / short tenor loans, “PLR” shall be the base
Powers for sanction of finer rate of interest rate. When the repayment is to be completed at 36
is delegated to Executives in the cadre of General months or above from the date of disbursement, as
Manager and above. Lending at Sub-PLR / Sub- per the terms of sanction ticket, the base rate to be
PTLR can be considered on a case to case basis taken is "PTLR".
only at HO, wherever it is justified/warranted.
The finer spread over the PLR, sanctioned
The market is witnessing stiff competition on case to case basis, shall be linked to the revised
and good borrowal accounts are being chased. PLR, provided the ROI was not under "fixed" rate
Therefore, branches should be vigilant, aggressive concept as per sanction terms.
and respond to market demands adequately, lest we
may lose these prime accounts. The changes to be incorporated in the
pricing chart (master chart) annexed to circular
Branches should now capitalise on the at- ADV.28/2003-04 dated 16.06.2003 are furnished in
tractive pricing package for agricultural loans and the circular.
scout for viable agricultural proposals from credit-
worthy persons. ADV.34/03-04 dt.26.06.03 (M-2 S-34)
ADV.30/03-04 dt.18.06.03 (M-2 S-21)
PERSONNEL
New Compromise Proposal format
As branches are aware, the compromise Opening of Asset Recovery Management Circle Office at
proposals received at Circle Office/Head Office are Chennai
processed and placed to the respective Commit- An Asset Recovery Management Circle Of-
tees/Sanctioning authorities for sanction. Whenever fice (ARMC) has been opened at Chennai on
clarifications regarding financials of the borrow- 25.03.2003 with IBGA code A 118.
ers/guarantors, their asset details, status of claims
PRNL.01/03-04 dt.04.04.03 (M-3 S-42)
pending, etc., are sought by the sanctioning author-
ity, very often the matter has to be referred back to Reimbursement of Travelling expenses to officers using
the concerned Circles/Branches resulting in avoid- their own vehicles for official duty
able delay in processing the proposals, as the ex- In view of the hike in petrol prices, with
isting format does not cover these aspects. immediate effect, it has been decided to revise the
In order to improve the quality of informa- rates for reimbursement towards the travel expenses
tion / data and save time in processing the propos- to officers for using their own vehicle for official
als, the existing format has been redesigned incor- purpose as under:
porating changes so as to take care of the additional Reimbursement
Type of Vehicle
information required as above. The new format rate per km (Rs.)
aims at submission of a comprehensive compro- Four Wheeler
mise proposal enabling the Circle Office/Head Of- Engine capacity of 1000 cc or more 4.50
fice to process and present the same speedily to the Engine capacity less than 1000 cc 3.60
respective sanctioning authorities/committees. Motor Cycle & Scooter 2.00
W.e.f., 15.07.03, branches/Circle Offices are ad- Mopeds 1.25
vised to submit the proposals for compromise/write
off/waiver of interest in the revised format only PRNL.04/03-04 dt.09.04.03 (M-3 S-45)
(enclosed to the circular) leaving no column un- Payment of TA/LFC Advance to Award Staff
filled.
Consequent to the increase in railway fare,
The Circle Heads are advised to submit the with effect from 01.04.2002, the revised per unit
format in A4 sheet typed neatly, properly and all entitlement for award staff for journeys performed
columns filled in wherever feasible. The Compro- under LFC, on or after 01.04.2003 is furnished be-
mise proposal may also be submitted in a floppy or low:
through e-mail to avoid delay in transmission.

9
Recollect April-June 2003 Volume 16 Issue 1

Two Years Block (Rs.) Four Years Block (Rs.) reminded to get the interest checked by two offi-
Clerk 2496/- 3966/- cials as per extant guidelines. When Staff are trans-
Part-Time-Clerk 1630/- 2496/- ferred, the product in respect of their PF Loan /
Sub-Staff 516/- 716/- RWPF should be properly arrived at and correctly
Part-Time Sweeper communicated to the branch where the staff is
i. 1/3 Wages 254/- 406/- transferred. Interest in respect of PF Loan / RWPF
ii. ½ Wages 338/- 516/- is not an income of the branch and hence invariably
iii. ¾ Wages 432/- 632/- the same has to be remitted to HO:Personnel Dept
through the Circle Office as provided in PEM-2A
PRNL.10/03-04 dt.30.04.03 (M-3 S-45) statement.
Amendment to Regulation 38 of IBOSR, 1979 Branches are instructed to be very careful
in calculating and collecting interest dues from PF
The above regulation is modified as under:
Loan/RWPF. Inspecting Officials undertaking
Provided also that where an officer leaves regular inspection and officials verifying leakage of
or discontinues his services by resignation on or income at branches are advised to verify correct-
after 1st April, 2001 after giving due notice under ness of interest calculations in respect of PF
sub- regulation (2) of Regulation 20, he may be Loan/RWPF. Branch officials would be account-
paid a sum equivalent to the emoluments in respect able for short collection of interest from PF Loan /
of the Privilege Leave to the extent of half of such RWPF.
leave to his credit on the date of cessation of
services, subject to maximum of 120 days. PRNL.30/03-04 dt.30.06.03 (M-3 S-43)

PRNL.24/03-04 dt.07.06.03 (M-3 S-50) GENERAL

Short Calculation of interest in PF Loans and Refundable Renewal of Bankers' Indemnity Policy for the Financial
Withdrawal against PF Year 2003-2004
It has been observed that interest dues in The Bankers’ Indemnity Policy has been
respect of PF Loans and Refundable Withdrawal renewed with policy number 260100/
against PF are not being calculated correctly and 46/03/7700004 for the financial year 2003-2004
recovered fully. In several cases, the unrecovered commencing from 01-04-2003 with
amount is sizeable, causing serious concern. We
M/s National Insurance Company Limited
give below some of the reasons for short collection Division I, Commercial Union Building
of interest, which are illustrative. 9, Wallace Street, Mumbai – 400 001
• Wrong calculation of product Phone: 22074841-22074844
The circular contains details of risks cov-
• Wrong communication of product by the ered, claim procedure, features of the policy, clari-
branch on transfer of a staff to another branch fications and special instructions.
• Previous branch product is not taken into ac-
count while closing the loan accounts GENL.03/03-04 dt.20.05.03 (M-6 S-81)

• Interest taken into branch income instead of Structured Financial Messaging Solution (SFMS)
remitting to HO:Personnel Dept Reserve Bank of India has established the
• Wrong application of rates of interest for vari- Indian Financial Network (INFINET) as a reli-
ous periods able, fast, safe and secure communication backbone
For ready reference of branches, interest for intra-bank and inter-bank communications.
rates for various periods on loans against PF are Public and Private sector Banks, Foreign Banks and
given below: Financial Institutions are members of the Closed
User Group (CUG) of INFINET. RBI has also
Period Interest rates taken up implementation of Payment and Settle-
Prior to 31.03.1997 12.00% ment Systems for the Indian Banking and financial
01.04.1997 to 30.09.2000 13.00% sector using the INFINET.
01.10.2000 to 30.09.2001 12.00%
Structured Financial Messaging Solution (SFMS)
01.10.2001 to date 10.50%
SFMS is a secured, common messaging
Branches are expected to calculate and solution designed in the lines of SWIFT for all in-
verify the interest chargeable on PF Loans applying ter-bank and intra-bank transactions. Systemically,
appropriate rates of interest to avoid leakage of in- important payment systems require a fast, secured
come of the Provident Fund Trust. Branches are

10
Recollect April-June 2003 Volume 16 Issue 1

and risk-free messaging platform and SFMS pro- imperative that the branches are conversant with the
vides such facility. technology and make best use of it for improved
Message Security in SFMS customer service and enhanced profitability.
In SFMS messaging, the messages are cre-
GENL.08/03-04 dt.23.06.03 (M-6 S-82)
ated electronically, authenticated electronically and
sent through electronic medium with Public Key Renewal of Burglary and House Breaking Policy
Infrastructure (PKI). Thus, message being carried
The Burglary and House Breaking Policy
over SFMS platform will have the features of
has been renewed for the financial year 2003-2004
authentication, confidentiality, integrity, authorisa-
for the period 10.01.2003 to 09.01.2004 under pol-
tion and non-repudiation. The Smart card based
icy number 010503/46/02/0073 with
access at the point of message generation for SFMS
will provide additional security and audit trail. M/s. United India Insurance Co. Ltd
Branch Office No.010503
SFMS Implementation in our Bank Catholic Centre, 64, Armenian St
Our Bank has taken-up implementation of Chennai 600 001
SFMS on a pilot basis at Seven branches – Har-
bour, Madras GT, Thousand Lights, OSB Chennai, The circular contains features, details of as-
sets covered under the policy, exemption clauses,
Hyderabad Main, Mumbai Fort and Nagpur.
and the procedure for reporting of occurrence of
Considering that SFMS is going to be the loss.
messaging platform, for inter-bank and intra-bank
communications in the years to come, it becomes GENL.09/03-04 dt.23.06.03 (M-6 S-72)

11
 Volume 16 Issue 2 Recollect July Sep 2003
of safeguarding against opening of accounts by
DEPOSITS undesirable persons or opening of accounts in
Recollect

fictitious names.
Notice Board in Computerised Branches, Making
Entries in Pass Book, etc. A separate register is to be maintained at
branch level to record the details of the individual
Central Vigilance Commission has come
cash deposits and withdrawals of Rs.10.00 lacs and
across a case in which a staff/Computer Terminal
above and the register is to be kept in the custody of
Operator of a Branch had committed a fraud by
the Manager-in-charge of the branch.
making manual entries in the passbooks of the
customers even though the Branch was fully Branch Manager and the Officer-in-charge of
computerised. The Commission apprehends that deposit account section should atleast for the first six
some illiterate/semi-literate people having accounts months keep a close watch on newly opened
in the semi-urban/rural branches are likely to be accounts accounts. Whenever, if there is any
taken for a ride by nefarious persons. This may suspicion regarding large transactions dispropor-
happen because in these areas, people may not be tionate to the stand up/background of the depositors,
aware that in the fully computerised branches the appropriate action to be initiated as per the
entries in their passbooks or other documents etc. are guidelines in this regard. Branches should be
to be made only through computers and not vigilant when the customers tender instruments for
manually. The Commission is, therefore, of the collection into their newly opened account for huge
view that in order to avoid commissioning of frauds, amounts.
a Notice Board in each computerised branch be put
Though the above guidelines were already
up clearly indicating that the branch is a compute-
communicated/reiterated, instances of opening of
rised one and any entry manually made should be
fictitious accounts and fraudulent encashment of
authenticated by an officer or Manager of the
cheques/DDs/interest warrants/dividend warrants etc
Branch.
in such a/cs at the branches have come to light.
Branches are advised to ensure that the Therefore branches are advised to strictly adhere to
directions contained in the circular are strictly the guidelines prescribed by Head Office through
adhered to various circulars issued time and again in respect of
opening of accounts
DEP.08/03-04 dt. 9.7.03 (M-1 S-76)

Master charts for calculation of maturity values / Issue DEP.10/03-04 dt. 13.8.03 (M-1 S-12)
prices for RIP/RD /Cash Certificate
Concept of Quarterly Average Balance in Current
In the Master charts provided by IBA in 1990, Accounts
the maturity value or issue prices for various The concept of minimum balance in current
deposits like RIP, Cash certificate and Recurring
accounts has been changed from daily average
Deposit etc are provided for the interest rates from
minimum balance to quarterly average balance with
6.00% p.a. to 15.00% p.a. for periods ranging from 3
effect from 01.10.03. The amount of quarterly
months to 240 months Since the interest rates on
average balances to be maintained are Rs.5,000 and
term deposits have been revised downwards below
Rs.3000 and the penalty to be levied in case of non
6% p.a. at present, the master chart for RIP, RD and
maintenance is Rs.300 and Rs.100 for computerised
Cash certificate schemes for finding maturity values
and non-computerised branches respectively.
or issue prices for the rate of interest from 0.25%
p.a. to 5.75% (compounded quarterly) for periods The quarter for this purpose will be reckoned
ranging from 3 months to 240 months is enclosed to from January to March, April to June, July to
the circular for the use of non-computerised September, and October to December in a calendar
branches. year. Quarterly average balance shall be arrived at
by dividing the sum total of the daily products by the
DEP.09/03-04 dt. 4.8.03 dt. (M-1 S -14)
number of days of the quarter.
Opening of new accounts at Branches Branches are advised to go through the
The necessity of proper introduction and circular for a detailed study.
obtention of photograph of account holders have
been specifically impressed upon in various circulars DEP.11/03-04 dt. 9.9.03 (M-1 S 12)
issued by HO from time to time. Introduction to an
account is not merely a formality but it is a measure

1
Volume 16 Issue 2 Recollect July Sep 2003

ADVANCES smooth cash flow.

Eligible Max.Rs.10 lakh for bus with capacity of 45 (approx)
Credit Risk Policy Amount Max.Rs. 7 lakh with 21 seater capacity
Max.Rs. 5 lakh, if it is Mahindra Van.
After taking into account the present scenario Margin
on Credit Risk Management System in Banks, a For new 20% on the cost of vehicle
policy on Credit Risk Management has been vehicles
formulated in our Bank. The details of the policy are For Second Additional Margin of 5% for each year to be brought
given as annexure to the circular in the form of a Hand in by the applicant according to age of the vehicle.
booklet for the information and guidance of Vehicle [e.g. if a vehicle is 4 years old, with 20% extra
margin( i.e. 5% x 4) the total margin will be 40%].
branches/offices. Interest PTLR + 0.50% (Presently 12.5%)
Repayment 60 EMIs
ADV. 35/03-04 dt. 11.7.03 (M-2 S-37) Security Hypothecation of Vehicle to be purchased.

Modifications to Annapoorna and Aroghya Scheme For other terms and details of the scheme,
branches are advised to refer the circular.
Target group: Caterers of all Kinds who
supply food to Schools/Colleges or for Domestic
ADV.37/03-04 dt. 11.7.03 (M-2 S-38)
functions like Birth Days, Marriages, parties etc and
staff canteens in established organisations. Credit to borrowers whose accounts were closed
Refreshment stalls in Railway stations/ Bus stations. through compromise / OTS /Write off
Fast food centres situated in important Tourism
Our Bank was following the policy of not
centres, Temple towns, National High ways. Special
providing finance to those who have settled their
thrust to Degree/Diploma holders in Hotel
borrowal accounts through OTS involving some
Management/Catering Technology for setting up
sacrifice on the part of the Bank. Now the policy is
Mid-sized hotel/Restaurants, with minimum of 3
changed and Branch Managers, irrespective of the
years experience in Metro Cities.
scale, are empowered to sanction loan upto the
Purpose: For providing of musical system/ musical powers delegated, to the following category of
instruments in the Hotel premises. For setting up of borrowers:
Bar-Restaurants. To encourage Diploma/Degree
Category of Borrowers Amount of sacrifice
holders in Hotel Management/Catering Technology
Loan against gold ornaments (Agri
for setting up new Hotels to finance for acquiring Irrespective of the amount of
& Non Agri).Loan under tie up with
premises on lease basis and consider loan for rent sacrifice
Sugar Mills for cultivation of cane.
advance., upto a maximum of Rs.2 lakhs. Where the amount of
Loan under priority upto
sacrifice permitted in the
Rate of Interest: In case of loans given to Women Rs.25,000/-
account was upto Rs.10,000.
entrepreneurs holding Diploma/Degree in Hotel
Wherever sacrifice is more than Rs.10,000 per
Management/Catering Technology, the rate of
borrower, the matter is to be referred to Circle Head.
interest will stand reduced by 1.0% (from the date of
advance) at the end of the repayment period, if the Branch Managers can exercise the powers
account is repaid promptly. For others, the present irrespective of the authority who permitted sacrifice.
rate of interest is continued. Similarly, Circle Heads irrespective of the grade, can
sanction secured loans only to the above category of
Other terms: All Scale III and above Branches are
borrowers where the sacrifice is not more than
permitted to sanction loan. Semi-urban Branches
Rs.50,000/- and where the limit required is upto
are permitted to sanction loan upto Rs.5 lakhs and
Rs.5.00 lakhs per person. The above policy is
urban and Metro Branches upto Rs.10 lakhs. If
subject to the following conditions:
Branch is headed by Scale I or II, the proposals are
to be referred to Circle Head for sanction. i. Quantum of sacrifice made should be mentioned
in the loan application itself.
ADV.36/03-04 dt. 11.7.03 (M-2 S-38)
ii. Reasons for such waiver and competent authority
Loan for purchase of Van/Bus to Educational who took such decision also should be recorded
Institutions therein for further reference.
The salient features of the scheme are: iii. Possibility of having one creditworthy guarantor
while making such advances to ward off risk may be
Purpose Purchase of New Vehicles and second hand
vehicles not more than 4 years old by reputed explored and ensured.
Educational Institutions with sound financials and

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Volume 16 Issue 2 Recollect July Sep 2003

ADV.38/03-04 dt. 11.7.03 (M-2 S-21) a commitment to sanction and the bank reserves its
right to decline the proposal after detailed appraisal.
Financing of Infrastructure Projects
It is observed that in many cases where in-
As some of the instructions relating to the principle sanction is accorded, the proposal for
Coverage, Criteria for Financing, Types of regular sanction is not received even after lapse of
Financing by Banks, Prudential requirement and
the 3 months. In such cases, wherever it is needed,
Assignment of Risk Weight for Capital adequacy branches should obtain specific mandate from the
purposes have since been modified by RBI, the sanctioning authority for extending the validity
policy guidelines are revised in our Bank also. The period.
details are furnished in the annexure to the circular..
While communicating the in-principle
ADV.39/03-04 dt. 18.7.03 (M-2 S-36) sanction to the customer, the following Clause
Flow of Credit to Small Scale Industries (SSI) Sector should invariably be added as part of the conditions
of sanction:
Banks may, while sanctioning/renewing credit
limits to their large corporate borrowers (i.e., The In-principle sanction should not be construed as
commitment on the part of the Bank to sanction the
borrowers enjoying working capital limits of Rs.10 facilities. The same will be considered on merits based on
crore and above from the Banking System), fix the guidelines of the Bank. The Bank reserves its right to
separate sub-limits, within the overall limits, decline the proposal after a detailed appraisal.
specifically for meeting payment obligations in
respect of purchases from SSIs either on cash basis ADV. 41/03-04 dt.25.7.03 (M-2 S-25)
or on bill basis.
Modifications in Home Loan Scheme
The size of sub-limits may be decided taking
into account the projected purchases by the Based on the representations received from
corporate borrowers from the SSIs during a year in various Circle Offices / Branches, the following
relation to their total purchases and other relevant modifications has been made to make our Home
factors. Loan Scheme more competitive and to enable the
Focus Branches to speed up the sanctioning of
Further, with a view to ensuring availability Home Loan application without any loss of time.
of adequate balance in the account for meeting the The modifications made in Home Loan Scheme are
payment obligations to SSI units, banks may ensure as under
that sale proceeds/ other receipts of the borrower are
Parameter Existing Terms Revised Terms
credited to this account on a pro-rata basis.
Processing/ Processing Charges /
Branches are advised to adhere to the Administrative Waived upto Administrative Fee waived
instructions meticulously. In case of any difficulties, Charge 30.06.2003 up to 30.09.03
they should take up the matter with Circle Office / Pre-closure No pre-closure For fresh sanctions to be
Head Office. charges charges are levied made, pre-closure charges
at present of 2% on the drawing limit
ADV.40/03-04 dt. 21.7.03 (M-2 S-22) to be levied, with
immediate effect.
In-principle sanctions – Condition to be added while Take over of Presently we allow Focus Branch Managers
Communicating the in-principle sanction loan accounts take-over of Circle Heads to permit
from NHB accounts from take-over of loan accounts
The practice of according of in-principle approved Nationalised Banks, from all institutions (as
sanction for fresh facilities to new borrowers/ institutions specified Financial shown in the annexure)
under Circle Institutions and who are in the approved
increased facilities to the existing customers was
Head powers Foreign Banks list of National Housing
restored by Circular letter No. CD:CHS:32:2000-01 under Branch/Circle Bank. (subject to
dt. June 16, 2000 of HO Credit Division. This Head Powers. For complying all take over
Circular also prescribed the format of proposal for other HFCs norms)
obtention of in-principle sanction. The in-principle approved by NHB,
the proposals are to
sanction has to be obtained from the appropriate be referred to HO.
authority under whose powers the proposed limit Review of As per existing In respect of Home Loan
falls. On obtention of in-principle sanction, full- Home Loan norms on asset sanctions made by Circle
fledged proposal has to be submitted early with a accounts classification, Head, Circle Head to
view to get the regular sanction within a maximum provisioning and review on the first two
income recognition, occasions and there after
period of 3 months. In-principle sanction shall not be accounts are liable Focus Branch Managers

3
Volume 16 Issue 2 Recollect July Sep 2003

for classification as to be allowed to review Branches/Circle Offices/HO Credit Desks are

non performing within their powers and advised to ensure that review/renewal of accounts
assets even for non report position of all
review / renewal. At accounts in the form of a
are submitted in an evenly distributed manner from
present review is statement to Circle Head October to March every year and bunching is
done by Circle once in 6 months. Circle avoided during March.
Office once in 6 Head to continue to review
months. accounts that are falling ADV.50/03-04 dt. 2.8.03 (M- 2 S- 36)
beyond the powers of
Focus Branch Manager. Financing Educational Institutions – Policy guidelines
All other terms and conditions remain
Credit exposure to any particular field brings
unchanged. The above modifications are applicable
with it certain specific risk perceptions necessitating
to NRI Home Loan/ Staff accounts/ VRS optees
mitigation mechanisms based on the trade practices.
having Home Loan/ Repairs and renovation loan.
Considering the various opportunities and risk
ADV.42/03-04 dt. 26.7.03 (M-2 S-38) factors in financing educational institutions, our
Guarantees - Maintenance of Registers, Issue of Bank has come out with certain policy guidelines on
Notice the subject and the powers to sanction credit limits
The various guidelines with regard to issue of under the policy has also been delegated to different
notices by branches, maintenance of guarantee levels/authorities.
registers and furnishing of details of disputed The guidelines are consolidated and given in
guarantees alongwith present status etc., are detail in the circular. Branches/Sanctioning
reiterated in the circular for information and authorities are requested to adhere the directions,
adherence by branches. For a detailed study on the while considering requests for financial assistance
subject, please refer the circular. from Educational Institutions.
ADV.45/03-04 dt. 28.7.03 (M –2 S-26)
ADV.52/03-04 dt. 7.8.03 (M 2, S 25)
Competitive Pricing of SSI Advances – Revision
Risk Management
The interest rates on SSI advances have been
revised w.e.f.01.07.03 as under: Risk is any real or potential event, action or
omission, internal or external, which will have an
Upto and inclusive of Rs.2 lakhs PLR / PTLR – 1% adverse impact on the achievement of Bank’s
For over Rs.2 lakhs
defined objectives. Risk is inherent in every
Rating Working Capital Term Loan business. Risk cannot be totally eliminated but is to
Prime PLR PTLR
AAA PLR + 1% PTLR + 1% be managed. Risks are to be categorised into high
AA PLR + 1.75% PTLR + 1.75% risk, medium risk and low risk and then managed.
A and below PLR + 2% PTLR + 2%
Risk Management is the process of identifying
The terms and conditions as per HO: SIFD and monitoring the risk and then deciding whether to
Circular ADV 134/2002-03 dt10.02.03 will continue carry, reduce or eliminate it. Risk Management
to apply. covers four essential aspects of risk viz
ADV.47/03-04 dt. 30.7.03 (M-2 S-22) i. Identifying
Timely Review / Renewal of Borrowal accounts ii. Quantifying/measuring
iii. monitoring and
All borrowal accounts (including Term loans) iv. controlling/mitigating the risks.
irrespective of the size of the loan amount must be
reviewed once in six months. In respect of working The Bank has put in place policy documents
capital facilities, review is done after six months of on all major areas of the Bank’s functioning viz.,
Liability Policy, Investment Policy, Long Range
sanction. Renewal of limits is undertaken once in a
Loan policy for lending 2001-05, Loan Policy, Loan
year. Review/renewal of limits are to be completed
policy for SSI, Policy on exposure to industries and
within three months from the due date. As per RBI's
directive, the credit limits, which have not been educational institutions, Policy for exposure on
reviewed/renewed within 180 days from the due date Cooperative Banks, Recovery/Compromise policy,
of renewal (in case of adhoc limits 180 days from ALM Policy, Inspection policy, Disaster Recovery
the date of sanction) the accounts will be treated as Management Policy, Credit Risk Policy, Country
NPA. Risk Exposure policy

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Volume 16 Issue 2 Recollect July Sep 2003

Apart from the above statements, the Bank At the time of taking over charge of a Branch,
has also come out with detailed ‘Manual of the Incoming Manager should thoroughly discuss
instructions’ and Handbooks on all key areas of with the Outgoing Manager on the irregularities
functioning viz., Deposits, Conventional Advances, noticed. After making all efforts to rectify the
Priority Sector advances - Agriculture, Priority mistakes, if there is any residue, it should be
Sector advances - Small Business, Priority Sector incorporated in the Relieving Manager's Certificate.
advances - Small Scale Industries, Ancillary
Thereafter, it will be the responsibility of the
Services, Cash Handling and Management, Foreign
Incoming Manager to follow up with the borrowers
Exchange, Personnel and Office administration,
for rectification of documents. The Incoming
Working in computerised environment, Booklet on
Managers cannot take shelter under the pretext that
Discretionary Powers, Inspection Manual, Security
the irregularities in documentation took place during
Manual, etc.
the tenure of their predecessors.
Master Circulars on matters like Disaster
recovery management, Adherence of systems and ADV. 54/03-04 dt. 9.8.03 ( M 2, S 38)
procedures, Stock audit, inspection of stocks,
Waiver of condition of opening of SB account for
stipulation of term and conditions for loan sanctions
jewel loan borrowers
etc have also been issued.
Insistence on opening savings bank account
One of the main pillars of the risk manage-
for jewel loan customers is one of the constraints in
ment systems is the information system, which
speedier expansion of jewel loan business. To
forms the basis for all analysis facilitating
overcome this, Branches are advised that
management of risk in the bank. Flow of timely,
consistent and reliable data forms one of the Where jewel loan is allowed for the first time
important aspects of the information system. The and where the limit sought is upto Rs.10000, Branch
Board, Risk Management committee of the board Manager can waive opening of SB account provided
are attaching great importance for the timely a photo of the borrower is obtained, JL applicant is
analysis Credit Rating and ALM for initiating introduced by a well-known customer of the branch
corrective actions wherever necessary. Braches are and his signature verified and he hails from the same
therefore advised to submit the data promptly and area.
accurately. The loss that may arise in the operational
For customers availing the jewel loan
area can be reduced by strict adherence to stipulated
subsequently irrespective of limit and for those who
procedures.
seek a loan of more than Rs.10000, branches should
ADV.53/03-04 dt. 8.8.03 (M 2, S 37)
insist on SB accounts
Timely rectification of Documentation irregularities in However, if one of the family members of the
respect of Structured Loan Products borrower is an account holder, opening of SB
Branches should pay attention towards account need not be insisted upon.
obtention of proper documentation, in order to keep
the documents always enforceable in the Court of ADV. 55/03-04 dt. 11.8.03 (M 2, S 20)
Law. As the number of accounts relating to Gramin Mahila Sowbhagya Scheme (GMSS) –
Structured Loan Products are large, the due date for Modification
renewal of documents must be diarised to facilitate
renewal well before their expiry. Likewise, acknow- The above Scheme has been modified as
ledgement of debt cum security (D11) must be under:
obtained in respect of all advances without fail and Existing: Only women in rural areas can be assisted
kept along with the relative documents.
Amended: Women living in rural/semi-urban/urban
Branch Manager and the loan officer should centres also can be financed provided they
periodically verify all the documents and satisfy are engaged in agriculture or activities allied to
themselves that they are in order and enforceable. If agriculture.
any irregularities are noticed, the same should be
rectified then and there. A proper record for having Minimum family income should be Rs.2500
verified the documents should be maintained at the p.m. which should be to the satisfaction of Branch
branch. Manager.
ADV. 55/03-04 dt. 11.8.03 (M 2, S 20)

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Volume 16 Issue 2 Recollect July Sep 2003

Reduction in interest rate on agricultural advances Return (in place of QIS) as per the system adopted
by leader Bank.
The interest rate on agricultural advances for
limits upto and inclusive of Rs.50,000 has been The returns are categorised as follows:
revised as under w.e.f. 15.08.03:
To be submitted in the week
Estimates for
Working Capital Term loan preceding the commencement of
QIS I the ensuing
quarter to which the statement
PLR - 2.5% (presently 9%) PTLR -3% (presently 9%) quarter
relates
Existing interest rate for all agricultural To be submitted within six weeks
QIS II / Actuals for the
advances with limits over Rs.50000 and the policy from the close of the quarter to
FFR I last quarter
which the statement relates.
on finer rate for agricultural advances shall continue. Half yearly
QIS III / operating and To be submitted within two months
ADV.56/03-04 dt. 12.8.03 ( M 2, S 34) FFR II funds flow from the close of the half year.
statement
Trade Advances – Precautions
Separate statements have been prescribed by
It is noticed recently that some of the RBI for manufacturing concerns and traders &
borrowal accounts under Trade Finance have started merchant exporters. Non submission of QIS returns
showing signs of irregularities even within a short in time will attract penal rate of interest at the rate of
period after sanction of loan. These have been 1% of the limits sanctioned. Charging of penal
caused by deficiencies in selection of borrowers, interest is not the remedy and the borrowers must be
appraisal, documentation, creation of security, etc. made to understand the importance of this return.
Interest spread is kept very low in the scheme and
any incidence of NPA will offset the income Branches shall analyse the QIS I return (with
derived, defeating the very purpose of introduction the appraisal / assessment) and fix Quarterly
of such scheme. Collateral security is the comfort on Operating Limit (QOL). In respect of accounts who
which the lending has been liberalised under the have been permitted to submit FFR, the fixing of
scheme and at all costs, such securities are to be QOL may not arise and the total limits will be the
valid and effectively charged to the Bank. operating limits.

Therefore, the guidelines on the scheme and Fixing up of QOL will help the Bank in
the precautions to be taken while extending credit monitoring large borrowal accounts from the point
under this concept are reiterated in the circular for of view of Asset Liability Management. Further,
the guidance of branches. QOL will be the basis for charging/recovery of
commitment charges.
ADV.57/03-04 dt. 18.8.03 (M 2, S 25) On receipt of QIS II, the achievement vis-à-
Analysis of QIS Statements vis estimates has to be analysed and reasons for
variation called for. Large deviations shall be
In monitoring working capital facilities brought to the knowledge of the controlling office /
various control returns such as monthly stock sanctioning authority along with suggestions for
statement, Monthly Statement of Select Operational corrective action, if any.
Data (MSOD), Returns under the Quarterly
Information System, Balance Sheet (with quarterly QIS III reveals the half yearly profitability
results in case of listed companies) etc. are available. and funds flow.
Such statements are to be followed up for timely These statements when properly analysed will
submission and analysed by the Branch / controlling reveal the health of the account and whether the
office. In addition to the scrutiny, stock audit for performance in the current year is as per targets /
borrowal accounts with fund and / or non fund based projections submitted at the time of assessment.
limit of Rs.1.00 crore and above has also to be
carried out. Branches/Credit Monitoring Officers are once
again advised to make use of the vital information
Returns under Quarterly Information system submitted by the borrowers in the QIS returns for
(QIS) need to be submitted by borrowers enjoying better monitoring of borrowal accounts.
fund based working capital facility of Rs.1 crore and
above from the Banking system. In borrowal ADV.58/03-04 dt. 20.8.03 (M 2, S 24)
accounts under consortium arrangement where we
are a member, we are accepting Financial Follow up Vermicomposting - A profitable economic venture

6
Volume 16 Issue 2 Recollect July Sep 2003

A large body of organic matter generated Eligibility: Registered Growers, (individuals) Asso-
from agriculture and activities related to it when ciation/Federations of growers, traders, manufac-
heaped or dumped in a corner, looses its manurial turers, societies, pharmaceutical companies, NGOs
value. It also pollutes the environment by emitting and recognised private research institute or any other
foul smell. This biomass if stored properly in group of people, who have past experience in the
compost pits can be converted into a value-added medicinal plants sector
end product called organic manure that can be
Crops identified: 32 species/plants have been
effectively used to enrich the soils.
prioritised and identified by the Board. Other
An analytical study of the project and its medicinal plants for which there is assured market
viability has been explained in the circular for the could also be taken up.
guidance of branches. The techno-ecomomic
Project Cost: For establishment and maintenance of
parameters including cost, economics, repayment
herbal gardens:
schedule and other terms and conditions are given in
detail in the circular. Rs.1.00 lakh per hectare upto planting including land
development, fencing, irrigation facilities etc.
ADV.59/03-04 dt. 21.8.03 (M 2, S 21)
Rs.0.40 lakh per hectare for annual maintenance
Modifications to Annapoorna and Aroghya Scheme Indicative cost of cultivation of 22 medicinal crops
is given in Annexure to the circular. Actual cost and
Loan Amount: Urban branches are permitted to loan amount to be worked out by factoring in the
sanction loan upto Rs.15 lakhs (TL Rs.10 lakhs & local conditions.
WC Rs.5 lakhs) Metro branches upto Rs.25 lakhs
(TL Rs.15 lakhs & WC Rs.10 lakhs) Funding Mechanism: (Subsidy/Grant Provided by NMPB)

Sanctioning Authority: All Scale III and above Category of Farmers Subsidy/ Grant
Branches are permitted to sanction loan as under: i) Marginal and Small (<2 hect) 50%

Semi-urban Branches upto Rs. 5 lakhs ( TL or WC) ii) Medium (>2-10 hect) 40%
iii) Large (> 10 hect) 30%
Urban and Metro Branches upto Rs.10 lakhs.
iv) Others (NGOs, Societies, Co-operatives
Scale IV and above only to sanction limits 30%
etc)
exceeding Rs. 10 lakhs in Urban and Metro Centres.
Branches are advised to take advantage of the (Subsidy is back ended)
above modifications made in the Scheme and Besides commercial cultivation of medicinal
aggressively market this product not only to increase plants, subsidy/grant is available for the following
lending under the Scheme but also to achieve the activities also.
target of Rs.1950 Crores set for the year 2003-04.
i. Production and supply of quality planting
ADV.60/03-04 dt. 23.8.03 ( M 2, S 38)
material.
ii. Value addition - for developing proper harvesting
Cultivation of Medicinal Plants
techniques, seem processing of products viz.
With a view to encouraging cultivation of collection, grading, drying, storage, package etc
medicinal plants, processing, export of end products,
.Branches are advised to avail of the
Government of India - Ministry of Health and
expertise available at RBD for project preparation,
Family Welfare, has set up a National Medicinal
project funding, cultivation, grounding of project,
Plants Board (NMPB) at New Delhi. Similarly, at
etc., and encourage medicinal plant cultivation.
regional/state level State Medicinal Plant Boards
(SMPBs) have been constituted for the development ADV.61/03 –04 dt. 23.8.03 (M 2, S 21)
of medicinal plants sector. They encourage
entrepreneurs to take up promotional and Home loan scheme to staff members – Modifications
commercial schemes. One such commercial Based on the representations received from
activity/scheme is cultivation of medicinal plants. the staff members, the existing ceiling of Rs.5 lakhs
The details of the scheme are well explained in the for additional construction, on the existing SHL
circular and branches are advised to go through the property, is removed. This shall be subject to the
same. repayment capacity of the staff members on case to

7
Volume 16 Issue 2 Recollect July Sep 2003

case basis. However the quantum of loan for advocates, the litigation in cases in DRT get
repairs/renovation shall be restricted to Rs.5 lakhs prolonged and disposal very often is being delayed
only. The modified ceiling limit for additional some time even beyond 3 to 4 years. In addition to
construction on SHL property is as under: this, branch/bank officials are also contributing
further delay in the matter of timely compliance of
Parameter Norms Modified terms
the various procedural formalities/ directions of the
Quantum of In case of additional Quantum of loan will be as
Loan for construction/repairs/ applicable to the public for Courts. Branch Managers/Officers in charge of these
additional improvements upto additional construction. (30 DRT or suit filed cases do not prepare/equip
construction Rs.5 lakhs, excluding times of gross or 48 times themselves with all the facts of case, furnish the
for staff balance outstanding in of net income whichever is required information/documents in time to the courts
members SHL, loan against title higher) subject to
on SHL deeds to staff repayment capacity. through our advocates. Also it is found that a few
property members, For the repairs/ renovation/ advocates handling the cases are not effectively
supplementary loan improvements, the ceiling presenting the Bank’s cases and attending the courts
from IBHL and other continues to be at Rs.5 with promptness, thus contributing to avoidable
loans availed from lakhs, subject to the ceiling adjournments. Large number of suit filed DRT
other financial as per salary, 40 % take
institutions. home pay etc. cases are pending for more than 5 years, thus
depriving the bank of quick recovery and recycling
The removal of existing ceiling of Rs.5 lakhs of funds.
for additional construction on SHL property is
subject to Time and again Head Office has been
receiving communications from Finance Ministry
i. Fixing of suitable repayment programme for the /various DRTs to the effect that, the proceedings
loan after ensuring that a minimum of 40 % of gross before the DRTs are not taken seriously by the
salary of the staff is available as take home pay. Banks and due to delay on the part of the Banks
ii. Obtaining irrevocable letter of undertaking for either by way of non representation or non
the prompt repayment of loan instalments from the production of necessary documents, petition /
co-borrowers. affidavit, the precious time of the DRTs is wasted.
Some Presiding Officers of DRTs have even gone to
iii. Extension of EM of the House property under the extent of referring such lapses to the Finance
SHL Ministry resulting in Bank submitting explanatory
iv. Adhering to the prescribed margin and all the reports to them on the incident. It also happens with
other relevant terms and conditions as applicable to some DRTs imposing penalty/Costs on Banks with
Home Loan scheme, from time to time. strictures sent to the Head Office. Such instances
are very serious in nature and attract disciplinary
v. Modifications within the existing carpet area
action for negligence in discharge of duties.
should not be construed as additional construction.
It is therefore instructed that the Branch
vi. In case loan is given for additional construction Managers/Officers-in-charge of DRT/Suit filed
on another property that specific property should be accounts should diarise each hearing of the DRT/
offered as security. Court and well ahead of the date contact/organise/
Processing charges /Administrative charges liaise with our advocate for complying formalities
are not applicable upto 31.3.2004 for Home Loans on the very first scheduled date, such as furnishing
sanctioned to staff members. the correct address of the defendants, filing of
rejoinder, counter in the interim applications if any
ADV.65/03-04 dt. 22.9.03 (M 2 , S 38) filed by the borrowers concerned, Implead legal
representatives /legal heirs of the deceased
Monitoring / Follow up of decreed/Certificate cases in defendant(s) if any, Implead official liquidator,
suit filed accounts written arguments in case it is necessary, application
The intention of the legislature in enacting the for obtention of Recovery Certificate etc. and see
Recovery of Debts due to Banks and Financial that the delay is avoided so as to realise our dues
Institutions Act 1993 (DRT Act) is that the DRTs early.
shall deal with the Recovery Applications as
Branch Managers should review all the suit
expeditiously as possible and endeavour shall be filed accounts (DRT & non DRT cases) at branch
made to dispose of the Recovery Applications fully level with concerned Branch Officials, as well as
within six months. However, due to the delaying with the advocates every month during the first
tactics adopted by the defendants and their week in any case not later than 10th of each month
8
Volume 16 Issue 2 Recollect July Sep 2003

and record the minutes of all such meetings in a Intimation to the Insurance Company by the
separate register called “Monitoring of suit filed Branch within 14 days under copy to concerned
cases” (DRT/Non DRT cases) leaving separate Circle Office.
folios for each category.
Claim applications should be submitted
within one month through Circle Office if the
ADV.66/03-04 dt. 30.9.03 (M 2, S 18)
employee is working in Branches / Circle Offices
and through Head Office, Personnel Department. if
PERSONNEL the employee is working in Head Office / Training
Centres / Inspection Centres and Subsidiaries.
Maintenance and Upkeep of Branch/Premises
Fatal claims should be accompanied by
This circular stresses in an elaborate manner original Death Certificate, Post-mortem report, copy
the importance of proper upkeep and maintenance of of FIR filed at Police Station, Salary certificate of
branch premises. since, in the banking sector, the previous month and Succession certificate or
number of competitors is on the increase and the Legal heirship certificate from competent authority.
ambience in a branch also plays a major role in Other claims should be accompanied by salary
attracting new customers and keeping the existing
certificate of the employee for the previous month,
customers satisfied.
copy of leave sanction letter and Doctor’s
It is important to recognise that ambience in prescriptions/Medical Bills and other details like
our premises, whether it is Branch or Office, plays a treatment Sheet / X-ray etc., While submitting
major role in making the right impression in the copies of certificates, the same are to be attested by
minds of the customers about our Bank, about the the Bank.
staff working in the Branch/Office and about the PRNL. 39/03-04 dt. 5.8.03 (M-3, S-46)
type of service that can be expected.
Branches and Offices are advised to follow Inward/Outward Mail – Maintenance of Registers
the guidelines given in the circular meticulously. It is observed from the inspection reports that
Circle Heads and Inspectors of Branches, during the branches/offices were not giving adequate
their visits to Branches, should pay attention on this importance in maintaining Inward/Outward Mailing
aspect of the Branch and make a comment in their Registers as its impact and consequences were not
reports realised. In various contexts, the information
PRNL.33/03-04 dt. 7.7.03 (M-2, S-78)
recorded in Letters Received Registers and Despatch
Registers have provided valid evidences. Some of
Amendments to Indian Bank (Employees') Pension the important guidelines in this regard are reiterated
Regulations, 1995 in the circular for the information and guidance of
branches.
Government of India, have advised
PRNL.47/03-04 dt. 28.8.03 (M-3, S-48)
amendment to Regulations 2, 3, 12, 18, 27, 32, 33,
34, 35, 36, 39, 40, 41, 48 and appendixes of Indian
Bank (Employees') Pension Regulations, 1995. The FX
text of the existing and the amended Regulations 2,
3, 12, 18, 27, 32, 33, 34, 35, 36, 39, 40, 41, 48 of Non-Resident Deposits – Comprehensive Single
Indian Bank (Employees') Pension Regulations, Return
1995 along with the Appendixes are furnished as
annexures the circular. The National Statistical Commission has
recommended introduction of a computerised
PRNL.. 38/03-04 dt. 17.7.03 (M-3, S-43) Comprehensive Single Return (CSR) for collection
of data on Non-Resident deposits. With a view to
Renewal of Group Personal Accident Insurance Policy implement the recommendation, Reserve Bank has
for all staff members developed a software package captioned “NRD-
The group accident insurance policy for all CSR”, for reporting the data on non-resident
staff members has been renewed for a further period deposits through floppy disks on monthly basis as
of one year from 2.8.2003. The procedure to be indicated therein. Branches receiving and
adopted In the case of any unfortunate event of maintaining Non-Resident deposits are required to
meeting with any accident by our staff members, the submit the data in CSR format on a monthly basis
following procedure may be adopted. with immediate effect through electronic media i.e.

9
Volume 16 Issue 2 Recollect July Sep 2003

floppy/e-mail to their Circle offices before 5th of In all Staff Meetings conducted at Branches/
every succeeding month. In respect of branches not Offices, ‘Preparedness of Disaster Recovery’ should
provided with a Computer, the relevant data shall be form a permanent agenda for discussion and details
collected manually. thereof should be minuted.
Branches may also note that on happening of
FX.15/03-04 dt. 16.9.03 (M-5, S-76)
a disaster and immediately after the recovery process
is completed, a comprehensive 'Disaster Recovery
GENERAL Report' (as per format given in Annexure-IV of the
Policy) has to be sent to C.O./H.O.: CPPD/H.O.:
Policy on Disaster Recovery Management for Security Department.
Computerised Environment
GENL.11/03-04 dt. 1.7.03 (M-6, S-83)
Banking Sector has been undergoing a
revolutionary change especially with the increased Detection of Forged notes
use of Information Technology by offering financial In view of increasing incidences of forged
services to its customers such as E-Banking, Internet notes being found during inspection of Currency
Banking, Electronic Funds Transfer, Electronic Chests and the branches and in the soiled note
Clearing Systems, E-Money, Smart Cards, Credit remittances of the Currency Chests, RBI has issued
Cards etc. Considering this, Reserve Bank of India various guidelines for detection of forged notes for
has advised all Banks to setup appropriate implementation and follow up. These guidelines as
Information Systems Audit Policy and Security communicated to branches through various Circulars
Policy in their Banks. are reiterated for the purpose of effective
implementation.
Accordingly in tune with the Risk
Management Policy adopted by our Bank, a Policy The security features of bank notes in various
Document on Disaster Recovery Management for denominations mainly on the size, watermark and
Computerised Environment has been prepared and other features in the front and back side of the
given as annexure to the circular. currency notes were already communicated to
branches by Circular Genl.:26/01-02 dated 09.08.01.
Guidelines on Backup procedures to be
All staff members are advised to familiarise
followed and various safety/security/preventive themselves with these guidelines
vigilance measures, which have already been
advised to branches/offices from time to time, have GENL.13/03-04 dt. 19.07.03 (M-6, S-73)
also been enumerated in the Policy as a Preventive vigilance relating to Vendor Management-
precautionary measure for avoiding a disaster. Additional Guidelines to TBC/ALPM branches
Branch Managers of computerised branches, Whenever the vendor is called for trouble
should identify an officer from their Branch, as a shooting with regard to maintenance of live data
Disaster Recovery Officer (DRO) for the Branch/ proper care should be taken to ensure data integrity
Office and recommend to their respective Circle and safety.
Offices immediately. Similarly Circle Offices and
other Administrative Offices including Departments Visiting engineer’s proper identity must be
at HO., should identify an officer from their office as ensured. For this purpose the photograph and
DRO and inform HO.:CPPD and HO: Security specimen signature of the engineers attested by the
Department immediately. The role and responsi- vendor has to be obtained and preserved in the
bilities of a DRO have been enumerated in the branch
Policy. Whenever new engineer has come for
Branches/Offices should conduct a ‘Mock troubleshooting his authorisation/identity must be
Disaster Recovery Drill’ as advised in the Policy and verified before allowing access to the system or data
keep a record of such drill conducted periodically Proper backups are to be taken before and
for verification of visiting Audit and Inspection after the troubleshooting for a diagnosis at a latter
Officials. Circle Heads while visiting the Branches time in case of need.
are advised to check conduct of such ‘Mock Drill’
by the Branches under their control. Whenever version changes are effected, verify
for proper authorisation and record the date of
implementation. Take backup of the live data and

10
Volume 16 Issue 2 Recollect July Sep 2003

existing version of the software before Branch Managers/ABMs and Officer assigned
implementation. with System Administration duties must jointly
strengthen their level of supervision to personally
The effective functioning of the new version
ensure that all prescribed daily routine checks are
has to be tested in the test area only.
completed/print outs generated and authenticated by
Whenever software/hardware vendor’s the Officers of the branch before they leave office.
engineer is undertaking trouble shooting the system All transactions in the system must be on the basis
manager or any knowledgeable official must be of authenticated vouchers and passing Officers must
present throughout. ensure meticulous compliance
The register of “Errors and Breakdowns”
GENL. 17/03-04 dt. 13.08.03 (M-6, S-83)
should be maintained at the branch with details of
date and time of call, when attended, what was the RBI’s Clean Note Policy – Revised procedure for
problem and the name of the Engineer attended the preparation of currency note sections and bundles
call with proper reports. This will give a clear
picture relating to any inherent defects in the RBI has directed that branches and currency
systems/ software, frequency of breakdowns and the chests of Banks should forthwith stop stapling of
pattern. sections and the entire cash holding shall be kept in
destapled condition only. Branches are, therefore,
Wherever the vendor or his representative is advised to ensure that their entire cash holdings are
maintaining their banking accounts and maintain the kept in destapled condition only. The procedure for
systems/software ,the transactions in the accounts preparation of currency note sections at branches/
must be closely monitored currency chests, preparation of bundles, remittance
The branches should note to adhere to the of cash from branches to currency chest/branches,
above guidelines to prevent tampering of Systems/ claim/responsibility for shortage/defective notes,
live data by engineers of the software/hardware remittance of soiled notes from currency chest to
vendors. RBI, etc., has been reviewed and the revised
GENL.14/03-04 dt. 26.7.03 (M-6, S-83) procedure is enclosed to the circular. This
supersedes all the existing guidelines in this regard.
Computer Security in TBC branches GENL:18/03-04 dt. 29.08.03 (M-6, S-73)
Some of the key areas relating to computer Maintenance of Password Discipline by the Users
security were reiterated through the following
Circulars: User Id and Password are used as authori-
sation and access control mechanism in a
Circular No. Date Subject computerised environment. No transaction can be
Checking of Sectional Day put through unless valid User Id and password is
Books / Scrolls / Printouts with
GENL 7/02-03 18.06.02 the vouchers in TBC branches – utilised. Since Password control is a very important
strict compliance to prevent control in a TBC branch, maintaining strict secrecy
frauds of the password, changing the Password, using
Computer Security in TBC passwords which are difficult to guess by others, are
GENL 24/02-03 27.08.02
branches some of the important points to be stressed to the
Adherence to Systems and
GENL 29/02-03 13.09.02 procedures – Strengthening of users by the branch-in-charge/system manager
internal control mechanism frequently.
Timely submission of Computer
GENL 54/02-03 27.12.02 It has been observed that maintenance of
Security control returns.
secrecy of passwords is not adhered to, in many
It is observed from the Computer audit reports branches/offices. Lack of secrecy of Passwords has
that some branches do not follow the systems and led to misuse of passwords by unscrupulous
procedures meticulously, despite repeated elements, gaining unintended/unauthorised access to
instructions. Frauds can very well be averted if each menus for fraudulent activities which has put the
and every staff member remains vigilant and follow owner of the password into difficulties. It must be
the systems and procedures in true spirit. Non understood that Absence of secrecy of Password or
compliance may even affect an innocent staff, since disclosing of Password may result in unauthorised
the USERID appearing in the transaction would be transactions and the ownership of such transactions
the deciding factor in case of fraudulent transactions will be that of the actual owner of the Password. To
in fixing staff accountability. facilitate secrecy, the Branch Manager/ABM/Dept

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Volume 16 Issue 2 Recollect July Sep 2003

Heads of Administrative Offices should advise the Therefore, it is essential to observe proactive
staff to change their password as stipulated, so that measures in a computerised environment and the
the culture of maintaining secrecy is well imbibed following guidelines should be followed
in staff. meticulously:
The guidelines for password maintenance Ø Only authorised persons should be allowed
have been iterated in earlier circulars, handbook of access to the systems/data
“Dos & Don’ts for computerised branches of
Ø Whenever vendors are given access for trouble
Banks” and “Preventive Vigilance Manual for
shooting, backup of live data should be taken
Computerised Branches of Banks”. Some of the
and testing, if required to be done only in test
important guidelines are listed in the circular for the
area
benefit of branches/offices.
Ø Unconnected persons should not be allowed to
GENL.23/03-04 dt. 12.9.03 (M-6, S-83) stand behind and watch the screen while
entering the information of others
Preventive vigilance relating to System and Data Ø Always log out of the software while leaving
Security the seat even for a temporary period.
In a financial institution like Bank, Ø Do not pass on your User ID and Password to
information about the customer and his transactions others.
with the bank are confidential in nature and the Bank
is under obligation to maintain the confidentiality Ø When ever any employee is transferred or on
and safeguard the sensitive data against falling into leave of any kind his User ID must be
the hands of unauthorised persons. Under the positively disabled.
computerised environment the systems and the data Ø In case of Suspended, Resigned, Retired/
in systems are very important assets of a Terminated employees, their user ID has to be
branch/office. It is very much essential to protect the immediately disabled and access to systems
data at the branch from corruption/ unauthorised should not be allowed to them so as to
modifications since such actions may have financial safeguard against any possibility of tampering/
implications on the Bank. In case the information modifying/misusing the live data.
falls into the hands of unauthorised persons, the
affected party may initiate legal action against the GENL. 24/03-04 dt. 12.9.03 (M-6, S-83)
Bank.

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 Volume 16 Issue 3 Recollect Oct-Dec 2003

Stockinvest Scheme in our Bank. Branches are

Recollect

instructed not to open any new Stockinvest account

DEPOSITS
under both the Deposit (SD) Scheme and Savings
(SS) Scheme with immediate effect.
Procedure for dealing with dishonoured cheques
Based on RBI advice, the existing guidelines Dep.17/03-04 dt.21.11.03 (M-1 S-15)
on return of dishonoured cheques have been
reviewed and additional guidelines have been put in
place, which cover the following: ADVANCES

i. Return/despatch of dishonoured cheques Continuation of credit facilities for normal VRS optees
ii. Information (MIS) on dishonoured cheques under pension regulation 1995
iii. Dealing with incidence of frequent dishonour Once an employee retires, he is placed on par
iv. Co-operation to courts by Banks with "General Public" for considering credit
facilities. Hence requests for continuation of the
v. Delay in communication/return of dishonoured credit facilities after VRS shall be considered on a
cheques case to case basis, based on the income /pension of
Detailed guidelines are furnished in the the retired employees, debt servicing capacity,
annexure to the circular. Branches are advised to securities available etc.
meticulously follow the additional guidelines and Existing loans that can be continued after voluntary
ensure strict compliance to the instructions for retirement are furnished in para 3 of CPGD circular
cheques dishonoured on account of insufficient Adv. 144 /00-01 dated 08.03.2001. The said eligible
funds loans can be continued as per the terms of respective
a. for amount of Rs.1 Crore and above and Structured Loan Product with the current rate of
b. for all cheques favouring Stock Exchanges interest as applicable to the product. This ROI
irrespective of the amount should be Card Rates as applicable to public. The
erstwhile stipulated/ concessional margin, if any, as
Dep.13/03-04 dt.01.10.03 (M-1 S-12)
per staff advance can be continued. Lien on Bond is
Premium payable to DICGC for Deposit Insurance applicable only for IBVRS 2000 retirees, and not for
other Retirees under normal VRS.
W.e.f. 1.10.03, the following changes in the
procedure for payment of deposit insurance Except self-liquidating loans and loans under
premium to DICGC have been made: exceptional circumstances, the loan facilities shall be
parked in the branch wherefrom the pension is being
i. The half-yearly periods for payment of deposit drawn. The branch should obtain standing
premium have been changed from January-June & instructions to debit SB account on the dates of
July-December to April-September & October- credit of pension to recover the instalment and
March respectively to coincide with the half yearly interest due. To accord sanction for continuation of
and yearly closing of accounts of the insured banks. credit facilities, all guidelines in Circular No. ADV
ii. The premium is to be paid on the total deposits 144/00-01 dated 08.03.01, (except para 6.1, 7.4
as at the close of business on the last working day of which were applicable only for VRS bond holders),
the preceding half year instead of last Friday of the are applicable for VRS optees under pension
preceding half-year. regulation 1995.
Branches are advised to adhere to the time ADV.70/03-04 dt.08.10.03 (M-2 S-36)
norms stipulated for submission of the statement to
Indian Bank-Staff Jewel Loan Scheme (IB-SJL)
their circle offices as any delay in making the
advance premium attracts huge penalty. A new scheme to our staff members who are
desirous of availing loan against gold ornaments is
Dep.15/03-04 dt.05.11.03 (M-1 S-15) introduced and the guidelines governing the scheme
are as under:
Withdrawal of Stockinvest Scheme
As the use of Stockinvest as a mode of Eligibility: All permanent staff of the Bank can
payment for application for allotment of shares / avail jewel loan in his/her branch if the branch is
debentures in the primary market has declined implementing jewel loan or at the nearest branch if
substantially, it has been decided to withdraw the his/her branch is not implementing jewel loan.
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Volume 16 Issue 3 Recollect Oct-Dec 2003

Purpose: Loan to meet all domestic needs such as will be an alternative to the existing Secured OD
construction/repair of house building, medical, upto Rs.5 lakh (allowed as a full limit)
marriage, educational expenses and other genuine Trade Link – Scheme II
requirements. As an alternative to existing OCC facility
Loan amount: (above Rs.5 lakhs upto Rs.10 lakhs), option may be
Sub-staff Rs.25,000 given to borrowers (existing/new) under the Scheme
Clerks Rs.50,000 to avail the facility as secured OD/OCC. For secured
OD, security/margin shall be as under:
Officers Rs.75,000
Type of Security Margin
Interest Rates: Immovable property 33%
Short Term Loans 11.50%
NSC, KVP, IVP, etc 10%
Medium Term Loans 12%
Agricultural Land 50%
Repayment: (only for semi urban branches)
Short term loans: Interest and principal in one bullet
Personal guarantee of directors for loans to
payment at the end of twelfth month
private & Public Limited Companies should also be
Medium Term Loans: Principal in 36/60 monthly taken.
instalments alongwith interest as and when charged.
Advances to Trade Sector (outside the Modified Trade
Appraiser fee is payable as per norms. There shall Finance Scheme)
be no processing fee. For other terms and conditions
Circle Heads in Scale V and above are
of the scheme, please refer the circular.
empowered to consider under their discretion
ADV.71/03-04 dt.07.10.03 (M-2 S-25) working capital advances under the above scheme
up to Rs. One Crore at rates of interest as detailed
Granting advances to Directors of banks, their
below based on the value of collateral security:
relatives/ interested concerns
Collateral ROI
The circular reiterates various restrictions/ 100% of the limit PLR
regulations imposed by Banking Regulation Act and Above 50% but < 100% of the limit PLR+1%
RBI on granting of advances
ADV.75/03-04 dt.20.10.03 (M-2 S-25)
i. to the directors of our Bank and to their
associate concerns and Special Financial Package for large Value Exporters -
ii. to the relatives of the directors of our bank, Rupee Credit Interest Rates
directors of any other bank and to their RBI has extended the validity period of the
relatives/associate concerns above package upto September 30, 2004. Other
For ascertaining the interest of the Director as terms and conditions remain unchanged. For easy
above, the existing format of declaration to be reference of branches, some of the main features of
obtained from borrowers for relatives employed the Scheme have been reproduced in the circular.
(F-172) has been revised, the format of which is ADV.78/03-04 dt.25.10.03 (M-2 S-34)
enclosed to the circular.
Fair Lending Practices Code (FLPC)
ADV.73/03-04 dt.11.10.03 (M-2 S-28)
Based on RBI guidelines and IBA's Model
Modifications to New Scheme of Financing Trade code, the Fair Lending Practices Code (FLPC) of our
Bank has been framed and approved by Board which
Trade Link – Scheme I
comes into effect from 1.11.03. Full text of the
Working Capital support upto Rs.5 lakh may be
FLPC is furnished in Annexure II to the circular.
considered as short-term assistance, by way of
The circular also comprises seven annexes as
secured .OD, to be operated on running basis with
detailed below:
equal monthly reduction in DL, to ensure that the
loan is repaid within 36 months. The securities viz. ANNEXURE I
Guidelines of RBI for Internal compliance by
Immovable property, NSC, KVP, IVP, Surrender Lenders.
value of LIC policy, Bonds of All India Financial ANNEXURE II Text of FLPC (to be made available to public)
Institutions (IDBI, ICICI) lodged for the full limit Terms and Conditions (to be given to
ANNEXURE III
has to be retained with the Bank till complete customer along with application form)
adjustment of the facility. This Short term assistance ANNEXURE IV Service Charges (to be given to customer

2
Volume 16 Issue 3 Recollect Oct-Dec 2003
along with application form) 1. the reasons for such circumstances which
ANNEXURE V Letter of Acknowledgement Format warranted allowing of such excess
ANNEXURE VI Letter of Rejection Format
2. the time frame within which such excess will be
List of select reasons for rejections
ANNEXURE VII
(for internal use)
adjusted
3. details of sources of funds for adjustment of
Any deviation in complying with FLPC is such excess
likely to make our bank liable to customers. Hence
branches are advised not to give room for any 4. the value of security and availability of drawing
deviation. Circle Heads, Internal/Concurrent power to cover the balance outstanding.
Auditors, Inspecting Officials are advised to ensure Circle Offices should communicate
compliance of FLPC by Branches. confirmation of the action to the branch within a
maximum period of seven days. When Circle Heads
ADV.79/03-04 dt.25.10.03 (M-2 S-36) find that allowing excess is not in conformity with
existing guidelines, then the branch may be advised
Credit Guarantee Fund Trust Scheme for Small as to why confirmation could not be accorded. In
Industries (CGTSI) such cases, branch should recover the amount of
Our Bank has joined the above scheme with excess allowed and desist from allowing further
effect from 01.11.2001 and the salient features of the excess. If allowing of TODs/excesses is warranted
scheme were given in circulars ADV.75/01-02 dt. frequently in an account, branch may take up an
31.10.01 and ADV.130/02-03 dt. 27.01.03. As the assessment as to whether there is need for revision
implementation of the scheme requires substantial of limits.
improvement at the field level, a list of Frequently ADV.85/03-04 dt.28.10.03 (M-2 S-25)
Asked Questions (FAQs) along with the
clarifications received from CGTSI is enclosed to Deficiencies observed in Home Loan Portfolio
the circular for the information and guidance of
Irregularities of the following nature have been
Branches/ Circle Offices.
observed in Home Loans:
ADV.81/03-04 dt.25.10.03 (M-2 S-22)
Pre-sanction / Appraisal Irregularities
Application for loan against gold ornaments (F 120) 1. Sanction of Home loans without obtaining the duly
approved construction plan
In view of certain changes in jewel loan
business, the existing Jewel loan application has 2. Proof of income not available in many cases
modified and the revised format along with 3. The applicant was aged above the prescribed maximum
appraiser's certificate is enclosed to the circular. age limit.
4. To arrive at the eligible quantum of loan, future rental
ADV.84/03-04 dt.28.10.03 (M-2 S-25)
income was taken into account without obtaining any proof/
Reporting of excess allowed in borrowal accounts, evidence / certificate of such income.
allowing of TODs 5. Credit appraisals were inadequate in quality. Income
statements submitted by the borrower were inconsistent /
Branch Managers in different scales have
wrongly computed.
been empowered to allow excess upto certain levels
subject to certain terms and conditions. The 6. In addition to borrower’s income, income of the guarantors
sanctioning authorities have to report all such were also reckoned for the purpose of arriving at the loan
sanctions periodically as per the prescribed reporting amount, whereas the Scheme permits recognition of the income
of the guaranteeing spouse alone for calculation of eligible loan.
system and any excess allowed within their
delegated tolerance level do not warrant 7. The purpose of additional Home Loan granted was not
confirmation. explained / appraised.

If the excess allowed falls beyond the powers 8. Sanctioning of loans in excess of eligibility; acceptance of
of branch Manager, it should be reported to the different costs for flats of same size with same inputs in the
same building; loan applications accepted were in the same
Circle Head in AUD-1 on the same day seeking
handwriting with same mistakes.
confirmation of action. In order to enable prompt
confirmation from the controlling offices, it is 9. In take over, liability position with asset classification with
essential that the branches, in the excess report, other banks/FIs were not obtained before sanction /
clarify disbursement of home loan advances. Also statement of

3
Volume 16 Issue 3 Recollect Oct-Dec 2003

account from other Bank was not obtained to ascertain the track 28. Visits not undertaken to ascertain the progress of
record of repayment. construction while releasing loans under housing at different
stages.
Documentation Irregularities
10. Approved copy of the plan was not available in a few
Branches are advised to pay attention to the
cases. lapses mentioned above and ensure that expansion of
Credit for generation of income does not adversely
11. In some cases, only photocopies of the sale and affect the safety and quality of our advances which
construction agreements were available. is equally important.
12. The records maintained revealed that documents were
ADV.86/03-04 dt.30.10.03 (M-2 S-38)
received but EM was not created.
13. In respect of certain accounts taken-over from other Banks Obtention of Post Dated Cheques in Home Loan
/ FIs, insurance policy remained to be assigned in Bank’s favour Accounts.
/ Insurance policies remained to be renewed / insurance not
In order to ensure prompt repayment,
taken, in some cases.
branches are advised to obtain 36 post dated cheques
14. Address of the borrower furnished in the insurance in all Home Loan accounts, keep them under safe
certificate differed from the address given in the loan custody and present them on due dates. In case of
application, Insurance Policies did not contain Bank Clause. dishonour of the cheque, branches should proceed
15. In respect of certain take over accounts, branch did not against the borrower under Section 138 of the
obtain legal opinion, up to date EC and did not undertake pre- Negotiable Instruments Act 1881, after taking
sanction / post sanction inspection. necessary permission from the appropriate
16. In case of certain housing loan accounts, undertaking / authorities.
consent letter regarding disclosure of name in case of default ADV.87/03-04 dt.04.11.03 (M-2 S-38)
were not obtained.
Loan for purchase of house sites under Home Loan
17. Agreement of construction from the builder not obtained Scheme
and forwarded to the sanctioning authority as stipulated.
A new scheme, for purchase of house sites
18. In certain cases, follow up for obtaining original title deeds
under the Bank’s Home Loan Scheme has been
was not done.
introduced and the details of the scheme are as
Post-Sanction / Follow-up Irregularities under:
19. Home Loans sanctioned were released without getting the
Target Group: Salaried class customers having net
duplicate copies of the sanction tickets signed by the borrower /
guarantor for having accepted the terms and conditions. salary of Rs. 8000/- before deduction of proposed
EMI. It is not applicable to NRIs.
20. In some cases, loan stages were released without
ascertaining the progress of work. In one case, the stages were Purpose of loan: Purchase of plot on ownership
released without receiving any request to this effect from the basis(not on lease basis),the layout of which is duly
party. approved by competent authorities.
21. Where funds were to be released in stages depending on Quantum of loan: 30 times of the gross salary subject
the progress of construction, inspection not carried out to to a maximum of Rs. 10 lakhs. To arrive at the
monitor the (progress) end use of funds released. quantum of loan the income of spouse can be taken
22. Delegated powers were exceeded in certain cases. into account if he/she is employed in Govt. / PSUs
Organisations / reputed private sector organisation.
23. Margin requirement was not met in a few cases.
24. Loans were sanctioned / enhanced within a very short time Margin: Minimum 33% on the land cost
without proper assessment. Take Home Pay: 40% take home pay on gross
25. Home loans were sanctioned without obtaining proof of income after the proposed EMI
income. Loan amount were credited to the SB account of the Rate of interest: PTLR minus 3.75% (presently
borrowers, thus there was nothing on record to show the end
8.25% p.a. - floating)
use of funds.
26. Certificates not obtained from Builders to the effect that Repayment period: 120 EMI; No holiday period
they were fulfilling their statutory obligations, and not deviating / Pre-payment charges: 2% on the balance outstanding
violating the approval. or on the applicable Drawing Limit whichever is
27. Details of inspection stated to be conducted were not higher.
entered in the follow up register.
Take-over: Not permitted

4
Volume 16 Issue 3 Recollect Oct-Dec 2003

Documentation: Revision in Proposal format for submission of

i. Proof of employment proposals falling under HO powers
ii. Salary certificate for self and spouse. The format for submission of credit proposals
iii. Income Tax for 3 years (wealth Tax Returns falling under Head Office Sanctioning Powers (GM
wherever applicable), at HO, ED, CMD, Management Committee and
iv. Bank Pass Book or statement of accounts for last Board) has been revised. Necessary instructions for
6 months filling in the application have been given in the
v. Agreement of sale / Sale deed alongwith patta format itself. The revised proposal format and
detailed guidelines for filling up the same are
vi. NIL EC for 13 years enclosed as annexure to the circular. Branches are
vii. Parent document for 30 years, advised to submit their proposals in the revised
viii. Valuation report from Panel Engineer, format with immediate effect.
ix. Legal opinion from Panel Lawyer ADV.93/03-04 dt.17.11.2003 (M-2 S-24)
Security: EM of the land to be purchased. Financing Agriculturists for purchase of tractors
Processing fee: 1% to be collected which is non- under tie-up arrangement with tractor manufacturers
refundable.
With a view to accelerating the agricultural
Sanctioning Authority: Only Circle Heads can term loan lending for purchase of tractors, our Board
sanction loan for purchase of plot has relaxed the norms governing tractor loans.
Other terms: Revised norms vis-à-vis existing norms are given in
a. Property to be purchased should be in a good detail in the circular. The revised terms and
accessible developed / developing area and the Bank conditions are applicable to all Tractor and farm
should be able to sell the same without problem in mechanisation loans both direct as well as through
case of default. MOU with Tractor companies. For further details,
b. Construction of the building should be please refer the circular.
commenced within 5 years from the date of purchase ADV.94/03-04 dt.17.11.2003 (M-2 S-21)
of plot / date of loan.
Non-priority Jewel Loans - Modifications
c. Spouse guarantee to be taken wherever his/her
income is taken into account for arriving at the loan As per extant guidelines, Jewel Loans for non-
eligibility. priority purposes are to be recovered within a
maximum period of one year in one instalment.
d. Staff members can also avail loan under this
scheme. In the case of loan availed by staff /spouse As regards interest, based on representations,
the guarantee of spouse / staff is compulsory. the following modifications have been made:

e. All other guidelines as contained in the Manual of Existing guidelines Revised guidelines
Instruction – Conventional Advance for loans 1. Charging of interest
against immovable property should be meticulously Debited to the loan To be debited to interest accrued account
account till loan falls due for repayment.
observed.
2. Periodicity of charging and rate of interest
f. Age of the applicant/ Recognition of income level At monthly rests at discounted rate to be
and all other terms as per Home Loan Scheme only. At monthly rests at calculated both on the principal and
discounted rate interest accrued amount to get the
ADV.91/03-04 dt.14.11.03 (M-2 S-38) quarterly compounding effect.
3. Reversal of interest
Modification in IB Pensioners Loan Scheme
Balance in interest accrued account to be
The following modifications are made to the above reversed and charged to the loan account
at the end of 12th month or at the time of
loan scheme:
closure whichever is earlier. Thereafter,
Parameter Modified Terms interest to be charged on a monthly basis
10 months pension with a maximum of Not applicable
Loan amount on the balance outstanding. Branches
Rs. 50,000/- may reverse the interest in the interest
PLR + 0.50% (presently 12% p.a. – fixed - accrued account at the end of the month
Rate of interest
for fresh a/cs only in accounts which fall due during the
All other terms of the scheme remain month instead of on a day to day basis.
unchanged. 4. Repayment of interest
ADV.92/03-04 dt.15.11.2003 (M-2 S-24)

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Volume 16 Issue 3 Recollect Oct-Dec 2003

As and when
Interest to be recovered in one lumpsum Branches are advised to go through the
at the end of 12th month along with the guidelines carefully and build up a healthy and
debited
principal.
strong home loan portfolio.
The above modifications are effective from
01.12.03 and applicable to the new accounts only. ADV.101/03-04 dt.06.12.03 (M-2 S-38)
As regards Agricultural JL, the present practice of
charging interest at half yearly rests at the prescribed Recovery in written off accounts
rates and debiting it to Interest accrued account till Though the exercise of write off was
the due date of the loan will continue. undertaken on merits of each case, the accounts were
permitted to be written off with a condition that
ADV.98/03-04 dt.22.11.03 (M-2 S-18) recovery efforts would be pursued in these accounts
Recovery in Staff Related Accounts – Obligation of on an ongoing manner. The recovery in written off
Employees for Recovery of Loans accounts, which directly enhances the profitability of
Branches, is being emphasised taking into
Whenever the Staff Related Advances/Loan consideration the following:
Accounts with personal guarantees of staff member i. Borrower/guarantor would have revived
becomes overdue, the guarantee given by the income generating activity so that the branch can
concerned staff member should be invoked for strive for recovery
recovery of the overdue loan accounts. A demand
notice should be sent to the concerned staff member ii. Borrower/guarantor would have returned to
also. A copy of the notice should be marked to HO: their native place / place of business so that recovery
efforts could be pursued
Personnel Department for their records and
necessary action by them as per extant service iii. Pursuance of recovery through the legal heirs/
regulations. close relatives of the borrower guarantor
In respect of the staff related NPA accounts iv. Realisation through residual value of assets
wherein the concerned staff member has not left if any, which has been charged to the Bank
extended his/her personal guarantee, branches
v. Identifying other assets of the borrower/
should issue letters to the concerned staff member
guarantor not charged to the Bank at a later date to
seeking his/her assistance in recovery of such loan.
write off
The response/reply of the staff member to the above
letter should be kept in his/her personal file vi. Pursuing for recovery from Assets acquired/
maintained at Branch/Circle Office/Head Office. inherited by the borrower/guarantor subsequent to
Proposals for suit filing/one time settlement if write off
any, pertaining to the staff related advances should vii. Improvement in the position of Net Worth of
carry the compliance report on the above. Branches the borrower/guarantor
are advised to follow scrupulously the above
directions and arrange to issue letters/ invoke viii. Identifying/locating the borrower/guarantor
guarantee/issue Demand Notice in respect of all the and finding their present address with the help of
staff related NPA accounts and inform Circle Office/ Village Presidents/Govt. Officials/Previous
HO: Personnel Department, as the case may be. Managers, staff members etc.,

ADV.99/03-04 dt.25.11.03 (M-2 S-18) Major steps towards enhancing the

performance under recovery in written off accounts
Loans to farmers under Home Loan Scheme are furnished hereunder for guidance and
Powers have been delegated to Branch implementation by the branches:
Managers of semi urban branches to sanction Home ¾ A village wise list of all accounts written off is
Loans to farmers subject to the terms outlined in the to be maintained at branches as a permanent
annexure to the circular. The home loan application record. Strict confidentiality of such accounts to
from to farmers is also enclosed to the circular. be ensured.
It has also been decided that interest rate on ¾ Branch wise list of such accounts to be
all loans for housing, irrespective of the scheme computerised and monitored at Circle Office
under which such a finance is extended, will be level.
priced uniformly.

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Volume 16 Issue 3 Recollect Oct-Dec 2003

¾ Notices to be issued to all such accounts by the Field level functionaries are requested to take
respective branches and should be followed by advantage of the enhancement in discretionary
visits to the borrowers’ place by the members of powers for increasing the flow of credit to SSI /Tiny
task force team and need for repayment is to be sector. Further, the collateral free/third party
stressed. guarantee free loans upto Rs 25.00 lakhs under
composite loans should be covered under CGTSI .
¾ At the time of Recovery Camps, special focus
should be given for recovery in written off ADV.106/03-04 dt.17.12.03 (M-2 S-24)
accounts. Settlement of these accounts through
compromise mode could be negotiated as per Lending under Multiple Banking Arrangement (MBA)
HO guidelines. Common code framed by IBA

¾ Amount recovered in written off accounts The guidelines on multiple banking

should be accounted then and there and a record arrangement evolved by the Bank was
of such recoveries made is to be maintained and communicated by Circular No.ADV.83/00-01 dt.
made available for scrutiny during the Circle 09.10.2000. Keeping in view the operational issues,
Head’s visit to the branch. IBA has suggested a model common code
comprising necessary ground rules for
¾ The staff should be adequately educated and implementation by banks on a voluntary basis.
motivated on the importance of recovery in
written off accounts by explaining its impact on The guidelines are given in detail in the
Branch’s profitability. annexures to the circular. Branches are advised to
go through the same for an in depth knowledge on
¾ A list of written off accounts, where recovery is the subject.
made in full and final settlement should be
ADV.107/03-04 dt.18.12.03 (M-2 S-24)
reported to Circle Office, who in turn should
consolidate & furnish to Head Office the details Accounting treatment of legal expenses incurred in
of Date, No. of accounts & Amount recovered suit filed accounts
together with the amount written off in all these
accounts. At present after filing suit, the actual expenses
for filing suit like court fees, advocate fees paid, etc.,
ADV.103/03-04 dt.11.12.03 (M-2 S-18) are debited to Law Charges account, which forms
part of loans and advances. A separate law charges
Collateral free loan to SSI borrowers – enhancement account is opened for each suit filed account W.e.f.
in the upper ceiling
01.10.03, it has been decided that
It has been decided to dispense with the
i. Legal expenses incurred by the branches in
obtention of collateral securities on the basis of good
respect of suit filed accounts should be debited to the
track record and the financial position of the SSI
profit and loss account at the time of incurrence. For
unit, for loan limit of above Rs 5 lakhs and upto
this purpose, it is proposed to introduce a bifurcation
Rs.25 lakhs subject to norms as given in the
under the expenditure head Legal Expenses as (a)
annexure to the circular. Field level functionaries are
Advances and (b) others.
advised to take advantage of the above decision and
take effective steps to improve SSI/tiny sector. ii. At the time of recovery of legal expenses from
the borrower, the amount recovered should be
ADV.105/03-04 dt.17.12.03 (M-2 S-22)
credited to income account. Consequently new
Enhancement in Discretionary Powers for Sanction of Heads of income account Recovery of Legal
Composite Loan under SSI in Select Branches Expenses – Advances (9.18) and Recovery of
Legal Expenses – Others (9.19) will be introduced
Consequent to enhancing the composite loan
limit to Rs 50.00 lakhs, our Board has approved iii. Regarding existing balance in the law charges
enhancing the discretionary powers to all Circle account suitable instructions will be issued in due
Heads and to select Branches with the availability of course.
infrastructure including trained man power. The iv. For the purpose of monitoring the recovery of
enhanced powers are furnished in the circular. The such expenses from the borrowers, branches may
list of select branches eligible for to exercise the keep a Memorandum of Legal Expenses (MLE)
enhanced powers is given in Annexure 1 to the account.
circular.
ADV.108/03-04 dt.20.12.03 (M-2 S-27)

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Volume 16 Issue 3 Recollect Oct-Dec 2003

Glossary of Risk Terms For clerks Rs. 8,000

In view of the emerging importance of Risk For substaff & part time employees Rs. 6,000
Management in day-to-day banking and to create an
awareness of the importance among all our staff The enhanced limit may be allowed to those
members, a Glossary of important terminology staff members who avail interest free festival
associated with Risk Management is enclosed to the advance on or after 14.10.2003. All other terms and
circular. All staff members are requested to conditions communicated through Circular PRNL.
familiarise themselves with these terminologies. 99/02-03 dt. 26.03.03 remain the same.

ADV.109/03-04 dt.24.12.03 (M-2 S-37) PRNL.70/03-04 dt.20.11.03

Introduction of 90 days Norms for NPA identification Scheme of Reimbursement of fees to Officers who
acquire CISA/CISSP Certification
Under the prevailing prudential norms of
Income Recognition and Asset Classification an The Certified Information Systems Auditor
“overdue” period of 180 days is reckoned to (CISA) and Certified Information Systems Security
consider an advance/loan (other than advance Professional (CISSP) are professional Certification
granted for Agricultural purposes) as Non Programmes recognised internationally. CISA is
Performing Asset (NPA). With a view to moving issued by Information Systems Audit and Control
towards international best practices and to ensure Association, USA and CISSP is issued by
greater transparency, it has been decided by RBI to International Information Systems Security
adopt the 90 days overdue norms for identification Certification Consortium Inc., USA respectively.
of NPAs with effect from March 31, 2004. The
In order to encourage officers in our Bank to
asset classification norms that are impacted by the
equip themselves with the requisite CISA/CISSP
introduction of 90 days norms are dealt with in detail
qualifications, incentives in the form of reimburse-
in the circular and branches are advised to adhere to
ment of various fees to the officers who acquire
the guidelines given therein.
CISA/CISSP certification shall be awarded as under:
ADV.114/03-04 dt.30.12.03 (M-2 S-36)
Nature of fees CISA CISSP
Reimbursement of Actuals or US Actuals or US
PERSONNEL Examination Fees $ 325, whichever $ 499, whichever
(One time). is less. is less.
Policy for promotion from clerical cadre to officer Reimbursement of Actuals or US
Annual Membership $ 120, whichever --
cadre JMG Scale-I
Fee is less.
With a view to provide career progression and Reimbursement of Actuals or US Actuals or US
growth opportunities to staff members in the Clerical Annual Certification $ 40, whichever is $ 85, whichever is
Fee. less. less.
Cadre and to make better use of the available talent
Reimbursement
within the organisation, a fresh promotion policy towards purchase of Upto Rs.5,000/- Upto Rs.5,000/-
settlement has been entered into between the Bank Books (One time).
Management and the Federation of Indian Bank
Employees' Unions on 20.10.03. The salient features For terms and conditions and other details like
of the policy and other related matters are furnished how to apply, etc., please refer to the circular.
in detail in the circular. The policy shall be in vogue
PRNL.79/03-04 dt.24.12.03 (M-3 S-46)
upto 19.10. 2006.
PRNL.61/03-04 dt.28.10.03 (M-3 S-47) Borrowings through Credit Cards by Staff of our Bank

Festival advance to staff members – enhancement in Instances have come to HO notice that some
the maximum limits under the government scheme of the staff members of our Bank have defaulted
payment of dues under Credit Card facility availed
The revised limits of interest free festival by them from other Banks. Non payment of the dues
advance under the Government Scheme are: in time, as per terms, results in an act of virtual
borrowing/incurring of debt leading to default,
For officers Rs.10,000
indicative of indisciplined handling of one’s

8
Volume 16 Issue 3 Recollect Oct-Dec 2003

financial affairs. Such acts affect the image of the Foreign Investments in India – Acquisition of
Bank in the eyes of the other Banks as well as the Immovable Property
public, which is prejudicial to the interest of the
An up-dated version of instructions of RBI
Bank and highly unbecoming of an officer/employee
with regard to the acquisition of immovable property
of a Public Financial Institution.
and repatriation of sale proceeds of immovable
Such acts of officers / employees tantamount properties by NRIs/PIO is enclosed in the annexure
to serious acts of misconduct in terms of Officers' to the circular for easy reference of branches.
Conduct Regulations and Bipartite Settlements. FX.30/03-04 dt.15.12.03 (M-5 S-62)
All staff members are hereby advised to take
note of the above and manage their financial affairs Indian Students Studying Abroad – Revision in the
in such a manner not to give room for such Residential Status
complaints, lest the matter shall be viewed seriously As per RBI directive, students who stay
and appropriate action taken against such staff abroad for more than 182 days in the preceding
members. financial year and those whose intention is to stay
PRNL.80/03-04 dt.24.12.03 (M-3 S-48) outside India for an uncertain period when they go
Conducting Staff Meetings made mandatory. abroad for their studies may be treated as Non-
Resident Indians (NRIs). As non-residents, these
Staff Meetings are the most appropriate students will be eligible for receiving remittances
channel for communicating the organisational goals from India
and also a forum to discuss strategies that should be
adopted to translate such aims into realities. To i. up to USD 100,000 from close relatives from
increase the involvement of all the staff members India on self-declaration towards maintenance,
without exception, conducting Staff Meetings once which could include remittances towards their
in a month at branches and submission of the studies also
minutes of the meetings to concerned Circle Offices ii. up to USD one million out of sale proceeds/
is made mandatory effective from January, 2004. balances in their account maintained with an
PRNL.83/03-04 dt.29.12.03 (M-3 S-49) Authorised Dealer in India
iii. all other facilities available to NRIs under
CRA FEMA

Outstation Bills for Collection (OBC) – Cheques Educational and other loans availed of by students as
resident in India can be allowed to continue. It is
Some of the important guidelines on also clarified that these instructions do not dilute in
collection of outstation cheques, the duties and any way the utilisation of the existing foreign
responsibilities of the collecting Banker and the exchange remittance facilities to students in regard
precautions to be taken are reiterated in the circular to their academic pursuits.
for the guidance of branches. Branches are advised
to follow the guidelines scrupulously and take FX.31/03-04 dt.15.12.03 (M-5 S-62)
necessary precautions to avoid frauds being
perpetrated in the collection of outstation cheques. Export Credit - Payment of Premium to ECGC for
extension in time period for lodgement of claims
CRA.31/03-04 dt.29.12.03 (M-4 S-51)
i. Where banks seek extension in time period for
FX lodgement of claim or where claims already
filed have to be kept in abeyance for any
Country Risk Management (CRM) policy reason, banks have to continue remittance of
As per RBI directive, our Bank’s policy on premium from the month they stopped
Country Risk Management has been defined and the remittance of premium.
details of the list of countries and the risk rating ii. Claims filed, if any, will be treated as
alongwith other guidelines are given in the circular withdrawn and banks will have to re-lodge
and its annexures. Branches are advised to go them at a later date, if considered necessary.
through the same for an updated knowledge on the
policy. iii. Granting such extension approvals by ECGC
will not amount to condonation of any lapse on
FX.21/03-04 dt.17.10.03 (M-5 S-64) the part of the bank.
9
Volume 16 Issue 3 Recollect Oct-Dec 2003

Branches are advised to ensure compliance iii. E-mail is to be used for informing customers/prospective
with ECGC's directions as above, while reporting customers about our various products/services, new
default/seeking extension of time to file ECGC products/services launched, change in interest rate and
claims from the stipulated time frame of six months other news about our bank.
and in situations where ECGC is requested to keep iv. E-mail facility is to be used efficiently as a marketing tool
the claim in abeyance. Further, while making fresh for attracting new customers by aggressively campaigning
claims / re-submission of claims to ECGC, branches about our products/services.
are advised to send a copy of the claim preference v. E-mail requests received from customers are to be
letter to HO: CPGD. attended to immediately and reply sent through e-mail only
without any time lag.
FX.33/03-04 dt.30.12.03 (M-5 S-67) vi. E-mail address is to be incorporated in all the
correspondences emanating from Branches/Offices to
customers/various external agencies.
GENERAL
vii. E-mails are to be checked atleast thrice in a day to avoid
time delay.
Popularising our Website and increasing usage of
Electronic Mail (E-mail) GENL.27/03-04 dt.20.10.03 (M-6 S-82)
Our website www.indian-bank.com Market Feedback to Corporate Office on Products /
It is imperative that all out efforts are made to Services
popularise our website, for greater visibility and
market penetration. An illustrative list of action Field level functionaries come across market
points for popularising our website is enumerated information through local newspaper/journals/
below for information and implementation by magazines/reports/interaction with customers/ fellow
branches/offices: bankers/Heads of institutions/discussion with trade
associations/bodies, Bankers' meeting, customers'
i. Customers have to be informed about our website during
meet, etc and also during deliberations with cross
interactions with them at various forums viz., customer
meet, deposit mobilisation camps, etc. section in social/public gathering, staff meetings and
quality circles at branch level. These information
ii. Address of our website has to be incorporated in all the
may relate to
correspondences emanating from Branches/Offices to
customers/various external agencies, in advertisements i. New deposit/loan schemes / fee-based services
released in the local print media and in visiting cards. introduced by various banks.
iii. Address of our website has to be displayed at the premises ii. Modifications in the existing products / services
of all our branches/offices, ATM centres and Extension
introduced by other banks.
counters.
iv. Stickers have to be prepared with the address of our iii. Rationalised Interest rates for sector-specific
website and the same affixed on covers/envelopes and advances or add-on benefits.
other correspondences. iv. New business opportunities, etc.
v. Address of our website has to be printed on passbooks, Hence Branch Managers are advised to send
cheque books, statement of account etc. their feedback reports to their Circle Office along
Electronic Mail (E-Mail) with copies of communication/circulars /supporting
E-mail has been provided to a large number of papers etc. Circle Offices are advised to designate a
offices/branches in our Bank. Exhaustive and senior officer to collect the reports, screen them,
judicious use of the facility needs to be made for all analyse the contents and place them to the Circle
our communication requirements which will Head. The Circle Heads shall forward the said
considerably reduce the expenditure on account of feedback along with their own feedback reports, to
postal/courier costs and also reach the recipient the Feedback Desk at HO: CPGD.
quickly. The following action points are reiterated HO: CPGD will serve as focal point at Head
for optimum usage of this communication channel: Office to facilitate channelling of the feedback
i. Directory of e-mail addresses of customers, firms, reports received from the field to the appropriate
educational institutions, trusts, companies, organisations authority at Head Office.
etc., is to be created.
GENL.31/03-04 dt.17.11.03 (M-6 S-81)
ii. E-mail is to be used for communicating effectively with
other offices/branches/Overseas correspondents/ other Use of Official Language in the Bank
banks/ organisations abroad, etc.

10
Volume 16 Issue 3 Recollect Oct-Dec 2003

It is our constitutional obligation to ensure Computer Security in TBC branches

proper implementation of the Official Language It has been emphasised time and again the
Policy of the Government of India in our Bank in need to meticulously follow the laid down security
terms of various orders/ guidelines issued from time procedures and guidelines to ensure non-occurrence
to time by the Central Govt and RBI. The use of of frauds in Computerised environment, especially
Official Language in every Bank is reviewed by the the TBC branches.
Banking Division, Ministry of Finance and RBI on
quarterly basis. Apart from this, senior officials of Maintenance of Password Secrecy is an
the Department of Official Language, Ministry of important aspect that safeguards the interest of one
Home Affairs and the members of the Committee of and all in the Branches. Despite clear and strict
Parliament on Official Language pay surprise visit to instructions, some of the employees do not maintain
any office. Hence, we will have to make all-out secrecy of their Password resulting in perpetration of
efforts to increase the use of Official Language. fraudulent transactions in their name. In all those
occasions, the responsibility for such fraudulent
GENL.32/03-04 dt.21.11.03 (M-6 S-74) transaction will squarely lie on the officer who had
failed to keep his Password confidentially, as the
Know Your Customer – Compliance System level logs records the time at which a user
RBI has directed Banks to draw up a time logged into the System and the time at which he has
bound action plan in respect of all the old accounts logged out.
for completing the exercise of KYC to ensure Such frauds can be averted if each and every
verification of the identity and address of the staff member remains vigilant and meticulously
customer on the basis of reliable documents. follows the Systems and Procedures in letter and
Branches/offices are advised to adhere to the spirit. Non compliance may even affect an innocent
following time schedule in this regard: employee, since the User Id appearing in the
Prescribed date for
transaction would be the deciding factor for fixing
Comple- sending staff accountability in case of frauds.
Nature of customer tion of compliance report by
The guidelines for password maintenance
accounts the Branches Circle
process to Circle Offices
have been reiterated in various circulars, Handbook
Offices to HO of Dos & Don’ts for computerised branches and
All customer accounts, also in the Preventive Vigilance Manual for
including borrowal Computerised Branches. Apart from these, the
accounts, of 29.02.04 07.03.04 15.03.04 areas which need to be monitored closely are also
companies, firms, enumerated in the circular.
trusts, institutions etc.
All customer accounts, Whenever the Circle Heads visit the branches,
including borrowal they will convene a meeting of the Staff and exhort
accounts, other than 31.05.04 07.06.04 15.06.04 them about the need for strict maintenance of
companies, firms,
trusts, Institutions, etc. various security measures prescribed by Head Office
from time to time.
While inoperative accounts are exempted,
such accounts should be subjected to the KYC A copy of all the Circulars issued from time to
time on computer security aspects should be kept in
procedures as and when any transaction comes up
a separate file for immediate reference.
and is sought to be transferred to the operative
category. GENL.40/03-04 dt.18.12.03 (M-6 S-83)
GENL.38/03-04 dt.15.12.03 (M-6 S-84)

11
 Volume 16 Issue 4 Recollect Jan-Mar 2004
Recollect

DEPOSITS DEP.23/03-04 dt.23.02.04 (M1 S84)

The rates of interest on Domestic Deposits Bank’s Policy on Customer Due Diligence – Know
revised as under with effect from 07.01.2004 : Your Customer (KYC)
Applicable rates of interest % Based on the direction received from RBI and
(p.a.) the existing guidelines/instructions enumerated in
Rs.15 the Manual of Instruction IV – Deposits (as
lakhs to
Period Below amended from time to time), our Bank’s Policy on
less Rs.2 Crores
Rs. 15
lakhs than and above ‘Customer Due Diligence’ – Know Your Customer
Rs.2 (KYC)’ has been evolved. The salient features of the
Crores policy guidelines are given in the Annexure to the
7 days to 14 days -- 4.00 circular. Branches are advised to ensure compliance
15 days to 29 days 4.00 4.00
As per to the KYC norms while opening new accounts.
30 days to 45 days 4.00 4.00
schedule
46 days to 90 days 4.50 4.50
provided from DEP.24/03-04 dt.25.02.04 (M1 S15)
91 days to 179 days 4.75 4.75 time to time
180 days to 364 days 5.00 5.00 (Refer to your
1yr to less than 2 yrs 5.25 5.25 Circle Office) ADVANCES
2 yrs to less than 3 yrs 5.50 5.50
3 yrs and above 5.75 5.75 Submission of Credit Information to CIBIL
DEP.21/03-04 dt.01.01.04 (M1 S14) The Credit Information Bureau (India)
Limited (CIBIL) has been set up to serve as an
Interest Rates on Domestic Term Deposits effective mechanism for collection and
A master chart containing the ratesof interest dissemination of credit information among banks
prevailing at different periods from 20.2.2002 to and financial institutions. In this regard, RBI has
15.11.2003 is annexed to the circular. (the rate of issued the following instructions with regard to
interest on domestic term deposits prevailed for the submission of periodical information to CIBIL:
period from 15.7.1996 to 15.12.2001 was
communicated through Circular DEP. 22 / 2001 – 02
dated 22.01.2002). i. on suit-filed accounts of Rs.1 Crore and
DEP.22/03-04 dt.29.01.04 (M1 S14) above and suit filed accounts of Wilful defaulters of
Rs.25 lakhs and above with effect from March 31,
Quick disposal of all proceedings against the Bank 2003.
Continuance of the court proceedings against ii. suit-filed accounts below Rs.1 Crore in two
the Bank for a longer period is quite expensive, as phases as under:
more man-hours have to be wasted in attending
Courts, answering queries and related a. balance outstanding between Rs.10 lakhs
correspondence. The Officers/staff who are familiar/ and upto Rs.1 Crore as on March 31, 2002 by
connected with the complaint/suit may also move January 31, 2003 and
out of the Centre and in the course of the legal b. balance outstanding between Rs.1 lakh and
proceedings the presence of such staff may be Rs.10 lakhs as on March 31, 2003 and onwards by
required which also poses avoidable difficulties and September 30, 2003.
expenditure. While filing thedefence in the court
proceedings, the issues involved should be iii. In respect of all other accounts (other than
thoroughly examined to confirm that the Bank's suit filed accounts), banks / notified all India FIs /
standing is on sound footing. Branches should SFCs were advised to obtain consent of the
ensure that the dealing advocates are ready with borrowers / guarantors for disclosure of credit
written statements/counters, proof affidavits, information to CIBIL. The timeframe prescribed in
documents and necessary details to substantiate this regard is detailed below:
Bank's stand in the proceedings with a view to avoid Sl. Non Suit filed Date for Submission
any adjournment due to lapses / delay in furnishing obtaining of return to
No accounts
the same. Therefore, branches are advised to take up consent CIBIL as on
i. New Loans Commencing from March 31,
the matter with the dealing advocate for expediting October 2002 2003 and
the proceedings to its logical conclusion. onwards

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Volume 16 Issue 4 Recollect Jan-Mar 2004

ii a.Existing loans Before March 31, June 30, Margin Presently, if land If land is already owned (either
Rs.10 lakh and 2003 2003 and is owned and self-earned / inherited /
above onwards Home Loan is acquired by way of gift) and
b. Commercial Before September December applied for loan is applied for construction
accounts 30, 2003 31, 2003 and construction purpose, cost of land (at
Rs.1 lakh and onwards purpose, market value certified by our
above but less than construction cost approved Engineer) and
Rs.10 lakh is considered as construction cost together will
c.Consumer/ retail Before September December project cost and be treated as project cost and
accounts Rs.25000 30, 2003 31, 2003 and borrower has to land value can be considered
and above but less onwards bring 15% of this for margin purpose and 15%
than Rs.10 lakh construction cost margin on project cost will have
iii. All other existing Before September December as margin to be ensured.
accounts 30, 2004 (instead 31, 2004 and The above modifications are applicable for
of September 30, onwards NRI Home Loans and Staff Accounts also.
2003 ) (instead of
December
31, 2003) ADV.118/03-04 dt.10.01.04 (M2 S38)
Data Collection Software for CIBIL Scheme for providing select structured loans on
HO : CPPD has developed in-house a Softer Terms to the Home Loan borrowers of our Bank
software to key in the data as per CIBIL It has been decided to offer interest
requirements. The executable version of the CIBIL concession of 0.25% p.a. over the card rate in
software (Version 1.0) has been sent to all Circle respect of fresh loans to be availed under Salary
Offices in CD and the same can be used both at Loan, Vehicle Loan, Loan against NSC, Pension
Circle offices and at the Branch level. The data Loan and Professionals’ Special by our Home Loan
relating to all the branches under the Circle have to borrowers.
be consolidated at Circle Office and sent to Other Terms
Head Office. A comprehensive User Guide · The servicing of EMI in the Home Loan account
containing the instructions for installation of CIBIL should be upto date and satisfactory.
software, Extraction of available data from CIS and
updating / keying in the remaining data as per CIBIL · The above concession is to be allowed only on
Data Input formats, Report generation, Data the card rates of the respective schemes. If the
validation, Maintenance and Backup of data etc., is Home Loan borrowers have already availed loan on
available in the CD. finer terms then this concession shall not apply.
With regard to data creation at branches with · In case of Salary loan, if the application of the
PC and at CEDP for manual branches, the detailed borrower is not sponsored by the employer or he
guidelines are given in the circular. does not maintain SB account with us, extension of
EM is to be obtained.
ADV.115/03-04 dt.03.01.04 (M2 S36) · The above interest concession is not applicable
Credit Risk Rating Models -CRM 1 toCRM 4 to Staff Members.
Certain amendments have been given in the · Only Circle Heads can sanction the concession
circular for the above risk rating models
communicated in the Circular No. ADV / 19 /2003- ADV.120/03-04 dt.20.01.04 (M2 S38)
04 dated: 27.05.2003 and Circular
No.ADV.104/2003-04 dt.12.12.03 on the subject Execution of Term Loan Agreement (D 96) for Housing
and branches are advised to incorporate the changes Loan by the borrowers
as notified therein.
Branches were instructed to include the
ADV.116/03-04 dt.05.01.04 (M2 S37) following clause in the term loan agreement for
Modification in home loan scheme housing (D96):

Parameter Existing Norms Modified Terms “The borrower agrees that the Bank is
Maximum 30 times the 36 times the gross monthly entitled to charge interest at such rates and rests as
Eligible gross monthly income or 60 times the net may be revised by the Bank at its discretion which
Loan income or 48 monthly income, whichever is shall be notified by the Bank in the Notice Board
Amount times the net higher kept in the Branch premises. The borrower agrees
monthly income,
whichever is that he shall take note of such changes and
higher

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Volume 16 Issue 4 Recollect Jan-Mar 2004

individual notices to the borrower is expressly Exchanges / on

waived.” behalf of Stock
brokers
If the Branches have not taken such consent Branches are advised to ensure that correct margin is
letters, the same should be obtained immediately applied for the fresh accounts and for the existing
without fail. For fresh accounts, the above clause accounts at the time of renewal.
should be incorporated in the sanction ticket as well
as Term Loan Agreement. ADV.123/03-04 dt.27.01.04
As the rate of interest for Home Loan is Management of Operational Risks
periodically undergoing changes , branches should
pay adequate care while obtaining Term Loan The details of various types of operational
Agreement form for Housing Loans in conformity risk, areas where operational risks are embedded,
with HO Guidelines. Branches are also advised to loss events, and measures for risk mitigation are
display Home Loan interest rates in force, in the given elaborately in the circular for the information
Notice Board. and guidance of branches.
ADV.121/03-04 dt.20.01.04 (M2 S38)
ADV.124/03-04 dt.09.02.04 (M2 S37)
Credit Rating of Borrowal accounts with credit limits
of Rs.2.00 lakhs and above. 1. Introduction of Benchmark Prime Lending Rate &
2. Master Chart on Interest Rates linked to BPLR
Moody’s Risk Rating Model has been
introduced for borrowal accounts under In the monetary policy of 2003-04, RBI
Manufacturing sector with credit limits of Rs.1.00 advised banks to come out with a single Benchmark
Crore and above. However there are still some more PLR (BPLR) taking into account: (a) Cost of Funds,
accounts in the non-manufacturing sector and the (b) Cost of operations, (c) appropriate requirement
accounts under manufacturing sector for which the for provisioning / capital charge and (d) Profit
Moody’s Model could not be applied in view of non margin. RBI advised banks to dispense with the
availability of ‘Peer Group’ data, but are to be multiple PLRs. Banks are free to fix interest rates by
covered under rating mechanism. Hence branches adding Risk Premium (RP) and / or Tenor Premium
are advised to use the rating model as advised by our (TP) to BPLR.
Circular ADV / 17/2000-01 dated 11.05.2000 for 1. BPLR concept is introduced with effect from 1st
rating such of those borrowal accounts.. February 2004, declared as 11.00% and is subject to
Branches should rate all the eligible borrowal revision from time to time.
accounts with credit limits of Rs.2.00 lakhs and 2. PLR-linked loans will henceforth be linked to
above by using a relevant Model so that all accounts BPLR.
could be rated in compliance with RBI guidelines.
3. In the case of Term Loans, Tenor Premium (TP)
ADV.122/03-04 dt.20.01.04 (M2 S37) is to be added to BPLR as under in place of the
erstwhile PTLR and Sub-PTLR, in addition to the
Revision in margin on Bank Financing of equities and
applicable Spread (i.e. Risk Premium), subject to
Investments in Shares
revision from time to time. Tenor Premium is to be
RBI has reviewed the margin on Advances reckoned as per the contracted tenor and not as per
against shares / financing of IPOs / issue of the residual tenor of the loan.
guarantees and raised it to 50% with immediate
Contracted Tenor of Term Loan Tenor Premium
effect. It is applicable only to all fresh advances /
Upto 36 months NIL
guarantees issued in respect of capital market
Above 3 years 0.50% over BPLR
operations / favouring stock exchanges. The
existing advances / guarantees issued favouring The pricing formula for term loans is BPLR
stock exchanges may continue at the earlier margins plus TP plus Spread for loans with the rate of
until they come up for renewal. interest (ROI) linked to the erstwhile PTLR; and
BPLR plus TP minus Spread for loans with ROI at
Details Existing Revised
the erstwhile Sub-PTLR.
Uniform Margin 40 % 50%
Minimum cash 20% 25% 4. This revised BPLR shall be applicable for
margin in respect [within the minimum [within the minimum all the outstanding and fresh advances linked to
of guarantees margin (security) of margin (security) of PLR/PTLR except the existing fixed rate advances,
issued by Banks 40%] 50%]
favouring Stock and the Government directed interest rate advances.

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Volume 16 Issue 4 Recollect Jan-Mar 2004

5. Agricultural advances irrespective of tenor ADV.126/03-04 dt.10.02.2004 (M2 S34)

with limits upto Rs.50000/- will continue to carry
ROI at 9% as hitherto or with revised Reverse Modifications in IB Vehicle Loan Scheme
Spread as detailed in the Chart for SHG etc., Interest on IB Vehicle Loan has been reduced
6. No change in Home Loan ROI. For Fixed from 12% to 10.5% with immediate effect in respect
rate accounts, 0.5% will be charged extra for loans of all the fresh loans to be sanctioned:
repayable upto 10 years and 1% extra will be All other terms and conditions of the Scheme
charged for loans repayable beyond 10years, over remain unchanged.
and above the applicable floating rate
ADV.128/030-04 dt.14.02.04 (M2 S38)
7. In the case of IBNSC Loan, the existing
absolute rate is retained. Rephasement of Structured Loan Products.
8. Existing guidelines on maximum Spread and All overdue accounts under Structured Loan
norms for quoting of finer rates shall continue as per Products falling under the following are eligible for
Risk Premium (RP) guidelines. restructuring subject to repayment capacity and at
9. The existing guidelines on Short Tenor loans the SPECIFIC WRITTEN request of the borrower
shall continue for pricing at HO level by using and guarantor.
market benchmarks like MIBOR / Treasury Bill · Death of the borrower / disability due to major
Rate / G-Sec Rate. accident.
10. The existing Advances under Sub-PLR / Sub- · Unforeseen event / major illness / social
PTLR priced with Fixed Rate option and CDR / functions happening in the family of the
BIFR accounts priced at absolute/fixed ROI method borrower or any other genuine / acceptable
will continue to carry the Contracted ROI. circumstances.
11. Advances against third party deposits are to · In case of Salaried class customers who are on
be reviewed by all the Branches on a case-to-case loss of pay due to lockout/ strike/ disciplinary
basis as the card rate is Deposit rate + 3% or BPLR, action etc.
whichever is higher.
· Delayed payment of salary by the Employer due
12. Advances are to be priced at variable ROI to delayed sanction of Government aid etc.(eg.
concept. Fixed Rate can be offered only for those School depending upon Government aid)
loan segments or on individual accounts, where
fixed rate method is permitted by H.O. For · Delayed completion of Housing Projects.
Structured Loan Products, the Fixed Rate Premia · Delayed remittance by Employer in case of tie-
(FRP) if applicable, are loaded / stipulated in the up arrangement.
product ROI itself. For Home loans and general
Due to borrowers inability to fix suitable tenant for
credit, the FRP is furnished below:
letting out the house acquired under Home Loan.
Fixed Rate Premia However wilful defaulters will not be covered under
For Home Restructuring Programme.
Contracted Duration of Loans Loans For a detailed study, please refer the circular.
For Other
(applicable Loans with
only for HO approval ADV.129/03-04 dt.14.02.04 (M2 S38)
Resident
Individuals)
Revised guidelines of RBI for compromise settlement
Short term / Demand Loans with 0.50% 0.50%
repayment upto 3 years of chronic NPAs upto Rs.10.00 Crores
Loans with repayment 0.50% 1.00% RBI has conveyed extension of time period
exceeding 3 years upto 10 for receipt of applications for one time settlement of
years
chronic NPAs upto Rs.10 Crores upto 31.07.2004.
Loan with repayment exceeding 1.00% 1.00%
10 years Consequently, the last date for processing
13. Monthly charging of interest at discounted applications received upto 31.07.2004 is extended to
rate will continue for advances brought under 31.10.2004.
monthly charging concept.
ADV.130/03-04 dt.14.02.04 (M2 S18)
A master chart for Interest Rates covering
advances linked to BPLR is enclosed to the circular.

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Volume 16 Issue 4 Recollect Jan-Mar 2004

Reduction in rate of interest on Home Loan - under Lawyers or in the Court and in the absence of proper
Special Offer Scheme records tracing the document was unduly delayed.
The delay in returning the same to the customers has
Proposed Rate of
Present Rate of Interest Interest under caused customer complaints at various fora.
Period Branches are advised to be careful in handling the
(floating) / Terms Special Offer
Scheme documents. For the detailed guidelines, please refer
Up to 5 BPLR Plus TP the circular.
BPLR + TP minus 4.00%
years minus 4.00 % i.e.
i.e. 7.5% p.a
7.50% p.a ADV.132/03-04 dt.18.02.04 (M2 S25)
BPLR + TP minus
5 years up to BPLR + TP minus 3.25% Stock Inspection - Obtention of Stock statement and
3.50% i.e.
10 years i.e. 8.25% p.a. 8.00%p.a. its scrutiny
BPLR + TP minus
10 years up BPLR + TP minus 3.25% OCC accounts where stock statements are not
3.50% i.e.
to 15 years i.e. 8.25% p.a. obtained for more than 90 days, is running the risk
8.00%p.a.
BPLR + TP minus of being treated as NPA and provisioning is to be
15 years up BPTLR + TP minus 3.00%
3.25% i.e. made as per rules. This will be over and above
to 20 years i.e. 8.50% p.a
8.25%p.a. classification of NPA on account of non-servicing of
Up-front fee NIL 0.25% interest for 90 days as well as account being treated
2% on Balance as out of order for more than 90 days due to stock
Pre-closure 2% on balance outstanding /
Charges outstanding applicable DL, shortfall etc. By proper monitoring of the OCC
whichever is higher accounts, fresh accretion of the NPAs could be
Processing Waived up to avoided. Therefore, in accounts where stock
Waived up to 31.03.2004
fee 31.03.2004 statement has not been received, the branches can
For fixed rate optees: permit operations, only with the permission of their
controlling offices with effect from 01.05.2004.
Repayment Period Rate of interest
Important guidelines on stock inspection,
Up to 10 years 0.5 % extra over and above the
applicable floating rate obtention of stock statement and its scrutiny are
reiterated in the circular for the guidance of
10 years and up to 20 years 1% extra over and above the branches.
applicable floating rate
All other terms of our Home Loan Scheme ADV.135/03-04 dt.23.02.04 (M2 S36)
remain unchanged. Kisan Credit Card - Modification of guidelines.
ADV.131/03-04 dt.17.02.04 (M2 S38) The maximum permissible limit under the
above scheme has been modified as under:
Return of Title Deeds deposited by the Mortgagors
Equitable mortgages are created by deposit of Particulars Existing Revised
title deeds. The borrowers/guarantors/third parties Provision for 10% towards post 10% towards post
who are the owners of the property will have to Miscellaneous harvest expenses, harvest expenses,
deposit the original documents of title with the Expenditure marketing marketing expenses,
expenses, household expenses
Bank. As there can be only one original document, household etc., subject to a
Branches should take great care in handling the title expenses etc., ceiling of Rs.25000/-
deeds. In case, the document deposited / handed subject to a per farmer.
over is not original title deed, but a photostat copy or maximum of
Rs.3000/- per
a copy obtained from Sub-Registrar's office, (subject
farmer
to approval of competent authority in the bank as per
guidelines), in the memorandum of deposit like D- Provision for 20% towards No change is
escalation in the increase in scale of contemplated in this
32, D-33 etc. the words 'photostat copy', cost of cultivation finance @ 10% regard. Status quo be
'registration copy' as the case may be shall be noted Maintenance of every year No maintained10%
in the list of documents describing the nature of the agri farm assets provision for towards maintenance
title deeds deposited. maintenance of of farm assets subject
In the recent past, there have been few assets which to a maximum of
indirectly contribute Rs.25000/- per
customer complaints with regard to delay in to the agrl. farmer..
returning the documents in cases where the liabilities production
are fully liquidated. On enquiry, it came to light that
Adoption of scale No provision for the Limit can be fixed upto
in such instances the documents were either with the of finance same is available. 120% of scale of

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Volume 16 Issue 4 Recollect Jan-Mar 2004

Wherever the finance by the 3. While identifying the agencies, it is to be

scale of finance branches in the case insisted that they should have godown facilities
fixed by the of irrigated crops only
technical where there is tie up
locally. This may be made part of the Agreement
committee is arrangement with and the address of the godown locally available
found corporates justifying incorporated in the Agreement itself.
inadequate and the need to incur
where there is additional cost 4. Branch can proceed to seize the vehicle, after
market tie-up or towards inputs. In any serving a Notice to the Borrower as prescribed and
involvement of case the total short only in cases of inadequate response for repayment
corporates, say term loan provided in the normal course.
for contract under all the above
farming etc categories should not 5. The seizure should take place in the presence of
be more than 50/60% two independent respectable persons and their
of the value of
produce per acre. signatures should be obtained on the Mahazar. The
seizure report should contain invariably all details
ADV.136/03-04 dt.23.02.04 (M2 S21) such as chassis number, colour, damages, if any etc.
Reporting of credit sanctions by second-in-command 6. Branches to obtain the approval of Circle Head,
in Branches / Circle Offices before action is initiated for seizure of vehicles.
It is observed that the loans sanctioned by the No vehicle should be allowed to be parked in
second line functionary in the branch as per the godown for more than three months, as delay leads
empowered powers were not placed to Branch to avoidable loss to the Bank. Branches may have to
Heads for approval and that such sanctions were either recover the overdues and release the Vehicle
directly reported to Circle Offices. The guidelines, or auction it promptly as per procedure laid down.
contained in i) Booklet on Credit and Administrative
Powers (page C-9, para 5 captioned as Empowering ADV.138/03-04 dt.25.02.04 (M2 S38)
at Branch Level) ii) HO: D.O. Department circular Allowing of TOD / Excesses over sanctioned limits –
letter No.HO: DO:01:2002-03 dated 04.01.2003 to Reporting System
Circle Heads on empowering the second-in-
command at Circle Offices and iii) HO: D.O. Circular No. Adv. 96/2003-04 dated
Department letter HO:SIC:625:2003 dated 18/11/2003 deals in detail the discretionary powers
22.09.2003, for empowering AGMs in Circle for granting of TOD / excess drawings and the
Offices headed by GM/ DGM and reporting of their guidelines on reporting of such TODs and excesses
sanctions, are reiterated in the circular for and the procedure for obtaining confirmation from
information and guidance of branches/offices. the competent authority.
As per Board directions, “for accounts
ADV.137/03-04 dt.25.02.04 (M2 S28) sanctioned under MC powers, the ratification /
Indian Bank Vehicle Loan Scheme – Seizure of approval of any excess sanctioned by the Branch /
Vehicles from defaulting borrowers. Circle should be placed preferably in the next Board
meeting”. Hence Branches / Circle Offices are
Branches should initiate steps for recovery of advised to report the excess drawings strictly in
overdues under IB Vehicle Loan Scheme by terms of the guidelines issued in the circular cited
engaging the services of Seizure Agents identified / above and recommend to HO immediately, for
approved by Circle Heads at borrower’s cost, after placing to Board for ratification / approval in the
issuing notice to defaulting borrowers. The next Board meeting itself.
important aspects of the operational guidelines for
seizure of Vehicles are as under: ADV.139/03-04 dt.25.02.04 (M2 S25)
1. Branches should engage only Corporate Bodies Modifications to Scheme of financing Trade
/Partnership Firms/Association/ Enterprises run by
Ex-servicemen/ Ex-Police personnel having good The circular contains the modified version of
reputation and should not engage individuals. different schemes of trade finance and also reiterates
the precautions to be taken while advancing under
2. The Agencies engaged should act responsibly the schemes. For further details please refer the
and be within reasonable limits. Nothing should be circular
done by them, which may damage the image of the
Bank and create any embarrassment / problem to the ADV.140/03-04 dt.03.03.04 (2 S25)
Bank.

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Volume 16 Issue 4 Recollect Jan-Mar 2004

Scheme for financing Retail Individual Investors of connected with the sanction of jewel loan. Stringent
Initial Public Offer (IPO) action will be taken against officer who violates the
guidelines. No application for leave or
With a view to meet the funding needs of
correspondence with appraisers should be
retail investors to subscribe IPOs, new Scheme for
entertained by the branches.
financing individual investors of IPO has been
launched and is being implemented at select Ø Photo of the borrower to be obtained. The
Branches of our Bank The details of the scheme and borrower should be a customer of the branch or
the list of selected Branches are annexed to the should have been introduced to the branch by a
Circular. person known to the branch. Introducer’s signature
ADV.142/03-04 dt.03.03.04 (M2 S25) and full address of the introducer to be incorporated
in the jewel loan application itself after verification
Rationalisation of Interest rates on Agriculture
and informing him / her of the purpose of the
advances introduction (Ref: HO:RBD cir. Adv..55/03-04
Subsequent to the introduction of the BPLR dated 11.08.03)
concept, the interest rates on Agriculture advances
DO’s
has been rationalised and the applicable rates for Ø Branch Manager to enquire and satisfy himself
various categories are given in detail in the Circular. whether the applicants and the credentials
The revised interest rates are effective from 1.3.2004 submitted by them are genuine.
and are applicable to fresh as well as existing Ø The loan application must be filled in by the
agriculture advances. borrower only, but the loan clerk or officer in
charge may assist him / her. In case of
ADV.143/03-04 dt.04.03.04 (M2 S34)
agriculture, please incorporate the details of land
Sanctioning of Jewel Loan at the branches - Certain holdings in the column provided.
important guidelines Ø Corrections made either in the loan application
Ø Jewel loan should be made against jewel or the appraiser certificate should be
ornaments but not on primary gold. The jewels authenticated under full signature of the
should not be less than 22 carat in fineness. borrower / appraiser.
Ø Whenever jewel loan packets are taken out for
Ø While empanelling appraisers under panel verification, the officer/ inspector, who verified
system, applications should be considered from them should note the date of such verification in
qualified / reputed goldsmiths conforming to norms / the identification card tagged on to the packet
criteria indicated in the manual. Branches should under their initial.
make confidential enquiries about them and forward Ø Lodgement/ withdrawal of jewel packets should
the applications with their report / recommendations be noted and duly signed by the joint custodians
to their Circle Office for empanelment. For any in the control register maintained. The total
deviation, permission from HO:RBD should be number of packets in safe should be verified
obtained. atleast once in a month by the custodians and a
Ø Branches should ensure that the panel has not suitable note be recorded in the control register
less than two persons and they make themselves after such verifications.
available alternatively. Ø Once in three months, the manager and the joint
custodian of the keys, should check the number
Ø The appraisal of the jewels should be done of packets and the contents of each bags and
within the bank’s premises in the presence of the send a certificate to the Circle Office concerned
borrower and Manager / an officer of the bank for having verified.
designated as in-charge of the jewel loan advance Ø Jewels in all overdue jewel loan accounts and
and the jewels should be handed over on the spot to 10% of current jewel loan accounts , should be
the officer of the bank after appraisal. The selected at random and re-appraised once in a
appraiser’s certificate should be obtained in the year by the jewel loan appraiser, who has not
prescribed format separately and not in the jewel originally appraised jewels.
loan application itself (Ref:HO:RBD Ø If any spurious jewels are found during the time
cir.Adv.128/02-03 25.01.03). of reappraisal, all the other jewel loan packets
Ø The jewel appraisers should not be utilised / should be reappraised. 100% verification of
allowed to do any work except jewel appraising and jewels should be done at the time of
under no circumstances they should be asked to discontinuation / termination of services of jewel
attend to any other work either incidental and / or loan appraiser.

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Volume 16 Issue 4 Recollect Jan-Mar 2004

DON’Ts are advised to go through the circular for a detailed

study on the scheme and the guidelines related to it.
Ø No jewel loan should be granted to the
appraiser, his relatives or the persons introduced by
ADV.153/03-04 dt.25.03.04 (M2 S20)
him.
Ø Overdues under jewel loans should not exceed a. Furnishing Guarantees favouring other banks for
1% of total outstanding of jewel loan. At the end of their lending and
15th month in case of non-agri jewel loan and 18th b. Financing against other banks’ guarantees
month in respect of agri jewel loan, the branch
As per RBI guidelines, banks are hitherto
manager should list out the accounts and arrange to
precluded from issuance of guarantees favouring
issue notices / auction jewels without any delay.
other banks, FIs and other lending agencies for their
Jewel loan accounts both agri as well as non-agri
on-lending except the following under certain
should not be allowed to run beyond two years under
circumstances, terms & conditions:
any circumstances.
1. Guarantee in favour of IDBI in the case of
Ø Branch Managers do not depend entirely on the
import of technical know-how under Technical
appraiser while valuing the jewels as well as its
Development Scheme.
fineness/ purity. At random, the appraiser should be
asked to analyse the quality in the presence of 2. Guarantees in favour of various Development
branch manager. The scrappings of the jewel on the Agencies / Boards like Indian Renewable Energy,
touch stone, colour and reaction to the acid applied National Horticulture Board etc., for obtaining soft
on the touch stone, etc. should be verified by the loans and other form of development assistance.
branch manager.
3. In the case of Sellers' Line of Credit operated
Ø All the branches are advised to follow the above by other all-India Financial Institutions like IDBI,
guidelines while empanelling the appraiser, SIDBI etc. for sale of machinery, buyers' banks are
advancing jewel loans, etc. and avoid incidence of permitted to extend guarantee / co-acceptance
frauds. facility for the bills drawn.
ADV.149/03-04dt.15.03.04 (M2 S85)
4. Guarantee favouring HUDCO / SHBs for loans
Credit Risk Management - Importance of Cash Flow granted by them to private borrowers.
The Circular gives in detail the concept of 5. Guarantees by consortium member banks if
Cash flow, its importance in determining the credit they are unable to participate in rehabilitation
risk exposure, the accounting treatment of cash packages.
flows for rating the risk, etc. for the information and 6. For Infrastructure financing, provided a
guidance of branches in monitoring the advances minimum of 5% funded exposure is taken by the
made. guaranteeing bank.
ADV.151/03-04 dt.20.03.04 (M2 S37)
Revised Guidelines
Modification in IB Rent Encash Scheme
On a review of the existing guidelines in the
The quantum of loan under the scheme is light of deregulation of the Banking sector and
modified as “Maximum of 60 months’ rent or rental adoption of risk management system in banks, RBI
value for the unexpired period of lease with 25 % has liberalised the issue of guarantees favouring
margin (amount of advance already received from other banks / FIs / other lending agencies for the
the tenant + TDS) subject to maximum of 50 % of lending by the latter subject to certain conditions.
the market value of property. The directions have been codified separately for (A)
ADV.152/03-04 dt.25.03.04 (M2 S38) Guaranteeing Banks and (B) Lending Banks and
given in the annexure to the circular.
Swarojgar Credit Card (SCC) Scheme
Artisan Credit Card scheme was launched in ADV.155/03-04 dt.31.03.04 (M2 S25)
our Bank in March 2003 and the details of the
scheme was communicated to branches by circular PERSONNEL
ADV.139/2002-03 dated 21.02.2003. Now, the Group Savings Linked Insurance Scheme for Award
scheme is subsumed by Swarojgar Credit Card Staff
Scheme, as it has broader perspective and wider
coverage. The scheme guidelines of SCC are Bank has finalised arrangements with LIC of
furnished in the annexure to the circular. Branches India for introduction of a Group Savings Linked

8
Volume 16 Issue 4 Recollect Jan-Mar 2004

Insurance Scheme for the Award Staff Members. relief under Section 88 of I.T. Act. The proceeds of
The scheme shall be operative with effect from the policy is exempted from Income tax. On
February 2004 providing Life Insurance cover from promotion from clerical to officer cadre, the staff
March 2004. This is basically self contributory i.e. will be allowed to continue his / her membership in
Staff member voluntarily contributes entire premium this scheme until the same is merged with the
by way of deduction from his / her monthly salary scheme in vogue for Officers (GSLI).
through Bank. It ensures financial relief to the
Under this Scheme, out of the monthly
bereaved family in the unfortunate event of death of
contribution received from each Award staff, the
staff while in service. The scheme also covers
contribution utilised for saving portion is returned to
accidental death of the staff with double the sum
the Award staff with interest at the time of
assured.
retirement, or exit from the service by any other
The relief shall be provided by way of mode. The rate of interest payable on savings
Insurance cover, with accumulation of savings amount is variable from time to time. The present
together with applicable interest accrued thereon. All rate of interest is 8%, which may vary in future. In
existing Award Staff members including part time the case of death during service, in addition to the
employees on scale wages who are on the rolls of accumulated amount of saving portion of the
the Bank as on 31.01.2004 are eligible to enroll contribution with interest, the amount of Insurance
themselves as members of Group Savings Linked cover will also be paid to the deceased employee’s
Insurance Scheme. Staff members who join the family by LIC through the Bank under this
Bank after the introduction of the Scheme shall arrangement. In the case of accident death during
compulsorily become members of the Scheme on the service, the deceased employee’s family will be paid
next annual renewal date of policy. The double the sum assured.
Membership to GSLI Scheme shall automatically
The operational modalities are given in the annexure to
cease immediately upon one’s death / retirement / the circular.
resignation / voluntary cessation / termination / PRNL.84/03-04 dt.05.01.04 (M3 S46)
discharge or dismissal etc., from the services of the
Bank. Incentives for Air Travel through Indian Airlines/
Alliance Air under ‘Indian Airlines Corporate House
The monthly premium specified for the sum Scheme’
assured / covered shall be paid through Bank
deducted from the salary, depending upon the sum Indian Airlines is having a scheme called
assured for the individual staff member. The ‘Indian Airlines Corporate House Scheme’ which
amount of Sum Assured / covered and the premium provides for incentives to the Corporate Houses for
specified are as follows: travel undertaken through Indian Airlines/ Alliance
(Amount in Rupees) Air by staff Members of the Corporate. Our Bank
Basic Pay Monthly Premium Per has entered into an agreement with Indian Airlines
of staff as Staff Member for availing the incentives under the said scheme.
Sum
on Category *Risk Total The incentives shall be available to our Bank based
Assured Savings
31.01.200 Porti Prem
4 Portion on the All India billing on account of Air Travel
on ium
undertaken by our Executives/Staff members on
Upto A 1,00,000 29 73 102
Rs.5,850/- duty / training / LFC, etc. as per their eligibility,
B 2,00,000 58 146 204 through Indian Airlines and Alliance Air. For further
A 1,00,000 29 73 102 details please refer the circular.
Above B 2,00,000 58 146 204
Rs.5,850/- C 3,00,000 87 219 306 PRNL.99/03-04 dt.23.02.04 (M3 S45)
D 4,00,000 116 292 408 Providing Banking services on Sundays by our
# to determine category of insurance cover, the Basic Pay should be
taken without adding any Special Allowance Singapore Branch
Our Singapore branch has informed that they
*Risk portion includes premium of Rs.2/- per month per lakh for
accidental death cover are providing banking services on Sundays, between
A Staff member can choose for his insurance 15.00 – 18.00 hours (Singapore Time). The extended
cover one among the applicable categories services are for the benefit of banking public,
mentioned above, according to his / her financial exclusively for handling Indian Rupee remittances
commitments. The monthly contribution paid by the and opening of NRI accounts. This Service is
award staff member will be eligible to be treated available on first and last Sundays of every month,
entirely as Insurance premium and eligible for tax commencing from March 2004 onwards. All the

9
Volume 16 Issue 4 Recollect Jan-Mar 2004

branches shall honour the drafts and other remittance i. Remittance for any purpose specifically
instruments issued by Singapore branch on Sundays prohibited under Schedule-I (like purchase of
as mentioned above, if otherwise in order. lottery/sweep stakes tickets, prescribed magazines
PRNL.109/03-04 dt.19.03.04 (M3 S42) etc.) or any item restricted under Schedule II of
Foreign Exchange Management (Current Account
CRA Transactions) Rules, 2000 (Annexure B enclosed)
Service charge for Electronic Funds Transfer ii. Remittances made directly or indirectly to
Transactions (EFT) Bhutan, Nepal, Mauritius or Pakistan.
The service charge on EFT transaction is
revised as Normal DD charges plus Rs.10 per iii. Remittances made directly or indirectly to
transaction with immediate effect. countries identified by the Financial Action Task
Force (FATF) as "non-co-operative countries and
CRA.37/03-04 dt.27.01.04 (M4 S57) territories" viz. Cook Islands, Egypt, Guatemala,
Indonesia, Myanmar, Nauru, Nigeria, Philippines
FX and Ukraine.
Liberalised Remittance Scheme for Resident
iv. Remittances directly or indirectly to those
Individuals
individuals and entities identified as posing
As a step towards further simplification and
significant risk of committing acts of terrorism as
liberalisation of the foreign exchange facilities
available to residents, RBI has formulated a new advised separately by the Reserve Bank to the banks.
scheme under which resident individuals may freely 3. Remittance Procedure: Following requirements
remit upto USD 25,000 per calendar year for any are to be complied with by the remitter.
purpose. Salient features of the scheme are detailed
below: a. To avail of this facility, the individual will have
to designate a bank branch (Authorised Dealer)
1. Eligibility: All resident individuals are eligible to through which all the remittances under the scheme
avail of the facility under the scheme. The facility will be made.
will not be available to corporates, partnership firms,
HUF, Trusts, etc. b. The resident individual seeking to make the
remittance should furnish an application letter cum
2. Purpose: This facility is available for making declaration in the format as indicated in Annexure -
remittance upto USD 25,000 per calendar year for A regarding the purpose of the remittance and
any current or capital account transactions or a declaration that the funds belong to the remitter and
combination of both. will not be used for the purposes as detailed above.
Under this facility, resident individuals will be Following requirements are to be complied with by
free to acquire and hold immovable property or the Authorised Dealers:
shares or any other asset outside India without prior
approval of the Reserve Bank. Individuals will also a. While allowing the facility to resident
be able to open, maintain and hold foreign currency individuals, Authorised Dealers are required to
accounts with a bank outside India for making ensure that the "Know Your Customer" guidelines
remittances under the scheme without prior approval have been implemented in respect of these accounts.
of Reserve Bank. The foreign currency account may They should also comply with the Anti-Money
be used for putting through all transactions Laundering Rules in force while allowing the
connected with or arising from remittances eligible facility.
under the scheme.
b. The applicants should have maintained the
The facility under the scheme is in addition to bank account with the bank for a minimum period of
those already available for private travel, business one year prior to the remittance. If the applicant
travel, gift remittances, donations, studies, medical seeking to make the remittance is a new customer of
treatment etc. as described in Schedule III of Foreign the bank, Authorised Dealers should carry out due
Exchange Management (Current Account diligence on the opening, operation and maintenance
Transactions) Rules, 2000. of the account. Further the AD should obtain bank
statement for the previous year from the applicant to
The remittance facility under the scheme is satisfy themselves regarding the source of funds. If
not available for the following: such a bank statement is not available, copies of the

10
Volume 16 Issue 4 Recollect Jan-Mar 2004

latest Income Tax Assessment Order or Return filed As per the provisions of Section 192 to 195 of
by the applicant may be obtained. the Incometax Act, Bank has to deduct tax at source
(TDS) on payments made towards salary, interest,
c. The Authorised Dealer should ensure that
rent, fees, etc. and remit the amounts so deducted to
the payment is received out of funds belonging to
the account of the Central Government within the
the person seeking to make the remittances, by a
prescribed time schedule. Further, Bank has to file
cheque drawn on the applicant's bank account or by
Annual Returns U/S 206 of the Incometax Act
debit to his account or by Demand Draft / Pay Order.
prepared manually till the year 2001-02 with the
d. Authorised Dealer should certify that the Incometax Officer who has jurisdiction over the
remittance is not being made directly or indirectly branch / office, such as Form 24 for TDS on
by / or to ineligible entities and that the remittances Salaries, Form 26A for TDS on Interest paid to
are made in accordance with the instructions depositors, Form 26C for Contractors, Form 26K for
contained herein. Professional fees etc.. Any violation in the procedure
4. Reporting of the transactions: The laid down in this regard would attract penalty and
remittances made under this Scheme will be reported prosecution under Section 201(1A),222(1), 271 C
in the R-Return in the normal course. The and 272 A of the Incometax Act.
Authorised Dealers may also prepare and keep on The Income Tax department had notified the
record dummy Form A2, in respect of remittances Scheme of Electronic Filing of TDS Returns (e-TDS
exceeding USD 5,000. Authorised Dealers may Scheme) requiring filing of e-TDS Returns from the
arrange to furnish on a quarterly basis, information year 2002-03 onwards by the deductors. The
on the number of applicants and total amount Scheme was made operational on 21.01.2004 with
remitted to the Chief General Manager, External the inauguration of Tax Information Net work
Payment Division, Foreign Exchange Department, (TIN). As per the e-TDS Scheme, all Corporate
Reserve Bank of India, Central Office, Mumbai 400 Deductors have to compulsorily file TDS Return in
001, electronic form only and they need not have to
submit the manual TDS Returns from this year
FX.41/03-04 dt.09.03.04 (M5 S63)
onwards. The details on the scheme, as provided by
GENERAL Income Tax Department, is reproduced in the
circular for the information and guidance of
Deduction of Income tax at Source (TDS) – E Filing of branches/offices.
TDS Annual Returns by the Branches /
GENL.51/03-04 dt.18.03.04 (M6 S56)
Administrative Offices of the Bank for the Financial
Year 2002-03 and subsequent years

11
a Volume 17 Issue 1
For Private Circulation Only

April – June 2004 Digest of Circulars

Non inclusion of a circular in Recollect does not reflect on its importance
i. The deposit shall be renewed for a
DEPOSITS
minimum period of 15 days from the date of
Payment of Interest on fixed deposit – Method of presentation
calculation of interest ii The rate of interest to be applied shall be
Branches shall continue the existing practice segregated into two parts as under:
of taking into account 365 days in a year for the Part A. Upto the date of presentation:
purpose of interest calculations irrespective of (irrespective of the type of original deposit)
whether it is a leap year or not. Branches may
At simple interest only, at the rate whichever
display our policy guidelines in the notice board
is lower of the following two.
intended for customers for their information and
also provide the same to the depositors at the time a. The rate prevailing at the time of maturity of the
of accepting the term deposits. deposit for the overdue period Or

DEP.1/04-05 dt.05.04.04 (M1 S104)

b. The rate prevailing at the time of presentation
for the overdue period
Renewal of Overdue Domestic Term Deposits Part B. from the date of presentation to the
Reserve Bank of India vide directive dt future date of maturity:
13.2.2004 have advised the Banks that all aspects At the rate prevailing on the date of
concerning renewal of overdue domestic term presentation for renewal at simple or compound at
deposits may be decided by individual Banks and the option of the depositor for the remaining
the customers being notified of the terms and period.
conditions of renewal including interest rates at the
time of acceptance of deposit. RBI has further Note
advised that the policy should be non- 1. As per the existing rules, in order to
discretionary and non-discriminatory. become eligible for compound interest, the deposit
Our Bank has decided to continue the 2. Should be renewed as RIP for a minimum
existing policy guidelines, which are reproduced period of six months from the date of Presentation.
below for ready reference. In cases where the terminal quarter is incomplete,
1. Where the overdue period does not exceed 14 branches may use the master chart to arrive at the
days: maturity value for the completed quarters. For the
incomplete quarter, simple interest on such
i. The deposit shall be renewed for a
maturity value should be calculated and added to
minimum period of 15 days from the date of
arrive at the final maturity value.
presentation
ii. The rate of interest to be applied will be 1. Branches should issue only a fresh deposit
the rate ruling on the date of maturity of deposit receipt. For this purpose,
relevant to the period of renewal i. The amount of deposit will be the original
2. Where the overdue period exceeds 14 maturity value + interest for the overdue period
days: calculated as per Part A above.

Circulars last issued as on 30.06.04 Though due care has been taken in the preparation of Recollect,
the version given in the circular is final.
DEP ADV PRNL CRA FX GENL MD/ED Compiled by HO: O&M Division
14 26 27 11 12 09 05 Printed & circulated by HO: Circular Issue Cell
Recollect

ii. The rate of interest to be mentioned in the 8. The proceeds of a Recurring Deposit Account
receipt will be the rate applicable for the remaining can be treated at par with other overdue term
period (i.e., from the date of presentation to the deposits for the purpose of renewal and payment of
revised maturity date on renewal) overdue interest provided the proceeds of the
matured Recurring Deposit is deposited under the
iii. On top of the receipt, entry should be made,
Fixed or Reinvestment Plan Scheme.
preferably in red ink, as follows:
9. For the purpose of renewal of term deposits, the
“ Issued towards renewal of Overdue Deposit
maximum period of 10 years have to reckoned
originally matured on………. (Date)” from the date of presentation and not from the date
The guidelines are also applicable for of maturity of the term deposits.
renewal of overdue domestic term deposits
accepted under Capital Gains Scheme 1988. 10. The renewed deposit after payment of interest
for the overdue period should run for a minimum
The other guidelines in respect of renewal of period of 15 days from the date of presentation. If
overdue term deposits are reproduced below for the deposit is preclosed before running the
easy reference of the branches. minimum stipulated period, the interest paid for the
1. Interest for the overdue period can be allowed if entire overdue period will have to be recovered.
the deposit is renewed for a minimum period of 15 Branches are advised to send the due date
days from the date of presentation. notice to the depositors as per instructions received
2. Though the minimum period for preferential at the time of opening the account in advance so
deposits of Rs.15 lakhs and above is 7 days, for the that there will not be any complaint from the
purpose of payment of interest of overdue deposit, depositors at a later date. The branches are
the preferential deposit should be renewed for a required to follow up the overdue deposits
minimum period of 15 days from the date of continuously till the deposits are either renewed or
presentation. closed.
3. In case the bank is requested to renew a portion DEP.3/04-05 dt.06.05.04 (M1 S103)
of an overdue deposit, it may be conceded and Payment of Interest on the deposit accounts of
renewal should be done from the date of deceased depositors
presentation with interest being allowed only on
the renewed portion of the deposit. Reserve Bank of India have advised that
decisions in regard to payment of interest on the
4. Two of more overdue deposits may be combined maturity proceeds of deposit accounts of deceased
and a consolidated deposit receipt may be issued depositor may be left to the discretion of individual
from the date of maturity provided the name of banks subject to their Board lying down a
depositor and maturity date is identical. Branches transparent policy in this regard.
should not combine two or more overdue deposits,
which matured on different dates. Where deposits It has been decided in our Bank to continue
are combined, the fact should be mentioned in the the existing policy guidelines for payment of
consolidated deposit receipt. interest in the accounts of deceased depositors.
5. Additional amount should not be accepted along The existing policy guidelines are
with overdue deposit while it is being renewed reproduced below for ready reference by the
after the date of maturity. However, a separate Branches: -
deposit receipt may be issued for the additional (a) In the case of a term deposit standing in the
amount. name / s of
6. Overdue interest shall be calculated on the 1. A deceased individual depositor, or
interest added amount kept in overdue deposit.
2. Two or more joint depositors, where one
7. While renewing a term deposit, the name of the of the depositor has died,
depositor, as appearing in the original deposit
should not be altered i.e. a deposit standing in the Interest should be paid in the manner
name of ‘A’ should not be renewed in the name of indicated below: -
‘B’. i. At the contracted rate on the maturity of
the deposit

2
 Apr– June 2004

ii. In the event of payment of the deposit

SB account without
being claimed before the maturity date, the bank 250 250 100
cheque facility
should pay interest without charging the penalty
indicated therein; However for students with bonafide
certificate, the minimum balance will be Rs. 250
iii. In the event of death of the depositor for accounts with cheque facility and Rs. 100 for
before the date of maturity of the deposit but claim accounts without cheque facility.
is made after the date of maturity, the bank should
pay interest at the contracted rate till the date of Note Branches with partial Computerisation and
maturity. From the date of maturity to the date of ALPM will be grouped under non- – computerised
payment, the bank should pay simple interest at the category.
applicable rate operative on the date of maturity,
for the period for which the deposit remained with 2. Pensioners
the bank beyond the date of maturity. However, in SB- Cheque facility - Rs.250/-
the case of death of the depositor after the date of SB- Without cheque facility – No minimum
maturity of the deposit, the bank should pay balance.
interest at savings deposit rate operative on the 3. Service Charges for non-maintenance of
date of maturity from the date of maturity till the minimum balance
date of payment. Rs.10/- per occasion. There are no service
iv. If on request from claimant/s the bank agrees charges for pensioners for non-maintenance of
to split the amount of term deposit and issues two minimum balance in SB accounts without cheque
or more receipts individually in the names of the facility.
claimant/s, it should not be construed as premature Reserve Bank of India, have informed that
withdrawal of the term deposit. The period and the recommendations of the Committee on
aggregate amount of the deposit should not Procedures & Performance Audit on Public
however undergo any change. Services with reference to minimum balance in
(b) In the case of balances lying in current account Savings Bank accounts have been examined by
standing in the name of a deceased individual them and it has been decided to issue the following
depositor/ sole proprietorship concern, interest clarifications:
should be paid from 01.05.1983 or from the date of 1. At the time of opening Savings Bank
death of the depositor whichever is later, till the accounts, banks should inform their customers
date of repayment to the claimant/s at the rate of about the requirement of maintaining minimum
interest applicable to savings deposit as on the date balance and levying of charges if such minimum
of payment. balance is not maintained.
DEP.04/04-05 dt.11.05.04 (M1 S104) 2. Any subsequent change in this regard
should be informed to the account holders.
Minimum Balance in Savings Bank Accounts and
Penalty for non- maintenance of Minimum balance. 3. The Committee has observed that banks
are adding charges without informing the existing
The minimum balance requirements and depositors.
service charges for non- maintenance of the
prescribed minimum balance in Savings Bank 4. The Committee has recommended that any
accounts are as follows: charge levied subsequently should be made known
to all depositors in advance with one month’s
1. General Customers notice.
(Amount in Rs.)
5. Accordingly, the banks should inform, at
Computeris Non-Computerised least one month in advance, the existing account
Nature of Account
ed Branch Branches
holders any change in the prescribed minimum
Metro/ Semi Urban / balance and the charges that may be levied if the
Urban Rural prescribed minimum balance is not maintained.
SB account with
500 500 500
Branches are advised to follow up the
Cheque facility guidelines while opening new Savings Bank
accounts, also to send notices to the existing

3
Recollect

customers / display the present and subsequent designated authorities in accordance with the
changes in the minimum balance requirements and applicable law/laid down procedures
service charges for non-maintenance of minimum
To comply with applicable laws as well as
balance in the customers notice board
predominantly. norms adopted internationally by banks and
financial institutions
DEP.05/04-05 dt.12.05.04 (M1 S102) The detailed policy guidelines of the bank as
Towards Customer - Centric Banking! also the precautions to be taken by
branches/offices are elaborately given in the form
Our chairman has given a detailed write up of a booklet and enclosed to the circular.
on the duties and responsibilities of the staff
members at branches with a view to have our All staff are advised to go through the
banking activities totally customer – centric. circular and its Annexures, be familiar with
Branch Managers are advised to bring the contents procedures/precautions issued by Head Office on
of the circular to the notice of all the staff members KYC norms from time to time, be alert and help in
for compliance. Circle Heads, during their visit to preventing our Bank being used for money
branches are to ascertain from individual staff laundering activities.
members, as to whether they have overall DEP.07/04-05 dt.26.05.04 (M1 S101)
awareness of the areas of response, contained
herein. It will be our collective responsibility to Bankers’ Fair Practice Code (BFPC)
ensure that highest standards of customer service
A Fair Practice Code for our Bank,
are maintained and a prompt and efficient
comprising the guidelines on the various services
customer grievance redressal mechanism is very
extended to the public, has been approved by our
much in place, thereby rendering a customer
Board. With a view to disseminate the contents of
centric banking.
the Code among staff and the customers, a copy of
DEP.06/04-05 dt.15.05.04 (M1 S101
the Bankers’ Fair Practice code is enclosed in the
form of a booklet to this circular.
Anti Money Laundering - Guidelines
The Bankers’ Fair Practice code Booklet
Money laundering is the process whereby should be made available to all those customers
proceeds of crimes such as drug trafficking, who ask for the same. A notice should also be
smuggling, etc. are converted into legitimate displayed in the banking hall on the availability of
money. The criminals attempt to hide and disguise such a code and those who are interested in
the true origin and ownership of the proceeds of knowing the same to contact the Branch Manager.
criminal activities, thereby avoiding prosecution,
The Code is also ported on the web site of
conviction and confiscation of criminal funds.
the bank www.indian-bank.com for the
Thus money laundering is involvement in any
information of the public and the viewers.
transaction or series of transactions that seeks to
conceal or disguise the nature or source of Dep.08/04-05 dt.27.05.04 (M1 S101)
proceeds derived from illegal activities.
Settlement of claims in deceased depositor’s
The Anti Money Laundering Policy is to accounts - Modification of delegated powers to
establish governing policies and standards to various authorities
protect banks/financial institutions from being used
The authorities mentioned below are
to launder money. The policy objectives are:
authorities to settle claims subject to monetary
To protect the bank from being used for limit specified below.
money laundering All Branch Claims upto Rs.10,000/- and / or the
To adhere to the internationally accepted Managers in value of which does not exceed
scale I, II, III Rs.10,000/-.
‘Know Your Customer’ (KYC) policies and Chief Managers in Claims upto Rs.50,000/- and/ or the value of
procedures VLBs/ AGMs in which does not exceed Rs.50,000/-.
ELBs and Circle
To take appropriate action, once suspicious Heads in scale IV
activity is detected and makes report to the &V
Circle Heads in All claims without any monetary limit and

4
 Apr– June 2004

Scale VI safe deposit locker account/safe custody Bank liable for penalty under Banking Regulation
items including ‘exceptional cases’, Act, 1949.
excluding staff claims
Circle Heads in All claims without any monetary limit and DEP.11/04-05 dt.29.05.04 (M1 S102)
Scale VII safe deposit locker account/safe custody
items including ‘exceptional cases’, Nomination facility – Important Do’s and Don’ts
excluding staff claims Dos
Deputy General Claims relating to any deposit without any ƒ The Nomination shall be in favour of an
Manager / Asst. monetary limit / safe deposit locker
General Manager accounts , safe custody items including the individual only.
(Law) at HO: category of ‘exceptional cases’ and claims ƒ Nomination can be made only in deposits /
Legal relating to deceased staff.
accounts held by individual(s) / sole proprietary
Department.
concern.
In ‘exceptional cases’ the power to settle ƒ The depositor or the depositors together
claims may be delegated to various officials can nominate only one Individual.
subject to the monetary limit as enumerated as
ƒ In deposit of articles for safe custody,
hereunder:
nomination can be made only if the deposit is
Branch Managers in Scale I, II Upto Rs. 5,000/- made by a single individual or sole proprietary
and III concern.
Chief Managers in VLBs/ Upto Rs.25,000/-
AGMs in ELBs/ Circle Heads in ƒ In case of safety lockers held by a single
Scale IV & V hirer, only one Individual can be named as
Circle Heads in VI All claims without any nominee. If the safety locker is held in joint names,
monetary limit.
the hirers can nominate one or more persons, who
Circle Heads in VII All claims without any
monetary limit. shall operate the locker along with the surviving
hirer.
ƒ In case of deposits in the name of minors,
Dep 09/04-05 dt. 27.05.2004 (M-1 S –105) persons lawfully entitled to act on behalf of minors
Opening of Current Accounts by Branches – Need shall make the nomination.
for Discipline ƒ Where the Nominee is a Minor, the
depositor(s) may while making the nomination
At the time of opening of current accounts
appoint some other individual who is not a minor,
branches should insist on a declaration from the
to receive the amount/articles on behalf of the
account holder to the effect that he is not enjoying
nominee during the minority of the nominee. Date
any credit facility with any other bank, or obtain a
of birth of the minor to be noted in bank records.
declaration giving particulars of credit facilities
enjoyed by the intending customers with any other ƒ Nomination, variation and cancellation
bank(s). Besides in the latter case, the concerned shall be made in the prescribed formats. If there
lending bank(s) were required to be duly informed are more than one depositor, variation and
so that suitable precautionary measures, where cancellation shall be done by all the depositors
necessary could be taken by them. together.
It is informed by RBI that the above ƒ Nomination can be made at the time of
procedure which is considered essential in the opening the deposit/account or at any time later
interests of overall credit discipline is reportedly during the currency of the deposit/account.
not being adopted by some banks and consequently Don’ts
facilitates diversion of funds by borrowers to the ƒ Nomination shall not be made in favour of
detriment of the banking system. Branches are non-individuals such as temples, associations,
therefore once again instructed to scrupulously institutions etc.
ensure that they do not open current accounts of
entities which enjoy credit facilities (fund based or ƒ Nomination shall not be accepted in
non-fund based) from the banking system without accounts held in any representative capacity such
specifically obtaining a No-Objection Certificate as accounts of Trust, Association, clubs, society or
from the lending bank(s). Branches should note any other organisation or any office bearer thereof
that any violation in this regard would make the in his official capacity.

5
Recollect

ƒ Nomination shall not be made if more than For full details Branches are advised to refer the
one person jointly deposits articles for safe circular.
custody. ADV.02/04-05 dt.05.04.04 (M2 S204)
ƒ The depositor(s)/account holder(s) shall
not nominate more than one individual, except in Credit Guarantee Fund Trust Scheme for Small
case of safety lockers held in joint names. Industries (CGTSI) - Bearing one time upfront fee of
2.5% for one year
ƒ No person other than the lawful guardian
shall make nomination on behalf of minor. The Small-Scale Industrial sector is one of
DEP.12/04-05 dt.12.06.04 (M1 S101) the important planks in the growth of the Indian
economy. Acknowledging the vital role-played by
Customer Information – Maintenance of Secrecy the SSI sector. Government of India
Wherever branches desire to collect (GOI)/Reserve Bank of India (RBI) is attaching
information about the customer for a purpose other special significance to this sector and are coming
than the KYC requirements, it should not form part out with various measures to enhance the flow of
credit to this sector. Further to enhance the flow of
of the account opening process. Such information
credit to tiny sector RBI has stipulated 60% of the
may be collected separately, purely on a voluntary
Bank’s total SSI credit towards the sector. In this
basis, after explaining the objectives to the regard our Bank has initiated various measures
customer and taking his express approval for the like:
specific uses to which such information could be
put. • Exempting the obtention of collateral security
for SSI borrowal accounts for limits upto Rs.
DEP.14/04-05 dt.30.06.04 (M1 S101) 5.00 lakhs
ADVANCES • Waiving obtention of collateral requirement for
Launching of new retail loan product – IB Swarna SSI loans with limits of above Rs.5 lakhs and
Abharana scheme. upto RS 25.00 lakhs based on good track record
and financial position of the units
An exclusive scheme under the name “IB
Swarna Abharana” to suit the needs of women folk • Joining the Credit Guarantee Fund Trust
Scheme for Small Industries (CGTSI) introduced
for buying gold ornaments has been introduced in
by GOI to enable SSI sector to access credit
our Bank and the facility is presently available in without collateral security and third party
the four southern States and Union Territory of guarantee.
Pondicherry. For further details on the scheme
The Credit Guarantee Fund Trust Scheme
with regard to eligibility, quantum of advance,
(CGTSI) covers credit facilities with loan limits
interest rate, etc. Branches are advised to go upto Rs.25.00 lakhs. For the loans covered under
through the circular. the Scheme, the upfront fee payable at 2.5% and
ADV.01/04-05 dt.02.04.04 (M2 S204) annual service fee at 1% are to be borne by the
borrower. It has been decided by our bank to bear
Scheme for financing of Commercial Property for the one time upfront fee of 2.5% on CGTSI
setting up Office/Shops ”MY OWN SHOP” covered loans for a period of one year w.e.f. 01 04
Our Bank has launched a new product as 04 upto 31.03.05. This applies to the existing
“MY OWN SHOP” to encourage financing for accounts also which are eligible to be covered
purchase of new commercial space/shops and also under the scheme. However Annual Service fee of
for second hand purchase, provided the residual 1% will be continued to be borne by the borrower
life of the commercial space is not less than actual as hitherto.
repayment period plus ten years. Take over of For further details/information regarding the
existing loan of standard asset category given for Credit Guarantee Scheme of CGTSI Branches may
similar purpose, from other banks/Financial refer circular or log on to www. Creditguarantee.
Institutions also permissible. The applicant should Org. in.
acquire the property for running his own business ADV.04/04-05 dt.20.04.04 (M2 S203)
activity / and should not be for renting/leasing out.

6
 Apr– June 2004

Preferred Customer Credit Card (P3C) for SSI/SME Frauds in Home Loan Financing
Customers
The group appointed by Reserve Bank of
In order to enable both the Bank and the India (RBI), for analysing the reasons for frauds in
SSI/SME customers for speedier and cost effective Housing Loan, has examined the issues involved
operations taking advantage of the technological and the causes for growing incidence of frauds in
development, our Board has approved introduction housing loans. The measures suggested by the said
of an ATM enabled Preferred Customer Credit Committee to RBI to prevent occurrence of frauds
Card (P3C), Smart Card. are given in the Annexure to the circular for branch
the information and guidance and points relevant
The card is an electronically enabled Smart
to the area of branch level functions.
card with Photo containing the basic profile of the
customer along with the limits, balance Issues examined by the group (on frauds in
outstanding, financials etc. The customer will be housing loans) appointed by Reserve Bank of
able to transact business by accessing the card in India:
select branches, which are interconnected. . The
Mitigating Factors /
cardholders will be entitled for an increase in Type of
Modus Operandi suggestions for
working capital to the tune of 20% and adequate Fraud
preventive cures
term loan limits for Expansion
Fabrication Committed generally 1. Verification of
programmes/Technical of income by borrowers in salary slips with
Upgradation/Modernization for next three years. documents connivance with Direct employer
The increase of limit will be based on the like income Selling Agent / Estate
tax Return / Agent / Builders. 2. Income Tax
assessment of limits done with three-year Department should
projections submitted by the borrower. The Salary Slip /
Balance upload on their
borrower along with the application form for the Sheet etc. Website the list of
card will submit the assessment for three years. Income Tax payers
and defaulters
The card will enable the customer to transact 3. Salary amount
business in select branches with interconnectivity should be compared
apart from the parent branch where the limits have with Bank Statement
originally been sanctioned. The electronic smart 4. Cross
card will be issued in due course. verification of
balance sheet
ADV.06/04-05 dt.22.04.04 (M2 S203)
5. Personal
Laghu udhyami credit card scheme interview of the
As per the suggestion made by the Hon'ble borrower plays a very
Finance Minister, Indian Banks' Association has important role
brought out a novel Scheme to provide hassle free Loan Disbursed amount 1. Cheque should
credit facility to Small Borrowers with credit limit Amount Cheques are collected be issued in the name
disbursed by by the Agents / third of Bankers to the
upto RS. 2.00 lacs. Accordingly, the Scheme was
way of parties from the Builders with the
introduced in our Bank vide our Circular Cheque / Borrower’s Bank and Bank account
ADV.014/02-03 dated 25th April 2002. Demand deposited in fictitious Number on it.
Drafts are account opened for
encashed by this purpose and 2. Cheque should
Now, Indian Banks’ Association has advised all member not be handed over to
third party / amount are withdrawn
banks, that in order to encourage development of small scale Agents etc. from such bogus the Borrower / Agent /
account Seller. Bank’s
and self-employment ventures and provide small and medium marketing officials
enterprises easy access to bank credit, the upper limit under can be sent for
delivery of cheque to
Laghu Udhyami Credit Card (LUCC) Scheme be revised from the Builders / Sellers
RS. 2 lacs to Rs. 10 lacs, keeping basic features of the of property at the
registered address
Scheme unchanged.
mentioned in the title
deeds
For detailed guidelines of the scheme please
refer the circular Title Coloured Xerox copy 1. Tracking &
documents of various documents Sharing of all
being forged are produced information among
ADV.07/04-05 dt.26.04.04 (M2 S202)

7
Recollect

– stamped including the Banks & Housing and Builder Builders case of Auto Loan.
Documents encumbrance Finance Companies
forged by certificate, fake stamp about names of Sale of Property is sold 1. Equitable
Borrower papers etc. which are blacklisted Builders & property by through duplicate / Mortgage should be
customer / difficult to identify / Developers loanee fake title deeds even created at Registrar’s
Builder distinguish from the without though the legal title is Office by deposit of
original one. 2. Agreement for clearing with the Bank / title deeds. For this,
sale / document of existing loan Housing Finance purpose all Banks
title should be in Agencies should represent to
DEMAT form. Central & State
Government through
3. In case of large
I.B.A & R.B.I to
value loans, Bank can
enactment of
approach the Sub-
necessary provisions.
Registrar’s Office to
verify the 2. Internal due
genuineness of the diligence plays
stamp paper / important role to
documents / prevent this type of
registration receipt frauds.
etc.
Misrepresent Loan taken for In order to ensure
Over These frauds are 1. For valuation of ation of end Residential Housing end use of loan, Bank
Valuation of committed to draw over Rs.25 lakhs, use of loan Property however, should depute an
the Property higher loan amount by valuation reports Commercial Property officer for inspection /
the Borrower in should be done by is purchased by verification of
connivance with the two independent availing such loan property whether it is
Builders / Valuers. valuers Residential Housing
The value of the Property or
property are inflated 2. Govt. should
Commercial Property.
by including various introduce certification
expenditure and course for the Sale of Builders / property 1. This aspect of
additional amenities, approved valuers. property by developers after construction Funding
fixtures, legal charges, Builder taking construction Loan whether availed
3. Banks should
society advance without loan from banks / by the Developer /
develop in house
maintenance charges clearing / Housing Finance Builder or not should
expertise for valuation
etc. which are non repaying Agencies are selling be verified at Project
of properties.
existing Construction developed ready flats clearance level by
Funding / Galas / developed Banks / Housing
Multiple These frauds are 1. Tracking & Loan availed plots etc. without Finance Companies.
Financing extension of the fake Sharing of information by them from knowledge of their
documents that are among the Banks & Banks / financiers & without 2. Original
produced to different HFCs about names of Housing repaying construction documents should be
Banks / Housing blacklisted Builders & Finance funding loan to them. called for verifications
Finance Agencies Developers selling Companies. at the time of
same properties to appraisals of any
more than one buyer Housing Loans.

2. Agreement for ADV.08/2004-05 dated 03.05.2004

Sale / document of
title should be in Issue of Bank Guarantee favouring Government
DEMAT form Departments
3. : Bank /
Housing Finance
Indian Banks' Association (IBA) informs
Agencies should that in the absence of full postal address of the
insist on the original Bank branch in the Bank Guarantee, the
title deeds of the Beneficiary of the Guarantee finds it difficult in
landed property on
which structure is
communicating with the Branch of the bank, which
built. has issued the Guarantee. Moreover in the absence
of details of counter party / applicant, relevant
Cancellation In this case after Registration Receipt
of booking of availing the initial loan issued by Registrar of contract, supply order, tender reference number
flats / amount, the booking Stamps Office should etc. in the correspondence with Beneficiary,
property i.e. is cancelled and the bear Hypothecation especially in the case of guarantees favouring
collusion borrower directly take Clause as in case of
between the refund from the Certificate of
various Ministries of the Government of India it
customer Registration has in

8
 Apr– June 2004

will be difficult for the Department / Ministry to scheme, a Master Circular incorporating the
reply to the letters from the bank. guidelines/directives in force, collated from all the
Branches are advised to ensure: / covering circulars issued earlier on the subject is appended.
letter enclosing the Guarantee with the This Master Circular contains gist of all the
Beneficiaries, full postal address of the Branch is circulars issued by the Head Office on IBA
properly incorporated in the Guarantee documents educational loan scheme and updated as of
and also in the correspondence / covering letter 18.05.2004
In respect of guarantees issued in favour of
all Government Departments, while making IBA scheme details, application format and
correspondence with Beneficiaries, full details as check list is also hosted in our Bank’s web site.
to the relevant contract, supply order, tender Branches/Circle Offices are requested to
reference number, the particulars of counter party/ effectively utilise the tools provided like
applicant etc. as appropriate for the guarantee pamphlets, banners / CDS for aggressive
issued shall be furnished in the correspondence / marketing of this product.
covering letter to facilitate the Beneficiaries (i.e. ADV.15/04-05 dt.22.05.04 (M2 S202)
Government Departments) to identify their files.
Recovery of Decretal Debts due to Banks – Steps to
ADV.09/04-05 dt.05.05.04 (M2 S207) be taken after obtention of Decrees/Recovery
Certificates
2% interest subsidy on Educational Loans
Execution of Decrees and Recovery
With a view to assisting the deserving
Certificates (RCs) obtained assumes greater
students, Government of India has formulated a
importance in the recovery of NPA accounts.
pilot scheme for subsidising the interest on
Obtention of Decree is only the first step in the
educational loans by 2% where the limit
Recovery process. Actual recovery is achieved
sanctioned is upto Rs.4 lakhs. The scheme will be
only through execution of Decree/RC. The delay in
effective from 1st March 2004. The subsidy will be
execution of Decrees/RCs could probably be due
routed to banks through the Reserve Bank of India
to lack of awareness on the part of our branches as
on reimbursement basis on submission of accounts.
regards the procedure to be followed in the
Detailed operational guidelines will be
execution process. Detailed guidelines on the
communicated. .
procedures to be adopted for enforcing the
ADV.10/04-05 dt.05.05.04 (M2 S202) decree/RC are furnished in the circular. .
IB – Bajaj Two Wheeler Finance – tie -up ADV.16/04-05 dt.27.05.04 (M2 S108)
arrangement with M/S Bajaj Auto Ltd.
Our Bank entered into tie-up arrangement Co-financing of projects with SIDBI-Operational
with M/S Bajaj Auto Ltd. on 15.05.2004. The guidelines
brand name “IB-Bajaj Two Wheeler Finance” will
Small Scale Industrial Sector contributes a
be used to promote the arrangement at all
lion’s share towards the employment generation,
dealership outlets of the Company, outside
industrial development, value addition, exports,
dealerships and in advertising and sales promotion.
GDP etc of our country. Government of India and
The loan given under this tie-up arrangement is to
Reserve Bank of India is laying more emphasis on
be classified under IB Vehicle Loan Scheme.
flow of credit to this sector in view of the
Salient features of the Agreement to Indian contribution made. Our Bank has initiated various
bank preferred customers in Tamil Nadu and pro-active steps to enhance the flow of credit to
Pondicherry is furnished in the circular. Branches SSI sector and in this direction, we have entered
are advised to popularise the scheme. into a Memorandum of Understanding with SIDBI
ADV.14/04-05 dt.19.05.04 (M2 S204 for co-financing projects under SSI, service and
related Infrastructure sectors on 05.02.2004.For
Master Circular on IBA Educational Loan Scheme details refer the circular. .
With a view to facilitating the branches to ADV.17/04-05 DT. 01.06.04 (M2 S203)
access all the information on IBA educational loan

9
Recollect

Reduction in the rate of interest on Home Loan with Bank is aiming a disbursement target of
effect from 29-05-2004 and waiver of processing fee / Rs.5000 Crores under structured Loan Products for
upfront fee upto 30.09.2004. the current year, of which Rs.3000 Crores is
targeted for disbursement under Home Loan alone.
Based on the rates charged by other banks
The rate of interest now offered by our Bank is
and to make our Bank Home loan Product more
most competitive with that of other Banks and also
competitive, the rate of interest has been revised as
we have waived processing charges/ up-front fee
under with effect from 29-05-2004 for Home
upto 30.09.2004.
Loan/NRI Home Loan accounts:
Branches are requested to take this
Period Existing Rate of Revised Rate of
Interest Interest (Floating)
opportunity and aggressively market not only to
improve our Home Loan portfolio but also to
improve our market share in Home Loan disbursal.
Up to 5 years BPLR Plus TP minus BPLR Plus TP minus
4.00 % i.e. 7.50% p.a. 4.25% i.e. 7.25% p.a. ADV.19/04-05 dt.03.06.04 (M2 S204)
5 years up BPLR + TP minus BPLR + TP minus
to 10 years 3.50% i.e. 8.00%p.a. 3.75% i.e. 7.75%p.a.
NPA RECOVERY – INTENSIVE RECOVERY
CAMPAIGN
>10 years up BPLR + TP minus BPLR + TP minus In order to accelerate the NPA recovery
to 15 years 3.50% i.e. 8.00%p.a. 3.75% i.e. 7.75%p.a.
process and to enable the branches to cover all the
>15 years up BPLR + TP minus BPLR + TP minus
NPA borrowers, Branches are advised to observe
to 20 years 3.25% i.e. 8.25%p.a. 3.50% i.e. 8.00%p.a. “Intensive Recovery Campaign”. The purpose of
the Intensive Recovery campaign is to accelerate
the NPA recovery process and to give a focussed
Pre-closure 2% on Balance 2% on Balance attention towards NPA management and It is
Charges outstanding / applicable outstanding / envisaged that during the campaign branches
DL, whichever is higher applicable DL,
whichever is higher
should endeavor to meet all the NPA borrowers at
their doorsteps and recovery efforts pursued.
Processing Processing fee of Processing fee of
fee 0.25% at the time of 0.25% at the time of Detailed guidelines with regard to conduct
submission of proposal submission of of Recovery Campaigns have been furnished in our
and up-front fee of proposal and up-front earlier circulars (ADV. 43, 62 & 102 / 2003-04
0.25% fee of 0.25% are
waived upto dated 28.07.03, 01.09.03 & 10.12.2003). Branches
30.09.2004. are advised to follow the guidelines scrupulously.
For the immediate reference of branches the
For fixed rate optees: guidelines are reproduced here below:
Repayment Period Rate of interest • Observe the period from 21.06.2004 to
Up to 10 years 0.5 % extra over and above the
31.07.2004 for “ Intensive Recovery Campaign”.
applicable floating rate • Mass campaigns with teams of members
> 10 years and up to 20 1% extra over and above the of staff should be conducted and all the NPA
years applicable floating rate. borrowers should be met during the course of the
All other terms and conditions of the campaign.
Scheme remain unchanged.
• Recovery Camps should be well planned
The above revision in the interest rates is in advance and conducted in all Locations / Towns
subject to resetting clause which provides the / Villages so as to get the maximum benefit out of
Bank, the right to vary the BPLR or Tenor the exercise.
Premium or spread or any one or all.
• Recovery camps shall be organised in
The above revision is applicable to existing consultation with Circle office / Government
Home Loan Accounts with effect from 29/05/2004 Departments etc. enabling the participation of
and by waiving the one time up front fees of officials from Circle Recovery Cell / Government
0.25%. Departments etc.

10
 Apr– June 2004

• Borrowers should be met at their doorsteps • Notices under Securitisation Act shall be
by the recovery task force and persuaded for issued with regard to all eligible accounts in
recovery or for submission of compromise consultation with the Circle Office.
proposals wherever normal recovery is not
• The steps suggested above are only
feasible.
illustrative and branches can adopt strategies suited
• In the case of unpaid / partly paid OTS to the local conditions as well. During the
sanctioned accounts, the concerned borrowers / campaign period, Executives from Head Office are
guarantors have to be met and the need for making also likely to visit the branches / circles to
payment as per sanction should be stressed upon. participate in the recovery campaign. Branches
shall keep the particulars of Recovery campaign
• Interest / installment arrears should be
ready and make available for scrutiny and
arrived in the case of all SS category of NPA
guidance by the visiting executives.
accounts and vigorous steps for recovery of such
overdue amount and upgradation of the assets to ADV.21/04-05 dt.15.06.04 (M2 S208)
standard category should be taken.
Reduction in the rate of interest on Home Loan with
• The eligible NPA borrowers should be effect from 29-05-2004 and waiver of processing fee /
educated upon the revised RBI OTS scheme and upfront fee upto 30.09.2004.
advised to avail the opportunity as per norms on We invite reference to our circular no
merits of each case. Adv/19/2004-05 dated 3.6.2004 communicating
• During the campaigns, branches should the reduction in the rate of interest on Home loan
take steps to effect recoveries from the written off with effect from 29.5.2004 and waiver of
accounts as well. processing fee/upfront fee upto 30.9.2004.
Branches are advised to charge the applicable rates
• Wherever Bank Vehicles / Jeeps are used to loans for repairs and renovation also. (Both
as part of campaigns, Recovery Banners may be existing and fresh accounts)
displayed in the vehicles.
Period Existing Rate Revised Rate of
• “Dawn to Dusk” recovery camps shall be of Interest Interest (Floating)
organised in villages facilitating participation of all
the NPA borrowers. Up to 5 years BPLR Plus TP BPLR Plus TP minus
minus 4.00 % 4.25%. I.e. 7.25% p.a.
• Recovery Camps / Mass campaigns could i.e. 7.50% p.a.
also be organised by a cluster of branches by
involving staff from the respective branches. 5 years up to 10 BPLR + TP BPLR + TP minus
years minus 3.50% i.e. 3.75% i.e. 7.75%p.a.
• Meeting with high value NPA borrowers 8.00%p.a.
should be arranged along with officials from Circle >10 years up to BPLR + TP BPLR + TP minus
Offices. A minimum of top 100 NPA borrowers in 15 years minus 3.50% i.e. 3.50% i.e. 8.00%p.a.
each Circle should be met and recovery efforts 8.00%p.a.
pursued for settlement at Circle office level during >15 years up to BPLR + TP BPLR + TP minus
the campaign period. 20 years minus 3.25% i.e. 3.50% i.e. 8.00%p.a.
8.25%p.a.
• Before the commencement of the recovery
campaign specific action points (viz. Normal Processing fee Processing fee Processing fee of
recovery or Compromise recovery) for each of the of 0.25% at the 0.25% at the time of
NPA accounts should be decided and a suitable time of submission of
submission of proposal and up-front
strategy followed for maximisation of NPA proposal and fee of 0.25% are
recovery. up-front fee of waived upto
0.25% 30.09.2004.
• Publicity of RBI OTS scheme may be
made with the mikes fitted to the Rickshaws / All other terms and conditions of the
Vehicles and the recovery cassettes played. Scheme remain unchanged.

• Circle Recovery cells shall endeavor to The above revision in the interest rates is
conduct a minimum of two Lok Adalats during the subject to resetting clause which provides the
campaign period.

11
Recollect

Bank, the right to vary the BPLR or Tenor (RBI has advised the Banks to make suitable
Premium or spread or any one or all. provisions during the current year to ensure a
smooth transition to the revised norm with effect
ADV.22/04-05 dt.17.06.04 (M2 S204) from 31 03 2005.)
Master Circular on Special Mention Account (SMA) Branches/ Circle Offices are advised to go
through the revised guidelines on IRAC norms
The guidelines of Special Mention Account
with regard to additional provisioning on NPA.
have been communicated vide HO. IRRD Circular
No.ADV.155 / 2002 – 03 dated 15 03 2003. ADV.26/04-05 dt.29.06.04 (M2 S208)
Subsequently certain modifications / improvements
have been effected and the same have been PERSONNEL
communicated through various circular letters.
Scheme for Compassionate appointment/cash
Now with a view to facilitating the branches to
compensation to eligible Dependants of the
access all the information on Special Mention
employees dying in harness/employees seeking
Account (SMA), a Master Circular incorporating
premature Retirement on medical grounds
the guidelines / directives in force, collated from
all the circulars / letters issued earlier on the Our Board, at its Meeting dated.31.1.2004,
subject is appended. This master Circular contains has approved a new Scheme for compassionate
gist of all the circulars / letters issued by the Head appointment/cash compensation, for
Office on SMA and updated as of 07 06 2004. implementation with immediate effect.
Branches / Offices are advised to go through
With the introduction of the new Scheme,
the updated guidelines on SMA as given in the
the Scheme that was in vogue, as per our Circular
Circular
Nos. 56/79 dated.4.4.1979 and PRNL: 190/85
ADV.23/04-05 dt.17.06.04 (M2 S211) dated.5.11.1985 for appointment under
compassionate grounds for the eligible dependent
Change in IRAC Norms - Additional Provision of employees stands rescinded.
requirement for the year 2004-05 on doubtful assets
of more than 3 years The eligible applications received earlier by
the Bank and pending in our records will be
At present, Banks are required to make suitably disposed of in accordance with the
provisions on NPAs on a graded scale based on the eligibility criteria under the new Scheme.
age of the NPA. However, in respect of NPAs
included in ‘doubtful for more than three years’ In the unfortunate event of death of an
category (D3 asset), the provisioning requirement employee, the eligible dependants may submit
on the secured portion remains unchanged at 50 application for Compassionate Appointment/Cash
per cent, irrespective of its age, till it is identified Compensation, to the branch/office where the
as a loss asset. With the enactment of the deceased employee worked last, within THREE
Securitisation and Reconstruction of Financial MONTHS from the date of death of such
Assets and Enforcement of Security Interest Act, employee.
2002 and the chances/extent of recovery of an asset
The details of the scheme are furnished in
reducing over a period of time, RBI has felt that it
the circular
is essential that banks expedite recovery of NPAs PRNL.09/04-05 dt.27.04.04 (M3 S305)
and advised to higher provisioning according to the
age of NPAs in doubtful for more than 3 years
Restoration of various benefits agreed to forego by
category would come into force with effect from
Staff Members in terms of Memorandum of
31 03 2005. The increase in provisioning
Understanding and Back to Back Agreement.
requirement on the secured portion will be applied
in a phased manner over a three-year period over It has been decided that the benefits agreed
the existing stock of NPAs classified as doubtful to forego in the following areas are restored with
for more than 3 years as on March 31, 2004. In immediate effect.
respect of all advances classified as doubtful for
more than 3 years on or after April 1, 2004, the 1. Closing Allowance to Officers as per Officers'
provisioning requirement will be 100 percent. Service Regulations

12
 Apr– June 2004

2. Entertainment Expenditure as per eligibility their SHL property before 28.07.2001 are left out
of the purview of Second SHL facility.
3. Reimbursement of fuel expenditure as per
eligibility There have been requests from the above
category of staff members to extend the facility of
4. Personal use of Office Vehicle as per Second SHL to them also.
entitlement
The request has been considered and it has
5. Foreign Travel for attending Training now been decided to sanction Second SHL to the
Programme/Seminars for the personnel above category of staff members, as a one-time
6. Utilization of Hotel/Accommodation facilities measure in their entire career, for the following
wherever required by Executives / Officers as purposes:
per their eligibility i. To receiving acquire / construct a new house and
Besides others, for travel to attend Training ii. To take over the Liability in respect of Housing
Programmes, officer’s upto Scale-IV shall continue Loan availed from other financial institutions /
to use only Train as the mode of conveyance. The Banks / Home Loan from our Bank for
extant guidelines to all Officers including construction / acquisition of another house.
Executives for travel by train and to avoid air
For full details of the Scheme the Branches
travel, wherever overnight journeys and weekend
are advised to refer the circular
journeys are involved shall be continued.
PRNL.14/04-05 dt.14.05.04 (M3 S305)
. The restoration of the facilities / sacrifices
should be taken in letter and spirit more as
restoration of sacrifices made and not as a general CRA
relaxation in our Expenditure and Cost Control, REVISION OF LOCKER RENT
which need to be continued.
Attention of the branches is invited to
PRNL.10/04-05 dt.30.04.04 (M3 S303) circular CRA.32 /2000 -01 dated 08.02.2001, on
the revision of rent on Safe Deposit Lockers. On
Second Housing Loan to Staff Members. reviewing our tariff of rent with other banks and
The facility of Second SHL to buy a new also since our establishment expenditure is
house by selling the existing house acquired under increasing, it has been decided to increase the
SHL was extended vide our Circular PRNL: 24/88 rental rate of safe deposit lockers with effect from
dated 10.02.1988 to those staff members who have 01.05.2004.The details of revision and action
availed SHL under Bank’s Scheme. points be followed is furnished in the circular.

SHL under Government Scheme was CRA.01/04-05 dt.06.04.04 (M4 S404)

introduced in our Bank for Award Staff and
Officers effective from 31.01.1991 and 11.02.1993 Real Time Gross Settlement System (RTGS)
respectively. However, the facility of Second SHL Settlement Systems
was not extended to the staff members who availed
SHL under Government Scheme. A settlement system is one in which
payment system among various parties is finalised.
The facility of Second SHL was extended,
Mainly there are two types of settlement systems
as one time measure in the entire career, to all staff
viz., Net Settlement and Gross Settlement.
members with effect from 28.07.2001 for selling
their existing house acquired under SHL for
In a net settlement system, presently
various reasons and to buy another house in its
followed in clearing houses, all the credit and debit
place, as communicated in our circulars
transactions pertaining to a participant are summed
PRNL.31/2001-02 and PRNL.32/2001-02, dated
up, the difference between total credits and debits
28.07.2001.
of the day is arrived at and the accounts of the
Consequently, Award Staff Members and participants are either credited or debited.
Officers who have availed SHL after 31.01.1991
and 11.02.1993 respectively under Government In a gross settlement system, payment
Scheme and adjusted the SHL liability by selling instructions are debited to the participant’s account

13
Recollect

as and when issued and credit is released to the transfer huge value of funds across the country
other party only after the account is debited. In from one customer’s account in a bank’s branch to
other words in a gross settlement, transactions are another bank’s branch within minutes.
processed and settled individually transaction wise,
Digital Certificate
throughout the day. This system has become
operational in 27 banks and is likely to cover all For any funds transfer, payment instructions
other banks in the Country. are communicated electronically and the messages
RTGS payment system is one in which the are duly authenticated by using digital signatures.
payment instruction between banks are processed For affixing the digital signature the select
and settled individually and continuously Officials are issued an authorisation called “
throughout the day. It ensures quick and efficient Digital Certificate” with smart cards. Digital
funds transfer mainly covering the following types Certificates are being issued by our Domestic
of transactions: Operations Department to the officers at identified
branches for RTGS.
1. Inter-Bank Funds Transfer
Our Bank’s preparedness for RTGS
2. Customer Based Inter-Bank Funds Transfer
Our Bank is slated to join the RTGS by June
3. Own Account Funds Transfer 2004.In the first phase 33 branches and 12 service
branches shall be covered and this may be
4. Multi-lateral Net Settlements.
extended to more branches gradually based on
In RTGS System, a single dedicated their business requirements. A Business
account, called RTGS Settlement Account for each Development Group has been formed to monitor
participant bank for outward and inward RTGS proper implementation of the system.
payments, is maintained with RBI. Each bank
maintains a Payment Gateway, connected to the For effective funds management RTGS Cell
identified branches, selected for handling RTGS has been formed as part of HO: Treasury
payments. When payment instructions are Department. The Registration Authority Office is
received from various branches, they are placed in functioning in HO: Domestic Operations
a payment queue. Depending on the liquidity Department for issue and management of digital
position and importance, banks assign priority to certificates. Bank’s Gateway Server has been
the payments and release them. As soon as a installed at Head Office with the required
payment is released, it reaches RBI’s Payment Hardware/Software
Gateway and after the participant’s RTGS account
is debited, the credit is released to the receiving As RTGS will have a major impact on the
bank’s gateway. On receiving the credit, the procedural & operational aspects of banks’
receiving bank’s gateway transfers the credit to the remittance/payment systems, it becomes
respective branch. imperative that the branches are conversant with
the system and make best use of it for improved
Features of RTGS System customer service and enhanced profitability.
1. Since debits precedes credits, RTGS
system requires relatively large amounts of CRA.06/04-05 dt.25.05.04 (M4 S601)
intraday liquidity because participants need Demand Drafts issued by Singapore Branch on
sufficient liquidity to cover their outgoing branches in India-
payments and have to plan their liquidity
management accordingly. Enhancement of powers for signing by a
single powered officer from RS 10,000 to Rs
2. RTGS System will have substantial impact 50,000.
on our current operations in Treasury, Service At present all Demand Drafts issued by our
Branches, and branches handling large corporate branches including Singapore branch are signed by
accounts, Cash Management Services and various a single powered officer upto Rs 10,000 as per
Government Transactions. O&M Division Circular CRA 1/97-98 dt 1.4.97.
3. Float funds may not be available in In view of the relatively high value of
customer-based transactions, since it is possible to Singapore Dollar and in order to improve the

14
 Apr– June 2004

quality of customer service and facilitate speedy Branches and Circle Offices are to approach
processing of remittance applications, Singapore the ATM monitoring desk functioning round the
branch has been permitted to issue Demand Drafts clock at CPPD for any assistance/guidance.
upto Rs 50,000 duly signed by a single powered
officer, with immediate effect. GENL.02/04-05 dt.20.04.04 (M6 S605)
Branches are advised to take note of the Detection of Forged notes – Issue of Receipt to
above and honour DDs issued by Singapore Office Tenderers.
signed by single powered officer. If otherwise in When a currency note is found to be forged,
order. However, DDs in excess of RS 50,000 and the same is impounded by branding with a
issued by Singapore office will continue to be stamp “FORGED NOTE”, an acknowledgement
signed by two powered officers. receipt should be issued to such tenderers. The
receipt book should be printed in duplicate with
CRA.11/04-05 dt.24.06.04 (M4 S403) running serial numbers and each receipt should be
authenticated by the cashier at the counter as well
GENERAL as by the tenderer.
Promoting ATM Services and increasing card base Branches should display prominently a
notice in the banking hall indicating that a separate
We have entered into ATM infrastructure receipt will be issued to the tenderers for the
sharing arrangement with two consortiums of forged notes detected in the cash so tendered and
banks viz., Cash Tree consortium and MITR after obtaining tenderer’s signature on such receipt.
consortium. Bank of India, Dena Bank, Indian Circle Offices should make immediate
Bank, Syndicate Bank, Union Bank of India and arrangements for printing of the receipt books for
United Bank of India is the current member of use in the branches under their control.
CashTree. Punjab National Bank, Global Trust
Bank, Indian Bank, Oriental Bank of Commerce GENL.03/04-05 dt.28.04.04 (M6 S601)
and U T I Bank are the current member of MITR. Acceptance of Coins
Moreover the amount charged by the consortium
banks for operations carried out at their ATMs by RBI has advised that they still continue to
our card holders is also not passed on to our receive directly as well as indirectly complaints
customers. We have entered into an ‘in principle’ about non-acceptance of coins by bank branches.
ATM sharing arrangement with State Bank of Such refusals have reportedly, inturn, lead to
India also. This sharing arrangement is expected refusals on the part of shop keepers and petty
to be made operational soon and with the three traders, etc, to accept coins as payment for goods
arrangements, ATM cardholders of our Bank can and services sold, thus inconveniencing the public
use any one of the networked ATMs of the at large. To avoid such situations, it is imperative
consortium banks for cash withdrawal and balance that all branches should accept coins of all
enquiry. Similarly, the ATM cardholders of other denominations tendered at their counters either for
Banks in the consortium will be using our exchange or for deposit in account.
networked ATMs for cash withdrawal and balance As advised earlier, aluminium coins of 5
enquiry. paise, 10 paise, 20 paise, aluminium bronze coins
In view of the need to provide uninterrupted of 10 paise, stainless steel coins of 10 paise, cupro
service, It is imperative that all our ATMs and nickel coins of 25 paise, 50 paise and rupee one
related infrastructure like UPS, AC, Hub/Switch, denominations are being withdrawn and remitted
medium and hardware for connectivity are kept in to the mints. In order to obviate the problems of
working condition round the clock without any storage these coins may be remitted to the nearby
snag so as to boost the image of our Bank. With Currency Chests. The Currency Chests may remit
the emergence of ATMs as a marketing tool to these coins to the Government of India Mints at
target new generation clients, there is a need for an Mumbai / Kolkata / Hyderabad with prior
aggressive thrust for promoting our ATM services intimation to them.
and provide impeccable customer services to Stainless steel coins of 25 paise, 50 paise
enable us to strategically position ourselves among and Re.1 and cupro nickel coins of Rs.2 and Rs.5
the market players. denominations should however be put back in
circulation. Branches should ensure that there are

15
Recollect

no complaints from the public in this regard. In With a view to facilitate the detection of
case the stocks of the coins received from the forged notes, all branches should be equipped with
public reach beyond the holding capacity of the Ultra - Violet lamps. It is necessary that these UV
Currency Chest / small coin depot for lack of lamps should be put into use and the notes received
demand, the respective issue department of RBI at the branches, particularly of the higher
may be approached for remittance of coins. RBI denominations of Rs. 100 and above should be
has informed that any non-compliance in this carefully examined.
regard will be viewed very seriously.
The security features of all the Bank notes
GENL.04/04-05 dt.08.05.04 (M6 S601) have already been circulated vide our all branch
Detection of Forged Notes circular Genl: 26/2001-02 dated 09.08.2001. This
may be prominently displayed at the branches for
Of late, large number of forgery notes are
information of the public.
detected by RBI in the soiled note remittances sent
by our Currency Chests or at the time of inspection All Currency Chests should maintain a set
of the Chests. RBI has issued a number of of genuine notes in all denominations of different
guidelines and these guidelines have been pattern for the purpose of comparison in the event
communicated by way of all branch circulars to the of doubt. The value of notes in the album is to be
field level staff members to maintain continued treated as part of Currency Chest balance. The
vigil in detection of forged notes at the entry point local RBI Offices may be approached for any help
itself to avoid loss to the bank. needed in creating the album of genuine notes.
RBI has made clear that continued detection It is reiterated that if we accept forged notes
of forged notes in the Chest remittances is and such notes form part of Chest balances /
construed as wilful involvement of the branches in remittances to RBI, the value of such notes will be
circulating forged notes and may attract special treated as a shortfall and will be debited to our
investigation by police authorities besides other account by RBI and penal interest will also be
actions like charging of penal interest and charged for such shortfall. It should be our
suspending the operations of our Currency Chests. endeavour that each and every forgery note is
In order to avoid such incidents, some of the detected the moment it enters the banking system
important points are reiterated for the guidance of so as to prevent their re-entry into circulation as
branches also the inclusion of such notes in the Chest
i. All the branches are having the authority to balances / remittances to RBI.
impound forged notes All branches / Currency Chests are advised
ii. Each note which is suspected to be forged or to strictly follow the prescribed guidelines. The
found to be forged shall be branded with a stamp Circle Offices should monitor the situation to
‘Forged Note’ and impounded. An ensure proper implementation.
acknowledgement should be given to the tenderer GENL.08/04-05 dt.28.06.04 (M6 S601)
in the format
iii. The forged notes detected in the cash received Custody of Safe Keys
by the branches shall be forwarded to local police Detailed guidelines on custody of keys of
for investigation by filing FIR, a copy of which Cash/Jewel Safe and Strong room/Grill door keys
shall be sent to HO / Cell for Government of branches have been given in Chapter 1 of
Transactions department. Manual of Instruction IX (Cash handling and
However if one or two pieces of forged Management) and reiterated in Chapter 1 of
notes are detected in the cash tendered by an Manual of instructions on Preventive Vigilance.
individual who may appear innocent and whose Some of the important instructions on custody and
bonafides are beyond suspect, his case need not be safe keeping of keys are reproduced in the circular.
reported to police. The forged notes, should Branches are advised to meticulously adhere
however be impounded and forwarded to issue to the above guidelines.
office of RBI, under copy to Head Office. In no GENL.09/04-05 dt.30.06.04 (M6 S101)
case, the forged notes should be returned to the
tenderers or destroyed by the branches.

16
 Volume 17 Issue 2 Recollect July-September 2004

As per the existing guidelines, all branches

DEPOSITS
except very small branches should have
RECOLLECT

Adherence to Know Your Customer (KYC) Norms “Enquiry” or “May I help you” counters either
exclusively or combined with other duties, located
In respect of all existing accounts (including
near the entry point of the banking hall. The Adhoc
borrowal accounts) of Companies, firms, trusts,
Committee on Procedures and Performance Audit
religious/ charitable organisations, institutions,
of Public Services (CPPAPS) of RBI, has observed
etc., branches should have completed the exercise
that even in large metropolitan branches, the
of verifying the address and identity of the
Enquiry counters are either inoperative or not
customers based on reliable documents.
existing and in some cases even hostile. Branches
With a view to ensuring that existing small and Circle Offices are, therefore, advised to take
account holders are not inconvenienced and the note of the observation and ensure provision of
KYC procedure is completed in time, Reserve such a counter to attend to the queries of the
Bank of India has advised that the banks may limit visiting public for their banking needs
the application of KYC procedures for existing
accounts (including borrowal accounts) of the (DEP.24/04-05 dt.25.08.04 M1 S105)
following:
Installation of 24-Hour Toll-Free Customer Help line
1. Accounts of other than trusts, companies/
firms, religious/charitable organisations and other In order to provide better customer service
institutions in which the credit or debit summation our Bank has come with a "Toll-Free Phone
for the financial year ended March 31, 2003 is Service" for the customers to register their
more than Rs.10 lakhs grievances/ suggestions. The calls to this Toll-free
telephone number 1600 44 1400 will be handled by
2. Accounts which are opened through a
our 24-hour Customer Care Centre, Chennai.
mandate or power of attorney
3. Accounts in which unusual transactions (DEP.25/04-05 dt.03.08.04 (M1 S101))
are suspected
Some important guidelines along with the Launch of "Arogya Raksha" - A Co-branded
format of the Certificate of Compliance to be Mediclaim Policy
submitted by branches/Circle Offices are also As a part of the strategic tie-ups to augment
given in the circular. our fee-based income, we have entered into an
(DEP.15/03-04 dt.12.07.04) MOU with M/s United India Insurance Co. Ltd. for
marketing their Non-life Insurance products as a
Amendment to Manual of Instructions IV – Deposits Corporate agent. Now, we have launched, in
Amendments to the Manual of Instructions association with the Insurance Company, their
for the period 01.07.2000 to 31.03.2004 is product of Mediclaim insurance for our account
appended to the circular and branches/offices may holders including our Staff members under a
keep the same along with the Manual for easy Group cover by co-branding it with our Bank viz.
reference. “Arogya Raksha”..

(DEP.21.04-05 dt.21.08.04 (M1 S609)) The scheme details of which are given in the
circular has been introduced in all the branches of
Operation of Bank Accounts by our Bank with a target of an average minimum of
Old/Sick/Incapacitated Customers 1000 policies per Branch. for the current year.
To avoid inconvenience to seriously ill /old/
(DEP.26/04.05 dt.03.08.04 (M1 S102))
incapacitated customers, the guidelines/procedures
for conducting operations in their account, as Adhoc Committee on Procedure and Performance
communicated in our circular GENL.46/98-99 Audit on Public Services (CPPAPS)
dt.7.11.98, are reiterated in the circular. Branches
are advised to note those guidelines and ensure that In order to support a broad-based improve-
old/sick incapacitated customers are not ment in customer service, Reserve Bank of India
inconvenienced. has constituted an Adhoc Committee on Procedure
and Performance Audit on Public Services
(DEP.21/04-05 dt.25.08.04 (M1 S102)) (CPPAPS) under the Chairmanship of Shri S S
Tarapore and advised all banks to constitute
“Enquiry” or “May I help you” counters at branches
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 Volume 17 Issue 2 Recollect July-September 2004

similar committees. Accordingly, a committee was 1. With a view to making the IBA educational
constituted in December 2003 in our Bank to loan scheme more student friendly, it has been
RECOLLECT

undertake a procedure and performance audit on decided to reduce the rate of interest as under
public services rendered by us. Translating the with immediate effect. This revision is
sentiments of RBI in letter and spirit, a Customer applicable to the existing educational loans
Service Committee of the Board has also been also.
constituted.
Loan Amount Revised
The recommendations of the Committee (a) Upto Rs.4 lacs BPLR + TP – 0.50% = 11%
were classified into the following four heads for (b) Above Rs.4 lacs BPLR + TP = 11.50%
adherence by branches: 2. Where the co-borrowers/parents service
1. Foreign Exchange transactions relating to interest during the study and holiday period, an
individuals interest rate rebate of 0.50% can be allowed at
the time of closure of the loan account
2. Government Transactions relating to
individuals 3. This rebate can’t be allowed in accounts where
repayment has already commenced.
3. Banking operations - Deposit accounts and
other facilities to individuals 4. Interest rate rebate can be allowed in the
existing educational loan accounts, which are
4. Currency management relating to individuals
under holiday period as of 01.07.2004 and to
For further details please refer the circular. the extent of unexpired holiday period only.
5. In addition to the above, 2% interest subsidy
(DEP.29/04-05 dt.14.09.2004 (M1 S101)
announced by Government of India will also
be available for those students who satisfy the
ADVANCES criteria laid down vide our Circular
Deficiencies in Credit matters pointed out in RBI No.ADV.10 dt.05.05.04.
Inspection Reports of Branches/ Circle Offices
(ADV.30/04-05 dt. 1.7.2004)
During the course of inspection of branches/
Circle Offices, RBI has pointed out certain Post Dated Cheques (PDC) – Policy Guidelines
deficiencies in areas related to credit. While
With a view to have proper system for
reviewing the RBI inspection reports, HO: Audit
obtaining, diarising, custody of PDCs and handling
Committee has directed to issue suitable
of dishonoured cheques, especially in the light of
instructions to Branches/ Circle Offices on the
time bound action contemplated under the NI Act,
following subjects:
detailed guidelines have now been framed as
Valuation of properties under mortgage to under:
the Bank
i. At least 36 cheques or cheques covering
• Inter-group transactions the full repayment period, whichever is less,
should be obtained.
• Take over of accounts from other banks
ii. A covering letter should also be obtained
• Submission of stock statements from the borrower.
• Inspection of stocks at Sugar Mills iii. Cheques shall be payable to “Indian Bank
• Credit Appraisal – Loan account of ............................”

Field level functionaries are advised to take iv. The 'Crossing Seal' should be put on the
note of the detailed directions given in the circular face of the cheque before keeping them in custody.
on the above to avoid recurrence of deficiencies in v. For the purpose of easy identification, the
their operations. borrower shall be requested to write the name, type
of loan and account number on the reverse of each
(ADV.28/2004-05 dated 01.07.2004 M 2 S 602) cheque.
IBA Educational Loan Scheme – Modifications / vi. The PDCs for each borrowal account shall
Improvements be arranged date wise in chronological order and

2
 Volume 17 Issue 2 Recollect July-September 2004

kept in a transparent plastic folder in such a way vii. Relief Measures for farmers indebted to
that the face of the cheque is visible from outside. non-institutional lenders.
RECOLLECT

vii. On the due date, the cheques should be As the Hon’ble Finance Minister, Govt. of
taken out from the folders and sent to the India would be making field visits for on-the-spot
respective departments for debiting the account (in review of the progress in disbursement of
respect of own branch cheques) or presenting in Agricultural Credit, soon after the budget
local clearing. presentation, all the branches are advised to
understand the importance being attached to this
viii. A suitable diary note for obtention of
exercise by Central Government and ensure
another set of cheques should be done.
implementation of the guidelines/directions in true
ix. PDCs should not be retained along with spirit.
the security documents to avoid unnecessary
handling of documents. (ADV. 32/04-05 dt. 5.7.2004 M2, S-201)
x. These should be retained by the Asst. Inclusion of production of Ethanol in the list of
Manager/Manager (Loans) in joint custody with activities under Priority Sector Lending
the Asst. Branch Manager/Branch Manager and
placed in a fire-proof safe / locker Use of ethanol blended petrol would boost
self-sufficiency and promote indigenous
The circular also contains the procedural production of fuel oils. In view of the importance
guidelines on the return of cheques and also follow attached to this, Reserve Bank of India has since
up and legal proceedings to be undertaken by the advised that Banks’ financing for ethanol
branches. production activity may be considered as eligible
under priority sector lending provided it satisfies
(ADV.31/04-05 dt.5.7.2004 M2, S-201) the norms prescribed for Small Scale Industry.
Doubling the flow of Credit to Agriculture
(ADV.33/04-05 dt. 9.7.2004 M2, S-203)
Government, in consultation with RBI,
NABARD and Commercial Banks, has initiated Prudential Norms for Agricultural Advances
steps in doubling the flow of institutional credit to In order to align the repayment dates with
Agriculture in 3 years. Accordingly, it is planned harvesting of crops, with effect from 30.09.2004,
to enhance the institutional credit to Rs.1, 05,000 the following revised norms will be applicable for
Crore in 2004-05 as against the estimated classification of the advance as NPA, to all direct
disbursements of Rs.80, 000 Crore in 2003-04. The agricultural advances:
Circle Heads and the Branch Managers are advised
to immediately implement the same by taking the a. A loan granted for short duration crops
following measures: will be treated as NPA, if the instalment of
principal or interest thereon remains overdue for
i. 30% increase in flow of credit during two crop seasons beyond the due date.
2004-05 over the previous year
b. A loan granted for long duration crops will
ii. Fresh/new farmers numbering atleast 200 be treated as NPA, if the instalment of principal or
on an average per branch on incremental basis interest thereon remains overdue for one crop
(other than JL) to be financed to increase the season beyond the due date.
coverage.
For the purpose of guidelines, “long
iii. New Investment activities/schemes/ duration” crops would be crops with crop season
projects at least 2 or 3 in number to be financed by longer than one year and crops, which are not
branches, Agri-Clinics in each District to be “long duration crops” would be treated as “short
financed duration” crops.
iv. Preference to be given to SF/MF in The crop season for each crop which means
financing by banks the period up to harvesting of the crops raised,
v. Debt restructuring of Farm Loans to would be as determined by the State Level
farmers in Distress and Farmers in arrears: Banker’s Committee (SLBC) in each state.

vi. One Time Settlement scheme for SF & MF Depending upon the duration of crops raised
by an agriculturist, the above NPA norms would

3
 Volume 17 Issue 2 Recollect July-September 2004

also be made applicable to agricultural term loans Branches are hereby advised to implement
availed of by him. These norms are not applicable the Rating System for Home Loan and Vehicle
to agricultural loans other than those specified in Loan by applying CRM 5 and CRM 6 respectively.
RECOLLECT

the annexure to the circular and term loans given to Borrowal accounts with limits of Rs.2 lakhs and
non-agriculturists. above are to be rated commencing from the
financial year 2004 – 05. The rating models are
(ADV. 34/04-05 dt. 10.7.04 M2, S-208) furnished as Annexures to the circular.
Master circular on solvency certificate. (ADV. 42/04-05 dt. 20.7.2004 M2, S 211)
The circular contains the procedural
Extension of Vidhya Shobha Scheme to all branches
guidelines for issue of solvency certificates by
branches, Maintenance of the records, applicable Vidhya Shobha Scheme, an Educational
rates of service charges, authorities empowered to loan scheme designed exclusively for the wards of
issue the certificates, etc. Branches may go through the SHG members, was launched by our bank on
the same for a detailed study and in-depth 08.03.2003.
knowledge on the subject.
Now, all the branches are permitted to
(ADV. 35/04-05 dt. 13.7.04 M2, S 205)
market the loan to those SHGs which satisfy the
eligibility criteria, outlined in the annexure to the
Empowerment of Branches for focussed lending circular. Through this innovative scheme, we can
enhance the quality of our relationship with the
The top management of the Bank has
SHG members. It may also result in other spin off
decided to permit 197 non-corporate and non-CI
benefits and facilitate cross selling of other loan
Branches of the bank to handle/entertain credit
products to these SHGs.
proposals above Rs.1.00 Crore and upto Rs.5.00
Crore at 10 circle Head Quarters (within the city (ADV. 43/04-05 dt. 20.7.2004 M2, S 201)
limits only). The list of branches and the general
guideline/instructions to be followed by these Post Harvest finance – Loans for storing agricultural
branches are also given in detail in the circular. produce

(ADV. 37/04-05 dt. 15.7.04 M2, S 216)

In order to further enhance credit flow to
build up storage facilities, it has been decided that
Financing Agriculturists for purchase of tractors loans to storage units, including cold storage units,
which are designed to store agricultural produce /
To make our farm mechanisation advances
products, irrespective of their location, would be
more farmer friendly the following amendments
treated as indirect agricultural finance under
are made to the lending norms for tractor advances:
priority sector. For details of the Guidelines refer
i. The land holding should be 4 acres of irrigated the circular.
land (or) 8 acres of dry land.
(ADV. 44/04-05 dt. 21.7.2004 M2 S 201))
ii. Margin: 5% if value of collateral security is at
least equal to loan amount and 10% for others. Rejection of Credit Proposals
iii. No processing fee shall be levied. Branch The guidelines for rejection of proposals are
Managers of Scale I, II & III can sanction loan revisited in the present context of poor off take of
upto Rs.5 lakhs. Actual cost of tractor with all the credit. The present guidelines for rejection of
accessories minus margin not to exceed Rs 5 lakhs. Credit Proposals and the modifications as directed
by Top Management Council (TMC) are re-
iv. Interest rates as given in the circular.
iterated in this Circular for compliance by the field
(ADV. 40/2004-05 dated 17.07.2004)
level functionaries.
i. Export Credit Proposals - The
Credit Risk Rating Models – Home Loan (CRM 5) and applications for export credit can be rejected only
Vehicle Loan (CRM 6) by HO irrespective of the amount involved
Our Bank has developed internal rating
ii. SSI Proposals and all Proposals from
models applicable for borrowal accounts under
SC / ST – The applications of SSI sector and
Home Loan and Vehicle Loan accounts having
applications of any sector from SC / ST borrowers
limits of Rs.2 lakhs and above.

4
 Volume 17 Issue 2 Recollect July-September 2004

should be referred to the next higher authority for Loan Review Mechanism (LRM)
approval to reject the said credit proposal
Loan Review Mechanism is an important
iii. All other Proposals (other than SC / ST) tool for evaluating the performance of the borrowal
RECOLLECT

– As per old guidelines, applications for credit accounts vis-à-vis projections and indicates the
(except in respect of SC / ST) may be rejected by direction of the risk migration. It also suggests
any of the Credit sanctioning / recommending suitable measures to maintain the quality of the
authority provided there are genuine reasons to accounts and facilitates the credit sanction
turn down the proposal. The cases of rejection are department to take adequate steps to arrest
to be recorded in the ‘Rejection Register’ and deterioration.
reported to the next higher authority by the
The review under Loan Review Mechanism
Branches / Circle Heads.
is to be carried out in addition to the normal review
Modified guidelines for “all other proposals” being carried out by the Credit Sanctioning
(non-priority/ Priority other than SSI), falling authorities. The main objectives of the review
under the Powers of CO/HO, besides the under LRM is to pick up warning signals and
existing guidelines detailed above: suggest remedial measures besides providing the
top management with information on credit
Branches are instructed not to reject any
administration including credit sanction process,
proposal in the following category falling under
risk evaluation and post sanction follow up. It is to
the discretionary Powers of CO / HO without
be carried out with risk perception and emphasis
reference to the next higher authority that is, the
on possible movement of risk factors under
concerned Circle Office:
management, financial, industry and Government
i. All non-priority Sector proposals other Policy.
than those falling within Branch Manager’s
Detailed and updated guidelines on Loan
powers;
Review Mechanism (LRM) are given in the
ii. All ‘other priority Sector’ proposals (other annexure to this Circular. Branches / Offices are
than SSI) and other than those falling under Branch advised to go through the same and ensure strict
Manager’s powers. compliance of the guidelines so as to reduce weak
assets under all segments.
(ADV.45/04-05 DT. 22.7.2004 M2 S 212)
(ADV. 50/04-05 dt. 30.7.2004 M2 S 211)
Launch of New Loan Scheme – “IndShare
ESOP/IPO” IB Vidhya Mandhir Scheme – a new Loan Product

This is a loan scheme to the employees of We have introduced a new product viz. IB
issuing companies to invest in their shares under Vidhya Mandhir Scheme for construction of new
Employees’ quota or under Employees’ Stock premises or upgradation of the existing structures
Option (ESOP) Scheme. As per RBI directives, our of private and aided schools.
Bank has formulated our own to cater to the safety and security of School
guidelines/regulations for the scheme. Building and by now branches would be scouting
for the proposals under this Scheme.
Eligibility Ten months' gross salary or Rs.5 lakh
whichever is lower to Employees / Officials of The salient features of the Scheme are given
the issuing companies in the circular
Margin 10% in case of tie - up with the employer for
recovery from salary; and 25% in other cases (ADV. 52/04-05 Dt. 30.7.2004 M2 S 204)
Interest BPLR Minus 2% (FIXED) IBA Educational Loan Scheme
Repayment Not exceeding 36 Equated Monthly
Instalments (EMI) With a view to enabling meritorious students
to pursue higher education/professional courses, it
Security Pledge of approved IPO/ESOP shares (in D- is proposed to relax security norm for loans upto
Mat form) allotted
Rs. 7.50 lacs. Under the revised norm, as
Other operational guidelines, terms and communicated by IBA, for loans above Rs. 4 lacs
conditions are given in detail in the circular. but not exceeding Rs. 7.5 lacs, no tangible
collateral security will be insisted upon. For such
(ADV. 47/04-05 dt. 23.7.2004 M2, S 204) loans, only a satisfactory guarantee provided on

5
 Volume 17 Issue 2 Recollect July-September 2004

behalf of the student will be taken. Branches are • Borrowal accounts of Rs.25 lakh and above
expected to implement Educational Loan scheme that figure in SPECIAL REPORT of
strictly in terms of the above IBA/ RBI guidelines. inspection during the quarter to the definition
RECOLLECT

of wilful default.
(ADV. 53/04-05 DT. 10.8.2004 M2 S 202)
Now, RBI has advised that the Grievances
Modifications made in NRI Home Loan Scheme Redressal Mechanism should take place before the
final classification and reporting of the borrower as
As per existing RBI guidelines, the "wilful defaulter".
instalment of NRI Home Loans, interest and other
charges, if any, are required to be paid by the To comply with the revised guidelines of
borrower either by way of inward remittance RBI, the procedure to be followed by branches is
through normal banking channel or by debit to his given in detail in the circular.
NRE/FCNR (B)/NRO/NRNR/NRSR account or
out of rental income derived from renting out the (ADV. 57/04-05 DT. 14.8.2004 M2, S215)
property acquired by utilisation of the loan. Relief measures to farmers in distress
Now, RBI revised the above guidelines Government of India has announced certain
stating that it has been decided to allow the close measures for improving the flow of credit to
relatives (as defined under Section 6 of the agriculture and providing relief to farmers in
Companies Act, 1956) of the borrower in India to distress. The guidelines on the schemes announced
repay the instalment of such loans, interest and by Govt. of India are furnished in the circular.
other charges, if any, through their bank account By providing relief by way of restructuring
directly to the borrower's loan account with the of loans/ rephasing of instalments and extending
authorised dealer/housing finance institution. further credit for carrying on with their farming
Branches are advised to make note of the RBI operations, the farmers would be able to recoup
direction. their losses and Branches also would be able to
recover their loans in an orderly manner.
(Adv/54/2004-05 DT. 11.08.2004 (M-2 S-204)
With this objective, a scheme called “Ryots
Monitoring of Letters of Credit Limits revised Punaruddhaarn Yojana” is formulated
accounting Procedure for Devolved LCs Branches are advised to implement the scheme in
true spirit and with the utmost commitment and
The circular contains the revised accounting earnestness.
procedure for devolved letter of credit on DA
terms and branches are advised to go through the (ADV. 59/04-05 dt. 16.8.2004 M2 S 201)
same for a detailed study on the subject and ensure One Time Settlement Policy for Small and Marginal
that the laid down norms are followed Farmers
meticulously.
Our Board has approved the One Time
(ADV. 55/04-05 DT. 12.8.2004 M2 S 207) Settlement (OTS) Policy for small and marginal
farmers based on the parameters set by the sub
Identifying Willful Defaulters – Modification in committee of IBA with suitable modifications.
process in line with RBI guidelines The policy / scheme comes into force with
immediate effect and will be operative up to March
To ensure reporting of all the liable cases of 31, 2005. The salient features of the policy are
wilful defaulters, branches are advised to subject given in the circular.
the following categories of accounts to the process
of identifying wilful defaulters: (ADV. 62/04-05 DT. 16.8.2004 M2, S 208)

• Borrowal accounts of Rs.25 lakh and above LOK ADALATS ORGANISED BY CIVIL COURTS
where SUIT has been filed during the quarter Government of India in consultation with
• Borrowal accounts of Rs.25 lakh and above Reserve Bank of India, has enhanced the monetary
that have SLIPPED in Asset Classification ceiling of cases to be referred to Lok Adalats,
during the quarter organised by Civil Courts from Rs.5 Lakhs to
Rs.20 Lakhs.

6
 Volume 17 Issue 2 Recollect July-September 2004

In view of the enhancement of the amount, introduced a new scheme of finance for BPO
all proceedings pending before Civil Courts, companies. Full details of the scheme and the
wherein the total amount due upto the date of features of the product are given in the circular.
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settlement is Rs.20 Lakhs or below, can be referred

for settlement before Lok Adalats organised by (ADV. 81/04-05 dt. 9.9.2004 M2 S 205)
State Legal Services Authorities, District Legal
Launch of New Loan Product – “IB Doctor Plus”
Services Authorities and Taluk Legal Services
Authorities. Non Suit Filed Accounts also can be HO: Marketing Department has coined a
referred to Lok Adalats which does not involve product specially designed to suit Doctors viz. IB-
payment of any court fees. DOCTOR PLUS .
Lok Adalats can take cognizance of any Purpose:
existing suit in the court as well as look into and
adjudicate upon fresh disputes. If no settlement is To finance qualified medical practitioners
arrived at, the parties can continue with court for
proceedings. Its decrees have legal status and are • buying equipment
binding. • setting up clinic or clinic-cum-residence or
nursing homes
(ADV. 63/04-05 DT. 17.8.2004 M2 S 208)
• setting up X ray lab, pathological clinics,
Ind Share –ESOP Scheme polyclinics etc.,
As advised by RBI, branches are permitted • setting up Drug/Medical Stores
to stipulate / collect margin of 40% for financing • Purchase of vehicles, ambulance, computers,
the forthcoming issues under the above Scheme, etc.
as and when communicated by Head Office. • expansion/renovation/Modernisation of
existing premises
(ADV. 64/04-05 DT. 20.8.2004 M2 S 204)
• any other activities related to medical
Advances against Shares profession
Based on the representations from field level Note: The above activities can be taken
functionaries for the increase in credit exposure individually or as a combination also.
ceilings to brokers / capital market in view of the Eligibility:
requests for issue of guarantee to stock exchanges
• Individuals/Partnership/Ltd.Company./Trust.
on behalf of brokers, our Bank has revised the
Exposure Ceiling in respect of Advances against • Promoters should have minimum
Shares as under: MBBS/BAMS/BDS/BHMS & registered
practitioners.
Exposure Existing Revised
• Key promoters should be qualified doctors.
Credit exposure to any Rs.50.00 lakh RS. One Crore
single stock broking entity Loan Amount
including its • Rural and Semi-urban – Rs.10 lakh (Sub-
associates/inter-
connected Companies
ceiling for working capital: Rs.2 Lakhs)*
Urban – Rs.15 lakhs (Sub-ceiling for working
Bank's Incremental credit Rs.10 Crore per Rs.20 Crore
exposure to capital financial year per financial
capital: Rs.3 lakhs)
market (i.e. Fund-based year Repayment
plus Non-Fund based)
• Maximum period up to 10 years.
Operational Guidelines are given in the • Maximum moratorium 3 months.
circular in detail. Security
(ADV. 69/2004-05 dt. 28.8.2004 M2 S 205) • Loan upto Rs. 1.00 Lakh: No security except
to the extent of Assets created out of loan
Launch of New Scheme for financing BPO amount.
Companies – “IB BPO”
• Loans above Rs. 1.00 Lakh: Hypothecation of
Keeping in view of the enormous growth assets + LIC Policy in the name of the
potential of BPO Industry, our Bank has borrower to be taken and assigned in Bank’s

7
 Volume 17 Issue 2 Recollect July-September 2004

favour to the extent of shortfall of security The details of the Schemes are furnished in
coverage or Collateral Security. the circular. Branches may refer the circular for
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full details.
For other terms and conditions, the circular may be
referred. (ADV. 85/04-05 dt. 11.9.2004 M2 S 204)
(ADV. 82/04-05 dt. 9.9.2004 M2 S 204) Enhanced scale of financed under "Golden Harvest
Scheme".
Discipline in Opening Current Accounts by Banks
In the light of meritorious reasons
All the borrower customers are expected to
enumerated in the circular our bank has now
route all their banking transactions through the
revised the scale of finance for two major crops in
bank/s who have sanctioned credit limits.
Andhra Pradesh and Tamil Nadu viz. Sugarcane
However, there may be instances where some
and Paddy
borrowers may open current accounts with banks
other than the lending banks to breach credit The branches are advised to follow the
discipline. revised scale of finance mentioned in the circular
for paddy and sugarcane in Tamil Nadu Andhra
Where the due diligence is carried out on the
Pradesh. Circle Offices in other States may also
request of a prospective customer who is a
undertake a review of the scale of finance
corporate or large borrower enjoying credit
approved for various major crops in the State and
facilities from more than one bank, the banks may
take up the matter with HO: RBD in case a higher
inform the consortium leader, if the account is
Scale Of Finance (SOF) is considered necessary.
under consortium arrangement, and the banks
concerned, if it is under multiple banking ADV. 87 2004-05 Dt. 13.09.2004 (M-2 S-201)
arrangement.
Banks may open current accounts of PERSONNEL
prospective customers in case no response is
received from the existing bankers after a Travelling Allowance / Reimbursement of Local
minimum waiting period of a fortnight . If a Conveyance etc. to staff members.
response is received within a fortnight, banks Instances of the guidelines issued, not being
should assess the situation with reference to strictly adhered to, have been brought to notice of
information provided on the prospective customer Management. Its reported by Inspectors of
by the bank concerned and are not required to branches that Some of Branches are effecting
solicit a formal No-Objection certificate, consistent ineligible/ unauthorized payments to staff members
with the true freedom to the customer of banks as while reimbursing local conveyance.
well as needed due diligence on the customer by Local conveyance charges payable on
the bank. account of regular journeys such as cash
Branches please make note of the directions remittance, attending clearing, etc. should be fixed
and ensure strict compliance with directions on by branches, after getting permission from the
credit discipline. concerned Circle Heads.
It is essential that we maintain very strict
(ADV.83/04-05 DT. 10.9.2004 M2 S 205) and tight control and adopt measures to curtail
New Loan Scheme – “IB Ayushmaan” wasteful expenditure.
Please note therefore that the guidelines
The product has 3 schemes as follows:
have to be meticulously adhered to by the
i. IB- Aayushmaan – (Premium): For financing competent authorities authorised to pass T.A. bills,
the gyms/fitness centres in organized sector. reimburse local conveyance, etc., and by other
ii. IB- Aayushmaan - (Economy): Caters to the officials concerned.
unorganized sector. Branch Managers shall sanction local
conveyance charges for regular journeys
iii. IB- Aayushmaan - (Home): Is for financing performed by staff members by obtaining proper
the fitness equipments for individuals. sanctions for such expenditure from competent
authorities and keep the same on records.

PRNL.32/04-05 dt.03.07.04 (M3 S304)

8
 Volume 17 Issue 2 Recollect July-September 2004

Observance of Secrecy during these meetings and circulated among

the staff members
Observance of secrecy and reverence to
maintain confidentiality is not only limited to the ™ Matters/Subjects of common interest in various
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accounts of our valued customers but also to: areas that will help in the development of
personnel can also be taken up for discussion.
• Certain areas of business, new products
which is unique to our Bank Branches are hereby instructed to introduce
immediately the above guidelines of
• Information which is used for the purpose of KNOWLEDGE DISSEMINATION/ KNOW-
our internal control/administration LEDGE SHARING which will help staff
• Vital statistics and data members in self development as well as the
development of our organisation as a whole.
• Strategic guidance received from the higher
offices with special relevance for improvement PRNL.42/04-05 dt.26.07.04 (M3 S303)
of business/increasing our market share
Development of women employees through better
• Information on certain accounts on which opportunities and further support to women
caution is to be exercised employees
• Personal information about the staff members. Our Bank has already implemented certain
The above list is only illustrative and not welfare measures to the women employees in
exhaustive. terms of the Government guidelines/ Service
Regulations. As part of the comprehensive Human
Staff members are therefore advised to Resource Strategy of our Bank, development of
create as well as encourage a sense of self- women employees is being accorded greater
discipline amongst them so that secrecy and significance. In this direction, it has been decided
confidentiality is maintained. to provide more opportunities to women staff in
Branches are advised to bring the contents order to encourage and motivate them to further
of the circular to the notice of all the staff their career. Our Bank’s Board has approved to
members. extend the additional welfare measures to the
women employees of our Bank. for details of
PRNL.40/04-05 dt.19.07.04 (M3 S301) welfare , branches are advised to refer the circular.
Knowledge dissemination/knowledge sharing PRNL.49/04-05 dt.06.08.04 (M3 S 305)
among staff
Checking of daily transactions and Safe Keeping of
Dissemination of knowledge and sharing the
Vouchers
same with others not only helps in self-
development but in the development of an Banking transaction involving an accounting
organisation as a whole. entry in the bank’s books is required to be
supported by a Voucher, either manually prepared
Human Resources Development enshrines or computer generated The voucher is the basic
this concept and the foundation for a sound HRD authority and evidence for all accounting
policy would be DISSEMINATION OF transactions. Any voucher prepared/processed by a
KNOWLEDGE to all the personnel. clerical staff must be authenticated by a
During the monthly staff meetings alongwith supervisory official. Vouchers like pay-in-slips,
the other aspects, the following aspects should also cheques etc., bear the signature of the customer or
be discussed: his authorised agent. Further, all the vouchers bear
the initials/signature of the staff member/s who
™ Personnel who had attended any training
handle/process the transactions and the signature of
during the last one-month should make a
the officer/s who authorise the transaction and also
simple presentation about the training course
the signature of the payment/receiving cashier for
attended by them. A question and answer
cash transactions. Thus, it is seen that each
session/brain storming session can also follow
accounting transaction will be handled by at least
so that the clarity in the concepts is fine tuned
two staff members. If this system is meticulously
™ Study Materials, Kits, Notes etc., which formed adhered to by branches, occurrence of frauds
part of the training programme can be tabled perpetrated by an individual can be eliminated.
9
 Volume 17 Issue 2 Recollect July-September 2004

Branches are aware and would appreciate Manager. It is essential that the Branch Manager
that the vouchers and other records are prime and the Assistant Branch Managers must discuss
material evidences not only for validating the the branch affairs on daily basis so as to ensure that
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internal accounting but also for dealing with both of them are equally aware of all the facets of
complaints, claims against the bank, legal issues branch working and in any situation they are not
etc. It, therefore, needs hardly any emphasis that fount ignorant or wanting during the absence of
utmost care is required in their safe keeping and either. It should be ensured that the harness our
preservation. human resources to the optimum level by creating
a healthy work atmosphere through Team Work
The Policy on Records Maintenance has
and effective Communication among rank and file.
been communicated to all the branches vide HO
Circular PRNL 38/ 99-2000 dated 01 11 1999 Prnl 64/2004-05 Dt. 09.09.2004 (M-3 S-303)
wherein detailed guidelines on all areas relating to
record maintenance have been covered. A revised Staff welfare scheme - improvement of existing
system for preservation and retrieval of printouts in schemes
computerised branches was also introduced vide
Our Bank Central Welfare Committee has
HO: CPPD Circular No.GENL.5/2000-01
made the improvements in the following Scheme.
dt.8.5.2000 and all computerised branches have
been instructed to follow the revised system of I. Provision for free eye check up and
preservation and retrieval of printouts. purchase of spectacles for employees
above 40 years of age
PRNL.50/04-05 dt.09.08.04 (M3 S309)
Staff Members who are aged more than 40
Indian bank fire security instructions years, are reimbursed the cost of the 'Eye Check
Up and Purchase of Spectacles' upto Rs.300/- once
In order to ensure fire safety in our Bank,
in their career. The amount of reimbursement
Fire Security Instructions have been formulated.
under the above scheme is now enhanced to
These instructions will be read in conjunction with
Rs.500/- and the same will be given effect
Chapter 12 of Manual of Instructions – X1,
prospectively from 01.10.2004.
Security Management 1993. All Branches and
Administrative Offices will make Fire Safety Staff Members above the age of 50 years,
Instructions as per format given in the circular. will now be considered for a second
Do’s and Don’ts given in these instructions should reimbursement of Rs.500/- towards the cost of 'Eye
be translated into vernacular and displayed in the Check Up and Purchase of Spectacles' in their
premises at a suitable place. Branches are advised career. However, Staff Members who have not so
to adhere to the guidelines. far availed the reimbursement upto the age of 50
years can avail only one reimbursement under the
PRNL.58/04-05 dt.21.08.04 (M3 S309)
scheme.
Maintenance of burglar alarms
II. Grant of medical aid to retired
Lack of care / maintenance of security employees who retired on superannuation
systems can prove very costly to our organisation.
The directions given in the circular must be As per the scheme, the Staff Members
implemented to ensure that the burglar alarms are retired on superannuation / medical grounds are
maintained in good working condition at all times. provided with a Medical Aid of Rs.500/- per
annum The existing limit of Rs.500/- under the
PRNL.61/04-05 dt.31.08.04 (M3 S309) above scheme is now increased to Rs.1000/- per
annum from the year 2004
Need for co-ordination in Branch Management.
In branch Team Work and effective PRNL.68/04-05 dt. 16.09.04 (M3 S305)
Communication must percolate from the top and it Term Loan Facility to Staff Members
is thus essential that the Branch Manager and
Assistant Branch Manager should work in together A scheme of Term Loan Facility to staff
in tandem, not only setting an example for others members was formulated .The salient features of
to follow, but also helping to avoid the feeling of the scheme are brought out in the annexure to the
ignorance or vacuum during the absence of either circular.
the Branch Manager or the Assistant Branch

10
 Volume 17 Issue 2 Recollect July-September 2004

The said loan facility comes into force from Further the following treatments/surgeries
1.10.2004. Branches may refer the circular for which are not adequately covered under BPS /
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guidance. IBOSR have been newly added for

PRNL.69/04-05 dt.17.09.04 (M3 S305)
reimbursement for the difference between the
charges fixed under BPS / IBOSR and the ceiling
Awareness on know your customer (KYC) guidelines fixed under Staff Welfare scheme.
With the international community realising The reimbursements will be upto 100%/75%
Money Laundering as a serious threat to financial of the bills in case of self/ dependants in respect of
systems of the countries, Banks and Financial Officers and Award Staff as per the provisions
Institutions have to scrupulously adhere to the available under BPS/IBOSR.In addition, as the
various procedures laid down in KYC norms to treatment under ‘Package basis’ may not be
avoid the pitfalls of operational, legal and available at all places in many Hospitals, Central
reputation risks. Welfare Committee has approved the
In order to improve the diligence under ‘Reimbursement’ for the treatments/ ailments
KYC at the Branch level, the involvement and taken under ‘Non-Package basis’ also.
awareness of each of the staff member is essential.
To accomplish this objective, Branches are hereby All the above modifications will be effective
instructed to include the KYC guidelines as a main for the treatments taken from 01.10.2004.
agenda in the Staff Meeting to be held in the month
of October 2004.The systems and procedures to be II. Grant of scholarship for education to
followed for branch banking operations may be the dependant of staff members
discussed elaborately in the Staff Meeting and the In view of the increasing costs to support the
Minutes are to be sent to the respective Circle staff members for the Education of their wards
Offices. who are meritorious, Central Welfare Committee
has approved for an increase in the number and
Branches and Circle Offices are advised to
quantum of the scholarships under the scheme.
strictly adhere to the time schedule for compliance.
Apart from continuing the existing reservation to
PRNL.72/04-05 dt.23.09.04 (M3 S303) SC/ST and to Substaff under the scheme, the
Committee has approved to extend the appropriate
Staff welfare MEASURES - improvement of existing reservation for OBC also as a gesture. In the
schemes absence of adequate eligible applications under
these reserved categories, the scholarships will be
Further to the enhancements made under
given to the wards belonging to ‘General
two of our staff welfare schemes, the
Category’ so that the scholarships are utilised to
improvements approved by Central Welfare
the optimum extent. For further details of welfare
Committee for yet another two schemes.
staff may refer the circular.
I. Reimbursement of medical bills from
staff welfare fund PRNL.75/04-05 dt.28.09.04 (M3 S305)
On account of the increase in medical Service Charges for Electronic Funds Transfer (EFT)
expenses during recent years, Central Welfare and Electronic Clearing Services (ECS) Transactions
Committee, has approved to enhance the ceiling as
given below for the referred treatments. ¾ No ECS / EFT processing charges would be
(Amount in Rs) levied by the Reserve Bank of India. This
would be applicable to ECS (Credit and Debit
S.No Name of the Treatment Revised Ceiling
Clearing), Centralised ECS, the Normal EFT
1 Open Heart Surgery 1,25,000 as well as to the Special EFT Schemes.
2 By Pass Surgery 1,30,000 ¾ The waiver would be effective from June
3 Angioplasty 80,000 1,2004 i.e., in respect of data submitted by
4 Closed Heart Surgery 60,000
banks from June 1, 2004 and would be valid
upto March31, 2006.
5 Catheterisation/ Angiogram 14,000
¾ Banks are required to pass on this benefit to
6 Kidney transplantation 1,75,000
the customers in the form of a reduction in the
7 Cancer 1,50,000 charges being levied for such transactions.

11
 Volume 17 Issue 2 Recollect July-September 2004

Hence branches are advised to note the Life Certificate to be obtained from all pensioners
revised service charges for ECS and EFT
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Branches are reminded to obtain Life

transactions effective from 1.6.2004.
Certificate from all pensioners and family
CRA.13/04-05 dt.07.07.04 (M4 S607)
pensioners, who receive pension from them under
public sector bank scheme, in the month of
Amendment to Manual of Instructions VIII - Ancillary November every year without fail. For detailed
Services guidelines please refer the circular
The Manual of Instructions, Ancillary CRA.26/04-05 dt.02.09.04 (M4 S404)
Services (other than those relating to Chapter on
Government Transactions) have been compiled Service Tax Act – Collection of Service Tax on
based on the circulars of Head Office issued from Various Banking Transactions Specified in Finance
1.4.2000 to 31.3.2004. The amendments are Act 2004
enclosed to the circular. Branches are advised to
The Finance Bill 2004 introduced during the
note the amendments in the Manual without fail
budget session of Parliament and passed by Both
and be guided accordingly.
the houses of Parliament has proposed several
CRA.17/04-05 dt.13.08.04 (M4 S609)
amendments to the existing service Tax Act in
order to bring the following financial services
Allotment of Safe Deposit Lockers - Maintenance of rendered by Banks under the purview of the
Wait List Service Tax Act.from 10.09.2004 and the Banks
are liable to pay Service Tax of 10% on the service
The Committee on Procedures and
charges collected and 2% of Service Tax as the
Performance Audit on Public Services (Chairman
Education Cess totalling to 10.2% of the Service
Sri. S S Tarapore) set up by RBI has observed that
Charges. Any failure or omission of collection of
forcing depositors to place deposits with banks for
service tax along with service charges from
locker facilities is a restrictive practice. The
customers/non-customers as the case may be will
committee therefore recommended that this
have an adverse bearing on the profitability of the
practice should be stopped forthwith by banks.
Bank, as the Bank has to bear the uncollected
Branches should maintain a waiting list for service tax in order to ensure full payment to
the purpose of allotment of lockers. All government
applications received for allotment of lockers
Branches may display in the notice board for the
should be acknowledged and each should be given
information of the customers stating that
a waiting list number. At least 80 % of the lockers
consequent to the amendment of the Service Tax
should be allotted by the branches on first come
Act, all the Service Charges levied by Bank attract
first served basis. The remaining lockers could be
the Service Tax and as a consequence there will be
allotted by the branch managers at their discretion
increase in the service charges collected by the
to valued customers on business considerations.
Bank to that extent. for detailed guidelines
Branches should not insist on term deposit branches are advised go through the circular.
as a pre-requisite for allotment of lockers. There
will however, be no objection to the branch CRA.27/04-05 dt.10.09.04 (M04 S404)
seeking a deposit (but not as a condition for
Surcharge on Income Tax and Education Cess in
allotment) from the applicant who has been
respect of Tax Deducted at Source U/s 193-194J of
allotted a locker, the annual interest from which
the Income Tax Act, 1961 for the financial year
would not be more than the actual rent of the
2004-05
lockers. In the alternative, advance payment of
locker rent for a period of three years may be As per the Finance Act 2004, the Rate of
collected from the locker holders. Surcharge and Education Cess (newly introduced)
to be applied on the tax collected for all payments
Branches are once again advised to
made u/s 193 to 194J of the Income Tax Act, 1961
implement the system without giving scope for any
has been fixed as follows for the financial year
customer complaints and in case of any difficulty,
2004-05 and effective from 10.09.2004.
seek the guidance of their controlling office.
Surcharge Rate of
CRA. 25/ 04-05 dt. 25.08.04 (M4 S404) Surcharge

12
 Volume 17 Issue 2 Recollect July-September 2004

(a) For individuals, HUF, Association of NIL p.a.) for the balances maintained during July 2004
persons, Body of individual for income upto - Sept. 2004.
Rs.8.50 lakhs
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(b) For Individuals, HUF, Association of 10% FX.13/04-05 dt.02.07.04 (M5 S503)
persons, Body of individual for income above
Rs.8.50 lakhs Introduction of IBEX Gold Card Scheme (GCS) for
Exporters
In case of all other persons/entities other than 2.5%
those referred in (1) above Based on policy indications in the EXIM
Education Cess Policy 2003 - 04 dated 28.01.2004 for introduction
of Gold Card Scheme by banks for easy
The Education Cess is calculated at 2% of
availability of export credit to creditworthy
Income tax collected as increased by surcharge
exporters, RBI has drawn up a Gold Card Scheme .
with effect from 10.09.2004
The Scheme aims at better terms of credit to
Both Surcharge and Education Cess has to
exporters, simpler norms for processing export
be collected simultaneously alongwith Income tax
applications, faster response time, sanction of in-
and where there is no surcharge to be collected
principle limits for a period of 3 years, preference
then education cess at the prescribed rate on the
for grant of packing credit in foreign currency
Incometax is also to be collected
(PCFC), relaxation in inventory norms and any
other value-added benefits.
CRA.28/04-05 dt.15.09.04 (M4 S404)
Based on the guidelines issued by RBI, our
Cheque Drop Box Facility Bank has put in place Gold Card Scheme (GCS)
With a view to providing the customers setting out guidelines for issue of IBEX Gold
certain flexibility in their transactions with Banks, Card to eligible exporters and operational
RBI has instructed that boxes for depositing guidelines. The salient features of GCS are
cheques for collection and clearing should be furnished in the circular.
provided at larger offices of Banks. Such drop
boxes should be cleared at regular intervals every FX.16/04-05 dt.27.07.04 (M5 S504)
day and receipted counter-foils placed at a
CASH PASSPORT –Prepaid Card for Persons
convenient place for customers to collect. This
travelling abroad
should be in addition to the regular collection
counter. Our Bank has launched a new product by
name 'CASH PASSPORT', which is an ATM
Both the drop box facility and the facility for
compatible prepaid card in substitution of Foreign
acknowledgement of the cheques at the regular
Currency Travellers Cheques. This card, which
collection counters can co-exist. No Branch should
will be co-branded with Indian Bank’s name and
refuse to give an acknowledgement if the customer
logo, can be issued to customers going abroad on
tenders the cheque at the counters. It is important
private visit / business visit / medical treatment,
that there should be no curtailment of the rights of
etc. As per the arrangement with M/s. Travelex,
the depositor to obtain an acknowledgement by
each card sold can be loaded upto a maximum
going to the concerned counter.
amount of USD 10,000/-. Upon utilisation of the
amount loaded, the issuing branch can re-load the
CRA.31/04-05 dt.30.09.04 (M4 S401)
card with additional amount to top up the card
value to USD 10,000/-. However, the initial
FX loaded amount plus reloaded amount should not
Interest on NRE SB Deposits: exceed the entitlement for the particular travel as
per FEMA regulations. Alternatively, a customer
As per the existing RBI Guidelines interest
can purchase more than one card at a time for a
rate on NRE Savings Bank Deposits is to be fixed
total amount not exceeding his eligibility
quarterly on the basis of the LIBOR/SWAP rate on
depending on the purpose of travel. For further
the USD on the last working day of the preceding
details of scheme branches are requested to refer
quarter.
the circular.
Accordingly, the interest on NRE/SB
deposits is revised to 1.90 percent per annum FX.20/04-05 dt.08.09.04 (M5 S501)
(increased from the existing rate of 1.20 percent

13
 Volume 17 Issue 2 Recollect July-September 2004

Amendments to Manual of Instructions XV – Foreign GENERAL

Exchange Transactions
Implementation of the recommendations of the
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The existing Manual of Instructions on

Committee on Legal Aspects of Bank Frauds set up
Foreign Exchange transactions was brought out in
by RBI under the Chairmanship of Dr. N L Mitra
the year 1996. Subsequent
additions/deletions/modifications to the manual As per the directions of the Board for
communicated through various Head Office Financial Supervision, RBI set up a committee on
circulars for the period upto 31.03.2002 were legal aspects of bank frauds under the
compiled and circulated to all branches. Chairmanship of Dr.N L Mitra. The
Additions/deletions/modifications made from recommendations made by the Mitra Committee
01.04.2002 to 31.03.2004 have been compiled now have been accepted by RBI for implementation by
and enclosed to the circular. Branches are advised banks.
to Note the amendments in the respective
chapter/para/annexure giving reference to the One of the recommendations is that a legal
relevant circular. compliance certificate needs to be mandated in all
transactions exceeding a value limit. In case of
FX.24/04-05 dt.17.09.04 (M5 S609) exercise of discretionary power, an explanation is
IND REMIT – ONLINE REMITTANCE SCHEME FOR required to be given indicating the circumstances
NRIs warranting the exercise of discretionary power and
whether all due diligence has been taken or not. It
The scheme has been named “IND- thus envisages establishment of an in-house legal
REMIT”. Salient features of the scheme are given compliance certificate process to be enforced from
in the circular. each desk especially from each management
Branches are advised to inform their NRI category staff.
clients who are residing at USA to avail this
facility for their remittances to India by accessing Considering the importance of the above
our web-site www.indian-bank.com.Branches are recommendations from the point of view of fraud
also advised to collect the e-mail addresses of their prevention, RBI has advised banks to implement
NRI clients residing in USA and furnish the same the same as envisaged by the Mitra Committee. To
to their Circle Office along with the Names and comply with the directions of RBI in the light of
telephone numbers at USA. Circle Offices will Mitra Committee recommendations, the procedure
consolidate and forward the same to HO is laid down in our Bank. Branches are advised to
International Division who will arrange for go through the circular.
publicity of the product through an E-mail GENL.11/04-05 dt.05.07.04 (M6 S101)
campaign.
Information Technology – Authentication of
FX.25/04-05 dt.17.09.04 (M5 S501)
Electronic Messages and Documents Using Digital
Master Circular on Export Credit Signatures
To foster export growth, the Government Digital Signature is a means of
affords incentives to exporters to compete with authenticating messages sent electronically by e-
other countries. RBI has mandated banks to mail. Like manual signature to the paper based
achieve export credit outstanding of 12% of their communication, digital signature is added to the
net credit. Guidelines on export financing issued electronic message. Digital signature is not a
from time to time based on RBI guidelines are scanned signature but changes from message to
consolidated and a Master Circular on Export message. To add a digital signature to the message,
Credit is now issued for the benefit of field level one must hold a certificate called “Digital
functionaries. This Master Circular details the Certificate” duly issued by a Certifying Authority
operational guidelines on export credit, RBI (CA), who has the necessary licence to do so. The
guidelines applicable for the banks in general, the Controller of Certifying Authorities (CCA),
interest rates applicable and the reporting Ministry of Information Technology, Government
requirements to RBI through Head Office: CPGD. of India is authorised to issue licences to these
Certifying Authorities.
FX.26/04-05 dt.21.09.04 (M5 S504)

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 Volume 17 Issue 2 Recollect July-September 2004

In our Bank, issue of Digital Signature to GENL.22/04-05 dt.07.09.04 (M6 S605)

Officers of the Bank is being undertaken by a
RECOLLECT

separate department at Head Office known as Maintenance of Password secrecy and scrutiny of
“Registration Authority’s Office” with Deputy Exceptional Transactions
General Manager (DO) as Registration Authority. Increasing number of frauds in TBC
branches have been taking place due to NON
The salient features of the system of affixing MAINTENANCE OF PASSWORD SECRECY
digital signatures to electronic messages and and non verification of important reports like
documents and certain important terms used in the Exceptional Transaction report, Sectional Day
process are given in the Annexure to the circular. Book, Special transactions log by the Branch In
Please be guided accordingly. charge. Among the various security measures to be
adopted in computerised branches, the following
GENL.15/04-05 dt.05.08.04 (M6 S605) preventive measures have been reiterated to avert
frauds in TBC branches:
Government of India Resolution on Public Interest
Disclosures and Protection of Informer Strict maintenance of Password Secrecy
must be ensured.
The Government of India has authorised the
Central Vigilance Commission (CVC) as the Change of Password is to be done as
"Designated Agency" to receive written complaints stipulated.
for disclosure on any allegation of corruption or Even under extreme work pressure password
misuse of office and recommend appropriate should not be revealed to others.
action. A copy of the Public Notice issued by the
Central Vigilance Commission in this regard is Whenever any employee is transferred or on
enclosed to the circular for the information and leave of any kind his User ID must be positively
guidance of the branches. disabled.
GENL.18/04-05 dt.23.08.04 (M6 S606) In case of Suspended, Resigned,
Retired/Terminated employees, their user IDs have
Reporting of Entries Outstanding in ATM Receivable to be immediately disabled and no further access to
and ATM Payable Accounts – AUF 3 systems should be allowed so as to safeguard
Branches were advised to ensure that there against any possibility of tampering/
was no entry outstanding for more than 3 days and modifying/misusing the live data.
in any case not exceeding 5 days under ATMs The Exceptional Transaction Report should
Payable and ATM Receivable accounts. be carefully scrutinised by the Branch Manager
To facilitate effective monitoring of the and any doubtful entry has to be immediately
outstanding entries by Circle Office as well as probed. Branch Managers should also verify the
Head Office, it has been decided to bring the ‘Special transactions log’ listing out the deleted
reporting of ATM Payable, ATM Receivable and and corrected transactions everyday.
ATM Cash under Audit Control return (AUF 3). Frauds can very well be averted if each
and every staff member remains vigilant and
GENL.20/04-05 dt.01.09.04 (M6 S603) follow the systems and procedures in true spirit.
Access Control – Password and its importance Branch Managers / Assistant Branch
Passwords ensure security and Managers and Officer assigned the System
confidentiality of data that is stored on various Administration duties must jointly strengthen their
workstations and servers across the network. level of supervision to personally ensure that all
Hence it is the user’s responsibility to make sure prescribed daily routine checks are completed /
that all passwords are safe and secret. Change the print outs generated and authenticated by the
password regularly, al-least once in 15 days or at Officers of the branch before they leave office.
any time when it is felt that the secrecy is
compromised. Guard password like guarding keys GENL.25/04-05 dt.13.09.04 (M6 S60
to an important secure place. For further guidelines
branches are advised to refer the circular.

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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

interest of 1% p.a as senior citizen or 1% p.a as

DEPOSITS
retired staff of our bank.
Special Domestic Term Deposit Scheme for Senior
Non-eligible category
Citizens
1 Single bulk deposit of Rs. 15 lakhs and above
The scheme has been modified with effect 2 Capital Gain Scheme 1988 – B Scheme
from 1.11.2004 as under:
3 NRE Term deposit Schemes
Eligibility: A person who has completed the age Deposit Receipt: The deposit receipt should be
of sixty years shall be treated as a senior citizen. At issued with specific notation “Senior Citizen
the time of opening of a new account, the branch Deposits”. In the opening form and the ledger folio
should satisfy itself about the age through also, it should be clearly mentioned that it is a
verification of any one of the following documents “Senior Citizen Deposit”.
1. Secondary School Leaving Certificate Foreclosure
indicating date of birth. Period Run Applicable rate of interest
2. LIC Policy. Less than 15 days No interest is payable on foreclosure
3. Voter’s Identity Card 15 days and Additional rate of interest of 1% p.a
4. Pension Payment Order. above will be deducted and only the card
rate for the actual period run will be
5. Birth Certificate issued by the competent paid without any penalty
authority
6. Passport Overdue deposit
Where the overdue period does not exceed 14 days
7. Any other relevant document which provides i. the deposit shall be renewed for a minimum
the proof for age of the senior citizen. period of 1 year from the date of maturity
Once the age of the senior citizen is verified ii. the rate of interest to be applied will be the
while accepting deposits for the first time, rate( Card rate + Additional rate ) ruling on the
branches should not seek proof of age for renewal date of maturity of deposit relevant to the period of
of deposit or for accepting subsequent deposits renewal.
from the same senior citizen. Where the overdue period exceeds 14 days
The account may be opened by the senior i. the deposit shall be renewed for a minimum
citizen singly in his / her own name or Jointly with period of 1 year from the date of presentation.
other persons in anyone of the following clauses: ii. The rate of interest to be applied shall be
segregated into two parts as under :
1. Joint
Part A Upto the date of presentation (irrespective
2. Either or Survivor
of the type of original deposit) at simple rate of
3. Former or Survivor interest only at the rate whichever is lower of the
4. Anyone or Survivor following two:
If the other person is below the age of sixty, it a. The Card rate prevailing on the date of maturity
should be ensured that the name of the senior of the deposit for the overdue period OR
citizen appears as the first named depositor. b. The Card rate prevailing on the date of
Minimum Deposit: Deposits can be accepted by the presentation for the overdue period.
Bank either as Fixed Deposit or Reinvestment Plan Part B From the date of presentation to the future
with a minimum of Rs.1000/-. date of maturity at the rate (card rate + additional
Period of Deposit: The minimum period shall be 1 rate) prevailing on the date of presentation for
year and maximum period shall be 5 Years renewal at simple or compound at the option of the
depositor for the remaining period.
Rate of Interest: Interest shall be payable at 1 %
p.a over and above the card rate applicable for the The renewed deposit should run for a
period of the deposit. Card rate for this purpose minimum stipulated period of 1 year as applicable
will be the rate prevailing for the domestic term to the deposit of Senior Citizens. If foreclosed
deposits of less than Rs.15 lakhs. Retired staff of otherwise, the interest paid for the entire overdue
our Bank can avail either the benefit of rate of period will be recovered and for the renewed

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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

deposit, the rules applicable to foreclosure will be iv. The issue of withdrawal slips should be made
applied. as per the instructions contained in para 5.4.2 &
Nomination: Nomination shall be accepted from 5.4.3 of Chapter 6 of Manual of Instructions –
the senior citizen while opening the account. Deposits.
General: The revised guidelines are applicable Branches are advised to place the amended
only to fresh deposits and for maturing deposits. Rule 8(i), in the notice board intended for
The depositors can give instructions for automatic customers and effect the change in the SB
renewal facility to avoid any loss of interest. passbooks.
(Dep.39/2004-05 dt.18.10.2004 M 1 S 101) (Dep.42/2004-05 dt.24.11.2004 M 1 S 102)

Revision of Interest Rates on Domestic Term

Deposits ADVANCES
The interest rates on domestic term deposits Industry Risk Score Model
are revised upward with effect from 22.11.2004
and the revised rates are given in the circular. In order to strengthen the credit appraisal
system in our Bank, we have made arrangements
A new slab for acceptance of single bulk with M/s. CRISIL Research and Information Ltd.,
deposits of Rs. 1 lakh and above for the period 7 to to access information on various industries such as
14 days at the rate of 3.50 % p.a. has been Industry report on each product with reference to
introduced. No interest will be paid on foreclosure capacity creation, demand and supply position,
of deposits before the contracted period under this production, market share and changes in regulatory
new category of deposits. environment with quarterly / monthly reviews for
(Dep.41/2004-05 dt.16.11.2004 M 1 S 104) updating the information. These information are
ported in Bank’s Intranet Service available in Head
Amendment to Savings Bank Account Rules Office, Circle Offices and select major branches.
The rules for operations of Savings Bank Wherever Intranet facility is not provided, we have
account was communicated to branches by advised the branches to get information through
Circular DEP.27 / 99-2000 dated 7.3.2000. By way their Circle Office Intranet Service for the purpose
of clarification, Rule 8(i) is amended as under: of credit appraisal.

“Withdrawals will be only by way of (i) Branches are advised to go through the
withdrawal forms for non-cheque operated circular for a detailed study on the subject.
accounts or (ii) by cheques supplied to the account (Adv.91/2004-05 dt.06.10.2004 M 2 S 211)
holder for cheque operated accounts.
Master Circular on Stock Inspection
However, withdrawal forms may be allowed
for cash withdrawal for cheque operated accounts Inspection of stocks of goods pledged or
at the discretion of the Branch Manager in hypothecated to the Bank is of great importance.
exceptional cases, in case of urgent needs, on The safety of advances made against the primary
specific written request by the account holders”. security of such goods depends on their adequacy,
quality and marketability.
Allowing withdrawal forms for cheque
operated accounts as per Rule 8(i) by the branches In order to have all the existing guidelines /
should be subject to the following, as contained in directions at one place, instructions on the subject
Circular DEP. 11 /96 –97 dated 7.6.96: have been compiled and given in the Master
circular.
i. The facility should be extended only when the
customer comes in person for cash withdrawal It should be clearly understood that
conducting stock inspection and submitting control
ii. He should bring his passbook. returns is not a routine ritual but has got greater
iii. He should be properly identified by following importance as a monitoring tool.
the procedure for verification of customer’s If a shortfall in the primary security is
signature and comparison of the photograph observed in any of the accounts, due corrective
available in our records. steps are to be taken to bring the account to within
Drawing Limit and take all measures to regularise

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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

the account. It has to be reported to the sanctioning gold, it has been decided to permit branches to
authority and close monitoring should be resorted advance at Rs.400/- per gram of gold of 22 carat
to. fineness or 70% of the market value of ornaments,
Branches are advised to follow the broad whichever is lower. This comes into force with
guidelines detailed in this circular meticulously immediate effect and is applicable for jewel loans
and also take other steps that are warranted by the both for agricultural as well as non-agricultural
requirement of each account so as to safeguard the purposes whatsoever as the demand is season
interest of the Bank. sensitive

(Adv.92/2004-05 dt. 11.10.2004 M 2 S 205) (Adv.94/2004-05 dt.14.10.2004 M 2 S 201)

Introduction of Self Help Groups under PMRY

Frauds in non-resident Accounts by using forged
Power of Attorney Self Help Groups (SHG) can be considered
for assistance under PMRY scheme provided:
In the case of loans to third parties against
NRI deposits, normally the relative documentation a. Educated unemployed youth who satisfy the
should be done at the branch from where the loan eligibility criteria laid down under the scheme
is being sought by the NRI depositor. The loan volunteer to form SHG to set up self employment
should be granted only when the depositor himself ventures (Common Economic Activity)
executes the loan documents in the presence of b. A Self Help Group may consist of 5 – 20
bank officials and a witness acceptable to the Bank educated unemployed youth.
wherever applicable. Advances to third parties
against such deposits should not be granted on the c. No upper ceiling on loan.
basis of Power of Attorney. d. Loan may be provided as per individual
Taking into account the difficulties that the eligibility taking into account the requirement of
above instructions have created to NRO account the project.
holders and in order to facilitate legitimate e. SHG may undertake common economic
transactions in NRO account and to reduce the activity for which loan is sanctioned without
possibility of frauds while sanctioning loans resorting to onward lending to its members.
against NRI deposits, it has been decided that in
case of Indian residing in the countries having f. Subsidy may be provided to the SHG as per
accounts with our foreign branches, the application the eligibility of individual members. Relaxation
for loan against NRI deposits may be forwarded provided in North Eastern States, Uttaranchal,
through our bank branch situated in that country Himachal Pradesh and Jammu & Kashmir are to be
where the NRI deposit holder resides. factored in while considering loans to SHGs in
those States.
A copy of the passport of the NRI along
with the application may also be called for and g. Requirement of margin money contribution
forwarded after attesting the signature / photo. (i.e., subsidy and margin money equivalent to 20%
of the project cost) should be brought in by the
Field level functionaries are advised to note SHG collectively.
the above directions on non - resident accounts of
customers residing in countries where our Bank h. The exemption limit for obtention of collateral
has Branches, and the customer is known to our security will be Rs.5.00 lakhs per borrowal account
Branches at overseas. for projects under Industries Sector. Exemption
from collateral will be limited to an amount of
In all other cases, the existing guidelines as Rs.1.00 lakh per member of SHG for projects
given in the first para shall continue. under Service and Business. Branches may
(Adv. 93/2004-05 dt.11.10.2004 M 2 S 205) consider enhancement in the limit of exemption of
collateral in deserving cases.
Jewel Loan - Enhancement in the advance rate of 22-
carat gold ornaments i. Implementing agencies to consider the
necessity and decide on pre disbursal training for
Considering the necessity to provide all the members/majority of the members in the
adequate quantum of credit to agriculturists and Group.
factoring in the escalation in the cost of
(Adv.95/2004-05 dt.14.10.2004 M 2 S 201)
agricultural inputs and the average market value of
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 Volume 17 Issue 3 Recollect October-December 2004

Modifications to ‘IB Doctor Plus’ scheme Bank, the rate of interest now consists of three
RECOLLECT

components namely, BPLR, Risk Premium

The scheme for advancing medical
(Spread) and Tenor Premium (TP). To give effect
practitioners under the banner “IB Doctor Plus”
to the BPLR, the rate of interest clause in the DPN
was communicated by Circular No: ADV 82/2004-
and the loan agreements have been modified
05 dated 09.09.2004. To improve the product, the
linking the interest rate to the Benchmark Prime
following modifications are made:
Lending Rate (BPLR)/Spread/TP of the Bank. The
i. To facilitate better tax planning for the doctor following are enclosed to the circular:
and to involve the spouse to support and encourage
1 Revised Single/Joint Demand Promissory D1
his or her doctor spouse, the loan may be advanced
. Note
to the spouse with joint name of the doctor, whose
2 Revised Joint and Several Demand D2
name would be as the second borrower. However,
Promissory Note
the doctor should extend his personal guarantee
(the above two are applicable for advances
and a specific undertaking to repay the loan, if the
sanctioned with floating rate of interest)
spouse fails to do so.
ii. The minimum loan shall be Rs.1 lakh and the 3 Revised Single/Joint/Joint and Several D 1A
maximum Rs.50 lakhs for all areas. Demand Promissory Note
iii. No processing charges upto Rs.10 lakhs for (applicable for advances sanctioned with
fixed rate of interest)
first time borrowers. Above Rs 10,00,000, Rs 250/-
per lakh or part thereof for all borrowers. 4 List of Agreements drafted in First/ Second Annex 1
. Person
iv. For prompt repayment 1% on Working 5 Modified Interest Rate clause for Appndx 1
Capital and 2 % on Term Loan can be considered agreements drafted in First/Second Person
as rebate and adjusted from the last EMI. 6 List of Agreements drafted in Third Person Annex 2
All other terms and conditions remain the 7 Modified Interest Rate clause for Appndx 2
same. agreements drafted in Third Person
(Adv.98/2004-05 dt.20.10.2004) (Adv.102/2004-05 dt. 18.11.2004 M 2 S 213)
Registering Criminal Complaints against Wilful Issue of Solvency Certificate in the format required
Defaulters by the customer/addressee
Reserve Bank of India has advised all banks In order to consider requests from our
to initiate various steps including criminal action customers for issue of solvency certificate in the
by borrowers to check wilful defaults. Our Bank is format required by the addressee,
filing criminal complaint against any defaulters
who indulge in fraudulent operations / cheating 1. The branch shall send the format of the
transactions / forgery etc. In addition to this, in the certificate to their Circle Office who in turn shall
case of Wilful Defaulters who were already forward the same to HO: Legal Department along
identified and reported to RBI / CIBIL , branches with their specific recommendations.
have to make in-depth enquiries for taking criminal 2. HO: Legal Department may approve the
action. Additionally, the Branch while in the format after satisfying themselves that the format
process of identifying any defaulter as Wilful does not contain any onerous clause and may
Defaulter during any quarter, can simultaneously stipulate such other conditions or precautions that
analyse / contemplate criminal action against the may be warranted on a case to case basis to protect
said defaulter in case of fraudulent operations / the interest of the Bank
cheating. Various steps and penal measures are 3. On receipt of approval from HO: Legal Dept,
summarised in the circular. the branch should prepare a draft of the solvency
certificate with all blanks duly filled in
(Adv.100/2004-05 dt. 28.10.2004 M 2 S 215)
4. A confirmation should be obtained by the
Change in the format of DPN and interest clause in branch on the draft of the solvency certificate
the loan agreements towards approval of the format and the contents
Consequent to the introduction of duly signed by the customer/ authorised
Benchmark Prime Lending Rate (BPLR) in our signatory(ies)

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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

5. The solvency certificate exactly similar to the Capital Investment Subsidy Scheme for
draft should be prepared and handed over to the expansion/modernisation of cold storages and
customer. storages for horticultural produce
6. The draft approved by the customer should be Government of India introduced Capital
kept along with the other back papers. Investment Subsidy scheme for construction/
Branches/Circle Offices are advised to expansion/modification or modernisation or
adhere to the above procedure whenever request rehabilitation of cold storages and storage of
for issue of Solvency Certificate in a format other horticultural produce to create a cold chain
than the one prescribed by HO (F-129) is received infrastructure from farm to the consumers and to
from our clients. All other guidelines/ procedure reduce post harvest losses. This scheme is being
given in our Master Circular remain unchanged. implemented by National Horticultural board,
(Adv.107/2004-05 dt. 12.11.2004 M 2 S 205)
Ministry of Agriculture in collaboration with
NABARD.
Stamp Duty under the Indian Stamp Act, 1899 The main features of the scheme are given
With effect from 1st March 2004, the proper bin the circular.
stamp duty chargeable on instruments, mentioned Branches may get familiarised with the
under column (1) in articles 13, 14, 27, 37, 47, 49, guidelines and scout for new units/ take over of
52 and 62 (a) in the Schedule I of the Indian Stamp well run units financed by other banks so as to
Act, shall be reduced and the stamp duty payable increase our exposure under this segment.
thereon, after such reduction, shall be as specified (Adv.113/2004-05 dt.23.11.2004 M 2 S 201)
in the Table given in the circular.
"IB Home Improve" Scheme
(Adv.110/2004-05 dt.17.11.2004 M 2 S 216)
The salient features of the Scheme are as
Consent of borrowers/guarantors for disclosure of under:
credit information to CIBIL Target Group
Branches are advised to ensure that (1) the Existing Home Loan Borrowers as well as
Consent clause is included in any of the documents prospective Home Loan Borrowers who are
or agreements including JL / LOD undertakings, Salaried Class Customers / Professionals /
signed by the Borrower and Guarantor / director Business people who submit IT Returns (both
etc. or (2) F.164 from borrower/ F.164A from residents & non-residents). Government Officials
guarantors / directors etc are obtained. /Employees of Public Sector Companies or
Reputed Organisations who avail housing at
In such of those old borrowal accounts
Concessional interest from their respective
where the consent clause is not available in any of
Employer (with second charge to us) are also
the documents or F.164 / F.164A is not obtained,
covered under this Scheme. Staff members can
branches are advised to send a letter to borrowers
also avail the loan.
and directors / guarantors if any, requesting them
to sign and retransmit the relevant consent letter. In Purpose
case there is no response within 10 days from the Purchase of house hold furniture, Kitchen racks,
date of despatch of the letter, it will be treated as cupboards, TV Sets, Fridge, Computers, wall paper
deemed consent for disclosure of credit provisions, lighting, interior decorations, Air-
information. This procedure is applicable only for conditioners, Kitchen Chimney, modern gadgets
those accounts disbursed prior to introduction of for kitchen /modular kitchen & piped gas supply /
consent clause in our documents or where F cost of digging bore well, with suitable water
164/F164 A are not submitted by the lifting devices like jet pump set, compressor and
borrowers/guarantors, even after our request. For immersible pump set.
all fresh disbursals and renewals, system for
inclusion of consent clause in any of the Quantum of Loan
documents/ agreements obtained or obtention of 30 times the net monthly income, subject to a
consent letter has already been put in place. maximum of Rs.5 lakhs. Income of spouse can be
added, if he / she is in Govt. / Public Sector
(Adv.112/2004-05 dt. 22.111.2004 M 2 S 216)
Organisation / reputed Private Sector

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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

Interest Rate exposures (including underwriting and similar

BPLR Plus TP minus 4.25% ( Presently 7.25%) - commitments). ‘Security’ will mean tangible
floating, security properly discharged to the bank and will
not include intangible securities like guarantees,
Margin: 15% of the value of the Article comfort letters etc. A general provision of 10
Take Home Pay percent on total outstanding should be made
Should be at least 40% of gross monthly income, without making any allowance for DICGC/ECGC
with a minimum of Rs.6000 as net monthly guarantee cover and securities available. The
income, after recovery of proposed EMI ‘unsecured exposures’ which are identified as
Repayment Period ‘substandard’ would attract additional provision of
10 per cent, i.e., a total of 20 per cent on the
For TV, Computer & other electronic items with outstanding balance. The provisioning requirement
less life span - Maximum 48 months. for unsecured ‘doubtful’ assets would remain
For others - Maximum 60 months. unchanged at 100 per cent.
Pre-payment Charges: NIL 2. State Government guaranteed exposures
It has been decided to prescribe revised norms in
Security respect of the following exposures, which are
Extension of EM of property mortgaged for Home backed by State government guarantee:
Loan. Guarantor of Home Loan may also give
guarantee for IB Home Improve. a. Loans and advances: and
Processing Fee b. Investments
1% of the loan limit
For documentation and powers to sanction, please The revised norms may be implemented in a
refer the circular. phased manner as under:

(Adv.115/2004-05 dt.26.11.2004 M 2 S 204) a. For the year ending March 31, 2005, State
Government guaranteed advance and investment in
Modifications to the IBA Educational Loan Scheme State Government guaranteed securities would
attract asset classification and provisioning norms,
Reference is drawn to Circular ADV.53/04-
if the interest and / or principal or any other
05 dated 10.08.2004 wherein the guidelines on
amount due to the Bank remains overdue for more
IBA Educational Loan Scheme was communi-
than 180 days.
cated. Now IBA has modified the norms with
regard to security. Further, in order to make the b. With effect from the year ending March 31,
scheme more student friendly, our Bank has also 2006, Government guaranteed advance and
made certain modifications/ improvements in the investment in State Government guaranteed
Scheme. The details of the modifications / securities would attract asset classification and
improvements as approved by our Board, are provisioning norms, if interest and / or instalment
furnished in the annexure to the circular. Branches of principal or any other amount due to the bank
are advised to take note of the changes and process remains overdue for more than 90 days.
the proposals strictly as per the modified
guidelines. Branches are advised to follow the above
modified norms regarding income recognition,
(Adv.116/2004-05 dt.30.11.2004 M 2 S 202) asset classification and provisioning as on 31 03
2005.
Income Recognition, Asset Classification and
Provisioning (Adv.118/2004-05 dt. 08.12.2004 M 2 S 208)
1. Provisioning for unsecured exposure in
Sub-standard assets Housing loans under Priority Sector – Enhancement
of ceiling
Unsecured exposure is defined as an exposure
where the realisable value of the security, as As directed by RBI, direct finance for
assessed by the bank/approved valuers/Reserve construction of houses by individuals upto Rs.15
Bank’s inspecting officers, is not more than 10 lacs irrespective of the location (ie., Rural, Semi-
percent, ab-initio, of the outstanding exposure. urban, Urban and Metropolitan Centres) and loans
‘Exposure’ shall include all funded and non-funded upto Rs.1 lac in Rural and Semi urban areas and

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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

Rs.2 lacs in Urban areas for repairs to houses shall reiterated in the circular for the guidance of
be treated as priority sector lending. branches along with the format of the Life
Certificate.
(Adv.119/2004-05 dt.10.12.2004 M 2 S 202)
1. Our Bank Officers are authorised to issue life
PERSONNEL certificate to the pensioners.

Human Resource initiatives taken by the 2. If a pensioner is unable to go to the branch on

Bank account of serious illness/incapacitation, an
intimation to this effect supported by a medical
1. A Study on HRM Systems of our Bank certificate from a registered medical practitioner
2. Talent search exercise about his inability to appear in person may be sent
to the Manager of the pension paying branch so
3. Massive training programme
that the latter may nominate an Officer to visit the
4. Internal selection of officers for specialised pensioner at his/her residence/hospital for the
areas purpose of recording the life certificate.
5. Recruitment of specialised officers 3. If Life Certificate is not furnished by the
6. Appointment of sports persons pensioner/family pensioner in November, branches
7. Blood donation movement are advised to stop the pension payment from the
month of November onwards till the life certificate
8. IBA – M/s Hewitt Associates study is submitted to the branch. The branches should
9. Human Resource Management solutions also note the same in Pension (SB) account and
exercise adequate caution to avoid any fraudulent
10. Placement of women employees on promotion withdrawal from the account.
11. Specialised clerical programme
4. Branch Manager is responsible for obtaining
12. Special increments to officers promoted under the life certificates from all the staff pensioners /
special selection process family pensioners.
13. Scheme of reimbursement of fees to officers
5. The amount of monthly pension/family
who acquire CISA / CISSP certification
pension should be credited to the Savings Bank
14. Subscription to newspaper account maintained in the individual name only.
15. Term loan facility to staff members Withdrawals from the account must be carefully
monitored.
16. Provision of residential accommodation to
officers on lease basis 6. If the death of the pensioner/family pensioner
is not intimated to the branch immediately after the
17. Bank sponsorship for professional educational
death, the pension amount credited for the period
programmes
after the death must be recovered in full and
18. Canteen subsidy remitted to us with full particulars.
19. Welfare measures 7. However, as a matter of abundant caution, the
The details of the initiatives/measures are Branch Manager has to ascertain that the
given in the circular for the information and pensioners/family pensioners are alive, though the
guidance of the branches/offices. certificate is received annually in the month of
November. This is to prevent any unauthorised
(Prnl.84/2004-05 dt.18.10.2004 M 3 S 303) withdrawal of the pension amount.
Obtention of Life Certificate from Staff 8. The Branch Managers are advised to take all
pensioners/family pensioners precautions and safeguards as per the guidelines
while disbursing pension/family pension.
Life Certificates are to be obtained without
fail from all Staff pensioners and family pensioners (Prnl.87/2004-05 dt. 27.10.2004 M 3 S 404)
in the month of November every year and kept in
the pensioner's individual files at the disbursing Educational Loan Scheme – Relaxation in Staff
branches. The extant guidelines on the subject is related accounts

7
 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

The following relaxations/terms are Based on the 2001 Census, the quantum of
approved in the matter of our staff members HRA and CCA payable to staff members are
standing as Co-borrower for their children’s revised with effect from 01.03.2001.The lists
Educational Loan under IBA Scheme: containing the revised classification of areas/places
are enclosed to the circular for the information of
a. 40% take home pay by the members of staff
branches/offices.
of all cadres need not be insisted upon, as
servicing of interest during gestation period is Accordingly, at such places where there is a
not insisted upon. change in the population as per 2001 Census,
b. If the parent/guardian/staff agrees to service revised HRA/CCA, wherever applicable, shall be
the interest during the holiday period, 40% calculated in terms of the relevant provisions of the
take home pay will continue to be insisted Bipartite Settlements/ Indian Bank Officers’
upon. This will entail an interest rebate of Service Regulations and paid.
0.50% for the staff and he will have the
In respect of staff members who have been
option.
transferred from the branches situated in such
c. Similarly, after holiday period, staff has to upgraded centres after 01.03.2001, these branches
ensure that take home pay is more than 40% should send the details of HRA/CCA already paid
so as to facilitate servicing of debt. and the amount of arrears payable to them to the
branches where the staff members are presently
d. Authorisation letter for appropriating terminal
working for making the payment.
benefits will be restricted to the balance
amount after netting dues to PF trust, SHL, In respect of staff members who have retired
other loans etc. from the services after 01.03.2001 and who are
(Prnl.101/2004-05 dt.18.11.2004 M 3 S 303) eligible for revised HRA/CCA due to the
upgradation of centres, the arrears shall be paid by
Money Insurance Policy for Cash, Jewels and the branches where the staff members last worked.
Securities ‘on Premises’
However the revised rates of Halting
A Money Insurance Policy has been taken Allowance are payable with effect from
by our Bank with M/s National Insurance 14.10.2004 only
Company Ltd covering the risks of loss of Cash,
Jewels and Securities ‘on Premises’, in addition to (Prnl.108/2004-05 dt.30.11.2004 M 3 S 304)
the coverage available under Bankers’ Indemnity
Policy for the financial year 2004-2005. CRA
The amount of Cover is Rs. 9 crores, in Marketing of Insurance Products
addition to the coverage of Rs.11 Crores (Basic
As per Insurance Regulatory &
Rs.50 lakhs + Additional Rs. 1050 lakhs) available
Development Authority of India (IRDA)
under Bankers indemnity Policy for the financial
guidelines, the Banks are permitted to take up
year 2004-05.
marketing of insurance products of one Life
With this, the overall coverage available for Insurance Company and one Non-life Insurance
loss ‘on Premises’ is Rs.20 Crores. The procedure Company. Accordingly our Bank has entered into
regarding reporting and lodging of claim is the tie-ups with the following companies for marketing
same as applicable for Bankers’ Indemnity Policy. of their products through our Branches:
Any loss ‘on premises’ beyond the available limit
1. HDFC Standard Life Insurance Company
of coverage under Bankers’ Indemnity Policy i.e.
Limited
over and above Rs.11 Crores only has to be
preferred under Money Insurance Policy. 2. United India Insurance Company Limited
Branches may go through the circular and 3. Export Credit Guarantee Corporation Ltd.
take all steps to protect the interest of the Bank. (ECGC)
Benefits available to the Bank
(Prnl.104/2004-05 dt.22.11.2004 M 3 S 309)
1. Augmenting non-interest income by way of
Payment of HRA, CCA and Halting Allowance commission on collection of premiums ranging
from 7.5% to 40%.

8
 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

2. A value-added service to our customers seeking our tie-up partner "United India Insurance Co.
a one-stop shop for Financial products. Ltd." However, it will be left to the customer to
decide on the Insurance Company and there shall
The commission earned/received on sale of
be no element of compulsion where the insurance
insurance products shall be credited by the
policy is taken by the borrowers themselves.
Branches as under:
5. Our branches shall also endeavour to
Under income GL Head 499 in the "Basis"
market the Personal products of "M/s United India
package for TBC branches
Insurance Co Ltd" like Householders Policy,
SUB-GL DESCRIPTION Personal Accident Insurance, Mediclaim,
CODE Shopkeepers policy etc. We have recently come
271 Insurance Commission - Life out with Co-branded Medicalim Policy "AROGYA
272 Insurance Commission - Non-Life
RAKSHA" for which also we can give a greater
thrust for marketing.
273 Insurance Commission - Others (ECGC)
6. The commission rates range from 7.5 to 15%.
274 All the above three Sub-GL heads will be
grouped under "Insurance Commission" for the 7. The commission on the policies canvassed is
purpose of BS-4 returns paid to the respective
HDFC Limited Export Credit Guarantee Corporation Ltd.
(ECGC)
The details of all the policies submitted to
HDFC Standard Life Insurance Co., by each Though the IRDA stipulated that Banks can
Specified Person (SP) shall be sent to our Nodal have tie-up for selling Insurance products with One
Office viz. Ashok Nagar Branch in Chennai Life Insurance Co. and One Non-life Insurance Co.
(South) Circle under copy to their respective Circle only, they made an exemption to ECGC in view of
Offices as per the format given in the circular the special nature of their products viz. Credit
every fortnight beginning 15th October 2004. Insurance and permitted Banks to have tie-up for
marketing their Credit Insurance products. Hence
Our Bank is ensuring only the collection of we have entered into a tie-up with ECGC for
proposal from the insurer along with the premium marketing their Credit Insurance products. The
amount and does not take any responsibility for commission rates range around 1.5 to 2%
acceptance of policy/settlement of claims. The The types of ECGC policies include 1.
policy holder/s or their nominee/s should take up Standard Policy and Small Exporter's Policy 2.
directly with the Insurance Company for settlement Specific Shipment policy - Short term 3. Exports
of claims. (Specific Buyer) Policy and 4. Exports Turnover
United India Insurance Company Limited Policy
Branches are advised to market the products
Our agreement with UIICO provides for
vigourously to enhance our non-interest income.
1. Insuring our own assets with them
(CRA.34/2004-05 dt.27.10.2004 M 4 S 404)
2. If our assets are already insured with any
other General Insurance company, the same may Prime Minister’s National Relief Fund
be renewed with UIICO when their insurance
cover becomes due for renewal The Prime Minister’s National Relief Fund
(PMNRF) provides immediate relief to the families
3. Insuring the assets created out of our of those killed in natural calamities like floods,
finance and the Collateral Securities hypothecated cyclone and earthquakes. It also grants assistance
to us to the maximum extent possible, especially to families affected by major disturbances, riots
where the branches themselves take these General and accidents. Besides, the Fund has been
Insurance policies, they are necessarily to be extending assistance to indigent persons to
routed through "M/s United India Insurance partially defray the cost of expensive medical
Company Limited". treatments like heart surgery, kidney transplan-
4. In case the customers themselves are tation and cancer treatment.
taking the General Insurance policies, the branches All contributions to the PMNRF are fully
may advise the Borrower to take the same through exempt from Income Tax under section 80 G of the

9
 Volume 17 Issue 3 Recollect October-December 2004

Income Tax Act,1961. Donations to the Fund are Removal of per transaction limit for ECS/EFT/SEFT
RECOLLECT

also excluded from the computation of taxable transactions

gifts under section 5(1)(V) of the Gift Tax Act,
Electronic Clearing Service (ECS) – Credit
1958.
and Debit Clearings, Electronic Funds Transfer
Ours is one of the Banks authorised to (EFT) and Special Electronics Funds Transfer
collect contributions made by the general public, (SEFT) systems ensure transfer of funds
for PMNRF. Given that our Bank has always been electronically in a safe and secure manner and are
in the forefront on matters concerning National witnessing large scale usage.
Spirit, all our branches should strive to create
In order to provide a fillip to electronic
public awareness on the PMNRF to support such a
payment modes, it has been decided to do away
noble and worthy cause
with the per transaction limit for all these schemes
(CRA.35/2004-05 dt.27.10.2004 M 4 S 404)
with effect from November 1, 2004.
As regards processing charges for these
Service Tax – clarifications received from Indian transactions, a flat rate of Rs.50.00 per transaction
Banks’ Association will be charged by Reserve Bank of India to the
originating bank(sending Bank) in respect of the
The accounting procedure on the collection
transaction for Rs.2.00 Crores and above, while for
and payment of Service Tax on various banking
transactions of value less than Rs.2.00 Crores, the
services was communicated by Circular
waiver of charges upto the period ending March
No.CRA.32/2004-05 dated 27.10.2004. For better
31, 2006 will continue to be in vogue.
understanding, the following clarifications are
given by IBA: Branches / Circle Offices having ECS / EFT
/ SEFT Facilities are advised to step up their
Advance Collection of rent on Locker, Bank
compaign taking advantage of increase in per
Guarantee commission etc
transaction limit to garner more volume of
In respect of the services brought under service tax
business to increase our non-interest income.
net with effect from 10th September 2004, value of
services received by the service provider prior to (CRA.39/2004-05 dt.02.11.2004 M 4 S 403)
10th September 2004 has been specifically
exempted from Service Tax. Merchant Banking Services of M/s IndBank
Merchant Banking Services Ltd.
Refund of Bank Guarantee Commission, etc.
Indbank Merchant Banking Services Ltd
Customers sometimes return bank guarantees
(IBMBS), merchant banking subsidiary of our
ahead of the date up to which it is issued. In such
Bank, is a Category I Merchant Banker, registered
cases, banks refund a portion of the commission
with the Securities Exchange Board of India
collected to the customer. In such cases,
(SEBI). It is engaged in the following activities:
proportionate service tax and cess can be refunded
or adjusted against future tax liability of the bank. a. stock broking services – as a member of
National Stock Exchange (NSE)
Service tax & Educational Cess on Financial
Services – rounding off of Tax Amount b. demat services – as a depository participant
registered with the National Securities Depository
The amount of duty, interest, penalty, fine or
Limited (NSDL),
any other sum payable, and the amount of refund
of any other sum due, under the provisions of this c. marketing mutual fund products – as a
Act shall be rounded off to the nearest rupee and Corporate Intermediary, registered with the
for this purpose, where such amount contains a Association of Mutual Funds of India (AMFI)
part of a rupee consisting of paise then, if such part
d. issue management
is fifty paise or more, it shall be increased to one
rupee and if such part is less than fifty paise it shall e. advisory services including valuation, buy
be ignored. back, take over assignments, merger and
acquisition, employee stock option schemes, etc.
(CRA.37/2004-05 dt.28.10.2004 M 4 S 404)
IBMBS is operating through its five
branches at Bangalore, Chennai, Coimbatore,

10
 Volume 17 Issue 3 Recollect October-December 2004

Mumbai and New Delhi. Each branch has a team correspondents at USA by the respective banks.
RECOLLECT

of staff, well versed in the nuances of stock Once the credit is received in the Nostro Account,
broking and demat services. Banks pass on the credit to their customers’
account after a certain “cool off” period (say 21 to
Branches having business relationship with
30 days). Based on the credit received, the
Corporates may refer Indbank Merchant Banking
exporters despatch the materials to the buyer. Of
Services Ltd for any advisory services that the
late, Banks have come across many instances of
Corporates may require. Customers may also be
return of such instruments after considerable lapse
requested to open Demat Account with IBMBS for
of time stating that the instruments are fraud /
their securities operations.
counterfeit / forged. The Nostro account is also
(CRA.46/2004-05 dt.16.12.2004 M 4 S 404) debited to that extent.
As per U.S. laws, it is understood that such
FX claims on fraudulent cheques can be raised upto a
period of three years from the date of payment of
Check 21 – New law in United States governing
the instrument if it is found that the instrument is a
Cheque Processing
fake / forged one and our Nostro account would be
The "Check Clearing of the 21st Century debited unilaterally. By this time, having received
Act” known as "Check-21" has been enacted in the payment, the exporter (beneficiary) at this end
United States as a Federal Law. It has been would have exported the goods. However, the
implemented with effect from 28th October 2004. branch has to recover the amount from the
The Act was created with the help of banks, exporter's account, due to the debit to our Nostro
consumer advocacy groups and technology Account.
companies to help streamline the banking system
Branches are advised to exercise caution
The goal of "Check-21 is to reduce paper, while handling such instruments and advise the
combat fraud and streamline how cheques are exporter customers to preferably get the advance
processed. The current way of processing cheques payment through SWIFT MT 103 – Customer
involves presenting paper cheques, which can be Transfer instead of accepting a cheque / DD,
time consuming and expensive. With "Check-21", especially if the buyer happens to be a new
a bank can replace an original cheque with a connection. Customers should also be advised to
"substitute cheque" that has the same legal verify the credentials of the buyers before
standing as the paper cheque and that can be accepting advance payments.
processed just like the original cheque. This will
(Fx.35/2004-05 19.11.2004 M 5 M 504)
enable banks to move cheques electronically.
Under the "Check-21" Act, the USD External Commercial Borrowing – Procedures &
cheques sent for collection by us through the USD Precautions
correspondents, will be presented in US clearing As per RBI guidelines, resident borrowers
only in electronic images (front and back of the can raise ECB from internationally recognised
cheque) viz. "substitute cheques" instead of sources such as
physical cheques. A "substituted cheque" is a (i) international banks, international capital
negotiable instrument and can be represented. markets, multilateral financial institutions
Hence, original instrument will not be made (such as IFC, ADB, CDC etc.),
available to us in case of return of cheques. US
(ii) export credit agencies and
Banks may destroy the original cheque shortly
after making the electronic image and will (iii) suppliers of equipment, foreign collaborators
maintain the image of the cheque for seven years. and foreign equity holders.
Branches are advised to inform their ECB for investment in real sector –industrial
customers accordingly. sector, especially infrastructure sector-in India falls
under Automatic Route, i.e. will not require
(Fx.34/2004-05 dt.09.11.2004 M 5 S 401) RBI/Government approval. Any other ECB will
Fake Instruments tendered for collection require prior approval of RBI, i.e. Approval Route.
The instruments, which are tendered by the Borrowers are also to submit Form 83
exporters, are sent for collection to Nostro (applicable for all categories and any amount of
ECB), in duplicate, to the designated branch. The
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 Volume 17 Issue 3 Recollect October-December 2004
RECOLLECT

additional precautions to be taken by the branch arises when an organisation connects its computers
while handling ECB / Form 83 applications of the to an open network, like internet, which are not
Resident borrowers are given in the circular. subjected to rigorous security requirements.
(Fx.36/2004-05 dt.29.11.2004 M 5 S 501) The circular also suggests the steps to be
Opening of FCNR and SB (NRE) Accounts - taken by branches/offices, to protect the integrity
Adherence to KYC Norms of information and information systems from
modifications, disclosures or destruction by
Adherence to KYC guidelines is all the more malicious software.
important while opening FCNRB/NRE/NRO
accounts of NRIs. (Genl.30/2004-05 dt.07.10.2004 M 6 S 605)

In case of NRE/FCNRD/other accounts of Liquidity Adjustment Facility of RBI (LAF) – “Repo”

Non Resident Indians, introduction may be and “Reverse Repo”
obtained from an existing account holder, a
Reserve Bank of India plays a major role in
Foreign correspondent/Branch, a Notary Public or
managing the liquidity i.e. surplus funds in the
Foreign embassy/consulate officials. Passport can
banking system. When liquidity is more, RBI will
also be accepted for the purpose of identifying the
absorb the same from the system under the
prospective Non Resident customer. Proper
“Liquidity Adjustment Facility” (LAF) and this
identification of the customer before opening the
process is termed as “Repo”. The rate at which
account as per KYC norms will minimize
RBI accepts money from banks is called Repo rate
occurrence of frauds and to check
(presently it is 4.50%).
misappropriations.
Similarly when the system experiences
The circular also reiterates some of the
tightness in the liquidity, RBI will infuse funds
additional precautions to be taken by branches,
which is termed as “Reverse Repo” (the present
irregularities observed in some cases and cautions
rate charged by RBI is 6.00%).
the staff handling these accounts.
In order to align with the international
(Fx.37/2004-05 dt. 30.11.2004 M 5 S 503)
usage, RBI has proposed to switchover to the
international usage of the terms “Reverse Repo”
GENERAL and “Repo” with effect from October 29,2004. The
Virus Control operations of Repo and Reverse Repo are
undertaken only at HO:Treasury Department.
Viruses are programs that attach themselves
to executable files, system areas on diskettes or (Genl.34/2004-05 dt. 21.10.2004 M 6 S 601)
data files that contain macros to cause disruption to
computer operations or damage to data and Master Circular - Detection and Impounding of
programs. They are designed to achieve two Forged Notes
objectives: to replicate themselves and to deliver a In order to enable the branches / Currency
payload that causes disruption of some kind. Chests to have all the existing instructions on
Basically, a computer virus is a threat to the ‘Detection and impounding of forged currency
security and integrity of the computer system. All notes’ at one place, a master circular has been
computer users in the bank have to take utmost issued by HO: CGT. The circular covers all the
care to protect the bank’s computer and related instructions of RBI issued upto August 2004 on the
equipments from virus attacks. subject and branches are advised to go through the
same for an undated knowledge.
Worms are other virus-like attack. Like
viruses, worms propagate copies of themselves (Genl.37/2004-05 dt. 19.11.2004 M 6 S 601)
with benign or malignant intent. Viruses attach
themselves to other legitimate programs, whereas, Exceptional Transactions Report and Special
worms usually exist as separate independent Transactions Report
programs. They use operating system services for
Daily checking of transactions with
replication. They exploit some type of bug or
vouchers, scrutiny of Exceptional Transaction
security weakness in the operating system to
Reports (ETR) and Special Transaction Reports
infiltrate to other systems. Threat from worms

12
 Volume 17 Issue 3 Recollect October-December 2004

(modified/ deleted transactions) are some of the Accounting code be insisted upon in the invoices /
RECOLLECT

vital control functions in TBC branches. receipts received from the service providers and
only after ascertaining the above mandatory
Daily Checking
requirements, payments be released. The
Every transaction in a computerised Accounting code of Security and Detective
environment should be supported by a voucher Services is 00440108 and that of maintenance and
either manually prepared or computer generated. Repair services is 00440244
At the time of transaction raising, wherever the
This concerted effort will not only help in
transaction number is automatically generated by
augmentation of Service tax revenue, but also help
the system, the number (batch no./node no./serial
the Banks to avail the Service Tax on the input
no.) may be written on the voucher and counter foil
services as credit for payment of service tax.
for easy identification.
Branches/offices are, therefore, advised to
In a Totally and partially computerised
ensure compliance.
environment, transactions are passed then and
there with the vouchers and electronic (Genl.46/2004-05 dt.14.12.2004 M 6 S 309)
authentications also take place. However, it is very
much essential to check the day's vouchers with
the Sectional Day book . The checking officer MD/ED
should be other than the one who originally
authenticated the voucher/transaction. Massive Training Programme
Exceptional Transaction Reports (ETR) In today’s highly competitive environment,
banks are vying with each other to garner business
Exceptional Transaction Reports reveal all
through a slew of products and services and several
transactions like excess allowed beyond drawing
technology-driven initiatives. Customers are quite
limit, TODs given, cheque authorisation, drawals
aware of the various options available to them and
against uncleared effects, commission collected on
it is imperative that we are able to convince them
remittances not as per rules etc. At the end of the
to choose to bank with us. Retaining existing
day, the Exceptional Transaction reports should be
customers and getting new ones into our fold are
scrutinised by Branch Manager/ABM to ensure
going to be challenges that have to be faced on a
that all the transactions put through are only
daily basis.
authorised transactions. Such reports should be
duly authenticated by the BM/ABM and preserved These would depend heavily on the ‘Human
safely for perusal by auditors/inspecting officials. Resources’ that would differentiate our Bank from
the rest. The need of the hour is to have a highly
Special Transaction Reports motivated, knowledgeable and well-trained
Special Transaction Reports (modified/ manpower that can provide the customers the kind
deleted transactions) should be scrutinised on a of service that would meet with their approval and
daily basis to ensure that the modifications/ take them to the zone of ‘delight’ rather than ‘mere
deletions are genuine ones. Repetitive satisfaction.’ All the staff members should be well
modifications/deletions in a particular node in a versed in relevant facets of banking so that they are
day would reveal poor operational efficiency on able to handle the current unprecedented level of
the part of the employee who has put through the competition that is expected to grow further in
transactions. times to come. This is both a challenge and an
opportunity for us. Full utilisation of talent and
Branches are advised to adhere to prescribed potential of the individuals would positively
systems to avoid unpleasant situations. contribute to the growth of the organisation and
would create conditions conducive for the personal
(Genl.39/2004-05 dt.20.11.2004 M 6 S 605)
career advancement of the team members as well.
Release of payments by Banks to its Service In order to make our staff members
providers thoroughly equipped to meet all kinds of
competition, it has been decided to embark on a
As advised by IBA , whenever any taxable Massive Training Plan under which some of the
services are received by the Banks, proper Service staff members may be trained in 4-5 different job
Tax Registration number / Service Tax Code and specific / common workshops within a span of one
13
 Volume 17 Issue 3 Recollect October-December 2004

year. Our staff members must clearly understand i. Always maintains a high level of quality
and appreciate the objective of this massive ii. is worth the price it commands
RECOLLECT

exercise. Every staff member should earnestly

endeavour to utilise this opportunity to hone his / iii. is the one brand that he would definitely
her skill in the different facets of banking so that consider if he has to buy the product
each one becomes proficient enough to handle the iv. is going to be a popular brand for many years
current challenging tasks. v. has something that no other brand has
(MD.ED.7/2004-05 dt. 12.10.2004 M 7 S 303) vi. evokes a feeling of confidence and pride
among users
News from our Chairman vii. is a very special brand and has some unique
Our Bank has been rated as the 10th Most feelings associated with it
Trusted Service Brand in the country, 6th in the The quality of our Customer Service and the
entire Banking Industry and 4th among the overall Customer-Centric approach in our day to
Nationalised Banks, while retaining its coveted day functioning have largely contributed to our
status as the Foremost South Based Service Brand present stature as an upward looking Top Service
for the 2nd consecutive year, in terms of the recent Brand in the country, also aided by our aggressive
survey by A C Nielsen – ORG MARG, brought out Multimedia visibility creation and Image building
by The Economic Times on the 15th instant. What exercises.
is most gratifying is the fact that our Bank is the Our Chairman also congratulates each and
only Public Sector Bank in the country, to have every one of us for having contributed to such an
moved upwards in the ranking. unique accomplishment of our Bank, as a Service
Our Chairman sensitises all of us on the Brand.
criteria based on which our Bank has been ranked
as a Top Service Brand in the country, by stating (MD.ED.9/2004-05 dt.27.12.2004 M 7 S 7
that our Bank

14
 Volume 17 Issue 4 Recollect January-March 2005

prescribed by Income Tax (Seventeenth

RECOLLECT

DEPOSIT
Amendment) Rules 2004, a Banking Company has
Monthly Customer Service Committee Meeting to file a 'Annual Return' in the prescribed format
along with Part A to Form 65 in a floppy or CD or
Operational Risk Management Committee in
DVD on or before 31st August of every year to the
its meeting held on 18.12.2004 has noted the non-
Commissioner of Income Tax, Central Information
conduct of Joint Customer Service Committee
Branch (CIB) by furnishing the information
Meetings with serious concern. Such non-
required by Income Tax Department.
compliance is observed as an across the Board
violation on the corporate directions. The direction
at the meeting was “action will be initiated at As per Government Notification, our Bank is
senior levels whenever there is an incidence of obliged to submit the Annual Returns relating to
large scale non-compliance of any of the systems cash deposit aggregating to Rs.10 lacs or more in
/ directions / procedures”. a year in any Savings Account of a person
Branches are advised to conduct the Joint maintained in our Bank from the year 2004-05
Customer Service Committee Meetings every onwards.
month without fail and submit the minutes to their
Circle Heads before 7th of the following month. This Annual Return in the prescribed format
has to be collected from the branches of our Bank
DEP.45/04-05 dt.10.01.05 (M1 S101) and consolidated at Head Office, in order to file the
consolidated Annual Return for the Bank as-a-
Inoperative Accounts – Revised Procedure whole in Electronic mode by way of Floppy / CD /
The Bank’s Audit Committee of the Board DVD with CIT, CIB, before 31st August of every
in its meeting held on 11.08.2004 directed to take year.
the following additional precautions while dealing
with inoperative accounts: DEP.48/2004-05 dt.29.01.05 (M1 S102)

i. When an inoperative account becomes Availing of Banking Services by Visually

operative, it is to be transferred to a new Handicapped (Blind) Persons
intermediary category of account before being As visually handicapped persons need
taken into the operative account. special dispensation, the existing systems and
ii. The transfer to the operative account to be procedures dealing with opening of accounts for
done only after watching the transactions in the them and conducting operations in such accounts
intermediary account for one year. have been revisited and reviewed. The revised
procedure in this regard is given in the annexure to
iii. There should be a mechanism to verify the the circular.
operations, especially of large value in the
accounts kept in intermediary account. The salient features of the revised procedure
are as under:
In order to implement the above directions
of ACB, the existing systems and procedure for i. Checklists for the following have been provided
dealing with operations in inoperative accounts has ii. Risks involved in opening of accounts for
been reviewed and revised. The revised procedure Visually Handicapped persons
in this regard is furnished in the annexure to the a. Interviewing the applicant and the
circular. information to be obtained before
Branches are advised to meticulously follow opening account
the revised procedure for transactions in b. Types of accounts allowed
inoperative accounts with immediate effect. c. Formalities to be completed at the time
of opening the account
DEP.46/04-05 dt.10.01.2005 (M1 S101)
d. Guidelines for conducting operations in
Introduction of Annual Returns U/s 285BA of Income the account.
Tax Act 1961, To be furnished by the Bank / ii. Issue of cheque book is permitted and the
Branches before 31st August of every year norms for issue have been spelt out.
As per Sec.285BA inserted by Finance Act, iii. Guidelines for sanction of loans and execution
2003, with effect from 01/04/2004 and Rule 114E of documents
1
 Volume 17 Issue 4 Recollect January-March 2005

Branches are advised to follow the revised identifies warning signals to check the incidence of
RECOLLECT

procedure while opening accounts for Visually fresh NPA.

Handicapped Persons and ensure that such persons
In order to prevent slippage and to
do not face any hindrance in availing normal
banking facilities. strengthen follow-up measures to improve quality
of assets, it is decided to monitor large value
DEP.49/04-05 dt.17.02.05 (M1 S101) standard advances of Rs.25 lacs and above “Pre-
Cheques Written in Urdu SMA Accounts” to be reviewed by Committee of
General Managers on Quarterly basis at HO.
Customers may write cheques in Hindi,
English or any language of their choice. There In order to facilitate identification of
should also be greater use of Hindi and Regional accounts under this new category, a list of 20
Languages in transacting business with customer, possible signs of incipient sickness are identified
including communication with customers. and incorporated in the new ‘short review format’
designed for reporting the “Pre-SMA Accounts”.
Branches are, therefore advised to accept
cheques written in regional languages including Irregularities showing incipient sickness
Urdu language. which may lead to slippage to SMA
DEP.50/04-05 dt.25.02.05 (M1 S102) 1. Repayment of instalments, EMI and servicing of
periodical interest with delay on regular basis
CAPITAL GAINS SCHEME 1988 2. In respect of term loan sanctioned for project
implementation, observing delay in progress of
Reserve Bank of India vide their letter implementation resulting in time over run /cost over
DBOD / BP No. 2090 / C.469-88 dated 10.06.1988 run.
have launched a scheme called ‘The Capital Gains 3. Slow or non movement of stocks/ obsolete stock not
Account Scheme 1988’ formulated by Government exceeding 10%.
of India, Ministry of Finance, Department of 4. Shortfall in DP for OCC not regularised within a week
Revenue (Central Board of Direct Taxes). Under 5. Frequent occurrence of shortage in drawing power
the Scheme the tax payers can avail of the benefit due to increase in sundry creditors/ increase in
of exemption from capital gains only. quantum of outstanding debtors beyond the
stipulated period
Scheme Details 6. Seeking excess in the account frequently due to (4)
All the Branches except rural Branches are 7. Delayed / non submission of Stock Statements /
authorised to accept deposits under the Scheme. MSOD/QIS and other feed back statements within 15
days from due date.
Eligible persons to apply 8. Submission of incorrect Stock statements and
reluctance on the part of the borrower for stock
All assessees who are eligible for exemption inspection.
under Section 54, 54 B, 54 D, 54 F, or 54 G, of the 9. Frequent return of cheques (five or more in a month)
Income Tax Act 1961 (43 of 1961) can deposit 10 Frequent return of bills purchased (Maximum two in a
under this scheme. . month and should not be a regular feature month
after month)/ Continuous overdue BP position /
The details of the deposit scheme are given
Outstanding overdue bills to the extent of 10% or
in the circular. more of the total bills discounted with the bank on
DEP.52/04-05 dt.09.03.05 (M1 S101) continuous basis
11 Devolvement under LCs on regular basis though
. cleared subsequently – resulting in outstanding under
ADVANCES Advance Bills continuously / DPGs & its non-payment
for long time
Monitoring of Pre-SMA Accounts. 12 Utilisation of limit, not commensurate with the level of
. operations, fall in turnover ratios.
Management of NPA is one of the prime
13 Attempt to divert funds/operations through other
challenge. A substantial amount of funds are . Banks/ accounts without Bank's prior approval.
already blocked as Non-Performing Assets (NPA). 14 Poor performance in terms of Production/Sales/
Slippage of standard assets to NPA category has . Profitability (below 60%)/ Poor order position
double impact on hard-earned profit of the Banks 15 Persistent delay for compliance of sanction terms/
by denial of income and making fresh provisions. . completion of documentation beyond 3 months from
So, there is need for an ‘early alert system’ and disbursement.

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 Volume 17 Issue 4 Recollect January-March 2005

16 Limits not renewed /reviewed for more than 3 months The various fora created under Lead Bank
RECOLLECT

. from the due date Scheme viz., BLBC, DCC, DLRC, SLBC and
17 Failure to pay statutory dues in time. SLRC will continue to function as usual.
.
18 Changes in constitution/dispute among promoters / The performance under Block Credit Plans
. Directors / Partners and / or a request for release of will be reviewed in BLBC meetings, while the
security or guarantee. performance of the banks under District Plan will
19 Emerging new technology/ Change of Government be reviewed at DCC meetings. Similarly,
. policies/ Accident and natural calamities performance of banks at the State level will be
20 Any other features likely to affect operation in
reviewed in the SLBC meetings. All these
. account. (Change / death of key personnel, labour
problems, litigations, group accounts, Management
meetings will continue to be convened on a
integrity, Power disconnection, Adverse market quarterly basis (once in a quarter).
reports etc.
As regards the monitoring / reporting
ADV.124/04-05 dt.01.01.05 (M2 S209) aspects, NABARD to review the SAMIS reporting
system and to intimate necessary modifications /
Rural Lending - Service Area Approach - Relaxation changes in the SAMIS.
in Service Area Norms
The following changes have been made in ADV.126/04-05 dt.04.01.05 (M2 S201)
Service Area norms under Service Area Approach:
Obtention of Engineer's Valuation Certificate for
The allocation of villages among the rural Home Loan property and Quality Lending
and semi-urban branches of banks shall not be Our Home Loan Scheme was introduced
applicable for lending, except under Govt. during October 2000 and hence, 3 years period
Sponsored Schemes. While the Commercial have been completed for all Home Loans
Banks and RRBs will be free to lend in any rural sanctioned upto 31.12.2001. Hence branches are
and semi-urban area, the borrowers will also have advised to obtain latest Engineer's valuation
the choice of approaching any branch for their certificate in respect of the Home Loan property
credit requirements. and ensure that our advance is secured sufficiently.
Consequently the requirement of obtaining This periodic valuation of immovable
no due certificate from the service area branch for property charged to Bank, ie. Engineer Valuation
lending by non service area branch would also Report, should be diarised by branches and taken
stand dispensed with. However, branches at their up well before the expiry of 3 years. The valuation
discretion may take steps considered necessary to fee for this purpose should be within the ceiling
avoid multiple financing. fixed as per HO:CPGD Circular ADV.115/2000-
01dated 2.1.2001and it is to be recovered from the
The Annual Credit Plan (ACP) will be based borrower. Branches should also ensure that the
on the Potential Linked Plans (PLPs) prepared by Insurance Policies are covered with vulnerable risk
NABARD. The particulars of the potential coverage.
available in different sectors (as indicated in the
PLP) will be communicated by the Convenor of ADV.127/04-05 dt.05.01.05 (M2 S204)
BLBC to all the branches in the Block. The
branches in turn will prepare branch credit plans Flexi Equated Monthly Instalments (EMI) for Home
based on such communication. Loan borrowers.

The branch credit plans would be aggregated In order to be more competitive in the
by the BLBC convenor bank into Block Credit market, it has now been decided to offer the Flexi
Plan. The Block Credit Plans would, in turn, be EMI by dividing the entire repayment period into
aggregated into District Credit Plan. The District three parts:
Credit Plans would eventually be aggregated into Low EMI Period (LEMI)
State Level Credit Plan. Normal EMI (NEMI)
In view of this arrangement, the village High EMI (HEMI)
credit plans need not be prepared by the branches. It has also been decided that the Flexi
EMI offer will be made available (both for
existing and fresh accounts), only for repayment

3
 Volume 17 Issue 4 Recollect January-March 2005

period of 10 years and above. This is applicable approved engineer, for valuation of the property.
RECOLLECT

both for floating rate and fixed rate Optees. In Instead branch should obtain the details of the
respect of existing accounts, Flexi EMI can be property of the borrower and instruct our panel
offered only if the remaining repayment period is engineer to visit the property and submit his
ten years and above. valuation report directly to the branch. Branch
should provide a copy of the report to the borrower
Branches are advised to offer FLEXI EMI
for his reference. The cost of valuation should be
for deserving Home Loan borrowers who choose
borne by the borrower.
this option. Branches are advised to exercise due
Legal fees and Engineer's Valuation charges
diligence and take judicious decision while
can be part of Home Loan. Engineer's Valuation
sanctioning Home Loan with this option, after fully
report need not be insisted if the flat is acquired
satisfying that there are enough supportive material
from Housing Board, State Development
to ensure that the repayment capacity of the
Authority/ Bodies/Local Improvement Trust.
Applicants will improve definitely, as per the plan
chosen. The future estimated / prospective ADV.137/04-05 dt.31.01.05 (M2 S204)
increase in income in tune with the Flexi EMI
chosen should be indicated in the application form Granting of One Time Settlement / Rescheduling of
and appraisal. (Under the income criteria i.e. both the Loan - Banks have discretion - Courts will not
source as well as quantum). direct Banks to grant OTS or to reschedule

ADV.128/04-05 dt.05.01.05 (M2 S204) We have come across a few instances where
borrowers have gone to High Courts with a prayer
Valuation of properties mortgaged to the Bank as to direct our Bank to grant OTS, for rescheduling
security the loan etc. Recently, Division Bench of the
Madras High Court in TIIC vs. Millennium
As per our Bank's extant guidelines,
Business solutions Pvt. Ltd. and another in W.A
immovable properties (viz., land and / or building)
No.2690 of 2004 held that High Court has no right
mortgaged to the Bank (either by first charge or
under Article 226 of Constitution to direct grant of
second charge) have to be valued atleast once in
One Time Settlement or for rescheduling of the
three years and a review of the account shall be
loan or to fix instalments.
made based on such periodic valuation.
Whenever Writ Petitions are filed to direct
Erosion in value of the security charged to
our Bank to accept OTS proposal or to rephase the
the Bank by more than 50% of its original value as
loan / instalments, the lawyers whom Bank engage
assessed by the bank would lead to classification of
may be requested to take note of the above
the related borrowal account into 'Doubtful
judgement and defend the proceedings and get the
Category'. Hence periodic valuation of properties
Writ Petitions dismissed at the earliest
in respect of borrowal accounts.
Hence, all the field level functionaries are ADV.138/04-05 dt.31.01.05 (M2 S208)
advised to ensure periodic valuation of properties
mortgaged to the bank in respect of all SSI Modifications to Scheme of financing Trade –
accounts and for this purpose suitable register may ‘TRADE WELL’
be maintained at branch level with due dates for New Scheme of financing Trade for
valuation, within which period the valuation may Working Capital as well as Term Loan
be got done. requirements was launched in the year 2000 vide
It should be the endeavour of the branches to HO:Credit Division Cir.ADV.85/2000-01 dated
ensure that valuation of properties mortgaged to 11.10.2000.
the bank is carried out once in every three years The `Trade Well’ Scheme was periodically
and no valuation report is allowed to cross this reviewed in tune with the present day scenario with
stipulated time criterion. emphasis on Retail Sector and to enable growth in
Credit with profitability.
ADV.129/04-05 dt.08.01.05 (M2 S216)
On further Review of the ‘Trade Well’
Obtention of Engineer's Valuation Certificate by Scheme, the changes are made . For changes
branches branches may refer circular.
In order to avoid deficiencies/ fraud ADV.139/04-05 dt.03.02.05 (M2 S205)
branches should not send the borrower to our
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 Volume 17 Issue 4 Recollect January-March 2005

Kisan Credit Card Plus (KCC Plus) - Introduction of Periodical and frequent occurrence of
RECOLLECT

term loan component under KCC. droughts, floods, cyclones, tidal waves and other
natural calamities take a heavy toll of human life
Kisan Credit Card (KCC) scheme was
and cause wide spread damage to economic
introduced to ensure uninterrupted and hassle free
pursuits of human beings in one area or the other
flow of credit to the farmers and also to reduce the
of our country. The devastation caused by such
work load at the branches. The scheme has since
natural calamity calls for massive rehabilitation
been stabilized and branches have been time and
efforts by all agencies. The State and local
again advised to route all eligible crop loans only
authorities draw programmes for economic
through KCC.
rehabilitation of the affected people. The
During inception of the scheme it was developmental role assigned to the bank warrants
envisaged that in due course of time, investment our active support in revival of the economic
credit requirements of farmers viz., allied and non- activities.
farm activities may also be covered under the The precise details in regard to the provision
scheme. Based on market sentiments and taking of credit assistance by the branches will depend on
into consideration the suggestions that emanated the requirements of the situation, and the actual
from various quarters for improving the needs of the borrowers. This can be decided in
performance under KCC the following are consultation with the district authorities.
approved:
Nevertheless, to enable branches to take
Provision of miscellaneous expenditure uniform and concerted action expeditiously,
towards post harvest / marketing / household particularly to provide financial assistance to
expenses @10% of Maximum Permissible Limit agriculturists, small scale industrial units, artisans,
(MPL) subject to a ceiling of Rs. 25,000/- per small business and trading establishments affected
farmer. by natural calamities, detailed guidelines for easy
Provision for maintenance of farm assets @ reference and quick action are furnished in the
10% of MPL subject to a maximum of Rs. 25,000/- annexure to the circular.
per farmer.
ADV.145/2004-05 dt. 09.02.05 (M2 S201)
Maximum of Rs. 50,000/- where activities
do not generate any direct additional income like REVISION IN MINIMUM MARGIN ON
fencing, reclamation of problematic soils, steining 1) Advances as per IND SHARE (ESOP) Scheme
of wells etc. (However, to ensure serviceability of
both the loans, branches have to ensure that 2) Advances against shares / IPO Financing /
Guarantees (i.e other than ESOP)
Both, the term loan as well as crop loan do
not exceed 60% estimated income from both the In line with RBI directives, the minimum
investments. Model worked out in Annexure II). margin requirements are revised as under:
OR Advances as per our Bank's Structured Loan
Maximum of Rs.2.00 lakhs (Rs.2.25 lakhs Product, Ind Share Employee Stock Option
for ACI branches) where activities generate direct Scheme (ESOP) to employees of issuing
additional income like dairy, goatery, sheep rearing companies to subscribe to the shares of their
purchase of farm equipments like power sprayers, employer companies:
Seed drill etc. Existing Minimum Margin Revised Minimum Margin
While arriving at the economics, branch 40% 10%
should take into consideration the Income 2. Advances against Shares / IPO Financing
generated from 60% of the estimated yield from (i.e other than ESOP) / Guarantees
the crop cultivated, Life of the farm asset
purchased and income generated from the asset. Existing Revised
Branch to monitor proper end use of credit. Minimum margin for advances 40% 50%
against shares to individuals /
Detailed scheme guidelines are furnished in
IPO financing and guarantees
Annexure 1 to the circular. favouring Stock Exchanges / on
ADV.144/04-05 dt.09.02.05 (M2 S201) behalf of stock brokers
Master Circular - Guidelines For Relief Measures By Minimum cash margin in 20% 25%
respect of guarantees issued by [Within the [within the
Banks In Areas Affected By Natural Calamities

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 Volume 17 Issue 4 Recollect January-March 2005

banks favouring Stock minimum minimum a. Financial Risk

Exchanges / on behalf of stock margin margin b. Business / Industry Risk and
RECOLLECT

brokers (security) (security) c. Managerial Risk.

of 40%] of 50%] Based on the objective study of the account
ADV.146/04-05 dt.11.02.05 (M2 S205) as above, the direction of risk movement for the
next six months to one year is also assessed and
Special Mention Accounts (SMA) corrective measures are suggested for improving
SMA is an asset which has potential the quality of the asset.
weakness to deteriorate and slip if timely It is reiterated that
corrective action is not initiated. Introduction of Review reports under LRM (as per format
90 days deliquency norms necessitates close LRM 1) have to be submitted within the time
monitoring of each and every SMA for frame as stipulated by Circle Office / Head Office
maintaining the quality standards. In this regard, for the identified accounts.
we reiterate the necessity of toning up our SMA Latest financials have to be obtained and the
management mechanism is reiterated hereunder: performance studied under parameters (a), (b) and
(c) referred above.
Functioning of Committee at branch level Operations in the account are to be
should be in line with the system & procedure as monitored on a regular basis.
suggested in the Master circular. Committee Compliance of sanction terms and
should meet more frequently, atleast once in a rectification of deficiencies pointed out are to be
month. ensured.
Compliance report on the observations of
Data used for deliberations should be Loan Review Management Committee (LRMC) (at
accurate and complete. All individual SMA of the HO/CO) to be submitted within the stipulated time
Branch are to be deliberated. or within an outer limit of 30 days to the respective
Members of the Committee to take more sanctioning authority.
active part in identification of likely problem ADV.148/2004-05 dt. 12.02.05 (M2 S211)
accounts and remedial measures / specific action
plans to be initiated then and there. Enhancement in Composite Loan Limit from
Rs.50.00 lakhs to Rs.100.00 lakhs - Delegation of
Committee's directions have to be recorded powers regarding
and progress of compliance is reviewed in the next
meeting to ensure accounts move out of SMA as Composite Loan limit was introduced during
standard assets. Directions received from Circle 1983 to loans with limit upto Rs 25,000 and the
Offices in respect of SMA of the branch are to be same has been enhanced from time to time. In the
complied within the time frame. Mid-Term Review of Annual Policy statement for
the year 2004-05 dated 26/10/2004 the composite
SMA Reports, as per formats, have to be loan limit for SSI entrepreneurs has been enhanced
submitted in time. Discuss specific issues with from Rs 50 lakhs to Rs 1.00 crore to facilitate
Credit Risk Management Cell at Circle Office to smooth flow of credit to SSIs.
resolve such issues.
As the Composite loan limit is now
increased from Rs 50 lakhs to Rs 100 lakhs, the
ADV.147/2004-05 dt. 11.02.2005 (M2 S211)
discretionary powers of the Circle Heads has
been enhanced as under:
Loan Review Mechanism (LRM)
Particulars Circles Headed by
Loan Review Mechanism (LRM) is one of GM DGM AGM/CM
the guidelines of Reserve Bank of India on Credit Exist Pro Exist. Pro Exist Pro
Risk Management. It enables identification of early posed posed posed
warning signals for initiating timely corrective Composit
e loan to 50 100 50 100 50 75
measures to maintain / improve the quality of the SSI
account. Of which
Clean 10 20 10 20 7.5 10
Under LRM, an objective study of the exposure
account is made with risk perception. Risk
inherent in a borrowal account is broadly analysed
under
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 Volume 17 Issue 4 Recollect January-March 2005

Further, in order to facilitate easy operations Linking levy of annual service fee to the
RECOLLECT

and quicker sanctions under the Composite Loan credit facility sanctioned & covered under the
limit, following are stipulated. Scheme
The composite loan limit should be Refund of guarantee fee and annual service
sanctioned comprising of both the Working capital fee paid by MLIs
requirement and Term Loan requirement
In view of the foregoing branches / Circle
The Term Loan component should not Offices are advised to take advantage of the above
exceed 60% of the total loan limits sanctioned modifications and cover all the eligible SSI
collateral free loans under the captioned guarantee
The working capital component can be
to maximise the said cover in our Bank.
considered as a running account
Further, the credit guarantee cover offered
The terms and conditions stipulated during
under the Scheme will help in mitigating the credit
the last enhancement will apply.
risk in the borrowal account. As such, the Branch
Terms and Conditions Managers are advised to market the SSI loans to
The Branch to note that the delegation deserving and viable SSI units more particularly
imposes the responsibility on the concerned under the Tiny / Cottage Sector considering the
authority to have proper appraisal of the proposal employment generation these units would provide
and maintain quality of decision . in rural and semi urban centres.

The concurrent auditor / Branch Inspectors ADV.151/04-05 dt.14.02.05 (M2 S203)

to verify these sanctions during their
audit/inspection Reduction of Interest rate on Loan against NSC/
KVP/RBI Relief Bond/ Life Insurance Policy
The powers may be exercised by the credit
functionaries subject to extant guidelines in force As per the existing scheme, the ceiling for
with regard to margin, security, repayment period the quantum of loan has been fixed as Rs.10 lakhs.
etc., Further modifications have also been made in the
scheme as under
ADV.149/2004-05 dt.14.02-05 (M2 S203) Existing terms Modified terms
Quantum of loan
Modifications in the Credit Guarantee Fund Scheme As per norms, the Circle Heads can sanction upto their delegated
for Small Industries (CGS) maximum amount that secured loan powers (Rs. in lakhs)
can be sanctioned is
Cadre Non- Corpo-
CGTSI has brought about the following Rs.10 lakhs.
corpo-
rate
modifications in the Credit Guarantee Scheme For Limits falling
rate
beyond Rs.10 lakhs,
(CGS) based on the suggestions received from DGMs and Circle CH, GM 400 600
Member Lending Institutions (MLIs) with a view Heads can sanction
upto their delegated CH, DGM 200 300
to making the scheme more user friendly and secured loan powers
acceptable to MLIs : CH, AGM/ Circle 80 100
Head Thanjavur &
Extending additional term loan / working Cuddalore
credit facilities to the borrowers already covered Margin
under the scheme upto the maximum extent of Rs 25 % for limits above Minimum margin 15 % on the accrued value
25 lakhs Rs.10 lakhs /surrender value of the securities

Inclusion of Non-Fund based working Rate of interest

capital facilities under CGS within the overall limit BPLR For existing as well as fresh accounts irrespective of the
presentl limit.
of Rs 25 lakhs
y 11 % Term Loan
Inclusion of outstanding interest on term BPLR + TP minus 3.50 % = 8.00 % p.a. (Floating)
loan under CGS BPLR + TP minus 3.00 % = 8.50% (Fixed)
(0.50 % extra over the floating rate)
Levying of pro-rata guarantee fee for
Overdraft
enhancement in working capital in case of BPLR minus 2.50 % = 8.50 % p.a. (Floating)
borrower accounts already covered under the Fixed rate not applicable for OD facility
Scheme

7
 Volume 17 Issue 4 Recollect January-March 2005

ADV.152/04-05 dt.17.02.05 (M2 S204) the revised format which is printed in Security
Paper and numbered serially.
RECOLLECT

Tips on canvassing new Agri. Credit Business

HO: Stationery Department had already
How could it be done? supplied sufficient number of LC formats to all
Branches can contact all the processing circle offices. Branches should contact their circle
units, who source raw material from Agriculture, offices for their requirements and place indent.
make market enquiries for a satisfactory track
record and forge a tie up arrangement. In this Branches should treat the blank LC formats
connection, Branches have to contact the following as Security Stationery (as in the case of Cheque
institutions in their area: Books, TDR, DDs, etc). On receipt of blank LC
formats, branches should
Private dairy units for tie up loans, vehicle
loan for transportation of milk, loan for chilling i. count and verify for the number of formats
plants, milk vendors etc. ii. verify that each form bears the serial
Cotton Mills-contract farming arrangement number continuously
for cultivation of cotton. iii. after verifying, enter them in the "Register
Paper mills for tie-up loans-for cultivation for Numbered Items" in a separate folio under the
of pulp wood trees. authentication of the officer in charge and the
Branch Manager/Asst Branch Manager
Ware houses/cold storages for post harvest
loan to farmers against produce warehoused, iv. keep them in safe custody
besides loan for construction of cold storages For Import LCs established in favour of
/warehouses and maintaining them. overseas exporters through SWIFT / operative full
Commodity Exchanges-National/local for telex LC, duly authenticated by testing with check
tie-up arrangement. cypher and where no other mail confirmation is
sent, the printed LC formats should not be used.
Agri export zones are coming up at However, in terms of Article 11 (a) (ii) of UCPDC
different centres both under private as well as 500, if the telecommunication states, "full details
public sector. Branches can contact the promoters to follow" (or words of similar effect) or states that
for hi ticket loans. the mail confirmation is to be the operative credit
Loans for purchase of tractors can be given instrument (or the operative amendment), then the
a push through tractor manufacturing companies format printed in security paper only must be used.
with whom we have signed MOUs.
ADV.160/04-05 dt.08.03.05 (M2 S207)
Companies which are procuring medicinal
plant products, processing and exporting under Conducting periodical inspection of stocks/goods
contract farming etc., charged to the Bank

Departments of Agri, Horticulture, Inspection

Sericulture, National Horticulture Board, Waste The system of inspection of godowns/shops/units
land Development Board, various other is an important tool for follow up of advances and
commodity Boards like Tea, Spices, Coffee, it ensures continuos check on the operations of a
Rubber, etc are sources for collecting reliable unit. In view of the increasing incidence of
market information, which can be pursued slippage of assets, it is essential that this follow up
vigourously. measure is meticulously adhered to by branches
with a view to locating any adverse symptoms at
ADV.153/04-05 dt.19.02.05 (M2 S201) the initial stage itself. Detailed guidelines on stock
inspection have been given in the Master Circular
Issue and Signing of Inland Documentary Letters of ADV.92/2004-05 dated 11.10.2004 (M2 S205)
Credit
issued by HO: Credit Division
The format in which LCs can be issued has
Office Order
been reviewed and revised. The revised format is
furnished in the Annexure. Branches are advised An office order to officers should be issued by the
to issue Inland LCs, with immediate effect, only in Branch Manager/Asst. Branch Manager on or
before the 5th of every month for inspecting the

8
 Volume 17 Issue 4 Recollect January-March 2005

godowns/shops/units/factories financed by the available in the panel, the subsequent valuation

branch. The OCC/KL/KCC godowns are to be shall be by a Valuer other than the previous
inspected by the AGM/CM/SM/ Manager/AM Valuer).
RECOLLECT

alternatively and it is to be noted that all the units Regarding the securities of superstructure
are inspected once in a month. where the mortgage is created to the Bank above a
A suggested format of letter to be addressed bench mark amount, it is essential that a certificate
to the unit soon after inspection is given in the from the approved architect/engineer be obtained
annexure to the circular. regarding the completion as well as that all the
rules and regulations of the local and other
ADV.161/04-05 dt.08.03.05 (M2 S205) statutory authorities are complied with. The
Relaxations of guidelines regarding financing of Certificate should specify the assessed quality and
second hand (Pre-used) tractors and power-tillers. life of the superstructure.

Our Bank has introduced a scheme for ADV.171/04-05 dt.16.03.05 (M2 S204)
purchase of second hand (pre-used) tractors for
agriculturists. Salient features of the scheme have Broad Guidelines In Pursuing Criminal Proceedings
been circulated to branches vide our circular
ADV.144/2003-04 dated 04.03.2004. To make There may be various instances of fraud
practised against the Bank which manifest as
these products also more attractive the guidelines
offences of criminal breach of trust, forgery,
are relaxed.
falsification of accounts, cheating etc. The Bank in
As per revised guidelines, the eligibiilty such cases is put to the necessity of approaching
criteria for a Pre-used tractors is 4 acres of the Police Personnel. Sometimes the branches tend
irrigated land (or) 8 acres of dry land. For further to face confused situations as regard the procedure
details, branches may refer to the circular. to be adopted. To put the branches on notice of the
procedure for pursuing a case of fraud in the
ADV.167/04-05 dt.11.03.05 (M2 S201) general sense, an outline of the same is detailed
hereunder:
‘Ind Vahana’ – Scheme For Financing Small Road
Transport Operators For Purchase Of New Buses ADV.172/04-05 dt.16.03.05 (M2 S208)
And Other Passenger Carriers Under Tie-Up
Arrangement Compliance Audit in respect of Home Loan
Accounts and Other Retail Loans.
The scheme
On an overall review of the position on
n order to facilitate the SRTOs to meet their credit scrutiny and audit of the accounts, the following
requirements for purchase of new buses and other are the major areas that need to be monitored for
public passenger carriers a new scheme – IND total compliance.
VAHANA is introduced. Salient features of the
Scheme are outlined in the circular HOME LOANS:

ADV.170/04-05 dt.16.03.05 (M2 S202) Obtention of upto date EC.

Obtention of Legal opinion with full details and
Obtention of Engineer's Valuation Certificate by without any restrictive clause.
branches
Maintenance of pre-sanction and post –sanction
"Valuation of the Home Loan property inspection records.
should be arranged by the branch and obtained Consent letter for disclosure.
directly from the valuer. Cost of valuation is to be
Pre-sanction verification of the credentials
borne by the borrower. Engineer's valuation
submitted by the borrower.
charges can be part of a Home Loan. As per the
Loan Policy of the Bank, Engineer's Valuation Sanction ticket to be duly signified for acceptance
should be obtained once in 3 years for all by the borrower and guarantor.
immovable properties (including Home Loan Builder’s certificate to be obtained as to
property) charged to the Bank as security. For compliance of statutory obligations and without
subsequent valuations also, Engineer should visit violations / deviations in the approval.
the property. (As per the existing guidelines Appraisal to be qualitative and adequate.
Wherever more than one approved Valuer is

9
 Volume 17 Issue 4 Recollect January-March 2005

To obtain a copy of the approved construction plan ADV.176/04-05 dt.19.03.05 (M2 S204)
and to be made available in the records.
RECOLLECT

Proof of income to be made available in the files / PERSONNEL

records.
Noting of correct address of property in the Inward Mail – Maintenance of Letters Received
insurance policy. Register
EM to be created as per Legal opinion. All communications received by the branch,
both by the conventional mode or through
End-use of loan amount to be ensured by payment electronic mode, should be branded immediately
directly to the builder / contractor. with the branch date-stamp, entered into the Letters
Other Retail Loans Received Register and authenticated by the
Restructuring to be done as per guidelines. Officer-in-charge of Mails Department. or by the
Action under Sec.138 against borrower’s cheque Assistant Branch Manager/Branch Manager.
returned to be initiated / taken immediately. Private and confidential letters, demi-official
letters and letters from Head Office/Circle Office
ADV.175/04-05 dt.19.03.05 (M2 A204) should be opened in the presence of the Branch
Review/Renewal of advances under Structured Loan Manager.
Products. PRNL.122/04-05 dt.03.01.05 (M3 S309)
The position hereunder regarding the Unauthorized payment of special pay at
guidelines to be followed regarding review / branches/offices.
renewal of accounts is summarised hereunder: Special pay carrying posts at Branches /
Nature of Loan / Offices, including allocation of computer nodes
Guidelines
Sanctioning Authority among award staff members attracting payment of
Home Loan – sanctioned by Circle Head to review on computer operator allowance, can be created only
Circle Head the first two occasions; with the prior permission of competent authority.
thereafter , focus branch
manager to review within While permitting the clerical node based
their delegated powers and on the node assessment made by HO: CPPD,
report position of all the following guidelines must be strictly
accounts to Circle Head adhered to.
once in 6 months
The number of posts which attract payment
Home Loan accounts falling Circle Heads to continue to of computer allowance should not under any
beyond the powers of review accounts
circumstances exceed the number of CLERICAL
Focus Branch Managers
COMPUTER NODES allotted by HO / CPPD.
Other Structured Loans: Branch Manager to review,
Accounts sanctioned under note in the loan ledger / file. While arriving at the number of posts
MDL powers and eligible for payment of special pay, the nodes
conforming to norms which are identified by HO / CPPD as reserve /
Accounts beyond MDL Further review to be done standby node or customer enquiry node have to be
powers and approved by by Branch Managers. excluded.
Circle Head, but revised
drawing limit to be reviewed The special pay is payable to the clerical
/ outstanding dues during staff only for the period so long as they are
review / renewal falling required to perform the special pay carrying post.
under MDL powers
Group accounts sanctioned Branches shall accord While entrusting the duties attracting
by Circle Head, but review and send a report of computer operator allowance, their designation
individual account falling such reviews to Circle Head should not be modified / altered.
under BM powers for scrutiny and records
Accounts sanctioned by To be reviewed by Circle The special pay post (computer operator)
Circle Head and drawing Head only and branches should be strictly on rotation basis and the period
limit to be reviewed falling should submit review of rotation will be for 6 (six) months, vide our HO
beyond the powers of MDL proposals for all such / Personnel Department circular PRNL.83/94-95
schemes well before dated 25.08.1994.
31.03.2005 to Circle Office

10
 Volume 17 Issue 4 Recollect January-March 2005

Special pay is not payable to those who are in Chennai, Mumbai, Bangalore and Hyderabad for
using computers for correspondence and other payment to the biller in the respective centre.
RECOLLECT

work unrelated to computing and data entry.

Indiaideas.com Ltd (Bill Desk) are the
Any deviation / violation of the aforesaid Facility Providers and they have arrangements with
guidelines would be viewed seriously and attract the respective billers in each centre. The details of
appropriate action against the erring official. the scheme, the role and responsibilities of
branches / Service branches are furnished in the
PRNL.124/04-05 dt.06.01.05 (M3 S304) Annexure. A list of billers with whom Bill Desk
have entered into agreements is also furnished in
the Annexure.
Revised limits of reimbursement of lodging
expenses to Officers who stay in non-ITDC hotels. To start with, in our Bank, this service is
extended in four centres viz., Chennai, Mumbai,
Our Board has approved revision of the Bangalore and Hyderabad. All Branches covered
limits of reimbursement of lodging expenses to under the Service Branch in these centres can offer
officers who stay in non-ITDC hotels with effect this facility. The coverage of the service will be
from 07.02.2005, as follows: extended to other cities where such services are
provided by Bill Desk in a phased manner.
Maximum Room Tariff
permissible
(exclusive of admissible taxes) CRA.49/04-05 dt.04.01.05 (M4 S404)
Grades of Eligibility
(in Rupees)
Officers to stay
Major A Collection Of Contribution To Prime Minister's
Other National Relief Fund By Bank Branches -
class Area I
places
cities Clarifications Issued By IBA
Top
Executive Reserve Bank of India, in consultation with
4* Hotel 4000 2000 1750
Grade Scale Prime Minister's Office and Indian Banks'
VI and VII Association (IBA), has decided that all the
Senior
Management
branches of commercial banks will receive
3* Hotel 2500 1500 1300 donations and nominate a Nodal Branch in New
Grade
Scales IV & V Delhi for the purpose of collection of contribution
Middle to Prime Minister's National Relief Fund. Prime
Management 2* Hotel
Grade (Non-AC)
1500 1000 800 Minister's Office has designated the following 12
Scales II & III bank branches as designated branches:
unior
Management 1* Hotel Each collection branch would send the
1000 750 500 collection to the respective nodal branch of its
Grade (Non-AC)
Scale I bank in New Delhi each day along with the details
of the Donor Cheque / Draft No. address and
All other extant conditions will remain amount of contribution. For our Bank, our New
unchanged. Delhi Main Branch is the Nodal Branch.
PRNL.151/04-05 dt.23.03.05 (M3 S305) Our bank has always been in the forefront in
helping such causes in true National spirit. We
CRA have donated Rs.2.00 Crores to the Prime
Indbank Billpay Service Minister's National Relief Fund and the employees
also have donated a day's salary amounting to
Our Bank has introduced ‘INDBANK BILL around Rs.1 Crore for the same to help the
PAY’ Service for our Customers. It is an Tsunami victims. As a leading Public Sector Bank,
Electronic Bill Presentment & Payment (EBPP) we have to play a pro-active role in educating the
Service offered to our customers enabling them to people on the need to contribute their mite to such
pay their utility services bills like telephone bills, causes. Our CMD has exhorted all our Branches to
electricity bills, Mobile Phone Bills, Credit Card create public awareness on PMNRF and
Bills, Insurance Premium, Payments for
undertaking the responsibility for making
Depository Services (For Demat Accounts), Gas
collections under PMNRF as a matter of social
Bills, Charities etc to the debit of their specified
obligation. We are certain that our Branches will
Bank accounts maintained at any of our Branches

11
 Volume 17 Issue 4 Recollect January-March 2005

rise to the occasion by mobilising substantial clearing transactions has been reviewed and a
collections to the PMNRF and support the revised procedure is put in place with immediate
RECOLLECT

Government in providing succour to the Tsunami effect.

affected people
The revised procedure is furnished in detail
in the annexure to the circular. Except the changes
CRA.50/04-05 dt.12.01.05 (M4 S104)
outlined in the annexure, all other instructions and
At par collection of contribution to Tamilnadu Chief procedures as detailed in Chapter 1.3 of the
Minister's Public Relief Fund through all the Ancillary Services Manual remain unchanged.
branches of our Bank
CRA.65/04-05 dt.29.3.05 (M4 S401)
Govt. of Tamil Nadu has decided to engage our
Bank for collection and remittance of contribution
FX
towards CHIEF MINISTERS' PUBLIC RELIEF
FUND. We have authorised ALL Branches of our Operations in Non-Resident External (NRE) / Foreign
Bank to receive contributions in the quadruplicate Currency Non-Resident (Bank) (FCNR(B)) Accounts
challan as in the case of PM's National Relief fund by the Resident Power of Attorney Holder
and send the collection on the same day to the In terms of para 9 (c) of Schedule to
nodal branch in Chennai viz. our Madras George Notification No. FEMA 5/2000-RB dated 3rd May,
Town (MGT) Branch by Mail Transfer along with 2000, banks authorised to deal in foreign exchange
the 2 parts of the Challan viz. Nodal Branch copy are permitted to allow operations on the NRE
and Chief Minister's Office copy duly filled in with account in terms of Power of Attorney granted in
the details of the remittance viz.. Name of the favour of a resident by the non-resident account
Donor, Cheques/Demand draft No., Address and holder, provided such operations are restricted to
Amount of collection. Government of Tamilnadu withdrawals for local payments.
has nominated our Bank among 12 select Banks
The position has since been reviewed by
for collecting the contributions.
RBI with reference to the observations/
All Branches of our Bank are instructed to receive recommendations made in this regard by the
AT PAR the contributions to the CHIEF Committee on Procedures and Performance Audit
MINISTERS' PUBLIC RELIEF FUND and send on Public Services (CPPAPS) (Chairman: Shri S.S.
the proceeds by Mail Transfer on the very same Tarapore) and it has been decided that in addition
day to our Madras George Town (M.G.T) Branch to the facility mentioned in the above paragraph,
in Chennai (North) Circle which is the nodal banks authorised to deal in foreign exchange may
branch. The collection Account will be maintained also permit a resident power of attorney holder to
at our MGT Branch and the proceeds will be remit, through normal banking channels, funds out
transferred to the Savings Bank account No. 70 of of the balances in NRE account to the non-resident
Chief Ministers' Public Relief Fund with the Indian account holder provided specific powers for the
Overseas Bank, Secretariat Branch, Chennai - purpose have been given. The remittances under
600009 everyday. power of attorney are permitted only to the non-
resident account holder.
CRA.51/04-05 dt.19.01.05 (M4 S404)
Terms and conditions as applicable to NRE
accounts in respect of operations by power of
Accounting of Clearing Transactions - Revised
attorney apply, mutatis mutandis, to FCNR (B)
Procedure
accounts. Therefore branches may allow a resident
Existing System power of attorney holder to remit, through normal
banking channels, funds out of the balances in
With the enormous increase in the volume of
FCNR (B) account to the non-resident account
instruments handled through clearing, routing of holder, provided specific powers for the purpose
electronic payments like EFT, ECS, National have been given to the power of attorney holder.
Clearing, Expressway Clearing, etc., and
settlement of claims in respect of ATM Branches are advised to be guided as above.
transactions through clearing system, the need to FX.46/04-05 dt.24.03.05 (M5 S503)
have effective control and monitoring of
transactions in clearing is imperative. With this
objective, the existing system of accounting
12
 Volume 17 Issue 4 Recollect January-March 2005

GENERAL GENL.56/04-05 dt.08.01.05 (M6 S602)

Accounting Policy under RTGS

Detection and Impounding of Forged Notes
RECOLLECT

Our Bank has gone live on RTGS with

Reserve Bank of India has reviewed the
effect from 24.6.2004. At present inter-bank
existing procedures relating to the reporting of
transactions at Mumbai centre are handled through
forged notes and it has since been decided that
RTGS. Our Bank is slated to begin customer
FIRs may be filed in respect of all cases of forged
based transactions and to facilitate handling of
notes detected in cash tenders, irrespective of the
customer based transactions, Accounting
number of counterfeit notes or the bonafides of the
procedure for handling customer based
tenderer with immediate effect. The instructions
transactions has been formulated. The accounting
contained in para No. 4 of the Master Circular
procedure and other related material for handling
No.37/04-05 dt.19.11.2004 stand revised to that
RTGS transactions is given in the annexure. To
extent.
begin with, 45 branches have been identified for
handling RTGS based transactions and this may be GENL.59/04-05 dt.28.01.05 (M6 S601)
extended to more branches gradually based on
their business requirements. Non compliance of systems / directions /
RTGS will have major impact on procedural procedures.
and operational aspects of our Bank’s remittance/ The systems and procedures prescribed and
payment system, but also provides scope for new directions issued by Head Office must be followed
products and services and helps improve by the branches / Circle Offices in toto and there
operational efficiency. Branches should be shall not be any deviation or dilution, whatsoever.
conversant with the system to make the best use of
Circle Heads during their visit to the
it for improved customer service and enhanced
branches should look into the aspect of adherence
profitability.
to systems and procedures and initiate corrective
GENL.52/040-05 dt.04.01.05 (M6 S601) action, wherever deviations are noticed in
Branches / Circle Offices.
Long Form Audit Report of our bank as on
31.03.2004. Observations/ suggestions made by The concern and seriousness attached by the
Central Statutory Auditors Top Management to the above aspect should be
understood by every staff member in the right
The LFAR of the bank submitted by the
perspective and acted upon.
statutory auditors reveals many avoidable lapses
and offers valuable suggestions/ guidelines for All Branches and Controlling offices may
corrective/ preventive action for effective please note that non-compliance of any of the
functioning and overall improvement in the systems / procedures / directions laid down / issued
performance of the bank. by Head Office will be viewed very seriously and
in case of large scale non-compliance, necessary
Many of the observations made by the
action will be initiated against the staff concerned,
statutory auditors indicate that the irregularities/
including senior level officers.
deficiencies are persisting despite being pointed
out in the earlier reports. We invite your attention GENL.61/04-05 dt.29.01.05 (M6 S608)
to Credit Division Circular No.Adv:106/04-05
dated 12.11.04 giving in detail the observations/ Supervisory Control - Need for Better Compliance
suggestions made by the statutory auditors relating
The concept of dual custody, second
to loans and advances. Observations/ suggestions
signature and second level checking have been
made by the auditors relating to other functional
prescribed in the systems to emphasise the “four
areas are furnished in the annexure for immediate
eyes” principle of management.
compliance.It is imperative for the bank to ensure
that the system and procedures devised are Strict adherence to system and procedure
meticulously followed. Hence we exhort all field coupled with effective supervision will ensure
level functionaries to take note of the observations There is no substitute to good prudence as it would
and ensure that corrective / preventive actions are instill a sense of fear even among a dishonest
initiated and sustained not only to avoid their customer / gullible staff members and will desist
recurrence but also for bringing in overall them from attempting a fraud.
improvement in the functioning of the branches.
13
 Volume 17 Issue 4 Recollect January-March 2005

Every employee/officer, before putting that any complaint received in this regard will be
through a transaction, should apply their mind viewed very seriously by RBI. The Circle Offices
RECOLLECT

seriously and inculcate the habit of reasoning out should follow up with the branches for compliance
the implications of each transaction rather than in this regard and report to Head Office for review.
executing them in a routine manner GENL.63/04-05 dt.02.02.05 (M6 S601)
A vigilant follow up as well as effective Outstandings under ATM Receivable at ATM
review and monitoring mechanisms of all accounts Branches and at ATM Centre, Mumbai
including the borrowal accounts will help in a
great way in avoiding the occurrences of frauds. We receive complaints from ATM Centre,
Mumbai and many ATM branches that the
There should be a system of close and branches are not debiting the customers' accounts
constant monitoring. and reimbursing the claims immediately.
Since lack of supervisory control is seen as In the case of branches not networked to
one of the main causes that facilitates dishonest CPPD switch, as soon as the claim is received
elements to attempt a fraud, we once again through service branch or nodal branch or directly
reiterate that Branch Managers and Staff Members from ATM Centre/ATM Branch, branches should
at all levels should exercise constant vigil and keep debit the customers account immediately on the
their eyes and ears open to all the happenings in same day and send credit advices. Even when
the branch and ensure strict compliance to systems, there is no balance in the account, the account shall
procedures and internal control, which will ensure be debited by passing TOD and immediately
prevention of frauds recover the amount by meeting the depositor/s.
Branches should never round off any amount in the
If the supervisory level and conformity to
claim and modify the claim amount.
laid-down procedures are ensured as per laid down
guidelines, the Bank can not only prevent the Branches are advised to adhere to the above
frauds but also put to better use, the precious man- and it should be the endeavour of all branches to
hours in a productive and profitable manner. report nil statements under AUF 3

GENL.62/04-05 dt.01.02.05 (M6 S608) GENL.64/04-05 dt.05.02.05 (M6 S605)

Master Circular on Distribution of Coins _ RBI Business Plan cum MoU 2005-06
Directions Everything augurs well for a splendid
All branches must accept coins of all performance of the Bank during 2005-06. With
denominations tendered at their counters either for Growing Brand Image, Continued goodwill
exchange or for deposit in account. Notice amongst Customers, Good track record of
informing the public about the availability of performance in the last five years, Improving net
exchange facility and acceptance of coins to be worth, Required capital adequacy, Computerised
displayed suitably inside as also outside the branch business environment, Introduction of CBS,
premises for information of the public. Availability of over 8500 ATMs under sharing etc.
should help all branches / Circles to utilise the
The purpose of remitting coins by RBI to potential for excellence in performance.
Currency Chests / bank branches is for meeting the
genuine requirements of coins of general public GENL.65/04-05 dt.05.02.05 (M6 S601)
without any restrictions.
With a view to enforce strict compliance of
RBI has observed that some bank branches
TDS provisions, the Government has brought in
are issuing coins at their convenience only and also
stringent provision requiring the Banks to add back
in bulk quantities in Mint Sealed Bags (as received
the expenditure, (such as Rent paid to Landlords /
from RBI) and the requests for issue of coins in
Interest paid on Deposits / Contractor Payments /
lesser quantities from the public do not get a
Professional Or Technical Fees payments, etc.) on
favourable response. Such practice by branches is
which either TDS has not been deducted or the
not in order and gives room for complaints.
TDS has not been remitted to the Government
The branches are advised to strictly adhere Account, to the taxable income of the Bank. This
to the instructions in distribution and acceptance of will result in paying higher income tax by the
coins as per demand from the public without Bank, which has adverse bearing on the taxable
imposing any sort of restrictions. It may be noted profits of the Bank. Such addition of expenditure

14
 Volume 17 Issue 4 Recollect January-March 2005

to the income of the Bank will be allowed as an remittance of tax to the Government Account
expenditure, only in the year in which TDS is within the due date, as per the Head office
RECOLLECT

remitted to the Government Account. guidelines issued from time to time.

Therefore, Branches/offices are advised to GENL.67/04-05 dt.04.03.05 (M6 S604)
strictly ensure prompt deduction of tax and

15
 Volume 18 Issue 1
a
For Private Circulation Only

April - June 2005 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
Surrender of unused Cheque Leaves/ Cheque Book
DEPOSITS
for transfer / closing of an a/c.
Grievance Redressal Mechanism
Before closing an account, it should be
The branches must already be observing ensured that all the cheques already issued to the
Customers’ day on 15th of every month. If 15th account have been either used or surrendered by
happens to be a Saturday or a Public Holiday, the the account holder. The unused cheques
customers’ day has to be observed on the surrendered by the customer should not be used for
succeeding working day. In the normal issue as loose leaf cheques. The officer-in-charge
circumstances, complaints should be settled within should destroy them in the presence of another
three days. If the complaint can not be redressed at officer of the branch and an entry thereof should be
the branch level, the same may be taken up with made in the remarks column of the “Accounts
the Circle /Head Office. Opened and Closed Register”.
All branches should have notice boards The account holder has to surrender the
indicating that the customer can approach the unused cheque leaves and pass book along with the
following for redressal of complaints/ grievances: request for transferring an account. If cheques are
a. The Banking Ombudsman located in State yet to be presented, the transferring of account
Capitals under RBI Ombudsmen Scheme should be deferred for a reasonable time.
2002
DEP.03/05-06 dt.02.06.05
b. The District Consumer Forum established
under Consumer Protection Act, 1986. ADVANCES
c. Directorate of Public Grievances, Govt. of
Grihalakshmi (Housing loan to SHG members),
India, Cabinet Secretariat, Sansad Marg, New
Relaxation of lending norms to SHGs and Revised
Delhi 110 001. delegation of powers
Dep.01/05-06 dt.01.04.05 Lending norms for SHG have been
revised as under.
Monitoring of Operations in Staff Accounts i. Branches are permitted to lend upto a
While opening SB, CA & TD a/cs in the maximum of 10 times the savings immediately,on
names of staff members, either individually or SHG satisfying the credit linkage norms.
jointly with others, a declaration should be
ii. Vidhya Sobha Educational Loan scheme
obtained from the staff concerned stating that the
will continue to be in operation and SHGs are free
monies deposited in the account are owned by
to avail 10 times the savings as credit under this
him/her. The operations put through the staff
scheme .
accounts should be subjected to regular scrutiny by
the Branch Manager/Asst. Branch Manager and it iii. Considering its fexibility and utility, the
should be verified that the turnover and operations SHG scheme is christened as Micro Flex ,which
in the account are not disproportionate to the salary can now meet multivarious credit requirements.
and declared/known sources of income of the staff A new rural housing loan scheme SHG -
concerned. Griha Lakshmi' exclusively for SHG members
has been launched to finance SHG members
DEP.02/05-06 dt.17.05.05
Last numbers of circulars issued as on 30.06.05 Though due care has been taken in the preparation of
Recollect, the version given in the circular is final.
DEP ADV PRNL CRA FX GENL MD/ED Compiled by HO: O&M Division
04 47 44 10 07 14 03 Printed & circulated by HO: Circular Issue Cell
 Recollect
individually for housing in rural/ semiurban/ urban/ The circular provides formats for i) Due
metropolitan areas upto a maximum loan limit of date register for periodical valuation of immovable
Rs.100000/-without linking with savings of the properties ii) important guidelines on valuation of
group. The details of the scheme and the revised immovable properties iii) Engineer's valuation
powers for Branch Managers for lending to SHGs report Summary - land valuation iv) building
are also given in the circular. valuation and v) Report on immovable properties
remaining without periodical valuation for 36
ADV.02/05-06 dt.05.04.05 months or over from the date of original / previous
valuation (AUH 2).
Expansion of District Rural Industries Project (DRIP)
- Phase-VII ADV.06/05-06 dt.08.04.05
The DRIP project has proved to be an
Advance against Pledge of Goods - Need for Regular
effective tool for credit intensification and
Inspection
employment generation through coordinated
efforts of all the agencies committed to rural It is imperative that monthly inspection by
development. DRIP is a participatory project and branch officials should be taken up independently
NABARD acts as a facilitator to coordinate the with all precautions/safeguards. However, it is
efforts of all players in the task of rural noted with concern that, branches are not strictly
industrialisation in the identified DRIP districts. following the systems and procedures regarding
The details of DRIP are annexed to the circular. KCC inspection.
Branches are advised to involve Detailed guidelines on stock inspection
themselves more actively to ensure further credit were given in circular No. ADV.92/04-05 dated
intensification, helping faster industrialisation and 11.10.04. However, for the guidance of branches,
employment generation in rural areas. some of the key areas regarding verification/
valuation of inventory are reiterated in the circular.
ADV.03/05-06 dt.06.04.05
ADV.07/05-06 dt.11.04.05
Reporting of advances under SSI Sector
SSI/SME Accounts which cover advances Recovery Policy - Modifications
to the SSSBEs, Tiny sector, advances to artisans The Policy on Negotiated Settlement for
and rural industries & KVIC should be classified recovery of NPAs was reviewed and the details of
properly under SSI sector and not included under modifications in the following areas are furnished
others. in the Annexure to the circular.

ADV.04/05-06 dt.08.04.05 i. Crystalisation of total dues for the purpose of

arriving the sacrifice for exercising the
Periodical Valuation of Properties mortgaged to the delegated powers,
Bank ii. Change in applicable interest rate linked to
Periodical valuation of immovable assets BPLR for negotiated settlement,
charged/mortgaged to the Bank is one of the iii. Obtention of details of sources of funds for
important measures of ‘Risk Mitigation’ which compromise settlements,
would enable the Bank to decide upon appropriate
iv. Engagement of outside agencies for recovery of
course of action in case of need. While valuations
NPAs and payment of commission,
of immovable properties are being carried out
periodically in respect of NPA accounts, this v. Higher powers to Executives for considering
exercise is not taken up in respect of performing OTS during their visits to Circles and
assets. vi. Extension of OTS scheme for Small and
Hence, all immovable properties Marginal Farmers till 31.03.2006 with the
mortgaged to the bank should be subjected to existing terms and conditions.
periodical revaluation by the approved/panel Branches / Circle Offices are advised to
engineers of the bank once in three years. The incorporate the modifications / inclusions in the
engineer who does the valuation should submit the booklet on “Recovery Policy of the Bank” and
EVR Summary, in addition to his detailed ensure compliance.
valuation report.
ADV.08/05-06 dt.12.04.05
2
 April-June 2005
Staff Incentive Scheme For Recovery Performance In all the above three categories, Staff
In Written Off Accounts along with his/her family of not exceeding four
members including the staff (Spouse and two
Taking into consideration the extra efforts
children in case of married or Father & mother in
that have to be put in by branches for effecting
case unmarried) can be considered. Only travel
recovery in written off accounts, a scheme known
expenditure and reasonable accommodation
as “Staff incentive scheme for recovery
charges will be considered. For this purpose a total
performance in written off accounts” has been
of 7 days duty relief including the intervening
introduced. Branch Managers and Circle Heads are
holidays will be considered, which includes the
excluded from the purview of the policy.
travel time as well. The special incentive is in
The objectives of the scheme are: addition to the incentive awarded individually. (i.e.
i. To involve all the staff members and 5% Incentive considered on actual amount of
develop a spirit of competitive efforts to maximise collection)
the recovery in written off accounts.
ADV.09/05-06 dt.15.04.05
ii. To maximise the performance under
recovery in written off accounts so as to improve Financing Opportunities in Logistics Industry
the profitability of the bank. In India, traditional transport companies,
iii. To create awareness of recovery ethics among courier companies and freight forwarders have
the borrowers. emerged as integrated logistics service providers
by leveraging on their existing infrastructure and
The details of the scheme are as below: experience. They not only provide prime functions
¾ Amount of incentive to the Staff: An incentive like transportation, warehousing, packaging,
of 5 % on actual amount recovered will be clearing and forwarding but also handle other
sanctioned to the staff member who is activities like order processing, sales tax and excise
instrumental in effecting the recovery. duty documentation, invoicing, collection of bills,
inventory management and others.
¾ Amount of incentive to the Branch: An
incentive of 3 % on actual amount recovered With the strategies adopted by traditional
for reaching the annual target can be awarded. industrial firms to reduce operational costs and
enhance value addition throughout the value chain,
At the Bank level, Special incentive will be importance of integrated logistics has got a new
considered for staff members effecting the highest dimension. Outsourcing of logistics service
recovery in written off accounts. For this purpose through specialised service providers having
all the circles will be grouped under two categories considerable expertise in the industry has become
(viz. Rural & others) the trend.
From each of the group three persons in the Branches should identify and list reputed
order of recovery will be considered for awarding companies, Franchisees/ Business Partners of
the Special incentive by Head Office, Recovery reputed Companies, vendors and suppliers to the
Department as below: reputed companies in their command area and
i. The staff who is ranking first will be market our products and services. The needs of
considered for a trip to Sri Lanka. (To qualify each institution/individual are to be studied,
for the same a minimum of Rs.1.00 lakh analysed and then they should be approached after
should be recovered). coming out with tailor made schemes to suit such
needs.
ii. The staff ranking second will be considered
for a visit to any place in India. (To qualify ADV.10/05-06 dt.15.04.05
for the same a minimum of Rs.0.75 lakh
should be recovered). Best Practices For Quicker Delivery Of Quality
Credit in Retail Lending
iii. The staff ranking third will be considered for
a visit to a place of interest in the nearby In order to reach 50% of the non-food
states of the circle to which the staff belongs. credit under SLP by the time we celebrate our
(To qualify for the same a minimum of centenary year, we have to adopt the following
Rs.0.50 lakh should be recovered). procedures and strategies to improve our retail
lending both in quantity and quality terms.

3
 Recollect
i. Aggressive Publicity actual worth. Hence, the A&L Statements are to be
necessarily obtained along with the applications for
ii. Aggressive marketing by going out and
credit facilities.
sourcing business instead of waiting for walk-
in business (which should be bare minimum) The important guidelines governing
obtention of Assets and Liabilities statements from
iii. To have regular marketing calls
borrowers/guarantors and compilation of credit
iv. Leverage technology to the maximum reports are annexed to the circular for the guidance
v. Tie-ups with Corporates by offering banking of branches.
products and services to their employees
ADV.20/05-06 dt.10.05.05
vi. Arrangement with reputed Builders
Educational Loan Scheme
vii. Out-sourcing non-core activities
Government of India, Ministry of Finance,
viii. Gearing up of the front line staff to improve Indian Banks’ Association and Reserve Bank of
the customer service India are giving thrust for popularising the IBA
ix. An efficient delivery which is most important Educational Scheme throughout the country and
for the borrower in choosing the are closely monitoring the performance of Banks.
bank/financial institution. We have also made the following
Branches should do marketing in tandem with improvements in the scheme guidelines, in order to
the market trend and improve the asset portfolio make our product more competitive in the market.
without sacrificing the quality.
i. Rate of interest reduced from 12.50% to
ADV.12/05-06 dt.23.04.05 11.50%. Finer rate of interest has been
sanctioned to the students who are studying in
Policy Guidelines for Financing NBFC/HP Financiers premier institutes / Deemed Universities.
Our Bank adopts instructions / guidelines
regarding the assessment of working capital credits ii. Interest rate rebate of 50 bps is provided for
for equipment leasing and hire purchase finance students/parents who service the interest during
companies, read with the modification for HPCC the moratorium period and a 25 bps interest
based on the loan appraisal guidelines given in our rebate allowed to our home loan customers.
Credit Risk Policy 2005-06.
iii. Such students are also permitted to avail the
RBI has advised banks to have their own loan in a branch near to the college irrespective
transparent policy and guidelines for credit of their place of domicile
dispensation to NBFCs with the approval of the
Board. iv. In meritorious cases, loan amount shall be
Rs.15 lacs for studies in India and Rs.25 lakhs
The guidelines on NBFC financing are
for studies abroad.
reiterated in the annexure to the circular which
branches may refer for a detailed study.
v. Multiple loans are also sanctioned to enable
ADV.14/05-06 dt.27.04.05
students to pursue Post Graduate/ Specialisation
courses.
Obtention of Assets & Liabilities Statement and
Compilation of Credit Reports vi. Discretionary powers of the Branch Managers
are enhanced to expedite educational loan
One of the vital sources of compilation of sanctions.
credit reports is the A & L Statement submitted to
the Bank. It contains complete details regarding vii. Circle Heads are empowered to consider
assets and liabilities of the borrowers and requests for relaxation of norms on merits.
guarantors. It is essential that Credit Report
compiled must be accurate by collecting Branches should extend courteous service
documentary evidences regarding all movable and and timely credit delivery to the eligible students
immovable assets of the firm/person on whom and avoid complaints in this regard.
opinion report is being compiled. Similarly, all
liabilities must also be recorded to arrive at the ADV.22/05-06 dt.13.05.05

4
 April-June 2005
SARFAESI Act 2002 – Initiation of proceedings Rs.25000/- applicable rate of interest will be
under the Act during the pendency of suits BPLR-2.50% (8.50% at present).
/Recovery applications before Courts/DRTs.
Other details of the scheme are given in
Recently in a case, the Chairperson of the circular. Formats of letter to be taken from
Mumbai DRAT delivered a judgement holding that private financier (F 174) and application are also
SARFAESI Act can be invoked even in cases annexed to the circular.
where Recovery Application is pending. The ADV.27/05-06 dt.18.05.05
DRAT observed that SARFAESI Act and
Recovery Act are complimentary to each other but Scheme for financing Milk Vendors - Kamadhenu
operate in different spheres and that SARFAESI Milk Vendors Scheme
Act is in addition to Recovery Act. HO Rural Banking Dept has formulated a
In view of the Judgment of DRAT referred scheme called, "Kamadhenu Milk Vendors
to above, we can proceed under SARFAESI Act, scheme", wherein financial support could be
even in accounts where Recovery Applications are extended to milk vendors who are collecting milk
pending. Wherever the borrowers contend that either from retail or wholesale sources and
Recovery Applications have to be withdrawn supplying to various chilling plants. Preference
where the bank desires to invoke SARFAESI Act, will be given to vendors who are having tie up with
this judgment may be cited to substantiate our reputed dairy units/hotels, Sweet stalls etc. The
stand that it is only an optional provision loans shall be in the nature of Secured Overdraft /
Term loan under Priority-Direct Agriculture. The
ADV.24/05-06 dt.14.05.05 details of the scheme are given in the circular.
ADV.28/05-06 dt.20.05.05
Issue of Kisan Credit Card to all eligible farmers
It has been frequently reiterated that the Scheme for financing farmers for purchase of land
total crop loan requirements of farmers should for agricultural purpose.
have to be met by branches only through Kisan To make the scheme more farmer -
Credit Cards. Branches are therefore, advised to friendly the eligibility criteria prescribed under the
issue Kisan Credit Cards to all eligible farmers and scheme has been revised as under:
meet their entire credit requirements strictly as per
“Small farmers, sharecroppers/Tenant
prescribed norms. Passbook along with a pouch for farmers i.e. those who would own maximum of
the card should also be issued, invariably to all non irrigated or irrigated land (including purchase
eligible farmers. of land under the scheme) as stipulated by
NABARD in respect of income ceiling translated
ADV.26/05-06 dt.17.05.05
into acreage of various states for small farmers and
Financing of distressed Urban Poor (FODUP) as furnished in our circular ADV 58/92-93 dated
03/08/92.”
Reserve Bank of India has advised Banks
to introduce a scheme for financing distressed All other terms and conditions of the
urban poor to prepay their debt to non-institutional scheme remains the same as per Cir.No.
lenders against appropriate collateral or group ADV.99/2001-02 dt.11.01.2002
security. ADV.29/2005-06 dt.20.05.2005
As per the scheme financing of distressed Produce Marketing Loan
urban poor engaged in economic activities such as
tea shops, Petty shops, milk vending, vegetable Keeping in view the importance of post-
vending, fish vending, laundering, chappal making, harvest operations, RBI has increased the limit on
saloons, rickshaw man, servant maids, etc, to loans to farmers through the produce marketing
prepay their debt to non Institutional financiers scheme from Rs.5 lakhs to Rs.10 lakhs, under
shall be made subject to the following: priority sector lending. Branches are advised to
As the maximum loan amount is Rs.25000, take note of the increase in credit limit under the
no margin is required. Interest rate is 4% (as per scheme, to scout for new/large scale proposals to
DRI norms) where the loan amount is upto increase our lending under agriculture.
Rs.5000/-. For loans exceeding Rs.5000/- and upto
ADV.30/05-06 dt.21.05.05

5
 Recollect
Examination of title to the property – Legal scrutiny Target Group Salaried class NRI customers as under:
Report of Bank’s approved lawyer. For loan amounts up to Rs.3.50 lakhs minimum
monthly income is US $ 250 or its equivalent.
Immovable property is often taken as a For loan amounts above Rs.3.50 lakhs upto
primary or collateral security to secure the Rs.5 lakhs minimum monthly income is US $
advances of the bank. For this, a legally 500 or its equivalent.
enforceable mortgage of the property is to be For loans above Rs.5 lakhs, minimum monthly
created in favour of the bank for which the title of income is US $ 900 or its equivalent.
the borrower over the said property should be Purpose of Purchase of housing site on ownership basis
loan (not on lease basis), the layout of which is duly
examined by the Bank’s lawyer in order to find out approved by the competent authorities.
that (i) The person in whose name the property
stands (mortgagor) has a good, valid, subsisting For other features of the scheme please refer the
and marketable title over the property. (ii)The circular.
property is free from all encumbrances whatsoever
and (iii) The property is not subject to any ADV.33/05-06 dt.02.06.05
litigation or attachment from any court or any Credit Guarantee Fund Trust for Small Industries
statutory authorities such as Incometax/ (CGTSI)
Muncipality/ Corporation/ Revenue authorities.
It has been decided to continue bearing the
The Legal Scrutiny Report must be
one time upfront guarantee fee of 2.5% on CGS
obtained covering the following parts as per the covered loans for a further period of one year upto
format prescribed. First part should give the 31.03.06.
description of the documents produced before the
lawyer for scrutiny. Second part must give Branches should meticulously follow the
description of the property, extent and assessment procedure/time frame for payment of upfront
of the properties. Third part should analyse the guarantee fee .i.e. the guarantee fee of 2.5% should
flow of title for the past 30 years in the manner be remitted by the branch within 30 days of first
prescribed. The fourth part should say the manner disbursement. Branches should remit the guarantee
and method of creating charge over properties in fee once in a month to their respective Circle
favour of the bank as security for advance, Offices and the latter shall remit the same to the
remission of stamp duty, if any and any other designated collecting banks of the Trust. The
opinion on simplified procedure for creation of acknowledgement received from the Trust should
charge over the properties. Fifth part should be a be kept on the record since the same will be
construed as a proof for covering the account(s)
certificate from the advocates certifying the title
under CGTSI, which can be made use of at the
deeds concerned being original and not duplicate
time of lodging a claim on a later date, if need be.
or fake and that the title is clear, marketable and
free from encumbrances. The annual service fee is to be borne by
the borrower.
Copies of the title deeds should not be
accepted normally. If it is to be accepted the points ADV.34/05-06 dt.02.06.05
as given in the circular should be looked
into/complied with. Under no circumstances the Permission for switch over from Housing loan
borrower alone should be allowed to approach the /OMTL to our existing Home Loan accounts under
advocate to obtain the LSR. Structured Loan Products.
In order to retain the existing clientele and
ADV.31/2005-06 dt.21.05.2005 to improve our portfolio under this scheme it has
been decided to permit conversion of OMTL
Scheme for purchase of Housing Site by NRI
Housing Loan with Standard Asset classification,
As per RBI guidelines, Banks are to Home Loan scheme under Structured Loan
permitted to grant rupee loans to NRIs for Products. Such conversion shall be considered
purchase of House sites subject to ensuring that the based on the recommendations of the Circle,
proceeds of the Rupee loan are not utilised for the subject to charging of 1 % fee on the balance
"Agricultural or plantation activities or in Real outstanding, at the specific request of the borrower.
Estate Business or construction of Farm Houses".
ADV.37/05-06 dt.11.06.05

6
 April-June 2005
Venture Capital Fund for Dairy/ Poultry sectors 3) The Credit Rating System (CRS) takes into
consideration all the possible factors, which
Government of India has announced a
are essential for assessing the risks associated
scheme for creation of a fund for ‘Venture capital
with the credit proposals for financing NBFCs.
for dairy and poultry sector’ with a view to provide
interest free loan/ interest subsidy on the bank loan The Credit rating parameters and criteria for
to the entrepreneurs for undertaking certain credit rating for NBFCs are annexed to the
activities in these two sectors. circular.
The main objective of the scheme is to ADV.42/05-06 dt.24.06.05
create a venture capital fund for providing
financial assistance to individuals, NGOs, public Constitution of Farmers' Advisory Committee at all
and private sector undertakings, cooperatives etc. Rural Branches
¾ To promote setting up of modern dairy farms Reserve Bank of India has advised Banks
for production of clean milk. to form Farmers’ Advisory Committees at all rural
branches. Farmers' Advisory Committees will play
¾ To bring structural changes in the unorganized a vital role in rural development and it will not
sector, processing and marketing of only strengthen the extension system, but also
pasteurised milk at village level. make it more reliable and transparent by proper
¾ To bring about up-gradation of quality and planning and resource allocation.
traditional technology to handle milk on a The Committee will discuss and suggest
commercial scale. strategies/steps to be taken by the branch in
formulating schemes for extending need based
¾ To boost the unorganised poultry sector in
rural credit to various segments of rural population
states where development is in primitive state
taking up income generating activities and also
and also to give incentive and create
address some of the impediments in reaching out
infrastructural facilities for export of poultry
the disadvantaged sections of the rural society.
products by organised sector from advanced
states. etc. ™ Branch Manager shall be the Chairman and
Convenor of the Committee
For detailed guidelines on the scheme please refer
the circular. ™ Farmers who are having regular transactions
with the branch and non-account holders in the
ADV.38/05-06 dt.17.06.05 service area villages, representatives from
Small (upto 5 ac of land), Medium (5-10 ac of
Credit Rating System for Non Banking Finance land) and Big farmers (above 10 ac of land),
Companies (NBFCs) except wilful defaulters of the branch shall be
In order to reduce the response time for members.
requests for sanction of finer rate of interest to ™ Select elected representatives of Panchayat Raj
NBFCs, a new Credit Rating System (CRS) has Institutions and Women SHG leaders in the
been introduced exclusively for rating of NBFC service area of the branch shall also be
borrowers. included.
1. The objectives of the Credit Rating System ™ Total members of the Committee should not
are – exceed 20
a) To assess the quality of advances to NBFCs ™ The Committee shall meet once in a quarter.
in our Bank’s fold.
™ The Committee should function on a voluntary
b) To ensure proper monitoring of advances basis and is only advisory in nature without
which show a slippage in the Credit Rating involving in any financial intervention.
and
ADV.43/05-06 dt.24.06.05
c) To quicken the processing of proposals for
sanction of finer rates of interest to well Grameen Bhandaran Yojana—Capital Investment
rated NBFCs. Subsidy Scheme for construction/ renovation/
2) The Credit Rating System shall be applicable expansion of rural Godowns.
only to those NBFCs which satisfy the A net work of rural godowns will enable
eligibility criteria mentioned in the circular. small farmers to enhance their holding capacity in

7
 Recollect
order to sell their produce at remunerative prices Maintenance of confidentiality and observance of
and avoid distress sales. Accordingly, Grameen secrecy
Bhandaran Yojana, a capital Investment Subsidy
It was made clear by the circular that staff
Scheme for construction/ renovation of Rural
members indulging/passing vital information
Godowns was introduced in 2001-02. The Scheme
pertaining to the Bank to any quarter will be dealt
has now been approved by Government of India
with firmly according to the provisions contained
for implementation during the years 2004-05 to
in the Service Regulations/Bipartite Settlement.
2006-07, with certain modifications. Revised
guidelines of the scheme given in the circular are PRNL.09/05-06 dt.25.04.05
applicable for projects sanctioned between
01.10.2004 and 31.03.2007. The Salient features of Staff Welfare Measures – Free Medical Facility
the scheme are given in the circular for the
Bank has made arrangements with M/s
guidance of branches.
Apollo Hospitals Enterprise Ltd, for staff members
ADV.44/2005-06 dt.27.06.2005 to avail the following free treatments.
i. Angiogram,
PERSONNEL ii. By Pass Surgery
Staff Meeting iii. Reservation of Bed
Acceleration in business and development All permanent staff members of the Bank
of a branch is the outcome of effective team work and their eligible dependants can avail the benefits
and concerted action on the part of all the staff under the scheme at any one of the Hospitals
members in a branch. To excel and sustain owned by Apollo Hospitals Enterprise Ltd as given
growth, the Branch Manager alone is not in Annexure – I of the circular.
responsible, but the entire team has to put their
In addition to the arrangement for free
mite so that the goals are ultimately met.
treatment / ailment as above, the following
It has been decided that, henceforth, the facilities have also been agreed to by the Hospital :
STAFF MEETING shall be based on a structured
agenda and deliberations in such staff meetings ¾ To offer discounted rates for specified
shall be centred around: ailments as given in Annexure –II of the circular,
on cash payment basis to our staff members.
¾ Business Potential of the branch;
¾ Review of achieved levels of Business as per ¾ A discount of 7% on the MRP + Tax shall
Business Plan; be allowed for medicines purchased by our staff
members from their retail outlets named “Apollo
¾ Introduction of new products and strategies for
Pharmacy”. Wherever, the purchase value is more
marketing the products;
than Rs.150/-, door delivery will be free of charge,
¾ Business opportunities in the market. The and a flat rate of Rs.10/- per delivery will be
allocation of such business achievement to a charged for purchases less than Rs.150/-.
set of staff members should be made in the
staff meetings as a challenge. Success achieved The Identity Cards issued by the Bank,
in a challenging assignment by an may be utilised for identification purposes.
individual/group should be appreciated in the
PRNL.17/05-06 dt.16.05.05
staff meeting.
Master Circular on Staff Housing Loan
PRNL.03/05-06 dt.21.04.05
For Award staff:
Bringing political or other outside influence by staff
Members for transfer as an act of misconduct. An employee who has completed 4 years
of continuous service in the Bank shall be eligible
Bringing political or other outside for the loan.
influence by staff members for the betterment of
their prospects in the Bank is an act of misconduct All employees who have not availed Staff
and shall entail appropriate punitive action besides Housing Loan and who are applying for Staff
noting in their Service Records Housing Loan for the first time will be eligible for
the following limits (with effect from 16.07.2001).
PRNL.04/05-06 dt.21.04.05
Rs.3.00 lakhs for subordinate staff; and
8
 April-June 2005
Rs.4.50 lakhs for clerical staff Master circular on Vehicle/Conveyance loan to staff
members.
In case of enlarging/repairs/renovations of
the accommodation of an existing house (not 1. Vehicle loan scheme for Award staff
acquired under Staff Housing Loan), the amount (Bank’s Scheme) - A limit of Rs.8000/ @ 7.5%
admissible is 50 times the monthly pay (including simple rate of interest for purchase two wheeler for
Special Pay ranking for PF benefits) subject to eligible staff.
following ceilings
2. Moped Loan To Substaff – Who have
Clerical Staff Rs.1, 20,000 completed 5 years of continuous service are
Subordinate staff Rs. 80,000 eligible. A maximum amount of 90% of the cost
of vehicle or Rs.14,000/- whichever is less @ 7.5%
Note In respect of Part Time Sweepers / Part Time Clerks
drawing scale wages the quantum of loan will be restricted to the simple rate of interest shall be advanced
proportion of the scale i.e. 1/3, 1/2, 3/4 drawn by them. 3. Conveyance Loan (Two Wheeler)
For Officers scheme to officers & Award staff. Workmen
employees drawing pay of Rs.3910/-p.m or more
All confirmed officers who have & all confirmed officers are eligible for Rs.60000/-
completed 5 years of continuous service in the @ 7.5% p.a (simple)upto Rs.15,000/- and Bank
Bank shall be eligible for the loan. rate or 12% (simple) whichever is higher for the
All Officers who have not availed Staff loan part exceeding Rs.15,000/-
Housing Loan so far and who are applying for 4. Conveyance Loan (four Wheeler)
Staff Housing Loan for the first time will be scheme to officers- All confirmed officers drawing
eligible for a maximum of Rs.7.50 lakhs with Basic Pay of Rs.9820/-p.m or more are eligible for
effect from 16.7.2001 Rs.3.50,000/- @ 8.5%(simple) upto Rs.80,000/-
In case of enlarging/repairs/renovations of and Bank rate or 12% (simple) whichever is higher
the accommodation of an existing house (not for the loan part exceeding Rs.80,000/-
acquired under Staff Housing Loan), the amount 5. Loan for repair of motor car to
admissible is Rs.2.00 lakhs. officers All confirmed officers drawing Basic Pay
General of Rs.9820/-p.m or more and having subsisting
liability under conveyance loan(Four wheeler) are
Second Housing loan to Award staff and eligible for Rs.10000/-once in every five years @
Officers may be availed only once in the entire bank rate or 12% (simple) whichever is higher .
career of the employee.
The conveyance loan to staff member can
Other Terms and condition are detailed in be availed only 3 times during their entire service.
the circular.
The repayment schedule, timegap for
PRNL.27/05-06 dt.04.06.05 availing second and subsequent loans,other terms
& conditions are detailed in the circular.
Master Circular on loan against Title deeds to Staff
Members PRNL.29/05-06 dt.04.06.05

A Scheme of ‘Loan against Title Deeds’ Master Circular on special (clean) loan against
for considering a loan to meet unforeseen medical Provident Fund
expenditure, heavy capitation fees and related
Any employee who has got sufficient
expenses for higher studies to their wards,
balance in his/her PF subscription [Employee’s
expenses for marriage of self or dependants and for
contribution] after providing for 3 months’ basic
meeting the escalation in cost of dwelling units has
pay to meet the Provident Fund Loan is eligible for
been introduced
this loan to meet Medical/Educational/ Marriage
A maximum loan amount not exceeding expenses or purchase of a flat, repairs to house or
Rs.1.00 lakh for Award staff and Rs.1.50 lakhs for funeral purposes of direct relatives. Minimum
officers shall be advanced under the scheme. Other amount is Rs.1000/-and maximum amount
terms & conditions are detailed in the circular. Rs.15000/-

PRNL.28/05-06 dt.04.06.05 PRNL.30/05-06 dt.04.06.05

9
 Recollect
Master Circular on Consumer Credit Instalment Loan Margin 10% 10%
Rate of 11% simple Commercial rate of interest i.e. BPLR
to Staff Members Interest (compounded).
Repayment In 60 monthly In 60 monthly instalments (interest to
Consumer Credit Instalment Loan (CCIL) instalments be recovered monthly).
scheme was extended to our staff members with (principal and
effect from 23.11.1978 (termed as Bank’s Scheme) interest accrued
in the ratio 3:1)
for the purpose of purchase of consumer durables. Security DPN, For Consumer Durables
Hypothecation DPN, Hypothecation Deed and
In 1991, Government of India has Deed and irrevocable letter of authority to
communicated a scheme for grant of CCIL to the irrevocable deduct the loan instalments from
employees / officers for purchase of consumer letter of monthly salary.
authority to
durables to be implemented uniformly in all Public deduct the loan For marriage / religious / social
Sector Banks. The same has been implemented in instalments obligations
from monthly DPN, Guarantee by another
our Bank also (termed as Government scheme). salary confirmed employee / officer,
Subsequently, schemes and the details / salient irrevocable letter of authority to
features of both the schemes as on date are deduct loan instalments from
monthly salary and a letter of
furnished in the circular authority authorising the Bank to
adjust the outstanding liability if any,
Banks Scheme Govt’s Scheme
under the CCL / Government
Eligibility All confirmed Employees with minimum 3 years of
scheme by appropriating the amount
employees confirmed service in the Bank.
from the superannuation benefits.
Purpose For meeting ¾ For meeting the cost of
General Take Home Deductions towards all types of loans
cost of consumer durables
Conditions salary shall not including housing, conveyance etc.
consumer Or
be less than should not exceed 50% of the take
durables. ¾ For meeting expenses on
40% of gross home pay. Take home pay for this
marriage of self / children /
emoluments – purpose would mean gross salary
dependant sister / dependant
Recoveries minus deductions on account of CPF
brother or
shall not include at the minimum rate, I.T. and other
¾ For meeting expenses of the
deductions tax liabilities.
following religious / social
towards premia
obligations:
on Life
¾ Ear boring ceremony for son /
Insurance, SHL
daughter.
instalments, PF
¾ Upanayanam or circumcision
and VPF and
or first communion for son /
Co-operative
dependant brother.
Society thrift.
¾ Betrothal for son / daughter /
dependant sister / dependant
Second and Second and subsequent loan may be
brother.
subsequent sanctioned after the expiry of 12
¾ Shastiabthapoorthy (60th
loan may be months from the date of availment of
birthday) / Sadabhishekam
sanctioned after the earlier loan provided the earlier
(80th birthday) function for
the expiry of 12 loan including interest is fully
dependant parents.
months from adjusted.
¾ Puberty function.
the date of
¾ Funeral expenses of parents /
availment of the
spouse / children of staff
earlier loan
members.
provided the
The expenses for the above earlier loan
should be supported by including
interest is fully
¾ Quotations / invoices for the adjusted.
eligible consumer durables. Staff members desiring to avail loan
¾ Marriage invitation alongwith under Bank’s scheme may be
the estimation towards the allowed to avail the facility according
cost of proposed marriage to his choice but the employee who
expenses. joined the Bank or became eligible
¾ A self declaration for the for CCIL after 01.04.1991 will be
above mentioned religious / covered by Government Scheme
social obligations along with only. Staff members eligible to avail
the estimation towards its loan under Bank’s scheme may opt
costs. to avail the loans under
Government’s scheme during any
Limit Cost of 90% of cost of consumer durables / subsequent availment. But, the
consumer expenses on marriage or social / option exercised would be final and
durables religious obligations subject to shall remain operative for the rest of
subject to a maximum of Rs.15,000/- for award the service of the staff member.
maximum of staff as well as officers. Loans may be availed either for
Rs.10,000/- for purchase of consumer durables or
Award staff and for meeting expenditure on marriage
Rs.12,000/- for / social / religious obligation at a
Officers time.

10
 April-June 2005
For other details please refer the circular For reference purposes
PRNL.31/05-06 dt.04.06.05 8TH BIPARTITE SETTLEMENT
Master Circular on Computer Loan Scheme to Staff PRNL 38/05-06 dt .20.06.2005
Members
SALARY REVISION FOR OFFICER EMPLOYEES
All confirmed officers/Award staff
members are eligible for purchase of new personal PRNL. 44/05-06 dt.29.06.05
computer with or without Software and other
electronic accessories. CRA
Eligibility All confirmed officers/award staff members are Rent on Lockers - Revised Procedure for Collection
eligible to avail this loan.
With the introduction of Caution Deposit
Purpose For purchase of New Personal Computer with or Scheme as mandatory for the locker hirers, the
without application software, printers, modem, other recovery of rent on the due dates should be an
electronic accessories etc. from established dealers.
automatic process. The procedure for collection of
Limit Award Staff : Rs.50,000/- rent is modified as under:
Officers : Rs.60,000/- i. When a locker is newly hired, the hirer
Margin 5%
will be required to pay the rent in advance for the
period from the date of hiring upto the immediate/
Rate of Interest BPLR + Tenor Premium (Interest recoverable next 30th day of June PLUS
monthly)
ii. Rent for a minimum period of one year for
Period of Repayable in 60 monthly instalments with interest.
Repayment
the succeeding year commencing from 1st of July.
Security and DPN, Hypothecation of Article (D-101), Letter of
Documentation Authority for deduction of instalment/interest from
The above procedure is applicable to staff
salary of the staff; Insurance (electronic policy) members also.
cover for the article.
Existing Lockers
In respect of existing lockers, the revised system of
For other details please refer the circular
collection of rent shall be implemented by
branches as under:
PRNL32/05-06 dt.04.06.05
1. Where the lease period expires on or
Incentives to Lady Officers who accept posting as before 30th June 2005.
Branch Managers
a. For the period from the date of expiry of
To motivate and encourage Lady Officers to lease to 30th June 2005, calculated on
accept postings as Branch Managers bank has monthly basis rounded off to next rupee
implemented the following incentives. plus
1. Monthly Dress Maintenance Allowance of b. Rent for a minimum period of one year
Rs.250/- from 01.07.2005 to 30.06.2006
2. Monthly Grooming Allowance of Rs.250/-
2. Where the lease period expires after 30th
3. Subsidy for transport by way of 50% June 2005
concession in interest on their vehicle loan (with
Indian Bank) during their tenure as Branch For the period from the date of expiry of
Manager. lease to 30th June 2006, calculated on monthly
basis rounded off to next rupee.
4. Residential leased accommodation at their
place of choice (either at place of posting or some In both the above cases, the next due date
other place) within eligibility applicable to their for recovery shall fall on 01.07.2006
place of posting, Notice to locker hirers
5. Joining time extension upto one year In respect of all existing locker hirers,
(increased from the present period of 3 months individual notices should be sent intimating the
after relief on transfer) and waiver of pre-condition revised procedure, the next due date of payment of
of shifting of family for availing joining time. rent, amount of rent, placing/renewal of caution
deposit, etc.,
PRNL.34/05-06 dt.08.06.05

11
 Recollect
Procedure to be followed in case of Provision for compensation for delayed credit/ECS /
overdue lockers and caution deposit is also given EFT / SEFT
in the circular.
Reserve Bank of India had once again
CRA.02/05-06 dt.07.04.05
reiterated that compensation on the delayed credit
to customers accounts for collection of outstation
Preponement in Service Tax Remittance cheques has to be paid by banks suo moto instead
of waiting for a claim by customers. The
The due date of monthly service tax
guidelines on operations of ECS / EFT / SEFT
remittance to the Government Account has been
facility along with rate of service charges and list
preponed from 25th of the succeeding month to 5th
of ECS / EFT centres are also given in the circular.
of succeeding month. One additional column “Paid
Date” to be incorporated for payment date of the CRA.05/05-06 dt.10.05.05
service providers’ bills has to be furnished.
Branches shall split the Sub GL of Turnover Banking Cash Transaction Tax (BCTT) on cash
commission into ‘Turnover commission attracting withdrawals
Service tax’ and ‘Turnover commission not
As per the Finance Bill, 2005 passed by
attracting Service tax’.
the Parliament recently, a new type of direct tax
Branches shall send the credit advices on called “Banking Cash Transaction Tax “(BCTT)
or before 2nd of the succeeding month and has been introduced by the Government and it shall
Annexure 1, 2, 3 before 10th of the succeeding come into force from 1st June, 2005. It is to be
month to circle offices. Circle offices shall submit collected by every scheduled bank from the
credit advices on or before 4th of the succeeding respective persons and remitted to the Central
month and the annexures 1, 2, 3 before 15th of the Government. Salient features, procedures and
succeeding month to HO: Accounts Department. instruction to branches are given in the circular.
HO: Accounts Dept. shall make the payment by 5th
1. Branches shall collect BCTT at the rate of 0.1
and submit the Annexures 1, 2, 3 by 25th of the
% on the whole amount of cash withdrawn on a
succeeding month to Government.
single day exceeding Rs.25000/-by an individual
or HUF and Rs.100000/-in case of other persons,
CRA.03/05-06 dt.25.04.05 from other than SB a/c.
Payment of interest for delayed remittance of 2. Branches shall collect BCTT at the rate of 0.1
Govt. revenue by branches % on the whole amount received exceeding
Rs.25000/- by an individual or HUF and
RBI has informed that remittances under Rs.100000/-in case of other persons, on
OLTAS (Online tax Accounting System) has to be encashment of one or more Term Deposit(s) on a
made to the credit of Government Account within single day.
T+3 working days (T is the day when Tax amount 3. The amount of BCTT to be collected from each
is received at the branch) failing which delayed account shall be calculated by the branches at the
period interest will be recovered from the Banks. end of each day and the total amount shall be kept
in a new GL Head “BCTT collected ” under “other
On review by RBI, of the collection of
Liabilities”
other Government revenues (other than OLTAS)
the permissible period in case of local transactions 4. The details regarding Accounting / Remittance
is T+3 working days and for outstation procedure and reporting formats etc are given in
the circular. The total amount collected shall be
transactions, it is T+5 working days within which
paid to the credit of Central Government account
the settlement of transaction with CAS, RBI, and on a monthly basis, within 15th of the following
Nagpur should be effected. The delayed payment calendar month.
interest charged by RBI will be Bank rate +2% and
CRA.07/05-06 dt.30.05.05
branches dealing with Government Transactions
are advised to ensure timely and accurate Surcharge on Income Tax and Education Cess in
remittance and avoid such interest payments. respect of Tax Deducted at Source
The rates of Surcharge and Education cess
CRA.04/05-06 dt.02.05.05
to be applied on the tax collected for all payments

12
 April-June 2005
including interest paid on deposits made u/s 193 to Reserve Bank of India has developed a
194J of the Income Tax Act, 1961 as per the software for reporting of IBS data and the revised
financial Act 2005 are furnished in the circular software is to be used for submission of data for
with examples. Branches / Offices are advised to the quarter ended MARCH 2005 and subsequent
strictly adhere to the statutory quarters in future. The new software could be
formalities/obligations in connection with installed at any of the levels viz., Branch, Circle
Deduction of Income Tax at Source (TDS), Office and Head Office.
payment of such TDS to the Govt. of India
Branches should obtain the CD containing
account, issuance of TDS certificates, filing of
the new software from the respective Circle
necessary Annual Returns under e-TDS Scheme
Offices and install the same in their system.
for deduction made u/s 193 to 194 J of the Income
Tax Act 1961 etc. and avoid any penal action for FX.02/05-05 dt.21.04.05
violation of TDS provisions by Income Tax
Department. Foreign Contribution (Regulation) Act, 1976 –
Obligations of Banks
CRA.08/05-06 dt.03.06.05
Provisions of Foreign Contribution
Cheques / instruments lost in transit / clearing (Regulation) Act, 1976 impose certain obligations
process on banks in respect of receipt of foreign donations.
Reserve Bank of India compiled the various
The RBI guidelines to be followed by the
instructions given from time to time and brought
Banks for cheques/ instruments taken for out a Master Circular for the benefit of the Banks
collection/clearing lost in transit are as under. and their branches.
In respect of cheques lost in transit or in
the clearing process or at the paying Bank’s FX.03/05-06 dt.30.04.05
branch, the branch of the collecting bank should
Rupee Draft Drawing Arrangements with Exchange
immediately bring such loss to the notice of the
Houses operating from Gulf Countries
account holder to enable him to inform the drawer
to record stop payment and also to take care that Most of our NRIs in the Middle East
due to non-credit of the amount of the lost countries remit money through demand drafts
cheques/instruments, other cheques issued by him drawn on banks in India. Draft drawing
are not dishonoured. The onus of such loss lies arrangement with these Exchange Houses in the
with the branch of the collecting bank and not the Middle East will facilitate hassle-free remittances
account holder. by them. We have entered into arrangements with
the following Exchange Houses operating from
Branches should reimburse the account
Gulf.
holder related expenses for obtaining duplicate
instruments and also interest for reasonable delays 1. Bahrain India International Exchange Co.,
occurred in obtaining the same. Manama, Bahrain
If the instruments /cheques have been lost 2. UAE Exchange Centre WLL. Kuwait
at the paying bank’s branch, the collecting branch 3. National Exchange Co. WLL. Doha, Qatar
has the right to recover the amount reimbursed to 4. Musandam Exchange, Ruwi, Sultanate of
the customer for the loss of cheque/instrument Oman
from the paying banker’s branch. 5. UAE Exchange Centre LLC, UAE
The other guidelines and procedure for The arrangement shall be used for channelling
taking cheques/instruments for collection inward remittances to India, primarily on private
alongwith different formats are given in the account. The remitter and beneficiary in most of
circular. the cases shall be individuals. Remittances
CRA.10/05-06 dt.20.06.05 through Exchange Houses for financing trade
transactions are permitted upto Rs.2,00,000 per
FX transaction. Remittance of donations/ contributions
International Banking Statistics (IBS) – Quarterly to charitable institutions is not permitted under the
Data to be submitted by branches arrangement. Overseas Branch, Chennai would be
acting as the Nodal Branch for this purpose.

13
 Recollect
Branches while crediting the DD proceeds to of opening the account, based on customer’s
the beneficiary’s account should ensure that all profile, a threshold limit of transaction is to be
guidelines with regard to Know Your Customer determined.
(KYC) and Anti-Money Laundering (AML) are
The indicative threshold limits will be
complied with.
¾ In the case of accounts of individuals,
FX.06/05-06 dt.26.05.05
Rs.10 lakhs or 25% of the annual income,
whichever is higher and
GENERAL ¾ In case of business enterprises, Rs.10 lakhs
Know Your Customer (KYC) Policy and Anti Money or one month turnover, whichever is higher
Laundering Standards— (Revised) Any transaction beyond the threshold limit
The existing ‘Know Your Customer’ fixed for the account should be looked into with
guidelines have been revised by Reserve Bank of extra caution.
India in the context of the recommendations made GENL.05/05-06 dt.11.04.05
by the Financial Action Task Force (FATF) on
Anti Money Laundering (AML) standards and on Operations in Funds in Transit Account
Combating Financing of Terrorism (CFT). Branches should note that only when there
Salient features of the Revised Policy is a physical movement of cash on account of Cash
In order to achieve the objectives of KYC / Funds remittance to another branch / other bank,
guidelines, the following four key elements have a debit entry will be made in the Funds in Transit
been made as the basis of Bank's revised KYC Account. It should also be ensured that FIT entries
Policy. are reversed within the time frame as stipulated
below:
i. Customer Acceptance Policy
ii. Customer Identification Procedures ¾ For cash remittances positively by the next day, if not on
iii. Monitoring of Transactions the same day.
iv. Risk Management ¾ For funds transactions, within 7 days from the date of
Each and every staff of the Bank, debit to the FIT Account.
especially staff manning front office operations, When the surplus cash is remitted into the
should be familiar with the Bank’s revised KYC Currency Chest, it will form part of our Bank's
policy and anti money laundering measures. Cash Reserve Ratio (CRR) which is eligible for
Branches should ensure that the revised KYC interest and the funds could be profitably deployed.
norms are applied to all new and existing Further, cash balance lying with branches will rank
deposit/advance accounts and other ancillary for SLR, though it will not give any return / yield.
services wherever applicable as outlined in the
Debiting FIT account without actual
revised policy guidelines.
cash/Funds remittance is a deliberate violation of
GENL.03/05-06 dt.08.04.05 the extant HO guidelines and is a matter of serious
nature. Branches are cautioned not to resort to such
Monitoring of Large Value Unusual Transactions – unhealthy practices.
Adherence to KYC Norms
GENL.08/05-06 dt.21.04.05
Branches were advised to closely monitor
cash deposits and withdrawals of Rs. 10 lakhs and Non compliance of TDS provisions under IT Act
above in deposit as well as advance accounts like In order to avoid penal action by the IT
OD, OCC and keep a record of the details in a Department branches are advised to strictly adhere
register and submit the details to their circle offices to the TDS provisions under various sections of IT
on a fortnightly basis in AUF2 statement on 15th Act, as conveyed by HO. Accounts Department
and Last working day of every month. periodically through circulars. In case of any
Transactions of suspicious nature irrespective of financial loss to the bank on account of penalty
the amount should also be watched and reported in levied by IT Department for failure to deduct tax
the statement. or remit the deducted tax, the same will be
As KYC norms play a vital role in preventing recovered from the staff responsible for the lapse.
banks from being utilised for money laundering
operations, branches should ensure that at the time GENL.11/05-06 dt.08.06.05
14
 April-June 2005
Are you aware? The due date for risk based
categorisation of customer accounts is 31.12.2005.

15
 Volume 18 Issue 2
a
For Private Circulation Only

July - September 2005 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
DEPOSITS competent and has powers to freeze the account.

DEP .08 / 2005-06 dt 22.07.05

Introduction of Quarterly Return u/s 206A of Income
Tax Act in respect of Interest Paid on Deposits to Nomination in Deposit accounts – clarification from
residents without deduction of tax IBA
“Quarterly Return of non deduction of tax In response to a suggestion for amending
at source under section 206A of Income Tax Act” Nomination Rules for providing Nomination in
in respect of payment of Interest on deposits to favour of charitable organizations etc., declining
residents without deduction of tax (TDS) (where the suggestion, IBA Committee on Legal and
interest paid is less than Rs.5000/- per year) has Operational Issues has clarified as follows:
been introduced by the Finance Act 2005.
“Under Banking Regulation Act, a nominee
The Quarterly return has to be submitted in is the trustee and therefore legal heirs of deceased
the prescribed format, Form 26QA (Part A & Part depositor have the right to claim their share from
B) to the respective Director General of Systems in the nominee. The objective of creating nomination
electronic media i.e., CD / Floppy Disc. facility is to give valid discharge to the Bank
without affecting the rights of the legal heirs.
DEP.05 / 05-06 dt.06.07.05
Therefore, any amendment to the Nomination Rules
Consumer Forum asks Bank to Pay Compensation to facilitate nomination in favour of religious
due to Non-adherence to KYC Norms institutions etc., would be outside the purview of
the Banking Regulation Act, 1949. The
In one of the cases, the District Consumer Committee, therefore, decided no change be made
Disputes Redressal Forum has asked a nationalised to the existing nomination Rules”
Bank to pay Rs.50,000 towards deficiency in
service wherein the KYC norms were not looked DEP. 13 / 2005-06 dt 02.08.2005
into while opening an account. In order to avoid
such situations branches are advised to adhere to Automatic renewal of domestic term deposits at
the following guidelines: bank's discretion
1. Letter of thanks may be sent both to the The facility of automatic renewal of
customer as well as to the introducer in order to domestic term deposits to customers is available
avoid benami accounts in the Bank’s fold with effect from 01.11.2005.
2. Verify the address of the new account Domestic Term Deposit Schemes viz. Short
holder independently Term Deposit, Fixed Deposit, Reinvestment Plan,
3. Discuss with the introducers and ensure Cash Certificate, Unit Deposit, Facility Deposit,
that the persons whom they are introducing are well Special Scheme for Senior Citizens placed under
known to them so that later they will not disown Fixed Deposit / Re-Investment Plan are covered
any knowledge about such persons, address, under the automatic renewal facility .
background or antecedents The term deposits will be renewed on the
4. Before freezing of any account, the due date for a similar period of the deposit subject
authority ordering such freezing must be legally to a maximum of one year.

Last numbers of circulars issued as on 30.9.2005 Though due care has been taken in the preparation of
Recollect, the version given in the circular is final.
competent
DEP ADVand has
PRNLpowers
CRAto freeze
FX the account.
GENL MD/ED Compiled by HO: O&M Division
18 84 94 33DEP.08/05-06
15 28dt.22.07.05
04 Printed & circulated by HO: Circular Issue Cell
 Recollect
The renewal amount will be net of TDS as and Monetary ceiling for release of goods from the
applicable on a case to case basis. Other operational godown.
guidelines are given in the circular. For further
Monetary Ceiling for release of goods from the godown
details please refer the circular.
¾ Where the value of goods/stocks to be lodged
DEP.18 / 05-06 dt.30.09.05
or released does not exceed Rs.25 lakhs per
occasion, the presence of the Godown Keeper
ADVANCES will be sufficient
Modification in IB Rent Encash Scheme ¾ Where the value of the goods/stocks to be
Considering the demand for IB Rent lodged or released exceeds Rs.25 lakhs but
Encash product, the rate of interest and Margin upto and inclusive of Rs.1 Crore per occasion,
have been reduced and modification has been made an officer of the branch should supervise
in the maximum loan amount also. ¾ Where the value of the goods/stocks to be
The revised rate of interest shall be lodged or released exceeds Rs.1 Crore per
considered for fresh accounts alone subject to the occasion, two officers of the branch (to be
terms and conditions stipulated in the Scheme and designated by the Br. Manager without
the details are given in the circular. affecting the routine functioning of the branch)
should supervise the lodgement or release of
ADV.48 / 2005-06 dt.12.07.05 the goods by the godown keeper.
Examination of title to the property - Legal Scrutiny ¾ If, in a single day, the aggregate value of the
Report of the Bank’s approved lawyer entire lodgement and/or release put together
exceeds Rs.50 lakhs, a designated officer of
Certain amendments have been made in the the branch should supervise
format of Legal Scrutiny Report (ADV.31/2005-06
dated 21.05.2005), where the property offered is ADV. 52 / 2005-06 dt. 26.07.2005
superstructure. The formats of letter from branch to
advocate, Revised LSR and covering letter from Scheme for development/strengthening of
advocate to bank are given in the circular. agricultural marketing infrastructure, grading, and
standardization
ADV. 49 / 2005-06 dt. 18.07.2005
The captioned scheme is reform linked and
Documents to be obtained in respect of Structured assistance for development of infrastructure
Loan Products projects will be provided in those States/Union
Territories which permit setting up of agricultural
In order to ensure completion of markets in private and cooperative sectors and
documentation process with ease and without allow direct marketing and contract farming.
omission, Documentation – cum - Application Advance made under this scheme ranks for
Booklets have already been printed and supplied to classification under Indirect Agriculture.
branches in respect of seven Structured Loan
Products. A ‘check list of documents’, to be Directorate of Marketing and Inspection
obtained in respect of the structured loan schemes – (DMI),Department of Agriculture and Cooperation,
IB Rent Encash. Ind Mortgage and My Own Shop Ministry of Agriculture , Government of India is
are given in the circular the nodal agency to oprerate the scheme .
NABARD will be administering the subsidy and
ADV. 51 / 2005-06 dt. 20.07.2005 monitoring the progress of the scheme besides
providing refinance to all eligible category.
Key Cash Credit – Additional Guidelines for
lodgement/release of goods Salient features of the scheme and variuos
formats are provided in the circular.
The guidelines to be followed by branches
for handling advances against pledge of goods ADV. 53 / 2005-06 dt. 27.07.2005
under KCC facility are given in Conventional
Advances Manual, Chapter 7, Para 8.2 to 8.8.4. Introduction of a new scheme - " IB BAVISHYA
Additional guidelines are given in the circular in PRAKASH"
respect of Storage of Goods, Releasing of Goods IB BAVISHYA PRAKASH - a Scheme for
sanction of loans to the individuals going abroad
2
 July-Sept 2005
for employment has been introduced. Maximum for delisting of the engineer concerned from the
loan amount is Rs 2.00 lakh for the purpose of Bank's Panel.
meeting expenses like Visa Charges, Air fare and
In case of third party properties, owner's
any other related expenses in connection with
photograph and specimen signatures and their
employment abroad.
consent to offer the property as security should be
Target Group: Professionally qualified obtained. Branch to ensure that there is no foul
persons such as Doctors, MCA, Qualified Nurses play / drawback in the property offered as security.
i. Age Not exceeding 35 years. Property must be inspected to ensure correct
ownership of the property before release of advance
ii. For gainful employment on job visas - Loan
and thereafter once in a year to ascertain varying
amount Rs.1 lakh for Middle East, Rs.1.50
factors and their impact on the marketable value.
lakh for UK / Europe, Rs.2.00 lakh for USA,
iii. Margin 10%, The mortgaged immovable property either
under 1st charge or under 2nd charge shall be
iv. Rate of Interest - BPLR+TP-2%
revalued atleast once in 3 years.
v. Repayment in 36 EMI or in lumpsum.
The property should be revalued by another
ADV. 56 / 2005-06 dt. 03.08.2005 approved engineer rather than from the same
engineer. Rotation among the panel engineers is
Agricultural loans - Fixation of gestation and
preferred periodically. Two separate panel valuers
repayment period
should value the property, if it is more than Rs.25
The gestation and repayment period for lakhs.
agricultural loans are decided on the basis of yield
In case of consortium accounts, the value
of crops, marketing season, income generation and
determined by the leader bank should be followed.
economic life of the asset financed to ensure that
borrowers are left with reasonable portion of ADV.65 / 2005-06 dt. 20.08.2005
incremental and surplus income.
Risk Mitigating factors for averting frauds in Home
Based on the suggestion given by
Loans
floriculture growers and exporters to Government
of India, NABARD has realigned the The major identified reasons for the failure
gestation/repayment period for major plantation and of Home Loan advances are due to Non-existence
Horticulture crops. Details of unit cost, gestation of borrowers and Non-existence of the property
period, repayment period etc., are given in the mortgaged to the Bank. The observations /
circular. guidelines are compiled and given in the circular to
have a clear understanding on the Risk
ADV.59 / 2005-06 dt.13.08.2005 Management function related to Home Loan
accounts.
Master Circular on Takeover of Borrowal Accounts
ADV. 66 / 2005-06 dt. 20.08.2005
Guidelines for take over of general
advances including Educational Loan and IB Star Capital Investment Subsidy Scheme for Commercial
Rice Mill , Agricultural Advances and Home Loans Production Units of Organic Inputs under National
are furnished in the Circular. Project on Organic Farming

ADV.61 / 2005-06 dt. 17.08.2005 Government of India has announced a

"Capital Investment Subsidy Scheme for
Valuation of property charged to Bank commercial production units of organic inputs
under National Project on Organic farming"
Our Bank has sent detailed guidelines and
wherein the assistance will be provided to the units
instructions directly to all the valuers at our panel
in the form of subsidy. Model Schemes are given in
covering various features including the fees
detail in the circular.
structure for compliance / guidance.
The scheme envisages (1) promotion of
Besides physical inspection and
organic farming in the country by making available
measurement by Panel Engineer, the property must
the organic inputs such as bio fertilisers, vermi
be physically inspected by Branch Manager also.
compost and fruit & vegetables waste compost
Wherever instances of overvaluation of properties
are noticed action should be initiated immediately
3
 Recollect
(2) increase in agriculture production while 2. The upper limit of Working Capital under the
maintaining the soil health and environmental safe. Scheme is increased from Rs.100 lakhs to Rs.200
lakhs
Under the scheme, each unit will be
provided with a subsidy of 25% of the capital cost 3. The upper limit of Term Loan is increased
of the project subject to a ceiling of Rs.20 lakhs per from Rs.10 lakhs to Rs.20 lakhs.
unit for biofertilisers, Rs.1.5 lakhs for vermiculture
For other modifications in ROI, the branch may go
hatcheries and Rs.40 lakhs for fruits and vegetable
through the circular.
waste compost units. The remaining cost will be
met through term loan from the Bank (50%) and by ADV.81 / 05-06 dt.30.09.05
owners contribution (25%). The subsidy will be
credit linked and back ended. Master Circular on Compliance of terms and
conditions of sanction
ADV. 69 / 2005-06 dt. 30.08.2005
Pre-release Audit and Feed Back Report System
Delisting of Tea & Coffee from selective financing A system of Pre-release Audit for advances
Bank has delisted Tea and Coffee of Rs.50 lakhs and above and Feed Back Report
industries from selective financing as a measure to System for advances of below Rs.50 lakhs are in
increase lending under Agriculture. The interest vogue in order to bring in discipline with regard to
rate in the `above Rs 2 lakhs category’ of advance compliance of terms and conditions of credit
under Tea & Coffee loans has been reduced. sanctions, zero error documentation and conduct of
accounts.
ADV. 76 / 2005-06 dt. 15.09.2005
It has been decided to extend pre-release
Scheme of "Development of Commercial Horticulture audit to cover loan accounts of Rs.10 lakhs to less
through Production and Post Harvest Management" than Rs.50 lakhs also excluding structured loan
products. In view of the above modification, the
National Horticulture Board provides back- salient features of pre-release audit scheme and
ended capital investment subsidy at the rate not Feed Back Report are summarised and are given in
exceeding 20% of the total project cost with a the circular.
maximum subsidy limit of Rs.25 lakhs per project
for Development of Commercial Horticulture ADV.82 / 05-06 dt.30.09.2005
through production and post Harvest Management
projects, which are found technically and Master Circular of RBI on flow of Credit to SCs / STs
financially viable. However, for the North Eastern/ A Master Circular incorporating all the
Tribal /Hilly areas maximum limit of subsidy existing guidelines / instructions / directives
would be Rs.30 lakhs per project. The subsidy is regarding flow of credit to SCs/STs has been
provided for hi-tech commercial production of released by Reserve Bank of India to enable banks
horticulture crops, creation of post-harvest to have current instructions in one place for easy
infrastructure facilities, marketing and primary reference. The salient points of the RBI circular are
processing etc. The features of the scheme are reproduced in the circular for the guidance of
given in the circular. The application format and branches/offices
affidavit are available with the Circle Offices.
ADV.84 / 05-06 dt.30.09.05
ADV.78 / 05-06 dt.19.09.05
PERSONNEL
Modifications to ‘Trade Well’ scheme
Trade Well’ scheme is operated through Rate of Interest on Staff Housing Loan
select focus branches and at Corporate/CI
Branches. The following modifications are made in The rates of interest mentioned in the
the operations of the Scheme :- Master Circular on SHL PRNL: 27/2005-06 dated
04.06.2005 are applicable to the Staff Housing
1. Circle Heads may identify/designate Loans sanctioned / availed on or after 01.10.2001.
potential branches of Metropolitan / Urban / Semi-
urban / Rural as Focus Branches without seeking As regards Staff Housing Loans sanctioned
clearance from Head Office. prior to 01.10.2001, the rates of interest prevailing

4
 July-Sept 2005
at the time of sanction / availment of the loan shall precautions should be taken to ensure that it is fully
be applicable. protected. Some of the general precautions to be
PRNL. 45 / 05-06 dt.01.07.05
observed under normal circumstances are given in
the circular.
Security arrangements at bank branches
PRNL. 55 / 05-06 dt.03.08.05
Ensuring safety of money to be deposited
and / or withdrawn inside the bank premises is Security, handling and maintenance of arms
implied part of service rendered by a bank to a
Banks are authorised to procure weapons
customer.
for protection of treasure and other assets of the
Security lapses in a bank qualify for Banks by Central Government. It is therefore
deficiency of service under Consumer Protection mandatory that these weapons are taken care of and
Act, 1986. handled in a manner that these are not dangerous
Security measures laid down from time to either to the user or to the public.
time must be ensured. Branches should ensure that Important guidelines are given in the
immediate action is taken to rectify any security circular for branches for strict compliance to avoid
deficiency pointed out in the Security Officer’s penalties and legal proceedings that may arise due
report. Branches are advised to strengthen security
to non compliance.
arrangements and follow security guidelines
scrupulously. PRNL.56 / 05-06 dt.03.08.05
PRNL.47 / 05-06 dt.12.07.05 Prevention of Money Laundering Act - Rules for
maintenance of records
Staff Housing Loan Scheme – Modification.
Our Bank has implemented the revised
Extension of the facility of SHL to Officers
KYC Policy through Circular No.GENL.03/05-06
where the house/site/plot is in the name of the
dt.08.04.05. In consultation with RBI, the Central
spouse has been approved in the Board meeting
Government has now given a notification in the
held on 07.07.2005 subject to the following
Gazette formulating
conditions:
¾ the rules for maintenance of records of the
¾ A consent letter from the spouse is to be
nature and value of transactions,
obtained to offer the property as security and to
sign the necessary documents for the housing ¾ the procedure and manner of maintaining the
loan to be sanctioned to the officer; records and
¾ The sale deed & other documents to title in the ¾ the time for furnishing of information and
name of the spouse will have to be scrutinised verification of records of the identity of the
and approved by our panel lawyers so as to clients of the Banks, financial institutions and
ensure a clear and marketable title to the intermediaries.
property;
The directions / rules covering the above are
¾ Documents for the SHL shall be executed by given in the Circular for the information and
the officer and the spouse jointly. guidance of branches / offices.
¾ A valid EM of the property has to be created by
These guidelines should be treated as part of
the spouse as security for the Housing Loan
the Anti Money Laundering standards
¾ All other terms and conditions governing SHL communicated by HO and read with the above
scheme shall remain unaltered. referred circular.
¾ In the case of Award Staff, it may please be
noted that the said facility is already being PRNL. 61 / 05-06dt 12.08.2005
extended. Encashment of Leave Fare Concession (LFC) by
PRNL. 48 / 05-06 dt.15.07.05 Award Staff Members and Officer Employees –
Delegation of powers for permitting encashment of
Security of cash in transit LFC
Cash in transit being the most vulnerable The 8th Bipartite Settlement signed by
aspect in the security set up in a bank, all Indian Banks’ Association (IBA) with various

5
 Recollect
Workmen Unions and the Joint Note signed by Single Window System – Operational Guidelines
IBA with the Officers’ Organisations on
Single Window System (SWS) is a system
02.06.2005 provide for encashment of LFC facility
of delivery of all services offered by the Bank, at a
by Award Staff Members and Officers, paving way
single counter. The customer can approach any
for the receipt of a lumpsum equivalent to 75% of
the eligible fare for the class of travel by train to SWS counter to avail any banking services. The
which they are entitled, subject to complying with ultimate aim of the SWS is to provide efficient,
certain conditions as given in the circular. quicker and delightful customer service.
Depending on the business position,
PRNL.66 / 05-06 dt.19.08.05 infrastructure available, operational requirements,
Renewal of Group Personal Accident Insurance and the existing number of computer nodes
Policy for all our staff members under Staff Welfare provided, Circle Heads will decide on the number
Scheme of posts under Computer Operator B for each CBS
branch (who will be the Single Window Operator –
Our Bank has obtained a Group Personal SWO) in consultation with General Manager, HO:
Accident Insurance Policy providing round the HRM department.
clock Personal Accident Cover with the sum
insured at 48 times of salary (Basic + DA), Specimen signatures of all customer
covering all the employees of our Bank, in the year accounts (Savings Bank and Current Account)
1986. The said policy has been last renewed for a should have been scanned and available in the
further period of one year from 02.08.2005 with system for viewing.
UNITED INDIA INSURANCE CO. LTD . The existing counters at CBS branches
shall be redesigned to facilitate introduction of
PRNL.68 / 05-06 dt.24.08.05
Single Window System.
Scheme for payment of Ex-gratia to family of
employees dying in harness / employees prematurely PRNL.91 / 05-06 dated 26.09.05
retired on medical grounds, in lieu of appointment on
Maintenance of Vouchers in CBS Branches
compassionate grounds.
In CBS environment there will be no
In the unfortunate event of death of an voucher for certain system generated transactions
employee, the eligible dependants may submit like charges/execution of standing instructions, etc.
application for ex-gratia to the branch/office where However, these items will appear in voucher
the deceased employee worked last, within six verification report or BGL Day Book reports
months from the date of death of such employee. received by the branch on the next day. For such
items, the Branch Manager must satisfy about those
The other details of the scheme and formats transactions to ensure that they are related to his
to be used are given in the circular. branch only.

PRNL.72 / 05-06 dt.30.08.05 Therefore, each officer authorising the

transaction should affix his/her user ID towards
Availment of mandatory leave by staff members. confirmation of having verified the same.
As per extant guidelines, every staff As per the revised guidelines, the vouchers
member, irrespective of his/her cadre, should avail are to be preserved for a minimum period of TEN
leave at least for ten consecutive days in a calendar years. This periodicity does not apply to those
year. vouchers that are needed to be furnished as
evidence in fraud cases, legal disputes, etc.
The availment of leave by staff members
should be preplanned in such a manner that it does PRNL.93 / 05-06 dt.30.09.05
not in any way affect the routine functioning of the
branch / office or customer service. The leave CRA
should be availed subject to the rules governing
leave under Bipartite Settlements / Service EFT Scheme, Special EFT (SEFT) and Electronic
Regulations. Clearing Service (ECS) - Processing Charges
In order to give further fillip to encourage
PRNL.79 / 05-06 dt.06.09.05 electronic mode of payment which is fast and
6
 July-Sept 2005
efficient, it has been decided to completely waive not exceeding two hours each and all receipted
the processing charges for all electronic products counter foils where cheques have been deposited
for transactions involving Rs.2.00 crores and above with counter foils, should be placed at a convenient
with effect from June 14,2005 and the waiver of place for customers to collect them later. In order to
charges will be in vogue upto the period ending bring uniformity for handling the cheques received
March 31, 2006, wherever such facility is made through the drop boxes, the procedural guidelines
available by RBI have been formulated and given in the Circular. The
Cheque Drop Box facility is introduced initially in
CRA.11 / 05-06 dt.05.07.05 all metro and urban branches.
Levy of Banking Cash Transaction Tax (BCTT) on the CRA.17 / 05-06 dt.25.07.05
Cash withdrawals by Government Departments
Safe Deposit Locker facility – Providing copies of the
The BCTT is also payable, among others,
Agreement to hirers
by an office or establishment of the Central
Government or a State Government if the amount A true copy of the Safe Deposit Locker
of withdrawal exceeds Rs.1,00,000/- (Rupees One Agreement shall be handed over to the hirers
lakh) in a single day from a single account. against their written request duly retaining the
original with the branch. Special care should be
For recovering the tax from the
taken to ensure that the original agreement executed
Government Departments, branches are advised to
is perfect in every aspect and only after such
directly debit the Government Account through the
verification, the copy should be parted with. This is
payment scrolls and not to deduct from the cheque
to avoid future litigation from the hirers on the
amounts drawn by Government Departments. The
legality of such document or its contents.
BCTT may be shown just below the relevant
cheque amount in the payment scroll, indicating in CRA.19 / 05-06 dt.29.07.05
clear words “Banking Cash Transaction Tax”.
Banking Cash Transaction Tax (BCTT) - Filling up of
CRA. 13 / 05-06 dt.11.07.05 Form 2 - Inter Bank Cash withdrawals exempt from
BCTT
Re-launching of Cash Management Services Scheme
as “CMS Plus” All cash withdrawals (number of
Transactions) from Current Account/OD/OCC,
Cash Management Services Scheme as
loans not exceeding Rs.25000 in case of individuals
“C M S Plus” has been re-launched with effect
and HUFs and not exceeding Rs. 1,00,000 in case
from 1st August 2005. Detailed guidelines on the
of other entities are to be reported in form 2. The
scheme and the operational modalities are given in
amount should be rounded off to the nearest rupee.
the Circular.
Branches are instructed not to levy BCTT on Inter
Initially the scheme is proposed to be Bank cash withdrawals with immediate effect.
implemented in 12 Service Branches and 14
Corporate/Credit Intensive branches. The existing CRA.20 / 05-06 dt.08.08.05
Current Account Opening form shall be used along
with Annexure I given in the circular specially Conduct of Government Business – Agency
designed to meet the requirements of this scheme. Commission – Revision of Rates
Other guidelines are given in detail in the circular. The rates of agency commission payable to
banks will be based on number of transactions,
CRA.16 / 05-06 dt.20.07.05 instead of value of transactions as under:
Customer Centric Banking - Provision of Cheque Receipts Rs. 45/- per transaction
Drop Boxes at Branches Payments other than Rs. 50/- per transaction
pension
Branches were instructed to provide Pension Payment Rs. 60/- per transaction
Cheque Drop Boxes as an additional facility to the
customers for deposit of instruments for clearing The above rates will be effective in respect
/transfer/collection. Branches should not refuse to of transactions from July 1, 2005 and onwards. As
give an acknowledgement, if the customer tenders the agency commission is payable on per
the cheque at the appropriate counters. Every day, transaction basis, the branches dealing with
drop boxes should be cleared at regular intervals of Government transaction viz. Collecting branches /
Link, Nodal or Focal Point branches / Nagpur (Link
7
 Recollect
Cell) branch are advised to maintain necessary manuals (as amended from time to time) should
records for claiming such commission which shall also be followed by branches.
be made available to Reserve Bank or its authorised
agencies for verification at any point of time. For CRA.32 / 05-06 dt.26.09.05
calculating the number of transactions, the daily
branch scroll rendered to the Government FX
authorities will be reckoned.
Revision of interest rates on NRE Term Deposits &
Commission received on account of NRE-SB & FCNR (B) deposits.
Government Transactions is exempted from service
Tax. Hence, such income need not be included Branches are permitted to accept NRE
while computing the amount of Service Tax Term Deposits for periods upto five years at the
payable by the bank. rates mentioned in the circular. However, as per
RBI guidelines, the interest rate for the period
CRA. 21 / 05-06 dt.08.08.05 above three years and upto five years will not
exceed the one applicable for three year - NRE
Setting up of IB Bancassurance Service Centre
Term Deposits.
(BASC)
“IB Bancassurance Service Centre” As per existing RBI Guidelines interest rate
(BASC) has started functioning with effect from on NRE Savings Bank Deposits is to be fixed
04.08.2005 at HO Annexe, Chennai 600 001. The quarterly on the basis of the LIBOR/SWAP rate for
major functions of the Centre will be to co-ordinate USD on the last working day of the preceding
with various insurance companies for marketing quarter. The revised interest rates on deposits
Life and Non-Life Insurance products and Asset would be applicable for all fresh deposits and for
Management Companies with which the Bank has renewal of deposits.
tie-up arrangements for marketing their Mutual
Fund products. FX.08 / 05-06 dt.04.07.05

CRA.22/05-06 dt.09.08.05 GENERAL

Modification in the procedure for custody and issue Credit of pension to a Joint Bank account operated
of numbered/security stationery in CBS Branches by the pensioner with his / her spouse
The entire stock of the security/numbered It has been decided to permit credit of
stationery will be held only in the custody of an pension to a joint account also operated by the
officer designated as VPIS custodian. Though held pensioner with his / her spouse in whose favour an
authorisation for family pension exists in the PPO
in single custody, the DD/BPO will be available for
subject to the following terms and conditions:
issue by all staff. The officer in charge should
maintain a register for recording the numbers of Once pension has been credited to a
DD/BPO given to various staff. After the DD/BPO pensioner’s bank account, the liability of the
is written and issued to the customer, the relevant Government / Banks ceases.
number should be rounded off in the register. If any Payment of Arrears of Pension
DD is spoiled and cancelled, the printed number (Nomination) Rules 1983 would continue to be
should be cut and pasted in the DD/BPO issued applicable to a Joint Account with the pensioner’s
register of the day, which will be sent to the branch spouse.
as part of EOD reports on the next day morning. Existing pensioners desiring to get their
For this purpose, the spoiled and cancelled DDs of pension credited to a joint account may submit an
previous day should be safely kept in the officer’s application to the branch in the format furnished in
custody. The fact of cancellation should be noted in the circular.
the remarks column of the Register.
GENL.15 / 05-06 dt.02.07.05
All guidelines/procedures for the custody,
monthly verification, reporting, etc., with regard to Phishing attacks and Countermeasures
numbered/security stationery as given in various Phishing is a recent form of cyber attack in
which scammers / attackers make internet users
8
 July-Sept 2005
divulge with sensitive information about their bank to HO: Inspection Department for further
accounts and personal details. processing.
There has been an alarming increase in the GENL.18 / 05-06 dt.26.07.05
number of Phishing attacks (Refer circular
Genl.30/2004-05 dt 07.10.2004) and banks and Deduction of Tax at Source - Filing of e-TDS
financial institutions are targeted by these attacks. Quarterly Return by Branches / Offices of the Bank
In order to safeguard our information and to create from the Financial Year 2005-06 onwards
awareness amongst the staff and customers,
additional information about the Phishing attacks All the Tax deductors have to file e-TDS
alongwith steps to be taken for avoiding such Returns on a quarterly basis for the quarters June,
attacks are furnished in the circular. September, December & March before 15th of the
succeeding month. The details of Quarterly e-TDS
GENL.16 / 05-06 dt.19.07.05. Returns to be filed by the Branches / Offices of the
Computerisation of the Operations of Rural Branches Bank and the guidelines on their preparation and
– Guidelines on "BRAINS" software submission are given in the circular. Branches /
Offices may please note that any delay in filing of
¾ The manual preparation of sectional day books,
e-TDS Return beyond due date will attract a
Day Book, Sub GL, Loan/SB/CA balance
books may be withdrawn provided all the penalty of Rs.100 per day of such delay and the
modules have been made LIVE (all masters Income tax department is also conducting surprise
created and gone to Phase II) checks at various places to verify the compliance
made by the branches / offices to the TDS
¾ The checking of sectional daybook, day- book, provisions.
GL, Sub GL generated by the system should be
done everyday. GENL.23/05-06 dt.20.08.05
¾ The other balance books as and when they are Uniform Format for Management Information System
generated should be checked with manual
ledgers by the officer/Manager, signed and filed A uniform format for Branch Profile from
properly. which all the required information can be culled out
has been provided in the circular. Branches /
¾ Back ups are to be taken everyday, kept safe in
Circles should update this format on periodical
fire proof cabinet.
intervals, preferably on monthly intervals and keep
¾ The GL has to be manually maintained it along with the Branch / Circle records.
parallely.
This format will be much useful for the
¾ The branches having BRAINS software shall Branch Manager / Circle Head not only for
be given one more PC as a backup/standby effective functioning but also for close monitoring
system and upgradation of UPS should also be of the problem areas.
taken up wherever needed.
GENL.24 / 05-06 dt.22.08.05
The systems and procedure to be followed at
the non-TBC branches consequent to waiver of the Adherence to KYC Norms - Check List
above registers/ balance books along with the
control measures to be adopted are furnished in the During the process of studying/analysing
circular. certain frauds that have taken place in some of our
GENL.17/ 05-06 dt.20.07.05
branches, it is observed that there had been failure
on the part of the branches in adhering to the KYC
Recommendations of the Mitra committee - procedures while opening of both deposit and
Reporting system borrowal accounts. In order to mitigate the risk
In order to monitor all the transactions of factors involved in these assignments, the important
above Rs.100.00 Lakhs, the branches have to instructions have been compiled in the form of
report the transactions/credit sanctions of above Check Lists and furnished in the Circular.
Rs.100.00 Lakhs to their Circle Office on quarterly
basis. Circle Offices should retransmit the figures GENL.26 / 05-06 dt.21.09.05

9
 Recollect
KYC Procedures – Relaxation to Low Income Group (i) Introduction from another account
customers holder having satisfactory operation for 6 months
and who has been subjected to full KYC procedure.
Branches may open accounts for those
persons in the low income group, who are not able (ii) Photograph of the customer who
to produce documents as mentioned in the KYC proposes to open the account and also his address
Policy, provided they keep balances not exceeding need to be certified by the introducer. Any other
Rs.50000/- in all their accounts (FDR/CA/SB) evidence as to the identity and address of the
taken together and the total credit summations in all customer to the satisfaction of the Bank.
the accounts taken together do not exceed Rupees
One Lakh (Rs.100000/-) in a year, after obtaining
GENL.28 / 05-06 dt.23.09.05

10
 Volume 18 Issue 3
a
For Private Circulation Only

October - December 2005 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”

DEPOSIT
Screens in the Core Banking Solution Software. To
Revised Account Opening Form for Individuals
note down the “queue” number and/or reference/
A common account opening form (for all journal numbers, separate space has been allotted.
types of customers) for Term Deposits including
RD has been introduced. DEP.20/2005-06 dt10.11.2005
The salient features of the redesigned Introduction of No-Frills Account – Vikas Savings
account opening form are: Khata
i. applicable for individuals (either singly or The salient features :
jointly) opening Savings Bank, Term Deposits
¾ Initial deposit NIL
(including RD) and Current Account
¾ Minimum balance: NIL
ii. columns for providing Mobile No., E Mail ID,
PAN/GIR No., of the customer ¾ Withdrawal is through withdrawal slips only
accompanied by pass book.
iii. Lists out the documents required for photo
identification and address proof of the customer ¾ 10 transactions (total credit and debit entries)
in addition to details of introduction by an are permitted free in a month. Transaction
existing customer charges of Rs.5/-( plus service tax) will be
levied for each transaction beyond 10
iv. Includes columns for fixing the threshold limit,
transactions per month.
noting the purpose of opening the account by
the customer DEP.21/2005-06 dt 24.11.2005
v. Column for incorporating additional details to
categorise the customer based on risk Verification of Permanent Account Number (PAN) by
perceptions branches.

vi. Columns for getting Date of Birth, Gender and Quoting of Permanent Account Number
Marital Status of the customer have been added (PAN) is mandatory in transactions such as opening
to meet CIBIL requirements of bank accounts, placing of fixed deposits in
excess of Rs.50000/-, cash deposits of above
vii. enables the customer to exercise options for Rs.50000/- in a day in a bank account, Payment in
¾ Sending due date notice cash for purchase of bank drafts or pay orders or
banker’s cheques for an amount aggregating fifty
¾ Standing Instructions thousand rupees or more during any one day,
¾ Auto Renewal of Term Deposits making an application for issue of a credit card etc.
under rule 114B of Income-Tax Rules. In case a
¾ SWAP facility person does not have Permanent Account Number,
¾ Nomination he needs to make a declaration in Form No.60.

It is designed to align the information and Whenever the customer is coming for the
details as required in the account opening menu / first time or where any doubt arises, branches
should call for the original PAN allotment letter
Last numbers of circulars issued as on 31.12.05 Though due care has been taken in the preparation of
Recollect, the version given in the circular is final.
DEP ADV PRNL CRA FX GENL MD/ED Compiled by HO: O&M Division
24 126 123 55 22 59 05 Printed & circulated by HO: Circular Issue Cell
 Recollect
or PAN card for verification, in order to ensure The above 3 new types of Savings Bank
whether the number quoted therein exists. Accounts have been launched in all our CBS
Branches:
DEP.22/2005-06 dt 25.11.2005
1. "SB SILVER": Minimum balance to be
HUF as a Partner in a Partnership Firm maintained is Rs.5000-. A onetime minimum
balance charges of Rs.25- will be charged if the
In legal parlance, it is partnership arising
outstanding balance goes below Rs.5000-.
out of status and created by the operation of Hindu
Law. As such Joint Hindu family business is Special benefits
outside the provisions of the Partnership Act 1932.
¾ Free Personal Accident Insurance cover for Rs.
If a "Karta" or any other member of HUF 1 Lakh ( IB CHHATRA)
joins a partnership, he can do so only as an
individual. In such a situation, neither the HUF nor ¾ Free issue of 1 DD for a maximum amount of
any member of the HUF can claim to be partner or Rs. 5000- per year.
connected with the partnership through a nominee. 2. "SB GOLD": Minimum balance to be
Where the Karta of a HUF enters into a partnership maintained is Rs.10000-. and a one-time minimum
agreement with a stranger, the Karta alone in the balance charges of Rs.25- will be charged anytime
eye of law is the partner. If any payment by the the outstanding balance goes below Rs.10000-.
firm to a partner is prohibited by law, the karta
Special benefits:
cannot take plea to say that the payment was
received by him not as a partner but in some other ¾ Free Personal Accident Insurance cover for Rs.
capacity. Even if a person nominated by the HUF 1 Lakh ( IB CHHATRA)
joins a partnership, he will be a partner in his
¾ Free issue of a maximum of 2 DDs totaling Rs.
individual capacity and not otherwise. His right and
10000- during the year.
obligation vis-à-vis other partners are determined
by the Partnership Act and not by the Hindu Law. 3. "SB PLATINUM": Minimum balance to be
maintained is Rs.25000-.
Hence, the accounts of those partnership
firms where HUF happens to be one of the partners In this type of account also, a one-time
should be dealt with cautiously. Minimum Balance charges will be charged
DEP.23/2005-06 dt 31.12.2005 equivalent to the Insurance premium borne by the
Bank when the outstanding balance goes below
Indian Majority Act 1999 - Age of Majority amended Rs.25000-. For those availaing the Multi-city
According to Indian Majority Act 1999, Banking facility, the charges will be levied as per
every person domiciled in India attains the age of that circular.
majority on his completing the age of 18 years and Special benefits :
not before, including minor of whom a guardian for
the person and property is appointed by a Court. ¾ Free Personal Accident Insurance cover for Rs.
1 Lakh ( IB CHHATRA)
In computing the age of any person, the day
on which he was born is to be included as a whole ¾ Free issue of a maximum of 4 DDs (one per
day and he shall be deemed to have attained quarter) totaling Rs. 25000-.
majority at the beginning of the eighteenth ¾ Free Life insurance cover for Rs. 1 Lakh also
anniversary of the day. i.e. IB JEEVAN KALYAN for those in the age
Branches are advised to take note of the group of 18 to 45 who open this SB account.
revised version and act accordingly while dealing ¾ Multi-city Banking facility
with the accounts of minors.
ADV. 107/2005-06 dt 21.11 2005
Dep.24/2005-06 dt 31.12.2005

Launch of Customized Savings Bank products with ADVANCES

value additions Redemption of expired guarantees
1. SB SILVER, It is observed that some branches, due to
2. SB GOLD and non receipt of expired guarantee documents are
maintaining expired guarantees issued to
3. SB PLATINUM
2
 Oct – Dec 2005
Government Departments unreversed for years Credit Guarantee Scheme ( CGS) of CGTSI - changes
together on the pretext that such guarantees have to in Guarantee fee structure
be kept in force up to 30 years from date of issue The norms on guarantee fee are modified as
of guarantee. In such cases the legal position is under
clear to the effect that when the guarantee expires,
the beneficiary cannot lodge claim after expiry A one time guarantee fee at specified rate
period. His holding on to the guarantee document (currently 2.5 %) of the credit facility sanctioned,
does not confer any better right on him. Therefore (comprising term loan and / or working capital
the procedure mentioned above has to be followed facility) shall be paid upfront to the Trust by the
and the guarantee liability marked off in our books. eligible institution availing of the guarantee within
30 days from the date of first disbursement of credit
Disputed guarantees: facility, provided such Guarantee fee will be at a
rate of 1.5 % instead, with regard to the following
Branches should ascertain the reasons for
category of borrowers in respect of credit facility
pending of expired guarantees and ensure that they
sanctioned on or after October 01, 2005 and
are not pending due to disputes. In cases where our
covered under the scheme
customers have obtained court orders restraining us
from making payment of the guarantee amount to a. all loans upto Rs 2.00 lakh
the beneficiary on invocation, we are eligible to
b. All eligible women entrepreneurs
recover commission from our clients on whose
behalf the guarantees were issued, even after the c. All eligible borrowers located in the North
expiry period of the guarantee till redemption of Eastern Region (including Sikkim) and
original guarantee / settlement of the case. Besides, Jammu & Kashmir”
recovery of commission, we have to take up with
the party for building up 100% cash margin to ADV. 87/2005-06 dt 20.10.2005
meet the eventualities.
Launch of Insurance Products - IB JEEVAN KALYAN,
ADV.85/2005-06 dt 04.10.2005 IB CHHATRA and IB VARISHTHA from LIC of India
for SENIOR CITIZENS (Term Deposit Holders)
IB Griha Jeevan – Provision of life insurance cover to
The New group insurance policies tailor-
Home Loan borrowers
made to our customers are offered as below:
LIC has allotted the Master Policy
From LIC of India
No.416858 to IB Griha Jeevan, which is a Group
Mortgage Redemption Assurance (GMRA) policy IB Jeevan Life Insurance Cover to all IB
for covering the lives of our Home Loan Kalyan customers of age group 18 to 55 years
Borrowers. This Master Policy Number has to be IB Jeevan Life cover from LIC & Personal
quoted in Annexure V to the above Circular. Kalyan Plus Accident cover from United India for all
IB customers
The premium can be debited to the home
loan account, over and above the eligible home loan IB Varishtha Life insurance and Double Accident
sanction norms, viz. 36/60 times of salary, etc. cover for Senior citizen Term Deposit
holders - Age group 55 to 64 years
The date of commencement of the Master
Policy is from 20.08.2005. From United India Insurance CO Ltd
The Scheme envisages automatic coverage IB Chhatra Personal Accident Insurance cover -
for fresh home loan borrowers on submission of Age 12 to 70 years
application form and consent letter.
The details of the Scheme and formats are
For existing Home Loan borrowers, they annexed to the circular.
have to be covered within 6 months from the date
of commencement i.e. within 19.02.2006. ADV. 88/2005-06 dt 21.10.2005
Branches can cover the NRI home loan HAPPY HOLIDAY - A New product to finance “Travel
borrowers also. Maximum age at entry remains at on Holiday” under the Life Style segment
60 years. The exit age is increased to 70 years.
Name of the scheme
ADV.86/2005-06 dt 20.10.2005 HAPPY HOLIDAYS
3
 Recollect
Purpose For staff members- 36 equated monthly
instalments.
To meet the expenses (like
airfare/Train/Bus charges, expenses for Processing Charges :-
accommodation, sight seeing, etc.) for going for
0.5% on the Limit sanctioned with a
tours / pilgrimage / excursions etc. undertaken / to
minimum of Rs 250- for other than Staff members.
be undertaken by Self / spouse / children / parents /
family members / close relatives of proponent ADV.95/2005-06 dt 02.11.2005
within India or abroad.
IIB INSURED RD – Group Life Insurance
The Loan product may be offered to those
Scheme from LIC of India
travelling for Medical treatment also.
The scheme works on a Group Insurance
Salaried Class and. Professionals / Self-
basis and covers only the New and Existing
employed/ People engaged in business / Individuals
Recurring Deposit Account holders who opt for the
with high net worth / Agriculturists / Pensioners
same.
subject to availability of 100% security and on
production of satisfactory proof of income are Low cost Life insurance cover is available
eligible. for new IB Insured RD account Recurring Deposit
holders of the age group 18 to 55 years as on the
The loan may be sanctioned upto a
date of opening
maximum of 7 times the gross monthly income
with a Maximum of Rs 5.00 Lakhs. Covers existing RD accounts having a
minimum residual tenure of 3 years; Life cover is
Margin:
available from the date of opting for the scheme.
25% of the proposed expenditure /
Rs.10 lakh is the maximum cover available
requirement.
under this scheme
For travel in connection with Medical
Hassle-free - No medical Check-up is
treatment, a margin of 25% of the cost of Air Ticket
required for the RD Account holders irrespective of
and 50% of the cost of medical treatment may be
the age. A simple Declaration of Good Health
prescribed.
(DGH) is sufficient.
Security :- Alongwith the necessary security as
Customer need not pay premium upfront.
detailed in the circular a third party guarantee with
The premium is paid by the Bank and recovered at
sufficient income and net worth is also to be taken
the time of maturity/premature closure.
Interest rate :-
Branches shall claim reimbursement of
1. Clean/Unsecured Advances: 1.50% over Administrative charges @ 10% on the premium
BPLR; at present 12.5% p.a. at monthly from LIC of India.
rests.
For further details please refer to the
2. Partly Secured Advances: (Where liquid circular.
collateral security is offered like TDRs /
IVPs / KVPs / NSCs / LIC Policy (surrender ADV.99/2005-06 dt 29.10.2005
value) etc. at least equal to 50% of loan
amount sanctioned) :- 1.00% over BPLR; at "IND-SME-SECURE” - Structured Product for
present 12% p.a. at monthly rests. financing Small & Medium Industrial Units

Fully Secured Advances: (Where liquid The scheme aims at (a) simple appraisal
collateral security is offered like TDRs / NSCs / mechanism with minimum input (b) Giving
IVPs / KVPs / LIC Policy (surrender value) etc. at weightage for the Business Potential of the unit by
least equal to 100% of loan amount sanctioned) :- at way of sales turnover for flexible credit assessment
BPLR; (at present 11% p.a.) at monthly rests. instead of CMA data & QIS (c) Rate of interest in
line with market trend (d) Securitizing the exposure
Repayment :- with saleable fixed assets (land, building etc.) by
The Loan will be repayable in 24 equated 100% to 150% (e) Monitoring of end use /
monthly instalments and may be extended to 36 utilisation of limits through operations in the
instalments in deserving / exceptional cases. account and regular unit inspections .

4
 Oct – Dec 2005
Detailed guidelines of the Scheme are as at entry date loan is not fully disbursed and also
under: where balance outstanding is more than limit
sanctioned.
Coverage: All Small & Medium Industrial
borrowers as per the extant definition ¾ balance outstanding at entry date in respect of
of Government of India. existing accounts where loan is fully disbursed
Eligibility: SME units with minimum 3 years of and balance outstanding is less than limit
existence and 2 years of Net Profit sanctioned.
(latest two years) having regular and
¾ term of loan (for new borrowers)
satisfactory operations.
Quantum of Working Capital: The Working Capital
¾ the remaining term of the loan (for existing
Credit: requirements are to be assessed in a borrowers)
simple manner at the rate of 20% of The details of the scheme and formats for
the projected / estimated turnover for premium chart, claim forms etc are available in the
the current year.
circular.
Term Loan: Shall be extended only in respect of
accounts to be taken over from other ADV.105/2005-06dt 17.11.2005
banks/FIs..
Recovery in Structured Loan Products.
Types of Primary:
securities: In terms of RBI Guidelines, “a non-
Hypothecation of stocks, work-in-
performing asset (NPA) is a loan or an advance
progress, finished goods, Book Debts
and Plant & Machinery (as
where interest and / or instalment of principal
applicable) remain overdue for a period of more than 90 days
in respect of a term loan. With effect from
Factory land 31.03.2005, a Sub-standard asset would be one,
Margin: 100% to 150% coverage of the Bank which has remained NPA for a period less than or
exposure by way of fixed equal to 12 months”.
assets/properties as mentioned
above. With regard to the upgradation of loan
accounts classified as NPAs,
25% on stocks and book debts.
“If arrears of interest and principal are
25% on Plant & Machinery paid by the borrower in the case of loan accounts
10 % cash margin on NFB limits classified as NPAs, the account should no longer be
treated as non-performing and may be classified as
For rates of interest, Documents to be taken
‘Standard’ Accounts”.
and other details please refer the circular
The above provision for bringing NPA
ADV.103/2005-06 dt 11.11.2005 accounts into Standard accounts is available only in
respect of accounts where re-schedulement /
IB Jeevan Vidya–life insurance cover to Educational rephasement is not involved and where the entire
Loan borrowers critical amount and arrears of interest is recovered
The scheme is extended to all our existing fully.
and new Educational Loan borrowers, throughout
the country at all our Branches. ADV.108/2005-06 dt 25.11.2005

This add on facility is only optional for the Processing and Disbursal of Loans through the
Educational loan borrowers and it should not be System in CBS Branches
insisted or made mandatory and based on this, no
In order to reduce the time taken in the
educational loan should be rejected.
processing and to speed up the process of disbursal
Under the scheme, the premium depends of loans to customers, some modifications have
upon the: been brought out by O & M Dept. in the existing
procedure which is communicated through the
¾ age(nearer birthday at entry of the member into
circular. For the ready reference of the CBS
the scheme)
branches, screen-wise workflow for different
¾ loan amount sanctioned in respect of new types of actions involved in the processing and
borrowers as well as existing borrowers where
5
 Recollect
disbursing of loans is enclosed in the annexure to The above products are also mortgage
the circular. related loans and providing life cover under the
above policy shall reduce the incidence of NPA and
ADV. 114/2005-06 dt 09.12.2005 ensure hassle free recovery.
Revised Method of Processing High Volume Credit ADV.122/2005-06 dt 19.12.2005
Proposals
PERSONNEL
With a view to achieve the twin objectives
viz., (a) adopting one of the best global practices of Job Rotation
screening the proposal from market and credit risk Job Rotation is one of the important HR
perception by an independent group before sanction initiatives that will not only reduce monotony of the
(b) reducing the time involved in credit decision individual employee but also enhance the quality of
process, a revised method of processing credit work at work place.
proposal has been introduced.
To make Job Rotation effective, it is
Salient features of the revised method and imperative that:
the relevant portion of the revised policy in this
It is a continuous process ensuring
regard are enclosed to the circular.
distribution of work equitably
ADV.117/2005-06 dt.14.12.2005 Job rotation is to be implemented
systematically and uniformly as per Head Office
Debt Restructuring Mechanism for Small and Medium
Guidelines/Norms eg : Rotation in cash department
Enterprises (SMEs)
once in three months, In other departments every
The restructuring guidelines have been six months and once a year in case of departments
evolved by RBI to ensure that all eligible SMEs are such as Advances, Foreign Exchange in exceptional
restructured at terms which are atleast as favourable cases.
as CDR mechanism in banking sector. The Scheme
Work flow must be properly established
covers SMEs with outstanding of upto Rs.10.00
and employees allotted work commensurate with
crores to begin with and separate guidelines are
the needs and requirements of the branch/office
proposed to be issued by RBI for accounts with
outstanding of above Rs.10.00 crores in due course. There must be no exemptions in the matter
of job rotation for any individual employee [unless
The details of Debt Restructuring
otherwise specifically permitted by the controlling
mechanism is being placed in our website. Details
office]. Without exception, the employees [both
regarding eligibility, viability,Time frame etc are
Award Staff and Officers] should be rotated
available in the circular.
periodically among the available functions/jobs in
ADV.120/2005-06 dt 17.12.2005
the branch/office
The allocation/allotment of work must be
IB Griha Jeevan properly recorded in the form of “Office Order”
The life insurance cover that is extended and the same should be made available for
only to our home loan borrowers at present is being scrutiny/future reference etc.,
extended to individual borrowers of the following Branch Managers and In-charge of
loan products, subject of course to a maximum of Offices/Departments should therefore effectively
Rs.50 lakh. implement the system of Job Rotation
i. Loan for purchase of House Site PRNL.100/2005-06 dt 20.10.2005
ii. IB Rent Encash
Obtention of Life Certificate from all Staff pensioners
iii. Ind Mortgage and family pensioners
iv. IB Home Improve
Life Certificates are to be obtained from all
v. Repairs and Renovation the Staff pensioners and family pensioners in the
vi. Loan for purchase of House Site for month of November every year and the format is
NRIs available in the circular.
vii. My Own Shop

6
 Oct – Dec 2005
The Life Certificate obtained is to be kept following revisions are made with immediate
in the pensioner's individual files at the pension effect:
paying branches.
Withdrawing cash by either self or third
PRNL.108/2005-06 dt 11.11.2005
party, either at a branch within the same city/ centre
or at a branch in an upcountry centre
Single Window Operations- “EXPRESS COUNTERS” The maximum amount of single cheque
In CBS Branches shall not exceed Rs.20,000 from Savings Accounts
The ultimate aim of offering all the and Rs.50,000 from CA/CC/OD accounts
Banking services under Single Window System is The aggregate amount of cash that can be
to provide efficient and quicker customer service. drawn on a single day shall not exceed Rs.40,000
In the above background, all Single Window for Savings Accounts and Rs. 1.00 lakh for
Counters shall henceforth be called “EXPRESS CA/CC/OD accounts
COUNTERS”.
The maximum number of withdrawals
The availability of Express Counters have allowed on a single day shall be 2.
to be popularized through display over the counters,
Branch name boards and in ATM Cabins. Charges
Existing CBS branches shall introduce No charges need be levied for amounts
“Express Counters” immediately by obtaining withdrawn upto and inclusive of Rs.25,000 per day
necessary approvals from their respective Circle (whether singly or aggregate)
Offices so that the benefit of CBS flows to the If the aggregate amount of withdrawal
customers. All the new CBS branches and new exceeds Rs.25,000 per day, a flat charge, at the rate
branches to be opened have to introduce “Express of Rs.1.25 per thousand, on the total amount of
Counters” from the day one. withdrawal shall be levied, with a minimum of
Rs.50 and maximum of Rs.125
PRNL.119/2005-06 dt 12.12.2005
Procedure for Verification of Signature and
CRA Identification of the payee /presenter of the cheque
by the Host Branch etc are given in detail in the
Accounting and remitting procedure of Service Tax circular.
Collection.
As per the Service Tax regulations all the CRA.40/2005-06 dt 22.10.2005
branches are collecting Service tax along with Levy of Banking Cash Transaction Tax (BCTT) – on
service charges from our customers on the services cash withdrawals by Government Departments –
rendered. The customers can set off the Service Tax State Government Transactions
paid from their Service Tax collections, for which Finance Act 2005 introduced a new tax
the customers require the proof of receipt of called Banking cash Transaction Tax which is
Service Tax to be submitted to the concerned levied on
Government Department.
Withdrawal of cash (by whatever mode)
Therefore all the receipts issued by us exceeding a specified limit on any single day from
should invariably contain the Bank’s Service an account other than a savings bank account with
Registration Number and STC No. Branches should any scheduled bank
affix a rubber stamp containing the above details on Receipt of cash exceeding a specified limit
all the Counterfoils and receipts issued by them. from any scheduled bank on any single day on
encashment of one or more term deposits, whether
CRA.39/2005-06 dt 24.10.2005 on maturity or otherwise.

Multi city banking – Multi city cheque facility - The BCTT is also payable, among others,
Amendments by an office or establishment of the Central
Government or a State Government, if the amount
On a review of the limits for cash withdrawn by them is in excess of Rs.1,00,000/-
withdrawal through multi city cheques, the (Rupees One Lakh) in a single day from a single
account. In order to recover the tax from the

7
 Recollect
Government Departments, branches are advised to There is no change in Annexures 2 and 3.
directly debit the Government Account through the The modified Annexure 1 and a new Annexure 4
payment scrolls. The BCTT may be shown just are enclosed to the circular.
below the relevant cheque amount in the payment
CRA.52/2005-06 dt 17.12.2005
scroll, indicating in clear words “Banking Cash
Transaction Tax”.
FX
CRA. 47/2005-06 dt 25.11.2005
Country Risk Management Policy – Changes in the
Life Certificates are to be obtained from pensioners / risk ratings of countries.
family pensioners in November every year. ECGC has revised the ratings of countries
(i) Payment of pension without obtaining as of 30.09.2005. The latest ratings of ECGC is
the Life Certificate is a clear violation and furnished in the annexure.
unauthorised act. As our Bank has adopted the ECGC
(ii) The branches should stop pension classification of countries in respect of Country
payment from November onwards, till the Life Risk Ratings, branches are instructed to take note of
Certificate is submitted to the branches. the latest ratings , while taking fresh exposures.

(iii) However, branches should not cause FX.18/2005-06 dt 26.10.2005

any harassment to the pensioners by insisting on
Introduction of a monitoring mechanism in the
monthly Life Certificate / personal appearance for
Monthly Audit return for “ Reimbursement Draft Paid
drawal of pensions. A/C “ (RDPA)
CRA.50/2005-06 dt.12.12.2005
RDPA is an item classified under OTHER
Modifications in the Service Tax half-yearly return – ASSETS of the Assets and Liabilities statement.
changes in the formats. such as FCPC, FCL, & FCFBD extended to the
customer.
As per the Service Tax Act branches have
been collecting Service Tax on the Service charges Branches raising RDPA debits have to
at 10.2% and remitting through Circle Offices to prefer a RDPA claim with the respective Overseas
Head Office for remitting to Government Account. Branch ( “A” category branch) and ensure reversal
The Central Board of Excise and Customs has now of the claim amount within a reasonable time.
modified the Service Tax half-yearly return Form A new format (AUM 15) to enable
ST-3 submitted by Banks, and to comply with the branches to report details of items pending under
new format of reporting commencing from the half this head has been introduced. AUM 15 shall form
year ending 31-03-06, the following changes / part of the Monthly Audit return of the branches.
additions in the reporting formats are introduced:
FX.22/2005-06 dt 24.12.2005
™ Service Tax Annexure I format containing a
certification from the respective Circle Head List of circulars cancelled during the year 2005-2006
/ Branch Manager regarding collection of
Service Tax at 10.20%. The following is the list of circulars which
were cancelled during the year 2005-06:
™ Introduction of new Service Tax annexure 4
format for capturing the following Details: S No. Subject Circular No.

™ Details of Service charges exempt from 1 DEP. 33

Service Tax 2. ADV. 35, 104
™ Details of service charges against which 3 PRNL 143, 150
service tax is absorbed by the bank 4 CRA 29
™ Total service charges on which service tax is 5 FX 04
collected and remitted
6 GENL 37, 52
™ Ensuring that the total of service charges 7 MD/ED NIL
tallies with BS 4 heads

8
Oct – Dec 2005

9
 Volume 18 Issue 4
a

For Private Circulation Only

January - March 2006 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
payment in case of FDs, etc., for the add on
DEPOSITS
accounts.
Collection of ‘Account payee’ cheques – Prohibition
The new deposit accounts can be linked to
on crediting proceeds to third party account
the existing CIF of the customer.
In order to protect banks from being
burdened with the liabilities arising out of DEP.29 / 2005-06 dt 03.02.2006
unauthorised collections, RBI has directed that
Annual Information Returns U/s 285BA of Income
9 Banks should not collect ‘Account payee” Tax Act 1961, to be furnished by the Bank / Branches
cheques for any person other than the payee for the Financial Year 2005-06
constituent.
As per Government Notification, our Bank
9 Where the drawer/payee instructs to credit the should submit the Annual Return relating to cash
proceeds of collection to any account other deposit aggregating to Rs.10 lacs or more in a year
than that of the payee, bank should ask the
in any Savings Account of a person maintained in
drawer/payee to have the cheque or the
account payee mandate thereon withdrawn by our Bank during this financial year.
the drawer. This instruction would also apply As Income-tax Department may require
to a cheque drawn by a bank payable to details from the customer and also these accounts
another bank. are also transacting high value in cash, branches
Any deviation from these directions would invite should verify the present address and also the PAN
severe penal action from RBI. numbers of these customers, before submitting the
statement. Moreover as per KYC and AML
DEP.28 / 2005-06 dt 25.01.2006
guidelines, branches should maintain details of
Add on Account Opening Form for Domestic Term such high value transacting accounts, as per
Deposit Accounts procedure prescribed.
In CBS branches to open additional
DEP.30 / 2005-06 dt 13.03.06
accounts for an existing customer, a simple ‘Add
on Account Opening Form’ has been designed and Service charges for ATM Transactions – Recovery of
a specimen of the same is annexed to the circular acquirer fee
This simple form shall be used at CBS It has been decided to partially recover the
branches, only for opening of deposit accounts in acquirer fee from our customers for the use of
the name/s of customer/s for whom CIF have been ATMs of other Banks with effect from 01.04.2006.
created and KYC norms complied with. There
should not be any change in the name/s including The charges have to be debited from the
joint applicant/s. card holders’ accounts including staff members of
our Bank. The charges mentioned are inclusive of
Since the customer details are already service tax.
available with the branch (CBS branches), it is
sufficient to get from the customer, the details like The acquirer fees payable in respect of
tenor, amount, interest rate, nomination, interest various consortium arrangements and MasterCard
Though due care has been taken in the preparation of
Last numbers of circulars issued as on 31.03.06
Recollect, the version given in the circular is final.
DEP ADV PRNL CRA FX GENL MD/ED Compiled by HO: O&M Division

34 173 168 82 30 84 05 Printed & circulated by HO: Circular Issue Cell

 Recollect
International is given in the Annexure to the Operational guidelines
circular. CCC shall be maintaining the details of all
Non-connected branches will have to debit transactions relating to the Credit Cards and all
the accounts manually for charges as per the rates books of account with regard to the transactions of
stipulated along with amount of withdrawal as and VISA with whom arrangements have been finalised.
when claims are received from Service Branches / All amounts payable to and receivable from VISA
Nodal Branches. will be routed through the two accounts viz. IB-
VISA Domestic and IB- VISA International being
DEP.32 / 2005-06 dt 14.03.06 maintained by Nandanam Branch with Bank of
America, Mumbai.
ADVANCES All IBGA transactions pertaining to Credit
Loan against Hall-marked Gold Jewellery Card transactions shall be done against Nandanam
branch.
Jewel loan is one of the most preferred
products by our Bank’s clients by virtue of its Billing statements will be prepared as on
hassle free nature. Hall marking is the accurate 20th of every month and sent to the respective
determination and official recording of the Credit Card Holders. The credit card holders will be
proportionate content of precious metal in gold. advised in the bill, to pay the same on or before a
Hall marks are the official marks used in many stipulated date, normally 5th of the next month.
countries as guarantee of purity or fineness of gold Branches, however can receive payments from the
jewellery. Taking into consideration the increasing card holders on any day, irrespective of whether it
trend under gold prices, branches are now permitted is beyond the due date or not. But while receiving
to advance loan against gold ornaments of 22 carat such payments, care should be taken to mark “the
fineness up to Rs.475/- per gram or 70% of market date of receipt” correctly, without fail.
value of gold whichever is less and Rs.485/- per Other details regarding collection of card
gram for Hall marked jewels of 22 carat fineness, holders` dues at branches, collection at TBC/Non-
with effect from 01.01.06 CBS Branches, returned cheques at both CBS and
non-CBS branches, cash withdrawals through our
ADV.127 / 2005-06 dt 03.01.2006
credit cards from our Bank’s ATMs (for the
Credit Cards – IB Visa Cards attention of Branches having ATMs) etc are
furnished in the circular.
As part of our customer-centric approach,
three variants of Credit Cards viz.,Global Gold (ADV.138 / 2005-06 dt 31.01.2006)
Card, Global Classic Card and Bharat Card, with Marketing of Credit Cards-for customers and staff
VISA International, have been introduced in our
Bank. The details regarding eligibility, fees, Branches should focus on the following
revolving credit, Cash advance facility, Insurance segments for marketing of Credit Cards:
benefits to cardholders, credit period and billing 1. Well operated SB accounts maintaining
cycle etc. are given in the circular. balances of say Rs. 10,000/- and above.
Credit Card Centre (CCC) at the following 2. Proprietors/ Partners of well-operated Current
address would monitor/control the entire Credit Accounts with balances of say Rs. 50000/- and
Card Operations. above.
3. Employees of our corporate clients drawing
Indian Bank Phone: 044 - 2433 0318 (D)
salaries of say Rs.10000/- and above.
HO: Credit Card Centre 2433 0319 (Gen)
4. Borrowers of our Home Loans and other
II Floor, 480 Anna Salai, Fax : 044 - 2433 0317
Structured Loan Products with good repaying
Chennai 600035 Email : ibcreditcard@vsnl.net
capacity and good track record of repayment.
Specimen of Application form for Credit Our Officers and Clerical staff are also
Cards, Terms and Conditions, Usage guide, eligible for our Credit Cards as detailed in our
Schedule of Charges, list of designated branches for Circular ADV/130/2005-06 dated 07-01-2006.
Credit Card Operations etc are annexed to the Please also refer circular ADV.166/2005-06 dt.
circular. 22.03.2006 on Bharat Card.
(ADV.130 / 2005-06 dt 07.01.2006) ADV.161 / 2005-06 dt 13.03.06

2
 Jan – Mar 2006
Master Circular on Swarojgar Credit Card (SCC) materials available to ensure that the repaying
Scheme capacity of the applicants will improve definitely as
Our Bank was the first to introduce in per the plan chosen.
March 2003 a novel credit card scheme for artisans
ADV.139 / 2005-06 dt 31.01.2006
viz. Artisan Credit Card. It is a Composite loan
including term loan/cash credit or both. Introduction of SHG Information Card
Maximum loan limit of 30000/- per It has been decided to introduce a system of
borrower as composite loan including consumption building a database on the SHGs, which have been
needs which will be restricted to 10% of the limit. provided with credit linkage. The information will
SHGs can also be issued cards in their contain individual member’s photo/ identity, details
names and they will be liable jointly and severally of additions/deletions of members, change of
for repayment with loan amount not exceeding leadership, grading path, financial assistance
Rs.30000 per capita subject to a maximum of Rs.2 provided, training given, visit record etc. This
lakhs per group. exercise will help the Branch Managers to have a
comprehensive view about the SHGs financed by
All branches excepting Specialised
them, know the health of the group, track the past
branches like OSB, Corporate, Service Branch etc.
history of the SHG and will serve as an internal
can implement the scheme.
control measure. The format in which the
With a view to enabling the branches to get information has to be collected is furnished in the
all the details of the scheme at one place, a Master annexure to the circular and the same will be
Circular has been compiled and enclosed as supplied to Branches in the form of a card titled
annexure to the circular. ‘SHG Info Card’.
ADV.131 / 2005-06 dt 12.01.2006 ADV.143 / 2005-06 dt 03.02.2006
Master Circular/Ready Reckoner on Structured Loan Legal Scrutiny Report of Bank’s approved lawyer –
Products. Examining the flow of Title
Considering the fact that several Existing guidelines Amended guidelines
modifications to the schemes were made in the
Flow of title is to be Flow of title is to be given
past, it is felt necessary that a Master
given chronologically chronologically for a minimum
Circular/Ready Reckoner incorporating updated for a minimum period period of 13 years if original
terms and conditions applicable for each scheme is of 30 years documents of title to the property
brought out, for easy reference by the Circles / in favour of the mortgagor are
branches. The scheme-wise updated terms and produced. If original document/s
conditions are given in the annexure to the circular. corresponding to 13 years is/are
not available, then certified copies
ADV.133 / 05-06 dt 18.01.2006 of documents of title are to be
obtained so as to cover a minimum
Flexi Equated Monthly Instalments (FEMI) for Home period of 30 years.
Loan Borrowers- Fresh Chart and Regular EMI Chart
for above 20 years, up to 25 years – introduction. All other guidelines issued in respect of
Legal Scrutiny Report communicated in our
HO: TMD has provided the Chart for Flexi
circular Adv.49/2005-06 dated 18.07.2005 remain
EMI for periods ranging from 10 years to 20 years
the same.
for interest rates varying from 6% to 15%, which is
enclosed as Annexure 1 to the Circular. Flexi EMI ADV.149 / 2005-06 dt 22.02.2006
facility is available only for repayment periods
ranging from 10 years to 20 years. Classification of advances given to Food and Agro
based Processing Sector
Normal EMI Chart for the periods ranging
from 20 years to 25 years for rates ranging from 6 The following items within the food and
to 20% is given as Annexure 2 to the circular. agro based processing sector would be eligible for
classification as priority sector for lending by
While sanctioning Home Loan under Flexi Banks.
EMI terms, sanctioning authorities should satisfy
themselves that there are enough supportive 1. Fruit and vegetable processing industry
3
 Recollect
2. Food grain milling industry While analysing the SSI credit portfolio of
3. Dairy products the Bank, it is observed that the advances are not
classified by branches properly and some of the SSI
4. Processing of poultry and eggs, meat products accounts have been classified in other subsectors
5. Fish processing under Priority Sector, thus leading to under
6. Bread, oilseeds, meals(edible), breakfast foods, reporting of Banks performance under SSI sector.
biscuits, confectionary (including cocoa Apart from increased financing of fresh SSI
processing and chocolate), malt extract, protein advances, proper classification of our existing
isolate, high protein food, Weaning food and portfolio also will go a long way in improving SSI
extruded/other ready to eat food products, advances.
7. Aerated water/soft drinks and other processed
foods ADV.157 / 2005-06 dt 09.03.2006

8. Special packaging for food processing

industries
Launching of Gold Coin Business – IB SWARNA
9. Technical assistance and advice to food MUDRA scheme
processing industry
As a measure of raising non-interest
With regard to the size of the units within this
income and also for bringing in more customers
sector, it is clarified that food and agro based
into our fold, our Bank has undertaken the business
processing units of small and medium size with
of ' Selling of Gold Coins ' and launched a new
investment in plant and machinery upto Rs.5.00
product called IB SWARNA MUDRA.
crores would be included under priority sector
lending. The gold coins will be supplied by MKS
Finance, S.A. Zurich. The imported gold coins will
ADV.155 / 2005-06 dt 04.03.2006 have purity of 999.9 (investment grade pure gold)
and will be of round shape with our Bank’s logo on
Banks' Exposure to Real Estate Sector obverse and PAMP Assay Hallmark, weight, purity
Reserve Bank of India has advised that and design on reverse. The certicards or the Assay
while appraising loan proposals involving real certificates will be made as per the Bank’s design
estate, Processing / Sanctioning Authorities should and embossed on the packaging within which the
ensure that the borrowers should have obtained coin will reside.
prior permission from government / local
The accounting procedure and other
governments / other statutory authorities for the
operational guidelines are given in detail in the
project, wherever required. In order that the loan
circular.
approval process is not hampered on account of
this, while the proposals could be sanctioned in It may be noted that our Bank will derive
normal course, the disbursements should be made the maximum benefit, if the entire consignment is
only after the borrower has obtained requisite sold within 30 days of receipt during which period
clearances from the Government authorities. there is no deployment of funds. Branches are,
therefore, advised to market the product vigorously
ADV.156 / 2005-06 dt 08.03.2006 and ensure that the coins are sold off within 30 days
of their receipt.
Proper Classification of advances under SSI sector
ADV.167 / 2005-06 dt 23.03.06
Finance to SSI sector is categorised under
Priority Sector. Our Bank has issued various Integrated Risk Management Policy for 2006 – 07
guidelines as to which of the activities financed by The Bank has adopted number of policies
the Bank are to be covered under SSI sector. This for risk management. With a view to bring certain
includes all manufacturing / processing / critical parameters of these polices under an
preservation / servicing units, Artisans, Agro & integrated policy framework with well laid norms
Rural Industries (ARIs), Tiny / Village & Cottage for risk measurement and control, an Integrated
Industries (VCIs), Small Scale Service & Business Risk Management Policy has been framed and the
Enterprises (SSS & BEs) and Small Scale Units. policy details are available in the circular.
ADV.168 / 2005-06 dt 23.03.2006

4
 Jan – Mar 2006
PERSONNEL statement. It is the responsibility of the branch
concerned to ensure timely reversal of the pending
Bank’s Policy on Record Management – Modification
entries in the above account. A structured format is
under the Right to Information Act, 2005
designed and numbered as AUM-16, which is to be
As envisaged by the Right to Information submitted by branches to their Circle Offices. This
Act, 2005, RBI has now advised that all public may be useful to Circle Offices in monitoring this
sector banks should maintain records of their daily head of account.
transactions for a minimum period of twenty years. PRNL.136 / 2005-06 dt 03.02.3006
Such requirement would be effective from the date
the Act has come into force i.e., 15th June 2005. Representations and complaints from staff members
Such requirement will be applicable to all existing
Staff members should air/address their
records not yet destroyed as also to the records
grievances, complaints, suggestions etc., through
created after the commencement of the Act.
proper channel only. In cases of urgency/exigency,
PRNL.133 / 2005-06 dt.30.01.2006 it can be addressed directly to the appropriate
authority without any reservation or fear. Staff
Sabbatical Leave Scheme-2006
members can thus effectively perform the role of a
The scheme called “Sabbatical Leave genuine ‘Whistle Blower’ in bringing to the notice
Scheme-2006” has been approved for the benefit of of the Management, in writing duly signed, any
those staff members who desire to avail leave for deviations which in the interest of the organization
longer periods to attend to their personal and family need to be checked/rectified.
requirements.
Anonymous or pseudonymous
Eligibility representations / complaints will not be taken
cognizance of and no action will be initiated on the
1. Permanent employees / officers with atleast
same. In case of incorrect or false representations
twenty years of completed service or above forty-
/complaints, stringent disciplinary action will be
five years of age as on 31.12.2005. For pursuing
initiated against the person concerned.
higher education under Sabbatical Leave, relaxation
may be given as minimum fifteen years of PRNL.144 / 2005-06 dt 09.02.2006
completed service or forty years of age (in such
case authentic proof of admission etc., shall be Determination of ‘Standard Rent’ in respect of
furnished). accommodation owned / hired by the bank

2. Officers / employees who have executed service With effect from 1.12.2005 in terms of
bonds and have not completed the specified bond Regulation 22 (1) of the Officers’ Service
period shall not be eligible. Regulations, 1979, where an officer has been
provided with Bank owned quarters as residential
The period of sabbatical leave shall be for a accommodation or leased accommodation hired by
minimum period of 2 years which can be extended the Bank either in the name of the Bank or in the
only once for a maximum period of one year. name of the individual officer, a sum equal to
During the Sabbatical Leave period, employees 1.75% of the basic pay in the first stage of the scale
shall draw every month a consolidated amount of pay in which an officer is placed or the standard
equivalent to 25% of (Basic Pay, including rent for the accommodation, as advised in the
permanent Special Pay ranking for PF + DA) as on circular, whichever is less, will be recovered from
the date of proceeding on leave towards him/her.
subsistence.
PRNL.146 / 2005-06 dt 10.02.2006
The total liabilities shall not exceed 75% of
the eligible terminal benefits while proceeding on Encashment of LFC facility
leave.
Further to Circular No.PRNL:66/2005-06 dated
For other details please refer to the circular. 19.08.2005, it is clarified that for the purpose of
PRNL.135 / 2005-06 dt 01.02.2006 encashment of LFC facility, in the case of Officers
in JMG/MMG, the actual train fare for AC Sleeper
Introduction AUM-16 for "IBPF Disbursal Account" class for a distance of 4500 Kms. (one way) may be
IBPF disbursal account is an item classified reckoned.
under ‘Other Assets’ of the Assets and Liabilities

5
 Recollect
The revised rate based on the above are Consequent to the introduction of the new
tabulated below: system, the Appraising and Reviewing Authorities
Matter Guidelines already Revised
for performance appraisal of officers also have been
communicated guidelines based revised. In the revised structure, care has been
on IBA taken to avoid bunching of performance appraisals
clarification at any single point/authority. In addition, a new
Fare Encash Fare Encash concept of Moderation Committee / Authority has
LFC Encashment Both ment Both ment
Entitlement per unit ways Both ways Both been introduced in order to carry out moderation in
under LFC to Rs.) ways ways case of officers scoring more than 90% or less than
Officers in JMG (Rs.) (Rs.) (Rs.) 50% marks in the Performance Appraisal.
scale I and MMG
scale II & III The detailed guidelines on the system are
5594 4196 6198 4649
(AC Sleeper Class given in the circular.
by train)

PRNL.149 / 2005-06 dt 16.02.2006 PRNL.163/2005-06 dt 10.03.06

Customer Service & Discipline in availment of Leave CRA

by Staff Members.
ECS (Debit Clearing) - Revocation of mandate
In order to ensure that customer service and by the customer
business growth do not get affected due to The withdrawal instructions of a customer
availment of various types of leave by staff need to be treated equivalent to a ‘stop payment’
members, the following guidelines are issued.
instruction in cheque clearing system. The
On any working day, not more than 10% of customer can simultaneously send an instruction to
the total strength of staff members in any cadre the user institution so that user institution stops
should be on leave in branches/offices (While including the transaction in the ECS file. Thus, for
arriving at the percentage, fraction shall be rounded action on the withdrawal instruction by the bank
off to the nearest number. Fraction less than one branches, it is not necessary for the bank branch to
will be taken as one). obtain a confirmation from the user institution. The
For genuine reasons, if the staff members user institution is not supposed to include
applying for leave exceeds 10% as aforesaid, the transaction in the ECS file on receipt of withdrawal
matter has to be referred to Circle Head or notice. For any reason, if the transaction gets
Departmental Head, as the case may be, for prior included in the ECS file, it may be dealt in the same
sanction. way as ‘stop payment’ instructions are handled in a
cheque clearing mechanism.
PRNL.153 / 2005-06 dt 24.02.2006
There may be instances of repeated return
Master Circular on TA and LFC of ECS debit transactions on account of customer
Taking into account certain modifications not maintaining sufficient funds. In such cases,
made in the Officers’ Service Regulations / branches may serve notice to customer in the forms
Bipartite Settlements on the above subject, a prescribed (Viz.) Form A, B, C and call for his
master circular has been issued. Branches are consent for cancellation of ECS debit mandate to
advised to go through the circular for a first hand enable them to cancel the same in their records and
and comprehensive instructions on the subject. inform user Institution and to stop presentation of
ECS debit on such accounts in future.
PRNL.154 / 2005-06 dt.25.02.2006
CRA.56/2005-06 dt.04.01.06
Performance Appraisal System – Appraisal & Review
A new system of Performance Appraisal is Safe Deposit Locker Facility for Visually Impaired
introduced which shall be effective from the year Persons
2006-07. As per the new system, the Key Locker facility has been extended to
Responsibility Areas (KRAs) will be discussed by persons who are visually impaired. The operational
the Appraising Authority with the Appraisee guidelines applicable and precautions to be taken
officer/Executive and the same shall be recorded at while extending locker facilities to hirers who are
the beginning of the Financial Year. The formats visually impaired are furnished in the circular.
shall be submitted as on 31st March.

6
 Jan – Mar 2006
Whenever visually impaired persons The detailed operational guidelines are enclosed as
approach for opening Locker account, branches annexure to the circular
should not insist for joint accounts, as this may not
be possible for those who are single or whose CRA. 74./2005-06 dt.28.02.2006
spouse is also visually impaired and children are
minor. However, branches may explore the Agreement for Safe Deposit Locker - Revised
possibility of opening the Locker account by the The Locker Agreement has been revised to
visually impaired person jointly with another make it more transparent and explicit.The revised
person who is preferably the account holder’s next format of the Agreement is enclosed to the circular.
kin or relative/s but not visually impaired, with Branches are advised to obtain the revised format
his/her consent. The risk elements involved in such from the new hirers and also for the existing
operations on account of his/her disability should accounts at the time of renewal with effect from
clearly be explained to the hirer. 01.07.2006.
CRA. 60/2005-06 dt 07.01.06 CRA.78/2005-06 dt.10.03.06
Popularising CMS Plus Scheme among Corporate /
FX
PSU Clients
Integration of Forex Treasury operations at OSB/
The Scheme is in operation since
Chennai – Forex Transactions of Non Authorised
01.08.2005. A centralised CMS Hub has been
Branches.
established at Anna Salai Branch premises. The list
of CBS/RTGS Branches who can handle CMS The Forex Dealing operations of our bank
operations is enclosed as annexure to the circular. has been centralized at OSB, Chennai and the
In branches where users for CMS operations are not Dealing Room Operations at Strand Road -
created already should send Name, SR No.. Kolkata, Coimbatore Main, New Delhi Main,
Designation and Scale of the Officers/Clerks Ernakulam Main, OSB, Bangalore and OSB,
entrusted with CMS operations to CMS Hub who Mumbai have been merged with the operations at
will assist in creation of user IDs for these OSB, Chennai w.e.f 01.01.2006.
Officers/Clerks. In order to provide efficient customer
service and to ensure speedy realisation of cheques
CRA.69/2005-06 dt 13.02.2006
and bills sent for collection, opening of LCs,
Collection of fees from Companies through Banks issuance of Foreign Currency DDs, Travellers
under MCA21 Project Cheques, etc. it is decided to nominate certain
branches in select circles as co-ordinating branches,
Ministry of Company Affairs (MCA) has for handling the business of Non-authorised
introduced a new project “MCA 21”, for e filing of branches. All Non-authorised branches shall
documents, and payment of fees by the companies henceforth refrain from sending their Cheques /
through Banks for various services offered by them Bills to OSB, Chennai and route their forex
enabled through their MCA Portal. Our Bank is one transactions only through the branch so identified.
of the five Banks identified by MCA for collection
of fees in Southern Region. The project is to be All branches with E Mail connectivity shall
implemented through CBS branches only. ensure that their Mail account is kept alive and the
Presently, the following 17 branches of our Bank Card Rates sent by OSB, Chennai are downloaded
have been identified for handling the collection: everyday and kept ready for reference / application
at Branches.
Registrar of
Companies (ROC) Branches (FX.24/2005-06 dt 04-01-2006)
Jurisdiction
Bangalore Mangalore, Hubli, Raichur, Bellary Categories of branches after centralisation
Ambattur, Guindy, MEPZ, Sterling With effect from 01.01.06, the bank is having
Road, Tambaram East, Madurai
only one “A” category branch, namely Overseas
Chennai Main, Tirunelveli Junction, Trichy
Main, Virudhunagar. Branch, Chennai. In the post integration scenario,
Cochin Palakkad all authorized branches should report their forex
Coimbatore Trichy Road, Udhagamandalam transactions to OSB, Chennai dealing room only.
Hyderabad Guntur The other categories of branches handling foreign
exchange business would remain unchanged as:

7
 Recollect
• “B” Category Branches (or) Forex liabilities in the Bank Balance Sheets. Our Board
Authorized Branches (FABs) has approved for adopting Accounting Standard 11
(AS 11) for implementation as recommended by
• “C” Category Branches (or) Non ICAI and it will come into effect from 20th March
Authorized Branches (NABs) and 2006.
• FCNRB authorised Branches. The essence of AS-11 guidelines involves
The key responsibility areas of these categories are recording of Foreign Currency Assets and
given in the annexure to the Circular Liabilities at the branches at the on-going daily
market rates and revaluing the same at quarterly
FX.25/ 2005-06 dt 13.01.2006
intervals and recognizing the resultant effect of re-
Inward Remittance – Money Transfer Service Scheme valuation through Profit and Loss Account.
–“Xpress Money” The other details with examples are given
Our Bank has now entered into Rupee DD in the circular.
Drawing arrangement with M/s. UAE Exchange & FX.30/2005-06 dt 11.03.2006
Financial Services Ltd. as well as M/s. UAE
Exchange Centre WLL, Kuwait. for handling GENERAL
inward remittance under their product “Xpress Internet, Mobile and Phone Banking
Money”.
In order to enable branches to effectively
Under the arrangement, money transfers
promote these delivery channels among our
made at any overseas agent location of UAE
customers, the salient features of Internet Banking,
Exchange across the world become available at the
Standards and Security guidelines on customer
destination location in India in the very next
aspects, the systems and procedures and the terms
instant. The transfer is effected in minutes using
and conditions for operations have been given in
the web / internet based technology.
detail in the annexures to the circular. Branches are
Unlike various types of remittances from advised to go through the same.
abroad, the beneficiary under “Xpress Money” will
GENL.61/2005-06 dt 09.01.06
always be a resident. The remittance proceeds
under the arrangement should not be paid / credited E- Payment - Systems and Procedure
to an NRE account. The detailed guidelines on the
operational and accounting aspects are given in the “E - Payment” is introduced to facilitate
circular for the guidance of branches. the taxpayers (eligible customers of CBS Branches
only) to pay their Central Excise and Service Tax
A list of identified branches is enclosed as on-line. The facility enables the taxpayer to make
annexure to the circular. While handling the tax payments at any time on any day, without
transactions under this arrangement, branches visiting the bank premises.
should ensure that all guidelines on KYC and AML
are strictly complied with. The CBS branch where the customer is
having the account need not be an authorised
FX.28/2005-06 dt 14.02.2006 branch.
Foreign Currency Accounts – Operational guidelines The systems and procedures to be followed
on implementation of Accounting Standards 11 ( AS- by branches for e payment are enclosed to the
11) in our Bank circular.
At present Foreign Currency Non- GENL.63/2005-06 dt 16.01.2006
Resident Accounts (FCNR), EEFC, RFC, RFC
(Domestic), PCFC, FCFBD, Foreign Currency Manager’s Manual
Loans etc. are maintained in the branch books at Some of the essential things that a Branch
“Notional Rates”. Interest provisions are also Manager must know is compiled in the form of a
accounted for at Notional Rates in the branch book named "Manager's Manual" which contains
books. When the exchange rate applicable for important guidelines conveyed through Head Office
various currencies moves up and down, the true circulars issued during the period from April 2000
value of these accounts do not get reflected in the to December 2005. For the convenience of the
Balance Sheet of the Bank. In order to ensure fair users, the subjects are divided into sections and the
disclosure of the foreign currency assets and
8
 Jan – Mar 2006
subject matters are sub-listed with appropriate para Details with regard to reporting of
and page numbers. At the end of each para, the transactions, Types of reports and their periodicity,
respective circular reference is also given formats etc are available in the circular. Branches
may also refer Genl.77/2005-06 dt 02.03.2006 on
The entire Manual is brought out in a
Record Management under PMLA and
Compact Disc (CD). Each Circle Office is provided
Genl.78/2005-06 dated 02.03.2006 on Staff
with a copy of the CD containing the above Manual
Accountability for non-adherence to KYC/AML
with instructions to make out further copies to
guidelines.
provide the same to all branches under their control.
All CBS branches and those branches/offices GENL.75/2005-06 dt. 2.3.2006
having the ‘IntraNet’ facility can view the Manual
in their PCs/systems. Our Bank's Home Page in Internet
Our Bank has registered the domain name
GENL.70/2005-06 dt 03.02.2006
with “.in” and our website address has been
Reporting of Cash and Suspicious Transactions changed to www.indianbank.in.
under the Prevention of Money Laundering Act, 2002 For the benefit of existing users of our
Section 12 of the Prevention of Money website it is arranged for retaining the existing
Laundering Act (PMLA) casts certain obligations address www.indian-bank.com also for a temporary
on the banking companies in regard to preservation period.
and reporting of customer account information. It is essential to create awareness among the
Under this, each bank has to furnish information of existing and prospective customers about our new
transactions to the Director of the Financial website through the following ways:
Intelligence Unit of India (FIU-IND) within the
prescribed time where the ‘Principal Officer’ has i. Printing the new website address on our
reasons to believe that a transaction or a series of letterhead (preferably at the bottom of the letter
transactions are integrally connected so as to defeat head) and our visiting cards.
the provisions of this section. ii. Displaying on the customer notice board the
The information should contain the nature change made
of transactions, the amount of transaction and the iii. By sending letters to important clients,
currency in which it was denominated, the date on dignitaries, Institutions and VIPs of the area.
which the transaction was conducted and the parties
to the transaction. iv. By giving website address as footnote in our
emails to the customers.
For this purpose, branches shall have to
maintain a register containing information on the The website is the most popular and cost
following types of transactions, vide Rule 3 notified effective medium of disseminating information
under the PMLA, 2002: about our products and services and this medium is
having an unlimited reach, much more than any
a. All cash transactions of the value of more than other media. Branches are advised to popularise our
Rs.10 lakhs or its equivalent in foreign website.
currency;
b. All series of cash transactions integrally GENL.76/2005-06 dt.02.03.2006
connected to each other which have been Levying of cash handling charges at branches
valued below Rs.10 lakhs or its equivalent in
foreign currency where such series of Our Bank has decided to levy cash
transactions have taken place within a month handling charges on the cash deposits, with
and the aggregate value of such transactions immediate effect, as under:
exceeds Rs.10 lakhs; Type of account Amount of charges on cash remittance

c. All cash transactions where forged or Current account / OD / For first 10 sections (one bundle) in a day in
OCC account any denomination-FREE
counterfeit currency notes or bank notes have
been used as genuine and where any forgery of From 11th section onwards in a day in any
denomination – Rs. 5 /- per section (service
a valuable security has taken place; tax to be collected separately)

d. All suspicious transactions whether or not

made in cash.
9
 Recollect
These charges should be uniformly followed in Circulars Issued by the Bank on KYC/AML guidelines
respect of all customers falling in the above
category irrespective of their status and any Sl
Subject Circular No.
Circular
previous agreements with the bank. No exemption No Date
is permitted from levy of charges. In a very special 1. Monitoring of Accounts – Genl.08/2002-03 19.06.2002
Cash deposits and
case of an account where exception is warranted,
withdrawals of Rs.10 lakhs
Circle Head should take up with HO: Banking and above
Operations Department, justifying the case with a 2. Know Your Customer Genl.30/2002-03 18.09.2002
cost benefit study. 3. Know Your Customer - Genl.38/2003-04 15.12.2003
Compliance
Branches should display the schedule of charges 4. Bank’s Policy on Customer Dep.24/2003-04 25.02.2004
prominently in the Banking Hall near cash counter Due Diligence – Know
for the information of all customers. Your Customer (KYC)
5. Anti Money Laundering Dep.07/2004-05 26.05.2004
Guidelines
GENL.83/2005-06 dt 24.03.2006
6. Adherence to Know Your Dep.15/2004-05 12.07.2004
Customer (KYC) Norms-
Some of the important Circulars on CBS
Reiteration
Circular No. Date Details 7. Adherence to Know Your Prnl.72/2004-05 23.09.2004
Customer (KYC)
guidelines- To be included
GENL.66/2005-06 Dt 31.01.2006 Safe and Secured in the staff meeting in all
Computing Environment in branches for Oct' 2004
CBS Branches 8. Opening of FCNR and Fx.37/2004-05 31.11.2004
GENL.67/2005-06 Dt.01.02.2006 Need for strict compliance SB(NRE) accounts – Need
of KYC Norms in CBS for adherence to KYC
Branches norms/guidelines
Know Your Customer
GENL.68/2005-06 dt .01.02.2006 Guidelines on Business (KYC) Policy - Revised
Continuity Planning for 9. Genl.03/2005-06 08.04.2005
and Anti Money
CBS Branches Laundering Standards
GENL.69/2005-06 Dt.01.02.2006 Adjustment of ATM 10. KYC procedures - A tool to Genl.21/2005-06 11.08.2005
Payable/Receivable and avert frauds and Money
ATM Cash GL Heads in Laundering
CBS Branches 11. Adherence to KYC norms Genl.26/2005-06 21.09.2005
GENL.72.2005-06 Dt.11.02.2006 House Keeping under - Opening of Accounts and
CBS Environment Monitoring of Transactions
GENL.74.2005-06 Dt.22.02.2006 Tallying and Verification of 12. KYC Procedures – Genl.28/2005-06 23.09.2005
Cash Reports in CBS Relaxation to Low Income
Branches group customers
GENL.79/2005-06 Dt.08.03.2006 CBS Branches- Real Time 13. Revised Account Opening Dep.20/2005-06 10.11.2005
Gross Settlement(RTGS) Form for Individuals
GENL.81/2005-06 Dt.16.03.2006 GLIF Difference – How to 14. Revised parameters for Genl.51/2005-06 10.12.2005
locate and correct Risk Categorisation of
CRA.57/2005-06 Dt.04.01.2006 Recovery of Service customers under KYC
Charges manually in CBS Policy
branches 15. Identification of customers Genl.62/2005-06 09.01.2006
CRA.59/2005-06 Dt.05.01.2006 Authority to officers at and verification of their
CBS Branches for signing addresses
DDs/BPOs independently 16. Need for strict compliance Genl.67/2005-06 01.02.2006
Enhancement in the of KYC norms in CBS
Powers branches.
Transactions in customer 17. Reporting of Transactions Genl.75/2005-06 02.03.2006
CRA.63/2005-06 Dt.24.01.2006
accounts between CBS – Introduction CTR/STR
branches within the same 18. Preservation /Maintenance Genl.77/2005-06 02.03.2006
city/centre of Records under PMLA
CRA.70/2005-06 Dt.15.02.2006 `Internal Clearing` in CBS 19. Staff Accountability on Genl.78/2005-06 02.03.2006
Branches non-compliance to
Negative Balances in TTs KYC/AML guidelines
CRA.81/2005-06 Dt.20.03.2006 20. Compliance to AML Genl.84/2005-06 31.03.2006
Payable Account
Dt. 08.02.2006 Authority for Standards
PRNL.139/2005-06 21. Reporting of Transactions Genl.15/2006-07 09.05.2006
authorizing/passing
transactions at CBS under PMLA, 2002
branches

10
 a Volume 20 Issue 1

For Private Circulation Only

April – June 2007 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”

CONTENTS OF THIS ISSUE

Cir. Date Subject Pg. 03 05.04.07 "Arogya Raksha" - for the Bank’s 10
No. customers in association with
DEP 20.04.07 Nomination Facility in Deposit 2 United India Insurance Co. Limited
04 Accounts with Single Name 07 20.04.07 KYC Norms and AML Standards 11
05 25.04.07 Seeking Introduction for Opening 2 for Wire Transfer transactions
of Accts by branches- Clarification 08 24.04.07 Rounding off Cheques to the 11
10 26.05.07 ATM Cards - Instructions to 3 nearest Rupee
Branches 11 09.05.07 Fixed Deposit as Security for New 11
14 14.06.07 Settlement of claims in deceased 3 Lockers
depositors accts - Enhancement of 12 09.05.07 Customer Due Diligence (KYC 12
powers to various authorities - reg. Norms) for Safe Deposit Locker
17 25.06.07 Renewal of "IB Jeevan Kalyan" to 4 13 11.05.07 Provision of e-payment facilities to 12
SB holders., "IB Insured RD" to RD Government Departments
holders(18-55Yrs) & "IB Varishtha" 14 17.05.07 Additional Education Cess @ 1% 12
to TD holders( 56-65 Yrs) on Service Tax - amendments
ADV 04.04.07 Credit card operation - important 4 16 25.05.07 Agency Commission – PPF 12
01 guidelines Scheme, 1968 & Senior Citizens
03 04.04.07 Legal audit for advances of Rs.50 5 Savings Scheme 04-Clarifications
lakhs & above with immovable 19 05.06.07 Marketing of Mutual Fund of 13
property as security Products of UTI
04 07.04.07 Exposure to Sensitive Sector 5 20 11.06.07 Change in RTGS Timings 13
08 16.04.07 Model Code for Collection of Dues 5 24 21.06.07 RBI Remittance facilities scheme 13
and Repossession of Securities 2007
10 30.04.07 Modification in Fair Lending 6 26 25.06.07 Single Window for reimbursement 14
Practices Code (FLPC) of Defence Pension
13 21.05.07 Prudential Guidelines on Capital 6 FX 18.04.07 Country Risk Management Policy 14
Adequacy and Market Discipline – 01 – Changes in the risk ratings of
New Capital External Credit Rating countries and ECGC’S New
14 24.05.07 Financial Inclusion ‘RYOTS 6 Country Risk Rating Model
PUNARUDDHAARN YOJANA’. 02 18.04.07 Treatment of Resident Foreign 14
15 01.06.07 Short Term Credit to Farmers at 7 Currency ( RFC ) Term Deposits at
concessional interest rate of 7% par with FCNR(B) Deposits.
p.a. -Union Budget 2007-08 07 06.06.07 Submission of R-Returns/FET- 14
18 12.06.07 Financing of Handloom Weaver 7 ERS
Groups (HWGs) 08 07.06.07 Precautions to be taken for 14
19 14.06.07 Micro, Small & Medium Entp. 8 opening of Joint NRI Accounts and
(MSME) - Revised guidelines operations by a Power Of Attorney
20 19.06.07 PMRY- Revised guidelines and 8 Holder
Targets for the year 2007-08 10 15.06.07 Revaluation of Foreign Currency 15
23 27.06.07 Implementation of Improvised 9 Assets & Liabilities for the quarter
Credit Scoring Model for Global ending 30.06.07 in compliance
Credit Card with (AS 11) guidelines
24 27.06.07 Guidelines on Empanelment of 9 GEN 22.06.07 Banking Ombudsman Scheme 15
valuers and valuation of properties 03 2006-Amendments 2007 – reg.
accepted as security ADMN 04.04.07 Exemption from the purview of Tax 15
HRM 16.04.07 Banking Industry - a Public Utility 9 03 Deducted at Source (TDS) on the
10 Service under the provisions of Income Accruable to the Bank
Industrial Disputes Act, 1947. during the Financial Year 2007-08
22 15.05.07 Residential Accommodation to 9 05 07.04.07 Implementation of RBI’s Clean 15
Officers on lease -Revision in Note Policy
rental ceilings. 09 16.04.07 Policy on Business continuity 16
CRA 04.04.07 Revision of Defence pension to 10 Planning (BCP) 2007 -08
01 Personnel Below Officer Rank 14 04.05.07 Acceptance of Small Denomination 16
(PBOR) Notes and Coins
 Recollect
15 04.05.07 Business Process Re-engineering 16 It is also reiterated that the nomination
(BPR) in our Bank facility could be availed in respect of deposits held
19 17.05.07 Banker’s Indemnity Policy for the 17
financial year 2007-08
in the name of Sole Proprietary concerns also.
21 21.05.07 Inspection and Audit Policy 2007- 18 (DEP.04/2007-08 dated 20.04.2007)
08
23 30.05.07 Policy on complaint/grievance 18 Seeking Introduction for Opening of Accounts by
redress- modifications branches - Clarification
28 07.06.07 Service Tax Input Credit 19
Accounting, Reporting & For opening an account though the
Reconciliation customer produces necessary documentary proof
29 07.06.07 Detection of Counterfeit notes - 20
Adherence to RBI guidelines
towards photo identification and address proof, we
observe that some of the staff members are not fully
aware of the provisions with regard to obtention of
DEPOSITS introduction.
Nomination Facility in Deposit Accounts with Single For individuals under the Low Risk
Name Category, documents to be obtained as per existing
Allahabad High Court has observed that it guidelines.
will be most appropriate if RBI issues guidelines to a. The identity of the customer, his/her address,
the effect that no Savings account or Fixed Deposit location and
in single name be accepted, unless the name of the
b. His/her recent photograph.
nominee is given by the depositors. It will go a
long way to serve the purpose of the innocent The following documents can also be accepted:
widows and children, who are dragged on long
a. Passport alone where the address on the
drawn proceedings in the Court for claiming the
passport is the same as the address on the
amount which lawfully belongs to them.
account opening form (OR)
Branches to take note of the following
b. Any one document (latest/recent) from each of
instructions:
the lists given below, for a photo identity and a
1. Branches should insist on the person opening a proof of residence/address
deposit account to make a nomination in the List I for Legal Name and any List II for correct permanent
prescribed format. other name(s) used address
2. In case the person declines to fill in 1.Passport where the address 1.Telephone Bill
nomination, the branch should explain the differs
advantages of the nomination facility. 2.Voter’s Identity Card 2.Bank account statement
3. If the person still does not want to nominate, 3.PAN Card 3.Income/Wealth tax
the branch should ask him to mark his option in assessment order
the account opening form itself against 4.Driving Licence 4.Credit Card Statement
'Nomination not required'. If the account
5.Govt. /Defence ID card * 5.Electricity Bill
opening form does not contain a column to
mark his option, then the branch should ask the 6.ID cards of reputed 6.Ration Card
applicant to give a specific letter to the effect employers *
that he does not want to make a nomination. In 7.Letter from a recognised 7. Letter from employer*
case the person declines to give such a letter, public authority or public
servant verifying the
the branch should record the fact on the
identity and residence of the
account opening form and proceed with customer*
opening of the account, if otherwise found
eligible. *Subject to the satisfaction of the officer authorising the
opening of the account
4. Under no circumstances, a branch should
In case of joint accounts, applicants who
refuse to open an account solely on the ground
are not close relatives are required to independently
that the person opening the account refused to
establish their identity and address.
nominate.
However, where the required documents
are not available, branches can accept introduction

2 2
 APR-JUNE 2007
by an existing account holder or by a person known as of now, vis-a-vis revised are enumerated in the
to the Bank as per extant guidelines given in the table given hereunder:
Deposits Manual. This happens when the Authority Powers prior to revision Revised Powers
prospective customer is an individual newly
occupying the area on account of his transfer, etc. Branch Claims upto Rs.10,000/- Claims upto
Managers in and/ or the value of Rs.25,000/- and/or
However, in such cases also, the applicant Scale I,II,III which does not exceed the value of which
has to submit his/her latest photographs, the person Rs 10,000/- does not exceed
Rs.25,000/-
who introduces the account should attest them and
it may be treated as photo identity. CMs-VLBs / Claims upto Rs.50,000/- Claims upto
AGMs-ELBs and/ or the value of Rs.50,000/- and/or
Therefore, branches are advised that /Circle which does not exceed the value of which
introduction need not be insisted in addition to Heads in Rs 50,000/- does not exceed
Scale IV Rs.50,000/-
KYC documents for accounts of individuals who
fall under the low risk parameters provided the Circle Claims upto Rs.50,000/- Claims upto Rs.2.00
documents submitted by the prospective applicant Heads in and/ or the value of lakhs and safe
Scale V which does not exceed deposit locker
are satisfactory to the authorising official to accept Rs 50,000/- accounts /safe
them as proof of identity as per KYC norms. custody items
including staff claims.
(DEP.05/2007-08 dated 25.04.2007)
Circle All claims without any All claims without
ATM Cards - Instructions to Branches Heads in monetary limit and safe any monetary limit
Scale VI & deposit locker accounts and safe deposit
ATM is one of the delivery channels, used VII /safe custody items locker accounts/ safe
by customers for withdrawal of cash, balance including ‘exceptional custody items
enquiry etc. The cost per transaction for withdrawal cases’, excluding staff including ‘exceptional
through ATM is very less compared to the service claims cases’ and also staff
claims.
cost at the branch. Banks popularise the ATM
delivery channel as it is convenient to the DGM /AGM Claims relating to any Claims relating to
customers. Also the time saved helps the bank to at Head deposit without any any deposit without
Office Legal monetary limit, safe any monetary limit,
utilise the same for marketing other products and Department deposit locker accounts safe deposit locker
increase the business of the bank. /safe custody items accounts / safe
including ‘exceptional custody items
Our Bank has so far installed 443 ATMs as cases’, and claims including ‘exceptional
on date and many of them are at very vantage relating to deceased cases’, and claims
locations. All our ATMs are networked and the staff relating to deceased
bank will be installing more off site ATMs at staff
important Railway stations. Further, our bank is a In Exceptional cases
member of MITR, NFS, CASHTREE consortiums
BMs in scale I, II & III Upto Rs 5,000/- Upto Rs.10,000/-
and also having bilateral arrangements with State
Bank of India group and Andhra Bank, which helps CMs in VLBs/AGMs in Upto Rs Upto Rs.25,000/-
the customers to have the facility to use more than ELBs/ Circle Heads in 25,000/-
Scale IV & V
19700 ATMs of member banks. Our Master Cards
can be used globally in ATMs and Point of Sales Circle Heads in VI & VII All claims All claims without
terminals entertaining Master Cards. wiithout any any monetary
monetary limit limit
(DEP.10/2007-08 dated 26.05.2007)
Second in command in circle offices
Settlement of claims in deceased depositors Scale IV Nil Rs.50,000/- excluding exceptional cases
accounts - Enhancement of powers delegated to and staff claims
various authorities - reg.
Scale V/VI Nil Rs.2,00,000/- including exceptional cases
With a view to ensuring that claims but excluding staff claims
received in deceased depositors’ accounts, without Important: Hitherto only Circle Heads were
nomination facility, are settled expeditiously, it has delegated with powers to settle the claims. To
been decided to enhance the powers delegated to relieve Circle Heads from such routine work, the
various authorities. The revised powers can be Board had in its meeting on 28/5/2007 authorised
exercised by the field level functionaries with the second in command of Circle Offices for
immediate effect. Authority-wise powers delegated settlement of claims upto the powers indicated
above. The Board has further authorised Circle

3
 Recollect
Heads in the Scale of V and above to settle claims No renewal forms need be collected from
relating to deceased staff also. the customer for renewal of the policy under the
(DEP.14/2007-08 dated 14.06.2007)
scheme. To facilitate the easy renewal of the Life
Insurance Cover, the first “Application-Cum-
Renewal of the exclusive Low-cost Life Insurance Declaration of Good Health” as per Annexure II or
covers from LIC of India - "IB JEEVAN KALYAN" to Annexure IV for the respective policies submitted
SB holders and "IB INSURED RD" to RD holders (18 by the customer when joining the scheme,
to 55 yrs) and "IB VARISHTHA" to Senior Citizens TD incorporates a Standing Instruction to debit the
holders (56 to 65 yrs). Annual Premium due every year in the month of
November, when it becomes due.
It has been observed that the premiums for
the renewal of Insurance covers like IB Jeevan While subscribing to the policies,
Kalyan and IB Varishtha linked to our Savings customers should be clearly told that every year in
Bank and Term Deposits respectively and IB October, they should remit the premium into their
Insured RD linked to our Recurring Deposit scheme account for renewing the policy. Branches would
have not been recovered by the Branches and sent do well to verify age group and the eligibility of the
through their respective Circle Offices to our H.O. customer also while carrying out the Standing
Bancassurance for onward remittance to LIC of Instruction, so that he/she is provided with the
India as per our Circulars Adv.88/2005-06 dated eligible cover.
27.10.2005 and Adv.99 dated 29.10.2005.
(DEP.17/2007-08 dated 25.06.2007)
The advantages of our Insurance products are -
ADVANCES
• No medical Check-up for Insurance Cover for
the age groups 18 to 65 years upto Rs. 1 Lakh Credit Card Operation - Important guidelines
for IB Jeevan Kalyan/IB Varishtha or upto The important guidelines in certain areas of
Rs.10 Lakhs for Insured RD (A simple credit card operation are cited.
declaration of good health is sufficient)
• Marketing of credit cards shall be through
• Tax Benefit under the Income Tax Act designated branches only among our customers
• Priced very low and competitive-This makes who are in our Bank’s fold for more than one
the selling of these policies to groups of year.
employees / organizations easier and helps
• Non-designated CBS or TBC branches, if they
acquire new customers in large numbers.
assess that necessary potential and infrastructure
Renewal of insurance under IB Jeevan Kalyan and are available in the centres, they may take up
IB Varishtha with HO: CCC through their Circle Office for
including their names in the list of designated
The above Life Insurance covers from LIC
branches.
of India are in force from 1st November every year
to 31st October of the following year. If the • Newly opened branches, if designated should
customer joins the scheme during the month of exercise utmost caution while selecting their
November any year, premium for one full year is to customers for issuance of credit card.
be collected. If the customer joins the scheme in
any other month, the premium at entry will be pro- • Customers whose dealings with us are less than
rata for the number of months till the following one year and non-customers such as
October and the policy will expire on 31st October. Bureaucrats, Important Contacts, etc. can be
considered on a case to case basis, keeping in
The renewal of the policies have to be done view overall business potential and good will
as long as the customers are eligible, i.e. till they factor. Applications from such category of
reach the age of 55, beyond which they will not be customers/non-customers should be submitted
eligible for Insurance cover under IB Jeevan by the concerned branches along with details of
Kalyan. The Branches would do well to renew the value connection and recommendations to their
Insurance cover for customer by recovering the Circle Heads, who will, in turn, recommend
premium applicable, as and when they cross the issuance of cards to them. Approval for such
particular age group. cards will be given by the functional Deputy
Diarising standing instructions for renewal General Manager / General Manager at Head
of insurance and execution of the same. Office.
4 4
 APR-JUNE 2007
• A Credit Card being totally unsecured, great The above guidelines are to be complied with
care has to be exercised before identifying while sanctioning advances for Rs.50 lakhs and
customers for issuance of credit card. above with mortgage securities.
• For other guidelines with regard to submission (ADV:03/2007-08 dated 04.04.2007)
of credit card application, branches can refer
Exposure to Sensitive Sector
HO: BD NFP & IBT Department circular No.
ADV.82/2006-07 dated 14.10.2006. Consequent upon the changes in norms for
Bank's exposure to capital markets by Reserve
Collection & Remittance of Credit Card Dues and
Recovery of Overdues & NPAs are detailed in the Bank of India; we have modified the CPG M8
circular. format as annexed to this circular. These changes
are effective from 01.04.2007 i.e. from April 2007
(ADV:01/2007-08 dated 04.04.2007) branches should submit it in the revised format
Legal audit for advances of Rs.50 lakhs and above only.
with immovable property as security The details of changes vis-à-vis the existing
ƒ As per the directions of the Board, it has now position are as under:
been decided to have legal audit for credit Existing Proposed
portfolio with mortgage securities. Accordingly Advances for any Advances for any other purposes to the
the following guidelines have been framed. other purposes in extent secured by collateral security of
which shares are shares or convertible bonds or
ƒ In all advances of Rs.50 lakhs and above, with taken as primary debentures or units of equity oriented
immovable property/ies as either primary or security only be mutual funds i.e where the primary
collateral security, immediately after included. Shares security other than shares, convertible
documentation but before disbursal of the loan, taken as collateral / bonds or debentures or units of equity
additional security oriented mutual funds does not fully
branches should refer the EM documents to need not be included. cover the advances
panel advocate for legal audit on the validity of
the mortgage created and charges registered
with SRO/ROC. (ADV:04/2007-08 dated 07.04.2007)
ƒ The legal audit should ensure the following:
Model Code for Collection of Dues and Repossession
ƒ Proper filling up of the charge creating of Securities - Revised Code
documents such as D-32 etc.
ƒ IBA has reframed the guidelines on “Model
ƒ Proper payment of stamp duty and registration Policy on Collection of Dues and Repossession
of such documents, wherever of Securities”, after studying a few model
stipulated/necessary. policies. Member Banks have been advised to
structure a model policy woven on the broad
ƒ Proper entries in the document execution
framework outlined therein. The Revised
register.
CDRS Code adopted by our Bank is given in
ƒ Proper entries in the EM register. the Annexure to this circular.
ƒ Availability of title deeds deposited for creation ƒ Our Bank has so far empanelled 50
of EM as per legal opinion/ Legal Scrutiny Recovery Agents and their services are being
Report. utilised for marketing the sale of assets
mortgaged / charged to us, especially in
ƒ Inspection report of the mortgaged property
instances where difficulty is faced in bringing
before/ at the time of sanction of loan, by the
the property for sale in the normal course.
branch officials.
Needless to state that their services should be
ƒ Obtention of EC immediately after creation of enlisted by the branches only in difficult cases
EM. as the service fee paid to them is costing the
ƒ Certificate of the lawyer that the document Bank substantially. As the Principal, who is
being deposited with the bank to create charge engaging these (recovery) Agents, Bank is
is original and the one finding in the records of accountable for their actions. Therefore, it has
Registrar of Assurances. to be ensured that the Recovery agents act
within the broad guidelines laid down under the
model code.

5
 Recollect
ƒ Our Bank is following well laid down Reserve Bank of India vide their circular
policies and adopting practices in the matter of No. DBOD / No. BP.BC. 90 / 20.06.001/ 2006 - 07
recovery of dues / taking possession in a dated 27 04 2007 have issued final guidelines on
transparent manner which are not only fair but the Revised Framework. A copy of the circular is
true to the spirit in which the guidelines have available in the intranet site of the Bank for
been framed. The policy of the Bank is that reference.
necessary care and caution is exercised in
Effective Date
ensuring that no unfair practices are adopted as
Bank is only aiming at recovery of its dues and Foreign Banks operating in India and
not interested in our defaulter borrowers Indian Banks having operational presence outside
dispossessing the assets. India should adopt Standardised Approach (SA) for
Credit Risk and Basic Indicator Approach (BIA) for
ƒ Circle Offices and Branches are advised
Operational Risk for computing their capital
to sensitize all those involved about the Policy
requirements under the Revised Framework with
and the features of the Code and notify the
effect from March 31, 2008. All other commercial
Code in their Notice Board. The CDRS Code
banks (excluding Local Area Banks and Regional
has been ported in the Bank’s website also to
Rural Banks) are encouraged to migrate to these
enable the customers to have easy access to it.
approaches under the Revised Framework in
The greater awareness created all around calls
alignment with them but in any case not later than
for careful handling of the issue by all those
March 31, 2009. These Banks shall continue to
who are involved in the process.
apply the Standardised Duration Approach (SDA)
(ADV:08/2007-08 dated 16.04.2007) for computing capital requirement for market risks
under the Revised Framework.
Modification in Fair Lending Practices Code (FLPC)
Accordingly, our Bank (having offices in
Our Board on 23.04.2007 has approved the Singapore and Colombo) should be compliant with
Modification in Fair Lending Practices Code the Revised Framework with effect from March 31,
(FLPC) for our Bank and FLPC is made applicable 2008.
to all categories of loan irrespective of the amount
of loan sought by the borrower. Highlights of the revised guidelines relating
to Credit Risk are furnished in the Annexure to this
The Lenders' liability / obligations framed circular.
by RBI, as internal guidelines are furnished in
Annexure I to this circulars for strict compliance at (ADV:13/2007-08 dated 21.05.2007)
all levels and Full Text of FLPC approved by the
Financial Inclusion– Farmers in distress-
Bank is furnished as Annexure II to this circular.
Popularisation of Scheme ‘RYOTS
(ADV:10/2007-08 dated 30.04.2007) PUNARUDDHAARN YOJANA’.
Prudential Guidelines on Capital Adequacy and NABARD has come out with special
Market Discipline - Implementation of New Capital scheme viz. ”Krishak Saathi Scheme” aimed at
Adequacy Framework - Criticality / Importance of redeeming indebted farmers from the clutches of
External Credit Rating. moneylenders. The scheme is made available to
farmers on condition that they would not create
The BCBS released comprehensive version fresh debts with moneylenders. Such loans
of the revised framework on "International provided to farming community by way of debt
Convergence of Capital Measurement and Capital redemption will also be eligible for refinance
Standards" in June 2006 incorporating the assistance from NABARD on usual terms and
constituents of capital and the 1996 amendment to conditions.
the Capital Accord to incorporate Market Risk.
The Revised Framework seeks to arrive at The ‘Ryots Punaruddhaarn Yojana’ is in
significantly more risk sensitive approaches to alignment with the above referred scheme and
capital requirements. The Revised Framework hence eligible for refinance assistance from
provides range of options for determining the NABARD. With the refinance facility, the scheme
capital requirements for Credit Risk and has been made attractive too.
Operational Risk to allow Banks and supervisors to We advise the Circles/Branches to give
select approaches that are most appropriate for their thrust for implementation of the scheme by
operations and financial markets. providing wide publicity among the prospective
6 6
 APR-JUNE 2007
borrowers, with a view to achieve desired results. format enclosed (Annexure I & 2 to this circular) as
Refinance claims should be submitted to concerned per time frame mentioned below without fail :
Regional Offices of NABARD under intimation to Scheme Claim in Date of Date of
HO: RBD. respect of submission of submission of
quarter/half claim by claim by COs to
Branches are also advised to implement the year ending branches to CO HO
scheme in the right earnest to select proper
borrowers, monitor and keep track on the 2006-07* 30.06.07 30.06.07 05.07.07
repayment and report the progress to Circle Office 2007-08 30.09.07 30.09.07 05.10.07
every month. 2007-08 31.03.08 31.03.08 05.04.08
Similarly, Circle Offices should monitor 2007-08* 30.06.08 30.06.08 05.07.08
the progress and repayment of the loans under the
* Claims pertaining to Rabi crops only.
scheme branch wise every month.
While claiming the interest subvention from
Circle Offices are advised to report the
HO sufficient care should be taken in the compiling
progress under the Scheme to Head Office, Rural
the statement and the integrity of the data should be
Banking Department regularly every month in the
ensured.
statement on Provision of Credit to Agriculture and
Debt Relief to farmers. (ADV:15/2007-08 dated 01.06.2007)
(ADV:14/2007-08 dated 24.05.2007) Financing of Handloom Weaver Groups (HWGs)
Short Term Credit to Farmers at concessional A scheme for financing of HWGs by the
interest rate of 7% per annum-Union Budget 2007-08 various banking agencies was formulated by
NABARD and forwarded to GOI. The scheme has
Salient features of RBI guidelines
been approved by the Ministry of Textiles, Govt. of
¾ In pursuance of the announcement made in the India for implementation by banks.
budget 2007-08, Government will provide The scheme addresses the need for providing
interest subvention of 2% p.a. to Banks in hassle free credit to handloom weavers in rural
respect of short-term production credit up to areas.
Rs.3 lakh provided to farmers during 2007-08. Branches to initiate measures urgently to
¾ This amount of subvention will be calculated facilitate formation of HWGs and their-financing so
on the amount of the crop loan disbursed from that this effort brings more and more handloom
the date of disbursement/drawal up to the date weavers within our bank’s fold. We advise that
while selecting clusters for formation of HWGs
of payment or up to the date beyond which the
preference may be given for handloom clusters
outstanding loan becomes overdue i.e. March where some developmental/promotional work has
31, 2008 for Kharif and June 30, 2008 for been/is being done by GOI/NABARD/Other
Rabi, respectively, whichever is earlier. Agencies. Further, SHGs already formed under the
¾ This subvention will be available to Banks on earlier Self-employed Weaver Group (SWG)
scheme (Co-operatives) could also be considered
the condition that they make available short-
for financing if they meet the basic criteria laid
term credit at ground level at 7% p.a. down under the HWG scheme.
In view of the above, branches are advised to The HWG Scheme should be implemented by
charge ROI @ 7% p.a on all crop loans including the Bank during 2007-08 and onward on an on-
jewel loans given for agriculture production going basis. The format of loan application and
purposes upto Rs.3.00 lakhs, which are disbursed other documents to be submitted by the HWGs to
during Kharif and Rabi 2007-08 i.e. from April branches are enclosed along with this circular.
2007 to Mar 2008 as against the prevailing card
rates. In order to effectively implement the scheme
and ensure adequate credit flow to Handloom
Submission of claims: Branches should claim Weavers the field level functionaries are advised to
the interest subvention at 2% p.a. on the follow the directions as spelt out in this circular.
disbursements made during Kharif and Rabi 2007-
08 through COs, on a half yearly basis as at (ADV:18/2007-08 dated 12.06.2007)
September 30, 2007 and March 31, 2008 in the

7
 Recollect
Micro, Small and Medium Enterprises (MSME) - (iii) A medium enterprise is an enterprise where
Revised guidelines the investment in equipment is more than Rs.
2 crore but does not exceed Rs.5 crore
Reserve Bank of India has issued two
notifications regarding the Credit flow to Micro, Classification under Priority Sector/ Non Priority
Small and Medium Enterprises Sector (RBI Sector
Notification - RBI/2006-2007/306 / RPCD.PLNFS.
With regard to the priority sector classification
BC.No.63/ 06.02.31/ 2006-07) on 04.04.2007 and
of the MSME sector, please refer to the circular
Guidelines on Lending to Priority Sector –
letter issued by HO/RBD dated 22.05.2007 to the
Revised (RBI/2006-2007/358 RPCD. No. Plan. BC.
Circle Heads which in turn would have been
84 /04.09.01/ 2006-07) on 30.04.2007.
communicated to the branches by them. Copy of
The contents of the above two notifications for the RBI notification of Guidelines on Priority
implementation by the field level functionaries are Sector – Revised dated 30.04.2007 in this regard, is
as under. annexed to this circular.
(a) Enterprises engaged in the manufacture or Bank’s lending to Medium enterprises (both
production, processing or preservation of goods as manufacturing & services) will not be reckoned
specified below: under the priority sector.
i) A micro enterprise is an enterprise where (ADV:19/2007-08 dated 14.06.2007)
investment in plant and machinery [original cost
excluding land and building and the items specified Prime Minister's Rozgar Yojana (PMRY) - Revised
by the Ministry of Small Scale Industries vide its guidelines and Targets for the year 2007-08
notification No. S.O. 1722(E) dated October 5, Prime Minister's Rozgar Yojana (PMRY) for
2006 (Annexure I)] does not exceed Rs. 25 lakh; providing self employment to educated unemployed
ii) A small enterprise is an enterprise where youth for economically weaker sections has been in
the investment in plant and machinery (original cost operation since 2nd October 1993.
excluding land and building and the items specified RBI has informed that the terms and
by the Ministry of Small Scale Industries vide its conditions of the Yojana will be governed by the
notification No. S.O. 1722(E) dated October 5, revised guidelines. Some of the salient features of
2006) is more than Rs. 25 lakh but does not exceed the revised guidelines are furnished hereunder:
Rs. 5 crore; and
¾ The family income ceiling has been enhanced
iii) A medium enterprise is an enterprise where from Rs.40,000/- per annum to Rs.1.00 lakh
the investment in plant and machinery (original cost per annum.
excluding land and building and the items specified
¾ Project cost has been enhanced from Rs.1.00
by the Ministry of Small Scale Industries vide its
lakh to Rs.2.00 lakh for business/service sector
notification No. S.O. 1722(E) dated October 5,
and from Rs.2.00 lakh to Rs.5.00 lakh for
2006) is more than Rs.5 crore but does not exceed
industry sector.
Rs.10 crore.
¾ Ceiling on subsidy has been enhanced from
(b) Enterprises engaged in providing or rendering
Rs.7,500/- to Rs.12,500/- per beneficiary in all,
of services and whose investment in equipment
other than the North – Eastern States
(original cost excluding land and building and
(including Sikkim), Himachal Pradesh,
furniture, fittings and other items not directly
Uttarakhand and Jammu & Kashmir, where the
related to the service rendered). The small and
ceiling remains at Rs.15,000/- per beneficiary.
micro (service) enterprises shall include small road
& water transport operators, small business, ¾ The ceiling on subsidy for Self Help Groups
professional & self-employed persons, and all other has been enhanced to Rs.15,000/- per
service enterprises beneficiary subject to a maximum amount of
Rs.1.25 lakh per Self Help Group.
(i) A micro enterprise is an enterprise where the
investment in equipment does not exceed Rs. ¾ The scheme envisages coverage of SC/ST and
10 lakh; minority candidates at least equal to their
population in the District/State. However, the
(ii) A small enterprise is an enterprise where the
percentage should not be less than 22.50% for
investment in equipment is more than Rs.10
SC/STs, 27% for Other Backward Classes
lakh but does not exceed Rs. 2 crore; and
8 8
 APR-JUNE 2007
(OBCs) and 30% for women. Equitable share Guidelines on Empanelment of valuers and valuation
for minorities may also be ensured. of properties accepted as security
¾ All efforts must be made to improve loan Our Board vide its meeting dated 28.05.2007
recovery under the scheme particularly in the approved the revised Policy Guidelines on
States/Circles where recovery percentage is Empanelment of Valuers and Valuation of
less than all India average of 35.78%. The properties as per RBI Guidelines. General Manager
names of the States where recovery is less than (CCB) is designated as the competent authority to
all India average are furnished in the Annexure approve the empanelment of Engineer/Panel valuer,
to this circular. recommended by the Circle Heads, subject to the
Engineer/Panel valuer complying with the norms as
¾ The revised quarterly schedule as furnished in
per circular.
the annexure D to this circular for sponsoring
and sanctioning of applications and (ADV:24/2007-08 dated 27.06.2007
disbursement of loan amount/subsidy has to be
implemented strictly. HRM

(ADV:20/2007-08 dated 19.06.2007) Declaration of Banking Industry to be a Public Utility

Service under the provisions of Industrial Disputes
Implementation of Improvised Credit Scoring Model Act, 1947.
for Global Credit Card – Furnishing of details on
Government of India, vide Gazette
deposit/business connection and VIP status of credit
Notification No.S.11017/5/97-IR (PL) dated
card applicants by designated branches.
28.03.2007, have communicated the following:
The existing Credit Scoring Model, which is in
QUOTE:
operation since launching of our Bank’s Global
Credit Card, involves awarding of graded points on Whereas the Central Government having been
certain parameters like income, occupation, type of satisfied that the public interest so requires that in
residence, age, No. of dependents, etc. furnished by pursuance of the provisions of sub-clause (vi) of the
the concerned credit card applicant. The limit is clause (n) of section 2 of the Industrial Disputes
sanctioned based on the points scored by the Act, 1947 (14 of 1947), declared by the Notification
applicant in the rating. of the Government of India in the Ministry of
Labour S.O.No.-3987 dated 26.09.2006 the service
There have been requests from branches to
in Banking Industry which is covered by item 2 of
take into account, in addition to other parameters
the First Schedule to the Industrial Disputes Act,
stated above, the applicants’ business/deposit
1947 (14 of 1947) to be a public utility service for
connection, their social status and duration of
the purpose of the said Act, for a period of six
satisfactory association with our Bank for awarding
months from the 17th October, 2006.
points in the process of arriving credit limits to
them. And whereas, the Central Government is of
opinion that public interest requires the extension of
An improvised scoring model has been
the said period by a further period of six months.
evolved, vetted by HO: Risk Management
Department and approved by competent authority Now, therefore, in exercise of the powers
of its implementation. The model will be introduced conferred by the proviso to sub-clause (vi) of clause
with effect from 09.07.2007. To implement the (n) of section 2 of the Industrial Disputes Act,
model in respect of credit card applicants, who are 1947, the Central Government hereby declares the
either having deposit/business connection or who said industry to be a public utility service for the
are being treated as having VIP status, we require purposes of the said Act, for a period of six months
additional information as per the Annexure to this from17th April, 2007.” - UNQUOTE
circular. (HRM:10 /2007-08 dated 16.04.07)
The designated branches shall furnish
particulars as per Annexure and submit the same Provision of Residential Accommodation to Officers
along with the credit card application to HO: Credit on lease basis – Revision in rental ceilings.
Card Centre to fix appropriate limit as per Bank’s Board, taking into account the
improvised scoring model. difficulties faced by the Officers in getting
(ADV:23/2007-08 dated 27.06.2007) residential accommodation on lease basis within the
existing rental ceilings, has approved an upward

9
 Recollect
revision as per details in the Annexure to the case there will be a downward revision of pension.
circular. In this context, it is specifically mentioned that
revised pension with effect from 01.01.2006 given
The rental ceiling in respect of officers
in Table No.6 will not be beneficial to Pre-96
working in twelve cities earlier classified under
retirees Havidars granted Hony rank of
‘Other Cities’ (for purpose of provision of
Nb/Subedar. Hence they will continue to get the
residential accommodation to Officer employees on
pension at the existing rates. However, revised
lease basis) has been increased to be on par with
pension with effect from 01.01.2006 shown in
‘Other Metros’ category in view of the difficulties
Table No.18 in respect of Post -96/Pre-10.10.1997
faced by officers working in these places in fixing
pensioners and Table No.24 in respect of Post-
residential accommodation within the respective
10.10.1997 pensioners is beneficial and as such
existing rental ceilings. Please see annexure for
pension will be revised as per these Tables.
details.
(CRA:01/2007-08 dated 04.04.07)
a) Rental advance shall be continued at the rates
specified below: "Arogya Raksha" - Co-Branded group Mediclaim
Lease Period Advance Amount Policy for the Bank’s customers in association with
United India Insurance Co. Limited (UIICO)
One year and above but less One month rent
than two years. Consequent to the levy of additional cess of
Two years and above. Three months rent. 1%, the service tax on the premium payable for
Arogya Raksha policies also stand revised to
b) Exceptions to the approved limits, upto a 12.36% (existing 12.24%) from 01.04.07 onwards.
maximum of 50% increase over entitlements in
the case of Officers in Scale IV (Branch A chart containing the premium structure
Managers/exceptional cases) and the for Arogya Raksha and Arogya Raksha Plus Policy,
Executives in Scale V and VI may be effective from 01.04.2007, is given in the annexure
considered by a committee of General to the circular.
Managers on case to case basis. Termination of Third Party Administrators
c) Garage rent of Rs. 150/- per month for office (TPAs) by UIICO from the existing panel
car, wherever provided, is continued. The services of the following TPAs have
(HRM:22 /2007-08 dated 15.05.07) been terminated by United India Insurance
Company Limited. However the above TPAs will
CRA continue to render services up to 31.03.08 for the
Revision of Defence pension to Personnel Below policies handed over to them till 31.03.07.
Officer Rank (PBOR) 1. Family Health Plan Ltd and
In para 6.3 of their Important Circular No. 350 2. Paramount Health Services Pvt Ltd
dated 19.05.2006, it was stated that the issue of
tables No.6, 18 and 24 pertaining to Pre-1996 and Induction of additional Third Party
Post-1996 Havildars granted Honorary rank of Naib Administrators (TPA)
Subedar were held back and shown as blank as the The following TPA has been inducted by
matter regarding removal of certain anomalies is UIICO to service the Arogya Raksha Policy:
being resolved by the Ministry.
M/s TTK Healthcare Services Pvt. Ltd.
Bank branches are required to revise the
pension on their own as per these tables after Crimson Court II,
matching Existing Pension as shown in relevant No.4 Jeevan Bhima Nagar Main Road
columns of the tables without calling or waiting for
HAL Third Stage, Bangalore 560075
any applications from the affected pensioners as per
the guidelines enumerated in the above Circular Phone #080 4012 5678
dated 19.05.2006 .
Toll free fax # 1800 425 2626
Where the revised pension as on 01.01.2006 as
Toll free # 1800 425 8885 /
per these tables happens to be less than what the
pensioner is getting now, the pensioner will get the 1800 425 7878 /1800 102 1234
pension which is more beneficial to him, and in no

1010
 APR-JUNE 2007
‘Dos and Don’ts’ in forwarding the Arogya rounded off to the next higher rupee and fraction of
Applications - fresh/renewal has been given in less than 50 paise shall be ignored. Issue prices of
detail in the circular. cash certificates should also be rounded off in the
(CRA:03/2007-08 dated 05.04.07)
same manner. Branches are requested to refer page
No. 4.27, para No.26 in the Manual of Instructions
KYC Norms and AML Standards for Wire Transfer on Deposits 2006 in this regard. Further cheques
transactions issued by clients containing fractions of a rupee
should not be rejected or dishonoured.
Branches use wire transfer mode as an
expeditious method for transferring funds between RBI has informed that recently a case
bank/branch accounts. Wire transfers include involving refusal by a bank to accept a draft drawn
transactions occurring within the national in fraction of a rupee, lodged for collection to the
boundaries of a country or from one country to credit of Government account came up before the
another. As wire transfers do not involve actual High Court of Gujarat, Ahmedabad. The High
movement of currency, they are considered as a Court of Gujarat, taking a serious view in the
rapid and secure method for transferring value from matter, has directed Reserve Bank of India to take
one location to another. appropriate steps in the matter in accordance with
law, and see that stern action is taken against the
Salient features of a Wire Transfer
persons who refuse to receive the cheques/drafts,
transaction by different mode are described in the
which are drawn in fractions of a rupee.
circular.
Branches are, therefore, advised to ensure
The Originator is the account holder or
that cheques/drafts issued by clients containing
where there is no account, the person (natural or
fractions of a rupee should not be rejected or
legal) that placed the order with the bank to
dishonoured.
perform the wire transfer. The originator is known
as the Applicant in our Bank. The Beneficiary of a (CRA:08/2007-08 dated 24.04.07)
wire transfer can also be termed as the Receiver.
Fixed Deposit as Security for New Lockers
An Ordering Bank/Branch is the one that
Existing Guidelines
originates a wire transfer as per the order placed by
its customer. Branches should not insist on a term
deposit as a pre-requisite for allotment of Lockers.
For both cross border and domestic wire
There will, however, be no objection to the branch
transfers, a bank which processes an intermediary
in seeking a Caution Deposit (but not as a condition
element of a chain of wire transfers is known as the
for allotment) from the applicant who has been
Intermediary Bank.
allotted a locker the annual interest from which
Beneficiary Bank/Branch is the one which would service the annual rent of the locker.
holds the account of the beneficiary of a wire
In the alternative, advance payment of
transfer transaction.
locker rent for a period of three years can be
Need for Obtention of Originator collected from the locker holder.
Information
Modified Guidelines for New hirers
Wire transfer is an instantaneous and most
In order to ensure prompt payment of
preferred route for transfer of funds across the
locker rent, branches should, at the time of
globe and hence, there is a need for preventing
allotment, obtain a Fixed Deposit that would cover
terrorist and other criminals from having unfettered
3 years rent and the charges for breaking open the
access to wire transfer for moving their funds and
locker in case of an eventuality.
for detecting any misuse when it occurs.
(CRA:07/2007-08 dated 20.04.2007)
This is applicable for the new locker hirers
only.
Rounding off Cheques to the nearest Rupee However, branches may endeavour to
As per extant guidelines on ‘Interest Rates convince those existing locker hirers who are not
on Deposits’, all transactions, including payment of holding a Caution Deposit as per the existing
interest on deposits/charging of interest on guidelines to make a Fixed Deposit as prescribed in
advances, should be rounded off to the nearest the modified guidelines.
rupee; i.e. fractions of 50 paise and above shall be

11
 Recollect
Circle Offices should ascertain from the Additional Education Cess @ 1% on Service Tax –
manufacturers the approximate charges for Service Tax amendments
breaking open lockers for each branch in their
Further to our circular No. CRA 18 / 2006-
Circle and inform the branches as to the amount to
07 dated 13.06.2006, now a new levy has been
be collected (to the next '000) from the new locker
introduced through the Finance Bill 2007 by name
hirers at the time of allotment. This is due to the
Secondary & Higher Education Cess at the rate of
reason that the location of a branch may matter
1% effective from 11.05.2007 (the date on which
while calculating the charges.
President of India has given his assent to the
(CRA:11/2007-08 dated 09.05.2007) Finance Bill 2007) on Service Tax. As a result
present rate of Service Tax and Education Cess at
Customer Due Diligence (KYC Norms) for Safe 12.24% has been hiked to 12.36%. Branches are
Deposit Locker Facilities advised to take note of the same and act
It is reported by Reserve Bank of India that accordingly.
in a recent incident, explosives and weapons were (CRA:14/2007-08 dated 17.05.2007)
found in a locker of a bank branch. This
emphasises that branches should be aware of the Agency Commission – Public Provident Fund
risks involved in renting safe deposit lockers. Scheme, 1968 (PPF) and Senior Citizens Savings
Scheme, 2004 (SCSS) - Clarifications
Customer due diligence for allotment of Lockers
and Measures for lockers remained unoperated are With a view to bringing uniform practice in
detailed in this circular. claiming agency commission which would facilitate
(CRA:12/2007-08 dated 09.05.2007)
PADs / CAS to settle the claims expeditiously, it is
advised as under:
Provision of e-payment facilities to Government a. Agency banks may submit their claims in the
Departments Formats enclosed (Annexure I & II in the
The Central Vigilance Commission has circular). The claims should be prepared for
directed the Government Departments vide Office each quarter separately and a summary of the
Order No. 98 / ORD /1 dated April 6, 2004 (copy claim may be submitted as per Annexure III in
enclosed to the circular) to switch over to e- the circular.
payment and e-receipts system to ensure b. Agency commission is payable on PPF with
transparency and avoid delays in Government effect from July 1, 2005 and on SCSS from
transactions as such delays lead to opportunities for April 1, 2006.
corruption.
c. Claim for arrears of agency commission due
In this connection RBI has informed that as upto March 31, 2007 shall be submitted by
a corollary, the agency banks are expected to Agency banks latest by June 10, 2007.
provide an enabling environment and facilities to
the customers for making Government transactions d. In case of PPF, there is no change in reporting
electronically by providing ECS / EFT facilities. arrangements and the Agency banks are
RBI has also informed that while several banks are required to submit their claims to the concerned
offering such facilities to their customers, it has PADs or CAS, Nagpur, as was being done
been reported that the progress of switching over to earlier. As regards SCSS, all the Agency banks
ECS / EFT has not been as expected due to are required to submit the claim to CAS,
unwillingness of the accredited agency banks in Nagpur.
public sector in this regard. It is also informed that e. Claims for agency commission shall be
the accredited banks are not coming forward to certified by Auditors / Concurrent Auditors of
open their deposit account. the Agency banks to the effect that no ineligible
It is therefore advised that branches item is included and the claim is made as per
handling Government business assist the extant instructions of RBI.
Government Departments by implementing RBI f. Since there will be only one channel of agency
guidelines as indicated in para 2 above whenever commission payable, the remuneration on PPF
such requests are received from them. & SCSS accounts received from Government
of India (GOI) for the period after July 1, 2005
(CRA:13/2007-08 dated 11.05.2007)
and April 1, 2006 respectively if any already
paid by GOI will be recovered by RBI.
1212
 APR-JUNE 2007
g. Brokerage / Commission paid to small savings RBI Remittance Facilities Scheme 2007
agents for mobilising deposits under the two The salient features of the modified
schemes will be reimbursed by GOI as hitherto, Remittance Facilities Scheme 1975 by RBI
hence and the same should not be claimed as a (RBIRFS – 2007) are given below.
part of the agency commission payable by RBI.
The Scheme will be in operation at the
RBI will pay agency commission on transactions following places in India:
relating to PPL & SCSS at the following rates from
01.07.2005 and 01.04.2006 respectively: 1. Wherever Reserve Bank of India has an office
of its Banking Department
Receipts – Rs.45/- per transaction
2. Wherever State Bank of India branches have
Payments – 9 ps per Rs.100/- turnover currency chests
(CRA:16/2007-08 dated 25.05.2007)
3. Where Associates of State Bank have branches
Marketing of Mutual Fund of Products of UTI – our with currency chest arrangements
Circulars no.CRA.10/2004-’05 dated 21.06.04 and 4. Wherever Treasury Agencies have currency
CRA/12/2005-06 dated 06.07.2005 and CRA/ 82/2005- chests
06 DT. 31.03.2006
5. Wherever Public Sector banks have currency
The validity of agreement has been chests and as and when approved by RBI
extended for a further period of three years i.e.
from 21.01.2007 to 20.01.2010. Branches shall Definitions for the purpose of this Scheme:
continue to sell UTI MF products and ensure that a. ‘ the Bank’ means the Reserve Bank of India
each application bears the ARN Code 17645,
name of the branch and IBGA code of the branch b. ‘agency bank’ means State Bank of India or
so that the commission can be received by our any other bank to which the custody of a
Bank and distributed to branches. currency chest of the Issue Department has
been entrusted at any centre by the Reserve
Other non-UTI mutual fund products will Bank (Annex-1)
continue to be sold through our arrangement with
Pnb Principal Financial Planners Pvt. Ltd. under c. ‘agency office’ means the office or branch of
ARN No. 25689 so that the commission can be the State Bank of India, State Bank of Bikaner
received by our Bank and distributed to branches. & Jaipur, State Bank of Hyderabad, State of
Indore, State Bank of Mysore, State Bank of
During the month of May 2007 alone Patiala, State Bank of Saurashtra and State
Mutual Funds have increased their Assets under Bank of Travancore or any other agency bank,
Management (AUM) by Rs.57475 crores to touch where telegraphic transfer, mail transfers,
an AUM of Rs.407754 crore. This will indicate the drafts or other instruments can be issued or
potential MF industry for the investors paid under the Scheme and includes a branch
(CRA:19/2007-08 dated 05.06.2007) of Public Sector Bank as approved under
paragraph (5) above.
Change in RTGS Timings
Banks and Offices through which remittances can
Reserve Bank of India has advised the be issued or paid:
change in the customer and inter-bank transaction A list of the agency banks (State Bank of
timings and the same has been extended by 30 India or any other bank to which the custody of a
minutes with immediate effect on week days i.e. currency chest of the Issue Department has been
Monday to Friday. There is no change in the entrusted at any centre by Reserve Bank) through
timings on Saturday. which remittances can be issued or paid is furnished
Branches please note that any message in Annex-I to this circular. The names of the
received after cut off time will be viewed seriously offices of the banks at which facilities for the
by RBI and will be treated as non-compliance of remittance of funds under this Scheme are offered
RTGS rules and may invite special scrutiny / site can be ascertained by a reference to the banks
visits by the Reserve Bank, apart from initiating themselves, but broadly facilities for the issue and
payment of remittances under the Scheme will be
appropriate action.
available at places where such arrangements exist.
(CRA:20/2007-08 dated 11.06.2007)

13
 Recollect
Modes of Remittances, parties to whom remittances • RFC deposits may continue to be opened in the
are available, Remittances of Commercial Banks form of Current, Savings and term deposits.
and Scale of Exchange etc., are detailed in this
circular. This scheme will be implemented with • Term deposits are accepted for a minimum
effect from July 2, 2007. period of one year with a maximum period of
five years at par with FCNR(B).
(CRA:24/2007-08 dated 21.06.2007)
• RFC deposits are accepted in USD, GBP and
Introduction of Single Window System ( SWS ) for EURO currencies.
reimbursement of Defence Pension Payments
• RFC deposits are accepted for any amount
It is reported by the PCDA (P) Allahabad without any minimum stipulation.
office that some of the banks are not furnishing the
Nodal branch–wise / month-wise pension payment • There is no change in the rate of interest payable
scrolls containing details of each pensioner as per on RFC SB deposits. The rates will be
the prescribed proforma to their office as required announced by HO/ID during March/September
under Single Window System. The Principal as per the existing practice.
controller of Defence Accounts (pension) has (FX:02/2007-08 dated 18.04.2007)
supplied a Flow Chart and work procedure for
Accounting and Reimbursement under SWS Submission of R - Returns / FET - ERS
(annexed to the circular). R – Returns are regulatory returns and non
We instruct the pension paying branches, submission or delayed submission of these data will
Link / Nodal branches, Circle EDPs and Nagpur attract penalty and could even lead to cancellation
(Link Cell) branch to strictly adhere to the of forex authorisation.
procedure laid down for reporting of Defence In view of the above, FX authorised
Pension payment transactions to PCDA, Allahabad. branches are advised to prepare R–Returns & FET-
Circle offices are advised to ensure proper ERS well in advance and to submit the same
implementation of the Single Window System for without any error within two days of the respective
quick reimbursement of Defence Pension Payment, fortnight under copy to HO: International Division.
by our branches, as required by the Government. (FX:07/2007-08 dated 06.06.2007)
(CRA:26/2007-08 dated 25.06.2007) Precautions to be taken for opening of Joint NRI
FX Accounts and operations by a Power Of Attorney
Holder
Country Risk Management Policy – Changes in the
risk ratings of countries and ECGC’S New Country It should be ensured that the new customer,
Risk Rating Model who is to be included in the existing account is also
an NRI and is eligible to open NRI account as per
ECGC has revised the ratings of countries RBI guidelines. He should also fulfil all KYC and
and country risk rating model by re-aligning the AML Norms.
risk exposure categories which is furnished in
annexure to the circular. The existing NRI customer must come to
the Branch in person, along with the new NRI
Branches may take note that there is no customer, whose name is going to be included in
“Off-Credit “category under the new classification. the existing account, to convert the existing account
(FX:01/2007-08 dated 18.04.2007) into a joint account.

Treatment of Resident Foreign Currency ( RFC ) Term A consent letter in the format (Annexure to
Deposits at par with FCNR(B) Deposits. the circular), should be taken from the existing
customer at the time of conversion into a joint
In modification of existing guidelines, RFC account, for undertaking the consequences that may
Term deposit will be made at par with FCNR(B) occur due to the acts of the Joint account holder.
deposits in terms of interest rate with effect from
01.05.2007. a. At the time of conversion, the style of account
should be specified, i.e. Either or Survivor,
Branches are advised to be guided by the Anyone or Survivor, Former or Survivors and
following modifications. Jointly or Survivors.

1414
 APR-JUNE 2007
b. In case of all transactions of value above ADMIN
Rs.5.00 lakhs, confirmation from the original
Exemption from the purview of Tax Deducted at
account holder has to be obtained.
Source (TDS) on the Income Accruable to the Bank
c. Operations by Power of Attorney Holder are during the Financial Year 2007-08
detailed in the Annexure.
The income earned by the Bank in respect
(FX:08/2007-08 dated 07.06.2007) of Interest on Securities, Debentures, Bonds etc,
Rent, Commission, Discount, Commission received
Revaluation of Foreign Currency Assets & Liabilities
from Mutual Funds & insurance companies,
for the quarter ending 30.06.07 in compliance with
Brokerage, Turnover Commission, Income from
(AS 11) guidelines
credit card operations etc. are subject to TDS under
As per the guidelines enumerated in our Sections 193 to 194J of the Income tax Act, 1961.
above circular, Foreign Currency Liabilities in the
The Bank has obtained the TDS Exemption
books of branches in the form of deposit accounts,
Certificate, under Section 197(1) of the Income tax
FCNR(B), EEFC, RFC etc. and assets in the form
Act, 1961, for the current Financial Year 2007-08,
of FCPC / FCFBD/ FCL etc. are to be revalued at
which is valid upto 31.3.2008, vide Certificate
the FEDAI closing Spot rate at the end of every
No.1/2007-08 dated 03 04 2007 issued by the
quarter. Branches which have already migrated
Assistant Commissioner of Income tax, Company
FCNR(B) accounts to BANCS under CBS, need not
Circle II(3), Chennai 34. This certificate is useful in
do the exercise of revaluation of FCNR(B) accounts
getting the entire income of the Bank receivable
and this will be taken care of at CDC. However
during the year 2007-08, exempted from the
such branches are required to revalue other foreign
purview of TDS.
currency deposits such as EEFC, RFC and assets
like FCPC/FCFBD/FCL etc which are still to be A copy of the above TDS exemption
migrated to CBS. certificate dated 03 04 2007 is annexed to this
circular, with instructions to produce a certified
The guidelines on revaluation procedure
copy of the above exemption certificate well in
are given in the circular.
advance to the authorities responsible for deduction
(FX:10/2007-08 dated 15.06.2007) of TDS in respect of income in the nature of
Interest on Securities, Debentures, Bonds etc., Rent,
GENERAL Commission, Discount, Insurance Commission,
Banking Ombudsman Scheme 2006- Amendments Brokerage, Turnover Commission, commission
2007 – reg. from Mutual Funds, income from credit card
operations etc., in order to avoid incidence of TDS
Revised “Banking Ombudsman Scheme on any income earned / accrued from 01.04.2007 to
2006” has become effective from January 1, 2006. 31.03.2008
The new Scheme has been expanded to Further, the Branches / Offices are
• include customer complaints on certain new requested to note the details of the TDS Exemption
areas such as Credit Card complaints, levying Certificates issued from time to time, in the Branch
service charges without prior notice to the Document Register and preserve copies of the TDS
customer, non-adherence to fair practices code Exemption Certificates along with the relevant
etc Circulars in the Safe Vault for any future reference.
• provide for online submission of complaints, (ADMN.3/2007-08 dated 04.04.2007)

• include changes in the Implementation of RBI’s Clean Note Policy

(i) appeal mechanism against the Awards issued RBI has issued the following directions
by Banking Ombudsman and under Sec 35A of the Banking Regulation Act,
1949 with the objective of implementing Clean
(ii) administration setup. Note Policy effectively and in public interest.
Salient features of the Scheme and highlights i. Banks should do away with stapling of
of the “Amendments 2007” are explained in the currency note sections and instead secure them
circular. with paper / polymer bands.
(GENL:3/2007-08 dated 22.06.2007)

15
 Recollect
ii. Banks should sort notes into re-issuable and deliberated in detail by RBI and the following
non-issuable and issue only clean notes to directions have been issued:
public.
1. All branches must accept coins of all
iii. Banks should forthwith stop writing of any kind denominations tendered at their counters either
on the watermark window of bank notes. for exchange or for deposit in accounts.
The very purpose of the above direction is to 2. Notice informing the public about the
ensure that the notes are not spoiled by stapling and availability of exchange facility and acceptance
proper sorting is done at the branches so that the of coins to be displayed suitably inside as also
good, clean and sorted notes can be issued to the outside the branch premises for information of
customers and the general public. Similarly as far the public.
as possible only new notes are to be kept in the
ATM’s. In case of non-availability of new notes, RBI has advised that stern action will be
ATM fit notes should be kept in the ATM’s for taken in the event of refusal / non-compliance by
issuing to the customers. any staff member. The Circle Offices should follow
up with branches to ensure that the above directions
The circular may be brought to the are complied with by the branches.
information of all staff members for adherence and
(ADMN.14/2007-08 dated 04.05.2007)
compliance.
(ADMN.05/07-08 dated 07.04.2007) Business Process Re-engineering (BPR) in our Bank
Business Process Re-engineering is the
Policy on Business Continuity Planning (BCP) 2007 –
“critical analysis and radical redesign of existing
08
Business Processes to achieve breakthrough
Reference is drawn to HO: Risk improvements in performance measures”. Business
Management Department Circular No.: Prnl – 141 / process is defined as “a set of logically related tasks
2006-07 dated 29.12.2006 on the Policy on performed to achieve a defined business outcome”.
Business Continuity Planning. The circular deals Processes are generally identified in terms of
elaborately on the activities that have to be carried beginning and end points, having interfaces with
out in case of occurrence of incidents disrupting the organisational units involved, particularly the
business of the organisation. customer unit.
This policy was reviewed and adopted for In a structured way to enhance value for the
2007-08 by the Board in their meeting held on organization it has been contemplated to move back
29.03.2007 with the following Addition- end jobs away from the front office, by making
front office as a delivery channel for service to the
“Implementation of the Business Continuity
customers.
Planning at all units of administration (Branches /
Circle Offices / IMAGE / Head Office) with Enabled by Core Banking Applications, the
reference to the checklist and the action points Bank has already initiated the following in-house
enunciated in the policy is to be inspected BPR processes:
periodically to ensure ever alertness.”
1. Introduction of Express Counters.
(ADMN.09/2007-08 dated 16.04.2007)
2. Removal of maker checker.
Acceptance of Small Denomination Notes and Coins 3. Setting up of ATM Service Centre
The attention of the branches is drawn to 4. Introduction of Multi City Cheque facility
our master circular No. Genl. 63 / 2004-05 dated
02.02.2005 on distribution of coins wherein the 5. Introduction of Internet / Mobile / Phone
complete details of RBI's directions on acceptance Banking facility
and issue of coins are furnished. 6. Introduction of Inter City / Intra city
RBI has advised to ensure that none of our transactions.
bank branches / staff refuses to accept lower 7. Centralized processing of ECS / EFT
denomination notes and / or coins. The hardship transactions.
faced by the members of public because of non-
acceptance of coins by branches has been 8. Implementation of CBS at Service branch.

1616
 APR-JUNE 2007
9. Payment of at Par instruments in CBS ATM card, personalised cheque book and product
branches. brochure etc., will be sent to the customer to reach
him / her within 4 to 5 days.
Further, the following are some of the
processes identified for taking up BPR and efforts 05. Centralised Pension Processing Centre (CPPC):
are on to implement the same on a pilot basis in
To avoid manual entry of pension payments
CHENNAI Circle Branches.
at branches and avoid delays in submission of
01. Centralized outward clearing: reimbursement claims, it is proposed to effect
Pension payments from a centralised location. The
Centralized Outward Clearing is introduced
pensioner’s account will be directly credited from
on pilot basis at Service Branch, Chennai for about
Nodal branch and wherever loan is availed,
40 branches. All the branches in Chennai Clearing
recovery also will be made simultaneously.
Zone will be covered shortly. Branches will be
relieved of adjustment of outward clearing, marking 06. Centralised Pay Roll Processing:
of returns and charging the accounts for returns.
It is also proposed to disburse staff salary
All these activities will be taken over by Service
from a centralized location on a pilot basis in
Branch.
Chennai Circle. Crediting the loan accounts with
02. Centralized Inward Clearing: recoveries made and other deductions such as PF,
IT, LIC, GSLI, etc., will be centralized.
To have the benefits of CBS environment
and to relieve the branches from the burden of 07. Government Business Branch:
making entries and adjusting the “ System Inward
At present, for various types of
Clearing “, it is proposed to centralize the activity
Government Businesses handled, Bank has various
of Inward clearing. Software is being developed to
nodal offices, in the same City. It is proposed to set
suit to the requirements and the revised process will
up a branch to exclusively handle all types of
be tested / implemented, on a pilot basis, at two
Government Business taken up by the Bank. It will
branches under Service Branch, Chennai,
bring all focal point activities under one roof,
03. Centralized collection of outstation instruments: promote and help market Government Business.
(OBC)
We call upon all the staff members to
In the process of centralizing all the update themselves with the changes in various
clearing activities and on migration of Service processes whenever and wherever possible and be
Branches to CBS, it is also proposed to centralize in readiness to take up the same as and when
collection of outstation instruments and effecting enabled for the branches at their Centre.
credit to the respective customers’ accounts, from (ADMN.15/2007-08 dated 04.05.2007)
Service Branch / Main branch / CMS Hub.
Software is being developed to meet all the Banker’s Indemnity Policy for the financial year 2007-
requirements for centralized collection of outstation 2008
instruments.
The Banker’s Indemnity Policy for the
04. Centralized Deposit Processing Centre (CDPC): financial year 2007-2008 commencing from 01-04-
To get the data pertaining to the customer 2007 has been renewed with
entered, and to issue personalised cheque books The Oriental Insurance Company Ltd.,
account opening and issue of cheque books from a
Division VIII, Sri Pankaj Complex, II Floor,
centralised location is proposed.
89 Perambur Barracks Road
On a pilot basis, at Alwarpet Branch in
Chennai, the CDPC started functioning and 5 Vepery, Chennai 600 007.
branches within the Chennai City are taken up on
Phone: 23458265/23458266
pilot basis, for centralised account opening.
Fax: 23458267 –
Branches, after following KYC norms, will
open the new a/c at the branch by filling up E mail oriental411800@hoymail.com
mandatory fields, issue pass book and send the The new policy number is 411800/48/2008/16
application to CDPC concerned. At CDPC, all the
other fields of the CIF / Account screens will be The branches should mention the above
filled in and a welcome kit with letter of thanks, number whenever claims are reported to the above

17
 Recollect
company during the financial year 2007-2008. This Branches shall go through this circular
policy covers losses occurred on or after carefully and take all steps to protect the interests of
01/04/2006 and discovered subsequently. However the Bank.
losses occurred up to 31-03-2006 (i.e. date of actual (ADMIN. 19/2007-08 dated 17.05.2007)
loss is prior to 01-04-2006 but discovered during
the current year) are not eligible for any cover, as Inspection and Audit Policy - 2007-08
our policy for that period with M/S National
The present inspection and audit policy is
Insurance Company Ltd., Division 16, Mumbai –
in vogue from 01.04.2006. In the course of review/
400 001 expired on 31.03.2006 and the retroactive
revision of the present policy, certain modifications
period has also expired on 30.09.2006.
and improvements have been made to the existing
BASIC SUM INSURED: policy.
In respect of the following clauses viz.(A) Main objectives of the inspection and audit
to (H) the basic cover available is Rs.10 crore policy are:
(Rupees Ten crore only), for the Bank as a whole.
¾ Ensuring timely adherence to systems and
ADDITIONAL SUM INSURED: procedures.
Additional cover available in respect of ¾ Adoption of Risk Based Rating & risk profile
Clause A ( Loss on premises) is Rs. 15 crore and in in implementation of Risk Based Internal Audit
respect of Clause B (loss in-transit) is Rs. 10.00 (RBIA)
crore.
¾ Review of control mechanism
Details of Risks Covered, Insurance cover
¾ Adoption of separate IS Audit Policy for
for cash held in Automated Teller Machines,
system (computer) related process/ technical
Extension of cover for risks under computerised
audit.
accounting environment, Loss of Safe Keys by
employees due to theft or burglary, Claims The revised Inspection and Audit Policy
Procedure/Maintenance of Records, Important was approved by the Board on 14.05.2007 and the
features of the Policy etc., are detailed in this Policy comes into force from 01.04.2007 and valid
circular. up to 31.03.2008.
Separate Insurance Policy to cover A copy of the policy document approved
properties of our Bank against Burglary risk is by the Board is furnished along with ‘Internal
being taken by HO: Premises, Expenditure & Estate Guidelines’ as Annexure – I and the detailed chart
Department and Circular being issued every year. indicating the authorities responsible to conduct the
Please refer to H.O. Premises, Expenditure & Estate audit, review of the reports, issuance of closure
Department circular for full details regarding Cover certificate etc as- Annexure II to this circular.
available against Burglary risk including terrorism (ADMIN-21/2007-08 dated 21.05.2007)
cover and theft, for all our Bank’s properties
throughout India. The current policy number is Policy on complaint/grievance redress -
010503/46/06/04/00000174, with United India Modifications
Insurance Company Ltd., 64, Armenian Street
Please refer our Circular No. PRNL.159/
Branch, Chennai –1, valid upto 15/02/08.
2006-07 dated 14.02.2007 informing our Bank’s
Branches that have claims pending for “Policy on complaint/grievance redress”.
settlement are instructed to follow-up with the
Banking Codes and Standards Board of
Insurance Company concerned for appointment of
India vide letter dated 23.02.2007 has suggested
surveyor, completion of survey and settlement of
some modifications on the ‘Policy on complaint
the claims by submitting the copy of
/grievance redress’.
documents/papers as required by the Insurance
Company/surveyor. Wherever Branches The “Policy on complaint/grievance
experience any difficulty for getting settlement after redress” incorporating the modifications suggested
fulfilling all the formalities, they may inform HO: by BCSBI is enclosed to this circular.
Accounts Department, for being taken up at
This policy document has been placed in
appropriate level with the Insurance Company.
our website for the information of customers. As
the Branch is the first point of redressal for any

1818
 APR-JUNE 2007
complaint/grievance, all the staff members should incorporating the details pertaining to their
be aware of the contents of the Policy and the Office.
complaint handling process. It is the responsibility
¾ It is learnt that in the case of certain agency
of Branch Managers to ensure the same.
arrangements, where the Bank earns income but
(ADMIN. 23/2007-08 dated 30.05.2007) receives the same net of Service Charges and
Service Tax input credit Accounting, reporting and Service Tax, the net income only is accounted
reconciliation for and the Service Charges/Service Tax
components are not accounted separately
The Service Tax Regulations allow the resulting in leakage of input credit or income to
Bank to claim credit for Service Tax paid to Service the Bank. Gross income (before deduction of
providers eg., courier, audit fees, telephone etc., Service Charges and Service Tax ) should be
while remitting the Service Tax collected. It is credited to the relevant income account and the
reiterated that the availment of Service Tax (Input Service Charges and the Service Tax deducted
credits) results in substantial saving to the Bank, in should be debited to the relevant expenditure
as much as the Service Tax input credits are account and the Service Tax (input credits)
claimed as deduction from the Service Tax accounts respectively and the net income
payments by Head Office for the Bank as a whole. received should be accounted as
¾ In order to fully avail the Input credit, a new Bank/cash(receipts). For eg :
procedure was introduced as detailed in our all Gross Income earned by the Bank 10000
Branch Circular CRA 35/2006-07 dt Less: Service Charges like fees others etc paid 500
28.07.2006, whereby with effect from Service Tax 61 561
01.08.2006 all the Branches/Offices/HO Net Income received by the Bank 9,439
Departments have to segregate and account the
Service Tax component in any expenditure The correct method of accounting the above would
attracting Service Tax in the account “Service be:
Tax paid (input credits) account” in BS- 2.
Dr. Expenditure (Service Charges like fees 500
¾ Even after the introduction of the new others etc paid)
Dr. Service Tax paid (Input credit) – 61
procedure of accounting Service Tax paid
(Service Tax deducted / collected by the
(input credits) some Branches/Circle Offices Service provider )
are not accounting and reporting input credits. Dr. Bank / Cash - (net income received) 9439

¾ Branches/Offices are not properly reporting the Dr. Income – (Gross income ) 10000
details like Bill No/date, Name and address of ¾ The Branches/Offices are advised to
the Service provider, Service Tax Registration meticulously follow the above method of
Number of the Service provider, nature of accounting of gross income, the related
Service availed, Service charges (excluding expenditure on service charges and Service Tax
Service Tax) paid, Service Tax paid amount component thereon separately. Branches/
debited in Service Tax paid (input credits) in Offices should also note to report the Service
the Service Tax Annexure 3, which may result Tax accounted in the Service Tax paid (Input
in disallowance of Service Tax input credits credits) account in Service Tax Annexure 3
(claimed earlier by us) by the Service Tax Format.
Authorities resulting in payment of interest,
¾ Similarly, in case of certain expenditure under
penalty etc.,
Service Tax, the whole amount is debited to
¾ All the Branches/Circles were also advised to Expenditure. The correct method will be:
claim reimbursement of Service Tax paid (input
Expenditure A/C Dr.
credits) by them from the respective Circle
Offices in the month of September (relating to Service Tax (Input Credits) A/C Dr.
the period up to August) and in the month of To BPO/Cash A/C
March (relating to the period up to February).
Branches/Offices are advised to ensure
¾ Circle Office in turn has to claim compliance so that there is no leakage of input
reimbursement from HO: Accounts Dept after credit (income) to the Bank.
consolidating the details of Branches and after
(ADMIN.28/2007-08 dated 07.06.2007)

19
 Recollect
Detection of counterfeit notes – Adherence to RBI
guidelines
CBS CIRCULARS
It is observed that the number of counterfeit
Introduction of Debit Master
notes detected at RBI in the soiled note remittances 1 DEP.07 08.05.07
Card (Unembossed)
sent from our currency chests have gone up. This Facility to transfer funds
has resulted in adverse comments from RBI on the 2 DEP.08 24.05.07 between accounts in cbs
issue of cash handling at branches / currency chests. branches
ATM cards - instructions to
3 DEP.10 26.05.07
With a view to educating the branch staff branches
on detection of counterfeit bank notes, we have Revision of charges for multi city
issued detailed guidelines which are reiterated in 4 DEP.19 29.06.07 cheque accounts, Intra-city and
inter city transactions
the circular. Revised Systems and Procedure
The notes issued to the branches from the for Clearing Operations at CBS
5 CRA.02 05.04.07
Branches Covered by a CBS
currency chests for loading ATMs must be sorted at Service Branch
our sorting machines as ATM quality notes and Provision of e-payment facilities
6 CRA.13 11.05.07
such sections must be labelled separately as to Government Departments
“sorting machine used – ATM FIT notes” so that Issue of Local Demand Drafts on
fake notes are detected at their end and not passed Service Branch in lieu of BPO -
7 CRA.15 18.05.07 Procedure for Payment When
on to the branches. Necessary directions have Presented to the Issuing Branch
already been given to currency chests in this regard. Itself
RBI has advised to ensure that no Procedure for Rectification of
counterfeit bank notes creep into the chest Wrong Credit / Debit Entries
8 CRA.25 23.06.07
Originated by
remittances. The branches and the currency chests CBS Service Branch
are advised to accord optimum priority in this National Elctronic Funds
regard to comply with the directions of RBI. 9 GEN.02 05.04.07
Transfer (NEFT)
Checking of important reports on
(ADMIN.29/2007-08 dated 07.06.2007) 10 ADMN.17 11.05.07 a daily basis – need for
awareness
Monitoring of various clearing
11 ADMN.18 12.05.07 related bgl heads in cbs
branches
Information Systems Audit
12 ADMN.20 21.05.07
Policy - 2007-08
Backup of Electronic Mail (E-
14 ADMN.32 14.06.07
Mail) Documents

Though due care has been taken in the preparation of Last numbers of circulars issued as on 30.06.07
Recollect, the version given in the circular is final.
MD/
Compiled by HO: O&M Division DEP ADV HRM CRA FX GENL ADMN ED
Printed & circulated
HO: Circular Issue Cell 19 24 32 27 11 3 33 4
by

2020
 a Volume 20 Issue 2

For Private Circulation Only

July – Sep 2007 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
CONTENTS OF THIS ISSUE 67 28.09.07 Payment of Ex-Gratia in lieu of 6
appointment on Compassionate
Cir. Date Subject Pg. grounds and Appointment of
No. dependents of deceased
DEP 03.07.07 Sending of Due Date Notice for 2 employees on compassionate
20 Term Deposits grounds in exceptional cases
22 14.07.07 Guidelines for issue of cheque 2 CRA 07.07.07 Banking Cash Transaction Tax 7
books to customers – Reiteration 29 (BCTT) – Finance Act 2007 -
23 18.07.07 Launch of a Savings Bank 2 Amendments
product for Children –“IB 31 09.07.07 MCA21 Project - Payment of 7
SMART KID" SB A/c fees to Registrar of Companies
ADV 02.07.07 Revision of Differential Rate of 2 by our Corporate Customers
25 Interest Scheme through Internet Banking.
26 02.07.07 Use of LoK Adalat mechanism 2 33 16.07.07 e-Payment of Service Tax and 7
for NPA resolution – Reg Excise Duties by Taxpayers
27 02.07.07 Financial assistance & 2 40 03.08.07 Govt Pension - Recovery of 7
monitoring under the scheme for Commutation Value of pension
technology upgradation/ and Obtention of Life Certificate
establishment /modernisation of in November, every year
food processing industries. 41 18.08.07 Insuring assets financed by the 7
28 09.07.07 Implementation of New Capital 3 Bank - Improving commission
Adequacy Framework -Criticality earning through our tie-up with
/Importance of External Credit M/s UII Co. Ltd.
Rating. 44 27.08.07 Marketing of insurance and 8
29 12.07.07 Policy on charging of Interest 3 mutual fund products - Booking
and Charges from borrowers Commission under the correct
30 17.07.07 Modifications in the Credit 3 head
Guarantee Scheme 45 28.08.07 Improvement in transactions 8
34 04.08.07 Launching of Personal Segment 4 under RTGS and NEFT
Loan Product–“Reverse 51 19.09.07 Annual Renewal of "Arogya 8
Mortgage” Raksha" agreement with UII Co.
37 22.08.07 Review of Banks’ exposure to 4 Ltd – new attractive features with
Real Estate Sector – Risk premium structure from
Management 01.10.2007
39 31.08.07 Credit Risk Management Policy - 4 FX 21.08.07 Guidelines for Interest 9
2007-08-Enhancement of 14 subvention on rupee export
Industry-wise Exposure Ceiling credit
41 31.08.07 Statutory & Other Restrictions – 5 15 23.08.07 Export Credit Insurance-Change 9
Discounting/Rediscounting of of names of credit guarantee
Bills covers to Banks
42 05.09.07 OTS Policy for NPAs with Book 5 GENL 17.07.07 Concession in service charges 9
Balance up to Rs.1.00 Lakh :04 for Armed Forces Personnel
43 07.09.07 Guidelines On Fair Practices 5 13 07.08.07 Bank's Policy on Compensation 9
Code For Lending - Furnishing to Customers for deficiency in
Copy Of Loan Agreement services rendered
44 07.09.07 LC–DA & Guarantees – Change 5 19 29.08.07 Revision of Service Charges 10
of Classification ADM 28.07.07 Implementation of Clean Note 10
49. 19.09.07 Advances to Accts rated below 6 N. Policy and monitoring of cash
entry grade & NBFC Sector 39 balances
51 24.09.07 New Capital Adequacy 6 42 03.08.07 Name Board of our Bank 10
Framework – Data requirement 43 16.08.07 Despatch of letters through 10
for capital computations Couriers
HRM 07.08.07 Renewal Of GPAIP to Staff 6 54 27.09.07 Circulation of new Ferritic 10
46 Members- Staff Welfare Scheme Stainless Steel coins of Rs.2/-
61 05.09.07 Supply of Uniform to sub-staff 6 with the theme “Nritya Mudra”
members
 Recollect
DEPOSITS to Rs.15000/- and the limit of the housing loan from
Rs.5000/- to Rs.20000/- per beneficiary. The other
Sending of Due Date Notice for Term Deposits
terms and conditions of the scheme remain
Branches are advised to send due date unchanged.
notice to the customers on their term deposits,
The target for lending under DRI scheme
unless there is a written request contrary to it
continues to be 1 % of the previous years’ total
received by the branches.
advances as hitherto.
(DEP.20/2007-08 dated 03.07.2007)
(ADV:25/2007-08 dated 02.07.2007)
Guidelines for issue of cheque books to customers –
Use of Lok Adalat mechanism for NPA resolution –
Reiteration
Reg
Branches are to strictly adhere to the
There are several tools of recovery now
guidelines given in the circular for issue of cheque
available besides the mundane modes of filing suits
book to customers, thereby avoid cheque books
and Recovery Applications before Civil Courts and
falling in the hands of unscrupulous elements
DRTs. One such mode is approaching ‘Lok
creating financial loss to the bank.
Adalat’. In Lok Adalat cases, settlement is arrived
(DEP.22/2007-08 dated 14.07.2007) at with the consent of the parties.
Launch of a Savings Bank product for Children –“IB The Eligibility criteria; Monetary ceiling;
SMART KID" SB A/c Who can refer to Lok Adalat, Advantages; Legal
status of the award; How to execute the award?;
We are happy to launch a Savings product Fee payable; Law of limitation; Can an appeal be
“IB SMART KID” SB A/c, targeted at Children filed against the award?; How should the default
below 18 years to create general awareness and to clause be worded?; What is to be done in case of
prepare them to handle their finances. default are all given in detail in the circular.
USPs of “IB SMART KID" SB A/c scheme (ADV:26/2007-08 dated 02.07.2007)
ATM /Debit Card Eligible for Minors of Age 12 Years or
more to those who maintain the Guidelines on the eligibility, scope and decentralized
prescribed minimum balance and procedure for appraisal and disbursement of grant of
subject to consent by parents/ guardian financial assistance and monitoring under the
for issue of ATM/Debit card.
scheme for Technology Upgradation/ Establishment/
Internet Banking Subject to consent by parents/guardian
for using internet facilities
Modernisation of Food Processing Industries.
Add-on facility Loan eligibility for Educational loan as The Scheme for Technology upgradation/
per the prevailing educational loan expansion/ modernization/ establishment being
scheme at that time implemented by the Ministry of Food Processing
Remittance by DD/BPO of Industries (MFPI) is aimed at upgradation of
school/college fees at par
Transfer of Funds Allowed at par
processing capabilities. Hitherto, the implementing
from Parents’/ agencies engaged in setting up, technology
Guardians’ A/c to upgradation, modernisation of food processing
Children’s A/c industries are at present required to submit their
Transfer from SB to Allowed at par proposal to the Ministry through State Nodal
Term Deposit/ RD as
Standing Instructions Agencies (SNA) which are State Government
Departments/Corporations.
Features and Terms and conditions of the With a view to speeding up disposal of
Savings Bank Account for Children are given in applications, enhance quality of appraisal and
detail in the circular. monitoring implementation, it has been now
(DEP.23/2007-08 dated 18.07.2007) decided to decentralise the implementation of the
scheme for Technology Upgradation
ADVANCES Establishment/Modernisation of Food Processing
Industries in the 11th Plan period i.e.w.e.f.1st April
Revision of Differential Rate of Interest Scheme
2007 through Banks/financial institutions to
The Hon’ble Finance Minister has provide a thrust and wider coverage for food
proposed to raise the limit of the loan under the processing industries in the country and
Differential Rate of Interest scheme from Rs.6500/-
2 2
 JULY-SEP 2007
simultaneously decentralise the procedures for absence of security and the value thereof should
appraisal, grant of assistance and monitoring. be taken into account.
MFPI has vide letter dt. 20.04.2007 » The total cost to the borrower, including
communicated the revised guidelines in this regard, interest and all other charges levied on a loan,
which (are also available in their website shoud be justifiable having regard to the total
www.mofpi.nic.in) have been reproduced in the cost incured by the bank in extending the loan,
Annexure to this circular for implementation by which is sought to be defrayed and the extent of
branches. return that could be reasonably expected from
(ADV:27/2007-08 dated 02.07.2007)
the transaction.
» An appropriate ceiling may be fixed on the
Implementation of New Capital Adequacy Framework interest, including the processing and other
–Criticality / Importance of External Credit Rating. charges that could be levied on such loans,
Our Bank has since entered into MoU with which may be suitably publicised.
the following three rating agencies. Pricing Policies in our bank, Policy on
(a) Credit Analysis and Research Ltd., (CARE) Sanctioning Personal Loans, Existing Guidelines of
our Bank on Borrower Safeguard are detailed in the
(b) CRISIL Ltd., (CRISIL)
circular.
(c) ICRA Ltd., (ADV:29/2007-08 dated 12.07.2007)
The Bank is in the process of entering into
similar MoU with M/s Fitch Ratings India P. Ltd. Modifications in the Credit Guarantee Scheme

In terms of the guidelines on New Capital It has been decided by the Credit Guarantee
Adequacy Framework, claims on corporates are to Fund Trust for Small Industries to effect the
be risk weighted based on the ratings awarded by following changes in the scheme.
any of these four rating agencies and thus obtention 1. The Trust has been renamed as the Credit
of rating from these agencies assumes greater Guarantee Fund Trust for Micro and Small
importance. Further as per the said guidelines, the Enterprises (CGTMSE).
ratings are to be solicited by the corporates only.
2. The Scheme will be known as the ‘Credit
Based on the external rating, the Bank may be able
Guarantee Fund Scheme for Micro and Small
to preserve capital for better rated accounts.
Enterprises’ instead of ‘Credit Guarantee Fund
(ADV:28/2007-08 dated09.07.2007) Scheme for Small Industries’.
Policy on charging of Interest and Charges from 3. The coverage of the Scheme will now be
borrowers extended to all new and existing Micro and
Small Enterprises (both in the Manufacturing
RBI advised banks to ensure that interest
Sector as well as in the Service Sector) instead
applied does not exceed principal amount in the
of SSI /SSSBE (IR) units.
case of short term advances granted to small and
marginal farmers. RBI further advised while laying 4. The eligible loan limit under the Scheme will
down such principles and procedures in respect of now be Rs.50 lakh instead of Rs.25 lakh as
small value loans, particularly, personal loans and obtaining earlier.
such other loans of similar nature, banks may take 5. The credit guarantee cover will be raised from
into account, interalia, and the following broad 75% to 80% for the following category of
guidelines: loans:
» An appropriate prior approval process should a. Loans to Micro enterprises upto Rs. 5 lakh;
be prescribed for sanctioning such small loans, and
which should take into account, among others,
the cash flows of the prospective borrower. b. Loans to Micro and Small enterprises
operated and/ or owned by women.
» Interest rates charged by banks, interalia should
incorporate risk premium as considered 6. Further, based on the recommendations of the
reasonable and justified having regard to the Committee on Financial Sector Plan for North
internal rating of the borrower. Further, in Eastern Region, it has been decided by CGTSI
considering the question of risk, the presence or as under:

3
 Recollect
a) The up front Guarantee Fee will be reduced Review of Banks’ exposure to Real Estate Sector –
by 50% from 1.5% to 0.75% for all loans in the Risk Management
North Eastern Region.
Commercial Real Estate Sector – Definition
b) The extent of guarantee cover will be raised
1. Fund based & Non Fund based exposures
from 75% to 80% for all loans in the North
secured by mortgages on commercial real
Eastern Region.
estates (Office buildings, Retail Space,
While covering credit proposals under Multipurpose, Commercial premises, Multi
enhanced ceiling of Rs.50.00 lakhs field level family residential buildings, multi-tenanted
functionaries are advised to go in for rigorous commercial premises, industrial or warehouse
appraisal of the proposals to ensure quality of such space, hotels, land acquisition, development &
loans. construction, etc.).
(ADV:30/2007-08 dated 17.07.2007) 2. Investment in Mortgage Based Securities
(MBS) and other securitized exposures backed
Launching of Personal Segment Loan Product – by exposures at (1) above.
“Reverse Mortgage”
In addition to the above, RBI vide circular
Bank is proud of launching a new loan
product viz. “Reverse Mortgage”, for the benefit of DBOD.BP.BC.30/21.01.002/2006-07dated20.09.06
senior citizens by providing finance to unlock has advised that the exposure of Banks to entities
money locked in their most important asset – home. for setting up of Special Economic Zones (SEZs) or
for acquisition of units in SEZs which includes real
Reverse Mortgage Concept:
estate would be treated as exposure to commercial
Under regular mortgage scheme, Bank real estate sector with immediate effect and Banks
lends and the borrower makes repayment at would have to make provisions as also assign
monthly intervals. Under Reverse Mortgage, the appropriate risk weights for such exposures as per
borrower is not required to service the loan during
the existing guidelines.
the loan period and hence he / she need not make
monthly repayments of principal and interest to the Review of Banks’ exposure to Real Estate Sector:
lender. The payment stream is reversed. The
Borrower mortgages the house property to the RBI has recently undertaken a review of
lender, who gives the loan by way of periodic lending by select banks to real estate sector and
payments, say monthly, to the borrower (i.e. they have observed several deficiencies and
annuity) over the agreed period of loan. irregularities in the lending processes of banks
Scheme: which have been summarized in the annexure to the
circular. Therefore RBI has advised to initiate
This scheme is a reverse of Home Loan corrective and preventive measures, wherever
Scheme. While under Home Loan, the customer
necessary.
pays monthly instalments to own a house, in a
reverse mortgage scheme, Bank pays instalments to (ADV:37/2007-08 dated 22.08.2007)
the customer and takes possession of the house after
Modifications to Credit Risk Management Policy -
his / her life time. While the customer can continue
to live in the house, the interest component will 2007 - 08 - Enhancement of Industry-wise Exposure
Ceiling
keep adding up till the loan is repaid. However, the
spouse can continue to stay in the house if he or she Our Board has approved for enhancing
outlives the borrower. Thus the borrower and the exposure ceiling limit for Automobile Industry as
spouse are sure of a roof over their head till their mentioned below:
life time. After their life time, the lender may sell
Industry Existing Limit Revised Limit
the house. The balance, if any, after deducting the
loan amount and interest thereon, will be paid to the Automobile / Auto Parts Rs. 500.00 Cr Rs.1000.00 Cr
legal heirs.
The broad parameters and the terms and Exposure ceiling for other industries/
conditions applicable for the Scheme are given in categories as mentioned in the circular No.
the Annexure to this Circular. ADV.16/2007-08 dated 01.06.2007.
(ADV:34/2007-08 dated 04.08.2007) (ADV:39/2007-08 dated 31.08.2007)

4 4
 JULY-SEP 2007
Statutory and Other Restrictions – Discounting / 2. Cases referred to Lok Adalat and awarded
Rediscounting of Bills 3. Cases where OTS has already been
To comply with RBI Directives, branches sanctioned but not paid fully
are restricted from extending fund based credit 4. Written-off accounts &
facilities (including Bills Financing) to a non-
constituent borrower or a non- constituent member 5. BOT-NRR accounts.
of a consortium / multiple banking arrangements. The OTS scheme will be valid upto
Branches are further restricted from opening LCs 31.03.2008.
and purchase / discount / negotiate bills bearing the (ADV.42/2007-08 dt.05.09.2007)
without recourse clause.
Guidelines on Fair Practices Code for Lending -
Based on the new directions given by RBI,
Furnishing Copy of Loan Agreement
the following directives are given to branches for
implementation with immediate effect: RBI has now informed that some banks are
furnishing a copy of the loan agreement only on
1. In cases where negotiation of bills under LC is
request made by the borrowers. In this connection
restricted to a particular Bank, and the RBI has advised that not furnishing a copy of the
beneficiary of the LC is not a constituent of our loan agreement or enclosures quoted in the loan
Bank, we may negotiate such an LC, subject to agreement is an unfair practice and this could lead
the condition that the proceeds will be remitted to disputes between the bank and the borrower with
to the regular Banker of the beneficiary. regard to the terms and conditions on which the
However, the prohibition regarding negotiation loan is granted.
of unrestricted LCs of non-constituents will
continue to be in force. Branches are therefore advised to
invariably furnish a copy of the loan agreement
2. Based on the credit worthiness of the LC along with a copy each of all enclosures quoted in
issuing bank, banks may negotiate bills drawn the loan agreement to all the borrowers at the time
under LCs, on ‘with recourse’ or ‘without of sanction / disbursement of loans
recourse. The restriction on purchase / discount
(ADV.43/2007-08 dt. 07.09.2007)
of other bills (the bills drawn otherwise than
under LC) on “without recourse” will continue LC–DA & Guarantees – Change of Classification
to be in force. Board on July 21, 2007 approved the
(ADV:41/2007-08 dated 31.08.2007) change of classification of LC-DA as Secured.
Accordingly, field level/ Credit functionaries may
OTS Policy for NPAs with Book Balance up to
exercise their discretionary powers delegated /
Rs.1.00 Lakh
vested with them under secured category for
A single comprehensive policy for the sanctioning LC-DA. But this should be secured
category of NPAs up to Rs.1.00 lakh has been now with goods under the LC.
formulated, which has been approved by the Board However, LC-DA for services where there
in the meeting held on 25.08.07. are no movement of goods will continue to be
a) Name of the Policy: treated as unsecured. (e.g., Payment of instalments
The Policy will be called “OTS Policy for etc.)
NPAs up to Rs. One Lakh” (Details in the circular). Similarly, guarantees covered with stocks
b) Objective: exclusively or excess over the drawing power duly
earmarked may also be considered as secured to the
Speedy recovery and sizeable reduction in
extent of availability of stocks earmarked for the
the number and amount of NPA accounts with book
said purposes and accordingly field level / Credit
balance up to Rs 1,00,000/-.
functionaries may exercise their discretionary
c) Coverage powers vested with them under secured category
The OTS Scheme will cover all NPAs for sanctioning guarantees
under all sectors with book balance up to The above mentioned stocks are referred as
Rs.1,00,000 as on 31 03 2006 including, Specified Stocks. The details to be noted while
1. Accounts where suit has been filed or exercising power is annexed to the circular.
decreed (ADV.44/2007-08 dt. 07.09.2007)

5
 Recollect
Advances to Accounts rated below entry grade and regarding the terms and conditions in the policy, the
NBFC Sector matter may be referred to the Insurance Company
Reference is invited to the Credit Risk (HRM.46/2007-08 dt. 07.08.2007)
Management Policy 2007-08 (ADV 16 / 2007-08
Supply of Uniform to sub-staff members
dated 01 06 2007) wherein the entry level rating of
borrowal accounts has been fixed at ‘B’ (i.e. B and All permanent Full time members of Sub-
above only) as awarded by the reviewing authority. ordinate staff as well as the permanent part- time
Accounts below the entry grade (i.e. ‘CC’ and ‘C’) workmen in sub-ordinate staff drawing scale wages
are to be considered by the next higher authority by (i.e. 1/3, ½, ¾) are to be supplied with three sets of
specifying the reasons for the same. Terrikhadi uniform Once in two years and one set
of woollen uniform once in three years. However at
In order to restrain the low rated accounts hill stations, one set of Woollen Uniform every year
(i.e. ‘CC’ and ‘C’) and to have proper check on and one set of Terrikhadi Uniform once in three
these accounts, it has now been decided to restrict years will be supplied in lieu of what has been
the powers for considering further exposure stated above. Likewise drivers would be supplied
under ‘CC’ / ‘C’ rated accounts to Head Office. with four sets of Terrikhadi Uniforms once in two
In view of the same, accounts below the years as per the practice of supplying with one extra
entry grade (i.e. ‘CC’ / ‘C’) fresh / renewal / set.
enhancement proposals for accounts falling under The present cost per set of Uniform
the powers upto DGM (CH) will be considered by (Terrikhadi and Woollen) was communicated to the
Functional Credit General Managers at HO and for branches vide our Circular PRNL. 42/94-95 dated
accounts falling under the powers of GM (CH) will 04.06.1994 and PRNL 02/95-96 dated 05.04.1995.
be considered by the Executive Director. Accounts Recently, Management has reviewed the cost of
falling under the powers of ED and above will uniform and it has now been decided to increase the
continue to be under their respective powers. ceiling on the cost prescribed per set of uniform as
(ADV. 49/07-08 dt. 19.09.2007) under:
New Capital Adequacy Framework – Data Uniform
Cost Limit per set
requirement for capital computations Existing Revised
Terrikhadi 400 600
Our Bank is in the process of Woollen 750 850
implementation of EWRM (Enterprise-wide Risk
Management) Software to facilitate compliance The above charges are inclusive of
with the new capital adequacy guidelines of RBI. maximum permissible stitching charges of Rs. 250
The capital computations require certain data for per set for Terrikhadi uniform and Rs. 400 per set
which specific fields are not available in CBS. For for Woollen uniform.
collecting this data, templates have been ported in
CBS Help Desk (Menu - Additional Requirements The revised cost mentioned above will
for capital Computations) come into effect from 1st October 2007. Branches/
Offices are authorized to supply Uniform to the
Branches should fill in details as on sub-staff members/ Armed Guards as per the
30.09.2007 in the templates itself eligibility criteria, within the limits prescribed.
(ADV. 51/2007-08 dt. 24.09.2007)
(HRM.61/2007-08 dt. 05.09.2007)
HRM
Scheme for payment of Ex-Gratia in lieu of
Renewal of Group Personal Accident Insurance appointment on Compassionate grounds and
Policy for All Our Staff Members under Staff Welfare Appointment of dependents of deceased employees
Scheme on compassionate grounds in exceptional cases
The said policy has been renewed for a IBA, has informed of the modifications to the
further period of one year from 02.08.2007 with existing scheme, as advised by Govt of India, for
United India Insurance Co. Ltd and the policy No is providing Compassionate Appointment in
GPA Policy No. 010500 / 42 / 07 / 05/ 00000001 exceptional cases as given below where an
The salient features of the Policy are employee.
mentioned in our Circular No.36/2002-03 dated ¾ dies while performing his official duty as a
05.08.2002. For any further details / clarification result of violence, terrorism, robbery or dacoity
or
6 6
 JULY-SEP 2007
¾ dies within 5 years of his first appointment or of Rs.50 lakhs or above per annum has to make
before he reaches the age of 30 years, their Service Tax / Central Excise only through e-
whichever is later, leaving a dependent spouse Payment.
and/or minor children It has been brought to the notice of CBEC
The Compassionate Appointment is provided that the assesses are facing procedural problems
on the following conditions to tide over the sudden like delay in opening of internet banking account,
crisis brought about by the premature death and delay in allotting User ID/password, not getting
conditions are detailed in the circular proper support and responses from the branches.
(HRM.67/2007-08 dt. 28.09.2007) It is also advised that branches should
provide all assistance to the assesses for making e-
CRA
payments of Central Excise and Service Tax.
Banking Cash Transaction Tax (BCTT) – Finance Act
Our HO/ Project office has provided the
2007 - Amendments
know-all of e-Payment facility available at our
Banking Cash Transaction Tax came into Bank at the CBS Help Desk under `Search Hyper
effect from 01.06.2005 and the amendments links` and the branches may use the facility by
incorporated in the Finance Act, 2007 are as under: typing `internet` in the box and clicking Search.
i. Cash withdrawals by Office or (CRA:33/2007-08 dt. 16.07.07)
Establishment of the Central Government
or the Government of a State are exempted Government Pension - Recovery of Commutation
from the levy of BCTT. Value of pension and Obtention of Life Certificate in
November, every year
ii. Cash withdrawals by individuals / HUFs
exceeding Rs.50000/- (as against Rs. The commutation value of pension is paid to
25000/- at present) in a single day from any the pensioner on Superannuation / Voluntary
account other than Savings Account will retirement and the amount of commutation value of
attract BCTT. pension is not to be recovered from the pensioner
after fifteen years from the date of its payment.
iii. Encashment of Deposits by individuals /
HUFs exceeding Rs.50000/- (as against It is complained that the commutation value
Rs. 25000/- at present) in a single day from of pension is still being recovered by some paying
one or more Deposit accounts will attract branches from the pensioner after fifteen years, thus
BCTT causing financial hardship to the pensioner.
Besides some of the paying branches are recovering
Branches have to deduct BCTT at 0.10% Commutation Value of Pension from the Family
on the aggregate amount of cash withdrawal in the Pension after the death of Pensioner which is not
applicable cases. correct and also against the codal provisions.
(CRA:29/2007-08 dt. 07.07.07) The paying branches are advised to adhere
MCA21 Project - Payment of fees to Registrar of to the following instructions strictly:
Companies by our Corporate Customers through 9 The commutation value of pension is not to be
Internet Banking. recovered from the pensioner after fifteen
The MCA 21 Project has now become fully years from the date of its payment.
operational from all project locations and online 9 Commutation value of pension is also not to be
receipt of electronic filings is functional for about recovered from the family pension after the
eight months. The stakeholders file their documents death of pensioner.
and can make payment of statutory fees, both in the
(CRA:40/2007-08 dt. 03.08.07)
off-line and on-line mode.
The procedure for payment of fees through Insuring assets financed by the Bank - Improving
Internet banking is reiterated in detail in the commission earning through our tie-up with M/s
circular. United India Insurance Company Limited
(CRA:31/2007-08 dt. 09.07.07) The Bank gets a commission of 5 to 15%
commission on the premium paid to insure our
E-Payment of Service Tax and Excise Duties by assets from UIICO. It has been the experience of
Taxpayers other banks that at least a minimum 2% of their
Government has made it mandatory, that total loan asset value is paid as premium.
high value Service Tax and Central Excise payers

7
 Recollect
Premium instalment data submitted by through PNB PFP for other mutual fund
Circle Offices we find that products
¾ the income earned by way of Commission In the above three cases, IB Bancassurance
through sale of non-life policies of United Service Centre at Head Office, receives the
India Insurance Company Limited (UIICO) commission and distributes the commission to
is very low respective Circles(Retail Banking Segments in case
of Chennai and Delhi Circles).
¾ the income earned is not commensurate with
Besides these, branches receive commission
the size of our advance portfolio
directly in respect of
With a growing advances portfolio, the ♦ Commission on premium paid in respect of
income by insuring our assets should also have policies taken by them for covering assets
registered a healthy growth and unfortunately this is financed through United India Insurance
not happening Company Limited.
Circle Heads/ Branch Managers are advised ♦ All the income earned through the above
to ensure that sources, should find a place only in the
♦ All insurance proposals submitted to following account in the balance sheet.
UIICO bear the Corporate Agency Licence
No 1021602 and 8-digit Agency Code of Commission, Exchange and Brokerage
our Bank allotted by the UIICO so as to 6.1.12 Insurance Business
ensure the receipt of commission and avoid
leakage of income.
For CBS Branches, they should enter the
♦ The 8-digit agency code for our branches is
code 99083 followed by Branch Code. For example
allotted by the individual UIICO branch
the IBGL account of Harbour Branch for booking
which is mapped to our branch.
income under Insurance Business is 99083000871.
♦ UIICO has classified 920200 - - as the
This code number relating to individual branch can
global code of Indian Bank.
also be queried through the Help Desk under the
♦ The first 4 digits of their global code, head “BGL Statement”. The service tax on
viz.9202 are common to all branches of our commission is borne up the insurance company
Bank. therefore no further service tax is to be deducted on
♦ Last 2 digits shall represent our Branch such income by the branch.
Code allotted by the respective UIICO
(CRA:44/2007-08 dt. 27.08.07)
branch.
(CRA:41/2007-08 dt. 18.08.07) Improvement in transactions under RTGS and NEFT
All CBS branches are not utilising the
Ancillary Services Dept. FILE M- 4 S- 404 - Marketing
facility of the above safe, secured electronic
of insurance and mutual fund products - Booking
payment system. Only few branches are using this
Commission under the correct head
facility.
During the recent Annual Financial As these facilities are most secured
Inspection (AFI), Reserve Bank of India has compared to other remittances, all CBS Branches
pointed out that the commission earned by selling should use the above mode of remittance actively
insurance and mutual fund products is not correctly and put at least two transactions per day to make a
reflected in our Balance Sheet. beginning with the ultimate motto of achieving 5
Branches receive commission on sale of transactions per day under RTGS and NEFT before
insurance and mutual fund products from their 30.09.2007.
respective Circle Offices in respect of the following (CRA:45/2007-08 dated 28.08.07)
products: Annual Renewal of "Arogya Raksha" agreement with
1. Life insurance products of HDFC Standard United India Insurance Co. Limited – new attractive
Life Insurance Co. Ltd. features with premium structure from 01.10.2007
Arogya Raksha is a popular co-branded
2. Sale of Arogya Raksha Policies
mediclaim policy available only to the customers of
3. Mutual Funds sale through our tie up with the Bank at very competitive premium. Branches
UTI for UTI mutual fund products and can make new customers by introducing this
8 8
 JULY-SEP 2007
scheme to them. The scheme opens the Bank’s Personal accounts of Armed Forces Personnel
marketing doors to new customers. Nature of account Concessions
The salient features of the policy, premium Collection of salary / At par
payable with effect from 01.10.2007 onwards and terminal dues
guidelines for a smooth process flow are given in Incidental Charges for There shall not be incidental
Savings Bank accounts charges to the Savings Bank
the Annexure. accounts maintained by the Armed
(CRA:51/2007-08 dated 19.09.07) Force Personnel except the charges
for non maintenance of minimum
FX balance
Standing No charges for noting the standing
Guidelines for Interest subvention on rupee export
Instructions/Stop instructions/stop payment
credit Payment Charges instructions issued by them. If
Reserve Bank of India vide its circular MTs/TTs/Demand Drafts are to be
DBOD.Dir.(Exp).BC.No.22/04.02.01/2007 - 08 issued in terms of standing
instructions, normal service charges
dated July 13, 2007 has announced to grant interest for such remittances shall be levied
Subvention to the exporters to mitigate the other than those mentioned below
difficulties faced by them in view of strong rupee Exchange commission DDs/BPOs may be issued without
against US $. The details of the scheme for on BPO/Demand Drafts commission for the purpose of
remittance of children/dependents
implementation by branches are given in the school/college fees. DDs/BPOs upto
circular. a limit of Rs.25,000 in a month shall
(FX:14/2007-08 dated 21.08.2007) be issued free of commission for
family maintenance/allotment
ECGC- Export Credit Insurance -clarifications- Collection of outstation Collection charges on outstation
Change of names of credit guarantee covers to cheques cheques shall be waived. However
Banks out of packet expenses and other
bank charges if any are to be
The Whole Turnover Packing Credit recovered
Guarantee (WTPCG) and Whole Turnover Post Issue of cheque book / SB pass book / statement of
Shipment Guarantee (WTPSG) of Export Credit passbook/ statement of account shall be issued without
Guarantee Corporation were renewed from account to SB account charges as in the case of general
holders of Armed Forces customers. SB cheque book
01.07.2007 to 30.06.2008. ECGC has issued (MICR/non MICR) shall be issued at
clarification vide Circular No. HO/Banks Divn/ 210 par
/07-08 dated 06.08.2007 regarding issues Custody of WILLs At par
concerning export credit insurance covers for Accounts of Armed All types of service charges shall be
Forces Public Fund / waived with recovery of out of
banks, new format of staff accountability to be
Government Fund pocket and other bank charges only
submitted to ECGC at the time of lodgement of provided concerned Armed Forces
claim and the change in the nomenclature of Public Fund /Government Fund
various credit guarantee covers. It covers staff maintains account with our Bank.
accountability issues, approval requirements in
compromise / OTS accounts, appropriation of (GENL:04/2007-08 dated 17.07.2007)
settlement amounts in claim paid accounts, Bank's Policy on Compensation to Customers for
obtention of prior approval from ECGC on various deficiency in services rendered
issues and other related matters to enable the branch Bank compensates the customer for any
and other field officials to be fully conversant with financial loss he/she might incur due to deficiency
the ECGC’s procedures. The details are annexed to in service on the part of the bank or any act of
the circular. omission or commission directly attributable to the
(FX:15/2007-08 dated 23.08.2007) Bank subject to the terms prescribed under paras 11
GENERAL and 12 in the circular.
Concession in service charges for Armed Forces As such, the commitments under this
Personnel Policy are without prejudice to any of the rights the
It has been decided to extend further Bank has/will has in defending its position before
concessions to Armed Forces Personnel based on any forum duly constituted to adjudicate the
the representation received from the Principal banker-customer disputes.
Director (Accts), Air Head quarters, New Delhi and This compensation policy of the Bank
the consolidated list of concessions applicable to covers areas relating to -
Armed Forces Personnel will be as follows :

9
 Recollect
a. Erroneous debiting of account; For the customers and general public the quality of
b. Debits towards Service Charges; the name Board of each branch reflects on the
image of the bank as a whole. Hence, it is important
c. Payment of cheques after acknowledgement of that special attention is given towards proper
stop payment instructions, maintenance of name boards of branches, especially
d. Payment of interest to customers for delayed glow sign name boards.
collection of cheques/ instruments,
With the introduction of “24 hours ATM
e. Collection Instruments Lost-in-transit; Centres”, the importance of glow sign boards has
f. Funds transfers using NEFT/RTGS and become even greater. The details of points for
installation and proper maintenance of Sign Board/
g. Foreign exchange services.
Name Boards are given in the circular.
The details of compensation for the above
ADMN.42/2007-08 dated 03.08.2007)
are in the circular.
(GENL:13/2007-08 dated 07.08.2007) Despatch of letters through Couriers

Revision of Service Charges Branches/offices are using the services of

couriers or Post Office for sending their mails. Of
Our bank has revised the service charges late, instances are reported to Head Office on loss
for the identified 27 basic banking services with of cheques and other instruments sent through
three tier system for the three categories of couriers. On investigation, it is observed that the
customers with effect from 1.10.2007. The service representatives of the Courier Company were
charges are inclusive of service tax of 12.36% deployed by branches in preparing the cover
payable to Government of India. including writing of the address, inserting the
For pensioners who are drawing pension letters/instruments meant for collection or proceeds
through our bank and Senior Citizens, the service of collection into the cover, etc. and it had been one
charges shall be as per schedule given for special of the reasons for loss of instruments which
category of customers irrespective of location of ultimately led to a fraud.
the branch. Branches/offices are, therefore, advised to
adhere to the guidelines given in the circular.
The details of service charges are
annexed to the circular. (ADMN.43/2007-08 dated 16.08.2007)

(GENL: 19/2007-08 dated 29.08.2007) Circulation of new Ferritic Stainless Steel coins of
Rs.2/- with the theme “Nritya Mudra”
ADMN
RBI has put into circulation new Ferritic
Implementation of Clean Note Policy and monitoring Stainless Steel coins of Rs.2/- with the theme
of cash balances “NRITYA MUDRA”. The coin is a legal tender as
Branches and staff members are advised to provided in the Coinage Act 1906. The existing two
follow the salient features of RBI’s Clean Note rupees coins in circulation shall continue to be legal
Policy as reiterated below: tender.
1. Banks should do away with stapling of (ADMN.54/2007-08 dated 27.09.2007)
currency notes sections and instead secure them CBS CIRCULARS
with paper /polymer bands/twine.
Despatch of ATM debit cards
2. Banks should sort notes into reissuable and 1 DEP.24 20.07.07
and PIN mailers
non-issuable and issue only clean notes to 2 DEP.26 17.08.07
Withdrawal slip transactions -
public. Relaxation in Norms
Functioning of ATMs – need for
3 DEP.30 24.09.07
3. Banks should forthwith stop writing of any improved uptime
kind on the watermark window of bank notes. Popularising of Usage of RTGS
4 CRA.28 04.07.07
and NEFT
(ADMN.39/2007-08 dated 28.07.2007) Issue of duplicate DD on Service
5 CRA.30 09.07.07
Branch
Name Board of our Bank Revised Procedure for sending
6 CRA.42 24.08.07 OBC/BP realisation from the
A good Name Board easily catches the eyes collecting CBS service branches
of people and carries a high advertisement value.
1010
 JULY-SEP 2007
Improvement in transactions
7 CRA.45 28.08.07
under RTGS and NEFT
Multi city cheque facility –
8 CRA.46 06.09.07
deficiencies observed Last numbers of circulars issued as on 30.09.07
Booking of railway tickets
9 GENL.14 07.08.07 through IRCTC with IB debit MD/
DEP ADV HRM CRA FX GENL ADMN
card ED
Half-yearly closing of accounts
and application of correct rate of 30 53 67 55 19 28 54 7
10 GENL.20 06.09.07
interest on loan accounts in CBS
branches
Submission and Settlement of
Complaints on ATM/POS
11 GENL.27 27.09.07
transactions – Use of CBS Help
Desk
Dispensing with vault custodian Though due care has been taken in the preparation of
12 ADMN.34 05.07.07
in CBS branches Recollect, the version given in the circular is final.
Implementation of CBS at Compiled by HO: O&M Division
13 ADMN.38 24.07.07
Administrative Offices
Capability Level to Officers of Printed & circulated
14 ADMN.44 17.08.07 HO: Circular Issue Cell
Extension Counters by
Publication of 'Handbook on
15 MD/ED.07 03.09.07
Information System Security

11
 a Volume 20 Issue 3

For Private Circulation Only

Oct – Dec 2007 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
CONTENTS OF THIS ISSUE 89 30.11.07 Mandatory requirement of PAN 7
number by all employees
Cir. No. Date Subject Pg. 94 06.12.07 Staff welfare scheme - 7
DEP. 27.10.07 Code of Bank’s Commitment to 2 improvement to the existing.
34 Customers – Sanctions 100 26.12.07 Revised guidelines for issue of 8
imposed identity cards to staff members
35 06.11.07 Relaxation in Charges on Intra- 2 CRA 01.10.07 Scrutiny of BCTT Banking Cash 8
City Cash Transactions 56 Transaction Tax report &
38 03.12.07 Legal Guardianship Certificate 2 changing the category (orgn)
issued – National Trust Act, code wherever required
1999 empowering the disabled 57 06.10.07 Service Charges on 8
persons RTGS/NEFT
40 24.12.07 Opening Of Vikas Savings 2 62 25.10.07 Lord Krishna Bank Ltd.- 9
Khata – No Frills SB Accounts Exclusion from the second
ADV 16.10.07 Legal decisions affecting 2 schedule to the RBI Act,1934
55 bankers. 63 27.10.07 Marketing of Unit Linked 9
17.10.07 Launching of Personal 3 Suvidha Range of Products and
56 Segment Loan Product – “IB Assurance Plan designed by
Reverse Mortgage” HDFC for our customers
57 23.10.07 Monthly statement of Bal O/s 3 65 27.10.07 Insurance of all assets financed 9
borrowal accounts with credit by us through our corporate
limits of Rs one crore & above agency tie-up
58 27.10.07 Monitoring of special mention 3 69 09.11.07 Banking Operations of LIC of 9
accounts India with various branches
59 29.10.07 IBA Educational Loan Scheme 4 72 21-11-07 IB GRIHA JEEVAN – for Home 9
– On-line Loan Request Loan Borrowers - Master Policy
63 04.12.07 (SARFAESI Act) – Security Int. 4 No. 416858 with LIC of India
(Enforcement) (Amendment) 81 30-11- 07 Marketing of HDFC policies - 10
Rules 2007 – Reg. Introduction of Service Help
64 06.12.07 Improving Performance under 4 Line – ‘DRISHTI’
Credit Guarantee Scheme FX 08.10.07 Guidelines for Int. Subvention 10
(CGS) of CGTMSE 20 on Rupee Export Credit
66 22.12.07 New Capital Adequacy 5 24 03.12.07 Guidelines for Int. Subvention 10
Framework – Data requirement on Rupee Export Credit
for capital computations MD.ED 30.11.07 Let us excel in performance - 11
67 26.12.07 Financing of Infrastructure 5 .9 cross one lakh crore this year
68 27.12.07 Study on Kisan Credit Card 5 ADMN 08.10.07 Misuse of banknotes and 11
Scheme by RBI 56 Discontinuance of re-issue of
HRM 08.10.07 Cash Award of Rs.1000/- to 5 Ashoka Pillar Series currency
72 Officers qualifying in the NCFM- notes – RBI directions
Depository Operations Module 59 27.10.07 Reporting of monthly data on 11
conducted by NSE. counterfeit notes to the Issue
73 09.10.07 Categorisation of Branches as 5 Offices of RBI
on 31.03.2007 61 10.11.07 Issue of Rs.10 denomination 12
75 10.10.07 Registration for E Learning 6 banknotes with inset letter “A”
through CBS Help desk. 62 13.11.07 Computer Security Returns – 12
76 10.10.07 Obtention of Life Certificate 6 i) Monthly Manager's Certificate
from all Staff pensioners and ii)Quarterly computer security
family pensioners – Pension review
credit through CBS. 64 22.11.07 Issue of new Ferritic Stainless 12
83 07.11.07 Value of perquisite on 6 Steel Coins-denominations of 2
accommodation provided to &5
employees by the Bank, as per 70 15.12 .07 Deduction of Tax at Source 12
amendment in Income Tax Act. (TDS) – Filing of e-TDS
85 12.11.07 Preferential rate of interest on 7 Quarterly Returns from the
deposits to ex-staff members Quarter ended 30.09.2007.
 Recollect
DEPOSITS and operate the bank account as long as he remains
the legal guardian.
Code of Bank's Commitment to Customers -
Sanctions imposed by BCSBI for breaches of the Branches are advised to rely upon the
Code by Member Banks Guardianship Certificate issued either by the
District Court under Mental Health Act or by the
Our Bank is a member of Banking Codes Local Level Committees set up under the National
and Standards Board of India (BCSBI). As a Trust for the Welfare of Persons with Autism,
member, we abide by the commitments made to Cerebral Palsy, Mental Retardation and Multiple
customers and BCSBI would impose sanction Disabilities Act 1999 for the purposes of opening
(Penalty) for any breach. /operating bank accounts. A list of Local Level
BCSBI officials and its authorised Committees is annexed to the circular for the ready
representatives have already started incognito reference of the branches.
visits to various branches of our Bank to assess the Branches may ensure that proper guidance
level of adherence to Commitments. is given so that the parents/relatives of the disabled
The sanction by BCSBI for any breach by person do not face any difficulties in this regard.
the branches of our bank has been enumerated in (DEP.38/2007-08 dated 03.12.2007)
the circular.
Opening Of Vikas Savings Khata – No Frills Savings
(DEP.34/2007-08 dated 27.10.2007)
Bank Accounts
Relaxation in Charges on Intra-City Cash The Banking Codes and Standards Board
Transactions of India (BCSBI) officials conducted a survey on
Our Higher Authorities have approved the the status of implementation of Code of Bank’s
following modification in respect of charges on commitment to customers in selected branches of
INTRA-CITY CASH TRANSACTIONS only. our Bank in 5 metropolitan cities viz Chennai,
Hyderabad, Kolkata, Mumbai and New Delhi.
Existing Modified
For All Customers For SB Customers The survey findings by the BCSBI
brought to light, that some of our metropolitan
Upto Rs 25000 - Upto Rs 10000 - NIL
Rs 10/- per txn 10001 – 25000 - Rs 10 per Txn
branches were not opening No frills accounts with
Above Rs 25000 - Re.1 /- per relaxed KYC norms.
Above Rs 25000 - Rs.1000 for the whole amount
Re1 /- per Rs.1000 for Our Bank had made a commitment to
the whole amount For CA/OD/OCC Customers BCSBI. Branches are therefore advised to take
[Charges inclusive of No Change in Existing Charges note of the findings by BCSBI and open NO
Service Tax] [Charges inclusive of Service Tax] FRILLS account as per relaxed KYC norms
whenever customers approach.
(DEP.40/2007-08 dated 24.12.2007)
(DEP.35/2007-08 dated 06.11.2007)

Legal Guardianship Certificate issued under the ADVANCES

National Trust Act, 1999 empowering the disabled Legal decisions affecting bankers.
persons with autism, cerebral palsy, mental
retardation and multiple disabilities. In a judgement delivered in Himadri
Chemicals Industries Ltd. Vs Coal Tar Refining
National Trust for the Welfare of Persons Co., SLP. 13775 pf 2007. Supreme Court observed
with Autism, Cerebral Palsy, Mental Retardation that the following principles should be noted in the
and Multiple Disabilities Act 1999 has mentioned matter of grant of injunction by courts to restrain
that the above Act was specifically passed by the the encashment of a Bank Guarantee or a letter of
Parliament in order to provide for appointment of credit.
Legal guardians for persons with disability that is
covered under the said Act. The above Act A Bank Guarantee or a Letter of Credit is
provides for appointment of legal guardians for an independent and a separate contract and is
persons with disability by the Local Level absolute in nature; the existence of any dispute
Committees set up under the Act. The Trust has between the parties to the contract is not a ground
opined that a legal guardian so appointed can open for issuing an order of injunction to restrain

2 2
 OCT-DEC 2007
enforcement of Bank Guarantee or Letter of applicable for a period of 180 months with current
Credit. interest rate for the advance at 10% per annum
fixed is given in the Circular.
When an unconditional guarantee or Letter
of Credit is given or accepted, then the beneficiary (ADV.56/2007-08 dated 17.10.2007)
is entitled to realize such a Bank Guarantee or a
Letter of Credit irrespective of any pending Monthly statement of balances outstanding in large
dispute. borrowal accounts enjoying credit limits of Rs one
crore and above
The Bank giving such guarantee is bound
to honour it as per the term irrespective of any Consequent to the formation of Credit
dispute raised by its customer. Monitoring Department at Head Office, this
statement as per the format annexed to the circular
The Courts should be slow in granting an has to be submitted to with effect from October
order of injunction to restrain the realization of a 2007 as per guidelines given in the circular
Bank Guarantee or a Letter of Credit.
. Branches are advised to submit the statement in
Supreme Court further clarified that Excel file format and by E Mail.
injunction can be given on two exceptional
grounds:- The effectiveness of Credit Monitoring
depends on the accurate and timely submission of
1. When there is fraud of an egregious nature this vital return.
which would vitiate the very foundation of
(ADV. 57/2007 dated 23.10.2007)
such a bank guarantee or Letter of credit and
beneficiary seeks to take advantage of the Monitoring of Special Mention Accounts (SMA).
situation.
Consequent to the formation of Credit
2. When allowing encashment of an Monitoring Department at Head Office, the
unconditional bank guarantee or Letter of following changes in the present procedure are
Credit would result in irretrievable harm or made with immediate effect
injustice to any of the parties concerned.
Circle Office to submit the entire SMA
The above decision is pertaining to grant details of the Circle in III (b) format to HO/Credit
of injunction by court in the matter of grant of Monitoring Department instead of HO/Risk
injunction on guarantee matters. In the normal Management Department.
circumstances, branches should note that
invocation of guarantee/ claim for payment under The SMA I format containing details of
LC should be considered strictly on the terms of SMA of Rs.50 lakhs and above should be
such guarantee or Letter of Credit as the case may submitted by Circle Office to HO/Credit
be. Hence, any dispute between the parties cannot Monitoring Department instead of HO/Credit
be a ground for avoiding payment, unless the Bank Division. The copy of the same need not be sent to
is specifically restrained /injuncted from making HO/Risk Management Department.
payment under the guarantee, by a Court of
The need for meticulous compliance of the
competent jurisdiction.
following by branches and Circle Offices are given
(ADV.55/2007-08 dated 16.10.2007) in circular.
Launching of Personal Segment Loan Product – “IB The submission of SMA report from
Reverse Mortgage” Branch to Circle Office has to be on or before 3rd
Our Bank has launched “IB Reverse of the succeeding month. Circle Office has to
Mortgage” as a personal loan product with submit the consolidated SMA statement to
immediate effect. HO/Credit Monitoring Department on or before
5th of the succeeding month.
The detailed terms and conditions of the
scheme are furnished in the annexure to Circular Strict adherence to the time schedule is
ADV/34//2007-08 and are also ported on the very important since quick action for regularisation
Bank’s Intranet for ready reference by the of SMA accounts is possible only when the reports
Circles/branches. are received and analysed in time.
A copy of the following set of Forms / (ADV. 58/2007 dated 27.10.2007)
Documents along with the Annuity Table

3
 Recollect
IBA Educational Loan Scheme – On-line Request Salient features of the amendments are
System for Professional Degree Courses given in the circular.
(ADV.63/2007-08 dated 04.12.2007)
Our Bank has introduced with effect from
15.10.2007, for the benefit of the student Improving Performance under Credit Guarantee
community in getting their educational loan Scheme (CGS) of CGTMSE
requests taken care through ‘Web based on line It has been time and again emphasised that
Educational Loan Request System’. Aspiring all eligible accounts should be covered under the
students can log on to the Bank’s web site and scheme and we should endeavour to substantially
apply for educational loan through web-access, improve our performance under scheme.
facilitating the early disposal of the request by the
Bank. To start with, the scheme covers The coverage of the Scheme is extended to
professional degree courses only (viz. Medical, all new and existing Micro and Small Enterprises
Dental, Engineering, Agriculture, Veterinary, Law, (both in the Manufacturing Sector as well as in the
Management & Computer Courses). Service Sector) instead of SSI /SSSBE(IR) units.
As the successful implementation of the The eligible loan limit under the Scheme is
system of online educational loan requires follow increased to Rs.50 lakh instead of Rs.25 lakh as
up at all levels, Circle Offices and branches should obtaining earlier.
give top priority whenever such students approach The credit guarantee cover is raised from
them after registration and provide courteous and 75% to 80% for the following category of loans:
quick service.
a. Loans to Micro enterprises upto Rs. 5
(ADV.59/2007-08 dated 29.10.2007) lakh; and
Securitisation and Reconstruction of Financial b. Loans to Micro and Small enterprises
Assets and Enforcement of Security Interest Act operated and/ or owned by women.
(SARFAESI Act) - Amendment made to the rules
Further, for North Eastern Region:
Security Interest (Enforcement) (Amendment) Rules
2007 - Reg. a) The up front Guarantee Fee is reduced
by 50% from 1.5% to 0.75% for all loans in the
SARFAESI Act was introduced with a
North Eastern Region.
view to facilitating secured creditors to enforce
their security interest without intervention of Court b) The extent of guarantee cover is raised
or Tribunal. Rule (4) and Rule (8) of Security from 75% to 80% for all loans in the North Eastern
Interest (Enforcement) Rules pertain to the Region.
procedure to be adopted for taking possession of In order to enhance performance under the
movables and immovable securities respectively. scheme it is imperative that we initiate immediate
Rule (8) which deals with taking steps to cover all the eligible units under the
possession of immovable property stipulates that scheme.
the Authorised Officer shall take or cause to be As per RBI guidelines all Small
taken possession, by delivering the possession Enterprises Loans with limits upto Rs 5 lakhs
notice to the borrower and by affixing the should be sanctioned without collateral security.
possession notice at conspicuous places of the All these loans should be mandatory covered under
property. It further states that the possession CGS.
notice shall be published in two newspapers, one in
vernacular language having sufficient circulation As per RBI guidelines all Small
in the particular locality. The time frame within Enterprises Loans with limits above Rs 5 lakhs and
which the publication of possession notice is to be upto Rs 25 lakhs may be sanctioned without
done has not been prescribed until now. collateral security based on good track record and
satisfactory financial position. Such loans
However, now Govt. of India has come out sanctioned without collateral security should be
with a notification No.SO1837 (E) dated covered under CGS.
26.10.2007 published in the Gazette titled
“Security Interest (Enforcement) (Amendment) The scope of CGS has now been extended
Rules 2007” incorporating certain amendments in from Rs 25 lakhs to Rs 50 lakhs and hence field
the Rules dealing with the procedural aspects. level functionaries should ensure that any loan
under Small Enterprises sanctioned without
4 4
 OCT-DEC 2007
collateral with limits upto Rs 50 lakhs to be Kisan Credit Card Scheme (KCC) is
covered under the scheme. closely monitored and critically reviewed by
(ADV.64/2007-08 dated 06.12.2007) Government of India/Reserve Bank of India.
Recently, a study on the functioning of the
New Capital Adequacy Framework – Data
requirement for capital computations Kisan Credit Card Scheme (KCC Scheme) was
carried out by Reserve Bank of India in the state of
Reserve Bank of India has stipulated Haryana. The objective of the study was to get
guidelines for computation of capital charge under feedback on the fulfilment of comprehensive credit
New Capital Adequacy framework. Our Bank is in requirements of farmers under single window, with
the process of implementation of EWRM flexible and simplified procedure, adopting whole
(Enterprise-wide Risk Management) Software to farm approach, including the short-term credit
facilitate compliance with the guidelines. The needs and a reasonable component for
capital computations require certain data for which consumption needs which was being met through
specific fields are not available in CBS. For KCC.
collecting such data, templates have been ported in
CBS Help Desk (Menu - Additional Requirements The deficiencies pointed out in the study
for capital Computations): the details of which are along with action to be initiated are given in the
given in the circular in table form. circular.
(ADV.66/2007-08 dated 22.12.2007) (ADV.68/2007-08 dated 27.12.2007)

Financing of Infrastructure HRM

The latest RBI’s definition of Depository Participant Services – Sanction of Cash
infrastructure lending and the list of all Award of Rs.1000/- to Officers qualifying in the
infrastructure sectors are as under. NCFM- Depository Operations Module conducted by
“Any credit facility in whatever form National Stock Exchange.
extended by lenders (i.e. banks, FIs or NBFCs) to With a view to expand the Depository
an infrastructure facility as specified below falls participant services in all the CBS branches and to
within the definition of "infrastructure lending". In create a pool of qualified Officers, it has now been
other words, a credit facility provided to a decided to reintroduce the sanction of Cash Award
borrower company engaged in: of Rs.1000/-, in addition to the reimbursement of
• developing or Examination Fees of Rs. 1000/-, to all the Officers
who qualify in the NCFM (Depository Operations
• operating and maintaining, or Module) test.
• Developing, operating and maintaining (HRM.72/2007-08 dated 08.10.2007)
Any infrastructure facility that is a project
in any of the sectors as given in the circular or any Categorisation of Branches as on 31.03.2007
infrastructure facility of a similar nature:” Board has approved at its meeting dated
(ADV.67/2007-08 dated 26.12.2007) 20.04.2006 the following business criteria for
Categorisation of branches.
Study on Kisan Credit Card Scheme by Reserve
Category Of Branch Business Criteria
Bank of India (Average aggregate Incumbency
Kisan Credit Card scheme (KCC) is deposits and advances Scale
during the last two
designed to carry certain distinct advantages over years)
the conventional crop loan system both from a) Small Below Rs.5 Crore I
farmers’ and Banks’ points of view such as
Rs.5 Crore and above,
providing timely credit for their cultivation needs b) Medium
but below Rs.25 Crore
II
including the post harvest/house hold
requirements/maintenance and term loan c) Large
Rs.25 Crore and above,
III
requirements of the farmer on continuous basis, but below Rs.75 Crore
with simplified procedures. d) Very Large Rs.75 Crore and above,
but below Rs.250 Crore IV
Detailed guidelines on KCC scheme were Rs.250 Crore and V
issued vide Master circular ADV: 160/2002-03 dt e) Exception-ally Large
above
31.03.2003 and ADV.136/2003-04 dt 23.02.2004.

5
 Recollect
Accordingly, Categorisation of Branches Cell). Detailed guidelines/instructions are given in
has been made as on 31.03.2007. The names of the the circular.
branches falling under different Categories / Scales
With effect from 1st June 2007 (Pension
are furnished in Annexure I and categorisation of
for the month of May 2007) monthly routine
specialised branches in Annexure II to this
pension is being credited through CBS every
Circular.
month on 1st working day directly to individual
(HRM.73/2007-08 dated 09.10.2007) pension accounts by HO: HRM Dept.
Registration for E Learning through CBS Help desk. (HRM.76/2007-08 dated 10.10.2007)

The E Learning is the latest initiative taken Value of perquisite on accommodation provided to
by our Bank as a competency building measure, as employees by the Bank, as per amendment in
announced vide our Circular MD/ED-2/2007-08 Income Tax Act.
dated 26.05.2007. This provides for 40 course
The perquisite value in respect of
libraries on general banking and exclusive library
accommodation provided by the Bank to its
on “Branch Management”, which has been hosted
employees was treated as Nil for the purpose of
in the CBS Help desk and can be accessed by the
Income Tax in view of the orders of Hon’ble
staff through user ID and related password.
Calcutta High court vide civil order No. 9740(w)
In order to facilitate easy accessibility, it of 1993.
has now been decided to allot the User ID and
Section 11 of the Finance Act 2007 has
Password to all Clerical staff and Officers, without
been amended by inserting new explanations in
any specific request. The User ID will be the
Sec 17 of the Income Tax Act by which the
respective SR NO without check digit and
provision of unfurnished and furnished
Password will be “image”. With this login ID all
accommodation provided by the employer to its
the Clerical staff and Officers will be in a position
employees will be treated as perquisite within the
to access the E learning module through CBS help
meaning of Sec 17 of the Income Tax Act. The
desk. The password can be changed after the first
decision of Hon’ble Calcutta High court is now put
login. This facility will be available on or after
to rest by the amendment and the Bank would be
October 15, 2007.
required to deduct income tax in accordance with
The e-learning course provides exhaustive the provisions of the Income Tax Act. The
topics in the area of General Banking, AML, Asset amendment is effective from 01.04.2002. As such
Liability Management, Credit, Foreign Exchange, the employees who have earlier been provided
Risk Management, Treasury Management, with Bank’s accommodation either in Bank owned
Derivatives, financial Mathematics and lot more. quarters or on lease from 01.04.2002 have to
recalculate their income tax by including the value
Staff Members are advised to make use of
of perquisites and pay income tax and file revised
this unique opportunity to enhance their
returns accordingly for the financial years 2002-03
knowledge which will go a long way in shaping
to 2006-07.
their career.
From the financial year 2007-08 onwards,
(HRM.75/2007-08 dated 10.10.2007)
Branches/Offices have to include the perquisite
Obtention of Life Certificate from all Staff value of the accommodation provided to the
pensioners and family pensioners – Pension credit employees while computing the income tax and
through CBS. deduct tax at source from the salary. As the
amendment has been made only in the Finance Act
Life Certificate is to be obtained from all 2007, Bank would be required to deduct tax in
Staff pensioners and family pensioners in the accordance with the provisions of Sec 17 of the
month of November every year in the prescribed Income Tax Act only from the current year
format. onwards. However, for the financial year 2002-03
Life Certificate obtained is to be kept in to 2006-07, it is the responsibility of the employees
the pensioners’ individual files at the branches to pay the tax and file tax return.
where they opted to draw the pension and should The relevant provision for computing the
not be sent to HO: HRM Department (Pension value of perquisite is given in the circular.
(HRM.83/2007-08 dated 07.11.2007)
6 6
 OCT-DEC 2007
Preferential rate of interest on deposits to ex-staff Staff welfare scheme - improvement to existing
members schemes
Board, in its meeting dated 03.11.2007, Our Central Welfare committee has
has approved as under certain modifications in approved improvement s in the following schemes.
payment of preferential rate of interest of one I. Provision for free eye check up and
percent on deposits to staff members who left the purchase of spectacles for staff members above 40
service. years of age
All staff members who leave the service The existing limits of Rs.500/- is now
on VRS including VRS2000 retirees and staff increased to Rs.1000/- per occasion for the staff
members who resign after 20 years of service are members above 40 years of age. The staff
eligible for preferential rate of interest of one members can now avail the facility twice in their
percent on deposits. career, the minimum interval between the two
The conditions of “health grounds” and reimbursements being four years.
“approval of Circle Head” in respect of staff II. Subsistence allowance for staff
members retiring on VRS and resigning after 20 members who are on leave on loss of pay due to
years of service as mentioned in Circular PRNL. prolonged hospitalisation has now been increased
No.103/2006-07 dated 17.10.2006, are dispensed from the maximum of Rs.2,500/- p.m to Rs.5,000/-
with. All other terms and conditions remain the p.m, while other terms and conditions remain the
same. same.
The modifications in respect of the III. Reimbursement towards cost of
preferential rate of interest may be made known to accessories purchased by physically handicapped
all the ex-staff members. staff members has now been increased to
(HRM.85/2007-08 dated 12.11.2007) Rs.5,000/- from Rs3000/- while other terms and
conditions remain the same.
Mandatory requirement of Permanent Account
Number (PAN) by all employees IV. Financial relief to the family of staff
members dying in harness. Increased to
, The Hon’ble Finance Minister, in the meeting
Rs.50,000/- and the amount to be paid on the
held with the Chief Executives of Public Sector
funeral day is also increased to Rs.10,000/- while
Banks, has directed that Banks should make it
other terms and conditions remain the same.
mandatory for every Bank employee to obtain
PAN for himself/herself. All the above modifications will be
effective from 01.04.2008.
Moreover, under Sec 139(A) of the
Income Tax Act, quoting of PAN of all employees V. Grant of medical aid to retired staff
in the TDS returns is mandatory and non members who retired on superannuation is now
compliance will attract a penalty of Rs.10000/- as increased to Rs.1500/- from Rs1000/- from the
per Sec 272B of the Income Tax Act. year 2008 and other conditions remain the same.
The accumulation of the Aid beyond the current
It is also informed that E-TDS returns to
year is strictly not permissible hereafter.
be filed every quarter by the branches/ offices will
not be accepted without the PAN of the employees. VI. Grant of scholarship for education to
the wards of staff members for professional
In this connection, reference is invited to
courses has now been increased to 300 from the
our Income Tax Circular PRNL 139/2006-07 dated
existing level of 100. Further, to encourage the
27.12.2006 wherein it was emphasised that
wards to take up higher education, 100 number of
employees have to apply for PAN and submit the
scholarships are introduced for Post Graduate
same to the respective salary disbursing authority
courses at Rs.3000/-p.a from 2008-09. All other
without fail.
conditions remain the same.
It is reiterated that Branch Managers/ Head
VII. Reimbursement of medical bills for
of Departments have to ensure that all the
the treatment for certain major specified ailments.
employees do obtain PAN immediately, if not
already obtained, to comply with the directives of On account of increase in medical
Ministry of Finance and as per Income Tax Act expenses during the recent years, Central Welfare
and avoid any penalty for non compliance. Committee has approved the enhancement of the
ceiling for the referred treatments as given below
(HRM.89/2007-08 dated 30.11.2007)

7
 Recollect
in the circular. The difference between the amount The above report is to be checked first for
reimbursed under BPS/IBOSR and the ceiling its accuracy and then branches should deduct the
permitted under Staff welfare scheme, excluding BCTT in eligible accounts. Instances have been
non-permissible items, subject to 100% for self noted that branches are not scrutinizing the reports
and 75% for the dependants are to be reimbursed
and BCTT is being deducted in ineligible cases
from the staff welfare fund.
also.
(HRM.94/2007-08 dated 06.12.2007)
Branches are advised to verify the
Revised guidelines for issue of identity cards to staff category (organization) code of the customer
members
(Individual / HUF or non-individuals) and change
Circle Offices will be the controlling the details, wherever required, in their database
authority for issue of Identity cards for staff seeking guidance from CBS Project Office.
members in their circle. For those joining Head
office, Security Department will continue to issue Verify the report pushed to them for its
the identity cards. According to the revised accuracy and deduct BCTT only in eligible
procedure, blank cards with running serial numbers withdrawals and avoid complaints from the
will be supplied to Circle Offices on demand, by customers.
HO: Security Department. These cards shall be
(CRA.56/2007-08 dated 01.10.07)
kept under the control of Circle Head and shall be
as security item in the custody of Security officer, The service charges for RTGS and NEFT for Normal
who shall sign as the issuing authority. The general and E-banking transactions are as under.
guidelines regarding issue are as under.
RTGS:
a) All Staff members are eligible for issue Normal Service E-banking Service
of Identity Card. Charges Charges
Retail 0.15% with a minimum 0.10% with a minimum
b) Permanent Part-time employees are also
Customers of Rs.225/- and of Rs.150/- and
eligible for Identity Cards. maximum of Rs.2250/- maximum of Rs.1500/-
+ RBI Charges + RBI Charges
2. Colour
Corporate 0.15% with a minimum 0.10% with a minimum
The cards shall be in four different colours. Customers of Rs.225/- and of Rs.150/- and
maximum of Rs.2800/- maximum of Rs.2100/-
Card Colour of the card + RBI Charges + RBI Charges
Executives Golden Yellow
Officers Blue
Clerks Pink For inward transactions Rs.30/- (including
Subordinate Staff Green service tax) is being charged for Non-SB
customers. (RTGS is for Rs.1,00,000/- and above
(HRM.100/2007-08 dated 26.12.2007) only)
NEFT:
CRA
Normal Service Charges E-banking Service Charges
Banking Cash Transaction Tax (BCTT) – Scrutiny of 0.10% with a minimum of 0.10% with a minimum of
BCTT report and changing the category Rs.25/- and maximum of Rs.25/- and maximum of
(organization) code wherever required Rs.2250/- + RBI Charges Rs.1500/- + RBI Charges
Banking Cash Transaction Tax came into
effect from 01.06.2005 and BCTT has to be
deducted @ 0.1 % of aggregate amount withdrawn All the above charges are inclusive of Service Tax.
in applicable cases. RBI charges are nil at present.

In case of CBS Branches, a report (ID: Service Charges of NEFT is same for
CA0909-01) is generated at EOD in the following Individuals, Non Individuals and Special category
name and pushed to branches. of customers like Pensioners, rural customers
under Normal and E-banking. All branches are
CBS code Date of report Name of the report
advised to increase transactions under RTGS and
00000_ yyyymmdd_ Details_Of_Accounts_
Liable_Under_BCTT NEFT and improve non-interest income.
_casd0909.txt.gz (CRA: 57/ 2007-08 dated 06.10.2007)

8 8
 OCT-DEC 2007
Lord Krishna Bank Ltd.- Exclusion from the second Insurance of all assets financed by us through our
schedule to the Reserve Bank of India Act,1934 corporate agency tie-up
Branches should effectively utilise our
Reserve Bank of India has communicated
corporate agency tie-up with United India
vide letter No. DBOD.No.Ret.BC.36/12.06.043/
Insurance Co. Ltd. (UIICO) for non-life insurance
2007-08 dated Oct.23, 2007.
by convincing our customers to insure all the
That the name of “Lord Krishna Bank Ltd” assets financed by our Bank through UIICO
has been excluded from the Second schedule to the For premium remitted to UIICO,
Reserve Bank of India act, 1934 by notification Commission should be received at the eligible
DBOD.No.PSBD.2536/16.01.130/2007-08 dated rates from them and booked under the correct
September 6, 2007, published in the Gazette of income head.
India (Part III-section 4) dated September 19, The detailed instructions are
2007. communicated in the circular CRA 41/2007-08
All Branches/Offices are advised to be dated 18.08.2007.
guided accordingly. The commission figures received so far
reveal that branches are not insuring their assets
(CRA.62/2007-08 dated 25.10.07) through our above mentioned corporate agency tie-
up. This is resulting into loss of income to our
Marketing life insurance policies – Over the counter,
Bank.
non-medical, easy to sell, Unit Linked Suvidha
Branch to ensure that optimum income is
Range of Products and Assurance Plan designed by
generated through our tie up with UIICO on par
HDFC Standard Life Insurance Company for our
with the industry standards.
customers
(CRA.65 / 2007- 08 dated 27-10-2007)
To improve our income component the
sale of policies as under has to be marketed. Banking Operations of LIC of India with various
branches
Unit Linked Suvida Range of Assurance Plan
Policies The revised terms and conditions
1.No medical test - only 1.No medical test - only governing the banking operations of LIC of India
Declaration of Health Declaration of Health has been given in the Annexure I and Annexure II
2. Simple documentation, Flexible 2. Simple documentation
premium payment options, Access
to this circular and will be in force from
to money after three years through 31.07.2007. The action point required by the
partial withdrawal. branches for some of the terms and conditions are
3. Eligibility: Min. Entry age is 18 3.Eligibility: Min. Entry given which should be followed meticulously.
yrs, Max. Entry age is 50 yrs. & age is 18 yrs, Max. Entry
Max. Maturity age is 65 yrs. age is 50 yrs. & Max. Branches are advised to submit the
Maturity age is 65 yrs. proposals for sanction of cheque BP limit to their
4. Endowment Suvidha Plus: 4. With profit plan,
respective Circle Offices. Circle Offices in turn
Premium per annum is Rs. reversionary bonuses
1,00,000 and Maximum Sum declared based on should submit a consolidated proposal to HO:
Assured is Rs. 5,00,000. performance Credit Division for their consideration/sanction.
5. Young Star Suvidha and Young 5. Maximum Sum
Star Suvidha Plus: Maximum Assured is Rs. 5 Lakh. Branches are cautioned not to extend
Premium per annum is Rs. 50,000 Minimum Annual services other than those given in Annexure and
and Maximum Sum Assured is Rs. premium is Rs.1, 800. not waive service charges for the services not
2,50,000. covered in the present MOU.
6.Low Fund Management Charge, 6.Policy can be
Flexibility to switch from one fund to surrendered for cash Branches are also advised to offer efficient
another ; .Suvidha Plus has Loyalty value before maturity. customer service to LIC of India which will result
Units, which boosts fund value
7.Tax benefits under Section 80 C 7.Tax benefits under in growth in business and other allied benefits.
and 10 (10 D) Section 80 C and 10 (10 (CRA. 69/ 2007-08 dated 09.11.2007)
D)
IB GRIHA JEEVAN – Life Insurance Cover for Home
All branches are advised to solicit Loan Borrowers - Master Policy No. 416858 with LIC
maximum sales of HDFC SLIC life insurance of India
policies. IB Griha Jeevan is a Group Mortgage
(CRA.63/2007-08 dated 27.10.07) Redemption Assurance Policy (GMRA) taken by
the Bank with LIC of India. Under this Master
Policy bearing No.416858, life insurance cover is
9
 Recollect
provided to borrowers under home loans and other For policy service queries, requests or
mortgage related individual loans like, Loan for complaints, the above phone numbers can be made
purchase of House Site – Resident Indians, Loan use of by our Branches/customers
for purchase of House Site for NRIs, IB Rent (CRA. 81/ 2007- 08 dated 30.11.2007)
Encash, Ind Mortgage, IB Home Improve, Home
Loan for Repairs and Renovations, and My Own FX
Shop.
Guidelines for Interest Subvention on Rupee Export
IB Griha Jeevan is basically a liability Credit
cover policy which helps in ensuring hassle free
recovery for the Bank in the unfortunate event of RBI vide its Circular DBOD.Dir (EXP)
death of the borrower. The minimum and B.C.No.34B / 04.02.012007-08 DT 06.10.07 has
maximum loan amounts that can be covered under extended the scheme upto 31.03.2008 and
IB Griha Jeevan Policy are Rs.50000 and Rs.50 extended the coverage to other sectors as listed
lakh respectively. All the above-mentioned loan below:
accounts which were sanctioned after 31-08-2006 Specified Sectors
can be covered under this policy.
Textiles (including Handlooms, jute and
Under the terms of the Master Policy, carpets) Readymade Garments ,Leather Products
branches should send the premium remittances to Handicrafts, Engineering Products ,Processed
their respective Circle Offices and Circle Offices Agricultural Products (including processed
consolidate and send the same in Annexure VI cashew, coffee and tea),Marine Products, Sports
(hard and soft copies) to IB Bancassurance Service Goods, Toys, Solvent Extracted De-oiled cake,
Centre. Plastics & Linoleum, All Exporters from the SME
Reasons which delay issue of premium sectors
certificate by LIC are detailed in the circular. All other instructions, periodicity of submission
(CRA. 72 / 2007- 08 dated 21-11-2007) of statements contained in our circular FX.
14/2007-08 dated 21.08.2007 remain unchanged
Marketing of HDFC Life Insurance policies –
(FX. 20/ 2007-08 dated 08.10.2007 )
Introduction of Service Help Line – ‘DRISHTI’
Our Bank has entered into a Corporate Guidelines for Interest Subvention on Rupee Export
Agency Agreement with HDFC SLIC for selling Credit
their life Policies RBI vide its Circular DBOD.Dir (EXP)
HDFC has come out with another Toll Free B.C.No.54 / 04.02.01 /2007-08 dated 30.11.2007
Number which can be dialled by customers has extended additional subvention of 2 percent
through any of the telephone operators (Airtel, (from 2% to 4%, i.e. from BPLR-4.5% to BPLR-
Tata Indicom, Reliance, Vodafone, MTNL / 6.5%) to the following sectors only from
BSNL etc.). 01.11.2007 to 31.03.2008 subject to the condition
that the interest rate after subvention will not fall
1800 - 209 - 7777 below 7% which is the rate applicable to the
With the introduction of the above Toll agricultural sector under priority sector lending.
Free No., HDFC SLIC has the following Customer For our Bank the interest subvention for the
Touch Points: following sectors is 3% from the existing 2% (i.e.
BPLR – 5.5% from the existing BPLR – 4.5%).
1800 – 228 – 228 (BSNL/MTNL) – Toll Free For other sectors there is no change in the existing
1800 – 209 – 7777 (any phone) – Toll free subvention of 2 % (BPLR – 4.50%).
6000 7777 (Non BSNL/MTNL) - At local call The eligibility for interest subvention for
charges carpet sector is 270 days for pre-shipment and 90
days for post-shipment and for other sectors 180
Call back request through SMS – type days for pre-shipment and 90 days for post-
SERVICE to 5676727 shipment.
E-mail: service@hdfcinsurance.com All other instructions, periodicity of
Website: www.hdfcinsurance.com submission of statements contained in our above
circulars FX.14/2007-08 dated 21.08.2007 and
1010
 OCT-DEC 2007
FX.20/2007-08 dated 08.10.2007 remain opportunity and surpass ONE LAKH CRORE
unchanged. The amount of interest subvention business well before March 2008.
should be in actual rupees and not in lakhs as in the
earlier circular. (MD.ED.9/2007-08 dated 30.11.2007)
(FX.24/2007-08 dated 03.12.2007 ) ADMN
MD/ED Misuse of banknotes and Discontinuance of re-issue
of Ashoka Pillar Series currency notes – RBI
Let us excel in performance - cross one lakh crore
directions
this year
Reserve Bank of India vide their letter No.
CBS has been introduced in more than 1300
Che. Cy. Res. / 1925 / 06.08.001 / 2006-07 dated
branches and the facilities offered to any customer
26.09.2007 has reiterated their earlier directions to
as the ‘Customer of the Bank’ are numerous. .
stop reissue of Ashoka Pillar series notes of all
denominations to the public. RBI has observed that
A link in the CBS help desk “ONE LAKH
some of the bank branches are still reissuing the
CRORE” is provided. Users have to click the link
Ashoka Pillar series notes to the public, which
to access the module. One time registration is
should be stopped immediately.
required for giving the details and creation of
password. SR Number will be the user id for login. These instructions have already been
The business is to be canvassed from new clients communicated to the currency chests and branches
which could be Deposits and Advances. In for their strict compliance. All the branches are
deposits, drop downs are provided for SB, C/A, again advised to strictly adhere to the above
R/D and Term Deposits. In advances the Home directions issued by the Reserve Bank of India and
Loan, Educational Loan, other structured products to ensure that the banknotes in Ashoka Pillar
and other loans are listed. The number of accounts Series notes are not reissued to the public and to
and amounts (likely to be maintained normally) are remit such notes to currency chests for further
to be mentioned. remittance to Reserve Bank of India Issue Offices
as soiled note remittances in the normal course.
The Edit facility could be used to increase (ADMN.56/2007-08 dated 08.10.2007)
the number and / or amount but not otherwise. The
accounts could be opened in any branch in the Detection and Impounding of forged notes –
country using the help and services of friends, Reporting of monthly data on counterfeit notes to
relatives etc. the Issue Offices of Reserve Bank of India
Many forged notes are still detected in the
Such accounts would be mentioned by the
Chest remittances to RBI inspite of stressing the
staff concerned as business canvassed in terms of
need for careful examination of the cash by the
achieving the goal.
branches at the time of receipt itself so as to
prevent re-entry of such notes into circulation as
The business so canvassed with recent
also to prevent inclusion of such notes in the chest
balances would be published periodically in the
remittances.
Help Desk and also INDIMAGE. After suitable
decision is taken, the same would be recorded in RBI vide their letter 2657 / 16.12.01 /
employees’ record and a transparent system of 2007-08 dated 12th October 2007 has observed
cash incentive will also be considered. Further that data on counterfeit notes detected by all
aspects of the above will be conveyed in due branches of our bank is not being reported to the
course. Issue Department of RBI, Local Regional Office in
a timely manner. RBI, therefore has advised that
The scheme, though voluntary, gives the the branches should strictly follow the extant
unique opportunity for the performance instructions on detection of counterfeit notes and
contribution of all staff members to be published reporting thereof.
and thus noticed.
For reporting the details, formats are
enclosed to the circular for strict adherence by
Let every one of us set our own ambitious
branches to RBI directions. And FIR is filed in
goal, pursue relentlessly by extending exemplary
respect of counterfeit notes detected. The data on
services to the customers, scouting for an

11
 Recollect
such counterfeit notes detected should be The coins shall conform to the following
submitted to respective Circle Offices. dimensions, designs and compositions, namely:
(ADMN.59/2007-08 dated 27.10.2007) Denomination of Shape and Metal composition
the coin outside diameter
Issue of Rs.10 denomination banknotes with inset Two Rupees Circular 27 Ferritic Stainless
letter “A” millimeters Steel containing Iron
– 83% Chromium –
Reserve Bank of India, vide their Circular 17%
No.9 dated 05.11.2007 has advised that they will The coin is a legal tender as provided in
be shortly issuing Rs. 10 denomination banknotes the Coinage Act, 1906. The existing Two Rupees
with inset letter “A” in both numbering panels in Coins in circulation shall also continue to be legal
Mahatma Gandhi Series with additional / new tender.
security features bearing the signature of Dr.Y.V. The Reserve Bank of India will shortly put
Reddy, Governor. Except for the change in the
into circulation new ferritic stainless steel coins of
inset letter, the design of these notes to be issued Rs.5 with the theme “CONNECTIVITY AND
now is similar in all respects to the banknotes in
INFORMATION TECHNOLOGY”.
Mahatma Gandhi Series with additional / new
security features issued on April 27, 2006. All The coins shall conform to the following
banknotes in the denomination of Rs.10 issued by dimension, design and composition, namely:
RBI in the past will continue to be legal tender. Denomination of Shape and outside Metal
(ADMN.61/2007-08 dated 10.11.2007) the coin diameter composition
Five Rupees Circular 23 millimeters Ferritic
Submission of Compliance Certificate- Computer with security edges Stainless Steel
(Mono- Metallic) containing Iron
Security Returns -i) Monthly Manager's Certificate – 83%
ii)Quarterly Computer Security Review Chromium –
17%
It is observed that some branches either do
not submit the said return to Circle Office or
submit the return in a routine manner without The coin is a legal tender as provided in
adhering to various compliance guidelines on the Coinage Act, 1906. The existing Five Rupees
critical areas. Coins in circulation shall also continue to be legal
tender.
In view of the criticality of the transactions
in automated CBS environment (anywhere (ADMN.64 /2007-08dated 22.11.2007)
banking through multiple delivery channels),
Branches are advised to ensure compliance of the Deduction of Tax at Source (TDS) – Filing of e-TDS
detailed guidelines given in the circular. Quarterly Returns from the Quarter ended
30.09.2007 onwards.
Any laxity on the part of the branch level /
controlling offices in ensuring compliance on the The Government of India recently has
above aspects are likely to pose serious security given the following instructions to the TIN-FCs
threats to the system leading to Financial / with regard to uploading of the e-TDS Returns to
Reputational risk. the NSDL Server which are given below for your
(ADMN-62/2007-08 dated 13 11 2007) kind information:

Issue of new Ferritic Stainless Steel Coins in the The importance of complying with the
denominations of 2 and 5 above PAN requirements is that the tax credit for
Reserve Bank of India, Chennai vide their the TDS deducted would be passed on
letter Che.Cy. Res. / 3277 / 06.16.004 dated electronically to the PAN of the deductive. The
19.11.2007 has advised about the issue of new data punched by the Banks in OLTAS at the time
Ferritic Stainless Steel coins in the denominations of remittance of tax and the corresponding data
of 2 and 5. With the following details: submitted through e-TDS Returns are matched by
NSDL Server and if all details including PAN
New Ferritic Stainless Steel coins of Rs.2 tallies, the Tax Credit for the TDS deducted could
denomination with the theme “PLATINUM be given to the respective PAN of the deductive.
JUBILEE OF INDIAN AIR FORCE (1932-2007).

1212
 OCT-DEC 2007
The deductors are liable for Penal CBS CIRCULARS
provisions as detailed below:
Relaxation in Charges on Intra-
1 DEP.35 06.11.07
City Cash Transactions
1. Non quoting of correct TAN in TDS related Issue of Cheque Books, Transfer
transactions will attract a penalty of of accounts from one branch to
Rs.10000/- another branch, Renewal of
2 DEP.39 14.12.07
2. Non compliance to the requirements of PAN Limits in OD/OCC accounts,
Scanning of Specimen
will attract a penalty of Rs.10000/- Signatures
3. Non filing or belated filing of e-TDS Returns Performance of RTGS and
beyond the stipulated due dates will attract a 3 CRA.75 21.11.07 NEFT – Need for increase of
penalty of Rs.100/- per day for period of such transactions under RTGS/NEFT
Adjustment of ATM Cash by
delay. 4 GEN.32 27.10.07
ATM attached Branches
As the e-TDS Returns are now MIS Report generation –
5 GEN.34 07.12.07 creation of User ID to access the
computerised, it would be easy for the Government
MIS Server
to identify defaulters and invoke the penal Payment of Demand Drafts
provisions, in case of delay or default. 6 FX. 21 25.10.07 drawn by Musandam Exchange
in CBS Branches
It is the responsibility of the branch
management to ensure that the e-TDS Returns for
every quarter are filed before the due dates, by Last numbers of circulars issued as on 31.12.07
achieving the required level of PAN Compliance
MD/
and report the date of filing of e-TDS Returns for DEP ADV HRM CRA FX GENL ADMN
ED
each quarter to the respective Circle Offices
immediately on filing the e-TDS Returns. 40 68 102 84 29 34 73 12

In the event of the deductees not

furnishing the PAN despite repeated reminders,
Though due care has been taken in the preparation of
they should be informed that the Bank is not Recollect, the version given in the circular is final.
responsible if no credit is given by Income Tax
Compiled by HO: O&M Division
Department for the TDS amount deducted.
Printed & circulated by HO: Circular Issue Cell
(ADMN.70/2007-08dated 15 12 2007)

13
 a Volume 20 Issue 4

For Private Circulation Only

January- March 2008 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
CONTENTS OF THIS ISSUE GENL 02.01.08 MIS Report generation – Web 7
35 page created for viewing the
Cir. Date Subject Pg. reports
No. 37 28.01.08 Negligence and cash shortages 7
DEP 09.01.08 BCSBI - Code of Bank's 1 and irregularities in Foreign
42 Commitment to customers- Exchange Transactions –
Nomination of Code Champion for Reporting of fraud
effective implementation of Code 39 07.02.08 Banking Ombudsman Scheme 7
in Branches. 2006
45 07.03.08 KYC Norms - Customer 2 44 24.03.08 Use of Electronic Mode of 7
Identification Documents for Payment for large value
Opening of Accounts transactions
46 24.03.08 Issue of master cards in lieu of 2 ADMN 03.03.08 Deduction of Tax at Source (TDS) 8
Maestro Cards 87 – Filing of Quarterly e-TDS
48 27.03.08 Inoperative / overdue / unclaimed 2 Returns from the Quarter ended
deposits 30.09.2007 onwards
ADV 03.01.08 Reverse Mortgage Loan Scheme – 3 97 22.03.08 Hindi option in CBS 8
70 Amendment
75 22.01.08 Implementation of Ryots 3 DEPOSITS
Punaruddhaarn Yojana Scheme
81 09.02.08 Home Loan with Fixed Rate 3 BCSBI-Code of Bank's Commitment to customers--
Option- RESET PERIOD Nomination of Code Champion for effective
86 14.02.08 Farmers’ club – an effective tool 3
for business promotion implementation of Code in Branches.
87 21.02.08 Model Code for Collection of Dues 3 Branches are aware that our Bank being a
and Repossession of Securities -
CDRS Code – Modified member of Banking Codes and Standards Board of
95 17.03.08 Referring to next higher authority 4 India is expected to abide by the commitments
before rejection of Small made to customers and BCSBI would impose
Enterprises (SE) Applications
100 20.03.08 Modified IBA Model Educational 4 sanction/penalty for any breach, in this regard.
Loan Scheme A specific time frame was given to us for
HRM 04.02.08 Bonus to staff for the year 4
111 01.04.2006 to 31.03.2007 on implementation of the Code provisions.
account of amendments in the
payment of bonus act
¾ Distribution of the copies of the Code to all
112 04.02.08 Sanctioning of Permission to 4 existing, operative Savings Bank and Term
Travel by Taxi under LFC Deposit account holders.
118 08.02.08 Maintenance of Festival/Interest 5
Free Salary Advance in CBS ¾ Mandatory displays at branches.
136 29.03.08 Bringing Political or other outside 5
influence by Staff Members for
¾ Nomination of Code Champion at each branch.
Comfortable postings / enhancing Details regarding Distribution of the copies,
Career prospects – An act of
misconduct. Mandatory display, Nomination of Code
CRA 09.02.08 Embossing of Identification Code 5 Champion, Duties of Branch Code Champion and
90 on Safe Deposit Locker Keys at Circle Offices are given in the circular.
92 13.02.08 Urgent need to increase our 5
government business Code Compliance Officer i.e., Circle Head
96 28.02.08 Reconcilable BGL Heads to get 6 has to report the breaches to Principal Code
outstanding details
97 15.03.08 Direct Tax collection through e- 6
Compliance Officer within 48 hours with details of
Payment the breaches committed and the remedial action
FX 24.03.08 Inward remittance product – 6 taken to enable Principal Code Compliance Officer
33 Xpress money – revised procedure
34 24.03.08 Web based EXIM bills - 6
to apprise BCSBI.
implementation before 31.3.2008 (DEP.42/2007-08 dated 09.01.2008)
 Recollect
KYC Norms - Customer Identification Documents for bank gets commission from M/s Master Card
Opening of Accounts International on the amount of spends from both
As per the KYC Policy of the Bank, for types of cards by the customers through POS
opening accounts for individuals under the Low terminals. When the “Maestro card” is used for
Risk Category, branches should obtain any of the purchase of goods/services the cardholder has to
following documents to verify the permanent key in the pin, whereas the “Master card” holder
correct address/location: needs to sign the authorization slip, when the same
is used in Point of Sales Terminals (POS).
1. Passport (where the address on the
passport is the same as the address on It is proposed to issue Master cards instead
the account opening form) of Maestro cards enabling customers to use in more
POS terminals. Master card is called Master card
2. Telephone Bill (unembossed) and it is signature based. Also, when
3. Bank account statement customers use the cards in POS, the Bank will be
4. Income/Wealth tax assessment order benefited and the points to be noted for issue of
Master card are given in the circular. The
5. Credit Card Statement advantages of using debit cards in POS terminals
6. Electricity Bill are also listed in the circular.
7. Ration Card The issue of MASTER CARDS without
8. Letter from employer (subject to the any deposit requirement comes into immediate
satisfaction of the approving official) effect.
RBI has advised that banks can obtain an (DEP.46/2007-08 dated 24.03.2008)
identity document and a utility bill of the relative Inoperative/overdue/unclaimed deposits
with whom the prospective customer is living along
Branches are aware that Savings Bank and
with a declaration from the relative that the said
Current accounts in which there is no operation for
person wanting to open an account is a relative and
a period of two years and over from the date of last
is usually staying with him/her at the same address.
operation, except by way of any charges debited or
Banks can use supplementary evidence such as
interest credited (in Savings Bank accounts) are to
letter received through post for further verification
be treated as “inoperative accounts”.
of the address.
Term deposits which are due on due date
Branches are advised to take note of the
are automatically renewed for a further equal period
above, while opening accounts for individuals with
subject to a maximum of one year. The term
low risk perception. Branches are further advised
deposits which are not automatically renewed are
that:
transferred to overdue term deposits.
¾ the review of risk categorisation of
Savings Bank accounts, Current accounts,
customers should be carried out at a
Fixed and other term deposits which are not
periodicity of not less than once in six
operated for 10 years and above are classified as
months and a report to be submitted to their
dormant/unclaimed deposits.
Circle Office twice a year (Upto 30th June
and 31st December). As soon as the accounts are classified as
inoperative/stagnant accounts, a letter as per
¾ updation of customer identification data
Annexure 4.34 of Manual of Instructions Deposits
(including photographs) after the account is
has to be sent to the account holders. If there is no
opened should be done not less than once
response to the letter from the branch, the account
in five years in case of Low Risk category
holders have to be personally contacted to ascertain
customers and not less than once in two
the reasons for the inoperative status of the
years in case of high and medium risk
accounts.
categories.
(DEP.45/2007-08 dated 07.03.2008)
As per Section 26 of Banking Regulation
Act, banks on an annual basis are required to
Issue of master cards in lieu of Maestro Cards submit to the Reserve Bank of India, the particulars
At the time of issue of MASTER cards it of accounts which are dormant/ unclaimed for ten
was stipulated to be given to those customers who years.
have a deposit balance of Rs.25,000/- (Rupees Branches are advised to contact the
Twenty five thousands only) with the bank. The depositors whose accounts are classified as
2 2
 JAN-MAR 2008
inoperative, overdue or unclaimed deposits at ) Loan amount will be paid to the financiers
regular intervals to make them operate the accounts. directly against stamped
With the 100% CBS environment and value added ) acknowledgement
services offered by our bank, it is possible that most
of the account holders may return to our fold. It is ) Providing further working capital loan /term
our earnest desire that the balances under loan for farming activities.
inoperative /overdue/unclaimed deposits are wiped ) Flexible repayment schedule i.e., 9 years with
off in a phased manner with the cooperation of the one year gestation
branches. (For complete details refer our
(DEP.48/2007-08 dated 27.03.2008) Cir.No.ADV.59/2004-05 dated 16.08.04)
ADVANCES (ADV. 75/2007-08 dated 22.01.2008)
Reverse Mortgage Loan Scheme – Amendment Home Loan with Fixed Rate Option- RESET PERIOD
Our Bank has made the Reverse Mortgage Branches are aware that even though the
Loan Scheme more customer-friendly and hence scheme provides for resetting the interest rate for
the stipulation of obtention of letter from the Legal fixed rate category also, as of now, Bank has not
Heirs stands withdrawn. It is enough if the Senior stipulated any specific period for resetting interest
Citizen borrower furnishes list containing the rate for Home Loans under fixed rate option.
names and addresses of his / her legal heirs to In case of Fixed Rate Option Home Loans,
Bank, at the time of availing the facility. This will the accounts will be subject to reset period of 3
facilitate the Senior Citizens to take independent years in respect of all fresh sanctions on or after 01
decision with regard to creation of mortgage, Feb. 2008.
without the necessity of referring the matter to their
legal heirs. The first date of disbursement will be the
governing factor for determining the fixed rate.
Branches are advised to make the Scheme
very popular by marketing the product to the Upon expiry of the reset period, the Bank/
Pensioners who draw pension through our Bank Sanctioning Authority will reset the rate of interest,
and also to the other Senior Citizens, by according to the interest rate structure for fixed rate
highlighting the benefits of our Scheme. advances prevailing as on that date.
Processing fee is waived for existing (ADV:81/2007-08 dated 09.02.2008)
customers and for others it is Rs.250 per lakh or Farmers’ club – an effective tool for business
part thereof. promotion
(ADV. 70 / 2007-08 dated 03.01.2008) Farmers’ club was conceptualised by
Implementation of Ryots Punaruddhaarn Yojana NABARD, as an experiment in social engineering
Scheme in the field of rural banking in India. The objective
of the farmers’ club is to propagate the principles of
RYOTS PUNARUDDHAARN YOJANA ‘Development through Credit’.
Scheme introduced by our bank as early in 2004
aims at rehabilitation of farmers who have fallen NABARD and the sponsoring bank share
into the debt trap of local moneylenders by the cost of maintenance of such clubs in the ratio of
providing them with soft loans. 50:50.
Loans extended under the scheme are A best performing club in each state is
eligible for refinance assistance from NABARD selected every year for National Award by
under “Krishak Saathi Scheme”. Branches are NABARD. During 2006-07, two clubs one in
advised to make concerted efforts to extend credit TamilNadu and another from Andhra Pradesh
under RYOTS PUNARUDDHAARN YOJANA to sponsored by our Bank bagged this prestigious
the farmers enabling them to be free from debt of award from Honourable Union Finance Minister on
moneylenders and ensure financial inclusion of this 08.02.2008.
category of farmers. (ADV:86/2007-08 dated 14.02.2008)
Highlights of ryots punaruddhaarn yojana scheme Model Code for Collection of Dues and Repossession
Loan amount – Maximum of Rs. 1 lakh per of Securities - CDRS Code – Modified
farmer subject to 25% average annual farm income The CDRS code aims at following fair
(or) 50% of the land value (or) actual debt. practice as regards collection of dues, re-possession

3
 Recollect
of securities and foster the customer confidence on modifications approved by our Board are furnished
the Bank and ensures transparency in the process. in the circular as Annexure. Branches are advised to
Banking Codes and Standards Board of India take note of the modifications in the IBA
(BCSBI) and Reserve Bank of India (RBI) have educational loan scheme and process the proposals
been making suggestions to revise the CDRS code. strictly as per the modified guidelines.
Some of the suggestions have been incorporated (ADV:100/2007-08 dated 20.03.2008)
and the CDRS code has been modified. The
modified CDRS Code is given in the Circular HRM
(ADV:87/2007-08 dated 21.02.2008) Bonus to staff for the year 01.04.2006 to 31.03.2007
on account of amendments in the payment of bonus
Referring to next higher authority before rejection of act
Small Enterprises (SE) Applications
Government of India has amended the
It has now been brought to our notice that Payment of Bonus Act with effect from 01.04.2006
in certain instances, Branch Managers have rejected as follows:
the SE loan requests without referring to the next
higher authority, i.e. Circle Head. For the purpose of defining an employee
under the Act, the ceiling on salary/wage has been
It is also reported that in some cases when increased from Rs.3,500/- to Rs.10,000/-. As such,
the SE customers approached the Branch Managers employees whose salary/wage does not exceed
with request for sanction of loan, Rs.10,000/- per mensem are now eligible for
¾ their loan applications were either not received Bonus.
or acknowledged. Where salary/wage exceeds Rs.3500/- per
¾ discussion was not conducted with the mensem, the bonus payable to such employees is to
customer be calculated as if their salary/wage were
¾ Application was rejected without referring to Rs.3,500/- per mensem. As such, employees whose
next higher authority/ without valid reason salary/wage exceeds Rs.3500/- per mensem but
does not exceed Rs.10,000/- per mensem shall get
¾ No decision was communicated bonus in respect of accounting year 2006-07 and for
¾ RBI time norms violated subsequent accounting years, calculated as provided
The above observations are very serious in in the Act on a salary/wage of Rs.3500/- per
nature and in violation of the RBI norms. Field mensem.
level functionaries are advised to desist from Our Board has approved the payment of
indulging in such acts which will have adverse Bonus for 2006-07 on the revised norms to the
impact on the image of our Bank. eligible staff members as mentioned above.
Since SE is a thrust area and we have Staff members whose salary/wages were
initiated various measures to improve the portfolio, more than 2500/- but less than Rs.3500/-, during the
field level functionaries should entertain the SE accounting year 2006-07 might have received
customers, understand their credit needs and take bonus as if their wages were Rs.2500/- only. On
appropriate decision based on merits. In case any account of this amendment, those staff members are
proposal warrants rejection, the same should be also eligible to receive additional bonus, in respect
done with the prior permission of next higher of accounting year 2006-07. Detailed guidelines are
authority. given in the circular.
(ADV.95/2007-08 dated 17.03.2008) (HRM:111/2007-08 dated 04.02.2008)

Modified IBA Model Educational Loan Scheme Sanctioning of Permission to Travel by Taxi under
Recently, IBA has communicated some LFC
modifications in norms, based on which our Bank Our staff members in branches have been
has formulated this Modified IBA Model permitted to travel by taxi under LFC (cir RNL
Educational Loan Scheme. The modifications 66/94-95 dated 29.07.94) with the prior approval of
pertain to Courses Eligible, Expenses to be sanctioning authority, i.e. the Circle Heads.
considered, Security, Insurance Coverage to With a view to simplify the existing
students, Quantum of Finance under Priority Sector, procedure, it has been decided to delegate the
Age Limit for students, Charging of Processing powers to the Competent Sanctioning Authorities.
Fees for studies abroad, etc. The details of the Branch Managers being sanctioning authorities for
4 4
 JAN-MAR 2008
leave and LFC at branch level shall also sanction fresh business for the Bank, which would certainly
for travel of Branch Staff Members by taxi under be appreciated.
LFC. (HRM:136 :07-08 dated 29.03.2008)
(HRM:112/2007-08 dated 04.02.2008)
CRA
Maintenance of Festival/Interest Free Salary Advance Embossing of Identification Code on Safe Deposit
in CBS Locker Keys
As a part of Business Process Re- Based on the directions of RBI, HO:
engineering measures, it is decided to process and Vigilance Department issued a circular (DEP.13/87
disburse the salary of all the employees of the Bank dated 10.03.1987) advising all branches to emboss
from a centralised location i.e Centralised Pay Roll an Identification Code on the keys of lockers hired
Processing Cell at HO: HRM department, in a out by them. It was advised that at least for those
phased manner. To implement the Salary disbursal / locker units sanctioned afresh by Circle Offices, it
loan credits from a centralised location, it is must be ensured that the Identification Code of the
essential that all related accounts are maintained in Branch is embossed on the keys.
the CBS environment.
The Code shall normally be the Part I of the
In order to facilitate credit from the Uniform Branch Code from which the Bank and
centralised location, interest free salary/festival branch at which the locker is maintained could be
advance accounts - which are now maintained traced out.
manually - are to be opened in CBS environment.
For this purpose, separate products in CBS [under The keys of the lockers provided recently
OD] have been created. Balances in the accounts to some of the branches do not carry the Code as
opened with these products are mapped to the prescribed. It is, therefore, once again advised that
respective CGLs in the Balance Sheet under Other the sanctioning authorities should stipulate the
Assets. embossing of Identification Code on all locker keys
as a precondition while according sanction for
Product Code Product Description purchase of Locker units.
2446 - 1511 Festival Advance – Award Staff Branches should advise the suppliers while
2446 - 1521 Interest Free Salary Advance to Officers purchasing new locker units to emboss Part I of the
Uniform Branch Code without fail on all the locker
The detailed guidelines/instructions are
keys before delivery.
given in the circular.
(CRA. 90/ 2007-08 dated 09.02.2008)
(HRM:118/2007-08 dated 08.02.2008)
Urgent need to increase our government business
Bringing Political or other outside influence by Staff
Members for Comfortable postings / enhancing Our bank has been functioning as bankers
Career prospects – An act of misconduct. to the Government by mobilising their revenues
under various schemes like direct taxes, indirect
Staff Members are well aware that through taxes, MCA 21, Public Provident fund, Senior
various circulars HO:HRM Department has been Citizen Savings Relief Bonds etc. Apart from the
advising that any attempt by an officer/employee to non-interest income at Rs.45/- per receipt and 9
bring political or external influence to further paise for Rs.100 per payment other than pension we
his/her interests in respect of matters pertaining to get substantial float fund benefit without much risk
his/her service in the Bank shall entail appropriate and extra cost by handling the Government
punitive action besides, a specific noting in Service transactions. Branches can acquire low cost deposit
Records. accounts and cross-sell the bank’s loan products to
Instances of staff members bringing such the tax payers. On account of these advantages,
influence on the Bank in matters related to their there is intense competition among the banks,
services (including Transfers) are noticed. It is especially the private sector banks, to grab
reiterated that staff members bringing maximum amount of Government business.
political/external pressures will not be tolerated by Though the total collection of direct and
the Management and appropriate Departmental indirect taxes by the Government is increasing
Action will be initiated against such employees, every year, there is no substantial improvement in
without exception. Such “influential” staff members the Government business of our bank. In view of
would do well to use their connections for getting the above, all authorised branches are advised to

5
 Recollect
take effective marketing steps and strategy for FX
improving the mobilisation of above Government
Inward remittance product – Xpress money – revised
revenues as detailed in the circular.
procedure
(CRA:92/2007-08 dated 13.02.2008)
Under Xpress Money (Revised) scheme the
Reconcilable BGL Heads to get outstanding details transfer is effected in minutes using the web /
Reconcilable BGL Heads viz. Sundries internet based technology. Presently money
Receivable II, Sundry Deposit, SR (Government transfers are received in India from the associate
transactions), Funds in Transit, Malaysian companies and agent locations in UAE, Qatar,
Government Pension etc. enables us to get Kingdom of Saudi Arabia, Bahrain, Oman, Kuwait,
outstanding details as on a particular date as well as Jordan, UK, USA, Australia, Singapore, Hong
over and above a particular amount, for information Kong, New Zealand and Sri Lanka.
and necessary action. These details are available in To improve the operational efficiency and
the CBS Project Office Help Desk. customer satisfaction further the product has been
The following reconcilable BGLs have also made anywhere payment similar to Money Gram,
been created by the Project Office: against the previous location specific arrangement.
i.e the beneficiary can receive payment at any one
BPFR – Banks (reconcilable) - 96526
of our designated branches.
BPFR – Others (reconcilable) - 96527
Branches, instead of accessing the Xpress
Clearing Adjustment Receivable (reconcilable) - 96528
Money Website directly, should transmit the details
Clearing Adjustment Payable (reconcilable) - 96529 of the transaction to the nodal branch – Harbour,
Government Pension (reconcilable) - 96530 through CBS Help Desk. The transaction is
processed at the nodal branch and proceeds of the
transaction credited to the designated current
From 16th March 2008, the transactions in account no. 752066114 and intimated to the paying
the above accounts should be entered in the branch, who makes the payment to the beneficiary
reconcilable BGL Heads only, so that the to the debit of the designated current account which
outstanding details will be obtained easily from the is already credited with the proceeds.
same, for better monitoring of the accounts.
The revised guidelines Annexured to this
(CRA:96/2007-08 dated 28.02.2008)
circular, supersede other operational instructions
Direct Tax collection through e-Payment contained in earlier circulars.
It is proposed by the Government of India (FX:33/2007-08 dated 24.03.2008)
that all the Corporates and large tax payers have to
pay their direct taxes like Income Tax, Corporate Web based EXIM bills - implementation before
Tax, Wealth Tax, Fringe Benefit Tax etc. through 31.3.2008
Electronic Payment mode, to reduce the errors Core Banking Solution (BANCS) was
committed during digitisation by the banks and implemented in our Branches for Retail Banking
facilitate the tax payers to pay their tax at their Operations, along with Exim bills Software for
convenient time and place through internet banking Trade Finance Operations.
facility.
The Exim bills Software is developed by
Our Bank is one of the Bankers for China Systems which is an International Software
collection of Direct Taxes physically for CBDT and customization was done by TCS, based on the
through our 405 branches under OLTAS and we are GAP Analysis done by experienced officers from
also authorised to collect direct taxes through e- various Forex Authorised Branches.
Payment. Our Madras High Court branch (IBGA
code -M157, CBS code - 1632) in Chennai is the Earlier when the branches were working on
‘Internet Collection Branch’. The entire direct tax Client Server Version, due to technical
collection made through e-Payment will be credited requirements it was necessary for installation of the
to Madras High Court branch who will report the client version in every node. To overcome this
collection of direct taxes to ZAO, Chennai through problem, we have switched over to centralized Web
our Ethiraj Salai Nodal branch at Chennai. based Exim bills which has many improvements
over the Client Server version both in terms of
(CRA:97/2007-08 dated 15.03.2008)

6 6
 JAN-MAR 2008
implementation and features. Details are given in 2. Cases of cash shortage more than Rs.5000/-
the circular. if detected by management/auditor/
(FX:34/2007-08 dated 24.03.2008)
inspecting officer and not reported on the
day of occurrence by the persons handling
GENERAL cash.
MIS Report generation – Web page created for All our branches are advised to note the same and
viewing the reports be guided at the time of reporting frauds, in future.
The website had been activated by our (GENL:37/2007-08 dated 28.01.2008)
Bank on 31.12.07, with 86 statements for which
Banking Ombudsman Scheme 2006
data is available fully or partly in CBS. The
website does not contain statements relating to The Banking Ombudsman Scheme 2006
EXIM bills, NPA and locker modules which are not was framed keeping in mind high standards of
fully operational in all branches. customer service. Banks will have to maximize
The package is arranged in such a way that customer satisfaction level in the present
available statements for the branch can be viewed competitive Banking Scenario.
by the branch officials, Circle office users and HO During a high level meeting at RBI, the
users. Chief General Manager of Customer Service
The statements are of two types viz., (1) Department conveyed the points for strict
that can be completely extracted from CBS data and compliance as detailed in the circular.
(2) that can be partially extracted from CBS data Branch Managers/Officers should realise
and for the remaining fields subjective inputs have that customer satisfaction is the motto of our Bank.
to be entered by branches. In respect of partial data In cases where they are not in a position to meet the
availability, whatever could be extracted from CBS requirement of the customer/complainant, the
is displayed in the statements and the branch users attendant complaint should be referred to Circle
are permitted to enter the remaining subjective Head. He should redress the complainant’s
inputs. Once the branch entry is completed and legitimate demands without giving any room for
after confirming the data in the subjective fields, the complainant to escalate his/her grievance to
these statements can be extracted by the Circle the Banking Ombudsman. Other details are
offices with complete details. given in the circular.
Branches may make the best use of the
(GENL:39/2007-08 dated 07.02.08)
statements/website.
(GENL:35/2007-08 dated 02.01.2008) Use of Electronic Mode of Payment for large value
transactions
Negligence and cash shortages and irregularities in
Foreign Exchange Transactions – Reporting of fraud. Reserve Bank of India, for ensuring safety
The Reserve Bank of India, Department of and security of the payment systems, has put in
Banking Supervision, has issued a Master Circular place three modes of electronic payments namely
on ‘Frauds-classification and reporting’, vide their Real Time Gross Settlement (RTGS), National
Circular DBS.FrMC.BC.No. 1/23.04.001 / 2006-07 Electronic Funds Transfer (NEFT) and Electronic
dated July 02, 2007. Clearing Service (ECS). Our Bank is participating
in all the three modes of electronic payments and
The Reserve Bank of India has made all our branches are enabled for RTGS and NEFT.
certain modifications in the above guidelines, the
details of which are - RBI has observed that there are still a large
number of bulk payments made through paper
Cases of ‘negligence and cash shortages’
instruments. An internal Working Group set up by
and ‘irregularities in foreign exchange transactions’
RBI has since examined various issues related to
are to be reported as fraud if the intention to
migration from paper-based systems to electronic
cheat/defraud is suspected/proved. However, the
systems and has recommended a phased approach
following cases where fraudulent intention is not
of encouraging, monitoring and mandating these
suspected / proved at the time of detection will be
electronic transactions.
treated as fraud and reported accordingly:
1. Cases of cash shortages more than It is decided by RBI to make large value
Rs.10,000/- and payments of Rs.1 Crore and above mandatory to be

7
 Recollect
routed through electronic payment mechanism with 4. Hindi Phonetic Data entry
time frame as under:
5. Phonetic Transliteration of Customer Data from
Type of transactions Time frame
(i) All payment transactions of Rs.1 Crore 1st April 2008
English to Hindi displayed/printed
and above between the RBI regulated 6. Searching in English & Hindi both, Hindi Data
entities such as banks, primary dealers and
NBFCs Entry converted into English (using reverse
(ii) All payments of Rs.1 Crore and above in 1st April 2008
RBI regulated markets such as money
phonetic transliteration) for search.
market, Government Securities market and 7. Printing of Pass Books & Statements in Hindi
foreign exchange market
Branches to note the above and comply with the (ADMN:97/2007-08 dated 22.03.2008)
above directions. CBS CIRCULARS
(GENL: 44/2007-08 dated 24.03.2008)
ADMN 1 DEP.44 31.01.08 Multicity Accounts – Modifications in
Deduction of Tax at Source (TDS) – Filing of the norm for maintenance of
minimum balance – new Products
Quarterly e-TDS Returns from the Quarter ended for Accounts sanctioned with
30.09.2007 onwards concession in Transaction charges.
Indian Bank’s Association (IBA) vide their 2 DEP46 24.03.08 Issue of master cards in lieu of
Maestro Cards
letter dated 16.02.2008 informed that Government 3 ADV 104 29.03.08 Recovery of charges for withdrawal
of India vide their Press Release dated 04.02.2008 against uncleared effects (WAUCE)
has extended the due date for filing of e-TDS - Enabled through system
Returns for the Quarter ended 30th September 2007 4 HRM 118 08.02.08 Maintenance of Festival / Interest
Free Salary Advance in CBS
and vide Press Release dated 12.02.2008 further
5 CRA 95 26.02.08 Opening of new CBS service
revised the stipulated level of PAN compliance to branch at Salem in Tamil Nadu
be made in the e-TDS Returns which are given in 6 GEN 35 02.01.08 MIS Report Generation - Web page
the circular. created for viewing the reports
7 GEN 36 11.01.08 Adjustment/Balancing of various
It is therefore the responsibility of the clearing heads in the revised CBS
Branch Management to take note of the revised enironment
requirements of the Government with regard to 8 GEN 38 31.01.08 Data Cleaning
PAN quoting and ensuring stipulated level of 9 GEN 40 03.03.08 Corporate Net Banking (CNB)
compliance in the e-TDS Returns from the quarter Facility Application for CNB
10 GEN 42 08.03.08 Monitoring at CBS Branches before
ending 31st March 2008 taking into account the Annual Closing of Accounts
penal provisions. 11 GEN 44 24.03.08 Use of Electronic Mode of Payment
(ADMN:87/2007-08 dated 03.03.2008) for large value transactions
12 GEN 45 27.03.08 Statements/Reports submitted to
Hindi option in CBS various controlling authorities
13 ADMN 07.01.08 Compliance to Information Systems
It is a matter of pride for our bank that 75 Security Guidelines
Hindi CBS software is ported in all our CBS 14 ADMN 23.01.08 Business Continuity Planning -
branches. You will be glad to know our bank is the 78 Prevention against Fire
first to provide Hindi option in CBS.
Last numbers of circulars issued as on 31.03.08
The following are some of the features
available in the CBS bilingual software: DEP ADV HRM CRA FX GENL ADMN
MD/
ED
1. There are around 3400 menus in English as
49 111 136 100 34 45 100 15
well as Hindi and data entry can be done in
Hindi also.
2. Online switching of display between English & Though due care has been taken in the preparation of
Recollect, the version given in the circular is final.
Hindi.
Compiled by HO: O&M Division
3. User can choose any one of the above
Printed & circulated by HO: Circular Issue Cell
languages he prefers
8 8
 Volume 26 Issue 2
a
For Private Circulation Only

July- Sept 2013 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Pg
CONTENTS OF THIS ISSUE C.No. Date Subject
No
Pg CRA 02.07.13
Grant of family Pension to next eligible
C.No. Date Subject 22 member in the family in the case of 8
No
DEP 17.07.13 Revision of powers regarding missing family pensioner.
07 settlement of claims in deceased 2 27 17.07.13 Standardisation and Enhancement of
depositors' accounts Security Features in Cheque Forms- 8
11 10.09.13 Safety measures on issue of cheque Migrating to CTS 2010 Standards
2
book - Issue of Cheque Book 30 26.07.13 Migration of Post-dated Cheques
ADV 05.07.13 Modifications in Tradewell scheme and (PDC) / Equated Monthly Instalment
9
43 observance of Trade Finance 3 (EMI) Cheques to Electronic Clearing
campaign Service (Debit)
44 08.07.13 IB Home Loan Scheme – Revision in 35 06.08.13 Agreement for Safe Deposit Locker 9
3
norms for arriving at LTV Ratio (Modified) - D116
45 17.07.13 Common Application Form for Micro 38 20.08.13 TDS on Sale of Immovable Property @ 9
and Small Enterprises (MSEs) 3 1% with effect from 1st June 2013 -
46 19.07.13 Provision of Micro Insurance Products to Collection by branches authorised for
3 OLTAS and payment of by using Net
customers in Financial Inclusion villages
Banking facility
48 24.07.13 Definition of Infrastructure Lending 4 41 02.09.13 TDS on pension and issuing of Form- 10
50 30.07.13 Obtention of Document for reduction in 16 to pensioners - Difficulties
Working Capital limits 4
Encountered
55 10.08.13 Check list for filing Recovery 42 02.09.13 8% Savings (Taxable) Bonds, 2003 - 10
Applications before DRTs and further 4 Premature Encashment
follow up 48 18.09.13 Collection of Property Tax for 10
57 19.08.13 Ensuring 100% compliance in the Corporation of Chennai (CoC) from the
implementation of revised KISAN ATM 4 Walk-in customers
cum Debit Cards (RUPAY CARDS) FX 07.09.13 KYC Procedure for opening bank 11
59 22.08.13 Standardisation of Procedure for 16 accounts for Foreign Students studying
valuation of Assets and Empanelment 5 in India
of Valuers 17 23.09.13 FCRA 2010 - Receipt of foreign 11
62 23.08.13 Modification in Prudential Guidelines contribution by Individual/ NGOs/
5 Organizations from certain Donors
on Restructuring of Advances
64 31.08.13 Implementation of Direct Benefit 21 28.09.13 Overseas loans to NRIs against 11
6 security of NRI deposits and hedging
Transfer for LPG (DBTL)
71 14.09.13 Asset classification of restructured of NRI deposits
6 GENL 19.07.13 KYC/ AML/ CFT obligations under
Education Loan accounts
HRM 08.07.13 Categorisation of Branches as on 38 Prevention of Money Laundering Act 12
6 (PMLA) 2002
39 31.03.2013
42 15.07.13 Online submission of Performance 42 03.08.13 Procedure to identify ‘Beneficial 12
Efficiency Reports of Officers on Owner’ and updation in CBS Menu
6 45 10.08.13 Blocking of Cash Receipts in Routing
Probation, Probationary and Promotee
Clerks Account 13
44 23.07.13 Purchase of raincoats by branches /
7 47 17.08.13 Know Your Customer (KYC)
offices.
compliance simplification of norms for 13
46 30.07.13 Centralisation of payment of
periodical updation of KYC
scholarship / grant of books & uniform 7
under staff welfare scheme MD. 27.09.13 Joining of Shri. Mahesh Kumar Jain as
53 02.08.13 Group personal accident insurance ED Executive Director of our Bank 13
policy for all our staff members under 10
7
staff welfare scheme Admin 06.07.13 "Near Miss Events" for TSA/AMA
20 approaches in Operational Risk 13
63 10.09.13 Allotment of Capability Levels for
“Specialist Officers” under Scale I 8 21 09.07.13 Comprehensive Centralised Insurance
during their probation period Policy for Safe, Furniture & Machinery 14
(SFM), Books, Forms, Stationery
 Recollect

Pg requisition slip must be verified and found

C.No. Date Subject
No genuine in every case.
(BFS) & Electronic Equipments (EE)
kept at Bank's premises all over India. ™ For one requisition slip, only one cheque
27 27.08.13 Legal Audit of title documents in book should be issued to the customer.
14
respect of large value loan accounts
33 21.09.13 Quarterly online compliance report ™ Request for bulk cheque books should be
15
submission by branches / zones accepted on ascertaining the reason for
DEPOSITS such request and ensuring that most of the
cheques issued earlier have been utilized.
Revision of powers regarding settlement of claims
in deceased depositors' accounts ™ In case of bulk request (more than one
book) from Current Account customers,
Powers delegated to various authorities has Branch shall deliver the Cheque Books
been enhanced, with regard to early settlement of with only one “Cheque Book Requisition
claims received in deceased depositors’ accounts slip” which should be available in the last
without nomination facility. Branches should take book. All requisition slips in other Books
note of the revised enhanced powers enumerated / should be taken out and destroyed by the
tabulated in this circular.
Branch.
Powers regarding Second in command in
™ In the Branches not linked to CDPC,
Zonal Offices and Delegation of powers relating to
during issue of cheque book over the
exceptional cases and Dispensing of Production of
counter, it should be delivered upon proper
Legal Heirship Certificate are also given in this
identification and after getting presenter’s
circular.
acknowledgement in the cheque book
DEP.07/2013-14 dt.17.07.2013 issued register.
Safety measures on issue of cheque book ™ If the requisition slip is sent through a third
party, presenter’s signature should be
All the Branches linked to CDPCs attested by the account holder.
should issue only personalised cheque books to the
customers by using the personalisation and ™ As an additional precautionary / safety
ordering menu in CBS after verifying the delivery measure, Branch may verify the SMS
address, thereby the cheque books are delivered message sent by the Bank on entering the
directly to the customers by the printers. Under issue of cheque in CBS to the customer’s
normal circumstances, these branches should desist registered mobile, wherever available,
from issuing cheque book over the counter. before handing over the cheque book to the
customer.
However, branches which are not linked
to CDPCs may continue to issue non-personalised ™ If the printed requisition slip could not be
cheque books. presented due to any genuine/convincing
reason, issuing Officer should be aware of
Some of the guidelines and safety the risk involved and thereby should apply
measures to be followed while issuing cheque due diligence before issuing the cheque
books are given below: book.
™ In case of newly opened accounts, the • In such cases, the account holder himself
cheque book should be issued only after should call at the Branch for obtaining
obtaining a requisition letter in the the cheque book;
prescribed form.
• Branch to ensure that the presenter is the
™ In the case of existing accounts, cheque account holder. Branch to enquire the
books can be issued only on receipt of the account holder regarding the reason for
requisition slip attached to the latest issued his urgent requirement, ensure the
cheque book duly signed by the account genuineness of the request and the same
holder. The customer’s signature on the may be recorded.

2
 April
July-Sept 2013

• Verification of signature on the from 80% to 75%. The revised LTV

requisition letter should be done Ratio/Margin requirement:
meticulously.
For purchase of new house or flat /
• Verification of the presenter of the construction of house:
cheque book requisition letter with the Upto Rs.20.00 lacs - 10% (LTV 90%)
photograph of the account holder, in case > Rs.20 lacs upto Rs.75 lacs - 20% (LTV 80%)
of personal appearance, to be made; > Rs.75 lacs - 25% (LTV 75%)
• Third party request for the cheque book 9 The existing margin requirement for (i)
without the pre printed requisition slip Home Loan for repair & renovation, (ii)
attached to the cheque book should not IB Home Improve and (iii) Plot loans for
be entertained. Resident Indians and NRIs will continue.
DEP.11/2013-14 Dt.10.09.2013 9 LTV may be calculated taking into
ADVANCES consideration the Realizable value of the
property instead of Market Value as per
Modifications in Tradewell scheme and observance Credit Risk Management Policy of the
of Trade Finance campaign Bank.
Based on RBI guidelines and in view of
II. When an immovable property is offered as
flourishing growth of trading enterprises, the
primary or collateral security for an advance to
existing Tradewell scheme has been revised, under
be made, it is necessary to get it valued by an
the following areas:
approved Engineer of the Bank before granting
of the advance.
a) Eligible Amount
b) Modalities for availment for fund based Henceforth, Branch Managers shall arrive
working capital (OCC / SOD) for all fresh sanctions at the project cost based on
c) Interest rates. the Realizable Value of the House property/Plot as
d) Margin. per the Engineers Valuation Report and should also
e) Security Terms. follow the guidelines given under 9.2.3. (m),
f) Sanctioning powers of various authorities. Monitoring Value of Securities of Credit Risk
The modifications approved in Tradewell Management Policy 2013-14.
Scheme are given as Annexure A of this circular. ADV.44/2013-14 Dt.08.07.2013
The guidelines/ salient features of Common Application Form for Micro and Small
Tradewell Scheme (with latest modifications Enterprises (MSEs)
incorporated therein) are furnished under Annexure
B of this circular A Common Application Form (Annexed to
this circualr) for all categories of borrowers in MSE
A field has been introduced in CISLA Sector replaces the existing one, with immeidate
(Screen 2) to input the value of Plant & Machinery effect. The application will also be ported in the CBS
/ Equipments and branches should update this field Help Desk.
so that correct data can be culled out for reporting.
ADV.45/2013-14 Dt.17.07.2013
ADV.43/2013-14 Dt.05.07.2013
Provision of Micro Insurance Products to customers in
IB Home Loan Scheme – Revision in norms for Financial Inclusion villages
arriving at LTV Ratio
Micro insurance products have been
Modifications made in the norms for extended to the FI customers, especially to the
lending under IB home loans are as below: marginalised sections of the society through the
I. For Individual housing loans above Rs.75.00 field BCS engaged by M/S TCS. The field BCS
lakhs Loan To Value (LTV) Ratio is decreased will market the insurance products of M/S

3
 Recollect

UNITED INDIA INSURANCE COMPANY already executed / security created will continue to
(UIIC) with whom the bank has entered with a tie be binding and enforceable.
up.
Branches are further advised to affix stamp
Micro insurance products as per local laws as that applicable to an agreement.
The following six products have been Inspector of Branches should ensure obtention of
identified for marketing to the customers in the FI the new documents by the branches, wherever
applicable.
villages. ADV.50/2013-14 Dt.30.07.2013
1. JANATHA PERSONAL ACCIDENT INSURANCE
2. HUT INSURANCE Check list for filing Recovery Applications before
3. KISAN CREDIT CARD INSURANCE DRTs and further follow up
4. GRAMIN ACCIDENT POLICY
5. SWASTHYA BIMA POLICY Ministry of Finance has directed the Banks
6. RURAL WOMEN PACKAGE POLICY to draw a complete check list of documents and
other requirements for filing Recovery
Salient features of the above products are Applications before DRTs which would serve as a
furnished in annexure I to this circular. ready reckoner to the field level functionaries.
Adherence to such a check list would facilitate
Other information / guidelines on the
expeditious disposal by DRTs and also ensure
procedure for collection of premium; procedure for
plugging of lacuna / gaps if any, in the Recovery
issue of certificate of insurance; payment of
Application too.
commission to field BCS; area of operation;
settlement of claim; training to the FBCS and field An exhaustive check list is prepared and
officials and renewal of policies are given in this enclosed to this Circular for due compliance. The
circular. branches should closely monitor the proceedings
ADV.46/2013-14 Dt.19.07.2013 before DRT, in co-ordination with the Nodal
Officer of DRT and the dealing advocate to ensure
Definition of Infrastructure Lending that there is no shortfall / lapse on the part of the
The updated categories furnished below are Bank.
to be read with list of infrastructure sub-sectors ADV.55/2013-14 Dt.10.08.2013
given in the circular ADV.110/2012-13 dated
04.12.2012, in the respective category/sub- sector Ensuring 100% compliance in the implementation of
revised KISAN ATM CUM DEBIT CARDS (RUPAY
i. Capital Dredging under the sub-sector CARDS)
‘Ports’ Strategies to be adopted, in order to
ii. Slurry pipelines under the category achieve 100% conversion of existing Active KCC
‘Water Sanitation’ accounts in to Revised Kisan ATM cum Debit
iii. Telecommunication and Telecom services cards as directed by the Government of India is
under the category ‘Communication’. given in this circular.
As a first step towards achieving the same,
branches should -
ADV.48/2013-14 Dt.24.07.2013
¾ Segregate the list of all KCC accounts
Obtention of Document for reduction in Working (Product codes: 5503-0005, 5903-0017,
Capital limits 0018, 0019 &0020) of the branch as on
15.08.2013.
A new agreement duly approved by CO:
Legal Department “Letter of continuity to be ¾ List of KCC accounts classified as NPA as
obtained when the original working capital limits on 30.06.2013.
are reduced” has been formatted and numbered as ¾ List of KCC accounts without borrowers
‘D – 125’ enclosed as annexure to this circular photograph.
which has to be obtained with immediate effect
from the party to the effect that but for the change ¾ List of KCC accounts, where the borrowers
in limit i.e., reduced limits, the security documents affixed LTI and availed loan.

4
 April
July-Sept 2013

¾ Arrive at the final list of eligible active valuation is 15% or less. If the difference in
KCC accounts (excluding NPA, without valuation is more than 15%, the valuation exercise
photograph & LTI accounts) other is to be repeated with a new valuer till it reaches a
guidelines relating to action initiated consensus. All other existing guidelines shall
branches shall refer this circular. continue.
Cards failed to be activated within a period ADV.59/2013-14 Dt.22.08.2013
of 120 days from the date of receipt by the branch,
Modification in Prudential Guidelines on
may move to Card destroyed category
Restructuring of Advances
automatically, resulting in re-uploading of data
once again in the DCMS site and subsequent Some of the modified guidelines on
financial loss to the bank. restructuring of Advances according to RBI are
given below:
Subsequent financial loss to the Bank, if
any, resulted staff accountability will be fixed on 1. The extant asset classification benefits
the Branch Manager and the Officer concerned. available on restructuring on fulfilling certain
conditions will be withdrawn for all the
ADV.57/20-13-14 Dt.19.08.2013
restructurings effective from 1, April 2015
Standardisation of Procedure for valuation of Assets with the exception of provisions related to
and Empanlement of Valuers changes in DCCO in respect of infrastructure
as well as non-infrastructure project loans.
Fresh guidance on empanelment of Valuers
and Valuation of properties as given by IBA are 2. The prescribed period of ‘six months from the
given below: original DCCO’ has been extended to ‘one
year from the original DCCO’ within which a
1. Application of for Empanelment of Valuers is non-infrastructure project will have to
given in annexure to this circular. commence operation. If the delay in
2. While entrusting valuation assignment for commencement of commercial operations
Corporate loans, please ensure that the valuer extends beyond the period of one year from
is preferably a firm with the date of completion as determined at the
accounting/engineering professionals. time of financial closure, banks can prescribe
a fresh DCCO and retain the ‘standard’
3. The standardized reporting formats are given classification by undertaking the restructuring
in the Annexure II and III. The of accounts in accordance with the provisions
formats prescribed are suggestive and not in this regard provided the fresh DCCO does
conclusive. Hence, the valuer shall be not extend beyond a period of 2 years from
suitably advised to furnish all other relevant the original DCCO.
details, if any, as applicable to each
case/situation. 3. With effect from June,1, 2013 in respect of
new restructured standard accounts provision
Field level functionaries should has been increased to 5 per cent and for the
• Visit and physically inspect the mortgaged stock of restructured accounts as on
property periodically 31.03.2013, in a phased manner as under :

• Ensure that the valuation report has taken into • 3.50 per cent with effect from
account all the aspects connected March,31,2014(spread over the four
to the property and its ownership particulars quarters of 2013-14)

• Periodically obtain revaluation report as per • 4.25 per cent with effect from
the periodicity set out by our Bank March,31,2015(spread over the four
quarters of 2014-15)
In case of difference in valuation of assets • 5.00 per cent with effect from
done by two independent valuers, the average of March,31,2016(spread over the four
the two valuations may be taken as notional quarters of 2015-16)
valuation of the property, if the difference in

5
 Recollect

4. NPA accounts which have been restructured Asset classification of restructured Education Loan
would be eligible for up-gradation to standard accounts
category after observation of satisfactory RBI has clarified the following, with
performance during the specified period regard to the repayment period for the IBA Model
The specified period is redefined as a Educational Loan scheme, as advised by IBA
period of one year from the commen- during Sept.2012:
cement of the first payment of principal or “If the repayments in educational loan are
interest whichever is later, on the credit extended due to revision in the repayment period
facility with longest period of moratorium under the new Model Educational Loan Scheme the
under the terms of restructuring package. same may not be treated as restructuring. However,
this treatment would be available only to educational
5. Standard accounts classified as NPA and NPA loans which are standard in the books of banks on the
accounts retained in the same category on date of such extension of repayment period. Further,
restructuring by the bank should be upgraded such extension should not be given by banks with a
only when all the outstanding loan/facilities in retrospective effect and any extension in repayment
the account perform satisfactorily during the period should be need based and taken into account
specified period i.e principal and interest on all the repayment capability of the borrowers”.
the facilities are serviced as per terms of
ADV.71/2013-14 Dt.14.09.2013
repayment during that period.
Branches shall refer this circular for some HRM
other guidelines in this regard.
Categorisation of Branches as on 31.03.2013
ADV.62/2013-14 Dt.23.08.2013
The existing norms of business criteria for
Implementation of Direct Benefit Transfer for LPG categorization of branches, including Specialised
(DBTL) branches, as on 31.03.2013, are furnished below:

Government of India has proposed to CATEGORY OF BUSINESS CRITERIA INCUBENCY

extend the DBTL to additional 269 districts across BRANCH (AVERAGE AGGREGATE DEPOSITS
AND ADVANCES DURING THE LAST
the country in a phased manner starting from TWO YEARS) SCALE
01.09.2013 to 01.01.2014. Of these 269 districts, A) SMALL BELOW RS.5 CRORE I
B) MEDIUM RS.5 CRORE AND ABOVE BUT II
¾ in 34 districts listed in Annexure I, DBTL will
BELOW RS.25 CRORE
be launched from 01.09.2013; C) LARGE RS.25 CRORE AND ABOVE BUT III
BELOW RS.75 CRORE
¾ in 44 districts listed in Annexure II from
D) VERY LARGE RS.75 CRORE AND ABOVE BUT IV
01.10.2013; BELOW RS.250 CRORE
¾ in 46 districts listed in Annexure III from E) EXCEPTIONALLY RS.250 CRORE AND ABOVE V
01.11.2013; LARGE

¾ in 40 districts listed in Annexure IV from The details of the branches falling under
01.12.2013 and different categories / Scales are furnished in
¾ in the remaining 105 districts listed in Annexure I and Specialised branches in Annexure
Annexure V to this circular, from 01.01.2014. II of this circular.

Since, Direct Benefit Transfer is effected HRM 39/2013-14 Dt.08.07.2013

through Aadhaar Enabled Bank Account of the LPG
consumer, it is important that bank account of all the Online Submission of Performance Efficiency
LPG consumers in these districts are opened and Reports of Officers on Probation, Probationary and
seeded with Aadhaar number within the time line, to Promotee Clerks
ensure seamless implementation of DBTL in these Henceforth, Performance Efficiency
districts. Reports of Officers on Probation, Probationary
ADV.64/2013-14 Dt.31.08.2013 Clerks and Promotee Clerks should be submitted
‘Online’ only. This is enabled for monitoring their

6
 April
July-Sept 2013

performance at periodical intervals and to confirm Centralisation of payment of scholarship / grant of

them is services of the Bank after the successful books & uniform under staff welfare scheme
completion of Probation. Corporate Office shall Staff members are advised to submit
take up the confirmation of all the Officers on Applications towards sanction of Scholarship and
Probation and Zonal Offices shall take up the Grant of books through ONLINE only. A separate
confirmation of Probationary and Promotee screen for entering the applications has been
Clerks. provided on HRM online website which can be
A menu has been provided in HRM Online assessed by Office/Branch/Departments.
Website (http://10.141.47.28:6001) under ¾ The details are to be entered in the screen
“Efficiency Evaluation” for submission of the by maker/checker concept (salary user) and
reports of the Probationers by the branches. Users the same are to be authorized by an officer
can login to this website with the Unser ID and (salary user) of the branch/office.
Password used for logging in to the Staff Pay Slip ¾ The BM/ABM/ designated officer of
view portal for submission of Evaluation report Branch/Office should ascertain the
and can be accessed by Branch Managers only. genuineness of the mark sheets; bonfire
The periodicity of submission of certificates produced by the staff, and
performance efficiency reports are as follows: authenticate the same. Based on such
authorization only the applications will be
Employee Type Periodicity entertained. Hence the responsibility for
Probationary Officer One month before the end of each the genuineness of claim solely rests with
phase of training the Branch/Office administration.
Specialist Officer Once in six months during the period of
probation and one month before the due
¾ The Applications are to be retained at the
date of confirmation respective branches/ offices for
Promotee Officer from At the end of the sixth month and One verification/ inspection in future.
Clerical Cadre month before the due date of ¾ Processing of claims will be done centrally
confirmation
by Corporate Office/HRM Department.
Probationary Clerks At the end of the third month and at the
end of Fifth month The guidelines for processing the
Promotee Clerk from At the end of the third month and at the applications are given in the annexure to this
Sub-staff cadre end of fifth month circular.
For Probationary Officers, Specialist HRM.46/2013-14 Dt.30.07.2013
Officers, Promotee Officers, Probationary Clerks
and Promotee Clerks shall refer this circular for Group personal accident insurance policy for all our
further guidance. staff members under staff welfare scheme
Branch Managers should strictly adhere to
A new Group Personal Accident Insurance
the time norms for effectively monitoring the
Policy has been renewed with The United India
performance of the Employees under Probation,
Insurance Company Ltd for one year, effective
the Probationers themselves are exhorted to
from 02.08.2013.
involve themselves in the in the process so as to RENEWED GPA POLICY NO: 010500/42/13/05/0000005
facilitate their timely confirmation in the service
PERIOD OF POLICY: 02.08.2013 TO 01.08.2014
of the Bank.
HRM.42/2013-14 Dt.15.07.2013 The United India Insurance Company Ltd,
Divisional Office - 010500
Purchase of raincoats by branches / offices. No.64, Armenian Street, Catholic Centre,
Chennai – 600 001.
The maximum limit for purchase of
Telephone No 044- 25389793, 25389794
Raincoat by Branches/ Offices for use by eligible
sub-staff who perform outdoor duties. has been The procedure to be adopted in reporting
enhanced from Rs.200/- to Rs.800/- once in three the claims, documents to be enclosed with the
years with immediate effect. claim forms are given as annexure to this circular.
HRM.44/2013-14 Dt.23.07.2013 HRM.53/2013-14 Dt.02.08.2013

7
 Recollect

Allotment of Capability Levels for “Specialist Standardisation and Enhancement of Security

Officers” under Scale I during their probation period Features in Cheque Forms- Migrating to CTS 2010
Standards
Financial capabilities of the “Specialist
Officers” (on probation) under Scale I may also be
On a review of the progress in migration to
assigned the same capability level as that of
CTS-2010 standard format, RBI informed that
generalist POs as per extant guidelines. there is still a large volume of non-CTS-2010
Since Specialist Officers do not have format cheques being presented in image-based
phases during their probation, the following clearing. The following arrangements are put in
Capability Levels should be assigned to the place by RBI for clearing of residual non-CTS-
Specialist Officers under Scale I, during their 2010 standard cheques:
probation period: a. Separate clearing session will be
¾ “1” during First Six months as “Maker” introduced in the three CTS centers
only. (Mumbai, Chennai and New Delhi) for
clearing of such residual non-CTS 2010
¾ “8” during Seventh month to Twelfth instruments (including PDC and EMI
month as “Maker” & “Checker” up to the cheques) with effect from January 1, 2014.
assigned financial limit. This separate clearing session will initially
¾ “9” during second year of their probation operate thrice a week (Monday,
as “Maker” & “Checker” up to the Wednesday and Friday) up to April 30,
assigned financial limit. 2014. Thereafter, the frequency of such
separate sessions will be reduced to twice a
On any account, the higher capability level week up to October 31, 2014 (Monday and
beyond the prescribed limit should not be allotted Friday) and further to weekly once (every
to the probationary officers. Only on confirmation Monday) from November 1, 2014
in the service, they can be assigned capability level onwards. If the identified day for clearing
higher than “9” depending upon the need/exigency. non-CTS-2010 instruments falls on a
holiday under the Negotiable Instruments
HRM.63/2013-14 Dt.10.09.2013 Act, 1881, presentation session on such
occasions will be conducted on the
CRA previous working day. Operational
Grant of family Pension to next eligible member in instructions in this regard will be issued
the family in the case of missing family pensioner separately by the CTS centers.

Government of India, Ministry of Defence, b. It is further advised that the volume of

informed that it has been decided to extend the instruments processed in the three CTS
Centers in all clearing sessions will be
provision of “Grant of Family Pension to next
monitored with respect to the non-CTS-
eligible member in the family in the case of 2010 instruments presented by banks. RBI
missing family pensioner”, to the families of may consider levying penalty on drawee
Defence Service Personnel, mutatis mutandis, with banks (and presenting banks where
effect from 2nd January 2012. No arrears on necessary) which violate the instructions
account of this shall be paid. issued under the Payment and Settlement
Systems Act, 2007.
The pension paying branches shall bring
out the above to the pensioners/family pensioners In view of the above, all the branches are
for information and necessary action. advised to ensure compliance to the above
guidelines of RBI and strictly adhere to the
Office Memorandum issued by the following:
Department of Pension & Pensioner’s Welfare in
i) Only CTS-2010 standard cheques
this regard has been annexed to this circular. (including DD / PO) are issued to the
CRA.22/2013-14 Dt.02.07.2013 customers and existing non-CTS 2010

8
 April
July-Sept 2013

standard cheques are withdrawn / replaced from customers in addition to ECS (Debit)
immediately. mandates. (Please refer our Circular No.
ii) Not to charge the savings bank customers CRA-96/2011-12 dated 23-09-2011).
for issuance of CTS-2010 standard cheques, c. Cheques complying with CTS-2010
when they are issued for the first time. standard formats shall alone be obtained in
However, the existing policy guidelines locations, where the facility of ECS/RECS
may be adhered for issue of additional is not available.
cheque books.
CRA.30/2013-14 Dt.26.07.2013
iii) No fresh PDC / EMI cheques (either CTS or Agreement for Safe Deposit Locker (Modified) - D116
non-CTS 2010 format) shall be accepted in
locations, where, the facility of ECS / RECS The “Agreement for Safe Deposit Lockers
is available. Branches shall make all efforts – D 116” has been suitably altered thereby enough
to convert existing PDCs in such locations provision has been provided for writing certain
into ECS / RECS (Debit) by obtaining fresh personnel details of the hirers along with their
mandates from the borrowers. address and modification in some of the clauses,
including Obtention of photo(s) of the hirer(s).
iv) Present / process the non-CTS 2010
standard cheques only in the three CTS Henceforth, branches are advised to obtain
centres as prescribed in Para – a, b, c & d only the revised “Agreement for Safe Deposit
above. Locker (Modified) - D 116” (Annexed to this
Branches shall refer this circular for other circular), from the locker hirers.
guidelines. CRA.35/2013-14 Dt.06.08.2013
CRA.27/2013-14 Dt.17.07.2013 TDS on Sale of Immovable Property @ 1% with effect
Migration of Post-dated Cheques (PDC) / Equated from 1st June 2013 - Collection by branches
Monthly Instalment (EMI) Cheques to Electronic authorised for OLTAS and payment of by using Net
Clearing Service (Debit) Banking facility
With effect from June 1st, 2013, TDS @
RBI has advised all the banks to adhere to 1% is applicable on sale of immovable property
the following instructions with immediate effect: wherein the sale consideration of the property is
a. No fresh / additional Post Dated Cheques Rs.50 lakhs or above. Such tax has to be deducted
(PDC) / Equated Monthly Installment by the purchaser of the property at the time of
(EMI) cheques (either in old format or new making payment of sale consideration to the seller.
CTS-2010 format) shall be accepted in For furnishing information regarding such
locations where the facility of ECS/RECS sale transaction and payment of TDS thereon to
(Debit) is available. The existing PDC / Government account, the purchaser can use the
EMI cheques in such locations may be online facility available on the website of Tax
converted into ECS/RECS (Debit) by Information Network (TIN) of the Income Tax
obtaining fresh ECS (Debit) mandates. Department viz. www.tin-nsdl.com.
b. As indicated in RBI circular Alternatively, the purchaser can complete the
DPSS.CO.PD.No.497/02.12.004/2011-12 online form at the said web portal and with the
dated September 21, 2011, Section 25 of acknowledgement slip generated by TIN, visit any
the Payment and Settlement Systems Act, of the authorised Bank branches to make the
2007 accords the same rights and remedies payment of TDS. Based on the information in the
to the payee (beneficiary) against dishonor acknowledgement slip, the bank will make the
of electronic funds transfer instructions payment ONLINE through NET BANKING
under insufficiency of funds are available facility and on successful validation and
under Section 138 of the Negotiable acceptance, provide the online challan counterfoil
Instruments Act, 1881. Considering the to the purchaser as acknowledgement for payment
protection available, there is no need for of taxes. Thus the payment is through electronic
banks to take additional cheques, if any, mode only.

9
 Recollect

A new Form 26QB with Minor Head Code investors in the age group of sixty years and
800 has been introduced for this purpose. The above, after a minimum lock-in period of three
detailed procedure for authorised bank branches years from the date of issue as indicated below:
(OLTAS authorised branches) to collect taxes and
a. Lock-in period for investors in the age
the process flow are given in this circular.
bracket of 60 to 70 years shall be 5 years
No physical challan should be accepted from the date of issue.
from the taxpayers depositing TDS on Sale of
b. Lock-in period for investors in the age
immovable property. (Payment should be made
bracket of 70 to 80 years shall be 4 years
only through electronic mode).
from the date of issue.
No data entry of challan is required against
c. Lock-in period for investors of the age of
the above payment as only e-payment mode is
80 years and above shall be 3 years from
permissible.
the date of issue.
The Bank/person making e-payment
An investor, desiring to avail of the facility
should ensure that the amount entered for e-
of premature encashment, will have to submit
payment is same as that reflected in the
documentary evidence in support of his/her date of
acknowledgement slip.
birth to satisfaction of the agency Bank. In case of
Detailed procedure, user friendly e-tutorial, joint holders or more than two holders of a Bond,
list of Bank branches authorised to accept TDS and any one of the holders should fulfil the above
Frequently Asked Questions (FAQs) for taxpayers conditions of eligibility.
are available on the website www.tin-nsdl.com for
After aforesaid minimum lock-in period
reference.
from the date of issue, an eligible investor can
CRA.38/2013-14 Dt.20.08.2013 surrender the Bonds at any time after 10th or 8th or
6th half-year as applicable, corresponding to the
TDS on pension and issuing of Form-16 to
respective lock-in period, however, encashment
pensioners - Difficulties Encountered
payment will be made on the following interest
CPPC, Chennai informed that they have payment due date. Thus, the effective date of
encountered few problems on TDS and issuance of premature encashment for the eligible investors, in
Form-16 to the pensioners. Some of the problems case of Non-Cumulative Bonds will be 1st August
faced by CPPC and the remedial measures required and 1st February every year after completion of the
are given in this circular lock-in period as per the eligibility criteria and for
Branches should not accept Form15G/15H Cumulative Bonds, it will be notionally the 7th or
from pensioners in respect of pension as it is not 9th or 11th half yearly interest payment due date (the
applicable for such category of persons. date can be any date and not necessarily 1st August
and 1st February). However, 50% of the interest
Branches should display the information due and payable for the last six months of the
given in this circular in their Notice Board for the holding period will be recovered as penalty from
information of pensioners. the investor for premature encashment in such
A list of pensioners coming under Tax cases, both in respect of cumulative and non-
bracket will be ported by CPPC in the pension cumulative Bonds.
website and the branches are advised to send letter Branches shall refer this circular for further
to the pensioners pertaining to their branches in this provisions for premature encashment etc.,
regard.
CRA.42/2013-14 Dt.02.09.2013
CRA.41/2013-14 Dt.02.09.2013

8% Savings (Taxable) Bonds, 2003 - Premature Collection of Property Tax for Corporation of
Encashment Chennai (CoC) from the Walk-in customers
According to the Government of India the Our Bank is one of the accredited Banks
facility of premature encashment of 8% Savings for Collection of Property Tax on behalf of
(Taxable) Bonds has been provided to individual Corporation of Chennai from the walk-in property

10
 April
July-Sept 2013

tax payers. Necessary software is put in place in in the form of a rent agreement or a letter
CBS enabling easy and trouble free collection of from the educational institution as a proof
Property Tax. of living in a facility provided by the
educational institution. Banks should not
The process flow and step by step screen insist on the landlord visiting the branch
shots detailing the Collection transaction and issue for verification of rent documents and
of Print Acknowledgement is given in the alternative means of verification of local
Annexure to this Circular. address may be adopted by banks.
Once the transaction is successful and ¾ During the 30 days period, the account
receipt is pushed by CoC, reversal of collection is should be operated with a condition of
not permitted. If due to technical /data transmission allowing foreign remittances not exceeding
problems, the receipt is not received from CoC site, USD 1,000 into the account and a cap of
branch should use enquiry menu (Ref: Page No.8 monthly withdrawal to Rs. 50,000/-,
pending verification of address.
of screen shot Annexure) to find out the status of
payment of Tax, contact MGT branch (Nodal ¾ On submission of the proof of current
branch) and Project office for confirming non address, the account would be treated as a
completion of Collection transaction at CoC and normal NRO account, and will be operated
prefer reversal of collection made through the in terms of instructions contained in RBI’s
menu available (Ref.Page No.7 of Screen shot Master Circular on Non-Resident Ordinary
Rupee (NRO) may also be kept in view.
Annexure). This should be used exceptionally and
occasionally only after checking up with Project ¾ Students with Pakistani nationality will
Office. need prior approval of the Reserve Bank
for opening the account.
Branches shall refer this circular for other
FX.16/2013-14 Dt.07.09.2013
information in this regard.
CRA.48/2013-14 Dt.18.09.2013 FCRA 2010- Receipt of foreign contribution by
Individual/NGOs/Organizations from certain Donors
FX
RBI has directed to ensure that any fund
KYC Procedure for opening bank accounts for flow from a donor agency viz, “Mercy Corps,
Foreign Students studying in India. USA” to any individual / NGOs / organizations,
should be brought to the notice of Ministry of
The following procedure has been laid Home Affairs so that the funds are allowed to be
down for opening accounts of foreign students who credited to the accounts of the recipient individual/
are not able to provide an immediate address proof NGOs/ Association only after clearance from
while approaching a bank for opening bank Ministry of Home Affairs, Foreign Division, FCRA
account. Wing. Further Government organizations can avail
¾ Banks may open a Non Resident Ordinary of foreign funding only with clearance of
(NRO) bank account of a foreign student Department of Economic Affairs and any instance
on the basis of his/her passport (with of Government organizations receiving funds
appropriate visa & immigration directly from “Mercy Corps, USA” may be
endorsement) which contains the proof of withheld and brought to the notice of Ministry of
identity and address in the home country Home Affairs.
along with a photograph and a letter FX.17/2013-14 Dt.23.09.2013
offering admission from the educational
institution. Overseas loans to NRIs against security of NRI
deposits and hedging of NRI deposits
¾ Within a period of 30 days of opening the
account, the foreign student should submit RBI has clarified the queries raised by
to the branch where the account is opened, various Banks in relation to the above subject as
a valid address proof giving local address, follows:

11
 Recollect

1. The first query was in respect of bringing above the threshold of Rs.50,000/- and
money borrowed overseas by NRIs and above.
places them as NRE deposits in banks in
RBI further advised that Banks should
India. Since the bank’s overseas
verify the PAN numbers given by the account
correspondent will be doing the first leg of
based as well as walk-in customers in view of the
the transaction i. e. lending abroad and the
reported findings that dummy/fictitious PAN
money will be used to raise NRE deposits,
numbers were quoted for transactions of Rs.
no enabling is required from Reserve Bank
50,000/- and above.
of India. Necessary amendments to the
FAQ have since been initiated. Branches may refer this circular for
illustrative instances of violations observed by RBI
2. The second query was regarding approval
in various Banks and other guidelines.
to hedge both principal as well as quarterly
interest on the maturity of NRE deposit. It GENL.38/2013-14 Dt.19.07.2013
is clarified that the extant instructions Procedure to identify ‘Beneficial Owner’ and
permit the hedge on balances held in NRE updation in CBS Menu
accounts and is not restricted to principal
alone. A relationship menu 0043: Beneficial
Owner has been enabled in the CBS System to
FX.21/2013-14 Dt.28.09.2013
capture the details of beneficial owners.

GENL Guidance to Branches

KYC/AML/CFT obligations under Prevention of While opening an account for an

Money Laundering Act (PMLA) 2002 Association / Trust / Partnership / Company etc,
the following should be ensured.
Guidelines with regard to KYC
Compliance on Third Party Products are as ¾ Collect the Account opening form along with
follows: KYC documents for the Firm and Persons
involved (Regn Cert, PAN of firm, Personal
1. Even while selling third party products as IDs, PAN of Persons, Address proof for
agents, banks should verify the identity and Firm/persons etc).
address of the walk-in customer.
¾ Identify the Beneficial Owner of the
2. Banks should also maintain transaction Proprietorship / Association / Trust / Partnership
details with regard to sale of third party / Company as explained above. For example, if
products and related records for a period the client is
and in the manner prescribed in paragraph
2.20 of the RBI master circular. a) Association or Body of Individuals:
Persons with entitlement to more than 15%
3. The instructions to make payment by debit of property or capital or profits
to customers’ accounts or against cheques
for remittance of funds / issue of travelers’ b) Trust: Beneficiaries with 15% or more
cheques, sale of gold / silver / platinum and interest of the Trust and any other natural
requirement of quoting PAN number for person exercising ultimate effective control
transactions of Rs. 50,000 and above, over the trust
would also be applicable to sale of third c) Partnership firm: Persons with
party products by banks as agents to ownership/entitlement to more than 15% of
customers, including walk-in customers. capital or profits
4. The above instructions in respect of third d) Company: Persons with
party products would also apply to sale of ownership/entitlement to more than 25% of
bank’s own products, payment of dues of shares or capital or profits of the Company
credit cards / sale and reloading of
prepaid/travel cards and any other product e) Agents: Principal in case of Accounts
opened by Agents in their own name.

12
 April
July-Sept 2013

f) In the absence of persons with required Know Your Customer (KYC) compliance
interest or entitlement: Person holding the simplification of norms for periodical updation of
position of ‘Senior Managing Official’ if KYC
client is other than individual or Trust. Reserve Bank of India has communicated certain
g) Company listed in stock exchange or a modifications with regard to periodical updation of
majority owned subsidiary of such a KYC, as detailed below:
company: This exercise need not be done. 1. Banks would need to continue to carry out
¾ Create Non-personal CIF for the Proprietorship / on-going due diligence with respect to the
Association / Trust / Partnership / Company business relationship with every client and
closely examine the transactions in order to
¾ Create Personal CIF for all the persons who are
ensure that they are consistent with their
identified as Sole Proprietor / Trustee / Partner /
knowledge of the client, his business and risk
Director / Authorized Signatory / Beneficial
profile and, wherever necessary, the source
owners.
of funds.
¾ Create Relationships between the Personal CIF
2. Full KYC exercise will be required to be
and Non-personal CIF in their capacity as Sole
done at least every two years for high risk
Proprietor / Trustee / Partner / Director etc
individuals and entities.
(Navigation given in Annexure-I)
3. Full KYC exercise will be required to be
¾ Create Relationships between the Personal CIF
done at least every Ten years for Low risk
of Beneficial Owner and Non-personal CIF in
and at least every Eight Years for medium
the capacity as Beneficial Owner. (Navigation
risk individuals and entities.
given in Annexure-I)
4. Positive confirmation (obtaining KYC
¾ (Also refer Circular Genl: 96/2010-11 dated
related updates through e-mail / letter /
08.02.2011)
telephonic conversation / forms / interviews /
The navigation for creating the relationship visits, etc) will be required to be completed
in customer master for persons in their capacity as at least every two years for medium risk and
Trustee/Partner/Director and Beneficial Owner is at least every three years for low risk
detailed in this circular. individuals and entities.
GENL.42/2013-14 Dt.03.08.2013 5. Fresh Photographs will be required to be
obtained from minor customer on becoming
Blocking of Cash Receipts in Routing Account major.

Receipt of cash in “Routing Account” is GENL.47/2013-14 Dt.17.08.2013

blocked with immediate effect. However, in order
to make transactions like receipt of cash from MD_ED
Currency Chests/Other branches, the branches
should use the BGL 98742 – “Sundry Deposit”. Joining of Shri. Mahesh Kumar Jain as Executive
The revised procedure is given below: Director of our Bank
Under Core to Core (C2C), at the receiving Shri Mahesh Kumar Jain has been
chest/branch, cash should be first received to the appointed and has assumed charge as Executive
credit of the “Sundry Deposit” a/c – i.e. BGL Director of our Bank on 27.09.2013.
98742. Immediately, on the same day, the Sundry MD_ED 10/2013-14 Dt.27.09.2013
Deposit account should be debited to create a
originating credit entry in the BGL 86903 on the
remitting chest/branch/. This entry will be ADMIN
responded by the concerned Chest/branch to "Near Miss Events" for TSA/AMA approaches in
reverse the debit entry in their Funds in Transit Operational Risk
(FIT) on the same day.
To ensure preparedness of our Bank to
GENL.45/2013-14 Dt.10.08.2013 move to the “Advanced Measurement Approaches”

13
 Recollect

in Operational Risk Management under Basel II RISK COVERED POLICY CERTIFICATE Period of
regime the data on “ Near Miss Events “must also NUMBER Insurance
be compiled along with the actual “loss data.” 30/06/2014
ELECTRONIC 02/07/13 To
010500/44/13/58/30000001
A “Near Miss Event” is an operational loss EQUIPMENTS (EE) 01/07/2014
event, where the event did not conclude as a loss or Branches/Offices should mention the
damage, but has potential to do so. As per the above number whenever claims are reported to the
Policy on Management of Operational Risk above company during the period 01/07/2013 to
Management, “Near Miss events” need to be 30/06/2014 for SFM & BFS and during the period
reported to ORM department at Corporate Office. 02.07.2013 to 01.07.2014 for EE.
Branches may report the same through the template
(507) ported in BBMIS site. Near miss events Branches shall refer the circular for the
often precede actual loss events which are by and details/guidelines on coverage, risks covered,
large ignored at branch level because, no loss initial / immediate reporting on the occurrence of
happened or reluctant to report. However reporting loss and submission of claim forms and claim for
of such event is crucial for sound Risk the loss incurred, insurance cover for bank’s
Management and RBI may take a serious view of vehicles etc.
non-reporting of such events during annual
inspection. This Policy does not cover Bank’s
Vehicles. Overseas Branches will continue the
In view of the above, and to encourage existing system for insuring their assets.
reporting of “Near Miss Events” / create awareness
among the branches, few examples are given in this ADMIN.21/2013-14 Dt.09.07.2013
circular. Legal Audit of title documents in respect of large
Henceforth, branches should report such value loan accounts
cases or similar cases of this type of incident, as a
“Near Miss Event” in ISG ID 507 template in According to Reserve Bank of India
BBMIS. branches should follow the new guidelines on
Legal Audit of title documents in respect of large
ADMIN.20/2013-14 Dt.06.07.2013
loan accounts.

Comprehensive Centralised Insurance Policy for 1. Banks should subject the title deeds and
Safe, Furniture & Machinery (SFM), Books, Forms, other documents in respect of all credit
Stationery (BFS) & Electronic Equipments (EE) kept exposures of Rs 5 Crore and above to
at Bank's premises all over India periodic legal audit and re-verification of
title deeds with relevant authorities as part
The Comprehensive Centralised Insurance of regular audit exercise till the loan stands
Policy has been taken at Corporate Office for the fully repaid.
Safe, Furniture & Machinery (SFM), Books,
Forms, Stationery & Electronic Equipments kept at 2. Banks may furnish a review note to its
Bank’s premises all over India for the period Board/Audit Committee of the Board at
01/07/2013 to 30/06/2014 with quarterly intervals on an ongoing basis
giving information of such legal audits.
United India Insurance Company Ltd.
Tel: 044 – 2538 9793/94, In view of the above, the following procedural
Fax: 044 – 25386298, guidelines should be followed by the branches:
Mobile Number: 09442233909 1. While the existing procedure for legal audit
POLICY DETAILS
continues for all credit exposures of
Rs.50.00 lacs and above, in case of all
RISK COVERED POLICY CERTIFICATE Period of credit exposure of Rs 5.00 crores and
NUMBER Insurance
SAFE, FURNITURE & 01/07/2013
above, title deeds and other documents
MACHINERY (SFM) 010500/11/13/11/00000012 To should be subjected to legal audit and re
30/06/2014 verification of title deeds with relevant
BOOK, FORMS,
010500/11/13/11/00000011
01/07/2013 authorities periodically. Periodicity of
STATIONERY (BFS) To legal audit will be within one year from the

14
 April
July-Sept 2013

last legal audit in case of all credit are to be separately submitted by the Zonal
exposure of Rs 5.00 Crores and above Offices.

2. The above audit exercise will continue till 7. The first report should commence from the
the loan stands fully repaid. Quarter September 2013.
8. Legal audit has to be undertaken for all the
3. For effective follow up, the branches are eligible accounts so as to enable the
advised to diarize the legal audits to carry concurrent auditors to offer their comments
out the legal audits in time and as per in their report for the quarter of September
periodicity.( Format enclosed to this 2013.
circular)
ADMIN.27/2013-14 Dt.27.08.2013
4. The legal audit exercise should be verified
by Concurrent auditors and a quarterly Quarterly online compliance report submission by
statement is to be attached to the Branches / Zones / Departments at CO
Concurrent Audit Reports after making due
verification. Compliance function focuses on
5. The quarterly report submitted by monitoring and observance of all statutory
Concurrent auditors should cover the provisions, regulatory guidelines and bank’s
following points: internal policies which are spelt through various
circulars from time to time. As per the Compliance
a. Number of Loan accounts due for legal
audit for the quarter Policy of the Bank, we have put in place a
quarterly online Compliance reporting system in
b. How many accounts covered our CBS Help Desk > Other Websites > In-
c. List of deficiencies observed by House Application, to be submitted by Branches /
auditors Zones / Departments at CO latest by 5th of April,
July, October and January.
d. Steps taken to rectify the deficiencies
The compliance report must be a factual
e. Number of accounts in which the
one prepared with utmost care and any wrong
rectification could not take place
reporting will not only draw the adverse comments
f. Course of action to safeguard the of the Audit Committee of the Board (ACB) /
interest of bank in such cases Regulator, but also cast a serious reputation risk on
g. Action taken on issues pending from our bank.
earlier quarters In order to have a smooth error free,
Quarterly reports should be factual, online compliance report submission all the
submitted as of June, September, Compliance Officers of Branches / Zones /
December and March of every year Departments at Corporate Office may follow the
(Reporting format enclosed) guidelines as detailed in this circular.
6. Zonal Offices are required to consolidate ADMIN.33/2013-14 Dt.21.09.2013
the reports of Concurrent auditors and to
submit the same to CO: Inspection Though due care has been taken in the preparation of
Department before 10th of succeeding Recollect, the version given in the circular is final.
month of the reporting Quarter. The
Compiled by CO: O&M Division
details for non- concurrent audit branches

15
 Issue 2
a
Volume 27

For Private Circulation Only

July– Sept. 2014 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Pg
CONTENTS OF THIS ISSUE S.No Date Subject
No
Pg 10626.09.14 Checklist for High Value Credit 7
S.No Date Subject
No Proposals
DEP 09.07.14 Revival of Unclaimed Deposit 2 HRM 01.08.14 Group Personal Accident Insurance 7
10 accounts - need of the hour 51 Policy for all our staff members under
13 03.0914 Inoperative Accounts 2 Staff Welfare Scheme
14 16.09.14 Enhancement of maximum deposit 2 63 10.09.14 Wearing of identity cards on duty 7
ceiling - IB TAX SAVER SCHEME 65 25.09.14 Stay of Officers at the place of 7
ADV 01.07.14 Reintroduction of Loan Tracking 2 posting
40 System for “other than MSME“ 66 26.09.14 Centralisation of Payment of 7
accounts / applications scholoship/grant of books & Uniform
49 05.0714 Padho Pardesh – Scheme of Interest 3 under staff welfare scheme
Subsidy on Education Loans for 67 29.09.14 Career Progression for aspiring 8
Overseas Studies for the students Officers
belonging to the minority communities CRA 02.07.14 Redressal of grievances of the 8
54 14.07.14 Risk Based Pricing 3 22 pensioners-Roll of pension paying brs
56 24.07.14 Comprehensive Financial Inclusion 3 23 05.07.14 Dealing with cheques presented in 8
under Mission Mode: “Sampoorn clearing
Vittiyea Samaveshan (SVS)”
26 23.07.14 PPF 1968 and SCSS 2004 - 8
58 28.07.14 Monitoring of Field Business 4 Amendment in Rules
Correspondents (FBCs) activities and 33 25.08.14 PPF, 1968 Amendment in Rules 9
FBCs Overdraft Accounts under
Financial Inclusion Plan 34 25.08.14 Introduction of online Stop Payment 9
Instructions of cheques
63 09.08.14 Compulsory Coverage of Crop loans 4
including Agricultural Jewel Loans 40 11.09.14 Acceptance of contribution from public 9
under (NCIP) towards PMNRF
78 25.08.14 Independent appraisal of proposals - 4 FX 08.08.14 US Foreign Account Tax Compliance 9
Project appraisal by wings of major 17 Act- Collection of details by branches
banks – their responsibility thereon 19 21.08.14 Applicability of Form 15 Ca & 15 Cb – 10
83 05.09.14 Loans against Gold ornaments and 4 CBDT revised directions
Jewellery for Non Agricultural GENL 08.08.14 KYC/AML/CFT guidelines – 10
purposes - Bullet repayment of loans 37 Modifications
88 11.09.14 Master Circular on Educational loan 5 38 08.08.14 Modifications in Procedure for 10
Schemes identification of Beneficial Owners for
92 13.09.14 SARFAESI action as against 5 entity customers
securities in occupation of tenants – 40 12.09.14 Launch of Rupay Debit Card 10
implication of latest Supreme Court 44 23.09..14 Companies Act 2013 - important 11
judgment–safeguards to be adopted features at a glance
95 19.09.14 Change in the name of Export Credit 6 ADMIN 02.07.14 Comprehensive Centralised
Guarantee Corporation of India Ltd Insurance Policy for SFM, BFS & EE 11
32
99 19.09.14 Policy for “Flexible structuring of Long 6 kept at Bank’s premises all over India
Term Project Loans to Infrastructure 37 05.07.14 Amendment Policy on Delegation of
and Core Industries” 11
Powers
101 23.09.14 Pradhan Mantri Jan-Dhan Yojana- 6 38 09.0714 Formation of Jaipur and
Insurance cover for RuPay Debit 11
Tiruvannamalai Zones
Cards
 Recollect

Pg INOPERATIVE ACCOUNTS
S.No Date Subject
No
Savings as well as current account should
43 25.07.14 Staff Accountability Policy 2014-15 - be treated as inoperative/ dormant if there are no
Change in Format for Staff 11 transactions in the account for over a period of two
Accountability study for the accounts
years. To classify the account as inoperative, both
46 16.08.14 Deduction of tax at source (TDS) on the type of transactions i.e. debit as well as
payment of interest on Deposits to
credit transactions induced at the instance of
Noida/Greater Noida/Yamuna 12
Expressway Industrial Development
customers as well as third party should be
Authority considered.
48 25.08.14 Safety of Security Equipments 12 Dividend on shares if credited to Savings
49 01.09.14 Formation of Karimnagar Zone 12 Bank accounts as per the mandate of the customer,
the same should be treated as a customer induced
transaction. The account should be treated as
DEPOSITS operative account as long as the dividend is
credited to the Savings Bank account. The Savings
Revival of Unclaimed Deposit accounts Bank account can be treated as inoperative
According to Reserve Bank of India, the account only after two years from the date of last
amount to the credit of any account in India with any credit entry of the dividend provided there are no
bank which has not been operated upon for a period of other customer induced transaction.
ten years or any deposit or any amount remaining DEP.13/2014-15 Dt.03.09.2014
unclaimed for more than ten years shall be credited to
the “Depositors Education and Awareness Fund” (the IB TAX SAVER SCHEME-enhancement of maximum
Fund), within a period of three months from the expiry deposit ceiling
of the said period of ten years. Under the IB TAX SAVER
The depositor shall be entitled to claim from SCHEME, the maximum investment for
the bank his deposit or any other unclaimed amount or availing tax benefit under 80 (C) has been
operate his account after the expiry of ten years, even enhanced to Rs.150000/- from current financial
after such amount has been transferred to the Fund. The year.
bank would be liable to pay the amount to the
depositor/ claimant and claim refund of such amount DEP.14/2014-15 Dt.16.09.2014
from the Fund.
ADVANCES
Henceforth, Funds outstanding in such
accounts/deposits would continue to be transferred to Reintroduction of Loan Tracking System for “other
RBI on an ongoing basis as and when these accounts/ than MSME “ accounts / applications
deposits complete the period of ten years. Loan tracking system has been provided by
In order to solve the repercussions the Bank as a step towards providing better service
encountered in this regard, all branches should revive to our customers. The loan tracking system is
the inoperative accounts / deposits which are likely to common for all the types of loans except MSME
be classified as unclaimed deposits. loan applications, since MSME loan tracking
system is already available in our bank's website
Project Office will be pushing a report to separately. All the branches and Zonal/Corporate
branches containing the details of accounts which Office department shall operationalise the same,
have been classified / likely to be classified as with effect from 01/07/2014.
“unclaimed deposit accounts”.
The functionalities of the Loan tracking
Branches should contact such account system can be referred from Annexure. The
holders with the available information so that the software for Loan Tracking system is published in
account is either made operative or closed. the URL as follows: http://10.141.7.89.55012/loan
DEP.10/2014-15 Dt.09.07.2014
status.
With the introduction of loan tracking

2
 April
July – Sept 2014

system, the reference number generated by the Branches shall refer regarding the revised
system should be marked on all interest rate structure excluding Agriculture, other
applications/requests without fail, including for Personal Banking Products and SME structured
applications falling under the powers of Branch
products which is given in the circular.
Managers. No application/request etc shall be
considered without the above requirements. Rate of interest to be capped at BR + 4%
ADV.40/2014-15 Dt.01.07.2014 (inclusive of TP, Presently 14.25%) as per RBI
guidelines which states that interest rate to
Padho Pardesh – Scheme of Interest Subsidy on CGTMSE covered accounts shall not be more than
Education Loans for Overseas Studies for the BR+4%
students belonging to the minority communities Separate interest rate structure for Govt.
(effective from 2013-14) guaranteed accounts are as follows:
Indian Bank’s Association (IBA) has A. Accounts guaranteed by Central Govt.: BR +
communicated about launching of the new scheme 0.75% i.e. 11% (excluding tenor premium)
‘Padho Pardesh’ a scheme of interest subsidy on irrespective of rating
Educational loans for Overseas Studies for the
minority students belonging to the minority B. Accounts guaranteed by State Govt.: BR +
communities (effective from 2013-14). The scheme 1.75% i.e. 12% (excluding tenor premium)
details are furnished in this circular. irrespective of rating
The objective of the scheme is to award Salient features of the pricing are also given
interest subsidy to meritorious students belonging in the circular.
to economically weaker sections of notified ADV.54/2014-15 Dt.14.07.2014
minority communities so as to provide them better
opportunities for higher education abroad and Comprehensive Financial Inclusion under Mission
enhance their employability. Mode: “Sampoorn Vittiyea Samaveshan (SVS)”

Canara Bank has been identified as the Government of India gave a serious push to
designated Nodal Bank for handling and the programme for providing accessible financial
implementing the scheme. services by undertaking the “Swabhiman”
campaign to cover all the villages with population
The details of the scheme are also available more than 2000.
in the website of Ministry of Minority Affairs. The present proposal of Comprehensive
Financial Inclusion under Mission Mode envisages
ADV.49/2014-15 Dt.05.07.2014 provision of affordable financial services to all
Risk based pricing citizens within a reasonable distance.
It comprises of the following six pillars:-
Risk based pricing involves the alignment
1. Universal access to banking facilities
of loan pricing with the expected credit risk. This
2. Providing Basic Savings Bank Accounts with
implies charging of higher rate of interest to low Overdraft facility and Rupay Debit Card.
rated customer and vice versa. The main purpose of 3. Financial Literacy Progrmme:
risk based pricing is to ensure optimal allocation of 4. Creation of Credit Guarantee Fund:
capital and earn adequate return on it. 5. Micro Insurance:
6. Unorganised sector Pension schemes like
Also efficient and fair pricing of credit will ‘Swavlamban”:
give flexibility to the Bank, to adjust the rates
quickly to the dynamic economic scenario so that The Government has prescribed timeline
the bank can remain competitive and profitable. for various activities under the plan and explained
There is a separate interest rate structure prescribed in this circular.
for CGTMSE and government guaranteed accounts.
ADV.56/2014-15 Dt.24.07.2014

3
 Recollect

Monitoring of Field Business Correspondents (FBCs) Independent appraisal of proposals - Project

activities and FBCs Overdraft Accounts under appraisal by wings of major banks – their
Financial Inclusion Plan responsibility thereon.

As per the renewed contract with M/s.TCS In the light of the observations of CVC,
Limited, for implementation of end to end guidelines of RBI and directions of Department of
outsourced BC Model, Banks shall be making Financial Services, Ministry of Finance,
payment of fixed charges to the service provider, Government of India, the following directions
BC Organisation and the Field BCs as below. should be strictly complied by the branches:
 Bank shall pay a fixed technology cost of A certificate should be submitted by Zonal
Rs.2600/- per active POS location per month to Offices / Branches that they have verified the
M/s.TCS. technical and financial aspects of the project and
based on their assessment, the project is technically
 Bank shall pay a fixed BC Management cost of viable and economically feasible.
Rs.1250/- per active FBC location per month to
the BCO through M/s.TCS. Parent bank of the subsidiary company,
 Bank shall pay a fixed remuneration of which appraised the project should take a share in
Rs.1500/- per FBC per month, through the project funding to repose faith in the appraisal
M/s.TCS. quality of the subsidiary.
For payment of fixed technology A data base in respect of performance of
component to M/s TCS, the POS device should be the project appraised by the consultants shall be
working on all working days. If any POS maintained and inclusion / exclusion of names in
machine/device goes out of order for more than 10 list of panel be done on the performance.
days, the location will be treated as in-active and no
POS charges/ fee will be paid for the location for ADV.78/2014-15 Dt.25.08.2014
that month. However, the cost of enrollment and
transactions shall be paid by the Bank as per agreed Loans against Gold ornaments and Jewellery for Non
terms to M/s.TCS. Agricultural purposes - Bullet repayment of loans
Branches shall refer this circular for other A ceiling of Rs.5.00 lakh has been fixed for
instructions and also on the aspect on Monitoring of Non Agri gold loans (both priority and non priority)
FBCs Overdraft accounts under Bullet payment i.e. both interest and principal
are due for payment on maturity of the loan.
ADV.58/2014-15 Dt.28.07.2014
The tenor of the loan shall not exceed 12
Compulsory Coverage of Crop loans including
months from the date of sanction. Interest in these
Agricultural Jewel Loans under National Crop loans will be charged to the account at monthly
Insurance Programme (NCIP) rests and will be recognised on accrual basis at the
end of 12 months, provided the account is classified
Branches are aware that Agriculture
as ‘Standard’ account.
Insurance Company of India Ltd (AICIL) is the
implementing Agency for National Crop Insurance Similarly Non-Agriculture loans against
Programme. pledge of jewels (both priority and non priority)
with limit above Rs.5.00 lakh shall be repaid in
The crop insurance premium is highly
monthly/ quarterly installments (both principal and
subsidized by the Government and is beneficial to
interest).
the farmers as well as Banks, as a risk mitigation
mechanism. Hence, Branches should ensure 100%  Loans with tenor up to 35 months –
coverage of all eligible crop loans including repayable in monthly installments
Agricultural loans against pledge of Jewels under
crop insurance scheme.  Loans with tenor up to 33 months –
repayable in quarterly installments
ADV.63/2014-15 Dt.09.08.2014 based on flow of income.

4
 April
July – Sept 2014

The tenor of the loan shall not exceed SARFAESI action as against securities in
33/35 months as stated above from the date of occupation of tenants – implication of latest
sanction and the interest in these loans are to be Supreme Court judgment – safeguards to be adopted
charged to the account at monthly rests. – Reg

 These loans irrespective of the limit, will To keep the SARFAESI mechanism at bay,
be governed by extant norms pertaining to the ingenous borrowers/mortgagors are taking other
income recognition, asset classification and tangent issues and one such ground is that the
property is leased out / subject to tenancy and
provisioning which shall be applicable once
therefore the possession of the tenants cannot be
the principal and interest become overdue. disturbed by the Secured Creditor / Bank while
 The Loan to Value (LTV) of 75 percent resorting to enforcement mechanism through
should be maintained throughout the tenure SARFAESI, except in accordance with Law.
of the loan for all loans extended against
Recently the Hon’ble Supreme Court has
pledge of jewels for Non-Agricultural
rendered a judgment wherein, the Court
purposes. distinguished between tenancy before mortgage and
tenancy after mortgage. The gist of the judgment is
The detailed guidelines on various schemes viz. given hereunder:
1. Jewel loan for Non Agri Priority.
 The tenancy / lease in the subject case was
2. Jewel loan to traders and before mortgage.
3. Jewel loan Non Priority
 SARFAESI action was initiated by the Banks
are given as annexures to this circular.
concerned by issuance of demand notice
ADV.83/2014-15 Dt.05.09.2014  As the borrowers failed to pay, the Banks
proceeded with Sec.13(4) measures and took
Master Circular on Educational loan Schemes
symbolic possession
Presently our Bank offers Educational Loan  As the securities were occupied by tenants,
under the following three schemes. Sec.14 application was filed before the CMM,
1. IBA Model Educational Loan Scheme praying for handing over of possession of the
securities to the Secured Creditors.
2. Non IBA scheme
 Batch of SLPs were filed by the lessees which
3. Educational loan for Vocational Education
were taken up by the Supreme Court.
and Training.
Suggested safeguards
With a view to facilitate the branches to  When any immovable property is being offered
have access to all the information on educational as security, the Branch Managers may obtain a
loan schemes, a Master Circular incorporating the letter from the owner confirming that there is
guidelines/directives in force, collated from no lease subsisting on the date of creation of
various circulars issued earlier on the subject is mortgage. This is, however not a fail-safe
appended to this circular. method as there is a possibility of mischief
played by the owner who intends to give the
Field level functionaries shall refer this property as security. Therefore, it is
circular regarding the revised IBA Educational IMMINENT that a personal visit should be
Loan scheme duly incorporating the modifications, undertaken by the Branch Manager to the said
Other important guidelines/ clarifications from property and confirm that it is not subject to
IBA, Non-IBA scheme, Educational loans for lease or tenancy, prior to mortgage.
Vocational Education and Training and Product
 In the event of the property being already
codes for educational loan.
leased out / tenanted, the Bank may obtain an
ADV.88/2014-15 Dt.11.09.2014
undertaking from the lessee as per the format
given in the circular, wherein the lessee / tenant

5
 Recollect

recognizes, the rights of the Bank as a Secured even without a pre-determined agreement with
Creditor. other banks / FIs, and fix a longer repayment
period, and the same would not be considered as
 As regards creation of lease hold rights /
restructuring in the books of the existing as well as
tenancy rights after mortgage, Bank is
taking over lenders, if the following conditions are
reasonably safe as the loan agreements
satisfied:
predominantly contain the clause that no
encumbrance / charge would be created and / or
any kind of transfer effected, without NOC or  The aggregate exposure of all institutional
prior consent of the Bank. lenders to such project should be minimum
Rs.1,000 crore;
ADV.92/2014-15 Dt.13.09.2014
 The project should have started commercial
Change in the name of Export Credit Guarantee operation after achieving Date of
Corporation of India Ltd Commencement of Commercial Operation
(DCCO);
The Name of the Company has been  The repayment period should be fixed by
changed from “Export Credit Guarantee taking into account the life cycle of and cash
Corporation of India Ltd” to “ECGC Ltd” with flows from the project, and, Boards of the
effect from August 08, 2014. existing and new banks should be satisfied with
ADV.95/2014-15 Dt.19.09.2014 the viability of the project. Further, the total
repayment period should not exceed 85% of the
Policy guidelines for “Flexible structuring of Long initial economic life of the project / concession
Term Project Loans to Infrastructure and Core period in the case of PPP projects;
Industries”  Such loans should be ‘standard’ in the books of
the existing banks at the time of the
RBI had issued guidelines for Flexible refinancing;
Structuring of Long Term Project Loans to  In case of partial take-out, a significant amount
Infrastructure and Core Industries which are as of the loan (a minimum 25% of the outstanding
follows: loan by value) should be taken over by a new
 It has not prescribed any ceiling or floor on set of lenders from the existing financing
banks/Financial Institutions; and
repayment period of loans, except in the case of
special regulatory treatment for asset  The promoters should bring in additional
classification on restructuring equity, if required, so as to reduce the debt to
make the current debt-equity ratio and Debt
 Banks to ensure that while granting loans and Service Coverage Ratio (DSCR) of the project
advances, realistic repayment schedules are loan acceptable to the banks.
fixed on the basis of cash flows with borrowers
as it would go a long way to facilitate prompt The refinance facility will be available only
repayment by the borrowers and thus improve once during the life of the existing project loans.
the record of recovery in advances.
 Banks can refinance their existing Branches shall refer this circular for further
infrastructure project loans by entering into instructions in this regard.
take-out financing agreements with any
financial institution (FI) on a pre-determined ADV.99/2014-15 Dt.19.09.2014
basis. If there is no pre-determined agreement,
Pradhan Mantri Jan-Dhan Yojana- Insurance cover
a standard account in the books of a bank can
still be taken over by other banks/FIs, subject to for RuPay Debit Cards
guidelines on ‘Transfer of Borrowal Accounts Under Pradhan Mantri Jan-Dhan Yojana,
from one Bank to Another’ issued earlier. The RuPay Debit Cards issued to the BSBD
Thereafter, RBI has decided that, in respect Account holders under PMJDY will have inbuilt
of existing project loans, banks may refinance such accident insurance cover up to Rs.1,00,000/-
loans by way of full or partial take-out financing, (Rupees One Lakh only)

6
 April
July – Sept 2014

NPCI has informed that accident insurance Stay of Officers at the place of Posting
cover would be given only to one card held by the All Officers need to stay in the place of work
customers and the choice of card for the claim
would rest with the customers.  to know the customers and understand their
needs and render good customer service
ADV.101/2014-15 Dt.23.09.2014  to strengthen and widen the clientele base
Checklist for High Value Credit Proposals  to ensure efficient management of credit
port folio
While processing the high value credit  to ensure judicious dispensation of credit /
proposals in order to eliminate the time delay and to speedier NPA recovery
ensure that the required data / details are in place, a  to achieve the branch level objectives.
detailed checklist covering major areas is annexed Therefore Branch Managers should set an
to this circular for the use and guidance of credit ideal example by staying at the place of their work
handling desks. and any violation of this directive by the Officers
will be viewed seriously and appropriate action
ADV.106/2014-15 Dt.26.09.2014
would be initiated.
HRM HRM 65/2014-15 Dt.25.09.2014
Group Personal Accident Insurance Policy for all our Centralisated payment of Scholarship / Grant of
Staff Members under Staff Welfare Scheme books & uniform under staff welfare scheme
Group Personal Accident Insurance Policy” Interested Staff members are advised to
has been renewed with THE UNITED INDIA submit Applications towards sanction of
INSURANCE COMPANY LTD for one more year Scholarship and Grant of books for the year 2014,
effective from 02.08.2014. The policy details are through ONLINE only.
given below: The details are to be entered/ authorized in
GPA POLICY NO: 010500/42/14/05/00000014 the screen by way of maker/checker concept (salary
PERIOD OF POLICY: 02.08.2014 TO 01.08.2015 user) and the same are to be authorized by an
officer (salary user) of the branch/office.
Requests for claim forms and all claim
related correspondences should be addressed to The BM/ABM/ designated officer of
Branch/Office should ascertain the genuineness of
The United India Insurance Company Ltd., the mark sheets, bonafide certificates submitted by
Divisional Office - 010500 the staff, and authenticate the same. Based on such
No.64, Armenian Street, Catholic Centre, authorization only the applications will be
Chennai – 600 001. entertained. Hence the responsibility for the
Telephone No.: 044- 25389793, 25389794 genuineness of claim solely rests with the
Fax No.: 044-25386298 Branch/Office administration concerned.
E-mail id: vpavankumar@uiic.co.in
Departments at Corporate Office,
under copy to CO: HRM Dept.
IMAGE/STCs/Inspection Centres/ARMB Branches
The procedure to be adopted in reporting and Treasury branch should enter the Applications
the claims, documents to be enclosed with the claim of their staff at their end directly through on-line.
forms are given in the annexure to this circular. Applications received physically at CO: HRM will
HRM.51/2014-15 Dt.01.08.2014 not be entertained. The Applications are to be
Wearing of Identity Cards while on Duty retained at the respective branches/offices for
verification/inspection in future.
Every employee of the Bank (including
those on probation) is provided with Identity Cards The guidelines for processing the
and they should wear the Identity Cards while on applications are given in the annexure to this
duty without any exception. circular.
HRM.66/2014-15 Dt.26.09.2014
HRM.63/2014-15 Dt.10.09.2014

7
 Recollect

Career progression for aspiring Officers  The seal for having received the cheque
should be fixed covering both foil &
Officers with residual service of more than counterfoil.
a decade, to comprehend the bountiful emerging  Ensure that the person presenting the
opportunities for rapid career progression in the cheque mentions his/her name and full
Bank, depending upon the academic address in the challan with contact number,
qualification/flair for learning, each one can focus if he/she is not the account holder.
on one niche segment in Banking and go for  Ensure that the account number and mobile
intensive learning. There will be adequate number are written on the back side top
opportunities/avenues for practical application of right hand corner of the cheque.
the knowledge/wisdom acquired. Bank would be
 Verify the prima facie genuineness of the
providing platform for launching their careers in the cheque to be truncated.
path chosen.
 Any material alteration in the cheque found
HRM.67/2014-15 Dt.29.09.2014 either through naked eye or through UV
Lamp, the said cheque should be returned
CRA to the customer immediately and should not
Redressal of grievances of the pensioners- Roll of be presented in the clearing.
pension paying branches.  No branch should refuse to give an
acknowledgment, if the customer tenders
All the pension paying branches should the cheques at the counters. If accepted at
 Not direct / refer the pensioners to CPPC or the counter then these cheques with challan
Corporate Office. Resolve the issues duly signed by the Official should not be
upfront at their level. given back to the customers for dropping
the same in the drop box.
 understand the grievance of the pensioner.
On verifying the pension master in the  Customers should not be compelled to drop
system / pension documents, if available, the cheques in the drop box.
the small enquiries / grievance of the
As an additional security feature, in CTS
pensioner can be replied / resolved at the
branch level. Hub Centres, the cheques are being verified
through the CTS scanner in which UV lamp is
 contact CPPC over phone / letter and seek already in-built. However the software enablement
their advice, in case of need. is being done in a phased manner, centre-wise.
Role of branches in handling complaints
In case, if any of the cheque is identified as
received from pensioners has been annexed to this
circular. altered one, the same has to be returned to the
CRA.22/2014-15 Dt.02.07.2014 Presenting Branch by the Hub Branch for taking up
further directly with the Account holder himself.
Dealing with Cheques presented in Clearing CRA.23/2014-15 Dt.05.07.2014
As the onus of due diligence lies with the Public Provident Fund Scheme, 1968 and Senior
Presenting Banker and taking into consideration the Citizens Savings Scheme, 2004 - Amendments in
risks on image processing under CTS system, all Rules
the Presenting Branches are directed to
Regarding Senior Citizen Savings Scheme
 Exercise caution by checking the (Amendment) Rules, 2014 three notifications have
mandatory details of the cheques before been issued by the Government of India and the
signing the counter foil, if the same is same annexed to this circular and the contents of
presented for collection/clearing. which are self-explicit.

CRA.26/20145-15 Dt.23.07.2014

8
 April
July – Sept 2014

Public Provident Fund Scheme, 1968 (PPF 1968) - Customers having net banking facility can
Amendments in Rules make contribution in online mode through our bank
web-site.
The individual subscription limit has been
enhanced under the Public Provident Fund (PPF) CRA.40/2014-15 Dt.11.09.2014
Scheme, 1968 to Rs.1,50,000/- in a financial year. FX
CRA.33/2014-15 Dt.25.08.2014 US Foreign Account Tax Compliance Act- Collection
Introduction of Stop Payment instructions of of details by branches
cheques through online
The Foreign Account Tax Compliance Act
An online facility has been introduced for in short FATCA is a US statute introduced as part
of the HIRE Act in 2010, is designed to compel
both Retail and Corporate customers, thereby the
Foreign Financial Institutions (FFIs) and Non
customer himself can initiate instruction for stop
Financial Foreign entities (NFFEs) to provide
payment of such cheque(s) issued but lost/missing. information to the US Internal Revenue Service
This facility will be made available for those (IRS) about US persons who hold accounts with or
customers having Internet Banking facility. having interest in FFIs or NFFEs. It is intended to
increase the transparency for the IRS with respect
The functionality in Stop Payment of cheque to US persons that may be investing and earning
by the customer, is as follows: income through non US institutions.
 A separate menu called “Stop Payment of While FATCA became a law way back in
Cheque” has been provided in Net 2010, the final regulations were issued for it in
Banking. January, 2013 and are set to become effective from
 The SB/CA/OCC/OD Accounts which are July 1, 2014 after signing of IGAs with different
under cheque book category only are countries
permitted. The identification of US accounts is
General information for both Retail and required in respect of all new accounts opened on
Corporate Customers have been given in the or after July 1, 2014. Identification in respect of all
pre-existing accounts as on June 30, 2014 is
circular.
required to be done by June 30, 2016 except for
CRA.34/2014-15 Dt.25.08.2014 high value individual accounts, which needs to be
done by June 30, 2015.
Acceptance of contribution from public towards
Prime Minister's National Relief Fund 1.Full KYC details of Passport No, Country of
citizenship and Country of residence, Tax
New Delhi Main branch is one of the identification Nos., Contact details including
collection Banks for Prime Minister’s Relief Fund full address, Telephone Nos., Email IDs etc.,
and maintain Account Number: 438302992 in the in all accounts of foreign nationals, business
name of ‘PRIME MINISTER’S NATIONAL entities and other legal entities opened on or
RELIEF FUND”. after July1, 2014, at the time of account
In order to facilitate the public who wish to opening itself.
donate money to PMNRF through online or 2.Initiate the process of obtaining above details
Cash/Cheque/Demand draft, Branches should in respect of all pre-existing accounts using
ensure that the format of challan for remittance is as the available contact details or by using
per format enclosed to the circular. This format search in US indicia by making electronic
should be used by public, duly filling up all the and/or paper search of the database.
required details, particularly the name of the donor.
The reporting mechanism under FATCA
Out of the three copies of challan, one copy will be finalized on signing of the IGA after due
of the form need to be sent to our New Delhi Main approval of the cabinet
branch for onward submission to PMNRF on a
daily basis without fail. FX.17/2014-15 Dt.08.08.2014

9
 Recollect

Applicability of Form 15 Ca &15 Cb - CBDT Revised Modifications in Procedure for Identification of

Directions Beneficial Owners for Entity Customers

It is clarified that for payments of the As per the amended PML Act and rules as
nature specified in column 3 of the specified list per Government of India notification on
(enclosed to this circular), no information is “Prevention of Money Laundering (Maintenance of
required to be furnished under sub-rule1 with Records) Amendment Rules, 2013 (Rules)” the
regard to Payments Made to Non Residents. procedure to identify the beneficial owner is
furnished in this circular, in case of client is a
For all remittances exceeding Rs.50,000/- company, partnership firm, Association, Trust and
for all outward remittances including for Import company listed on total exchange or subsidiary of
purposes (including Advance Payments) as well as such company.
items not mentioned in the specified list branches
should obtain Form 15CA duly completed in Part B GENL.38/2014-15 Dt.08.08.2014
& Form 15CB or other documents mentioned in Launch of RuPay Debit Card
rule 2.
“RuPay Card” was introduced by National
As per the direction of Department of Payment Corporation of India (NPCI) as an
Revenue, IT department may require the branches
indigenous Card Payment Network, which
to furnish the signed printout of Form CA for the
promises cost-effective transactions for the Indian
purpose of any proceedings under Income Tax Act.
financial services entities. The RuPay card payment
As such branches must obtain the print out network is the seventh card payment network in the
of Form CA for all import remittances as well as world, equivalent to Visa, MasterCard, Discover,
which are not exempted under the Income Tax Act. and other such entities in terms of functionalities
Branches must therefore preserve these Form CA as and robustness. More than 90% of debit card
well as Form CB where applicable, to produce the
transactions are carried out within India and hence
same to the Income Tax authorities as and when
having an indigenous Card Payment Network
demanded.
reduces payment of foreign exchange fees to
Branches may issue a communication to all international card payment networks. Hence, RuPay
their customers about the Income Tax department’s Card which can be used only in India was brought
direction for submission of Form 15 CA and Form out by NPCI and was dedicated to the nation by our
15CB mandatorily in the absence of which the Hon’ble President of India on 08th May, 2014.
remittance will not be effected by branch.
The RuPay Payment platform makes the
FX.19/2014-15 Dt.21.08.2014 transaction cost affordable and will drive usage of
cards in the industry.
GENL Being transparent & economical, RuPay
KYC/AML/CFT Guidelines—Modifications as per PML offers electronic product options to extend to
Amendment Rules, 2013 untapped/ under-penetrated/ unexplored consumer
segments in rural areas that do not have access to
The amendments in PML Act and rules as banking and financial services. RuPay card is
per Government of India notification on uniquely positioned to offer complete inter-
“Prevention of Money Laundering (Maintenance of operability between various payments channels and
Records) Amendment Rules, 2013 (Rules)” has products.
been communicated by RBI. “RuPay” is the coinage of two terms Rupee
The relevant portions of the existing and Payment. As such “RuPay”, the word itself has
guidelines and modified guidelines are furnished in a sense of nationality in it.
this circular for the information and guidance of The highlights of our RuPay Debit Card
branches. have been given in this circular.
GENL.37/2014-15 Dt.08.08.2014 GENL.40/2014-15 Dt.12.09.2014

10
 April
July – Sept 2014

COMPANIES ACT 2013 - Important features at a 4. Claim for the loss insured.
glance 5. Insurance Cover for Bank’s Vehicles
6. Overseas Branches
The Companies Act 2013 has replaced the
Companies Act 1956. The Govt. of India, Ministry ADMIN.32/2014-15 Dt.02.07.2014
of Corporate Affairs has brought in New
Companies Act which is aimed at facilitation of Amendment to Policy on Delegation of Powers
adopting international best practices, to provide
adequate flexibility which is required to balance the Amendments under the head
requirements of corporate sector in present day, Advertisement and Publicity on the delegation of
facilitate lesser Govt. approvals and enhanced self powers under this expenditure head has been
regulations with emphasis on corporate democracy. approved and the same has been enclosed to this
circular.
Significant features and other points of the This amendment should be kept along with
New Companies Act 2013 are given in this circular. Policy on Delegation of Powers dated 03.04.2014.

GENL.44/2014-15 Dt.23.09.2014 ADMIN.37/2014-15 Dt.05.07.2014

Formation of Jaipur and Tiruvannamalai Zones

ADMIN
Delhi Zone has been bifurcated with
Comprehensive Centralised Insurance Policy for
formation of new Jaipur Zone. 24 branches in the
Safe, Furniture & Machinery (SFM), Books, Forms,
State of Rajasthan have been realigned with the
Stationery (BFS) & Electronic Equipments (EE) kept
Jaipur Zone and 61 branches in Delhi would
at Bank’s premises all over India
continue to be under the administrative control of
The Comprehensive Centralised Insurance Delhi Zone.
Policy for Safe, Furniture & Machinery (SFM),
Books, Forms, Stationery (BFS) & Electronic Similarly, Vellore Zone has been bifurcated
with formation of new Tiruvannamalai Zone. 39
Equipments (EE) kept at Bank’s premises all over
branches in the district of Tiruvannamalai have
India for the period 01/07/2014 to 30.06.2015 with
been realigned with the Tiruvannamalai Zone and
United Indian Insurance Company Ltd the remaining 52 branches in Vellore district would
Divisional Office No. 010500 be under the administrative control of Vellore
64, 1st Floor, Armenian Street Zone.
Catholic Centre, Chennai – 600 001
The new Zones at Jaipur and Tiruvannamalai
Tel:044-25389793/94 have been formed on July 01, 2014. With the
Fax:044-25386298, formation of these 2 new Zones, the total number of
Mobile No. 09442233909 Zones in the Bank has gone up to 37.
e-mail. kthayumanasundaram@uiic.co.in
Details of branches falling under Jaipur and
Branches/Offices should mention the above
Tiruvannamalai Zones are given in the annexure to
number whenever claims are reported to the above
this circular.
company during the period 01/07/2014 to
30/06/2015 for SFM & BFS and during the period ADMIN.38/2014-15 Dt.09.07.2014
02.07.2014 to 01.07.2015 for EE. Staff Accountability Policy 2014-15 - Change in
Branches shall refer the circular for details Format for Staff Accountability study for the
regarding accounts
The format for staff accountability study
1. Coverage for the accounts with book balance of Rs.10 lacs
2. Risks covered and above has been revised and approved by the
3. Initial/Immediate reporting on the Board.
occurrence of Loss and submission of
claim forms

11
 Recollect

The officials undertaking the staff system was switched off by somebody to avoid
accountability study should use the revised format recording and to facilitate in commission of
which is annexed to this circular. undesirable activity.

ADMIN.43/2014-15 Dt.25.07.2014 Accordingly the CCTV System should also

be locked with Password, so that no one other than
Deduction of TDS on payment of interest on Deposits the Branch Manager / Assistant Branch Manager is
to Noida/Greater Noida/Yamuna Expressway able to access it.
Industrial Development Authority
ADMIN.48/2014-15 Dt.25.08.2014
In view of the unambiguous legal position
Formation of Karimnagar Zone
on the Bank’s liability to deduct TDS on “Interest
paid on Deposits” to M/s Noida Expressway Hyderabad Zone has been bifurcated with
Industrial Development Authority / M/s Greater formation of new Karimnagar Zone. 37 branches in
Noida Expressway Industrial Development the districts of Adilabad, Karimnagar, Khammam,
Authority / M/s Yamuna Expressway Industrial Mehbubnagar, Medak, Nalgonda, Nizamabad and
Development Authority, all the branches should Warangal of the State of Telangana have been
abide by the law and should deduct tax at source realigned with the Karimnagar Zone and 48
(TDS) on payment of interest on Deposits to these branches in the remaining districts of the State viz.,
authorities. Hyderabad and Rangareddy would continue to be
ADMIN.46/2014-15 Dt.16.08.2014 under the administrative control of Hyderabad
Zone.
Safety of Security Equipments

We have installed Security Systems in all The new Zone at Karimnagar has been
branches i.e. Burglar Alarm, Fire Alarm & CCTV formed on September 01, 2014. With the formation
System. It is very important that they are kept in of this new Zone, the total number of Zones in the
proper working condition at all times to ensure Bank has gone up to 38.
that they function whenever required. At the same ADMIN.49/2014-15 Dt.01.09.2014.
time it is also important to ensure the safety of
these Systems. Though due care has been taken in the
preparation of Recollect, the version given in the
The Burglar Alarm System / Fire Alarm circular is final.
System Control Unit key should not be left on the
Control Unit, it should be held by the Branch Compiled by CO: O&M Division
Manager / Assistant Branch Manager. Recently in
one of the branch, it was noticed that the CCTV

12
 Volume 22 Issue 1
a
For Private Circulation Only

April – June 2009 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
Cir No. Date Subject Pg.
CONTENTS OF THIS ISSUE 03 22.04.09 RTGS Transactions 7
04 28.04.09 RTGS/NEFT Timings - 7
Authorisation in Time
Cir No. Date Subject Pg.
05 12.05.09 Usage of Inter-bank window for 8
DEP. 08.04.09 Inoperative Accounts 1
01 customer transactions – RTGS
06 22.05.09 Launching of IndMobile – 8
03 13.04.09 Restriction in Usage of 2 Enabling Funds Transfer facility
Withdrawal Slips for Third Party
through Mobile Phone
payment
04 13.04.09 Foreclosure of Domestic Term 08 04.06.09 Service Charges on ATM 8
2 services
Deposits
05 15.04.09 Renewal of Overdue Domestic 10 19.06.09 Withdrawal of Express Way 9
3 Clearing (EWC) facility at Service
Term Deposits
branches
20 20.06.09 Processing of AML alerts – New 3 ADMN. 06.04.09 Policy on Business Continuity 9
link provided in the Help Desk for
01 Planning 2009-10.
submission of replies
ADV. 13.04.09 Implementation of PMEGP 02 06.04.09 Whistle Blower Policy 2009-10 9
3 10 25.04.09 ATM Security 9
05 Scheme- Addition to Negative list
and Addendum 14 11.05.09 Banker’s Indemnity Policy for the 10
06 15.04.09 Entry level scoring of borrowal Financial Year 2009-
4
accounts 16 25.05.09 Information Systems (I S) Audit 10
09 25.04.09 Recovery policy 2009-10 4 Policy - 2009-10
17 28.05.09 Methodology of assessment of 4 17 25.05.09 Inspection and Audit Policy - 10
working capital requirements 2009-10
20 12.06.09 Methodology for assessment of 5 24 17.06.09 Security of Cash in Transit 10
working capital requirements 28 26.06.09 Comprehensive Centralised 10
23 17.06.09 Verification of genuineness of 5 Insurance Policy for SFVM of
Salary Certificates Bank’s Assets of all
branches/Offices all over India
26 18.06.09 Intoduction of web based status 5
view facility to applicants of credit HRM 14.05.09 Staff Welfare Measures - further 11
limits 22 improvements
31 20.06.09 Revised scoring model for 5 DEPOSITS
educational loans
35 27.06.09 Provision of copy of credit report 6 Inoperative Accounts
to customers
CRA 17.04.09 Return of cheques by bank 6 According to Reserve Bank of India, banks
03 branches citing ‘link failure’ as a should play a more pro-active role in finding the
reason
whereabouts of the account holders whose accounts
04 20.04.09 Government Transactions –Need 6
for prompt Remittance / have remained inoperative.
Reporting – Levy of penal interest 1. Branches should make an annual review of
for delayed remittance of
Government revenue accounts in which there are no operations for
11 01.06.09 Revision of locker rent in 6 more than one year. Branches should approach
metropolitan and urban branches the customers and inform them in writing as per
FX 11.04.09 Increase in percentage of cover 6 the letter enclosed to the circular that there has
03 under Export Credit Insurance for
Banks - (ECIB WT-PC and ECIB
been no operation in their accounts and
WT-PS) by (ECGC). ascertain the reasons for the same. In case the
07 05.06.09 Bank’s Policy on collection of US 7 non operation in the account is due to shifting of
Dollar denominated cheques. the customers from the locality, they may be
GENL. 15.04.09 Recovery of commission on 7
01 Letters of Comfort
asked to revive their connection.
02 20.04.09 Joint custody of Security 7 2. If the letters are returned undelivered, branch
Stationery-Numbered items. may immediately be put on enquiry to find out
Guidelines on custody of
Numbered Stationery items
 Recollect
the whereabouts of customers or their legal heirs Restriction in usage of Withdrawal Slips for third
in case they are deceased. party payments
3. In case the whereabouts of the customers are not The following modifications are introduced
traceable, branches should consider contacting in using of withdrawal slips in our Bank (under
the persons who had introduced the account manual/physical control only) in order to improve
holder. They could also consider contacting the the security in the system/procedure.
employer / or any other person whose details are
¾ The third party payment on withdrawal slip is
available with them.
restricted up to Rs.1000/-, subject to production
4. A savings as well as current account should be of pass book on withdrawal,
treated as inoperative / dormant if there are no
¾ Third party payment beyond Rs.1000/- on
transactions in the account for over a period of
withdrawal slip is not permitted.
two years.
¾ Branch Managers are authorized, to allow third
5. In case any reply is given by the account holder
party payment above Rs.1000/- only to close
giving the reasons for not operating the account,
relatives (as defined in page C-8 and Para 2.2.4
branches should continue classifying the same
of “Booklet on credit and credit related
as an operative account for one more year
administrative powers) under exceptional
within which period the account holder may be
circumstances based on merits of the individual
requested to operate the account. However, in
case.
case the account holder still does not operate the
same during the extended period, branches ¾ All other guidelines about issue and
should classify the same as inoperative account maintenance of withdrawal slips are as
after the expiry of the extended period. mentioned in Manual of Instructions –
“Deposits -2006” pages 5.6 and 5.7 – para 5.4
6. For the purpose of classifying an account as
and 5.5, and Circular Admin.100/07-08 dated 29
‘inoperative’ both the type of transactions i.e.
03 2008.
debit as well as credit transactions induced at
the instance of customers as well as third party (DEP.03 /2009-10 dt. 13.04.09)
should be considered.
Foreclosure of Domestic Term Deposits
7. The customer should not be inconvenienced in
any way, just because his account has been The revised charges for foreclosure of
rendered inoperative. The transaction may be Domestic Term Deposits are as follows with
monitored at a higher level both from the point immediate effect.
of view of preventing fraud and making a Perio Deposits of less Deposits of Deposits of
d run than Rs.15 lakhs Rs.15 lakhs to above Rs.5
Suspicious Transactions Report. Rs. 5 Crore Crore
7 No interest will be No interest will No interest will
8. Operation in such accounts may be allowed days paid on be paid on be paid on
after due diligence as per risk category of the to 14 foreclosure of foreclosure of foreclosure of
customer. days deposit deposit deposit
15 Eligible rate will Eligible rate will Eligible rate of
9. There should not be any charge for activation of days be the applicable be the applicable interest will be
inoperative account. and card rate for the card rate for the the applicable
above actual period run actual period run rate of interest
10. Branches are also advised to ensure that the prevailing on prevailing on the prevailing at the
amounts lying in inoperative accounts are the date of date of deposit time of deposit
properly audited by the internal auditors / deposit less less 1% p.a as for above Rs.5
0.75% p.a as foreclosure crore or Rs.15
statutory auditors of the bank. foreclosure charges lakhs to Rs. 1
charges crore, which
11. Interest on savings bank accounts should be ever is less
credited on regular basis whether the account is minus 1% as
operative or not. foreclosure
charges
12. Branches may also note to apply the service
charges in force for Inoperative accounts. For foreclosure of Term Deposits of Senior
Citizens, the existing norms remain unchanged.
(DEP.01/2009-10 dt. 08.04.09 )

2 2
 APRIL-JUNE 2009
The authority for waiver of foreclosure “Negative List” of activities of the PMEGP scheme
charges is vested with Executive Director on the guidelines-
basis of the recommendation of the Committee of
General Managers to be approved by Chairman and i) Business activities like opening of grocery
Managing Director. The waiver is restricted to the and stationary shops etc., involving no
Corporates for deposits of Rs.25 Crore and above. manufacturing process and value addition.

(DEP. 04 / 2009-10 dt. 13.04.2009) ii) Farm related activities like Goatery, Piggery,
Poultry etc.,
Renewal of Overdue Domestic Term Deposits
iii) All Urban/rural transport activities-
The following procedure has to be observed
for payment of interest on overdue term deposits a. Except Auto Rickshaw, Tourist boat and
with immediate effect. House boat in A & N Islands.
1. The present guidelines on payment of interest
b. Except the House Boat, Shikara and
on overdue term deposit for the overdue
Tourist boat in J & K.
period, when it is renewed is to be continued
2. When the request is made by the customer for c. Except Cycle Rickshaw.
payment of overdue deposit without renewal, ) Other terms already mentioned in
the unclaimed amount will attract savings bank the Negative list will remain
rate of interest from the date of original unchanged.
maturity to the date of payment (simple
interest). ) The above negative list will be
(DEP. 05 / 2009-10 dt. 15.04.2009)
applicable to all the cases
sanctioned during 2008-09 and
Processing of AML Alerts – New Link provided in the onwards under PMEGP Scheme.
Help Desk for submission of replies.
KVIC Mumbai has also informed the
AML Cells at Head Office and Circle following “Addendum” in respect of
Offices, require confirmation from the branches, implementation of PMEGP Scheme-
whether the account has complied with KYC norms
and whether the transaction referred is genuine and • Sanction Of Application
is in conformity with the declared customer profile
before taking a decision on the closure of the AML Sanctioning order will be issued by the
alert. Financing Branch of the Bank in favour of
beneficiary under intimation to District Offices of
To ensure authenticity for such information KVIC/KVIB /DIC with a copy to their respective
from the branches a secured gateway has been headquarters of KVIC, KVIB & DIC as the case
created with a link provided in the Help Desk. may be i.e, from whom the Government subsidy
BMs / ABMs alone are empowered to give will be availed.
reply for the above queries, by clicking on the box • Release Of Margin Money
“YES / NO”. The BMs/ABMs have to login to this
utility on a daily basis and submit their replies (vi) The financing branch of the Bank while
within 48 hours. forwarding the Margin Money claim to the
Based on the replies received from the respective Nodal Branch, a copy of the same should
branches, AML cell at Head Office or Circle office invariably be sent to District Head quarter of KVIC,
will take a decision on the closure of the alert. KVIB and DIC.

(DEP. 20/ 2009-10 dt.. 20.06.2009) (vii) The Nodal branch of the Bank while
forwarding the original Margin Money claim to
ADVANCES respective Head Offices of KVIC, KVIB and DIC, a
Implementation of PMEGP Scheme- Addition to copy of the claim should also be sent to District
Negative list and Addendum Headquarter of KVIC, KVIB and DIC.

KVIC, Mumbai has informed that the (ADV. 05/2009-10 dt. 13.04.2009)
following additions have been made to the

3
 Recollect
Entry level scoring of borrowal accounts improvements approved by the Board are detailed in
the Appendix – I of this circular.
The following categories of accounts are
exempted from “individual rating” as well as entry The intention is to equip the field level
level “Scoring”. functionaries for efficient handling of the NPA
S No. Exempted Segments – from Individual Rating or
portfolio & maximizing recovery. A well planned
Scoring strategy coupled with an action plan on the ground
1 Loan Against Deposits for each account targeted would enable Branches /
2 All Jewel Loans Circle Offices to reduce NPA substantially.
3 Staff Loans
4 All Loans < Rs.25000/- other than those under Rural OTS Policy for NPAs with book balance up
Banking Segment and Personal Banking Segment to Rs.2 Lakhs: The scheme was valid up to
5 All Loans < Rs.200000/- under Rural Banking
31.03.2009 which has been extended upto
Segment
30.09.2009. All other terms and conditions
The existing scoring models applicable for
stipulated should be followed without any deviation.
various loan products have been reviewed in
consultation with the credit departments concerned (ADV. 09 / 2009-10 dt. 25.04.2009)
and the revised models, are now rolled out replacing
Methodology of assessment of working capital
the existing scoring models.
requirements
The scoring models are revised and ported In the Consortium and Multiple Banking
in “CBS Help Desk”. Branches shall use only these Arrangement accounts, we are adopting the
models for the respective loan products w.e.f appraisal method of the Leader Bank.
20/04/2009.
STBC method was relied on empirical study
The scoring models are proposed as a two- conducted during the period 1996-97. Hence the
tier approval system with an initiator / assignor for study became outdated on account of reform
assigning the score and an approver for score measures taken by the Govt. and the changing
confirmation, as stated below: (Refer page no: 11 of industrial scenario.
Credit Risk Management Policy 2009-10 - Circular
No: Adv:211 / 2008-09 dt 30/03/2009). As per Loan appraisal guidelines (para
5.6.2. of Credit Risk Management Policy for 2009-
Sanctioning 10), limits more than Rs.5 crores shall be assessed
Scoring Initiator Scoring Approver
Authority
Branch (Second-in-
as per MPBF method of lending.
Branch Branch (Loan Officer)
command) The MPBF method is based on the two
Officers nominated by
RBS Branch (Loan Officer) the Official-in-charge of fundamental principles:
RBS The industrial borrower should carry a
Officer in charge of
Circle Office
Branch (Loan
Circle Office, Risk reasonable level of Current Assets that is neither
Officer) excessive nor short of their genuine requirements.
Management Cell

The entry barrier for all these scoring Such borrowers must ensure that their Net
models are fixed as “BBB” and proposals below the Working Capital (excess of long term liabilities
entry grade can be considered only by the respective including equity over fixed assets and non-current
functional Credit General Managers at HO. assets) is reasonably adequate in relation to the level
of Current Assets held.
Illustrative screen shots relating to scoring
Guidelines for classification of Current
process are given as Annexure to this Circular.
Assets and Current Liabilities are given as per
(ADV.06 / 2009-10 dt. 15 04 2009) annexure to this Circular.
Recovery policy 2009-10 Export Receivables: Export receivables are
to be excluded from current assets for computation
Modifications are carried out in the
guidelines stipulated in the Recovery Policy taking of margin, the reason being that, as a measure of
into consideration the developments to make our export promotion, Corporates need not maintain any
approach realistic and efficient. Major margin for export receivables. (as per existing
method).

4 4
 APRIL-JUNE 2009
Margin on Letter of Credit and Guarantee The genuineness of Employee, genuineness
relating to Working Capital shall be considered as of Salary Certificate and genuineness of issuing
Current Assets for the purpose of calculation of authority of Salary Certificate are very very
Eligible Bank Finance. important Risk Mitigating factors for the Bank
which should never be compromised.
LC/DA for raw materials shall be over and
above the fund based Working Capital limit (if the Various precautionary measures to be
requested limit is in line with the Trade creditor’s adopted while financing /appraising proposals with
level projected in the current liabilities). the Salary Certificates produced by the applicant is
The revised methodology of assessment of given in the circular.
Working Capital comes into effect immediately. Recording of verification by an official of
(ADV.17/2009-10 dt. 28/05/2009) the Bank is made mandatory in the Loan appraisal
note with immediate effect.
Methodology of assessment of Working Capital
requirements (ADV. 23 / 2009-10 dt. 17.06.2009)

Refer Cir. ADV.17/2009-10 dated 28.05.09 Introduction of web based status view facility to
and the corrected working is reproduced hereunder applicants of credit Limits
for MPBF II Method:
Web based status view facility to applicants
Projected Gross Current Assets (to be in A
line with past actuals or any variation
of credit limits has been introduced by our Bank.
should be justified) Applicants seeking credit facilities from our bank
Less Current Liabilities Other Than Bank B can view the status of their loan application through
Borrowing
our web site www.indianbank.in .
Working Capital Gap (A-B) C
Less 25% Margin On Gross Current Assets (A) *D As the compliance level is low the Branch
Actual/Projected Net Working Capital
Manager/ designated officer are responsible for
*E
C-D Working Capital Gap-Margin F entry of all eligible applications and updating the
C-E Working Capital Gap-NWC G status on daily basis.
F or G which
Maximum Permissible Bank Finance
ever Is lower Loan proposals without the application ID
* Margins should be available at the time of sanction itself or No. shall not be taken up for consideration by the
proposed limits shall be permitted on prorata basis. Circle offices/Head office.
Annual Maturing Term Liabilities need not As the facility is created as per CVC
be included under other Current Liabilities (B) and
directions for the benefit of the customer,
Net Working Capital (E) for the purpose of
appropriate staff accountability will be fixed for any
calculation of MPBF. All other things remain the
same. omission.

(ADV. 20/2009-10 dt. 12/06/2009) (ADV. 26/2009-10 dt. 18/06/2009)

Verification of genuineness of Salary certificates Revised Scoring Model for Educational Loans
Based on feedback / representations
There are various Personal Loans raised by
received, the scoring model for Educational Loans
individuals in which the Bank bases its appraisal on
has been revised and ported in CBS – Helpdesk.
the ‘Salary Certificate’ of the customer. Such loans
are Home Loans, Salary Loans, Vehicle Loans etc. Branches / RBS Centres shall go through
the operational instructions mentioned in the first
If the Salary Certificate produced by a screen.
customer is fake or inflated in amount or forged in
signatures or forged in competent authority signing Branches, Circle Offices and Retail Banking
the Salary Certificate, the quality of such Home Segments should score all the educational loan
Loan/ Salary Loan/ Vehicle Loan will run the risk of applicants through the revised scoring model only.
getting defrauded. (ADV. 31 / 2009-10 dt. 20 06 2009)

5
 Recollect
Provision of copy of Credit Report to customers products. If branches show laxity to remit the
Government funds expeditiously and error free, it
Customers are entitled to get copy of the
will result only in financial loss to the bank due to
Credit Report obtained by us from CIBIL (Credit penal interest payment. The salient features of
Information Bureau of India Limited). In our Bank, earlier circular on the subject to highlight the
for all retail loans, sanctioning authorities are importance of avoiding levy of penal interest
referring CIBIL Consumer Credit Information payment is furnished in this circular.
Reports. If a customer requests for a copy of the
(CRA. 04 / 2009-10 dt. 20.04.2009)
credit report, we have to provide the same after
collecting service charges of Rs.50/- (maximum Revision of locker rent in metropolitan and urban
fees). branches
Branches shall ensure strict compliance with The rental rates of safe deposit lockers has
the provisions of the Credit Information Companies been increased with effect from 01.07.2009 for
(Regulation) Act, 2005 as well as the rules and metropolitan and urban branches.
regulations framed thereunder. 1. Different rates of locker rents have been
prescribed for branches situated in Metro,
(ADV.35 / 2009 - 10 dt.. 27.06.2009) Urban, Semi Urban and Rural areas. Depending
CRA upon the branch classification, branches should
recover the appropriate locker rents.
Return of cheques by branches citing ‘link failure’ as
a reason 2. Revised Rental Rates on the Safe Deposit
Lockers are furnished in the Annexure I to the
According to RBI, returning of cheques by Circular. The revised rent is exclusive of service
Drawee Banks/Branches drawn on them in Clearing tax. Service tax at the appropriate rate have to
quoting “Link Failure “ as reason is are frequently be collected as per rules prevailing from time to
cited. time. Presently the rate of service tax including
In such situations branches shall proceed as education cess is 10.30%.
given under: 3. HO: O&M Division has issued a circular
¾ Banks should explore other alternatives before CRA02/2005-06 dated 07.04.2005 on revised
returning the cheques viz., processing at the procedure for collection of locker rent. The cut
service / drawee/nearby branch. off date for recovery of annual locker rent has
been uniformly fixed as 1st JULY. The
¾ After exhausting all avenues if it is necessary difference in rent has to be collected for the
to return the cheque due to link failure, it may subsequent periods, if the locker rent has
be returned under Reason Code 84 ( Other already been paid for more than one year.
reasons – Connectivity Failure), with no
charges to be debited to the payee’s account. 4. In case of termination of locker, advance rent
paid by the hirer on annual basis, shall not be
¾ No charges shall be recovered from the payee refunded on any case.
for return of the cheque in such cases.
5. All other terms and conditions as communicated
¾ Such cheques should be re-presented in the next in the earlier circulars remain unchanged.
clearing without waiting for a request from the
payee. (CRA.11/ 2009-10 dt. 01.06.2009)

All branches/offices should comply with the FX

above. Increase in percentage of cover under Export Credit
(CRA. 03 / 2009-10 dt. 17.04.2009) Insurance for Banks - Whole Turnover Packing Credit
and Whole Turnover Post Shipment (ECIB WT-PC and
Government Transactions – Need for prompt ECIB WT-PS) by Export Credit Guarantee Corporation
Remittance / Reporting – Levy of penal interest for of India Ltd. (ECGC).
delayed remittance of Government revenue
Attention of Branches is drawn to HO:ID
We undertake Government business only to Circular FX.20/2008-09 dated 17.09.2008 wherein
earn non-interest income and to cross-sell our other the salient features / terms and conditions of the
6 6
 APRIL-JUNE 2009
renewed Export Credit Insurance for Banks ECIB liability in months or part thereof and in case of
(WT-PC) and ECIB (WT-PS) are detailed. early redemption of the guarantee, commission may
ECGC has now informed that under the be refunded.
stimulus package announced by Government of (GENL. 01/2009-10 dt. 15.04.2009)
India additional benefits by way of increased
percentage of cover is available as per details given Joint custody of Security Stationery- Numbered items
vide Annexure to this circular. Branches should take stocks
note of the above and act accordingly. The system and procedure for joint custody
of security/numbered items, custody of ATM/Debit
(FX.03 /2009-10 dt. 11 .04.2009)
Cards and Pin Mailers and guidelines for
Bank’s Policy on collection of US Dollar denominated verification of custody of security/numbered
cheques. stationery items are reiterated in this circular.

In line with the RBI’s suggestions, our (GENL.02/2009-10 dt. 20.04.2009)

Bank’s Board approved policy guidelines on RTGS Transactions
collection of US Dollar denominated cheques,
contents of which are detailed in the annexure to According to Reserve Bank of India all the
this circular. Banks to have maker-checker concept at Data entry
of RTGS transactions and these transactions are to
The important features of the policy are be signed and encrypted digitally.
detailed below. Our CBS interface for RTGS and NEFT is
1. Branches shall reduce transit time for enabled with maker-checker concept and all the
despatching the cheques from branches to transactions routed through our RTGS and NEFT
payment gateways are digitally signed and
Correspondent Banks by handling the same on
encrypted.
the date of receipt of cheque from the customer.
As no digital signature will be used for
2. Payment of interest at SB rate calculated on the RTGS transactions in branches, all the staff shall be
amount of proceeds credited from the date of more cautious while originating and authorising the
sighting credit in the nostro account and until messages, as once the message is authorised the
such time the customer’s account is credited. same will be settled and transmitted to the
destination bank’s branch.
3. Payment of compensation on “step up basis” by
way of additional interest at 2% over and above (GENL. 03/2009-10 dt. 22.04.2009)
SB interest rate for the period of delay beyond RTGS / NEFT Timings - Authorisation in Time
30 days till the date of credit to customer’s
Timings for RTGS and NEFT are as
account.
follows:
(FX.07/2009-10 dt. 05.06.2009)
Days RTGS NEFT
GENERAL Customer Inter-Bank Customer
Transactions Transactions Transactions
Recovery of commission on Letters of Comfort
Monday – 9.00 AM to 9.00 AM to 9.00 AM, 11.00
According to our Loan Policy for 2009-10, Friday
4.30 PM 6.00 PM
AM, 12.00 Noon,
Letter of Comfort is equal to issue of money 1.00 PM, 3.00 PM,
5.00 PM
guarantee as per the guidelines of RBI. Letter of
Saturday 9.00 AM to 9.00 AM to 9.00 AM, 11.00
Comfort is equivalent to Foreign Guarantees and 12.30 PM AM, 12.00 Noon,
commission applicable to foreign guarantees has to 2.30 PM
be charged for issuing of Letter of Comfort. The RTGS messages authorized by the
The commission chargeable on issue of branches should reach RBI on time, for settlement.
Hence branches are informed to authorize the
letter of comfort shall be 0.20% per month with a
messages at least 15 minutes before the cut of time
minimum of 0.35% (subject to minimum of
specified by RBI to avoid cancellation of messages.
Rs.575/- per guarantee) for the specified period of After authorizing the RTGS messages, branches

7
 Recollect
should ensure that the Status of the message changes ‘IndMobile’ facility of Mobile Banking is
to SETTLED, which indicates that the message has presently extended to the a/cs of Individuals / Sole
gone to the receiving Bank. If the status of the Proprietary concerns, and Joint accounts with E or S
message is not changing to SETTLED even after a facility only.
long time, the branches may contact RTGS Cell to
know the reason. The transactions effected through mobile
banking will appear in
Branches should immediately reverse the “Other_Branch_GL_VVR_For_Home_Branch_cfpd
amounts pending in their CGL/BGL of RTGS 0613.txt.gz” with teller–id 9902001 of branch code
payable and NEFT. For the benefit of the branches 09999. From the above report. branches can verify
FAQs are given in the circular. the transactions done through ‘IndMobile’ in case of
any clarification by the customer.
(GENL. 04/2009-10 dt. 28.04.2009)
List of compatible Mobile handsets, detailed
Usage of Inter-bank window for customer procedure for downloading, installation of Mobile
transactions – RTGS application software and its features are placed in
RBI has informed that many RTGS internet banking site, intranet and helpdesk for
participants are routing RTGS Customer payments information of customers/Branches /administrative
in the inter-bank session i.e after the customer offices.
window is closed.(i.e after 4.30 PM during Monday- Branches shall use the RM Module for
Friday and after 12.30 PM during Saturday), obtaining the M-Pin from Project Office and deliver
probably to accommodate late transactions of high to the customer. All staff members may be advised
net worth customers. This is against the procedural to avail all self-service channels so that they may be
guidelines of RTGS. in a position to market these products and enlighten
All our branches should not route any type the customers wherever required.
of customer transactions in inter-bank mode and (GENL. 06 /2009-10 dt. 22.05.2009)
observe the time norms for both customer and inter-
bank transactions in toto. There should not be any Services Charges on ATM Services
deviation in this regard. The revised charges for ATM Debit Card
(GENL.5/2009-10 dt. 12.05.2009 ) related services w.e.f 06.07.2009 are as follows:
Nature of Services Existing Revised Service
Launching of IndMobile – Enabling Funds Transfer charges charges (inclusive of
facility through Mobile Phone Rs. ST) plus applicable
postages Rs.
Presently our mobile banking customers ATM Debit Card – Duplicate Nil 15/-
have been offered with SMS based enquiry services Pin Mailer Generation
like Balance enquiry, Last 3 transaction enquiry, charges
issued cheque status enquiry and Deposited cheque Issue of Duplicate ATM Debit 100/- 150/-
status enquiry, etc. Card

Menu Based Mobile Banking with Enquiry (GENL. 08 /2009-10 dt. 04.06.2009)
and Funds Transfer Facility:
Withdrawal of Express Way Clearing (EWC) facility at
With advancement in technology, Bank has Service Branches
introduced a new module ‘IndMobile’ for our With the introduction of Core to Core (C2C)
mobile banking customers. This facility works on facility in CBS, the concept of Express Way
secured, menu based and user friendly interface Clearing has lost its utility now. C2C has enhanced
provided through J2ME technology. Customers the customer service, while reducing the expenditure
need not memorise the text based OP codes on postages for the bank.
(operation codes) for different services. Some of the
salient features and guidelines are given in the Henceforth, branches are advised to send
Circular. cheques drawn on upcountry centres where we have
Service Branch directly for collection.
An IndMobile customer does not
necessarily need to have Internet Banking a/c. GENL.10/2009-10 dt. 19 06 2009

8 8
 APRIL-JUNE 2009
ADMIN The above guidelines should be followed in
all the ATMs so that the safety and security of the
Policy on Business Continuity Planning 2009-10
ATMs can be ensured.
The Policy on Business Continuity Planning
(ADMIN-10/2009-10 dt. 25 04 2009)
was reviewed and adopted for 2009-10 by the Risk
Management Committee of the Board on Banker’s Indemnity Policy for the Financial Year
26.03.2009. A copy of the revised and updated 2009-10
policy is enclosed to this circular for meticulous
implementation. The Banker’s Indemnity Policy for the
financial year 2009-10 commencing from 01-04-
(ADMN.01/2009-10 dt. 06.04.2009) 2009 has been renewed with The New India
Assurance Company Limited and the policy
Whistle Blower Policy 2009-10
number is 710800/46/09/62/00000003.
Whistle Blower Policy was reviewed and
This policy covers losses for the period
approved for 2009 -10 by the Risk Management
01.04.2009 to 31.03.2010 and also for losses
Committee of the Board on 26.03.2009.
occurred on or after 01.04.2008 and discovered
All the staff members are advised to go subsequently. The policy covers losses at our
through the Policy document meticulously for its Banking Service Centres also with effect from
effective implementation. 06.05.2008 as detailed in the circular. However
losses upto 31-03-2008 (i.e. date of actual loss is
(ADMIN.02/2009-10 dt. 06.04.2009) prior to 01.04.2008 but discovered during the
current year) are not eligible for any cover.
ATM Security
Basic Sum Insured:
All the Branches, having ATMs under their
control are instructed to ensure the following: In respect of the following clauses viz.(A)
to (H) of the circular the basic cover available is
¾ Proper maintenance of access door to avert Rs.10.00 crore (Rupees Ten crore only), for the
free entry. This must be ensured on day to Bank as a whole.
day basis.
Additional Sum Insured:
¾ Stand alone Burglar Alarm System must be
provided to ATM by connecting the cash Additional cover available in respect of
loading door and server area with a magnetic Clause A (loss on premises) is Rs.25.00 crore and in
sensor. respect of Clause B (loss in-transit) is Rs.10.00
crore.
¾ A CCTV must be installed in all the ATMS
irrespective of whether it is Onsite or Offsite. Detailed information is given in the circular
regarding the Risks covered, the important features
¾ When the ATM is not functioning due to any of the policy, Exceptions, Claim procedures to be
technical problem, a board must be displayed followed/ Maintenance of records, clarifications/
indicating the status of the ATM. special instructions etc.,
¾ It must be ensured that the glass doors are A separate Insurance Policy to cover
transparent and should not obstruct the view properties of our Bank against Burglary risk is taken
from outside. by Head Office. The current policy number is
¾ The names and contact details of officials 010503/46/08/04 /00000198, with United India
responsible for the ATM should be displayed Insurance Company Ltd., 64, Armenian Street
prominently in the ATM room Branch, Chennai–1, valid upto 15.02.2010.
Similarly there is a separate insurance Policy to
¾ Surprise checks should be carried out by the cover Standard Fire and Special Perils plus
branch staff during day and night to monitor Earthquake and Terrorism risks for owned premises
the working of ATM. of the bank in various locations taken by HO:
¾ Security Officers of the Circle should make Premises, Expenditure & Estate Department. The
surprise visit to the ATM sites to check the current policy number is 010503/11/09/11/
serviceability of the security systems installed 00000006 and is valid upto 31.03.2010.
for ATM cabins. (ADMIN.14 /2009-10 dt. 11 05 2009)

9
 Recollect
Information Systems (I S) Audit Policy - 2009-10 Coverage
The Information Systems Audit Policy- The Policy covers all the existing ‘SFM,
2009-10 approved by the Board on 19 05 2009 will Book Forms Stationery and Electronic Equipments’
be valid up to 31 03 2010. (including Computer related items and all ATMs)
and accessories as well as all purchases made after
A copy of the policy document alongwith 01.04.09. Hence all the Branches/ Offices must
Internal Guidelines indicating the authorities ensure that all purchases/deletions made by them
responsible to conduct the audit, review of the every quarter is duly reported to HO: TMD (from
reports, issuance of closure certificate etc as is time to time) to reach not later than 5th July, Oct.,
placed in the intranet of our Bank. Jan., Apr.
(ADMIN. 16/2009-10 dt. 25-05-2009) As the Centralised Comprehensive Policy
Inspection and Audit Policy - 2009-10 comes in to effect from 01.07.09, Branches/Offices
need not renew their existing insurance policies
The revised Inspection and Audit Policy which are due for renewal.
approved by the Board on 19 05 2009 comes into
force with immediate effect and will be valid up to The existing policies may be surrendered
31 03 2010. for the residual/unexpired period of insurance by
claiming the pro- rata premium thereunder from the
The policy document alongwith “Internal respective insurance companies (including M/s.
Guidelines” and the flow chart mentioning the New India Assurance Co Ltd) with immediate
periodicity follow up and closure of various effect.
inspection reports, is placed in the intranet.
Risks covered
(ADMIN. 17/2009-10 dt. 25-05-2009)
The risk covered are as per Standard Fire &
Security Of Cash In Transit Special Perils Policy for SFM & Books Forms
Branches should take caution and ensure Stationery and Electronic Equipment Policy for
security of the cash-in-transit. Remittances from Electronic items. Details are given in Annexure 1 of
Branch to Currency Chest and vice-a versa are the Circular.
exposed to threat of being waylaid and robbed
(ADMIN. 28/2009-10 dt. 26.06.2009)
unless security guidelines are followed.
The guidelines to be observed during cash HRM
remittances are reiterated in the circular for Staff Welfare Measures - further improvements
compliance.
The improvements introduced in some of
(ADMIN.24/2009-10 dt. 17 06 2009) our welfare schemes implemented by our Bank for
the benefit of our staff members/retired staff
Comprehensive Centralised Insurance Policy for members, approved by the Bank are as follows:
'Safe, Furniture & Machinery (SFM), Books Forms
Stationery & Electronic Equipments' of Bank's Assets 1. Scheme for presentation of Memento to staff
of all Branches / Offices all over India members Retiring on Superannuation:

In order to have uniformity, reduce the work The amount for Staff members Retiring on
load in Branches / Offices and to have better Superannuation stands increased to Rs.5,000/- from
control, Head Office has taken Centralised April 2009. Branches may continue to pay the cost
Comprehensive Insurance Policy for ‘SFM, Books of Article to the debit of “Sundries Receivable”
Forms Stationery & Electronic Equipments’ of Account and claim the amount from HO: HRM
Bank’s assets all over India at Head Office. Department.
The Centralised Comprehensive Insurance 2. The limit under the scheme for Staff
Policy has been taken with M/s. The New India members retired under Superannuation on
Assurance Company Ltd., with effect from declaration basis for reimbursement of Medical
01.07.2009. Expenses is increased to Rs.3,000/- per annum.
The address of the Insurance company and Branches may continue to forward the Applications
the Policy numbers are given in the Circular. from such of those Retired Staff members to HO:
HRM Department for reimbursement.
1010
 APRIL-JUNE 2009
3. Treatments / surgeries for certain ailments The scheme has been modified to make the
had already been approved for reimbursement from child eligible to get the grant every year, on the
Staff Welfare Fund and it has been decided to basis of marks obtained. For the wards of Sub-staff
include the treatment of LIVER transplantation for employees, total number 150 grants in all the
reimbursement upto a maximum of Rs.3.00 Lakhs classes, have been made available.
over and above the eligibility under OSR/BPS.
There is no change in the eligibility
4. The scheme for grant of Scholarship to
conditions, format and last date for submission of
dependents of Staff Members is available to all the
Award Staff and Officers up to Scale IV. The other applications under the Scheme.
existing guidelines and format of application remain 6. Physically Handicapped/Hearing Impaired
unchanged. The last date for receipt of the Employees are eligible for reimbursement of cost of
applications is 15th September of every year. Accessories such as Caliper Shoes (One side or both
5. The grant for Educational Books and side) / Crutches/Below knee limb/ Wheel Chair/
Uniforms is available to any one child of the Staff Tricycle/Hearing Aid, subject to a maximum of
Member, in each of the 3 stages viz I to V Std, VI to Rs.5,000/-, in total, once in their career.
XII Std and College level Courses. To be eligible
for the grant, the Dependant child of Sub-staff 7. It has been decided to reimburse an amount
Members should have secured aggregate minimum of Rs.1,000/- per annum to the Visually Impaired
marks of 50% and 60% for others, in the preceding Employees towards Accessories etc. Visually
final examination. Those who have secured highest Impaired Employees may prefer claims, to the
marks in each of the three stages alone will be Bank, through their Circle Office, once in a year.
eligible for the grant.
(HRM. 22/2009-10 dt. 14.05.2009)
Last numbers of circulars issued as on Though due care has been taken in the preparation of
30.06.09
Recollect, the version given in the circular is final.
MD/
DEP ADV HRM CRA FX GENL
ED Compiled by HO: O&M Division

21 39 44 13 8 11 2 Printed & circulated by HO: Circular Issue Cell

11
 a Volume 23 Issue 1

For Private Circulation Only

April – June 2010 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
Cir
No.
Date Subject Pg.
CONTENTS OF THIS ISSUE
36 08.06.10 Farm Mechanization – Revision of 8
Cir acreage norms for eligibility
No.
Date Subject Pg.
46 30.06.10 Base Rate -- Interest On Loans 8
DEP 01.06.10 Payment of Interest on Frozen A/cs 2
03
And Advances
CRA 24.05.10 Payment of renewal Premiums by 9
ADV 01.04.10 IB Swarna Mudra Scheme - 2 12 direct credit to HDFC SLI’s
01 Maintenance of Stock
04 collection A/c with our Mumbai Fort
07.04.10 Back End Subsidy sanctioned to 2
Branch
Micro and Small Enterprises
14 08.06.10 Online Payment (of Utility Bills, LIC 9
09 19.04.10 Priority Sector Lending - Advances 3
Premia, Mobile Bills, Fees,
to Micro and Small Enterprises
Charities / Donations etc) by
engaged in Exports
11
Registered Net Banking Customers
22.04.10 Applications Supported by Blocked 3
having Transaction Password
Amount (ASBA) Phase II services
12
FX 06.04.10 KYC Norms / AML Standards / 10
24.04.10 New Jewel Loan Product “Jewel 3
04 Combating of Financing of
Loan To Senior Citizens
Terrorism (CFT) – RBI
15 03.05.10 IB Home Loan Combo – 3
Communication
Introduction of Special Package for 10 13.05.10 Online submission of ECGC 10
Home Loan borrowers
Annual Statements (CPG A2- A to
20 11.05.10 Collateral free loans to Micro and 4
L) through BBMIS templates from
Small Enterprises (MSEs) -
the year ended March 2010
Directions of RBI for increase in
onwards
mandatory limit to Rs.10 lakhs. GEN 07.04.10 Recovery of TDS by branches for 11
21 11.05.10 Accounting procedure of amount 4 04 site work of ATMs
settled by CGTMSE Introduction of 18 15.05.10 ATM -Configuration of Cassettes in 11
Reconcilable BGL 96218
different denominations and
"CGTMSE Claim Received"
loading of Cash
22 13.05.10 Personal Segment Loan Products 4 19. 25.05.10 Bigfix and Symantec Antivirus: 12
(PSLP) – revision in norms and
Procedures to be followed by
discretionary powers for relaxation/
Branches and Circle Offices
sanction
25 07.06.10 Rationalisation of Service Charges 12
23 14.05.10 Branches to obtain LSR & EVR 4
for Inter City transactions
reports instead of RBS HRM
26
05.04.10 Reimbursement of Local 12
19.05.10 Classification of Export Credit for 5 01 Conveyance expenses incurred
Agriculture and Allied activities
while on Outstation Duty by
under Priority Sector
Officers.
29 24.05.10 Use Of Business Correspondents 5 13 23.04.10 Nodal Officer for Customer 12
(BC) - Revised Guidelines
Service/ Principal Code
31 27.05.10 Interest Subsidy Scheme for 6
Compliance Officer (BCSBI) and
Housing the Urban Poor [ISHUP] –
Public Information Officer under
Procedure for claiming Subsidy
Right to Information Act, 2005.
32 01.06.10 Modification in RoI in Reverse 7 19 08.05.10 Grant Of Incentives For Passing 12
Mortgage Loan Scheme
Hindi Examinations.
33 04.06.10 Implementation of Pilot Weather 7 21 13.05.10 IXth Bi-Partite Settlement - Award 13
Based Crop Insurance Scheme
Staff.
(WBCIS) Administrative Instruction 37 08.06.10 Salary Revision for Officer 13
for Kharif 2010 season
Employees governed by Indian
35 07.06.10 Increasing the Advance & No. of 8
Bank (Officers’) Service
Accounts under “Micro Enterprises”
Regulations, 1979
-Fresh guidelines received from
GoI/RBI. 38 08.06.10 Staff Welfare schemes 13
 Recollect
Cir we may continue to credit the interest to the
No.
Date Subject Pg.
account on a regular basis.
44 14.06.10 Formation of Women Cell at Head 14
Office DEP.03/2010-11 dt. 01.06.2010
50 29.06.10 Group Savings Linked Insurance 14
Scheme for Officers/Award staff- ADVANCES
Enrolment for new recruits and IB Swarna Mudra Scheme - Maintenance of Stock
option to promoted staff members
52 29.06.10 9th Bipartite Settlement - Single 14 A template for entering the Stock and Sales
Window Operator – A position of Gold Coins of the branches on a daily
MD/ 01.04.10 Shri T M Bhasin - Appointment as 15 basis has been ported by HO: MIS Department in
ED Chairman and Managing Director the CBS Help Desk.
2 of our Bank Procedure for entering the Gold Coin Data
ADM 12.05.10 Fourth Annual General Meeting of 15 in the MIS Template is given in the Annexure to this
07 the Bank circular.
12 08.06.10 Review Of Cash Limit For Cash In 15 All the branches which are authorised to sell
Transit
gold coins should enter the details in the template
16 15.06.10 Banker’s Indemnity Policy For The 16
Financial Year 2010-11 displayed as and when the transaction takes place or
at the end of the day without exception. Branch
DEPOSITS Manager to ensure the correctness of the data fed as
Payment of Interest on Frozen Accounts the same will be consolidated at Head Office level
and will be put up to Top Management on a periodic
According to RBI bank shall follow the basis for review.
procedure as detailed below in case of Term Deposit
ADV.01/2010-11 dt.01.04.2010
accounts frozen by the enforcement authorities:
a. A request letter may be obtained from the Back End Subsidy sanctioned to Micro and Small
customer for renewal of deposit on maturity. Enterprises
While obtaining the request letter from the Many of the Micro and Small Enterprises
depositor for renewal, advise the depositor to are eligible to avail capital subsidy under various
indicate the term for which the deposit is to be schemes of Central and State Govt Organisations.
renewed. In case the depositor does not Many of these subsidies are of back end in nature.
exercise option choosing the term for renewal, The eligible subsidy drawn has to be kept for a
we may renew the same for a term equal to the certain period as stipulated in the scheme before
original term. releasing the same to the entrepreneurs.
b. No new receipt is required to be issued. No interest will be paid for the subsidy
However, suitable note may be made regarding amount so kept. Instead interest on TL sanctioned to
renewal in the deposit account. the entrepreneur will be calculated on balance
outstanding in TL net of subsidy.
c. Renewal of deposit may be advised by
registered letter / speed post / courier service to Sl No Product Code Name of the Product
1 5002 002 SSI Composite Loan
the concerned Government department under
2 5008 001 SME- Micro Enter-Manufacturing
advice to the depositor. In the advice to the
3 5009 001 SME- Small Enter-Manufacturing
depositor, the rate of interest at which the 4 5011 001 SME- Micro Enter- Service
deposit is renewed should also be mentioned. 5 5012 001 SME- Small Enter- Service
d. If overdue period does not exceed 14 days on The above product codes have been enabled
the date of receipt of the request letter, renewal for entertaining the subsidy details.
may be done from the date of maturity. If it
exceeds 14 days, the eligible interest for the The procedure for entering subsidy received
overdue period should be kept in a separate in “Subsidy Reserve Fund or Fixed Deposit”
interest free sub-account which should be (instalment) in respect of the existing accounts are
released when the original fixed deposit is furnished in the Annexure to this circular. The
released. appropriation of the subsidy so kept in Subsidy
e. Further, with regard to the savings bank Reserve Fund can be done only on or after due date
accounts frozen by the enforcement authorities, of appropriation. As on last Friday of each calendar
2 2
 APRIL-JUNE 2010
month balancing of all outstanding subsidies should Features of ASBA Phase II are provided in
be taken, tallied with the outstanding under GL this circular. The details of Controlling branches,
Head “Subsidy Reserve Fund” and certified by Loan Eligible accounts for blocking the bid amount and
Officer/ Branch Manager. the transactions in ASBA Hold accounts are
As regards new accounts, in the existing furnished in the Annexure to this circular.
loan creation screen the subsidy options are ADV.11/2010-11 dt.22.04.2010
available and at the time of creation itself the
subsidy details can be entered. New Jewel Loan Product “Jewel Loan To Senior
Citizens”
ADV.04/2010-11 dt. 07.04.2010
In order to garner the potential for Jewel
Priority Sector Lending - Advances to Micro and Small loans amongst the senior citizens, a new product has
Enterprises engaged in Exports been formulated in the name and style of “Jewel
RBI vide their Circular dated 09.04.2010 has loan to Senior Citizens” under Non-priority Jewel
clarified as under- Loan with a maximum limit of Rs.5.00 lakhs per
borrower repayable in 35 EMI at an interest rate of
• finance granted by Banks to Micro and Small 10% (BPLR less 2%) to meet short term financial
Enterprises as defined under the Micro, Small needs. The product details are enclosed as annexure
and Medium Enterprises Development to this circular.
(MSMED) Act, 2006 is eligible for
classification under priority sector. ADV.12/2010-11 dt.24.04.2010

• loans granted by Commercial Banks to Micro I B Home Loan Combo – Introduction of Special
and Small Enterprises (MSE) (manufacturing Package for Home Loan borrowers
and services) are eligible for classification To attract more customers and also to cross
under priority sector, provided such enterprises sell our other Personal Segment Loan Products,
satisfy the definition of MSE Sector as Home Loan Combo Package for our Home Loan
contained in MSMED Act, 2006, irrespective borrowers (both existing and new borrowers) has
of whether the borrowing entity is engaged in been introduced at softer terms in the following
export or otherwise. Personal Segment Loan Products, subject to
• The Export credit granted to MSEs may be complying with eligibility criteria:
reported separately under heading “Export
credit to Micro and Small Enterprises Sector”. Product Concession in Concession in
interest rate Processing charges
ADV.09/2010-11 dt.19.04.2010 IB Vehicle Loan 0.50% from the 50% on applicable
Salary Loan applicable processing charges
Applications Supported by Blocked Amount (ASBA) Card Rate of of the respective
IB Bhavishya
Phase II services in our Bank Prakash the respective Product.
In view of the successful launch of IB Pension Loan Product
Application Supported by Blocked Amount (ASBA) IB Home improve - Nil - 50% on applicable
and a good market response for the same amongst processing charges
the retail investors, SEBI had extended this facility, The Home Loan borrowers are entitled for
christened as ASBA Phase II, to other investors any one or more of the above products within the
(except Qualified Institutional Buyers) in public overall eligible limit subject to repayment capacity
issues through book built route with effect from and other eligibility criteria. The details of the
January 01, 2010 replacing ASBA Phase I. Home Loan Combo Package, Product Code for the
After putting in place the ASBA module respective products and the present concessional
confirming to ASBA Phase II requirements and on interest rate and processing charges for these
submission of the Self Certification to SEBI, our products are given in Annexure I and II of this
Bank has been admitted as a Self Certified Syndicate circular. The above concessions shall be extended
Bank (SCSB) and is eligible to act as SCSB for all only for the sanctions of the aforesaid Products
issues opening on or after 1st April 2010. The made on or after the date of this circular to the
ASBA Phase II services in our Bank had been made Home Loan borrowers.
operational from the first week of May 2010. ADV.15/2010-11 dt.03.05.2010

3
 Recollect
Collateral free loans to Micro and Small Enterprises fully or partly, the corresponding reference
(MSEs) - Directions of RBI for increase in mandatory number has to be given.
limit from Rs.5 lakhs to Rs.10 lakhs.
• “BGL_accounts_age_wise_break_up” report is
RBI vide its circular dated May 6, 2010 has being pushed by Project Office every day to the
directed that Banks are mandated not to accept branches, to know reference number wise
collateral security in the case of loans up to Rs.10
pending in each BGL.
lakhs extended to units in Micro and Small
Enterprise (MSE) sector. Branches should give correct reference number
while creating credit entry and while debiting, the
Branches shall ensure that all such accounts
same reference number should be entered to obviate
are covered under CGS scheme without fail which
wrong accounting. Branches, which have already
will facilitate to enhance our Bank’s performance in
received the amount on settlement and kept in
respect of coverage under CGS scheme. suspense accounts, should transfer the same to
ADV.20/2010-11 dt.11.05.2010 CGTMSE CLAIM RECEIVED account.
Accounting procedure of amount settled by CGTMSE ADV.21/2010-11 dt.11.05.2010
Introduction of Reconcilable BGL 96218 "CGTMSE Personal Segment Loan Products (PSLP) – revision in
CLAIM RECEIVED" norms and discretionary powers for relaxation/
Whenever CGTMSE releases the first sanction
instalment (75% of the admissible claim) towards The modifications in norms, delegated
settlement of claim in respect of an account covered powers, and relaxation powers approved by Board
under the scheme, the amount has to be held by us for the following products -
separately in a liability account. This can be
1. Home Loan to Residents and NRIs
appropriated to the loan account only at the time of
final closure of the account. The Bank has to 2. Loan for purchase of House sites to both
continue the recovery efforts and the amount Residents and NRIs
realised from the sale of assets or otherwise must 3. IB Vehicle Loan
first be passed on to the Trust. The balance 25%of 4. Ind Mortgage
the admissible claim will be paid on conclusion of 5. IB Rent Encash
recovery proceedings.
are detailed in Annexure I of this circular. The
Procedure for accounting the amount received revised powers for sanction at Retail Banking
towards First Instalment of Claim Segments (RBS) are detailed in Annexure II to this
circular.
• A new BGL – 96218 “CGTMSE CLAIM
RECEIVED” account, has been created with ADV.22/2010-11 dt.13.05.2010
effect from 30.03.2010, which is reconcilable. Modification in procedure of Obtention of Legal
• Branches should keep the amount received on Scrutiny Report(LSR) & Engineer’s Valuation Report
settlement under CGTMSE in BGL 96218 only. (EVR) at Retail Banking Segments (RBS) – Branches to
obtain the Reports instead of RBS.
• On crediting this BGL, branches have to give a
In respect of mortgage related proposals
reference number as follows:
under PSLP, the procedure of obtention of LSR
‘ 4 digit CBS Branch code followed by nine from the Panel Advocate and EVR(s) from Panel
digit loan account number (total digits 13)’ Engineer(s) by the Branches themselves, instead of
at Retail Banking Segments is reintroduced with
• On recovery of any amount, the same should be immediate effect and ensure proper implementation
credited to the respective Loan Account/ of the same.
Protested Bills account. Simultaneously
In view of the above, branches shall take
branches should return an amount equivalent to
care of the following:
the recovery less expenses incurred towards
recovery to the Trust to the debit of BGL 96218 (1) when loan application is received, a credit
(CGTMSE Claim Received account) While interview with the applicant should be held by
reversing a transaction already entered either the Branch. The applicant’s employment status
4 4
 APRIL-JUNE 2010
should be verified. Critical examination and Use of Business Correspondents (BC) - Revised
satisfaction about the ‘Employment Status’ of Guidelines
the applicant, his/her source, continuity, Board has approved the revised guidelines
consistency and sustainability of the income is in engaging Business Correspondents (BCs) by
to be ascertained and recorded. branches. As per the present guidelines the
(2) After ensuring all the required information is following entities are eligible to be engaged as BCs.
furnished in the application, adherence to KYC Individuals Organisations
Norms, Branches shall obtain directly (and not Kirana / Medical / Fair price NGOs/MFIs set up
through any intermediary) Legal Scrutiny shop owners under Societies/Trust
Report and Engineer Valuation Report (both acts
first valuation and second valuation, wherever Public Call Office Operators Societies registered
required) from our Approved Lawyer and under Mutually Aided
Valuer respectively (who are currently on Cooperatives Societies
Acts or the Cooperative
Panel). societies Acts of the
(3) KYC identified at branch level must be States.
revalidated at RBS level as it is one of the Individuals who own petrol Section 25 companies
cardinal principles of the Quality Policy of the bunks
Retired bank employees, Registered NBFCs not
RBS. RBS to complete the processing based on
retired Government accepting public
the LSRs and EVRs obtained and forwarded by employees and retired deposits
branches. teachers
If required, RBS may also call for copies of title Ex servicemen Post offices
Authorized Functionaries of Section 25 companies
deeds for verification and also seek clarification
well run SHGs linked to that are stand alone
directly from Panel Advocate/ Engineer. banks entities or in which
(4) Branch should forward the proposal with NBFCs, Banks, telecom
necessary papers, copy of Legal Scrutiny Report companies and other
corporate entities or
and Engineer Valuation Report etc along with
their holding companies
their recommendations to RBS for further do not have equity
action. holdings in excess of
(5) In order to reduce the turnaround time, if the 10%.
Agents of Small Savings ---
branch foresees any delay in obtention of LSR Schemes of Govt. of India
and EVR, they may forward the proposal alone /Insurance Companies
to RBS for appraisal/processing. Subsequently, Individuals
upon receipt of LSR and EVR, they may
forward the same to RBS, quoting the reference Preferred BCs: Of the entities mentioned above,
number of original proposal. Branches can give preference to the following
ADV.23/2010-11 dt. 14.05.2010
entities viz., Retired bank employees, retired
Government employees, retired teachers, Kirana /
Classification of Export Credit for Agriculture and Medical / Fair price shop owners, Individuals who
Allied activities under Priority Sector own petrol bunks, Public call linked to banks,
According to Reserve Bank of India, loans office operators and Authorised functionaries of
granted by commercial banks for agricultural and well run SHGs
allied activities are eligible for classification under Job role: BCs have to carry out various job roles
priority sector, irrespective of whether the in order to provide complete range of financial
borrowing entity is engaged in export or otherwise. services in the areas allotted to them. Some of the
RBI has also advised that export credit major activities are highlighted below:
granted for agricultural and allied activities may be • Canvassing of “no frills” SB accounts,
reported separately under heading “Export credit to
Regular SB accounts, SHG SB accounts and
agriculture credit” while reporting Priority Sector
Current accounts and facilitating in enrolment
information.
of customers in opening of the accounts.
ADV.26/2010-11 dt. 19.05.2010

5
 Recollect
• Canvassing and collection of fixed deposit where there are no banks and who are hitherto
account including STD/RIP, RD, Variable uncovered. This will supplement the Bank’s effort
Deposit, etc upto Rs.5000/- and facilitating in in ushering in an era of inclusive growth through
enrollment. financial education and activating the No frill SB
• Receipts upto Rs.5000/- and payments upto accounts, most of which are not operated
Rs.5000/- per individual /per day in all regularly.
mapped accounts including receipts and ADV.29/2010-11 dt.24.05.2010
payments in loans. BCs will be allowed to
make total payment upto Rs.50000/- and Implementation of Interest Subsidy Scheme for
receipt upto Rs.50000/- per day. Housing the Urban Poor [ISHUP] – Procedure for
• Identification of borrowers and fitment of claiming Subsidy
activities for small value credit proposals upto
Rs.25000/- . The detailed procedure for claiming interest
• Collection and preliminary processing of loan subsidy under the ‘Interest Subsidy Scheme for
applications including verification of primary Housing the Urban Poor [ISHUP]’ scheme is
information/data. furnished below
• Pre-sanction inspection/Processing and
submission of applications to banks. ¾ Within 7 days of the end of each quarter (June,
• Post-sanction monitoring, Follow-up for September, December and March every year),
recovery in respect of borrowal accounts with branches should submit claim for interest
cut off sanctioned limit collection of subsidy furnishing details of disbursement
Rs.25000/- made under the scheme during the quarter,
• Recovery of principal and of interest in name wise and account wise, to the respective
borrowal accounts sanctioned limits upto Circle Offices(through relevant forms furnished
Rs.25000/- per borrower including NPA in the Annexure).
accounts. ¾ The designated Nodal Officer at Circle Office
• Receipt and delivery of small value will consolidate the subsidy claims received
remittances/ other payment instruments upto from branches in the respective Circle and
Rs.5000/- per remittance/instrument. arrive at the eligible amount of interest subsidy.
• Sale of micro insurance/ mutual fund ¾ The consolidated interest subsidy claim for the
products/ pension products/ other third party Circle in the prescribed format given in the
products. annexure (soft copy as well as the hard copy)
should be forwarded to HO/ Rural Banking
The details of the Job role of the BCs, Department within 10 days of receipt from
operational guidelines, remuneration payable and
branches for onward submission to the Central
payment procedure etc are given in Annexure I to
Nodal Agencies for interest subsidy.
this circular.
¾ The consolidated interest subsidy claim
Branches/Circle offices have to monitor received from the Circles will be scrutinized at
the functioning of the BC closely and carefully. HO/Rural Banking Department and will be
Their performance should be reviewed every submitted to the Central Nodal Agencies (NHB
month and review report to be submitted to Head or HUDCO, as the case may be) within 10 days
Office: Rural Banking Department in the monthly of receipt at Head Office.
reporting format.
¾ The Central Nodal Agency will submit claim to
BC model will enable the branches in Government of India, Ministry of Housing &
rendering services at the door step to the needy Urban Poverty Alleviation within 15 days.
customers who are not able to visit branches for ¾ Government of India will sanction and send the
their regular transactions and it will also provide eligible subsidy amount to the Central Nodal
better customer service by making banking Agency within 15 days of receipt of subsidy
accessible in remote rural areas. claim, who in turn will send the same to the
BC model at present seeks to provide nodal branch of the Bank through E-
banking services to rural people living in centres mode/RTGS/NEFT.
6 6
 APRIL-JUNE 2010
¾ The amount of subsidy received will be credited Modification (Reduction) in Rate of Interest in our
to the respective beneficiary’s loan account Reverse Mortgage Loan Scheme
through C2C by Nodal branch (Royapettah) With effect from 28.05.2010, the rate of
within 24 hours after verification and approval interest for all fresh sanctions under our Reverse
by HO: RBD. Mortgage Loan Scheme has been revised
¾ Circle Nodal Officer should ensure credit of downwards to 9.50% p.a. Fixed (from 10.50% p.a.
subsidy amount to the respective beneficiary’s Fixed).
loan account.
The details regarding monthly annuity for
The subsidy claim formats to be submitted by those who want to avail the lump sum etc. and other
Branches / Circle offices are enclosed as Annexure tables relating to annuity payable according to the
to this Circular. To enable the branches to arrive at rate of interest, property value, etc are given in the
the correct amount of eligible interest subsidy, EMI, Annexure to this circular
etc., an interest subsidy ready reckoner as also the
ADV.32/2010-11 dt.01.06.2010
subsidy claim formats have been ported in our
Bank’s intranet that can be accessed by branches / Implementation of Pilot Weather Based Crop
Circle Offices. Government of India has informed Insurance Scheme (WBCIS) Administrative Instruction
that though the scheme has been launched with for Kharif 2010 season
effect from 01.10.2009, all such loans extended by
The salient features of Weather Based Crop
the branches on or after 26.12.2008 and conforming
to the above criteria will be eligible for inclusion Insurance Scheme (WBCIS) relating to Kharif 2010
under the Scheme. season are furnished below for your immediate
reference.
Separate product codes, as given below,
have been allocated to loans sanctioned under the ¾ WBCIS will be implemented on pilot basis in
scheme: twenty States

5105-0001 – ISHUP (FLOATING)

¾ The Scheme shall compensate anticipated loss
in crop yield resulting from adverse conditions
5105-0002 - ISHUP (FIXED)
of weather parameters like deficit or excess
and the loans sanctioned under ISHUP scheme rainfall.
should be opened under the above product codes
¾ The pilot will be applicable to major Cereals,
only.
Millets, Pulses, Oilseeds and
After crediting the interest subsidy received Commercial/Horticultural crops grown during
in the loan account, branches should make necessary Kharif season.
changes in the EMI field. Branch Managers should
¾ The pilot will be implemented by Agriculture
ensure that lending under the scheme are correctly
Insurance Company of India Ltd. (AIC) and
classified so that the performance of the Bank is
Private Insurance Companies i.e. ICICI-
properly reflected while reporting to various
Lombard General Insurance Company, IFFCO-
Governmental Agencies. As this is one of the
TOKIO General Insurance Company &
priority schemes of Government of India and
Cholamandalam MS General Insurance Co.
included in schemes being monitored at the highest
level. ¾ Areas, where WBCIS will be implemented, will
be notified by the State Governments
Monthly income ceiling has been revised in
concerned.
respect of EWS and LIG as under:
EWS: Existing - Upto Rs.3300/- ¾ Pilot Scheme will be compulsory for loanee
Revised - Upto Rs.5000 per month per household farmers for the crop(s) notified by the State
LIG: Existing - Upto Rs.3301 to 7300/- Government in selected areas(s) i.e., with
Revised - Rs.5001 to Rs.10,000 per month per regard to loanee farmers NAIS stands
household withdrawn and should be covered compulsorily
under Pilot WBCIS.
ADV.31/2010-11 dt.27.05.2010

7
 Recollect
¾ The scheme is optional for non-loanee farmers. Base Rate -- Interest On Loans And Advances
¾ Actuarial rates of premium would be worked Base Rate
out by Insurance companies including AIC The Base Rate system will replace the BPLR
using Standard Premium Rating Methodology system with effect from July 1, 2010.
and rates are capped at 10% for food crops & Applicability of Base Rate
oilseeds. Farmers will actually pay premium for
food and oilseed crops at par with existing rates All categories of loans should henceforth be
of NAIS in Kharif season. Difference between priced only with reference to the Base Rate.
However, the following categories of loans could be
actuarial rates and flat rates in respect of food
priced without reference to the Base Rate: (a) DRI
and oilseed crops shall be shared by Central and advances (b) loans to banks’ own employees (c)
State Government on 50: 50 basis. loans to banks’ depositors against their own
The detailed guidelines are enclosed as annexure to deposits.
this circular and branches shall refer the circular for Since the Base Rate will be the minimum
other salient features. rate for all loans, banks are not permitted to resort to
ADV.33/2010-11 dt.04.06.2010 any lending below the Base Rate. Accordingly, the
current stipulation of BPLR as the ceiling rate for
Increasing the Advance & No. of Accounts under loans up to Rs.2 lakh stands withdrawn. Base Rate
“Micro Enterprises” - Fresh guidelines received from
will be applicable for export credit also.
GoI / RBI.
The Base Rate system would be
According to Reserve Bank of India,
applicable for all new loans and for those old
• Increase in share of Micro Enterprises in MSE loans that come up for renewal. Existing loans
lending to 60% should be achieved in stages based on the BPLR system may run till their
viz. 50% in the year 2010-11, 55% in the year maturity. In case existing borrowers want to
2011-12 and 60% in the year 2012-13. switch to the new system, before expiry of the
existing contracts, an option may be given to
• The Annual growth in the number of Micro them, on mutually agreed terms and the same
Enterprises accounts may, for the present, be may be considered at interest rate applicable to
fixed at 10% instead of 15%. the category of the borrower linked to Base
ADV.35/2010-11 dt.07.06.2010 Rate. Banks, however, should not charge any
fee for such switch-over.
Farm Mechanization – Revision of acreage norms for
eligibility As authorized by our Bank Board,
ALCO in the meeting held on 29.06.2010
Land Holding norms under Farm
approved Base Rate of the Bank at 8.00 %.
mechanisation for Tractor and Power Tiller stands
revised as follows with effect from 03.06.2010 As per base rate guidelines, interest rate for
the borrower will be having the followiing
Existing Guidelines Revised Guidelines
components:
Tractor: Minimum 4 acres of Tractor: Minimum 6 acres of
a) Base Rate
irrigated land (or) 8 acres of irrigated land (or) 12 acres of
unirrigated land (dry land). unirrigated land (dry land). b) Operative Expenses
Power Tiller: 3 acres of Power Tiller: 4 acres of c) Credit Risk Premium
irrigated land (or) 6 acres of irrigated land (or) 8 acres of
unirrigated land (dry land). unirrigated land (dry land).
d) Tenor Premium.
We propose to adopt the risk based pricing
The revised guidelines are applicable for all with introduction of base rate system.
tractor loans to farmers irrespective of the brand and
with / without MOU. Regarding Credit Risk Premium and Tenor
Premium, branches shall refer circular.
ADV.36/2010-11 dt.08.06.2010

8 8
 APRIL-JUNE 2010
For all new accounts and the accounts which This system is open not only for Policies
come for renewal, the Base Rate based interest rate canvassed by us; but also for all policies of HDFC
will be applicable. Proposed Sector-wise interest SLI.
rates are enclosed as annexure CRA.12/2010-11 dt.24.05.2010
For the unavailed sanctioned limits where Online Payment (of Utility Bills, LIC Premia, Mobile
documentation is not completed, Branches should Bills, Fees, Charities / Donations etc) by Registered
obtain modified sanction of interest rate linked to Net Banking Customers having Transaction Password
Base Rate from the sanctioning authority before
Bank has tied up with the following
obtention of documents. Wherever documents are
merchants for facilitating online payments for goods
executed on or before 30.06.2010, the branches may
and services ordered / purchased online.
disburse the loan as per the BPLR linked interest
rates as per documentation. 01. M/s APOnline, a joint venture between Govt
of AP and M/s TCS – for online payment for
ADV.46/2010-11 dt.30.06.2010 the following:
CRA Services Presently Offered by AP Online
Payment of renewal Premiums by direct credit to Category of Payments Area of Coverage*
HDFC SLI’s collection A/c with our Mumbai Fort Tata Indicom Bill
Branch Payments
Vodafone Bill Payments Andhra Pradesh
HDFC SLI has opened a Centralised IDEA Bill Payments
Renewal Premium Collection A/c No. 885210873 Air Tel Bill Payments
with our Mumbai Fort Branch. Hence forth, Air Tel Broad Band/Land
customers may be advised to remit the renewal Line Bill Payments
Electricity Bill Payment Twin cities of Hyderabad,
Premium directly by giving credit to that account,
Service Secunderabad & Ranga
through our branches. reddy Dt.
Procedure to be followed: Water Bill Payment
Property Tax Payments Twin cities of Hyderabad &
1. This system is NOT applicable to Fresh Trade License Renewal Secunderabad
(FIRST) Premium paid along with the Proposal Payments
2. Existing Credit challans will be used for this ICICI Prudential Insurance
Premium Payments
purpose
* Customers can refer the AP Online Portal (mentioned below)
3. Customers have to furnish Policy No. and for latest information on coverage of services.
Name of the Life Assured, in the Challans. https://Secure.aponline.gov.in/CitizenPortal/
4. Cash and cheques can be accepted as per the UserInterface/Citizen/loginForm.aspx
existing rules of the Bank. Please note to select 02. M/s Bill Desk, a unit of Indiaideas.com –
“Charge beneficiary”. for the following merchants covering broad
5. In case of remittance through local cheques, areas such as
Premium should be credited to the A/c only on a. Charity
realization of the proceeds. b. Fee payments
6. Cheques of other Banks payable at outstations c. Mobile payments
NOT to be accepted. d. LIC and BSNL etc.,
7. On realization, Premium A/c to be credited with
The detailed list of merchants is furnished in
the following narration:
Annexure A of this circular.
“By Policy No……………………. of
Mr/Ms…………………………………….. 03. IRCTC: Online payments for purchase of
(Name of Life Assured)” Railway Tickets through Net Banking and
8. Any query from HDFC SLI in this regard ATM-cum-Debit Card.
should be immediately attended to. 04. IndBank Merchant Banking Services Ltd – for
online purchase of Shares.

9
 Recollect
05. Guruvayur Temple : for online payment towards c) Jurisdictions previously publicly identified
booking of difference sevas etc., by the FATF as having strategic AML/ CFT
deficiencies, which remain to be addressed
06. TNEB: Online payments of Electricity Bills as of February 2010: Pakistan,
through Net Banking and ATM-cum-Debit Turkmenistan and Sao Tome and Principe.
Cards.
Branches are accordingly advised to take
Hence branches shall - into account risks arising from the deficiencies in
AML/CFT regime of these countries.
¾ Popularise usage of net banking facility by our
customers by explaining the benefits of online Branches are also advised to note the
payments. contents of the statement given by Financial Action
Task Force (FATF) which is Annexed to this
¾ Provide net banking to the existing customers circular and exercise proper due diligence in
who have not enrolled for net banking. conducting transaction involving these countries and
¾ Promote net banking to the new accounts. if any suspicion is aroused, the same is to be
reported under Suspicious Transaction Report
¾ Contact institutional customers and offer to (STR), to be submitted through respective Circle
collect their dues / payments online by Offices, to “Principal Officer/General Manager
providing suitable payment gateway solution. (IED)”, for further reporting to Financial
CRA.14/2010-11 dt.08.06.2010 Intelligence Unit (FIU-IND), New Delhi.
FX.04/2010-11 dt.06.04.2010
FX
Online submission of ECGC Annual Statements (CPG
Know Your Customer (KYC) Norms / Anti-Money
A2- A to L) through BBMIS templates from the year
Laundering (AML) Standards / Combating of
ended March 2010 onwards
Financing of Terrorism (CFT) – RBI Communication
Twelve statements have now been made
Reserve Bank of India under reference
available on-line in our BBMIS under yearly
DBOD.AML.No. 16477/14.01.034/2009-10 dated
statement menu of HO:ID and all the AD Branches
26.03.2010, contents of which are given below:
& Credit Intensive branches should submit the
It may be observed that the instant Financial above statements through BBMIS only with effect
Action Task Force (FATF) statement divides the from the year ended March 2010.
strategic AML / CFT deficient jurisdictions into
three groups as under: The main objective of the above statement
is to submit our export credit account details to
a) Jurisdictions subject to FATF call on its
ECGC for the renewal of our yearly Export Credit
members and other jurisdictions to apply
countermeasures to protect the international Insurance for Banks ECIB (WT-PC) & (WT-PS)
financial system from the ongoing and policy. ECGC’s ECIB Credit Insurance policy is
substantial money laundering and terrorist renewed on the basis of the details submitted
financing (ML/FT) risks emanating from the through this statement. Hence all branches are
jurisdiction: Iran advised to ensure that all the accounts covered under
the ECGC policy are included in the statement
b) Jurisdictions with strategic AML/CFT
deficiencies that have not committed to an submitted by them without any omission to avoid
action plan developed with the FATF to any rejection of claims by ECGC at a later stage.
address key deficiencies as of February Of the twelve statements, two statements namely
2010. The FATF calls on its members to ¾ CPG A2 – A (190) Packing Credit limit
consider the risks arising from the sanctioned and in force accounts and
deficiencies associated with each ¾ CPG A2 – F (189) Post shipment credit limit
jurisdiction: Angola, Democratic People's sanctioned and in force accounts,
Republic of Korea (DPRK), Ecuador and
are structured in such a way that the account details
Ethiopia.
like Name, Account number, limit in force assets
classification and rating are captured directly from
1010
 APRIL-JUNE 2010
BANCS links. Hence branches have to ensure the the amount delivered will differ from requested. All
following before confirming the above two Branch Mangers and ATM Officers shall bestow
statements. utmost attention in configuring the cassettes and also
while replenishing cash in the ATM.
1. All the eligible accounts are appearing in the
Certain points for ready reference and action at
statement without any omission
the branches, allotted with ATM are given below:
2. The Limit/asset classification details appearing • Cassettes configuration is done as per the
in the statement are correct. Branch requirement. Branch should obtain
3. All other columns viz Account Status, IEC confirmation from Switch for the required
Code, Other Banker details, Details of sister configuration of cassette denominations.
concerns are filled properly. Certificates of configuration need to be
obtained from Vendors both for initial and
FX.10/2010-11 dt. 13.05.2010 subsequent revisions for our record.
GENL • ATM identifies only cassettes and not currency
Recovery of TDS by branches for site work of ATMs notes loaded in it. Loading of correct
denomination needs extra care and attention.
. We are under statutory obligation to deduct Both custodians should verify cassettes and
applicable taxes at source on expenses incurred denomination of notes loaded.
towards the cost of ATM and cost of site preparation
etc. payments. • Test check after installation / every
replenishment is done and confirms delivery of
The costs of ATMs are paid centrally by HO correct notes to avoid excess/short
TMD after obtaining satisfactory installation dispensation. Record of loading of cash under
certificate from branches. Further budget sanctions dual signature to be maintained and should be
are accorded to respective circle offices for ATM made available for Inspectors/Concurrent
site preparation work. The payments for site Auditors on inspection.
preparations work for ATMs are done by the
branches after obtaining financial sanction from the • Non-configured cassettes / empty cassettes may
respective circle offices. On satisfactory completion be kept aside for future configuration.
of the work, payments to the vendors are also done • Strictly adhere to the procedure laid down for
by the branches based on actual measurement and on holding the keys of the ATM.
completion of work duly certified by our approved
engineer. Branches while making payment to the • Do EOD everyday irrespective of cash
vendors have to recover the TDS and remit it to replenishment.
Government by e-payment mode as advised by • Admin Card should be used compulsorily
HO:Accounts Dept. vide Circular No: ADMN:58/ before and after EOD functions in ATMs.
2008-09 dt 31.10.2008.
• Load ATM fit notes in correct cassettes to
GENL.04/2010-11 dt.07.04.2010 avoid erroneous delivery of notes.
ATM - Configuration of Cassettes in different • Claim cash loaded in ATM through ISG
denominations and Loading of Cash software immediately after finishing EOD in
The automated teller machine is designed to ATMs. Keep sufficient cash, Journal Paper, and
deliver the required amount in different Audit paper so as to avoid downtime.
denominations to enable the customer to use the • Any excess cash found in ATM at the time of
notes with easy negotiability. The accuracy in
EOD as compared with the remaining cash
delivering the correct amount in different
printed in the JP obtained at the time of EOD
denominations rests on setting the machine to
should be transferred to ATMSC through C2C
deliver the required notes. This is done by
along with full particulars. Do not credit any
configuring the cassettes with specified
customer’s account regarding ATM complaint
denominations to the switch. The machine
understands the currency note denomination by settlement. This has to be done by ATMSC
identifying the cassettes and if the cassette only.
configuration is not properly done with the switch

11
 Recollect
• Difference in Admin Balance be informed to Branch managers / sanctioning authorities
ATMSC and corrected according to their advice shall allow the claims made by the officers towards
only. local conveyance on daily basis while in outstation
GENL.18/2010-11 dt.15.05.2010 on duty after satisfying themselves about the
reasonableness of claims duly supported by
Bigfix and Symantec Antivirus: Procedures to be vouchers / declaration.
followed by Branches and Circle Offices
HRM.01/2010-11 dt.05.04.2010
Towards centralized management and
automation of Operating System patches and Nodal Officer for Customer Service / Principal Code
Antivirus software updation, Asset and Patch Compliance Officer (BCSBI) and Public Information
Management Solution (Bigfix) has been deployed in Officer under Right to Information Act 2005.
all systems across the bank as part of Enterprise
Wide Security Project. Sri K Natarajan, General Manager (P&D /
MCC) has assumed charge as Nodal Officer for
We had already ported details like Bigfix redressal of complaints / grievances, Principal Code
overview, Bigfix implementation procedure for Compliance Officer for implementation of Code of
branches and Circle Offices etc in Help Desk under Bank’s Commitment to Customers and Public
“ Tools & Trouble shooting >> Bigfix Symantec Information Officer under Right to Information Act
Antivirus” and communicated by way of circulars 2005. Branches have to modify accordingly, in their
and letters. notice board:
The procedures to be followed by Branches Circle Heads have to ensure that the above
and Circle Offices for successful updation of Bigfix information is displayed at a prominent place in the
and Symantec AV in all their nodes/servers are Banking hall of the branches in their jurisdiction
given in the circular.
HRM.13/2010-11 dt.23.04.2010
GENL.19/2010-11 dt.25.05.2010
Grant of Incentives for passing Hindi Examinations –
Rationalisation of Service Charges for Inter City
The quantum of incentive paid to the staff
transactions members who pass the Hindi Examinations on or
Inter-City transaction charges have been after 01.01.2010 has been revised and the details are
rationalised, to align with the electronic remittance furnished below.
charges (RTGS/NEFT) with immediate effect, as
DETAILS For Employees in categories
follows: A & B (Rs.) C & D (Rs.)
Propos Propos
Existing Existing
Amount of Transaction Charges ed ed
Upto Rs.1 lakh Rs.5/- Prabodh Examination of 250/- 2000/- 500/- 4000/-
Hindi Teaching Scheme
Above Rs.1 lakh and less than Rs.25/- Praveen Examination of 250/- 2500/- 500/- 5000/-
Rs.5 lakhs Hindi Teaching Scheme
Rs.5 lakhs and above Rs.50/- Pragya Examination of 300/- 3000/- 600/- 6000/-
Hindi Teaching Scheme
GENL.25/2010-11 dt.07.06.2010 Examinations which are 300/- 3000/- 600/- 6000/-
conducted by the
HRM voluntary Hindi
Organisations and
Reimbursement of Local Conveyance expenses recognized by the GoI
(Ministry of Education
incurred while on Outstation Duty by Officers. and Social Welfare) as
equivalent to or higher
The actual expenses incurred by officers than the matriculation
towards conveyance (on daily basis), while in examination
outstation on duty, have been revised, subject to the Hindi Diploma Course 300/- 3000/- 600/- 6000/-
conducted by Central
following ceiling: Hindi Directorate
Hindi Typing / Hindi 500/- 2500/- 500/- 2500/-
Place Present Proposed Stenography
Reimbursement Reimbursement Examination
In Metro Centres Rs.30/- Rs. 60/- Banking oriented paper 300/- 3000/- 300/- 3000/-
In other Cities Rs.20/- Rs. 40/- in Hindi of IIBF

1212
 APRIL-JUNE 2010
DETAILS For Employees in categories For the details regarding the provisions of
A & B (Rs.) C & D (Rs.)
Propos Propos
the 9th Bipartite Settlement, branches shall refer
Existing Existing
ed ed HO:HRM circular No.29/2010-11 dt.20.05.2010
English Typists English
Stenographers HRM.21/2010-11 dt.13.05.2010
In addition to the 80/-p.m. 160/- 120/- p.m. 240/-
honorarium paid for p.m. p.m.
acquiring proficiency in Salary Revision for Officer Employees governed by
Typing / Stenography in Indian Bank (Officers’) Service Regulations, 1979
Hindi or Regional
language, Hindi incentive
allowance to English Indian Banks’ Association (IBA) has
typists and entered into a Memorandum of Understanding with
stenographers who do
typing or stenography
authorized representatives of the Officers’
work in Hindi respectively Associations on Salary Revision and other issues
in addition to English. concerning service conditions of officers in Banks.
For the purpose of payment of incentives to The Government has conveyed through IBA
be given on passing various Hindi Examinations, the its ‘No Objection’ for the Banks to disburse an
employees have been categorized as under: adhoc amount equivalent to the net arrears of salary
payable to the officers for the period from
Category ‘A’: Employees whose mother tongue is
01.11.2007 to 31.05.2010 as also to continue to pay
Hindi and who can express themselves well in the revised salary and allowances on an adhoc basis
Hindi. from 01.06.2010 to the officers, till such time
Category ‘B’: Employees whose mother tongue is amendments are carried out in the Officers’ Service
one of the following languages: Urdu, Punjabi, Regulations.
Kashmiri or other allied language. One of the salient features of the
Memorandum of Understanding is giving one more
Category ‘C’: Employees whose mother tongue is
option to the officers who were / are in service as
one of the following languages: Marathi, Gujarati,
on 27th April 2010 and are presently covered by the
Bengali, Oriya, Assamese and other allied languages contributory Provident Fund to switchover to
and Sindhi. Pension Scheme.
Category ‘D’: Employees whose mother tongue is The details of the salary revision as per the
any South Indian language or English. MOU entered into between IBA and representatives
For other details please refer the circular. of the Officers Associations are given vide
HO:HRM circulars No. 46/2010-11 dated 16.6.2010
HRM.19/2010-11 dt.08.05.2010
HRM.37/2010-11 dt.08.06.2010
IXth Bi-Partite Settlement - Award Staff
Staff Welfare schemes
Indian Banks Association (IBA) on behalf
1. New Scheme for reimbursement to the
of 46 member banks entered into a Bi-partite
differently abled children of staff member for
Settlement with Workmen Unions on 27.04.2010
purchase of accessories
and all employees irrespective of their Union
affiliation are covered under the settlement. In a. Eligibility : The differently abled children of
terms of the settlement, the salary and allowances all confirmed staff members who are
are revised with effect from 01.11.2007. subscribing to Provident Fund
One of the Salient Features of the IX b. Purpose: For purchase of accessories like
Bipartite Settlement is a separate settlement Calipher Shoes / Crutches / Below Knee
regarding one more option provided to the Staff who
Limb / Wheel Chair / Tricycle and hearing
is in service as on 27th April 2010 and presently
Aid
covered by the Contributory Provident Fund to
switchover to Pension Scheme. c. Availability: Once in their career
d. Amount: Maximum of Rs.5000/-

13
 Recollect
e. Documents to be submitted: Bills supported All the newly recruited staff upto
by Doctor’s certificate carrying the physical 31.03.2010 are required to submit an application
challenge and the need for the accessory. cum irrevocable authority and nomination as given
in Annexure I & II to this circular and start
2. Provision for Eye check up and purchase contributing from the salary payable every month.
of spectacles for employees above 40 years of age:
The newly recruited employees can exercise
The staff members above the age of 40 are
the option for any category related to their cadre,
reimbursed with an amount not exceeding Rs.3000
failing which she/he will be covered under lowest
towards the reimbursement for eye check up and category applicable to their cadre.
purchase of spectacles for employees above 40 years
of age, twice in their career with an interval of at Change of category for Promotees (Officers and
least 4 years in between. The scheme is modified to Award Staff):
permit the reimbursement for three times to the staff The promotee Officers/Clerks .who were
members in their entire career, with the condition confirmed in their promoted cadre as on 30/06/2010
that the interval between any two reimbursements will have to switch over to the corresponding
shall not be less than four years. category in the higher grade .
HRM.38/2010-11 dt.08.06.2010 The promotee Officers/Award staffs are
required to submit their application for the change
Formation of Women Cell at Head Office. and debit authority as per the Annexure – III to this
circular.
An exclusive Women Cell has been formed The membership of GSLI scheme shall
at Head Office on 01.05.2010 to take care of the automatically cease immediately upon ones
special needs of the women employees working at retirement/death/resignation/VRS/termination/
Branches / Offices and for redressal of their dismissal etc from the service of the bank.
grievances. The Cell will function in addition to the
In the case of death during the service
Complaints (Women) Redressal Committee already
period in addition to the accumulated savings
in existence at all Circle Offices and Head Office. portion of the premium amount, the amount of
The following are the members of the insurance cover shall be paid to the deceased
Women Cell formed at Head Office: employees family by LIC through the bank under
this scheme .In the case of death on account of
1. Ms. V. Maya, Chief Manager, HO: Legal Dept. accident the deceased employees family will be paid
2. Mrs Lalitha K.Damodaran, Manager, HO: double the sum assured first by LIC to the extent of
HRM Dept normal cover and later an equivalent amount by the
United India Insurance Co, providing cover for
3. Mrs S. Saraswathy, Clerk/Shroff/Typist, HO: accidental death. The savings portion together with
HRM Dept. the interest as per arrangement will be refunded by
Women employees are free to approach the LIC of India to the retirees and others separated
above Cell for redressal of any grievance. from the Bank.

HRM.44/2010-11 dt.14.06.2010 The monthly contribution paid towards

GSLI will be treated entirely as Insurance Premium
Group Savings Linked Insurance Scheme for and become eligible for the Tax Relief under Section
Officers/Award staff- Enrollment for new recruits and 80C of Income Tax Act/Rules. The proceeds of the
option to promoted staff members Policy are also exempted from Income Tax.
All the newly recruited Award Staff as well HRM.50/2010-11 dt.29.06.2010
as Officers are required to become members of The
Group Savings Linked Insurance Scheme (GSLI) 9th Bipartite Settlement - Single Window Operator – A
scheme compulsorily.
The promoted staff (Officers and Clerks), The 9th Bipartite settlement allows the
who were confirmed in their respective cadre as on clerical staff designated as Single Window Operator
30/06/2010 have to switch over to the corresponding “A” to do the following additional duties:
category in the higher grade.
1414
 APRIL-JUNE 2010
Sl No Transaction Prescribed ⇒ The Operating Profit of the Bank has
Limit registered an increase of 33.64% to
1 Passing and cash Payment of all Rs 10000/-
Rs.2,747.35 crore as against Rs.2,055.83
cheques / withdrawal forms /
banker’s cheques / gift cheques crore as at March 31, 2009.
2 Clearing and Transfer cheques, Rs 15000/- ⇒ The Net Profit for the year has grown up by
vouchers (whether credit or debit) 24.87% to Rs.1,554.99 crore as against
3 Receipt of cash Rs 15000/- Rs.1245.32 crore as at March 31, 2009.
To facilitate the clerical staff to perform ⇒ The Bank’s Gross NPA reduced to 0.81%.
these additional duties, capability level “6” has been As on March 31, 2010, the Net NPA stood
parameterised in our CBS system. at 0.23%.
The Branch Manager is the competent ⇒ Earning per share and Book Value per share
authority to increase the capability level from “5” to as of March 31, 2010 improved to Rs.35.09
“6” for the clerical staff at his Branch depending and Rs.154.66 from Rs.27.96 and Rs.127.52
upon the need. as at March 31, 2009, respectively.
HRM.52/2010-11 dt.29.06.2010 ⇒ Capital Adequacy Ratio was at 12.16% as
per Basel I and 12.71% as per Basel II
MD/ED
ADMIN.07/10-11 dt.12.05.2010
Appointment of Shri T M Bhasin as Chairman and
Managing Director of our Bank Review of Cash Limit for Cash in Transit
Shri T.M.Bhasin has assumed charge on As per existing Policy of our Bank, all
01.04.2010 as Chairman and Managing Director of remittances exceeding Rs. 50 lakhs upto Rs.5 crores
our Bank in terms of Notification issued by should be accompanied by atleast 2 Armed Guards.
Government of India, Ministry of Finance, All remittances above Rs.20 lakhs and upto Rs.50
lakhs should be accompanied by atleast 1 armed
Department of Financial Services, New Delhi.
guard. For remittances upto Rs.20 lakhs it may not
MD/ED.2/2010-11 dt.01.04.2010 be necessary to provide an armed escort. However,
recently, most of our Circles requested for
ADMIN enhancement of the upper limit as heavy cash
Fourth Annual General Meeting of the Bank balances being accumulated in the Branches were
both a security risk and loss to the Bank.
The Fourth Annual General Meeting of the Board has reviewed the cash limit for cash in
Shareholders of the Bank was held on Thursday, the transit keeping in view of the operational
June 10, 2010 at IMAGE, Chennai. requirement of our Branches in the field, and
approved limits for escorting of cash as follows -
During the year 2009-10, the Bank
continued its sustained growth in Revenues, (a) For remittances upto Rs.40 lakhs it may not
be necessary to provide an armed guard.
Operating Profit, Net Profit and business and the
total global gross business of the Bank crossed (b) All remittances above Rs.40 lakhs and upto
Rs.50 lakhs should be accompanied by
Rs.1,50,000 crore mark to Rs.1,50,886 crore as
atleast ONE armed guard.
compared to Rs.1,24,413 crore as on March 31,
2009, registering a growth of 21.28%. Few other (c) All remittances exceeding Rs.50 lakhs and
upto Rs.500 lakhs should be accompanied by
important highlights of performance of the Bank
atleast TWO armed guards.
during the year 2009-10 are given below:
Board reiterated the need to provide
⇒ The total Global Deposits of the Bank rose
additional security in vulnerable areas over and
by Rs.15,646 crore to Rs.88,228 crore from
Rs.72,582 crore as at March 31, 2009, with above the limits prescribed above.
a growth of 21.56%. In view of the above, the Orders issued by the
⇒ The total Gross Advances increased by local Law Enforcing Agencies / District Authorities
Rs.10,827 crore to Rs.62,658 crore from / State Government will be adhered to while
Rs.51,831 crore as at March 31, 2009, carrying out the cash remittances. In such cases the
registering a growth of 20.89%. local Orders will prevail upon this Circular.

15
 Recollect
Cash transportation in North Eastern Region In respect of the following clauses viz. (A)
should be done as per the local Orders prevailing. to (H) [which is given in the circular], the basic
This revised cash limit for cash in transit will not be cover available is Rs.10.00 crore (Rupees Ten crore
applicable to North Eastern Region. only), for the Bank as a whole.
ADMIN.12/2010-11 dt.08.06.2010 Additional cover available in respect of
Banker’s Indemnity Policy for the Financial Year 10-11 Clause A (loss on premises) is Rs.30.00 crore and in
respect of Clause B (loss in-transit) is Rs.10.00
The Banker’s Indemnity Policy for the crore.
financial year 2010-11 has been renewed with
Branches to be guided with regard to the
The New India Assurance Company Limited,
Divisional Office:710800, Risks covered, important features of the policy,
Ratna Building, 372, T.T.K. Road, Exceptions, Claim procedures to be followed/
Alwarpet, Chennai – 600 018. Maintenance of records and Clarifications/ Special
Phone: 23456795/ 23456796 instructions as given in the circular.
Fax: 23456794, E-Mail: niaco800@vsnl.net
Branches that have claims pending for
The new policy number is 710800/46/10/
settlement are instructed to follow-up with the
62/00000005.
Insurance Company concerned for appointment of
Branches should mention the above policy surveyor, completion of survey and settlement of the
number whenever claims are reported to the above
insurance company during the financial year 2010- claims by submitting the copy of documents/papers
2011. This policy covers losses for the period as required by the Insurance Company/Surveyor.
01.04.2010 to 31.03.2011 and also for losses Wherever Branches experience any difficulty for
occurred on or after 01.04.2008 and discovered getting settlement after fulfilling all the formalities,
within two years from date of loss. they may inform HO: Accounts Department, to
The policy covers losses at our Banking enable them to take up at appropriate level in the
Service Centres also with effect from 06.05.2008 as Insurance Company.
detailed in the circular elsewhere. However losses
upto 31-03-2008 (i.e. date of actual loss is prior to ADMIN.16/2010-11 dt.15.06.2010
01.04.2008 but discovered during the current year)
are not eligible for any cover as our policy for that Though due care has been taken in the preparation of
period was with The Oriental Insurance Company Recollect, the version given in the circular is final.
Ltd., D.O. VIII, Chennai-7, who were our insurers
for the years 2006-07 and 2007-08 and the Compiled by HO: O&M Division
retroactive period has also expired on 30.09.2008.

1616
 a Volume 24 Issue 1

For Private Circulation Only

April – June 2011 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

CONTENTS OF THIS ISSUE

Cir No Date Subject Pg
11 20.04.11 Return of Dividend Warrants /
Cir NoDate Subject Pg Interest Warrants for want of
DEP 08.04.11 Opening Staff Accounts 08
02 payee's signature on the reverse of
02 the instruments
09 03.05.11 Interest Rates on S B Deposits 02 20 28.04.11 Display of timings for RTGS / NEFT
11 12.5.11 Restriction in the Usage of 08
02 transactions
Withdrawal Slips at Host Branches 25 09.05.11 Database maintenance of
ADV 09.04.11 Central Electronic Registry to avoid 08
pensioners
07 multiple loans against same 03 40 17.06.11 Collection of ESI contributions of
security 08
employers by branches
08 11.4.11 Categorization of activities under FX 06.04.11 Agreement with Weizmann Forex
Manufacture or Service under the 03 02 Ltd for money transfer through 09
MSMED Act 2006 Western Union–Revised procedure.
12 26.4.11 Clarifications regarding IND SME 03 18.04.11 Country Risk Management Policy –
SECURE and IB Doctor Plus 04 Changes in the risk rating of 09
Schemes countries effective 01.04.2011
16 05.05.11 Revision in B P L R 04 06 21.04.11 Service Tax on conversion of
17 05.05.11 Review of Base Rate 04 09
foreign currency transactions
23 06.05.11 Financing receivables of Wind 09 24.05.11 Migration of existing accounts and
Power suppliers and Financing opening of fresh accounts falling 09
04
against the security and cash flow of under provisions of FCR Act, 1976.
unencumbered wind mills GEN 01.04.11 Pension related recoveries by
24 11.5.11 Introduction of Revised Educational 09
05 01 branches – Credit through C2C
Loan application 10 25.04.11 Endorsing copies of letters,
25 11.05.11 Housing Loan limit under Priority e-mails replies by Officials at
05
Sector Branch/ Zonal level to the 10
29 16.05.11 Procedure to send Confirmation of addresses/e-mail of Governor / Top
Balances & Scrutiny of Financial 05 Management of RBI
Statements 17 16.05.11 RBI’s Approach Paper on Automatic
30 16.05.11 Take over of Borrowal accounts 10
05 Data Flow from Bank to RBI
from other Banks 19 25.05.11 Revised Guidelines on Submission
36 25.05.11 Documentation - linking to Base of Suspicious Transaction Report
Rate on Renewal of existing 06 (STR) – Implementation of IBA 10
facilities with BPLR based system recommended 88 new AML
38 28.05.11 Automation of ARC transactions 06 Scenarios
44 08.06.11 OTS Policy for Farm 22 31.05.11 Settlement of Failed ATM
06
Mechanisation / Tractor Loans Transactions & Payment of 11
47 13.06.11 Modifications in IB Star Rice Mill 07 Compensation
48 16.06.11 Restructured Advances -- 25 13.06.11 NPA Management – Assignment of
07
Additional provision requirement NPAs to Asset Reconstruction
52 23.06.11 IB Swarna Mudra - Revision of Companies – Continuation of 11
07 SARFAESI / pending suits and filing
Notional Liability Amt for Gold Coins
CRA 06.04.11 PAN Drive for Online view of 26 AS of suits – Formats to be used.
07
03 (Tax Credit Statement)
29 24.06.11 Audit Committee of the Board
05 12.4.11& Interbank Mobile Payment Service directions to include one Pensioner
08
36 07.06.11 (IMPS) as member of the Committee in
06. 12.04.11 Customer Grievance Redress 11
Branches where large number of
through SMS with keyword 08 pension accounts are handled.
Complaint
 Recollect
Cir No Date Subject Pg Æ “Date of Birth” field is mandatory to get the
30 30.06.11 Assigning Threshold Limit for “Senior Citizen” benefit in addition to “Staff
11
Accounts rate” benefit.
HRM 01.04.11 Nodal Officer for Customer DEP.02/2011-12 dt.08.04.2011
01 Service /Principal Code
Compliance Officer (BCSBI) and 11 Interest Rates on Savings Bank Deposits
Public Information Officer under
Right to Information Act 2005 According to the directives of Reserve Bank
18 19.05.11 Interest on Staff Provident Fund of India to increase the interest rate on Savings Bank
Accounts and Loan against PF / 12 Deposits from 3.50 % to 4.00 % per annum, upward
RWPF loan. revision on rate of interest to 4.00% per annum on
20 25.5.11 Modification in Nomination of Domestic Savings Bank Deposits, Ordinary NR
Disciplinary Authority / Concurrent Savings Bank Deposits [ NRO ], Non Resident [
Discipline Authority / Appellate 12
External ] Savings Bank Deposits [NRE ] and
Authority / Reviewing Authority for
Officers Savings Bank Accounts opened under Capital Gains
21 01.06.11 Categorisation of Branches as on Scheme 1988 comes into force, with effect from
12 May 03, 2011.
31.03.2011
ADM 09.04.11 Processing of Electronic Clearing DEP.09/2011-12 dt.03.05.2011
03 Services (RECS) - Checking /
12 Restriction in the Usage of Withdrawal Slips at Host
verification of ECS Credits / Debits
after posting. Branches
05 19.04.11 Inter Branch / Bank movement of Transactions through withdrawal slips
12
Cash (accompanied by pass book) in SB accounts is
08 26.04.11 Renewal of Standard Fire and restricted to Home Branch alone and Cash payments
Special Perils Policy of the Bank’s 13
up to Rs.10000/- (both SWO “A” & “B”) and
Own Buildings
14 30.05.11 Banker’s Indemnity Policy for the
Transfer transactions up to Rs.15000/- and
13 Rs.20000/- by SWO ”A” and SWO ”B” respectively
Financial Year 2011-12
17 03.06.11 Fifth Annual General Meeting of the can be passed / authorised by SWOs.
13
Bank However, for transactions exceeding the
20 15.06.11 Debiting of Penalties imposed by
RBI - Opening of New BGL Head 14
above limits and up to their delegated powers for
96397 (Reconciliable) – SR-II both cash and transfer as SWO, they shall
24 27.06.11 Amendment to Manual of pass/authorize, only after BM/ABM manually
14 instruct in writing on the withdrawal slips, with
Instructions XIII – Compliance 2009
instructions “Please Pass (subject to availability of
DEPOSITS clear balance)” under his full signature and date.
Opening Staff Accounts
Where a transaction exceeds the SWO
To facilitate the opening of accounts under
powers, Special Assistant/Officer having the
staff products correctly, a modification in the
procedure for creating Customer Information File requisite capability level is authorised to approve /
(CIF) is given under: pass the transaction.

Æ Products under “Staff” category will be Cash payment against withdrawal slip
available only for “Staff” type CIFs. (accompanied by pass book) to third party is
restricted to Home Branch alone up to a limit of
Æ Primary CIF (CIF number of the customer
Rs.1000/-. Payment beyond this limit is permitted
used for opening the account) should be a
only under exceptional circumstances based on the
Staff, to get the “Staff rate” benefit.
merits of the individual case and this is to be
Æ In Joint accounts (E or S, A or S, F or S and authorised by the Branch Manager.
Joint) the primary CIF should be the CIF of
staff. Cash Payment against Withdrawal Slip /
Transfer transaction against Withdrawal Slip at a
Æ In minor accounts operated by Staff as “Father
and Guardian” or “Mother and Guardian” are HOST BRANCH are strictly prohibited, even when
not eligible for “Staff rate” unless the first accompanied with the pass book for Self as well as
name should be staff and the second name can Third party payments.
be a minor or any other customer. DEP.11/2011-12 dt.12.05.2011
2 2
 APRIL-JUNE 2011
ADVANCES 7. The particulars of transactions registered with
Central Electronic Registry to avoid multiple loans Central Registry shall be kept open for
against same security - Reg. inspection to any person through website during
business hours on payment of requisite fee.
The details of steps taken by IBA with
regard to Central Electronic Registry, to avoid 8. The necessary fee for each of such aspects viz.
multiple loans against same security, are outlined creation / modification / satisfaction of charges /
hereunder: securitisation / Asset reconstruction transactions,
The Central Registry of Securitisation Asset condone delay charges, fee for inspection and
Reconstruction and Security Interest of India access etc. have been specified by the Central
(CERSAI) has been incorporated as a Company for Registry and the same has been placed as an
the purpose of operationalising the Central Registry, Annexure to this circular.
to facilitate the lenders – Banks and FIs to have an Branches shall refer this circular for more
avenue to scrutinize charges created over the guidelines.
securities offered. ADV.07/2011-12 dt.09.04.2011
Notification in this regard has been issued Categorization of activities under Manufacture or
by Central Govt. which has come into effect from Service under the MSMED Act 2006
31.03.2011. Central Govt. has also prescribed the
The Ministry of Micro, Small & Medium
Central Registry Rules. Initially, it is proposed to
Enterprises, Government of India, New Delhi on
extend the registration system to “Mortgage by
Categorization of Activities under Manufacturing or
deposit of title deeds” and that too prospectively.
Service, under the provisions of MSMED Act.2006
Guidelines to the branches: informed as under:
1. With effect from 31.03.2011, all EMs created by
A) Activities considered as Manufacturing:
deposit of title deeds have to be mandatorily
registered with the Central Registry which is in i) Seed Processing (for Genetic
addition to existing legal provisions for enhancement) (involving collection of
stamping and registering of charges as per germplasm, cleaning, gravity separation,
applicable local stamp / registration laws. chemical treatment etc)
2. The object of the Registration System is to ii) Composite unit of Poultry with Chicken
compile data relating to secured transactions (Meat) Processing (Poultry Farm without
which can be searched by any person on Chicken (Meat) Processing shall not be
classified either as Manufacturing or as
payment of fees prescribed.
Service Enterprise because this is a
3. All our branches have to make search with the
Farming activity)
registry for ascertaining whether the property is
free from encumbrances or whether there are B) Activities considered as Service
any other charges subsisting over the property, i) Medical Transcription Service,
before advancing any loan. This will not in any ii) Production of T.V serial and other T.V
way dilute or do away with the present Programmes,
requirement of obtaining EC / legal opinion/visit
iii) Ripening of Raw-Fruits under controlled
to the property etc.
conditions, (Subject to norms prescribed
4. Under Central Registry Rules 2011, necessary
by Food Safety and Standards Authority
forms for registration of mortgage and
of India, Ministry of Health and Family
Securitisation / Asset Reconstruction
Welfare, GoI)
transactions have been prescribed. The same
may be made use of by branches. iv) Service Rating Agency (Rating and
5. The system is operated online and therefore grading services across sectors based on
accessible throughout India and from any part of set methodology and standards).
India. CERSAI will be providing User IDs and In view of the above, branches shall verify
Passwords to the Administrators designated by the advance portfolio thoroughly and classify all the
the Bank.. eligible accounts which are falling under the above
6. Under Sec.23 of SARFAESI Act, particulars of said categories properly under MSME sector and
charge creation to be filed with Central Registry
required changes shall also be made in the CBS.
within 30 days of date of creation of charge /
mortgage. ADV.08/2011-12 dt.11.04.2011

3
 Recollect
Clarifications regarding IND SME SECURE and IB Position with regard to coverage vis-à-vis
Doctor Plus Schemes exposure under the scheme is illustrated by way of
Type of securities and margin under IND an example in the Annexure to this circular. Product
SME Secure and IB Doctor Plus Schemes are made code (1441-1651) has been assigned for Base Rate
more explicit as under: linked working capital accounts under the scheme.
IND SME SECURE Scheme IB Doctor Plus
Types of Hypothecation of stocks, work in process, Security Loans upto Rs. 10 lac: Hypothecation of
securities finished goods, book debts, plant & assets created out of loan amount. No
machinery (as applicable) collateral / third party guarantee and to be
Factory land: Factory land, either freehold covered under CGS of CGTMSE
or lease hold. In case of lease hold Loans above Rs. 10 lac: Hypothecation of
properties, the same should be in select assets and LIC policy assigned in favour of
centres like metropolitan cities, State
the bank or other collateral security, so as to
capitals, District Head quarters, approved
ensure compliance with Loan Policy
Industrial Estates etc. where local
development authorities of State / Central guidelines in respect of Security Coverage.
Governments have leased out such ADV.12/2011-12 dt.26.04.2011
properties on long term lease (residual lease
period should not be less than 25 years), Revision in Benchmark Prime Lending Rate
with mortgage rights / permission to the
Our Bank’s ALCO has approved the
lessee from the lessor.
increase of Benchmark Prime Lending Rate by 50
Factory buildings: Factory buildings owned
by the borrower / guarantor Freehold
basis points (bps) from 13.75% to 14.25% per
residential plots and / or residential annum. This revision will be EFFECTIVE FROM
commercial buildings owned by the 05.05.2011 for the advances linked to BPLR. All
borrowers / lease hold properties of State other existing guidelines on spread, tenor, re-set
Govt. development authorities like MMDA, clause for fixed Rate, etc., for the BPLR linked
DDA, CMDA, NOIDA etc with mortgage advances shall continue.
rights / permission to lease from the lessor. ADV.16/2011-12 dt.05.05.2011
No agricultural land should be taken as
security for this purpose. Review of Base Rate
Properties taken for EM should be in Our Bank’s ALCO approved revision of Base
possession of the mortgagor and should not Rate from 9.50% to 10.00% Per Annum with
be leased out to third parties. A suitable effect from 05.05.2011. There will be no change in
undertaking to be obtained.
spread/ tenor premium and other guidelines
Value of RBI bonds, NSC and residual value except specifically exempted by respective
of plant & machinery shall be accepted as
departments. Consequent to the revision of base
collateral security subject to that the method
of valuation of P&M is based on distress
rate, Interest rates for all floating rate accounts other
value and should be assessed every year. than exempted category will increase by 0.50%.
Margin 25% on stocks and book debts ADV.17/2011-12 dt.05.05.2011
25% on plant & machinery 1. Financing receivables of Wind Power suppliers
10% cash margin on NFB facilities 2. Financing against the security and cash flow of
30% margin on building unencumbered wind mills for any bankable
75% to 150% coverage of Bank exposure by proposal
way of security of fixed assets and / or Windmills are installed on a standalone
properties as mentioned above.
basis as a means of investment considering the tax
Where Term Loan facilities are outstanding, benefits and income generation. The wind energy
the liabilities under Term Loan may be first suppliers are raising bills on Electricity Boards on
deducted from the value of securities (P&M,
monthly basis. Bills are settled over a period of time
L&B), keeping 25% / 30% margin, as the
varying from 45 days to 12 months depending upon
case may be, and the balance may be
reckoned while fixing security coverage for the cash flows of Electricity Boards. Considering
Bank exposure / pricing. the time taken for settlement of the bills by
4 4
 APRIL-JUNE 2011
Electricity Boards, there is an opportunity for the Housing Loan limit under Priority Sector
Bank to lend in the form of bill financing.
According to the instructions of Reserve
Further, it is gathered that sizeable number Bank of India, Housing Loans up to Rs.25 lakh
of windmills are debt free and entrepreneurs are irrespective of location to individuals for purchase /
willing to offer these unencumbered windmills as construction of dwelling unit per family, excluding
security to the Bank for setting up fresh ventures. loans granted by banks to their own employees are
This forms another avenue for our Bank to improve eligible for classification under priority sector. The
our lending. To mobilise new business, two above change will be applicable to housing loans
structured schemes have been designed in sanctioned on or after April 1, 2011.
consultation with Zones viz 1) Financing
receivables of Wind Power suppliers 2) Financing ADV.25/2011-12 dt.11.05.2011
against the security and cash flow of unencumbered Procedure to send Confirmation of Balances &
wind mills. Detailed guidelines are given in Scrutiny of Financial Statements
Annexure to this circular.
Branches should comply with the below
ADV.23/2011-12 dt.06.05.2011 given RBI directions with regard to Confirmation of
Banlances -
Introduction of Revised Educational Loan application
In the present scenario, tracking of (i) branches should send confirmation balances
students, close monitoring and continuous in deposit and advances accounts of their
entities/ customers directly to the respective
follow up of educational loans are needed to
auditors when called for and
maintain the asset quality of the educational
loan portfolio. (ii) as a part of strengthening the credit
Bank’s present educational loan assessment / monitoring framework of
Banks, Branches should ensure that the
application format has been revised
financial statements of borrowers are
incorporating some additional columns for
reviewed diligently.
collecting the following information:
ADV.29/2011-12 dt.16.05.2011
1. A table which denotes the discipline for
which the loan is required. Take over of Borrowal accounts from other Banks
2. Minority details – to collate and report According to Reserve Bank of India
correct information on minority applicants branches shall adhere to the following points while
3. Details of study – affiliation status of the taking over the borrowal accounts from other Banks.
college, duration of the course etc. Apart from complying of the take over policy of our
Bank, branches shall ensure the following RBI
4. More information about the employment of
guidelines,
the co-applicant/ guarantor
5. Details of the nearest bank to the residence 1. credit requirements of the borrowers are
of the student independently assessed by the branches
6. Details of existing loan accounts availed by while taking over accounts from other
the applicant’s family members Banks
2. formalities, such as, fresh documentation,
7. Name of two persons known to the applicant
transfer of securities etc., between the
as reference
transferor Bank and the transferee Bank are
8. Consent of the student for cover under expeditiously completed and
group insurance scheme 3. credit report obtained by the branches from
9. Consent of the applicant for disclosure of the transferor Bank should contain the
credit information adverse features, if any, observed by the
10. An acknowledgement format for handing transferor Bank.
over to the applicant. If we are the transferor Bank we have to
The revised educational loan application is specifically indicate the adverse features, if any,
enclosed as annexure to this circular. observed, in the credit reports issued by us.
ADV.24/2011-12 dt.11.05.2011 ADV.30/2011-12 dt.16.05.2011

5
 Recollect
Documentation - linking to Base Rate on Renewal of 1. Name of the Policy
existing facilities with BPLR based system. OTS Policy for Farm Mechanisation
The Base Rate system would be applicable 2. Coverage/ Eligibility
for all new loans and for those old loans that come The OTS policy is exclusively for
up for renewal. Existing loans based on the BPLR agricultural farm mechanization loans as outlined
system may run till maturity. For all new accounts hereunder:
and the accounts which come for renewal, the Base i. All Farm Mechanisation loans which were
Rate based interest rate is applicable. NPA as of 30.06.2010.
According to our Manual of Instructions - ii. All tractor loans which were
XVI on Documentation 2008 – rescheduled/rephrased before 30.06.2010
and on being classified as NPA
“so long as the conditions of sanction
subsequently.
remain the same and D-11 is being
iii. Tractor loans which were disbursed before
obtained, there is no need to obtain
30 06 2010 but slipped to NPA category
fresh documents (including DPN) for
subsequently
renewal of facilities”. 3. Minimum Recoverable amount (MRA)
Thus, so long as the terms and conditions of and the sanctioning authority
sanction remain the same, there is no need to obtain i. Branch Managers irrespective of scale:
fresh documents (including DPN) for renewal of Book Balance as on date of NPA
facilities. But, as Base Rate based interest rate will ii. Zonal Managers. : 90 % of the Book
be applicable, on renewal of limits, (which were Balance
earlier under BPLR based system) branches shall iii. General Managers at HO: 75% of the Book
obtain an Undertaking letter as Annexed to this Balance.
circular, provided there are no other changes in the 4. Appropriation of Subsidy
existing limit, security etc.,
Extant guidelines issued from time to time
ADV.36/2011-12 dt. 25.05.2011 shall be followed while appropriating the subsidy
Automation of ARC Transactions under Government sponsored Schemes. The Book
balance for the purpose of OTS will be book balance
To find out a permanent solution for the net of subsidy eligible for appropriation.
existing practice of passing manual entries for the
second leg of transactions on the same day of 5. Other Term loan/crop loan of the same
recovery made for a particular ARC account, a farmers
temporary solution for automation of ARC If there are other term loans/crop loans of
transactions has been introduced by PO. The the same farmers who availed tractor loan, powers
document for modified accounting procedure is delegated for OTS settlement for the respective
attached as Annexure to this Circular. loans can be exercised and a comprehensive
All manual transactions will be handled in settlement reached by the appropriate sanctioning
EOD programme by Project Office and branches authority.
need to take care of the following only: 6. Period of validity
1. Debit ARC Collection account and Credit the Valid till December 2012.
ARC Loan/ODCC account for the Write 7. Implementation
off/Waiver Portion (if any) before closure of the i. The provisions of this OTS policy should be
loan. informed to the farmer loanees who will be
2. SHOULD NOT VOUCH for any other entries. told clearly that such a concessional
Once permanent solution Write off/Waiver treatment is available only for those coming
module is introduced, the branches need not carry forward to repay the entire amount before
out any manual vouching for ARC transactions. December 2012. All the loanees should be
ADV.38/2011-12 dt.28.05.2011 approached personally by the branch level
staff for sensitizing the farmers of the
OTS Policy for Farm Mechanisation / Tractor Loans special concession available for a limited
Board has approved an OTS Policy for period.
Farm Mechanisation/Tractor Loans as follows as
ii. For continuing the Agricultural operations,
one time measure:
branches can consider eligible crop loans as
6 6
 APRIL-JUNE 2011
per extant guidelines as denial of crop loans Some examples are given in the Annexure to
will drive farmers to other agencies. this circular. Based on the restructured template
Branches shall refer this circular for further data submitted by the branches, the particulars as per
guidelines / instructions. the Format (I) and (II) attached to this circular herein
will be pushed to the branches by CDC as at the end
ADV.44/2011-12 dt.08.06.2011
of every quarter. The Branches selected for quarterly
Modifications in Structured Loan Product - IB Star review should obtain auditor’s certificate as per the
Rice Mill Formats.
Certain modifications were approved in Branches need not make any provision at
order to make the loan product IB Star Rice Mill their end. The Auditor signed certificates should be
more customer-friendly. Gist of the changes in the sent to Zonal office/HO: Credit division. Zonal
product features are as under: office has to consolidate the data for the Zone
1. Rate of interest has been fine tuned so as to (including non-audit branches) and submit the
be competitive with other banks. statement to HO: CREDIT for consolidation and
2. Norms relating to collateral security have submission to HO accounts for arriving at the
been relaxed for accounts with combined provision requirements.
rating of BBB and above.
3. Requirement of CMA data is waived for ADV.48/2011-12 dt.16.06.2011
accounts with limits upto Rs.1 crore. IB Swarna Mudra- Revision of Notional Liability
4. Method of Assessment has been made more Amount for Gold Coins
flexible.
5. Need to ensure compliance with close In order to keep this Notional Rate in line
monitoring guidelines is underlined to with the prevailing market price of gold, Notional
ensure Standard Asset quality. Rate has been revised from the existing Rs 825/- per
6. Complete details of which are given in Gram to Rs 2300/- per gram, applicable from 1st
Annexure to this circular. July 2011.
ADV.47/2011-12 dt.13.06.2011 Branches shall apply this new Notional Rate
of Rs 2300/- per Gram for the sales / transfers
Restructured Advances -- Additional provision effected and also note to show the balance of gold
requirement
coin stock held at this new notional rate only.
Reserve Bank of India as per Monetary ADV.52 /2011-12 dt. 23.06.2011
Policy Statement for the year 2011-12, decided to
enhance the provisioning requirements on certain CRA
categories of non-performing advances and PAN (Permanent Account Number) Drive for Online
restructured advances as follows: view of 26 AS (Tax Credit Statement)
1) Restructured accounts classified as Online view of Tax Credit Statement (Form
standard advances will attract a provision 26AS) of taxpayer is also available to net banking
of 2 per cent in the first two years from the account holders of our Bank as we have registered
date of restructuring. In cases of moratorium for the same with National Securities Depository
on payment of interest/principal after Limited (NSDL), for the benefits of the tax payers.
restructuring, such advances will attract a
To avail this facility, the PAN holder is
provision of 2 per cent for the period
required to have net banking account with our bank,
covering moratorium and two years
wherein view of Tax Credit Statement (Form 26AS)
thereafter (as against existing provision of
has been made available to PAN holder which is
0.25-1.00 per cent, depending upon the
mapped to that particular account.
category of advances); and
Branches should obtain the PAN number of
2) Restructured accounts classified as non-
each of the Net Banking Account holders and link
performing advances, when upgraded to
the same to the respective CIF. Branches shall send
standard category will attract a provision of
SMS to the customers focusing on `net banking
2 per cent in the first year from the date of
users` who have not yet availed the online view
upgradation (as against existing provision of
facility and prompt them to use this facility.
0.25-1.00 per cent, depending upon the
category of advances). CRA.03/2011-12 dt.06.04.2011

7
 Recollect
Interbank Mobile Payment Service (IMPS) nature, shall be directly dealt with by Customer
Service Cell. Complainants will be charged for sms
Interbank Mobile payment Service (IMPS)
as per plans with their respective Service Providers.
is an interbank electronic fund transfer service,
within and outside the bank, through mobile phones. CRA.6/2011-12 dt.12.04.2011
The transactions can be done only during the Return of Dividend Warrants / Interest Warrants (D/W /
working hours of the RTGS system. National I/W) for want of payee's signature on the reverse of
payment Corporation of India (NPCI) is the nodal the instruments
agency for IMPS. IMPS facilitate customers to use
According to RBI and IBA guidelines
mobile instruments as a channel for accessing their
branches shall
bank accounts and perform interbank fund transfers 1. Not return the D/W / I/W for want of
in a secured manner with immediate confirmation signature of the payee on the reverse unless
features. specifically insisted by the issuing company.
This facility is provided by NPCI through its 2. Advise their corporate customers not to
existing NFS switch. At present, IMPS is restricted insist on payee’s signature while issuing the
to interbank transactions, by which one can pay the D/W / I/W by incorporating suitable clauses
grocery bill to the shop owner through mobile, in the agreement to be entered with them.
provided both are registered IMPS users with their CRA.11/2011-12 dt.20.04.2011
respective banks. Similarly, one can pay a taxi fare
to the taxi driver, directly through IMPS. So, IMPS Display of timings for RTGS / NEFT transactions
paves the way for all kinds of payments through All the branches shall display the timings for
banks from a mobile handset. RTGS / NEFT transactions prominently in the
According to RBI guidelines, a customer banking hall / notice board / banners as per the
can transact up to Rs.50000/- a day through IMPS, directions of RBI, as below:
Product Days Customer Inter-bank
provided he / she is using end-to-end encryption
transactions transactions
(provided by the bank). Transactions up to Rs.5000/- RTGS Monday to 9.00 AM to 9.00 AM to
a day can be facilitated by banks without end-to-end Friday 4.30 PM 6.00 PM
encryption. Saturday 9.00 AM to 9.00 AM to
The charges for funds transfer through 1.30 PM 3.00 PM
NEFT Monday to 9.00 AM to 7.00 PM (settlement
IMPS will be Rs.6/- per transaction / as per NEFT Friday on hourly basis)
charges (waived till 31.08.2011). Customer’s FAQs Saturday 9.00 AM to 1.00 PM (settlement
for Interbank Mobile payment Service (IMPS) is on hourly basis)
annexed for reference to this circular.
CRA.20/2011-12 dt.28.04.2011
CRA.05/11-12 dt.12.4.11 & CRA.36/11-12 dt.07.06.11
Database maintenance of pensioners
Customer Grievance Redress through SMS with
keyword Complaint Pension paying branches shall:

Our Customer Grievance Redress 1. intimate any change in the status of each
Mechanism is strengthened by enabling customers pensioner so that they can update the database
complain through SMS. Customers using their in respect of pensioners of the above PAO
mobile numbers can send SMS by typing the (code No. 062463)
keyword Complaint to 56677. The Mobile phone 2. follow the provision as given in the circular
numbers will be received by our Customer Service strictly and return the PPOs of the closed
Cell, almost instantaneously, who will immediately pension accounts to CPAO, through Link
call the customers in the mobile phone numbers Branch under intimation to the concerned
received and all complaints about our services will PAO.
be sorted out within 2 working days. CRA.25/2011-12 dt.09.05.2011
Branches / Departments on intimation from Collection of ESI contributions of employers by
Customer Service Cell have to directly address the branches
grievance and submit action taken/compliance report
through e mail / ip message to Customer Service According to Joint Director (Finance),
Cell. Some of the complaints depending upon the Employees` State Insurance Corporation, Regional
8 8
 APRIL-JUNE 2011
Office, Chennai, the collection of ESI contributions the time of conversion of foreign currency from the
through non-SBI branches should be discontinued, Customers till the automatic calculation under
due to implementation of collection of contributions CBS/Exim Bill is introduced.
through system generated challans.
Activities covered
CRA.40/2011-12 dt.17.06.2011 a. Conversion of foreign currency into Indian
rupees and vice versa. The transaction shall
FX include all trade finance and remittance
Agreement with Weizmann Forex Limited for money products, TC/Currency purchase and sale,
transfer through Western Union – Revised procedure FCNR, EEFC, RFC when converted to Indian
for effecting payments w.e.f 08 04 2011. rupees must be covered.
As part of better security measures and b. Conversion of foreign currency into another
easier reconciliation, the process flow of payment foreign currency.
under the product ‘Weizmann Forex Limited for c. Only transactions with merchants are covered
money transfer through Western Union’ is under this provision and bank to bank
revised. Branches shall refer this circular for Steps to transactions are not falling under this
be followed as per the revised procedure and service tax net in India or abroad.
Procedure for making payment under CBS. d. This type of service tax will not be applicable
for booking and cancellation of forward
Branches may note that since one to one
contracts. However, service tax will be
matching of the records is enabled based on the 10 recoverable at the time of utilization of
digit reference number, branches have to enter the forward contract (i.e., conversion of foreign
details correctly otherwise the CBS transaction will currency).
not be successful.
Branches shall refer to the circular for the
The customer copy of the receipt should be
method of calculation (Manual) of Service Tax and
handed over to the beneficiary and agent copy to be
other guidelines.
retained at branches along with proof of identity.
FX 06/2011-12 dt 21.04.2011
A separate register has to be maintained
date-wise, under this product containing all the Migration of existing accounts and opening of fresh
accounts falling under provisions of Foreign
details of the payment transactions handled by the
Contribution (Regulation) Act, 1976.
branches. Screen shots of the process flow under the
product are furnished in the annexure to this circular. To ensure compliance with the RBI
Detailed write-up and contact numbers of M/s guidelines and to report accurate data to the
weizmann Forex Ltd., are avaliable in the Help Government, new product codes have been created
Desk. under CBS exclusively for opening SB and Current
FX.02/2011-12 dt.06.04.2011 accounts in which remittances which will attract
Country Risk Management Policy – Changes in provisions under FCRA, should be made.
the risk rating of countries effective 01.04.2011. All fresh accounts which attract provisions
under FCRA should be opened under the specified
According to ECGC of India the revised
product code as detailed in this circular. Branches,
Country Risk Classification applicable for Quarter
which do not have any FCRA related account should
April – June 2011, is given in the annexure to this
send a NIL report to respective Zonal Office
circular. Branches shall take note of the same, while
marking a copy to HO/International Division.
taking fresh exposure.
FX.03/2011-12 dt.18.04.2011 Branches shall refer this circular for Details
/ Process Flow for opening a New Account under
Service Tax on conversion of foreign currency
FCRA.
transactions with effect from 01.04.2011 FX.09/2011-12 dt.24.05.2011
While announcing the Union Budget for
financial year 2011-12, Government of India has GENL
Pension related recoveries by branches – Credit
made certain changes in service tax regulations with
through C2C.
effect from 01.04.2011 and it encompasses foreign
exchange transactions which involve conversion of In order to avoid reconciliation problems at
one currency into another currency. Branches shall CPPC, HO: TMD has modified the Pension Web
calculate and recover the Service Tax manually at Module for entering the pension recoveries in the

9
 Recollect
Pension Recovery Menu. In this Menu, the maker RBI’s Approach Paper on Automatic Data Flow from
after entering the PPO number of the pensioner Bank to RBI
concerned from whom the recovery is made has to
A “Roadmap”, for automating all the 200
mention the reason briefly in the narration column
RBI reports to flow from Banks to RBI, had been
and on transmitting by the checker for authorisation,
submitted to RBI. As per schedule the automation
the system will display a 4 digit Advice Number.
The officer concerned has to note this system process has commenced from 01.04.2011 and is to
generated 4 digit advice number and incorporate it in be implemented successfully before 31st, March
the C2C 20 digit Reference Number as the last 4 2013 in a gradual and phased manner.
digit number without fail. In the Pension Web MIS Department has displayed the error lists
package, this 4 digit advice number will run from in the following areas:
1001 to 9999 every month and it will be initialized • CISLA errors covering Sub_sector_code,
on the first day of subsequent month by HO: TMD. Sanctioing authority codes, security codes,
IB_codes, etc. for all the loan products
In the C2C Reference Number, the New Service including Base Rate Products.
Numbers allotted for reporting pension recoveries • An exclusive error cleaning tool for BSR
are as follows: Organisation codes
1. Recovery of excess paid to pensioners – Service • Home Loans, Loan against deposits, Jewel
No. 50 loans without security value
• Loan terms not updated correctly and
2. Reimbursement received from SBI/Other
accounts where repayment schedule had not
Associate banks for which debits are available
been generated.
with CPPC – Service No.52
• List of accounts which are not updated with
3. Other pension related recoveries– Service No.54 Review and renewal details.
Branches should exercise sufficient care in • Interest rate wise distribution of advances
selecting & entering the correct/relevant Service Branches should correct the data in CBS,
Number as given above, while making the C2C based on the error codes displayed in the website.
credit posting to CPPC. Relative screen shots are Branches shall the circular for further guidelines.
given in the annexure to the circular for the guidance
GENL.17/2011-12 dt.16.05.2011
of the branches.
With this revised process, CPPC will be able Revised Guidelines on Submission of Suspicious
to reconcile the pension recovery reported in the Transaction Report (STR) under the Provisions of
Pension Web module with that of the credit entry PMLA 2002 – Implementation of IBA recommended 88
new AML Scenarios
made to CPPC by branches through C2C and refund
such excess pension paid to the Pension Authorities In making the STR detection more
without delay and avoid payment of penal interest. meaningful, the Working Group of IBA on
Parameters for Generating Suspicion, suggested new
Staff Accountability will be fixed on the specifications consisting of 88 AML Scenarios
officer concerned for selecting the wrong Service wherein the Banks are required to provide
Number while making the refund of pension information about the source of Alert and indicators
recovery through C2C for detection of Suspicious Transactions. Of these 88
GENL.1/2011-12 dt.01.04.2011
Scenarios, 61 Alerts are transaction based while the
Endorsing copies of letters, e-mails replies remaining 27 Scenarios are based on Customer
by Officials at Branch / Zonal level to the addresses/ Behaviour Patterns.
e-mail of Governor / Top Management of RBI The list of 27 Scenarios for which the
According to RBI’s instructions, junior Branches are required to submit Suspicious
officer at branches/ZO who are in the practice of Transaction Report (STR) are given in the Annexure
endorsing copies of letters, e-mail replies sent to to this Circular.
complainants to the addresses / e-mail IDs of Branches shall to go through the indicative
Governor / Top Management of RBI, shall if list of Alerts and ensure that STRs are filed on the
considered necessary may be marked to CGM, CSD above instances also with immediate effect in
by post or email at cgmcsd@rbi.org.in. addition to the existing pattern of Reporting.
GENL.10/2011-12 dt.25.04.2011 GENL. 19/2011-12 dt.25.05.2011
1010
 APRIL-JUNE 2011
Settlement of Failed ATM Transactions & Payment of the ARC involved. However, these formats are
Compensation being made use of by branches, without making
RBI has modified the directions on appropriate changes in the draft.
Settlement of Failed ATM transactions as follows: Branches should incorporate the correct
a. The time limit for resolution of customer name of the trust in the appropriate blank spaces
complaints by the issuing banks shall stand provided in the format and shall refer the circular
reduced from 12 working days to 7 working regarding issues relating to RARC and ARCIL
days from the date of receipt of customer Lapse by the branches, in this regard may lead to
complaint. Accordingly, failure to re-credit the litigation.
customer’s account within 7 working days of List of accounts wherein waiver of legal
receipt of the complaint shall entail payment of action is to be taken should be provided to HO:
compensation to the customer @ Rs.100/- per Recovery Dept. at least two months in advance
day by the issuing bank. before the accounts become time barred.
b. Any customer is entitled to receive such Genl.25/2011-12 dt.13.06.2011
compensation for delay, only if a claim is
lodged with the issuing bank within 30 days of Board directions to include one Pensioner as member
the date of the transaction. of the Committee in Branches where large number of
pension accounts are handled
c. The number of free transactions permitted per
month at other bank ATMs to Savings Bank In view of the ACB’s directions, Branches
account holders shall be inclusive of all types where large number of pension accounts is handled
of transactions, financial or non-financial may include one pensioner also as member of the
(Only Five Transactions free of charge per Joint Customer Service Committee with immediate
month including balance enquiry etc). effect. However, the total members from customers’
d. All disputes regarding ATM failed transactions side may be restricted to only 3.
GENL.29/2011-12 dt.24.06.2011
shall be settled by the issuing bank and the
acquiring bank through the ATM system Assigning Threshold Limit for Accounts
provider only. No bilateral settlement
arrangement outside the dispute resolution To facilitate a more effective transactions
mechanism available with the system provider monitoring through the system, assigning the
is permissible. This measure is intended to Threshold Limit for all the new deposit accounts
bring down the instances of disputes in (SB / CA / TD) and OD / OCC accounts will be
payment of compensation between the issuing made mandatory with effect from 11/07/2011.
and acquiring banks. Branches shall mark the Threshold Limits as per the
norms given in the Policy viz. (i) Accounts of
These directions were issued under section individuals: Rs.10 lakhs or 25% of annual income
18 of Payment and Settlement Systems Act 2007, whichever is higher, (ii) Accounts of Business
(Act 51 of 2007). Non-adherence to the provisions Enterprises: Rs.10 lakhs or one month turnover
of this circular shall attract penalty as prescribed whichever is higher
under the Payment and Settlement Systems Act
2007 (Act 51 of 2007). For all the existing deposit accounts opened
up to 10/07/2011, the threshold limits shall be
GENL.22/2011-12 dt.31.05.2011
automatically updated as Rs.10 lakhs in the CBS
NPA Management – Assignment of NPAs to Asset system. Branches should suitably modify the
Reconstruction Companies (ARCs) – Continuation of Threshold Limit of all the existing accounts based
SARFAESI / pending suits and filing of suits – on the proper assessment of the Customer’s income.
Formats to be used. GENL.30/ 2011-12 dt.30.06.2011
As two ARCs viz. Reliance Asset
HRM
Reconstruction Company (RARC) and Asset Nodal Officer for Customer Service / Principal Code
Reconstruction Company of India Limited (ARCIL), Compliance Officer (BCSBI) and Public Information
are involved in the process of recovery, HO:Legal Officer under Right to Information Act 2005
Dept. evolved a common format of various Branches have to make suitable
documents / formats, which could be utilized with modifications in their notice boards and display as
appropriate modifications / deletions depending on under:

11
 Recollect
Sri. V.Srinivasan, Sri. V.Srinivasan, Categorisation of Branches as on 31.03.2011
Nodal Officer for Customer Principal Code
Service, Compliance Officer Categorisation of branches as on
General Manager General Manager 31.03.2011, including Specialised branches has been
(P&D/MCC) (P&D/MCC) reviewed as below as per norms approved by the
Indian Bank, Head Office, Indian Bank, Head Office, Board. The details of the branches falling under
66, Rajaji Salai, 66, Rajaji Salai, different Categories/ Scales accordingly are
CHENNAI 600 001 CHENNAI – 600 001 furnished in Annexure I and Specialised branches in
Telephone: 044- 25226655 Telephone:044-5226655 Annexure II to this circular.
Fax No : 044- 25221532 Fax No : 044- 25221532 The norms of business criteria for
Email : srinivasan@indian- Email:srinivasan@indian-
categorization of branches are as follows:
bank.com bank.com
Business Criteria
Sri. K.G.Balasubramanian Sri. V.Srinivasan,
Category Of (Average Aggregate Incumbency
Public Information Officer First Appellate Authority Scale
Branch Deposits And Advances
(PIO) under RTI Act, (FAA) under RTI Act.
During The Last Two Years)
Deputy General Manager General Manager
a) Small Below Rs.5 crore I
(Law) (P&D/MCC)
Indian Bank, Head Office, Indian Bank, Head Office, b) Medium Rs.5 crore and above but II
66, Rajaji Salai, CHENNAI 66, Rajaji Salai, CHENNAI below Rs.25 crore
600 001 – 600 001 c) Large Rs.25 crore and above but III
Telephone: 044- 25260339 Telephone: 044- 25226655 below Rs.75 crore
Fax No :044- 25221532 Fax No : 044- 25221532 d) Very Large Rs.75 crore and above but IV
Email:ibhocustomerservice Email :srinivasan@indian- below Rs.250 crore
@indian-bank.com bank.com e) Exceptionally Rs.250 crore and above V
Large
HRM.01/2011-12 dt.01.04.2011
HRM.21/2011-12 dt.01.06.2011
Interest on Staff Provident Fund Accounts and Loan
against PF / RWPF loan. ADMIN
Processing of Electronic Clearing Services (RECS) -
The Trustees of the Indian Bank Staff Checking / verification of ECS Credits / Debits after
Provident Fund has decided to pay interest at 8.50% posting.
p.a with effect from 01.04.2011 on Indian Bank All the branches shall verify the transactions
Staff PF accounts. based on the reports pushed by Service Branch and
Consequently, the rate of interest on loan the end user, i.e. the home branches shall ensure
against Provident Fund and Refundable withdrawal i) The correctness of the transactions
loan is fixed at 9.50% with effect from the said posted through STP i.e. Name and
date. The revised interest rate is applicable to the account number etc., are matching.
existing as well as new loan accounts. ii) Conversion of Old account number in to
new CBS account number is correct.
HRM.18/2011-12 dt.19.05.2011 iii) Returns are not done erroneously.
Modification in Nomination of Disciplinary Authority / Branches shall inform the discrepancies, if any,
Concurrent Discipline Authority / Appellate Authority / immediately to the concerned Service branch.
Reviewing Authority for Officers
ADMIN.03/2011-12 dt.09.04.2011
Chairman and Managing Director in
exercise of the powers conferred on him under Inter Branch / Bank movement of Cash
Regulation 5(1) of the Indian Bank Officer
Employees’ (Discipline & Appeal) Regulations, According to Reserve Bank of India,
1976 effected the following nomination of the movements of cash from one branch to another
Concurrent Disciplinary Authority for officers in branch of the same bank/other bank, should be for
Scale IV. justifiable reasons and the cash-in-transit has to be
accompanied by the banks’ representative/s with
To function as Name of the Official proper documents/identification and produced to the
Concurrent Disciplinary Shri S.V.Raghunathachari officials of the District Administration, if required.
Authority for Officers in Scale Deputy General Manager In case the officials accompanying the cash
IV for Head Office and Zonal HO: T M D,Chennai
Cases
remittances are not able to produce the necessary
documents/identification, it might result in the cash
HRM. 20/2011-12 dt.25.05.2011 being confiscated by the appropriate authorities. The
1212
 APRIL-JUNE 2011
cash transfers/remittances should be duly covered shall refer the circular for further information and
under insurance. guidelines.
ADMIN.05/2011-12 dt.19.04.2011 ADMIN.08/2011-12 dt.26.04.2011

Renewal of Standard Fire and Special Perils Policy of Banker’s Indemnity Policy for the Financial Year 11-12
The Bank’s own Buildings
The Banker’s Indemnity Policy for the
The Standard Fire and Special Perils Policy financial year 2011-12 has been renewed with The
for the Bank’s Owned Buildings all over India has New India Assurance Company Limited.
been renewed for the financial year 2011 – 2012 for Chennai.
the period 01/04/2011 to 31/03/2012 with M/s
The new policy number is
United India Insurance Company Ltd. Chennai –
710800/46/11/04/00000001
600 001.
The New Policy Number is: Branches should mention the above policy
010503/11/11/11/00000003 (Commercial Buildings) number whenever claim relating to the year 2011-
010503/11/11/11/00000004(Residential Buildings) 12, if any, is reported to the above insurance
company. This policy covers losses for the period
Branches/Offices should specify the above
01.04.2011 to 31.03.2012 and also for losses
number depending on Building (Commercial or
occurred on or after 01.04.2008 and reported within
Residential) whenever claims are reported to the
three years from date of loss. The policy covers
above company during the period 01/04/2011 to
losses if any, at our Banking Service Centres also
31/03/2012.
with effect from 06.05.2008 as detailed in the
Assets covered: circular elsewhere. However losses upto 31-03-2008
All owned Buildings (Commercial and (i.e. date of actual loss is prior to 01.04.2008 but
Residential) of Indian Bank located all over India discovered during the current year) are not eligible
are covered under this Standard Fire and Special for any cover as our policy for that period was with
Perils Policy. The policy also covers damages due to The Oriental Insurance Company Ltd., D.O. VIII,
Earthquake and Terrorism. (The policy has been Chennai-7, who were our insurers for the years
taken on the basis of Reinstatement value.) 2006-07 and 2007-08 and the retroactive period has
also expired on 30.09.2008.
Broad features of the Policy:
BASIC SUM INSURED: In respect of the
The Policy covers damage to the building or
following clauses viz. (A) to (H), the basic cover
any part thereof due to Fire, Lightning, Explosion /
available is Rs.10.00 crore (Rupees Ten crore only),
implosion, Aircraft damage, Riot, Strike and
for the Bank as a whole. Additional cover available
Malicious damage, Storm, Cyclone, Typhoon, in respect of Clause A (loss on premises) is Rs.40.00
Tempest, Hurricane, Tornado, Flood and Inundation, crore and in respect of Clause B (loss in-transit) is
Impact damage, Subsidence and landslide including Rs.15.00 crore.
rock slide, Bursting and/or overflowing of water
Other informations regarding Risks covered,
tanks, apparatus and pipes, Missile testing operation,
important features of the policy, Exceptions, Claim
Leakage from Automatic sprinkler installation, Bush
procedures to be followed/ Maintenance of records
fire. and Clarifications/ Special instructions are furnished
Initial reporting on the occurrence of in this circular.
damage Even prior to determination of the
ADMIN.14.2011-12 dt.30.05.2011
magnitude, real nature and the extent of loss,
• On the occurrence of loss or Fifth Annual General Meeting of the Bank
• on the detection of any damage or The Fifth Annual General Meeting of the
• any events or acts that are likely to cause a Shareholders of the Bank was held on Wednesday,
loss to the Bank’s building, the June 29, 2011 at IMAGE.
branches should immediately report to the nearest During the year 2010-11, the Bank
branch of United India Insurance Company Limited continued its sustained volume growth in Revenues,
under copy to HO/Estate Department and United Operating Profit, Net Profit and business and the
India Insurance Company Limited Catholic Centre, total global gross business of the Bank crossed
No.64, Armenian Street, Chennai 600 001. Branches Rs.1,80,000 crore mark to Rs.1,81,530 crore as
compared to Rs.1,50,886 crore as on March 31,

13
 Recollect
2010, registering a growth of 20.3%. Other Sl.No BGL Head – Mapped to Nature of Debit
important highlights of performance of the Bank Number CGL
during the year 2010-11 are given below: 01 96397- SR 2801505005 1. Penalties imposed on
⇒ The total Global Deposits of the Bank rose II a/c account of wrong / delayed
Penalty reporting of ICCOMS.
by a 17,576 crore to a 1,05,804 crore from imposed by 2. Penalties charged on
Rs.88,228 crore as at March 31, 2010, with a RBI account of
growth of 19.9%.
a) forged notes
⇒ The total Gross Advances increased by b) shortages
Rs.13,068 crore to Rs.75,726 crore from c) Mutilated notes found in
Rs.62,658 crore as at March 31, 2010, Soiled Notes Remittance
registering a growth of 20.9%. (SNR) sent to RBI.
⇒ The Operating Profit of the Bank has 02 98835 - SR 2801505006 To make good the equal
registered an increase of 19.8% to II a/c amount of debit for forged /
Admin shortages / mutilated notes
Rs.3291.68 crore as against Rs.2,747.35
Office found in SNR sent to RBI. i.e
crore as at March 31, 2010. amount debited by RBI in
⇒ The Net Profit for the year has grown up currency account at Link
by 10.2% to Rs.1714.07 crore as against Branch.
Rs.1,554.99 crore as at March 31, 2010.
Currency chests and Link branches on
⇒ As on March 31, 2011, the Bank’s Gross
receipt of the claim should immediately reimburse
NPA and Net NPA stood at 0.98% and
0.53%, respectively. the same to the link branch by debiting above BGL
accounts only. The amount should then be recovered
⇒ Earning Per Share and Book Value per share
as of March 31, 2011 improved to from the erring staff as per extant guidelines within a
Rs.38.79 and Rs.184.44 from Rs.35.09 and week from the date of debit of SR II a/c.
Rs.154.66 as at March 31, 2010, ADMIN.20/2011-12 dt.15.06.2011
respectively.
⇒ Capital Adequacy Ratio was at 12.83% as Amendment to Manual of Instructions XIII –
per Basel I and 13.56% as per Basel II. Compliance 2009
ADMIN.17/2011-12 dt.03.06.2011 Further to publication of the first edition of
Manual of Instructions XIII – Compliance 2009
Debiting of Penalties imposed by RBI - Opening
during November 2009, amendments to the Manual
of New BGL Head 96397 (Reconciliable) – SR-II
of Instruction, have been compiled for the benefit of
A new BGL Head 96397 – SR II – Penalty the staff working in the branches / Zonal Offices /
Imposed by RBI mapped to CGL 2801505005 has Head offices. The compiled amendments are
been configured. This BGL is configured as enclosed to this circular.
Reconciliable – One to Many – Debit preceeding
like SR-II BGL. ADMIN.24/2011-12 dt.27.06.2011

Though due care has been taken in the preparation of

Recollect, the version given in the circular is final.

Compiled by HO: O&M Division

1414
 Volume 26 Issue 1
a
For Private Circulation Only

April - June 2013 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Cir. Pg.
CONTENTS OF THIS ISSUE No.
Date Subject
No
Cir. Pg. 16 14.06.13 Launching of Web Portal to facilitate
Date Subject
No. No Online Collection of Premium &
8
ADV 03.04.13 Processing charges for Home Loans Generation of e-policies for General
2 Insurance Products
02 and Vehicle Loans from 01.04.2013
04 04.04.13 Recovery Agents – Review of terms of 17 22.06.13 RTGS/NEFT Timings 8
2 FX Pre-mature withdrawal of NRE and NRO
engagement
13 03.05.13 Forwarding of MSME proposals along 01 01.04.13 term deposits – withdrawal of related 8
2 penalty
with acknowledgement Number
14 04.05.13 Hosting of documents for structured loan 03 30.04.13 Restrictions by RBI on receipt of foreign
3 8
products for MSME sector in intranet contributions under FCRA 2010
16 06.05.13 Revised Priority Sector Lending-Targets 08 05.06.13 Salient features of FCRA a/cs –
3 monitoring/caution to be exercised by 8
and Classification Revision of Limits
20 13.05.13 Extension of Direct Benefit Transfer to branches
3 GENL 01.04.13 Scanning of names with UN Caution
additional 78 districts
24 29.05.13 Revised guidelines for advances against 02 Lists at the time of creation of CIF On- 9
4 Line
security of gold coins
27 30.05.13 Credit Guarantee Scheme (CGS) - 11 10.04.13 Outsourcing of Cash Dispensers -
Intimation of NPA classification to 4 Changes in Operational Work Flow & 10
Job Role
CGTMSE
31 12.06. 13 Hedging of Foreign Exchange 13 13.04.13 Know Your Customer (KYC) compliance
4 10
for Self Help Groups (SHG)
Exposures
32 18.06. 13 E-tracking of Prime Minister's 14 16.04.13 Procedure for making NEFT / RTGS
4 transactions using BGL routing 11
Employment Generation Programme
(PMEGP) accounts. account/BGL FIT- clearing account
37 26.06.13 Assistance to Primitive Tribal Groups 15 16.04.13 Procedural Guidelines for handling
(PTGs) - Central Sector Scheme for 5 Paper to Follow (P2F) cheques under 11
CTS Clearing
Development / Strengthening
39 29.06.13 Priority Sector Lending-Restructuring of 16 16.04.13 Facility for Re-generation of
Login/Transaction Password by Retail 11
SGSY as National Rural Livelihood 5
Mission (NRLM)- Aajeevika Net Banking Customers
17 17.04.13 Centralised Deposit Processing Centre
HRM 06.04.13 Festival advance for the financial year 11
5 (CDPC)
06 2013-2014
19 27.04.13 Outsourcing of Cash Dispensers (CDs) -
07 12.04.13 Supply of uniforms to sub-staff 6 Change in Current Account Product
12
08 29.04.13 LFC – FOREIGN TRAVEL 6 Code for replenishment of cash in
24 27.05.13 Incentive to officers for learning of local Outsourced ATMs
6 23 20.05.13 Delay in re-presentation of technical
languages
34 24.06.13 Digitally signed FORM 16 (PART A & B) 7 return cheques and levy of charges for 12
CRA 01.04.13 Amendment to PPF 1968 and SCSS such returns
7 32 17.06.13 ATM cards - efficiency and safety of
01 2004 - Revision of Interest rates
ATM transactions & customer 13
02 02.04.13 Defence Pensions - Eligibility of
protection
unmarried daughters of Armed Forces
7 33 22.06.13 Merging of Cheque Book Order screen
Personnel for grant of Family Pension
beyond 25 years of age with Cheque Personalisation screen in 13
CBS
05 22.04.13 Amendment in "Scheme for payment of
pensions to Central Govt. Civil 7 ADMIN 28.05.13 Expenditure Approval Committee at
13
Pensioners by Authorised Bank" 08 Corporate level and Zonal offices
10 22.05.13 Marketing Website – Utilizing the 10 17.06.13 Acknowledgement by Bank to
information for Marketing and Customer 7 Depositors at the time of receipt of 14
Service Form-15G / 15H
 Recollect

Cir.
Date Subject
Pg. annual basis. All the zones should ensure that the
No. No Recovery Agents strictly adhere and follow the
14 27.06.13 Standardization and Enhancement of Code evolved, to ward off any complaint.
Security Features – CTS – 2010-
14
Specifications – Extended to Demand Endeavour should be to entrust mainly the
Drafts difficult cases/accounts wherein expertise is
required, to the Recovery Agents. Branches should
ADVANCES keep a portfolio of difficult accounts and “not so
Processing charges for Home Loans and Vehicle difficult accounts” and entrust the matter to the
Loans from 01.04.2013 Recovery Agents accordingly. In the guise of
engaging RAs, the branch / zonal office should not
Processing Charges for Home Loans and lose focus on the recovery of such accounts.
Vehicle Loans has been re-introduced with effect
To make the fee structure more acceptable
from 01.04.2013 which is as given below.
for the RAs the same had been streamlined along
HOME LOAN with the terms and conditions for engaging their
REVISED services which is furnished as Annexure to this
PROCESSING FEE* circular. The revised fee structure will come into
(TO BE COLLECTED ALONG 0.225% OF LOAN AMOUNT WITH A
WITH THE APPLICATION, WHICH MAXIMUM OF S. 20,000/-
force with effect from 01/04/2013. However, the
IS NON-REFUNDABLE) work already allotted will continue till completion
ADMINISTRATIVE FEE* as per the earlier agreed terms.
(TO BE COLLECTED ON
NIL The fees prescribed are the ceiling limits,
SANCTION OF LOAN – BEFORE
DISBURSEMENT) but Zonal Managers should negotiate with the RAs
VEHICLE LOAN and reduce the fees to the extent possible on a case
REVISED to case basis and specifically arrive at, at the time
PROCESSING FEE* of entrustment itself, depending on the merits of the
0.225% OF LOAN AMOUNT WITH case.
(TO BE COLLECTED ALONG A MAXIMUM OF S.10,000
WITH THE APPLICATION, WHICH
The fee and expenses incurred towards
IS NON-REFUNDABLE)
Recovery Agents, can be realized out of recovery
* INCLUSIVE OF SERVICE TAX effected, as expenses and thereafter balance may be
These charges are applicable for fresh appropriated towards our loan dues and till such
sanctions and also for loans already sanctioned time, the amount may be treated at par with the
where disbursement is yet to be commenced. MLE/MOX incurred for recovery and may be paid
ADV.02/2013-14 Dt.03.04.2013 accordingly.
Zonal Office should review the
Recovery Agents – Review of terms of engagement
performance of all the Recovery Agents to whom
Model Code on Collection of Dues and accounts have been entrusted at quarterly intervals
Repossession of Securities (CDRS Code) has been and a report should be submitted to Corporate
evolved as advised by IBA and our Recovery Office.
Agents have been advised to adopt the guidelines
contained therein to ensure fair practice and Branches shall refer the circular for other
transparency. The list of the 52 Recovery Agents Terms and Conditions.
(currently) has been attached to this circular. ADV.04/2013-14 dt.04.04.2013
The RAs are empanelled for a period of Forwarding of MSME proposals along with
one year and thereafter Zonal Managers shall acknowledgement Number
review and recommend for their continuation in the
Henceforth, Corporate Office will accept/
panel based on their satisfactory performance.
process/ sanction the MSME proposals relating to
Corporate office shall review their performance and
any request viz fresh/ renewal/ enhancement/ adhoc
renew the empanelment of the eligible RAs based
limit/ administrative clearance/ any other request, if
on the data and recommendations received from
and only if the system generated acknowledgment
Zonal Office. This exercise shall be done on an
number (of the receipt which is issued by the

2
 April
April-June 2013

Branch to the borrower) is mentioned in the Extension of Direct Benefit Transfer to additional 78
proposal. districts
Similarly Zonal Offices shall accept / Government had extended the Direct Benefit
process/ sanction MSME proposals received from Transfer scheme to 78 more districts w.e.f.
Branches if and only if the proposal carries the 01.07.2013. List of the new 78 districts along with
acknowledgement number. Branch Managers shall earlier 43 districts is furnished as annexure-I of this
ensure that acknowledgement of all proposals circular. Under DBT, benefits under Government
received from MSME borrowers is given to the schemes are directly credited to the account of the
applicants and copy kept on record. beneficiaries and the beneficiaries withdraw the
same through various delivery points like branch,
ADV.13/2013-14 dt.03.05.2013
ATM, Field Business Correspondent (FBC) etc.
Hosting of documents for structured loan products cutting the delays and diversions. DBT is presently
for MSME sector in intranet implemented in 26 schemes and the list of the
schemes is furnished as annexure-II of this circular.
The required documents to be taken under The guidelines for initiating required action
Structured Loan Products of MSME Sector have by the branches in these 78 districts, for
been hosted in our INTRANET and can be implementation of Direct Benefit Transfer are as
accessed through the navigation Intranet >> follows:
Downloads >> MSMESchemes.
™ In our Lead districts, Lead District Manager
(http://10.100.6.213:81/intra/download_msme.php).
has to obtain the scheme wise list of
ADV.14/2013-14 dt.04.05.2013 beneficiaries along with details of bank
account and Aadhaar (if available) from the
Revised Priority Sector Lending-Targets and District Collector/Departments in the
Classification Revision of Limits prescribed digitised format and circulate to
With effect from April 01, 2013, limits for the member banks as per the service area for
Priority Sector Lending - both Targets and opening of accounts.
Classification have been revised as follows: ™ In non-Lead districts, the District
1. Agriculture Coordinator has to obtain the details of the
(i) The limit of loans to farmers against beneficiaries under various schemes from
pledge/hypothecation of agricultural produce the concerned Lead District Manager and
(including warehouse receipts) for a period of furnish the list to our branches.
12 months stands increased from the current ™ Each branch will identify the beneficiaries
limit of Rs 25 lakhs to Rs 50 lakhs under direct within its service area, who do not have a
and indirect agriculture. bank account. The branch would contact
(ii) The limit of loan to dealers/sellers of fertilizers, such beneficiaries and ensure that their bank
pesticides, seeds, cattle feed, poultry feed, accounts are opened.
agricultural implements and other inputs has ™ Information about the accounts opened
been raised to Rs 5 crore per borrower from Rs should be shared by the Lead District
1 crore. Manager with the District Collector and the
2. Micro and Small Enterprises Departments implementing the scheme for
(iii) The limit of bank loans to Micro and Small updation of their database.
Service Enterprises (MSEs) engaged in ™ Branches should seed Aadhaar Number into
providing or rendering of services has been the bank account of the beneficiaries based
increased from Rs 2 crore to Rs 5 crore per on the details received from the District
borrower/unit, provided they satisfy the administration/concerned departments. Since
investment as defined under MSMED Act the Governmental agencies would have
2006. already verified the Aadhaar Number, there
ADV.16/2013-14 Dt.06.05.2013 would be no need for the banks to reconfirm
the Aadhaar. Aadhaar details received from

3
 Recollect

the District administration /Department must (Member Login area -- Guarantee Maintenance --
be seeded in the beneficiary’s bank account Periodic Information --NPA Details )
promptly without delay.
ADV.27/2013-14 Dt.30.05.2013
™ Banking infrastructure, particularly in the
Hedging of Foreign Exchange Exposures
areas so far not covered by the banking
services should be strengthened. Branches should have a constant review of
™ All the beneficiaries under the schemes all foreign exchange exposures in the light of the
should be issued with ATM debit cards in a depreciation of the rupee and ensure that all such
focused way, so that they are able to draw exposures of all our customers are adequately
the benefit as per their convenience. hedged against foreign exchange risk, both in terms
of the amount and also the tenor and ensure
™ Zonal Managers have been designated as
compliance of MC directions/Loan Policy
Nodal Officer for supervising the
guidelines. Branches should obtain Undertaking
implementation of Direct Benefit Transfer in
letter from all the borrowers with foreign exchange
the districts covered by them and District
exposures to the effect that they shall bear the loss
Coordinator of each district has been
on account of unhedging.
designated as the nodal officer for the
district. ADV.31/2013-14 Dt.12.06.2013
ADV.20/2013-14 Dt.13.05.2013 Prime Minister's Employment Generation Programme
Revised guidelines for advances against security of (PMEGP) E-tracking of PMEGP accounts.
gold coins The E-Tracking system developed by The
Banks while granting advance “against the Khadi & Village Industries Commission (nodal
security of specially minted gold coins sold by agency for implementation of PMEGP Scheme),
them, should ensure that the weight of the coin(s) covers all relevant information right from the
does not exceed 50 grams per customer and the receipt of application to final stage of adjustment
amount of loan to any customer against gold of margin money to the loan account.
ornaments, gold jewellery and gold coins (weighing
CO: TMD has provided link to KVIC site
up to 50 grams) should be within the approved
advance value and per borrower limit. (www.kviconline.gov.in/pmegp) in our CBS Help
Desk with navigation as below:
Branches should also strictly ensure that
“Advance against pledge of gold coins should be Indian Bank Help Desk (Home) >> Other
disbursed only against the coins which are already Websites >> E-tracking of applications under
purchased and possessed by the intending PMEGP
borrowers and in no case, loan should be sanctioned
FINANCING BANK Branches should key
for purchase of new coins and
in certain information as detailed hereunder:
subsequent/simultaneous pledging of the same”
a) Details of loan sanctioned (sanction date,
ADV.24/2013-14 Dt.29.05.2013
details of capital expenditure of the project
Credit Guarantee Scheme (CGS) - Intimation of NPA and break-up of bank loan sanctioned)
classification to Credit Guarantee Trust for Micro and b) Promoter’s contribution (date of deposit
Small Enterprises (CGTMSE) and amount of contribution)
According to Credit Guarantee Trust for c) Loan released (date and amount)
Micro and Small Enterprises (CGTMSE), the d) Claim forwarded to Nodal Bank (date,
Member Lending Institutes (MLIs) may henceforth letter number and amount)
indicate the date of classification of the account as e) Claim received from Nodal Bank (date and
NPA in a particular calendar quarter, by end of amount).
subsequent quarter using the following option f) Performance of Unit, (production, sales and
online. employment ) and

4
 April
April-June 2013

g) Margin money (subsidy) adjustment (NRLM), to be implemented in mission mode

against TDR (date and amount) in their E- across the country. The core belief of NRLM is that
Tacking Module. the poor have innate capabilities and strong desire
h) User manual and admin module issued by to come out of poverty.
KVIC containing operating instructions to RBI has come out with a Circular on
financing branches is Annexure to this National Rural Livelihood Mission (NRLM)-
circular. Aajeevika for implementation from April 1, 2013.
i) The user ID is its “IFSC CODE” and A copy of the same is annexed to this circular for
default password is “pmegp” which can be meticulous implementation by branches and to be
changed after first login. familiar with the latest revised guidelines issued on
the captioned scheme.
ADV.32/2013-14 Dt.18.06.2013
Branches should report the data relating to
Central Sector Scheme for Development/ performance under NRLM as per the format
Strengthening of Agricultural Marketing prescribed and submit all the returns to various
Infrastructure, Grading and Standardization - authorities in time.
Assistance to Primitive Tribal Groups (PTGs)
ADV.39/2013-14 Dt.29.06.2013
Directorate of Marketing and Inspection
(DMI), Government of India has instructed that HRM
assistance to Primitive Tribal Groups (PTGs) may Festival advance to staff members for the financial
be provided under Agricultural Marketing year 2013-2014
Infrastructure, Grading and Standardization
(AMIGS) scheme as per the recommendations of Branches shall permit Interest Free Salary
the National Commission for Scheduled Tribes Advance / Festival Advance to staff members for
(NCST). the following forthcoming festivals during the
financial year 2013-14:
Further, PTGs are covered within the ambit
Name of the Festival Date of the Festival
of Scheduled Tribes (STs) and therefore the same
Hari Raya Pusa 08.08.2013
documentary proof as obtained for ST category
may be obtained by the banks to consider the Ramzan 09.08.2013
borrower under PTGs category. Ganesh Chaturthi 09.09.2013
Onam 16.09.2013
Since separate record/data has to be
Durga Pooja 11.10.2013
maintained for the PTGs, the category of the
beneficiary in Scheduled Tribe belonging to PTGs Deepawali 03.11.2013
may be indicated separately in the application form Christmas 25.12.2013
for subsidy to enable to capture the data in this Milad-Un-Nabi 13.01.2014
regard. Pongal 14.01.2014
ADV.37/2013-14 Dt.26.06.2013 Chinese New Year 31.01.2014
Holi 17.03.2014
Priority Sector Lending-Restructuring of SGSY as Only permanent confirmed employees and
National Rural Livelihood Mission (NRLM)-Aajeevika part time employees who are in scale wages are
Integrated Rural Development programme eligible for the advance.
(IRDP) was introduced by the Ministry of Rural The advance shall be allowed on a written
Development, Govt. of India during the year 1980 request of the employee not earlier than 3 weeks
as a poverty alleviation programme by targeting the before the festival for which the advance is availed,
poor families for creation of assets and self subject to disbursement of the advance for any
employment. Later on during the year 1999, the calendar year being available for disbursement only
IRDP was transformed into Swarnajayanti Gram during that year. The Advance is repayable in 10
Swarojkar Yojana (SGSY). equal monthly installments, the first installment to
Government of India has restructured the commence from the month succeeding the month in
which the advance is availed.
SGSY as National Rural Livelihood Mission

5
 Recollect

The eligible amount of IFSA / FA - LFC – FOREIGN TRAVEL

For the Staff who joined the Bank before With effect from 01.05.2013 the revised
06.12.1990: guidelines for reimbursement of travel expenses
• One month Basic + DA to Officers and under LFC-Foreign travel shall be as under.
One month Basic + DA and special
The economy class fare for travel between
allowance to Award Staff as applicable
to the preceding month in which the the point of origin and point of destination in India
advance is availed. through the shortest route or by any non-stop
service fare for one way as the eligible amount and
For the Staff who joined the Bank on or twice this amount will be the overall eligibility.
after 06.12.1990:
Hence, the air-tickets for travel between
• One month Basic Pay, subject to the point of origin and point of destination in India
maximum of R.25,000/- for Officers, shall necessarily contain the air fare, failing which,
maximum of R.20,000/- and minimum no reimbursement will be made. Further, it is
of R.8000/- for Clerks and maximum clarified that, irrespective of the date of sanction of
of R.15,000/- and minimum of LFC (Foreign Travel), the onward travel
R.6000/- for Sub Staff and part time undertaken on or after 01.05.2013 shall come under
employees with effect from this guideline.
09.09.2011. HRM.08/2013-14 Dt.29.04.2013
Professional Qualification Pay and Fixed
Permanent Pay shall be included to arrive at the Incentive to officers for learning of local languages
eligible amount since they are sanctioned in lieu of The tuition / exam fees paid for learning
increments. the local language and passing an examination in
Branches shall refer this circular for other the local language (other than Mother tongue and
terms and conditions governing the facility of Indian Languages studied in school/college) besides
Festival Advance. payment of incentive will be reimbursed to
Officers. Guidelines in this regard are as follows:
HRM.06/2013-14 Dt.06.04.2013
Eligibility criteria :
Supply of uniforms to sub-staff
All Officers including those on probation.
The ceiling on the cost per set of Uniform
to Sub-Staff has been enhanced as follows: Nature of Course:
Terrikhadi Certificate course / short term course in local
(Once in 2 Years - 3 sets)–Rs.700/- including languages (other than the mother tongue and
stitching charges of Rs.250/- languages studied in school/college).
Woollen Duration of Course:
(Once in 3 Years - 1 set)– Rs.1300/- including Minimum 6 to 12 months.
stitching charges of Rs.400/-
Branches/Offices are authorized to supply Amount of Tuition fees eligible for reimbursement:
Expenditure incurred by the officer towards tuition/
Uniform to the Sub-Staff members/Drivers/Armed
examination fees and cost of books subject a
Guards as per the eligibility criteria, within the
maximum of Rs.1000/- (one time) will be
limits prescribed.
reimbursed on successful completion and passing
In respect of Armed Guards, the colour of of the course.
the Uniform is Khaki. In addition to Uniform, the
Armed Guards would be supplied with certain Eligible Incentive:
items such as Cap/Badge etc. CO: Security Rs.5000/- on successful completion and passing of
Department will monitor the usage of above items. the course.
Branches shall refer this circular for other Branches shall refer this circular for other
instructions in this regard. guidelines in this regard
HRM.07/2013-14 Dt.12.04.2013 HRM.24/2013-14 Dt.27.05.2013

6
 April
April-June 2013

Digitally signed FORM 16 (PART A AND PART B) Defence Pensions - Eligibility of unmarried
daughters of Armed Forces Personnel for grant of
Digitally signed Form 16 has been made Family Pension beyond 25 years of age
available in Salary site and also ported in CBS Help
Desk. Staff members can download and print the According to Government of India,
digitally signed Form 16. Ministry of Defence unmarried / widowed /
divorced daughter shall be eligible for family
Navigation to get Form 16 – 1) Help Desk / Branch pension beyond 25 years of age subject to
Champion / Staff Pay Slip-IT Projection. Login into fulfilment of other prescribed conditions.
the site and download through “Form 16
The family pension shall be payable if all
Download”. 2) Help Desk / salary site / login and
other eligible children below the age of 25 years
download through Reports Download
have ceased their entitlement to receive family
Navigation to get Form 16 – Indian Bank Staff pension and there is no disabled child to receive the
Pensioners – CBS Help DeskÆHRM Online family pension. In order of their date of birth and
websiteÆ select Pension tabÆ select Form 16 younger of them shall not be eligible unless the
(2012-13). Enter SRNO of the pensioner and press next above has become ineligible for grant of
glass icon. family pension.
Income Tax is deducted at source on the Branches shall refer this circular for further
salary / pension paid to staff members / retirees guidelines in this regard.
based on the proof of investment and declaration
CRA.02/2013-14 dt.02.04.2013
submitted by the staff members / Retirees. Heads of
branches / offices / departments are solely Central Civil Pension - Simplification of Pension
responsible for verifying the investments made and Procedure - Amendment in para 15 and para 16 of
for obtaining the physical proof and preserving "Scheme for payment of pensions to Central Govt.
them. Civil Pensioners by Authorised Bank"
Branches shall refer this circular with Henceforth, pensioner / family pensioner
regard to HRA rebate, Proof of Investment, can submit the life certificate as well as other
Address in Form 16, Correctness of PAN number certificates to any branch of the Bank through
and responsibility of Staff members to have PAN which his / her pension / family pension is being
Cards and TDS under Centralised Payroll System. disbursed.
Penalty clause - “20% of tax has to be Further the pensioner / family pensioner
deducted from the Gross Salary where there is no who is desirous of transferring his /her pension
valid PAN Numbers" - shall be invoked wherever account from one branch to another branch
PAN numbers are not provided. (whether local or out station) of the same bank can
put in his / her request at either of the two branches
HRM.34/2013-14 Dt.24.06.2013
instead of the present dispensation wherein transfer
CRA request is entertained only at the home branch. The
transfer application should contain both account
Amendment to PPF 1968 and SCSS 2004 - Revision numbers (in old & new branch) with both branch
of Interest rates contact details. The branch receiving the
application will scan and register the same to
With effect from April 01, 2013, the rates
CPPC. CPPC will coordinate the continuity of
of interest on Public Provident Fund Scheme, 1968 disbursement of monthly pension / family pension
(PPF 1968) and Senior Citizens Savings Scheme, without any break.
2004 (SCSS 2004) for the financial year 2013-14,
will be as under: CRA.05/2012-13 Dt.22.04.2013
Scheme Rate of Interest Rate of interest Marketing Website – Utilizing the information for
w.e.f 01.04.2012 w.e.f 01.04.2013 Marketing and Customer Service
5 year SCSS, 2004 9.3% 9.2% p.a
Following changes had been introduced in
PPF, 1968 8.8% 8.7%
the Marketing website maintained by
CRA.01/2013-14 dt.01.04.2013 CO:Marketing Department:

7
 Recollect

“Presentations”:
Six presentations are currently available on Product Days Customer Inter-bank
CASA, Corporate Products, Structured Loan transactions transactions
Monday
Products, All Products (including Bank’s profile), 9.00 AM to 4.30 PM 9.00 AM to 6.30 PM
RTGS to Friday
Fee Collection and Distinctive Schemes for High Saturday 9.00 AM to 2.00 PM 9.00 AM to 3.00 PM
Net worth Individuals (HNIs). Monday 8.00 AM to 7.00 PM
to Friday (settlement on hourly basis)
NEFT
“News Room”: 8.00 AM to 1.00 PM
Saturday
(settlement on hourly basis)
Marketing-relevant banking and financial articles
The above timings are subject to Branch
are available month-wise w.e.f 01.04.2013.
business hours and may vary from branch to branch
Broadly, news that are included, relate to launch
and place to place. Branches should initiate and
of new products and services, guidelines and
authorise the RTGS transactions immediately on
policy changes by apex bodies, competitors’
receipt of the request from the customer. Any
activities, latest trends, statistics indicating usage,
delay in the counter will force the customer to pay
penetration, potential, etc.
the time varying tariff at higher rate.
CRA.10/2013-14 Dt.22.05.2013
CRA-17/2013-14 Dt.22.06.2013
Launching of Web Portal to facilitate Online
FX
Collection of Premium & Generation of e-policies for
General Insurance Products Pre-mature withdrawal of NRE and NRO term
deposits – withdrawal of related penalty
A web portal has been launched for online
collection of the premium for “Arogya Raksha” There shall be no penalty on premature
Mediclaim Group Insurance Policies on 12.06.2013 withdrawal of NRE and NRO term deposits with
as a first step towards enabling other General effect from 01.04.2013. In case of such premature
Insurance Products of UIIC online. withdrawal of NRE and NRO term deposits,
This web portal enables online collection of interest at applicable card rate at the time of
fresh / renewal premium by all our branches and opening of the said deposit for the actual period run
also facilitates the remittance of renewal premium shall be paid.
directly by our customers having Net Banking FX.01/2013-14 Dt.01.04.2013
facility. By doing so, e-policies generated by UIIC
for fresh / renewal policies along with the Tax Restrictions by RBI on receipt of foreign
exemption certificates will be made available contributions under FCRA 2010
immediately to the customers if renewed through
net banking channel and on the next working day if Reserve Bank of India conveyed that Credit of
initiated through the branches. any funds flow from a donor agency viz., Dan Church
Aid to any individual / NGO / Organisation should be
Similarly, TPA Identity Cards under the effected only after obtaining clearance from Ministry of
revised procedure can be generated on 3rd working Home Affairs, Foreigners’ Division, FCRA Wing.
day. However, while issuing TPA Identity Cards,
branches must ensure affixing of the photographs of These transactions are subject to AFI by RBI
all the family members covered under the policy and any violation of the said directions attracts penal
and duly attested by Bank Officials before handing provisions as prescribed by RBI from time to time under
over the same to the customers. Banking Regulation Act.
Process Flow & Screen Shot Guide have FX.03/2013-14 Dt.30.04.2013
been annexed to this circular for information of the
branches. Salient features of FCRA accounts – monitoring/
CRA.16/2013-14 Dt.14.06.2013 caution to be exercised by branches
Apart from the other regular features of
RTGS/NEFT TIMINGS
FCRA accounts, branches should comply the
RBI has extended the RTGS timings effective following essential RBI guidelines:
from 02.07.2013 as below:

8
 April
April-June 2013

1. With the introduction of FCRA 2010, FCRA ¾ UN Sanction List (1267/1988 Sanctions List-
1976 stands repealed. List of Individuals and entities linked to
2. Branches have to ensure that all the existing Taliban
accounts which attract the provisions of FCRA ¾ OFAC list (List provided by Office of
2010 are maintained under the exclusive FCRA Foreign Assets Control)
CBS product codes only.
¾ Internal watch list (IWL), circulated by RBI.
3. All such new accounts also should be opened
under the specified FCRA CBS product codes Accordingly, there are certain changes in
only. the steps/procedure for creation of CIF, which are
explained hereunder.
4. PAN numbers must be updated in CBS for all
the FCRA accounts. Lack of these details for At maker level
some of the accounts has invited severe Steps are same as existing. Queue is
remarks by RBI during the latest special RBI generated for creation of CIF.
inspection in this regard.
At checker level
5. Branches have to access the website of the ¾ Fetch the Queue for Authorization.
Ministry of Home Affairs, Govt. of India and
obtain the list of all organisations who have ¾ On clicking the Queue the ‘authorize’ button
been prohibited from receiving foreign will get disabled. The ‘View’ button to be
contributions and list of all organisations whose clicked.
FCRA registrations have been cancelled by the ¾ A verify button will appear on left hand top
Govt. Immediately concerned home branches side with a message blinking on the right side
should set “STOP” status in CBS system on to guide you
such accounts and no credits or debits should ¾ Click the ‘Verify’ button for verifying the
be allowed in such accounts until further names of customer with the UN watch lists.
directions from the Government. ¾ A list of names with possible matches will
6. Branches should ensure that the FCRA appear with ‘Accept’ and ‘reject’ buttons on
registrations are valid and unexpired relating to the down side
all the FCRA accounts maintained with the ¾ The checker has to verify and ensure that the
branch. proposed customer is not the person whose
7. All the FCRA registrations issued earlier under name appears in the list of matches. In other
FCRA, 1976 are valid only up to 5 years from words verify the genuineness of KYC
01 05 2011 and all the subsequent registrations documents and identify the proposed
are sanctioned by the Government with validity customer.
period specifying the expiry. ¾ Click ‘Accept’ CIF after the verifying the
Branches shall refer this circular for other names to ensure that our proposed customer
guidelines on this matter. is not the one mentioned in the list of
matches. In case of doubt click ‘reject’
FX.08/2013-14 Dt.05.06.2013
button.
GENL ¾ Comment by Checker is mandatory for
On-Line Scanning of Names with U.N. Caution Lists Accept or Reject.
at the time of creation of CIF ¾ Once the verification is complete, Checker
In Compliance to the Government/RBI may fetch the Queue Again. Authorize button
directions, “on-line scanning of Names” have would have been enabled on completion of
been enabled at the time of creation of CIF itself. verification and acceptance. Or decline as the
As a fist step the scanning is enabled for First case.
Name of the Customer with the following lists. ¾ Authorize the ‘Queue’. The CIF number will
get displayed.
¾ UN Sanctions List (1267/1989 Al-Qaida
Sanctions-List of Individuals and entities
linked to Al-Qaida)

9
 Recollect

¾ On decline of Queue, same will be available by the CMA should be duly attested by the
for modification to maker in his personal Vendor.
queue as usual.
Para No.1.4 Any change in the CMA / CMA’s
Branches shall refer this circular with authorised signatories / CMA’s operational staff
regard to other guidelines on Bulk CIF should be based on the written communication duly
authorisation at Checker Level, Exceptions and attested by the Vendor.
generation of reports.
Para No.3.1 A BGL “ATM - CMA FIT ACCOUNT”
GENL.02/2013-14 Dt.01.04.2013 (BGL NO – 96156) is created for the designated Link
Branches for transfer of cash to the Vendors’ accounts.
Outsourcing of Cash Dispensers (CDs) – Changes in
Operational Work Flow & Job Role Para No.3.2 The Link branches should debit “ATM -
CMA FIT ACCOUNT” (BGL NO – 96156) and credit
Reference is invited to circular No:
the Current account opened for this purpose.
circular GENL.74/2012-13 dated 13/12/2012 on
“Outsourcing of Cash Dispensers (CDs) – Under Job Role of CO:CGT, ADD- Ported in the website
Operational Work Flow & Job Role”. as mentioned in 1.2.1 and 1.2.2

The following revised guidelines are made Under Job Role of CO:TMD, ADD- CO: TMD will
in the workflow and job roles pertaining to communicate the list along with the identified link
outsourcing of Cash Dispensers (CDs) which are as branches to the MSP for site feasibility study and Project
follows: Office to enable the ATM-CMA FIT BGL for the
Branch).
Para No.1.1 - Current Account (under product code All the Departments/Offices/Branches for
2311 – 1631) to be opened in the name of Vendor whom the specific job roles are framed should
(e.g.Vendor-CMA-Branch name i.e.TCPSL-Brinks allocate the above Cash Dispenser related work to
Arya-Harbour) at the designated Link Branches. the staff concerned through specific office order
Link branches identified by CO: CGT will be and with proper back up for exigencies.
communicated by ATM Section, CO: TMD to With regard to the issues pertaining to
Zonal Offices and respective link branch once the financial transactions done at Outsourced Cash
CD deployment in the location is finalised. Dispensers, the same can be escalated to ATM
Para No. 1.2 - The Link Branch should obtain: Service Centre (ATMSC).
1.2.1 Copy of the agreement between Vendor GENL.11/2013-14 Dt.10.04.2013
and the Bank, (ported in the ATM website
- http://10.100.6.210/atmnet/Bank Know Your Customer (KYC) compliance for Self Help
Agreement List.htm) Groups (SHG)
1.2.2 Copy of the Agreement between the Reserve Bank of India, has communicated
Vendor and the Cash Management Agency certain modifications in KYC procedure for Self
(CMA), if any, appointed by Vendor. Help Groups. Accordingly, KYC verification of all
(ported in the ATM website - the members of SHG need not be done while
http://10.100.6.210/atmnet/Bank opening the Savings Bank Account of the SHG and
Agreement List.htm) KYC verification of all the office bearers would
1.2.3 the related documents for the purpose of suffice.
opening the Current Account may be As regards KYC verification at the time of
obtained as mentioned in 1.2.1 and 1.2.2 credit linking of SHGs, it is clarified that since
1.2.4 From the CMA in their letter head (a) a list KYC would have already been verified while
and photos of authorized signatories of opening the Savings Bank Account and the account
CMAs to sign for the request to withdraw continues to be in operation and is to be used for
cash and (b) list and photos of CMA's credit linkage, no separate KYC verification of the
authorized operational staff / custodians to members or office bearers is necessary.
receive cash. All the documents submitted GENL.13/2013-14 dt.13.04.2013

10
 April
April-June 2013

Procedure for making NEFT / RTGS transactions 4. The concerned branch has to debit the cheque
using BGL routing account/BGL FIT- clearing and transfer the proceeds through C2C to its
account controlling Service Branch.
To overcome the difficulty, in making 5. The branch which is passing the instrument
transactions relating to RTGS, especially the Inter- will be solely responsible for the
bank Settlement and Payment of Interest on Term genuineness of the instrument since the
Deposits of a customer to his/her account with physical cheque is in its possession. After
another bank using NEFT N06 messages on passing the instrument, the branch has to
account abolition of Parking Account, a new Screen cancel the instrument and keep it along with
(20078) has been enabled in CBS for making NEFT the day’s vouchers.
transactions using the BGL Routing Account. 6. In case of return of such cheque, the branch
The menu/navigation for making the RTGS has to inform its controlling Service Branch
(R41) for settling INTER-BANK transaction before the stipulated Return time with the
instantaneously (screen: 20074) using ‘BGL FIT- return reason for return. In addition, the
Clearing account’ is given in the annexure to this branch has to submit the returned cheque in
circular. By using this modified menu, branches can P2F session to the concerned bank which has
settle the inter-bank transactions without any submitted the cheque in P2F Session
difficulty. 7. While processing the image of such P2F
GENL.14/2013-14 Dt.16.04.2013 cheque, the Service Branch has to ensure that
Procedural Guidelines for handling Paper to Follow either receipt of the proceeds of the cheque
(P2F) cheques under CTS Clearing through C2C or the return information. If it is
With the introduction of Speed Clearing a returned instrument, Service Branch has to
system/CTS, it is possible to present a cheque incorporate such return reason for that
drawn on one centre at another centre under CTS instrument for including the same in the
Clearing e.g. a cheque drawn on Chennai can be RBI/NPCI Return file.
presented at Coimbatore. In this scenario, the The above mentioned procedure comes into
physical cheque will be lying at Coimbatore force with immediate effect.
whereas the scanned image of the Cheque will be GENL.15/2013-14 Dt.16.04.2013
sent to Chennai, since the images are segregated
centre-wise in CTS. In such a situation, if P2F is Facility for Re-generation of Login/Transaction
warranted, it is not possible for the Chennai Centre Password by Retail Net Banking Customers
to verify the physical cheque. Facility has been enabled for re-generation
To overcome such issues, the following of password i.e. “Forgot Password” (Login or
methodology is made available to the branches Transaction password or both) through Retail Net
handling CTS clearing to handle the P2F cheques Banking facility by the customer himself. Adequate
under CTS clearing. security is ensured by sending One Time Password
1. Wherever Service Branch centres are (OTP) to the customer’s registered mobile which
situated, the image will be transmitted to the needs to be keyed-in by the customers for
Service branch centre where P2F physical validation.
instrument is available for processing the Branches shall refer this circular for the
same. detailed workflow about the said facility.
2. In other centres, the physical instrument has
to be passed by the branch which is receiving GENL.16/2013-14 Dt.16.04.2013
the P2F instrument in P2F session conducted Centralised Deposit Processing Centre (CDPC)
by NPCI, since it is not possible to transmit
the image of the cheque due to technical In order to extend the benefits of CDPC
reasons. concept, it is proposed to link all Branches (except
3. The image of such cheque will be available at Rural Branches) to CDPC, Chennai in a phased
the Service Branch which is handling the manner and to merge CDPCs functioning at
CTS clearing of that branch.

11
 Recollect

Bangalore, Mumbai and Delhi with CDPC, at Branch, Linking of the CIF to the pre-opened
Chennai in the last Phase. account, Issue of Welcome Kit to the customer,
Receipt of Cash, Handling of Cheque Book request
Main functions of CDPC are as follows:
of the customer at the Branch, Handling of
i. Centralisation of Processing of CASA Undelivered Cheque Book at CDPC/Branches,
Deposit Accounts Scanning of CIF / Account Opening Application
a. Creation of pre-opened accounts. Initially Forms / KYC documents under Document
Savings Bank and subsequently all Management System (DMS) – (to be implemented
types of CASA Deposit Accounts. in phase III), Reports available at the Branch level
and Responsibility / Control / Monitoring at the
b. Preparation of Welcome kits (Welcome kits Branch etc.
sent by CDPC to branches represent a pre
opened account and contain ATM card and GENL.17/2013-14 Dt.17.04.2013
PIN mailer and material on Bank Products. Outsourcing of Cash Dispensers (CDs) - Change in
These welcome kits can be issued to the Current Account Product Code for replenishment of
accounts which are eligible for ATM cards. cash in Outsourced ATMs
Further, without ATM cards also, the welcome In view of certain operational difficulties
kits will be issued at a later date. observed in the Current Account (product code
2311-1631) opened in the name of the Outsourced
ii. Centralised Issuance of Personalised Cheque
ATM Vendors for replenishment of cash in CDs,
Books
the branches shall change the already opened
iii. Sending of “Thanks Letter” to the new Current Account under product code 2311-1631 as
customers on behalf of the Branches (date product code 2711-1691 with the nomenclature
will be informed later on implementation of “Vendor – ATM Cash Replenishment” Account.
phase II) Henceforth, the branches should open the
iv. Sending of “Statement of Accounts” to Current Account for replenishment of cash under
customers of CA/CC/OD on behalf of all the outsourced CDs under the product code 2711-
branches wherever requests are recorded in 1691 only.
CBS (phase II) Current Account opened under the above
v. Monitoring of scanning of CIF/Account product code (2711-1691) will have the following
Opening forms with KYC documents in features:
DMS (Document Management System) and 1. No Cheque Books to be issued under this
scanning of signature in CBS, in co- product
ordination with the respective Zonal offices 2. Product change is not allowed
once the DMS is fully operationalised by 3. Branch Change is not permitted
CO: TMD (phase III).
4. Home Branch Restriction is to be marked
On any account, the Account Opening by branches immediately once the account
Forms, CIF opening forms and copy of KYC is created under this product using Account
documents should not be sent to CDPC or any other Security Menu under Branch
Office with immediate effect. These forms should Administration (USER TYPE 50).
be stored as mentioned in para 13.3 for future GENL.19/2013-14 Dt.27.04.2013
reference.
Branches shall refer this circular for Delay in re-presentation of technical return cheques
other guidelines/information with regard to - and levy of charges for such returns
Concept of CDPC, Linking of Branches to CDPC, With regard to re-presentation of technical
Opening of Dummy CIF at branches (one time return cheques and levy of charges for such returns,
activity), Welcome Kits, Receipt of Application for branches shall follow the instructions mentioned
opening of a Savings Bank Account from a below, with immediate effect:
prospective customer, Processing of the application

12
 April
April-June 2013

1. Cheque return charges shall be levied only Cheque Personalisation-Order menu before
in cases where the customer is at fault and authorising the same and avoid any customer
is responsible for such returns. The complaints in this regard.
illustrative, but not exhaustive, list of
returns, where the customer is not at fault GENL.33/2013-14 Dt.22.06.2013
is indicated in the annexed to this circular. ADMIN
2. Cheques that need to be re-presented
without any recourse to the payee, shall be Expenditure Approval Committee at Corporate level
made in the immediate next presentation and Zonal offices
clearing not later than 24 hours (excluding
A Committee by name “Expenditure
holidays) with due notification to the
Approval Committees at Corporate Office and
customers of such re-presentation through
Zonal Office Level” has been formed in lieu of
SMS alert, email etc.,
existing powers assigned with CMD, ED and GM
3. To give publicity to these revised at Corporate Office Level and Zonal Managers at
guidelines for better customer service and Zonal Office Level as detailed below:
dissemination of information by display in
the Notice Board meant for customers. At Corporate Office:
Delegation of Powers Delegation of Powers
GENL.23/2013-14 dt.20.05.2013
(Existing) (Revised)
Chairman and Managing Expenditure Approval
ATM cards - efficiency and safety of ATM
Director Committee (EAC)
transactions & customer protection
Executive Director Corporate Office Level
ATM attached branches should Expenditure Approval
prominently display the “Do’s and Don’ts” of ATM Committee (ED)
operations in ATM premises for increasing General Manager (in-charge
customer awareness. This small step will go a long of Expenditure / Premises / Corporate Office Level
way in educating a common person and preventing TMD / CCD / Legal / Expenditure Approval
him/her from becoming a victim of fraudulent Marketing etc. at Corporate Committee (GM)
activities. Office)

The list of “Do’s & Don’ts” to be displayed ƒ DGMs, AGMs at CO / CM (Exp) / SM (Exp)
in our ATM cabins is annexed to this circular. will exercise the powers as per the existing
GENL.32/2013-14 Dt.17.06.2013 delegation of powers. However, on monthly
basis, such sanctions are to be reported to the
Merging of Cheque Book Order screen (Screen Corporate Office Level Expenditure Approval
No.50212) with Cheque Personalisation screen Committee (GM) for ratification.
(Screen No.50216) in CBS
At Zonal Office
Henceforth, both the “Cheque Book Order”
screen (screen 50212) and “Cheque Delegation of Powers Delegation of Powers
(Existing) (Revised)
Personalisation” screen (screen 50216) are merged
Zonal Manager (GM / Zonal Office Level Expenditure
together and a new screen by name “Cheque
DGM / AGM) Approval Committee (GM /
Personalisation-Order” screen (screen 50216) only DGM / AGM) ZLEAC
will be available for the Branches. Branches are (GM/DGM/AGM)
directed not to fill the “Name 2” field in the cheque
ƒ DGM / AGM / CM will exercise the powers as
personalization screen under any circumstances. per the existing delegation of powers.
The Branches, which are not linked to any However, on monthly basis such sanctions are
CDPC, may continue to issue cheque book (non- to be reported to the Zonal Office Level
personalised) through the screen 50213. Officers Expenditure Approval Committee
authorising the queue should verify the correctness (GM/DGM/AGM)
of the name and address of the customer in the

13
 Recollect

At Branch Standardization and Enhancement of Security

Delegation of Powers Delegation of Powers Features – CTS – 2010- Specifications – Extended to
(Existing) (Revised) Demand Drafts - Reg.
DGMs / AGMs /CMs in Existing delegated powers to
CO: Stationery Dept to supply the Demand
Branches and BMs in scale III / continue
Scale II / Scale I Drafts with CTS - 2010 standards to all Zonal
Offices / Zonal Stationery Centres as a one time
Details regarding the Composition of measure for onward supply to the branches of the
various Committees and General Terms are given respective zone.
in this circular for the benefit of various sanctioning
authorities to exercise their powers judiciously. All the branches should use only revised
This circular may be kept along with the booklet on Demand Drafts with effect from 22.07.2013.
“Delegation of Powers”.
From 01.08.2013 Issue of Demand Draft in
ADMIN.08/2013-14 Dt.28.05.2013 non CTS form will be deemed as contravention of
Acknowledgement by Bank to Depositors at the time RBI directions.
of receipt of Form-15G / 15H
The existing stock of Demand Draft
All branches should give acknowledgement stationery will become obsolete from 22.07.2013
to the depositors at the time of receipt of Form 15- and necessary steps should be taken for destroying
G / Form 15-H itself. Immediately should enter the after getting prior sanction from their Zonal
details in the system in order to comply with the Offices.
directions of Reserve Bank of India and to render
ADMIN.14/2013-14 dt.27.06.2013
better customer service.
Revised formats of Form-15G and Form- Though due care has been taken in the preparation of
15H are made available in CBS Help Desk Æ Recollect, the version given in the circular is final.
Other web sites Æ Centralised TDS Cell.
Compiled by CO: O&M Division
ADMIN.10/2013-14 Dt.17.06.2013

14
 Issue 1
a
Volume 27

For Private Circulation Only

April – June 2014 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Pg
CONTENTS OF THIS ISSUE S.No Date Subject
No.
Pg 11 15.04.14 Entering of Data in CPP Website on
S.No Date Subject 6
No. drawing House Rent Allowance (HRA)
DEP. 07.05.14 Levy of Penal Charges on Non- 21 23.05.14 Encouragement To Employees to acquire
05 Maintenance of Minimum Balances in 2 Professional Acumen / Qualification 6
Inoperative Accounts 22 23.05.14 Payment of Conveyance Allowance to
06 26.05.14 One Time Password for Corporate Net Deaf and Dumb employees (Award Staff)
2 7
Banking Customers at par with Blind and Orthopaedically
ADV. 04.04.14 Incentive Scheme for branches for Handicapped employees
04 recovery in NPA accounts outstanding in CRA 03.05.14 Sharing of KYC Documents by banks in
2 7
our books and in the accounts transferred 08 Fraud cases
to Reliance Arc
11 09.05.14 Arogya Raksha Group Health Insurance
06 07.04.14 Continuation of Interest Subvention Policy” by arrangement with M/s. United
scheme for short term crop loans to 3 India Insurance Co. Ltd (UIIC) offered 7
farmers during the year 2014-15 exclusively to the customers of our Bank -
15 03.05.14 New Product codes for Non-Agri. Need for Aggressive Marketing
loans against Gold ornaments and 3 FX 27.05.14 Transfer of funds from NRO account to
Jewellery NRE Account - Collection of data for 8
08
16 10.05.14 Defaulted guarantees, Devolved LCs, consolidated monthly report to RBI
TODs & BPs 3
12 24.06.14 Export and Import of Currency 8
17 14.05.14 Implementation of Financial Inclusion GENL 03.06.14 Maintenance of Vouchers at Branches
Plan 2013-2016 - Revised Guidelines on 8
24
Information and Communication
3 27 26.06.14 Know your customer (KYC) guidelines - 9
Technology based Smart Card enabled
Business Correspondent Model with M/s Relaxation in requirement of address
TCS Limited proof
18 14.05.14 Reporting of SMA – 2 Accounts to RBI by 28 27.06.14 Transmitting LC messages through 9
3 SFMS - Recovery of charges for
our Bank
originating messages by IDRBT
21 15.05.14 Rajiv Rinn Yojana (RRY) Scheme
3 ADMIN 01.04.14 Formation of Bhopal Zone 9
guidelines-Reg.
04
22 19.05.14 New CSIS scheme – Clarification
regarding obtention of Income Certificate 15 03.04.14 1. Delegation of Powers for Capital/ 10
4 Revenue Expenditure
and procedure for submission of claim for
Interest Relief on Educational Loans 2. Authorizing loss on sale of assets.
31 12.06.14 Implementation of National Crop 18 25.04.14 Issue of a 10 denomination Banknotes 10
Insurance Programme (NCIP) and with inset letter ‘A’ in numbering panel
withdrawl of National Agriculture 4
21 13.05.14 Issue of a 20 denomination Banknotes 10
Insurance Scheme (NAIS) with incorporation of (a) symbol without
39 27.06.14 Bank Guarantees issued by Branches - inset letter
Addressing Letters in the Name of 5 22 13.05.14 Issue of a 1000 denomination Banknotes 10
President of India with incorporation of (a) symbol without
41 30.06.14 CREDIT GUARANTEE SCHEME --- inset letter
5 17 19.04.14 Renewal of standard Fire and Special 10
Modifications to the Scheme
HRM 03.04.14 Interest Free salary Advances /Festival Perils Policy of the Bank’s Own Building
05 advance to staff members for the financial 5 23 19.05.14 Maintenance of Numbered Stationery 11
year 2015-16 Item
06 04.04.14 Details of incentives available to Officers 25 31.05.14 Banker’s indemnity Policy for the financial 11
Posted from outside North Eastern 6 year 2014-15
Region (NER) to branches in NER 31 24.06.14 Formation of Special Investigation Team (
11
21 23.05.14 Leave fare concession (LFC) – foreign SIT)
6
travel
 Recollect

DEPOSITS ADVANCES
Incentive Scheme for branches for recovery in NPA
Levy of Penal Charges on Non-Maintenance of
accounts outstanding in our books and in the
Minimum Balances in Inoperative Accounts
accounts transferred to Reliance ARC
Branches shall be guided by the latest With a view to accelerate and give greater
directions of Reserve Bank of India and accordingly impetus to the recovery in NPAs, an Incentive
no penal charges should be levied for non Scheme for branches has been introduced.
maintenance of minimum balances in any
The details of the Scheme are furnished
inoperative account.
below:
DEP.05/2014-15 Dt. 07.05.2014
 The incentive scheme is restricted to NPAs with
One Time Password for Corporate Net Banking Book balance upto a.1 crore.
Customers
 NPAs under doubtful, loss and written off
accounts including fraud accounts is covered
Customers using the facility of Corporate
under the scheme
Net Banking in our Bank have been provided with
Transaction Password on request under Retail Net  Following recoveries will not be eligible for any
Banking facility to be operated by an individual in incentive:
the official capacity as Principal or Correspondent of 1. Accounts allotted to Recovery agents
the College/Institution, Secretary of the 2. Settlement under compromise settlement
Club/Society, Karta of the HUF as the authorised 3. Fresh NPAs identified during any financial
person to do the funds transfer. In case of Corporate year
Net Banking (CNB), with multiple level 4. Repayment received in normal course
authorisation, they can do only one to one funds
5. ECGC, DICGC, any subsidy, CGTSME
transfer and Government Payments like claim settlement and any such recoveries
direct/indirect taxes. However, the facility to make
6. Recovery in staff/staff guaranteed, FDR,
bill payments / merchant payments through
NSC and gold loan accounts
aggregators (Bill Desk, Tech Process etc) is available
under Retail Net Banking only. 7. Recovery by way of sale of mortgaged
properties under SARFAESI
One Time Password for the ‘MAKER’ on CNB 8. Recovery in restructured accounts as per the
To ensure that the transactions are carried out terms of restructure
safely and securely with more inbuilt checks and 9. Wherever staff accountability is fixed, the
balances, One Time Password for the maker of the recovery effected by the staff involved in
transactions has been introduced. This step will such cases should not be included in
ensure added security as the OTP is sent to maker’s reckoning the eligibility for the award.
registered mobile number. Incentive Model
Accordingly, with effect from 01.06.2014,  Incentive amount to be utilized for the welfare
(under Phase I) whenever the maker initiates of the branch
RTGS/NEFT transaction (both individual and bulk  On no account, cash should be paid to the staff
upload transactions), OTP will be generated and sent members.
to the maker’s registered mobile number.
 Manner of utilization of incentive awarded to a
For transfer to other IB accounts/own accounts, branch will be decided by the Branch Manager
OTP will be introduced in Phase II. The date of and his decision will be final.
effect of Phase II will be intimated later.
 Incentive will be paid to the branches on
DEP.06/2014-15 Dt. 26.05.2014 quarterly basis. Based on the claim submitted
by the branches, Zonal Office will settle the
claim

2
 April – June 2014

 The scheme will be valid upto 31 03 2015.The instances of default/devolvement, that concession
scheme will be reviewed thereafter. extended in the accounts shall be withdrawan.
Two separate schemes have been formulated -one for In addition, information on withdrawal of
recovery effected in ARC accounts and the other for concession should also be sent to the borrowers
recovery effected in other than ARC accounts. without fail.
Details regarding these schemes and other general ADV.16/2014-15 Dt.10.05.2014
instructions are available in this circular.
Implementation of Financial Inclusion Plan 2013-2016 -
ADV. 04/2014-15 Dt.04.04.2014 Revised Guidelines on Information and Communication
Technology based Smart Card enabled Business
Continuation of Interest Subvention scheme for short Correspondent Model with M/s TCS Limited
term crop loans to farmers during the year 2014-15
Detailed guidelines on implementation of
 Branches shall continue extending crop loans @ 7% outsourced ICT based smart card enabled BC Model
to the eligible farmers from 01.04.2014 as follows: were communicated to branches vide HO: Rural
 Extend Short Term production credit @ 7% upto Banking Department circular No.ADV.140/2010-11
R.3.00 lakhs under interest subvention scheme dated 31.12.2010. Bank has renewed the contract for a
further period of 3 years with M/s TCS Ltd., for
 Provide incentive subvention @ 3% to the prompt implementation of end to end outsourced BC Model,
repaying farmers who avail loan during 2014-15. with effect from 16.12.2013. Under the renewed
ADV.06/2014-15 Dt.07.04.2014 contract, the scope of BC activities has been enlarged
and the modalities of implementation of BC model
New Product codes for Non-Agriculture loans against have undergone certain modifications. The detailed
Gold ornaments and Jewellery procedure for implementation of BC model under the
renewed contract is furnished in this circular.
The following new product codes have been
introduced for opening of Non-Agriculture Jewel Staff members shall refer this circular
loans upto a.1.00 lakh (Bullet payment i.e. Principal regarding the guidelines to be followed on “Cash
along with Interest to be repaid at the end of the term) Management Procedure’ and the details of individual
against pledge of gold ornaments and jewellery: component wise payment to be maded to TCS, BCO
and the FBC (furnished as Annexure).
Product
No Product Product Name
Code ADV.17/2014-15 Dt.14.05.2014
1 Jewel loan Non JL NP UPTO 1 LAC 5911-0011
priority Reporting of SMA – 2 Accounts to RBI by our Bank.
2 Jewel loan Non JL NON AGRI PRTY 5911-0012
Agri Priority UPTO 1 LAC All Branches / Zonal Offices shall sensitise
3 Jewel loan Traders JL TRADERS PRTY 5911-0013
UPTO 1 LAC
all the borrowers with exposure of a 5.00 Crs and
above regarding reporting of the names appearing in
For Non-Agriculture Jewel loans above s.1.00 lakh (Quarterly the SMA 2 category to RBI, which is accessible to all
repayment) banks like defaulters’ list.
Product ADV.18/2014-15 Dt.14.05.2014
No Product Product Name
Code
1 Jewel loan Non JL NP >1 LAC 5911-0001
priority Rajiv Rinn Yojana (RRY) Scheme guidelines
2 Jewel loan Non Agri JL NON AGRI PRTY > 1 LAC 5911-0002
Priority Rajiv Rinn Yojana (RRY or Rajiv Loan
3 Jewel loan Traders JL TRADERS PRTY > 1 LAC 5911-0003 Scheme) is an instrument to address the housing
needs of the Economically Weaker Section (EWS) /
ADV.15/2014-15 Dt.03.05.2014
Low Income Group (LIG) segments in urban areas,
through enhanced credit flow. RRY is a Central
Defaulted guarantees, Devolved LCs, TODs & BPs Sector Scheme, applicable in all the urban areas of
Branches shall not extend any concession in the country, which has been formulated by
the accounts where there are instances of default. All modifying the Interest Subsidy Scheme for Housing
borrowers shall be informed in writing, in the event of the Urban Poor (ISHUP) piloted in the 11th Plan

3
 Recollect

period with enhanced scope and coverage. The AUTHORITY NEED NOT BE INSISTED FROM
tenure of ISHUP expired on September 30, 2013 and STUDENT/PARENT IN SUCH CASES.
Rajiv Rinn Yojana is effective from October 1, 2013. Wherever income is not declared in the
The scheme envisages the provision of a educational loan application, income certificate
fixed interest subsidy of 5% (500 basis points) on from appropriate authority has to be obtained from
interest charged on the admissible loan amount to the student borrower for preferring Interest
EWS & LIG. Primary Lending Institutions (PLIs), Relief/Subsidy claims. Branches have to
Banks and Housing Finance Companies (HFCs) are communicate to the eligible borrowers, based on
the channels through which the Scheme reaches the the above guidelines.
beneficiaries.
The Ministry has revised the format for
The two products for RRY scheme have monitoring the progress under the New CSIS
been introduced by the Bank as mentioned below. Scheme which is enclosed and the format for
Product Name Particulars Claiming of Interest Subsidy through Nodal Bank
Product-1 - 5925-0003:RRY-INT SUB HSG
(Canara Bank) are enclosed to this circular.
Rajiv Rinn Yojana(RRY)
SCHM-FLG
Product-2 - 5925-0004:RRY-INT SUB HSG ADV.22/2013-14 Dt.19.05.2014
SCHM-FXD
Implementation of National Crop Insurance
Upper Loan Limit for a.5,00,000
EWS Programme (NCIP) and withdrawl of National
Agriculture Insurance Scheme (NAIS)
Upper Loan Limit for a.8,00,000
LIG A new scheme viz, National Crop Insurance
Minimum Term 180 Months-Monthly Repayment Programme (NCIP) has been introduced with effect
Maximum Term 240 Months-Monthly Repayment from 1st November 2013 Consequent to the
Rate of Interest 10.25% (Base Rate at present) withdrawal of National Agriculture Insurance
(Floating) Scheme (NAIS).
Rate of Interest(Fixed) 11.25% (Base Rate 10.25% at present + The National Crop Insurance Programme
1.00) (NCIP) has three components:
Sector Priority
 Modified National Agriculture Insurance
Processing Charges Nil
Scheme (MNAIS)
Subsidy 5% INTEREST SUBSIDY AVAILABLE UPTO
A LOAN AMOUNT OF R.5.00 LAKHS  Weather Based Crop Insurance Scheme
Source of Subsidy NHB/HUDCO (WBCIS)

Staff members may refer this circular regarding  Coconut Palm Insurance Scheme (CPIS)
Broad features of the scheme and Terms for Loan Many of the drawbacks of the erstwhile
and Subsidy Reimbursement. National Agriculture Insurance Scheme (NAIS) have
been addressed in National Crop Insurance
ADV.21/2014-15 Dt.15.05.2014
Programme (NCIP), which will further help the
New CSIS scheme – Clarification regarding farmers in mitigating their losses adequately and
obtention of Income Certificate and procedure for promptly.
submission of claim for Interest Relief on The advantages of the new scheme are:
Educational Loans
 On Account payment of claims:
With regard to implementation of New
CSIS scheme (Interest Relief Scheme), providing In case of adverse seasonal conditions during
relief on interest outstanding component as on crop season, claim amount upto 25% of likely claims
31.12.2013 for Educational Loans sanctioned / would be released in advance subject to adjustment
against the claims assessed on yield basis. The on
availed upto 31.03.2009 and outstanding as on
account payment will be considered only if the
31.12.2013, branches are clarified that they shall
expected yield during the season is less than 50% of
identify eligible accounts based on the income normal yield.
declared in the application or income certificate
submitted along with the application. INCOME  Prevented Sowing/ Planting Claims:
CERTIFICATE FROM APPROPRIATE The extent of claims payable will be decided in

4
 April – June 2014

respect of the insurance unit area on the basis of rainfall CGTMSE has decided to exclude the time
position issued by the concerned Indian Meteorological period from the identification of the MSE unit as sick
Department (IMD) for the area during the sowing through rehabilitation process and till the unit is
season and acreage sown particulars issued by the State subsequently found non-viable for invocation of
Government. guarantee .The assumed NPA date for claim purposes
The maximum claims payable will be 25% of the sum would now be taken as the date when the unit is
insured. Having received indemnity based on prevented subsequently found non-viable; all other guidelines
sowing/ planting, the insurance cover is automatically remaining unchanged. The assumed NPA date may be
terminated. marked in the CGTMSE Software System by the
Bank and while lodging the claim, the Declaration-
 Post Harvest Losses:
Cum-Undertaking must clearly indicate that the
Coverage is available only for those crops, which proposal was covered under the "RBI Rehabilitation
are allowed to dry in the field after harvesting against Guidelines for Sick Micro and Small Enterprises"
specified perils of cyclone in coastal areas, resulting in dated November 01, 2012 and indicate the actual NPA
damage to harvested crop lying in the field in ‘cut & date .
spread’ condition. In other words, the crop which after
harvest is left in the field for drying, is only covered Modification in the Guarantee Claim Settlement
against the peril of post harvest losses. Process
CGTMSE has created online module in
The state/ UT concerned will bring out the list CGTM SE portal whereby the claim application form
of such crops in consultation with implementing age. would be reverted to the MLI duly indicating
The harvested crop bundled and heaped at a appropriate nature of deficiency/ies when the claim
place before threshing is beyond coverage under post application form is incomplete or fed incorrectly. The
harvest losses. intimation to that effect would be given to the
respective Member (i.e. Zonal Office in our Bank )
The coverage is available only upto a by means of email (system generated) to the email
maximum period of two weeks (14 days) from address available in the records of CGTMSE. The
harvesting. Zonal Office shall re-lodge the claim with the
Assessment of damage will be on individual desired additional information and / or correct details
basis. particularly in respect of nature of deficiency/ies
indicated, while resubmitting the claim in the
Branches shall refer this circular regarding CGTMSE portal.
important features / Improvements in the schemes
and functions and responsibilities of Banks/ Financial Branches shall refer the circular with regard
Institutions under NCIP. to Receipt of Guarantee Fee (GF) through RTGS /
NEFT - Modification in existing procedure and
ADV. 31/2014-15 Dt.12.06.2014 Credit Guarantee Scheme (CGS) - Claim lodgement
Bank Guarantees issued by Branches -Addressing Change in procedure for submission of Declaration &
Letters in the Name of President of India Undertaking by MLIs.
Henceforth, branches should not address any ADV.41/2013-14 Dt.30.06.2014
correspondence in the name of the President of India HRM
and only to be addressed to the Department concerned Interest Free salary Advances / Festival advance to
for any further action, with regard to BGs issued by staff members for the financial year 2014-15
the Branches.
ADV.39/2014-15 Dt.27.06.2014 Branches/offices shall permit Interest Free
salary / Festival advance to staff members for the
CREDIT GUARANTEE SCHEME --- Modifications to the financial year beginning 01.04.2014 to 31.03.2015
Scheme for the following festivals
The following modifications have been
Sl No. Name of the Festival Date of the Festival
brought in consequent to the issue of Master Circular:
1. Baisaki 14.04.2014
Restructured accounts - Relaxations in 2. Tamil New Year 14.04.2014
3. Sinhalese New year 14.04.2014
guidelines for lodgment of claims by MLIs under CGS
4. Bohag Bihu 15.04.2014
5. Hari Raya Pusa 28.07.2014

5
 Recollect

Sl No. Name of the Festival Date of the Festival on completion of tenure of two years of
6. Ramzan 29.07.2014 stay in NER.
7. Ganesh Chathurthi 29.08.2014
8. Onam 06.09.2014 As per the existing guidelines, the above
9. Durga Pooja 03.10.2014 incentives are applicable not only to those Officers
10. Deepwali 23.10.2014 who were transferred to North Eastern Region
11. Christmas 25.12.2014 from other regions but also to the new recruiters
12. Milad-un-Nabi 04.01.2015
13. Pongal 15.01.2015
belonging to other regions but are posted on their
14. Chinese new year 19.02.2015 first appointment directly to North Eastern Region.
15. Holi 06.03.2015
HRM.06/2014-15 Dt.04.04.2014
16. Ugadi 21.03.2015

Only permanent confirmed employees Leave fare concession (LFC) – foreign travel
and part time employees who are in scale wages
are eligible for the advance. LFC under Foreign Travel stands abolished
with immediate effect and circulars on LFC-Foreign
The quantum of advance and the terms Travel stands withdrawn with immediate effect. All
and conditions governing the facility of Interest sanctioning authorities should take note of the same
Free salary advance/Festival advance are set out and act accordingly.
in this circular. HRM.10/2014-15 Dt.15.04.2014
HRM.05/2014-15 Dt.03.04.2014
Entering of Data in CPP Website on drawing
House Rent Allowance (HRA)
Details of incentives available to Officers Posted
from outside North Eastern Region (NER) to
If PAN number of landlord is not
branches in NER
furnished whenever the rent exceeds the
prescribed amount and in case the landlord does
In terms of extant GoI/IBA Guidelines, our
not have a PAN, a declaration to that effect from
Bank has been extending certain benefits to
the landlord along with the name and address of
Officers posted from outside NER to Branches
the landlord should be furnished by the employee
coming under NER, which are as under:
to CO: HRM Department for claiming the
following exemption for Income Tax calculation.
 Retention of accommodation at earlier
place of their posting or in any places 1. Rebate on HRA for award staff
indicated of their choice. 2. Rebate on HRA for Officers and 150% of
 Provision of single furnished eligible HRA.
accommodation at the place of posting at The eligible amount of Rebate on HRA
NER with 50 % of their otherwise for Income Tax exemption will be calculated
eligibility. monthly by thesystem, based on the salary input
 Payment of mid-academic transfer given and cannot be changed at a later date as no
retrospective effect in input can be given nor
allowance for the entire period of their
updated manually. Hence all staff members are
stay in NER if his/her children do not
advised in their own interest to furnish the details
join at NER. accurately during the relevant month itself
 Ad-hoc and temporary monetary whenever there is a change of HRA option or
incentive @ 12.5% of basic pay subject to change in the rental amount.
a maximum of a. 1500/- p.m. for the
HRM.11/2014-15 Dt.15.04.2014
duration of their active duty in NER.
Encouragement To Employees To Acquire
 Yearly leave travel concession to the
Professional Acumen / Qualification
place where his/her family resides.
A Scheme to reimburse the following
 Preferential transfer to any place of expenses incurred by those staff members who
his/her choice (out of 3 places indicated) successfully complete the Diploma / Certificate

6
 April – June 2014

examinations conducted by IIBF, Mumbai, has states that “it shall be the duty of the banker who
been approved receives payment based on an electronic image of a
truncated cheque held with him, to verify the prima
1. Applicable Examination Fees.
facie genuineness of the cheque to be truncated and any
2. The cost of books/study material upto a
fraud, forgery or tampering apparent on the face of the
maximum of a.2500/- or actual cost of the
instrument that can be verified with due diligence and
Books, whichever is less, on production of
ordinary care.”
bills and
3. An incentive amount of a.1000/- CRA.08/2014-15 Dt.03.05.2014
Staff members shall also refer Cir No.HRM.34/ Arogya Raksha Group Health Insurance Policy” by
2014-15 dt.21.06.2014 in this regard. arrangement with M/s. United India Insurance Co. Ltd
(UIIC) offered exclusively to the customers of our Bank
HRM.21/2014-15 Dt.23.05.2014 - Need for Aggressive Marketing
Payment of Conveyance Allowance to Deaf and Dumb As per latest MOU with UIIC, following
employees (Award Staff) at par with Blind and significant changes / improvements / benefits have
Orthopaedically Handicapped employees been introduced in Arogya Raksha Group Health
Conveyance Allowance to Deaf and Dumb Insurance Policy keeping in view of extant IRDA
employees (Award Staff) has been since extended guidelines and group health insurance products
w.e.f. 01.05.2014 onwards subject to the same terms offered by other public sector banks as on date:
and conditions as stipulated for the Blind and  Premium Rates: Now slashed by 5% to 59%
Orthopaedically Handicapped employees ie., @ 5% of under all the Plans
Basic Pay subject to a maximum of a.400/- p.m.  Plans revised:
To claim Conveyance Allowance, the Deaf and  Plan A: A/c holder + Spouse + Two
Dumb employees (Award Staff) should submit a copy dependent children (1+3) for age group up
of the medical certificate/recommendation obtained to 35 years
from Head of ENT Department of a Government Civil  Plan B: A/c holder + Spouse + Two
Hospital to the effect of their Deafness/Dumbness and dependent children (1+3) for age group >
the same may be forwarded to CO: HRM: Group ‘A’ 35 years
Section through Branch Manager/Head of the  Plan C: A/c holder + Spouse + Two
Department for payment of the Conveyance dependent children + dependent parents
Allowance. Staff members who joined the services of (1+5) for age group > 35 years
the Bank under PWD Category (Person with  Age limit at entry level: 3 months to 65 years
Disability) may submit their representation mentioning and renewals allowed for Life time
the details submitted at the time of appointment.  Minimum Insurance Slab: a.1 lakh under all
three Plans
HRM.22/2014-14 Dt.23.05.2014
 Hospitalisation for Major Illnesses: Actual
CRA
expenses or 80% of sum insured whichever is
Sharing of KYC Documents by banks in Fraud cases lower
 Additional Benefits:
According to Indian Banks’ Association the
Collecting banks shall share copies of the KYC  Ambulance Charges up to a.1,000/- for
documents (retaining the original documents with emergency transport of patient from the place of
them) with the paying bank to facilitate the paying residence/ accident/illness to the hospital where
bank to lodge FIR with the police and keep the RBI treatment is taken.
informed.  Hospital Cash at R.100/- per day subject to
maximum of a.1,000/- to parents/guardians in case
As per RBI’s procedural guidelines on CTS, the of hospitalisation of children up to 12 years of age
onus of due diligence shifts to the Presenting Bank, provided there is a valid claim under the policy.
since the payment processing is done on the basis of
images. The NI Act also has been modified  Funeral Expenses of a.1,000/- in case of death
accordingly, under explanation II to Section 131 of NI following hospitalisation due to illness/ accident and
Act 1881. The amended Section 131 of NI Act, 1881

7
 Recollect

their eyes have been donated to a recognised and Reserve Bank of India notes up to an amount
institution and is over & above the sum insured not exceeding a.25,000 (Rupees twenty five
 Reimbursement of expenses - Nepal & Bhutan thousand only); and
in Indian Rupees for treatment while insured is away
ii) who had gone out of India on a temporary visit,
at these places either on holiday or business
may bring into India at the time of his return from
purposes. Cashless facility however is not offered
under this extension. any place outside India (other than from Nepal
and Bhutan), currency notes of Government of
CRA.11/2014-15 Dt.09.05.2014 India and Reserve Bank of India notes up to an
amount not exceeding a.25,000 (Rupees twenty
FX five thousand only).
Transfer of funds from NRO account to NRE Account -
Collection of data for consolidated monthly report to Any person resident outside India, not being a
RBI citizen of Pakistan and Bandladesh and also not a
traveller coming and going to Pakistan and
Reserve Bank of India had modified the Bangaldesh and visiting India.
periodicity of reporting remittances made by NRIs /
PIOs Foreign Nationals out of the NRO from i. may take outside India currency notes of
Quarterly to Monthly. RBI has further included the Government of India and Reserve Bank of
data on Transfers from NRO to NRE account in the India notes up to an amount not exceeding
reporting format in addition to outward remittances on a.25,000 (Rupees twenty five thousand only)
account of sale of immovable property and other while exiting only through an airport
assets abroad from NRO accounts.
ii. may bring into India currency notes of
Generation of the data of transfer from NRO Government of India and Reserve Bank of
to NRE accounts from CBS data source is not India notes up to an amount not exceeding
possible. As the data need to be reported to RBI, CO: a.25,000 (Rupees twenty five thousand only)
MIS has developed Template No 643 (BBMIS > while entering only through an airport.
Monthly > ID > 643) for submission of the data by all FX.12/2014-15 Dt.24.06.2014
branches. Such transfers are subject to within the
overall remittance ceiling of repartiable funds of USD
GENL
1 million against payment of applicable taxes
available to NRIs. The template is also provided with Maintenance of Vouchers at Branches
a column whether proof of payment of Tax obtained.
As per e-VVR system, arrangement and
Guidelines for data entry are available in the template.
stitching of vouchers after the introduction of CBS
Branches are advised to keep the back papers
and e-VVR in the Branches have gone through a
including the proof of payment of Tax for future
change, since the concept of stitching has changed
records and to be presented to inspecting officials. If
from account type wise to voucher ID wise.
no data to be reported, branches have to submit NIL
data by selecting the option ‘no data to report’ . Further, in e-VVR system, docket sheet is
provided with complete details of checker-wise and
FX.08/2014-15 Dt.27.05.2014
verifier-wise number of vouchers allotted, verified
Export and Import of Currency with individual vouchers (ie, codes 11, 22, 23, 24,
25), verified with List/Batch entries (ie, code 12),
Enhanced facilities for residents and non-residents
and verified as system generated (ie code 13 ).
According to Reserve Bank of India,
A Voucher-ID (Branch-wise Serial) is
enhanced facilities for residents travelling abroad and
non-residents visiting India to take out Indian generated and appended to each voucher by the e-
currency notes up to a.25,000 has been announced VVR software, which is unique for the Branch for a
which are as follows: day, and unique for the bank as a whole when
clubbed with branch code, which should be noted on
i) may take outside India (other than to Nepal and the respective voucher by the officer at the time of
Bhutan) currency notes of Government of India verification without fail as per extant guidelines.

8
 April – June 2014

Additionally, printing brief docket slips is accordingly it has been decided to simplify the
available, which contains the number of individual requirement of submission of proof of address.
vouchers and number of list/batch vouchers. The Certain modifications simplifying requirement of
slips can be printed and pasted on the voucher address proof for opening / transferring / periodical
bundles. updation of KYC etc. pertaining to the accounts of
individuals have been communicated by RBI, which are
The Daftary, before stitching the vouchers after furnished in this circular.
completion of checking all the vouchers, has to arrange
the vouchers “Voucher ID” wise and stitched together For opening of New Accounts / Periodical updation
along with the voucher docket sheet (signed by the of KYC:-
Daftary and Officer/Branch Manager) on the top.
a) Customers may submit only one documentary
After stitching, the bundle is to be pasted with brown proof of address (either current or permanent)
sheet over the stitched thread portion both at the top while opening a bank account or while
and bottom of the bundle. Round seal of the Branch by periodical updation of KYC.
the rubber stamp is to be affixed on both the sides of b) In case the address mentioned as per ‘proof of
the voucher bundle. Thereafter, the same is to be address’ undergoes a change, fresh proof of
authenticated with the date by the Asst. Branch address may be submitted by the customer to
Manager/Branch Manager. For any reason, if the the branch within a period of Six months.
bundle is to be cut opened, it should be stitched again
as explained above and the reason for such cut open is c) In case the proof of address furnished by the
to be recorded on the docket sheet itself by the Asst. customer is not the local address or address
Branch Manager/Branch Manager. where the customer is currently residing, the
bank may take a declaration of the local address
GENL.24/2014-15 Dt.03.06.2014
on which all correspondence will be made by
the bank with the customer. No proof is
Know your customer (KYC) guidelines - Relaxation in required to be submitted for such address for
requirement of address proof correspondence / local address. This address
Please refer the Circular No. Genl-77/2012-13 may be verified by the bank through ‘positive
dated 14.12.2012, wherein the stipulations with regard confirmation’ such as acknowledgement of
to address proof for opening of accounts, were given as receipt of (i) letter, cheque books, ATM Cards
follows: (ii) telephonic conversation (iii) visits etc.
 If the address in the document submitted for d) In the event of change in this address due to
Photo identity proof by the prospective relocation or any other reason, customers may
customer is same as that declared by him/her in intimate the new address for correspondence to
the account opening form, the document may the bank within Two weeks of such a change.
be accepted as valid proof of both identity and
address. GENL.27/2014-15 Dt.26.06.2014
 If the address indicated on the document
Transmitting LC messages through SFMS - Recovery of
submitted for identity proof differs from the
charges for originating messages by IDRBT
current address mentioned in the account
opening form, a separate proof of address Branches shall recover @ a.100/- plus taxes
should be obtained. from the customers for all the Inland LC transactions
effected from 01.01.2014 through SFMS platform.
Reserve Bank of India has been receiving
representations / references from various quarters GENL.28/2014-15 Dt.27.06.2014
especially migrant workers, transferred employees, etc.
ADMIN
regarding problems faced in submitting a proof of
current/permanent address while opening a bank Formation of Bhopal Zone
account. The matter has since been examined by RBI in
the light of amendment to the Prevention of Money A total of 25 branches in the State of Madhya
Laundering Rules (Maintenance of Records), 2005, and Pradesh under Delhi Zone and 11 branches in the
State of Chattisgarh under Bhubaneshwar zone have

9
 Recollect

been realigned and a new zone, ‘Bhopal’ has been of India, and the year of printing ‘2014’ printed on
formed on April 01, 2014. Details of the branches the reverse of the Banknote.
falling under Bhopal Zone are given in the annexure The design of these notes to be issued now
to this circular. is similar in all respects to the a 20 Banknotes in
ADMIN.04/2014-15 Dt.01.04.2014 Mahatma Gandhi Series 2005 issued earlier.

1. Delegation of Powers for Capital/Revenue All banknotes in the denomination of a 20

2. Authorizing loss on sale of assets. issued by the Reserve Bank of India in the past will
continue to be legal tender.
The delegation of Powers (for Non Computer
related) towards Capital and Revenue Expenditure ADMIN.21/2014-15 Dt.13.05.2014
& Authorising loss on sale of assets to various
sanctioning authorities at Corporate Office and Issue of a 1000 denomination Banknotes
Field level functionaries has been revised. with incorporation of (a) symbol without inset letter
With the introduction of Committee concept
The Reserve Bank of India will shortly
as suggested by MOF, individual financial powers
issue a 1000 denomination Banknotes
delegated to CMD, EDs, GMs(at CO) &
incorporating (a) symbol on the obverse and
ZM(GM/DGM/AGM) have been assigned to the
respective committees. reverse, without inset letter, in the Mahatma
Gandhi Series – 2005 bearing the signature of
The revised powers / norms come into Dr.Raghuram G. Rajan, Governor, Reserve Bank
force with effect from 01.04.2014 and a booklet on of India, and the year of printing ‘2014’ printed on
the same is annexed to this circular, for ready the reverse of the Banknote.
reference to various sanctioning authorities.
The design of these notes to be issued now
ADMIN.15/2014-15 Dt.03.04.2014 is similar in all respects to the a 1000 Banknotes in
Mahatma Gandhi Series - 2005, issued earlier.
Issue of a 10 denomination Banknotes with inset
letter ‘A’ in numbering panel All banknotes in the denomination of
a1000 issued by the Reserve Bank of India in the
The Reserve Bank of India will shortly
past will continue to be legal tender”.
issue a 10 denomination Banknotes incorporating
(a) symbol on the obverse and reverse, with inset ADMIN.22/2015-15 Dt.13.05.2014
letter ‘A’ in both the numbering panels, in the
Mahatma Gandhi Series – 2005 bearing the Renewal of standard Fire and Special Perils Policy
signature of Dr.Raghuram G. Rajan, Governor, of the Bank’s own Building
Reserve Bank of India, and the year of printing
The Standard Fire and Special Perils
‘2014’ printed on the reverse of the Banknote.
policy for the Bank’s Owned Buildings all over
The design of these notes to be issued now India has been renewed for the financial year 2014
is similar in all respects to the a 10 Banknotes in – 2015 for the period 01.04.14 to 31.03.2015 with
Mahatma Gandhi Series 2005, issued earlier.
M/s United India Insurance Company Ltd,
All banknotes in the denomination of a 10 Divisional Office No.010500.
issued by the Reserve Bank in the past will continue
The new Policy Number is
to be legal tender”.
010500/11/14/11/00000001 (Residential
ADMIN.18/2014-15 Dt.25.04.2014 buildings)
010500/11/14/11/00000002 (Commercial
Issue of a 20 denomination Banknotes with buildings).
incorporation of (a) symbol without inset letter The policy has been taken on the basis of
The Reserve Bank of India will shortly issue Reinstament value.
a 20 denomination Banknotes incorporating (a)
Broad features of the Policy
symbol on the obverse without inset letter, in the
Mahatma Gandhi series – 2005 bearing the signature The Policy covered damage to the building or any
of Dr. Raghuram G Rajan, Governor, Reserve Bank part thereof due to

10
 April – June 2014

1. Fire Our branches should mention the above policy

2. Lightining number whenever claim relating to the year 2014-15, if
3. Explosion/implosion
any, is reported to the above insurance company. This
4. Aircraft damaghe
5. Riot, Strike and Malicious damage policy covers losses for the period 01.04.2014 to
6. Storm, Cyclone, Typhoon, Temphest, 31.03.2015 and also for losses occurred on or after
Hurricane, Tornado, Flood and inundation 01.04.2011 and reported within three years from the
7. Impact damage date of loss. Lossses occurred upto 31.03.2011 are not
8. Subsidence and landslide including rock
eligible for claim only with any of the insurance
slide
9. Bursting and/or overflowing of water companies.
tanks, apparatus and pipes Basic Sum insured
10. Missle testing operation
In respect of the following clauses viz., (1.1)
11. Leakage fromn Automatic sprinkler
to (1.7) the basic cover is available is a 10.00 crore
installation
(rupees ten crore only) for the bank as a whole.
12. Bush fire
Additional sum insured
Branches shall refer this circular regarding initial
reporting on the occurence of damage and other Additional cover available in respect of
guidelines. Clasue 1.1 (loss on premises) is a 100.00 crore and in
ADMIN.17/2014-15 Dt.19.04.2014
respect of Clause 1.2 (loss –in transit) is a 25.00
crore.
Maintenance of Numbered Stationery Items The following information are furnished in
Surrendering the Non-usable/Obsolete Security Items
this circular in detail:

As a one time measure, it was decided to i. The Risks covered

permit the Branches themselves to destroy the non- ii. The important features of the policy
CTS cheque books collected/lying with them after iii. Exceptions
properly recording the details of the non-CTS cheque iv. Claim procedures to be followed/ Maintenance
books in a register checked and signed by a minimum of records
of two officers out of which one should be the Branch v. Clarifications/Special instructions
Manager/Asst. Branch Manager.
ADMIN.25/2014-15 Dt.21.05.2014
Normal procedure to be adopted by the
Branches for destroying numbered security items Formation of Special Investigation Team (SIT)
which are non-usable/obsolete, which are withdrawn
from usage is given in the Annexure I. Branches/Zonal offices should submit all the
information and documents required, by the SIT, at
The draft notice to the public informing the
withdrawal of non-CTS standard cheques from the once, as and when required.
circulation is enclosed as Annexure II, which may be While furnishing the required
put up in the Notice Board of the Branch. information/documents, the identity / credentials of the
ADMIN.23/2014-15 Dt.19.05.2014 investigating officials seeking the information should
be verified, discreetly.
Banker’s indemnity Policy for the financial year 2014-15
ADMIN.31/2014-15 Dt.24.06.2014
The Banker’s Indemnity Policy for the
Financial year 2014-15 has been renewed with Though due care has been taken in the preparation
of Recollect, the version given in the circular is
The New India Assurance Company Limited final.
Divisional Officer: 710800
The new policy number is Compiled by CO: O&M Division
71800/46/14/04/00000001

11
 a Volume 28 Issue 1

For Private Circulation Only

April – June 2015 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Pg
CONTENTS OF THIS ISSUE C No. Date Subject
No
Pg 47 10/06/15 Financial Inclusion Plan - Enhancement
C No. Date Subject
No of per transaction limit for Field Business
DEP 18/04/15 Revival of Unclaimed Deposit / Correspondents (FBCs) from `. 2000/- to 7
2
02 Inoperative accounts `. 5000/-
03 18/04/15 Levy of Service charges for non 53 16/06/15 Pradhan Mantri MUDRA Yojana (PMMY)
maintenance of minimum balance in 2 7
- MUDRA loans
Savings Bank accounts 59 23/06/15 IB Rent Encash Scheme – Revised
08 30/05/15 Rights of transgender persons - Change method of calculating eligible loan 8
2
in Forms / Applications etc. amount based on NPV
09 16/06/15 Fixed Deposit Interest Payment by 65 29/06/15 Opening of Trust and Retention Account
3 8
NEFT Mode (TRA) for Consortium/MBAs
ADV 11/04/15 Implementation of PMJDY-Directions of CRA 20/04/15 Implementation of Pradhan Mantri
3
07 DFS,GOI 12 Jeevanjyoti Bima Yojana (PMJBY) and
8
14 22/04/15 Accidental Insurance cover to RuPay Pradhan Mantri Suraksha Bima Yojana
Card holders under Pradhan Mantri Jan- (PMSBY) in our Bank
3
Dhan Yojana (PMJDY) for the year of 16 30/04/15 Enrolments under Atal Pension Yojana
8
2015-16 (APY)
15 25/04/15 Revised priority sector lending-targets 22 15/05/15 Verification of Debit Mandate given by
4 9
and classification our customers.
18 12/05/15 Inclusion of Stamp duty and other 24 18/05/15 Mandatory issue of acknowledgement to
charges in LTV ratio in housing loans pensioners on submission of Life 9
where the cost of house / dwelling unit Certificates
4
does not exceed `.10 lakhs b) 28 28/05/15 IB Home Suraksha Group Life Insurance
Construction linked disbursal of housing Cover to Home Loan Borrowers –
loan Modifications in claim processing for the 9
19 13/05/15 Changes in Delegation of Administrative/ policies by M/s.Kotak Mahindra Old
Discretionary powers to various Mutual Life Insurance Ltd.
4
authorities on Legal and other related 36 08/06/15 SUKANYA SAMRIDDHI ACCOUNT (S S 9
issues A) - A new Scheme of Government of
26 26/05/15 Concept of Wilful Defaulters – RBI India specifically for girl child below 10
5 years.
guidelines dated 01/07/2014
28 20/05/15 Introduction of New product code for 39 23/06/15 Guidelines on Atal Pension Yojana (APY) 10
5
Adhoc limits HRM 12/05/15 Issuance of Office Order for all Officers 10
29 22/05/15 Revised application forms for Jewel Loan 11 And Staff
5
Agri and Non-agri loans 13 14/05/15 Extension of Benefits and facilities to 10
30 26/05/15 Rajiv Rinn Yojana (RRY) - Scheme Probationary Officers
5
coming to an end 14 15/05/15 Reimbursement of Conveyance expenses 10
31 26/05/15 Jan-Dhan Se Jan Suraksha: Pradhan – Increase in quantum of fuel for Branch
Mantri Suraksha Bima Yojana (PMSBY), Managers
Pradhan Mantri Jeevan Jyoti Bima Yojana 15 15/05/15 Policy on payment of compensation to 11
5
(PMJJBY) and Atal Pension Yojana staff working on Holidays or Extended
(APY) - Seeding of Aadhaar Number Working Hours.
16 15/05/15 National Voter’s Service Portal – Linking 11
38 08/06/15 Vehicle Loan Schemes-Modifications 6 of Aadhaar number with EPIC (Electors
39 08/06/15 IB Pension Loan Scheme (IBPLS) Photo Identity Card) Number
6
Modifications 19 11/06/15 Catergorisation of Branches as on
11
41 05/06/15 Revised Exposure Levels to Single / 31.03.2015
Group Borrowers 7
FX 15/04/15 Modifications in “XPRESS MONEY”
Website. 11
46 10/06/15 IB Rent Encash Scheme – Modifications 7 03
 Recollect
Pg received from statutory authorities, subsisting
C No. Date Subject
No charge, court deposits, deposits in the nature of
04 16/04/15 Restrictions on receipt of foreign EMD favouring Government Departments/Statutory
contributions under FCRA (Foreign bodies etc., branch must endeavour to activate the
11
Contribution (Regulation) Act), 2010 –
account by obtaining suitable mandate/authorization
Recent communication from RBI
from the customer/s.
06 05/05/15 Restrictions on receipt of foreign
contributions under FCRA (Foreign Branches should activate an account when
12
Contribution (Regulation) Act), 2010 –
approached by customer, either on their own or after
Recent communication from RBI
receipt of correspondence/SMS/email etc. However
07 13/05/15 Closure of USD Nostro Accounts with
HSBC, NYK, RBS, NYK and BNY, Mellon 12 while doing so, due diligence may be exercised as
A/c 1 & 2. per risk category of the customer viz., ensuring
08 16/05/15 Foreign Currency (Non-Resident) genuineness of the transaction, verification of the
12
Account (Banks) FCNR(B) Scheme signature and identity etc. Care should also be
17 02/06/15 Rupee Drawing Arrangement-Increase in exercised that the customer is not inconvenienced as
12
Trade related remittance limit. a result of extra care taken by the bank/branches.
19 29/06/15 Opening of New CAD Nostro Account DEP.02/2015-16 Dt.18.04.2015
12
with Bank of Montreal – Canada
GENL 07/04/15 Cheque Drop Box Levy of Service charges for non maintenance of
13
01 minimum balance in Savings Bank accounts.
05 29/04/15 Improving Customer Service – Sure
13 The additional guidelines regarding levy of
strategy for Growth
20/05/15 Launching of "IB Smart Remote":
penal charges for non maintenance of minimum
11 Android application for controlling debit 13 balances in savings bank accounts have come into
card parameters through mobile effect from April 1, 2015 which are as follows:
12 20/05/15 Launching of “On line Net Banking facility The customer should be notified by
14
with Green PIN"
SMS/email/letter etc., the fact regarding default in
13 20/05/15 Launching of "e-purse Debit Cards " 14
maintenance of minimum balance and the penal
15 29/05/15 Upward Revision of Service Tax on
14 charges that would be applicable in the event the
Service Charges
ADMIN 08/04/15 The Banker’s Indemnity Policy for the minimum balance is not restored within a
14 reasonable period, which shall not be less than one
05 financial year 2015-16
13 11/05/15 Business Plan 2015-16 14 month from the date of notice of shortfall in the
22 14/05/15 Branch Manager’s Diary for the period account. In case the minimum balance is not
15
2015-18 restored within the said period, penal charges can
23 16/05/15 Renewal of Standard Fire and Specila be recovered under intimation to the account
15
Perils Policy of the Bank’s Own Buildings holder.
33 25/05/15 Service Tax Rate Increase with effect
15 Accordingly, the service charge for non
from 01.06.2015
35 02/06/15 Regular Inspection of Branches - Zero maintenance of minimum monthly average
15
Tolerance areas balance for savings bank accounts is being
38 17/06/15 Claim under the Banker’s Indemnity enhanced to ` 50 per month and the following slab
Policy – transfer to CO: Banking 16 structure for levying charges as per percentage of
Operations Department
shortfall observed vis- a-vis actual monthly average
39 23/06/15 Amendments made in the Finance Act
16 balance required is being implemented w.e.f
2015 in respect of TDS Provisions
01.04.2015.
DEPOSITS DEP.03/2015-16 Dt.18.04.2015

Revival of Unclaimed Deposit / Inoperative accounts Rights of transgender persons - Change in Forms /
Applications etc.
Branches have to revisit unclaimed deposit
accounts and Inoperative accounts and ensure that As directed by Reserve Bank of India,
all out efforts are made to activate the same. No Branches are hereby advised to modify the Gender
account should be allowed to continue in unclaimed field in all the applications / forms / documents as
status in the books of the branch. Even where the “Mr/ Mrs / Mx” or “Male / Female / Third Gender”
account is required to be maintained at branch on manual, until CO: Stationery Dept. Supply the
account of compelling reasons viz., dispute with the modified application forms.
customer, legal issues pending, attachment notice
DEP. 08/2015-16 Dt.30.05.2015
2 2
 APRIL-JUNE 2015
Fixed Deposit Interest Payment by NEFT Mode Delivery and activation of RuPay cards:
At present our system allows interest DFS, GOI advised that all the RuPay cards issued
payment through A: Cheque B: Demand Draft G: to BSBD Account holders under PMJDY should be
Transfer to BGL or T: Transfer. As there was no delivered to the customers and activated
provision for payment of interest to non-account immediately. Since availability of Accident
holder, a program has been developed whereby the Insurance cover under PMJDY is linked to
interest on fixed deposit can be sent through NEFT activation of RuPay cards, all the cards should be
to bank branches which are authorised for NEFT delivered to the customers and they should be
transactions. educated to keep the cards active by doing at least
one transaction within a period of 45 days of
In the new program, an option with letter previous transaction.
N: NEFT has been introduced in the Interest
payment method at the time of opening the FD Status of Zero Balance accounts under
deposit. When the new option is chosen, necessary PMJDY: All 'zero' balance accounts opened under
particulars have to be entered in the miscellaneous PMJDY are to be activated and the customers
Tab. System will generate NEFT transaction on the should be advised to carry out at least small value
scheduled interest transfer date entered by the transactions in the account. Financial Literacy
branch. The NEFT transactions returned due to Campaigns should be organized in all the allotted
various reasons will be credited to the suspense SSAs/Urban wards to create awareness in this
account. Branches can verify the status of these regard. DFS has directed that by 30.04.2015 the
type of NEFT transactions through enquiry Menu. number of accounts with zero balance should be
Also, Branches can verify the UTR number in the brought down below 30%. The necessity to keep
FD statement screen. The screen shots of the new the accounts operative to avail the benefit under
facility have been provided as Annexure to this PMJDY should be explained to the customers.
circular, for the branches as ready reference.
Branches shall refer this circular regarding
DEP.09/2015-16 Dt.16.06.2015 Financial Literacy Campaigns, Aadhaar seeding
ADVANCES and AEPS transactions, Remuneration for BCs etc.,
ADV.07/2015-16 Dt.11.04.2015
Implementation of PMJDY-Directions of DFS, GOI
Accidental Insurance cover to RuPay Card holders
Pradhan Mantri Jan-Dhan Yojana
under Pradhan Mantri Jan-Dhan Yojana (PMJDY) for
(PMJDY) is one of the flagship programme of the
the year of 2015-16
Government.
National Payment Corporation of India
Deployment of BCs: BCs with the required
infrastructure should be available in all BC (NPCI) has now entered into an agreement with
locations. Zonal Offices / Branches should initiate The New India Assurance Co. Ltd. to provide
steps for identification/deployment of BCs Accidental Insurance cover under PMJDY facility
wherever BCs are not available. for the financial year 2015-16. This Insurance
program has come into effect from 1st April, 2015
Branding of Fixed BC Locations /
and shall remain effective for a period of one year
Provision of BC infrastructure: All BC locations
should be converted as ‘Fixed Point BC locations’ i.e, up to 31st March, 2016.
and name board with PMJDY logo should be Extension of Insurance program beyond
displayed. The name boards should have the aforesaid period will be reviewed by NPCI
contact details of BC, base branch and visit timings internally and in consultation with participating
of BC. All BCs should have POS devices in banks and communicated before the expiry of the
working condition. The POS devices should have
financial year 2015-16.
facility for e-KYC, AEPS and RuPay card inter
operability. Uniforms (jacket, cap and sling bag) Branches shall refer this circular regarding
should be supplied to all BCs. BCs should be Claim Settlement Procedure, Eligibility of Claim,
available in the fixed locations on all working days Procedure for Claim, Procedure of sending the
during pre fixed timings. Beyond this prefixed Completed Claim forms to CO: FI Dept., etc.
timings, BCs shall visit other locations/additional
ADV.14/2015-16 Dt.22.04.2015
villages.

3
 Recollect
Revised priority sector lending-targets and Inclusion of Stamp duty and other charges in LTV
classification ratio in housing loans where the cost of house /
dwelling unit does not exceed `.10 lakhs and
The salient features of the revised
Construction linked disbursal of housing loan
guidelines on Priority Sector Lending-Targets and
Classification are as under:- With a view to encourage availability of
 Categories of the priority sector: Medium affordable housing to the borrowers from
Enterprises, Social Infrastructure and ‘Economically Weaker Sections’ (EWS) and ‘Low
Renewable Energy will form part of priority Income Groups’ (LIG), RBI has now permitted as
sector, in addition to the existing categories follows:
 Agriculture: The distinction between direct and 1. ‘In cases where the cost of the house / dwelling
indirect agriculture is dispensed with. unit does not exceed `.10 lakh, banks may add
 Small and Marginal Farmers: A target of 8 stamp duty, registration and other
percent of ANBC or Credit Equivalent Amount documentation charges to the cost of the
of Off-Balance Sheet Exposure, whichever is house/dwelling unit for the purpose of
higher, has been prescribed for Small and calculating LTV ratio’
Marginal Farmers within agriculture, to be
achieved in a phased manner i.e., 7 percent by 2. In cases of projects developed by Government
March 2016 and 8 percent by March 2017. / Statutory Authorities, Banks may disburse the
loan as per the payment stages prescribed by
 Micro Enterprises: A target of 7.5 percent of
such authorities even where payments sought
ANBC or Credit Equivalent Amount of Off-
from house buyers / allottees are not linked to
Balance Sheet Exposure, whichever is higher,
the stages of construction, provided such
has been prescribed for Micro Enterprises, to
be achieved in a phased manner i.e. 7 percent authorities have no past history of non-
by March 2016 and 7.5 percent by March completion of projects.
2017. Hence, Branches/Zonal offices shall permit
 Bank loans to food and agro processing units disbursals in line with the payment modes
will form part of Agriculture. prescribed by Government / Statutory authorities,
subject to ensuring the following:
 Export credit: Export credit upto 32 percent of
ANBC or Credit Equivalent Amount of Off- 1. The project is sponsored by Government
Balance Sheet Exposure, whichever is higher, Statutory Authority.
will be eligible as part of priority sector for
foreign banks with less than 20 branches. For 2. Such authorities have no past history of
other banks, the incremental export credit over non-completion of projects.
corresponding date of the preceding year will 3. The borrowers / allottees have brought in
be reckoned upto 2 percent of ANBC or Credit the prescribed margin in full or in
Equivalent Amount of Off-Balance Sheet proportion to the level of disbursement
Exposure, whichever is higher. sought.
 The loan limits for housing loans and MFI ADV.18/2015-16 Dt.12.05.2015
loans qualifying under priority sector have
Changes in Delegation of Administrative/
been revised. Discretionary powers to various authorities on Legal
 The priority sector non-achievement will be and other related issues
assessed on quarterly average basis at the end
of the respective year from 2016-17 onwards, Keeping in pace with the change in
instead of annual basis as at present. scenario, the existing delegation of powers to
various authorities pertaining to legal and other
The revised guidelines are operational with related issues were re-visited and fresh approval
effect from the date of the RBI circular. The with necessary modifications has been taken from
Priority Sector loans sanctioned under the the Board of Directors in their meeting held on
guidelines issued prior to this date will continue to 17.04.2015, which are enumerated as an Annexure
be classified under priority sector till to this Circular.
repayment/maturity/renewal.
ADV.19/2015-16 Dt.13.05.2015
ADV.15/2015-16 Dt.25.04.2015
4 4
 APRIL-JUNE 2015
Concept of Wilful Defaulters – RBI guidelines dated Introduction of New product code for Adhoc limits
01/07/2014
For the purpose of convenient workflow at
The recent guidelines on wilful defaulters the field level in respect of Adhoc facilities, the
have covered the various grey areas raised by
following separate product codes have been created
Banks and other agencies now and then on the
concept of wilful defaulter and also brought in for Adhoc limits in the CBS system.
some substantive changes to bring in greater TYPE INT CAT DESCRIPTION
transparency and accountability in the due process 1441 1751 ADHOC OD SECURED - MIC
required to be adopted for identification of wilful
defaulters. 1446 1751 ADHOC OD UNSECURED - MIC

Branches shall refer this circular for the 1511 1751 ADHOC OCC-MIC
revised definitions of the terms - wilful defaulter, 1511 1851 ADHOC KCC-MIC
diversion of funds and siphoning of funds etc.,
The limit expiry date has to be manually
The identification of wilful default, updated in the system as per the sanction terms.
oriented on diversion of funds / siphoning of funds
would have to be judgment of the lenders based on The screen shots of the said products have
‘Objective facts and circumstances of the case’. been annexed to this circular.
Further the identification should also bear in mind ADV.28/2015-16 Dt.20.05.2015
the track record of the borrowers and should not be
decided on isolated transactions / incidence. Revised application forms for Jewel Loan Agri and
Further, most importantly the default should be Non-Agri loans
categorized as wilful and for the same, it should be The existing application form for loan
‘intentional, deliberate and calculated’. against pledge of gold ornaments has been
RBI has clarified that this treatment of modified to cater to the requirements of revised
guarantors who are not Directors and non group RBI guidelines. Accordingly two separate
corporate guarantors as wilful defaulters, based on application forms, namely (a) F 120-A for
their guarantee liability would apply only Agricultural Loan against pledge of Gold
prospectively and not to cases where guarantees Ornaments and (b) F 120-B for Non-agricultural
have been taken prior to the Circular. RBI has also Loan against pledge of Gold Ornaments, have been
clarified / stipulated that this position should be enclosed to this circular.
made known to the guarantors at the time of ADV.29/2015-16 Dt.22.05.2015
execution of the guarantee and therefore it has
become imminent to incorporate the same in the Rajiv Rinn Yojana (RRY) - Scheme coming to an end
Credit policy as well as our loan documentation.
National Housing Bank had communicated
Wherever there are Govt. undertakings, it that the Rajiv Rinn Yojana (RRY) Scheme has
should be ensured that the names of Directors are come to an end now. Ministry of Housing and
not reported. Instead a metaphor viz. ‘ Govt. of Urban Poverty Alleviation (MoHUPA) is in the
………. Undertaking’ should be added. process of launching a comprehensive Mission for
If the lenders desire a specific certification ‘Housing for All’ with a component of interest
from the borrowers / auditors regarding diversion / subvention.
siphoning of funds by the borrower, the lender Fresh proposals may be taken up under the
should award a separate mandate to the auditors for new Interest Subvention Scheme on the launch of
the purpose and to facilitate the same appropriate the said Mission for ‘Housing for All’.
covenants are to be incorporated in the loan
agreements, to enable award of such a mandate, by ADV.30/2015-16 Dt.26.05.2015
the lenders to the borrower / auditors. Jan-Dhan Se Jan Suraksha: Pradhan Mantri
Branches shall refer this circular regarding Suraksha Bima Yojana (PMSBY), Pradhan Mantri
Mechanism of identification of wilful default, Jeevan Jyoti Bima Yojana (PMJJBY) and Atal
Constitution of Screening Committee and Review Pension Yojana (APY) - Seeding of Aadhaar Number
Committee, Criminal action against wilful
Branches should seed both the existing as
defaulters, Dissemination of information to RBI &
also newly opened saving bank accounts of
Credit Information Companies etc.,
PMSBY, PMJJBY and APY customers with
ADV.26/2015-16 Dt.26.05.2015 Aadhaar Numbers, following the below guidelines:

5
 Recollect
i. Seed Aadhaar Number in customers’  All confirmed employees of Central / State
accounts wherever available. If not Government Departments / undertakings
available inform customer to seed Aadhaar can be extended Vehicle Loans without
number in their accounts. Please note to insisting on minimum period of service /
obtain the mobile numbers and register the experience
same in the bank accounts.
 Proof of employment and submission of
ii. Inform customers about various options financial papers for the last two years
available for seeding Aadhaar i.e through instead of last three years
ATM, Mobile Banking, and Internet
 Copy of the confirmation letter, the last six
Banking etc.
months’ salary certificates and bank
iii. Prominently display a banner in branches account statement for last six months shall
inviting attention of the customers to seed suffice in case of confirmed employees of
Aadhaar. Central / State Government Departments /
Undertakings
iv. Seed the Aadhaar in the bank accounts on a
daily basis without any delay whenever The revised Ready Reckoner incorporating
requests are received. the approved modifications in detail is annexed to
the circular.
v. Utilize the services of FBCs in the villages
and organize camps for collections of ADV.38/2015-16 Dt.08.06.2015
Aadhaar along with their consent to
improve Aadhaar seeding. IB Pension Loan Scheme (IBPLS) – Modifications

ADV.31/2015-16 Dt.26.05.2015 Certain modifications have been made in

Indian Bank Pension Loan Scheme (IBPLS) and
Vehicle Loan Schemes – Modifications the salient features of the modifications are listed
We give below the salient features of the below:
modifications made in the Vehicle Loan Scheme: For Regular Pensioners
 Personal guarantee of the spouse OR any  Increase in quantum of Pension Loan –
third party acceptable to the bank – to be from the existing level of `.3.00 lakhs
insisted for certain categories of borrowers (Max.) to `.6.00 lakhs (max.)
– as detailed in the Circular
 Increase in the number of times of pension
 Dispensation of obtaining duplicate keys of – from “10 months pension” to “15 months
the vehicles. pension”
 Repayment period upto 84 months for New  Increase in repayment period – from
four wheelers (which was previously “Maximum of 3 years” to “Maximum of 5
permitted by ZLCC only) from the present years”
repayment period of 60 months and for
Used cars - upto 60 months (max)  Entry Level Age - Reduced from 80 years
to 75 years
 Increase in maximum loan amount per
vehicle under “Van / Bus to Educational  Exit Level Age - Reduced from 83 years
Institutions” Scheme & loan quantum to 78 years
ceiling For Family Pensioners
 Waiver of condition relating to obtaining
 Increase in quantum of Pension Loan –
prior administrative clearance
from the existing level of `.1.00 lakh
 Modification in sanctioning powers for (Max.) to `.2.00 lakhs (max.)
various sanctioning authorities in both the
 Increase in the number of times of pension
schemes
– from “10 months pension” to “12 months
ZLCCs have been empowered to sanction the pension”
following:
 Repayment period - Existing 3 years to
 Reduction in minimum period of service / continue
experience from the existing level of three
years to two years
6 6
 APRIL-JUNE 2015
 Entry Level Age – Same as existing - 70 corporates. Reduction of margin by 10% for
years this category of lessees on the RSV (of the
 Exit Level Age - Same as existing - 73 property) also.
years  Reduced margin of 20% (on net rent – NPV
ADV.39/2015-16 Dt.08.06.2015 basis) in all other cases

Revised Exposure Levels to Single / Group ADV.46/2015-16 Dt.10.06.2015

Borrowers Financial Inclusion Plan - Enhancement of per
The capital funds of the Bank as on transaction limit for Field Business Correspondents
31.03.2015 (rupees in crores) have been revised as (FBCs) from `.2000/- to `.5000/-
under: Based on the feedback received from the
Tier I 12473.12 field level functionaries, per transaction limit for
Field Business Correspondents (FBCs) have been
Tier II 2639.40 enhanced from `.2000/- to `.5000/-. There is no
Total 15112.52 change in the existing guidelines stipulated for
number of transactions per customer per day.
Based on the above revision in the capital
funds, the exposure ceilings for Single / Group ADV.47/2015-16 Dt.10.06.2015
Borrowers (as per the extant CRM Policy
Pradhan Mantri MUDRA Yojana (PMMY) - MUDRA
guidelines) as proposed in, have been re-worked
loans
and the revised limits for different catergories of
borrowers have been provided in this circular. The Micro Units and Development Agency
Ltd (MUDRA) was launched by the Hon’ble Prime
ADV.41/2015-16 Dt.05.06.2015 Minister on April 8, 2015 as a new financial entity,
IB Rent Encash Scheme – Modifications for developing and refinancing last mile financial
intermediaries like Banks, NBFCs, MFIs etc., who
The salient features of the modifications are in the business of lending to smaller of the
underwent in the loan product – Rent Encash - are micro enterprises in manufacturing, trading and
given as under: service sector. As per NSSO, about ` 5.77 crore
 Increase in quantum of Loan – from the such units exist in the country and a great majority
existing level of `.2.00 Crore (Max.) to `.5.00 of them are outside the formal banking fold and are
Crore (Max.) - with lessee-wise & location- unable to sustain or grow due to lack of finance or
wise ceiling relying on informal channels, which were very
expensive or unreliable. On the same day, Pradhan
 Increase in the ‘number of times of rent’ & Mantri MUDRA Yojana (PMMY) was launched to
‘repayment period’ – from “Maximum of 84 ‘fund the unfunded’ by bringing such enterprises to
months” to “Maximum of 120 months” in case the formal financial system and extending
the property is leased to PSBs / Central or State affordable credit to them.
Government undertakings, MNCs or top-notch
corporates This segment mainly consists of non-farm
enterprises in manufacturing, trading and services
 Reduction in Rate of Interest – from the whose credit needs are below `.10.00 lacs. The
existing level of ‘BR + TP + Spread of 3%’ to loans to be given to this segment for income
‘BR + TP + Spread of 2.25%’ generation will be known as MUDRA loans under
 Instead of keeping a constant Tenor Premium the PMMY and branded accordingly. The overdraft
of 0.75%, term related tenor premium to be amount of `s.5,000 sanctioned under PMJDY may
applied as per extant guidelines also be classified as MUDRA loans under PMMY.
Loans upto `.50,000 will be termed as “Shishu”,
 Computing the eligible amount based on NPV loans from `.50,000 to `.5.00 lacs will be termed as
of the rent receivable “Kishore” and loans from `.5.00 lacs to `.10.00
 Reduction of margin from the existing level of lacs will be termed as “Tarun”.
40% to 10% (on net rent – NPV basis) in case In this context, Dept. of Financial Services,
the property is leased to PSBs / Central or State Ministry of Finance, Govt of India has requested to
Government undertakings, MNCs or top-notch comply with the following

7
 Recollect
i. All advances granted on or after 8th property tax / statutory dues. If it exceeds /
April 2015 falling under the above does not cover, the eligible loan amount
mentioned category be classified as should be appropriately reduced.
MUDRA loans under the PMMY. ADV. 59/2015-16 Dt.23.06.2015
ii. All such loans can be covered under
refinance and / or credit enhancement Opening of Trust and Retention Account (TRA) for
products of MUDRA. The application Consortium/MBAs
forms for such loans shall also carry To improve the credit discipline in opening
the name “Pradhan Mantri MUDRA of Trust and Retention Account (TRA) it has been
Yojana”. made mandatory for lending under Consortium /
iii. All Banks shall create a separate Multiple Banking Arrangement to control diversion
counter for MUDRA and constitue a of funds by the delinquent borrowers.
cell, specifically for monitoring of the ADV.65/2015-16 Dt.29.06.2015
PMMY at Corporate Offices and Zonal CRA
/ Controlling Offices.
Implementation of Pradhan Mantri Jeevanjyoti Bima
Further, MUDRA will work on creating a
Yojana (PMJBY) and Pradhan Mantri Suraksha Bima
common charter applicable to PMMY loans which
Yojana (PMSBY) in our Bank
are to be adopted by all Banks. The charter will
apply to all eligible loans, irrespective of the fact, Further to the announcement made by
whether or not the Bank concerned obtains / Hon’ble Finance Minister in the Budget speech
receives support from MUDRA for such loans. 2015-16 regarding Pradhan Mantri Jeevanjyoti Bima
Yojana (PMJBY) for life insurance cover of `.2.00
ADV.53/2015-16 Dt.16.06.2015
lakhs and Pradhan Mantri Suraksha Bima Yojana
IB Rent Encash Scheme – Revised method of (PMSBY) for accidental death Insurance cover of
calculating eligible loan amount based on NPV `.2.00 lakhs, our Bank is implementing both the
Schemes as per the guidelines received from the
A revised method of calculating eligible loan Department of Financial Services (DFS), Ministry of
amount for IB Rent Encash Scheme, on NPV basis Finance (MOF), Govt. of India (GOI).
has been introduced. This revised method is
constructed on the following premises: Scheme details & FAQs for both PMJBY &
PMSBY are furnished in Annexure I & II
a) “Monthly Rent (Net of TDS)” constitutes the respectively of this circular.
‘receivable’ for the lessor. Hence, NPV shall
be calculated based on “Monthly Rent (Net of Bank have engaged LIC of India (LIC) for
TDS)” for the residual ‘Certain Period’ of PMJBY & United India Insurance Co. Ltd (UIIC)
lease (exemption - option period is also for PMSBY and necessary MOUs have already been
permitted in case of lease to our bank) entered into.

b) The amount of ‘advance rent’ received is not For the purpose of enrolment, branches must
deducted. Instead, the repayment period shall collect the “Consent-cum-Declaration Form” for
be reduced by the “No of months’ rent” applicable schemes from the eligible Savings Bank
received as advance amount. This ensures that (SB) A/c holders desirous of joining.
our loan repayment is not affected by the Branches shall refer this circular for further
‘advance rent’ during the final phase of the details in this regard.
lease period.
CRA.12/2015-16 Dt.20.04.2015
c) The statutory / property tax payable is also not
deducted. Instead, Branch / ZO shall ensure Enrolments under Atal Pension Yojana (APY)
that the difference between “Monthly Rent Branches should enter all the details relating
(Net of TDS)” and the EMI is sufficient to Atal Pension Yojana (APY) in the In-House
enough to cover such statutory dues on annual Application on the same day of receipt of
basis. applications from the subscribers, get MUP
d) Branch / ZO shall ensure that the EMI does Reference Number, generate challan and collect the
not exceed the Monthly Rent (Net of TDS) contributions from the subscriber’s account through
and cushion is available to take care of the Bancs (Screen No.1009). The Permanent Retirement
8 8
 APRIL-JUNE 2015
Account Number (PRAN) will be allotted to Insurance Cover to Home Loan Borrowers which
subscribers and a separate communication will be comes into force, with immediate effect.
sent to the subscribers on allotment of PRAN. Since
a. Revised Declaration of Good Health Form to
a daily report on number of applications collected
be obtained in case of new policies - This
under APY is to be sent to Department of Financial
revised form contains the clause for authorizing
Services, Ministry of Finance, Government of India,
Kotak Life Insurance to pay the outstanding
Branches should generate challan from the software
loan amount as on date of insured contingency
on the same day of receipt of applications under
to Indian Bank, in case of death of borrower.
APY from the subscribers.
CRA.16/2015-16 Dt.30.04.2015 b. Group Insurance Death Claim intimation form

Verification of Debit Mandate given by our customers c. Claim discharge form

An agreement had been entered with M/s. d. Authorization from member under group credit
TVS Credit Services Ltd for collection of the policy
instalments under CMS given through debit Preliminary claim documentation list
mandates by the customers. The mandates given by required for processing of Death Claims has also
our customers are being presented for verification at been enclosed as Annexure to this circular.
home branches or at Thousand Lights branch. After
verification the mandates are delivered at CMS HUB CRA.28/2015-16 Dt.28.05.2015
branch for executing the transactions. Service SUKANYA SAMRIDDHI ACCOUNT (SSA) - A new
charges for authorising the mandates are being Scheme of Government of India specifically for girl
recovered centrally at CMS HUB branch. child below 10 years
CRA.22/2015-16 Dt.15.05.2015 The branches authorised for handling Direct
Mandatory issue of acknowledgement to pensioners Taxes can open and handle Sukanya Samriddhi
on submission of Life Certificates Scheme Accounts also.
In continuation of the circular CRA- At present the branches authorised for
46/2014-15 dated 30.10.2014, Branch Managers collection of Direct Taxes in physical mode are
shall issue a duly signed acknowledgement with designated for opening and handling Sukanya
branch seal (as per the format given in this circular) Samriddhi Accounts. Other branches may request
to the pensioners on receipt of the life certificate the customer to approach our nearby authorised
from them in physical form. branches for opening the Scheme account.

CRA.24/2015-16 Dt.18.05.2015 Eligible to open account: Accounts can be

opened only in the name of Girl Child below the age
IB Home Suraksha Group Life Insurance Cover to of 10 (on the opening date) by natural / legal
Home Loan Borrowers – Modifications in claim guardian. Any girl child, who had attained the age
processing for the policies by M/s. Kotak Mahindra of ten years, one year prior to the commencement of
Old Mutual Life Insurance Ltd. these rules (02-12-2014) shall also be eligible for
Regarding guidelines on processing of opening of the account as a special case under these
claims for group life insurance policies has stated rules. Birth Certificate of the Girl child in whose
that, the claims proceeds of policies under Group name the account is to be opened shall be submitted
Life Insurance can be made to the Bank (Master by the guardian at the time of opening of the account
Policy Holder) towards outstanding balance as on alongwith other documents relating to identity and
date of insured contingency and the balance claim residence proof of the depositor. Natural / legal
amount payable to the insured member / nominee / guardian of a child shall be allowed to open the
beneficiary shall be communicated by the Life account for two girl children only.
insurer directly to the insured member / nominee / Remittances: The account may be opened
beneficiary subject to authorization from the insured with an initial deposit of rupees one thousand and
person (borrower) thereafter any amount in multiple of one hundred
rupees may be deposited subject to minimum of
Kotak Life has revised the existing forms
`.1000/- and maximum of `.150000/- per financial
pertaining to IB Home Suraksha Group Life
year.

9
 Recollect
Deposits in this account may be made till HRM
completion of fourteen years, from the date of
opening of the account. An irregular account where Issuance of Office Order for all Officers and Staff
minimum amount as above has not been deposited,
All Branch Managers and Zonal Managers
may be regularised on payment of a penalty of `.50/-
should issue the Office Order to the officers and
per year alongwith the said minimum subscription
staff under their control, in line with the Job Cards
for the year(s) of default any time till the account
issued by CO: O & M Department. Branch
completes fourteen years.
Managers / Zonal Managers are vested with
Remittances by way of Cash or Cheque discretion to add any job role / assignment to suit
Transfer shall be accepted. Clearing instruments on the individual branch / office requirement.
realisation can be credited into this account.
All officers / staff members should
Branches shall refer this circular with regard discharge their duties and responsibilities allocated
to Interest on Deposit, Operation of account, to them in compliance with the instructions /
Premature closure of account. guidelines / rules in force and offer exemplary
CRA.36/2015-16 Dt.08.06.2015 customer service besides putting their best efforts
Guidelines on Atal Pension Yojana (APY) for improving the Business / Brand Image of the
Bank.
APY is now open to all subscribers HRM.11/2015-16 Dt.12.05.2015
regardless of their status of being a beneficiary of Extension of Benefits and facilities to Probationary
any statutory social security scheme or income-tax Officers
payers. Guaranteed pension under APY will be
available to the above category of subscribers also. The following facilities have been
However the Government’s co-contribution will approved/extended to Probationary Officers on
not be available to the above category of their transfer to outstation branches for Phase II or
subscribers. The above guidelines has widened the III training:
scope of enrolment under APY to all sectors 1. Payment of lump sum amount of `.9000/- on
including the employees of our own Bank as well transfer to outstation branches for Phase II/III
as the employees of our corporate and other training for meeting expenses connected with
industrial/commercial customers. The benefit of packing, local transportation, insuring the
fixed monthly contribution and assured pension baggage etc. as applicable to JMG I.
under APY may be extended to all sectors
including the workforce under the unorganised 2. Joining time of 7 days on completion of Phase
sector and make the society as pensioned society I/II and upon transfer to outstation branches for
from pension less society. Phase II/III training to be availed by them
immediately on relief. They are not permitted
Further, PFRDA clarified that nomination to avail the joining time at a later date.
is mandatory in APY irrespective of whether the
subscriber is married or not. If the subscriber is 3. Leased Accommodation Facility on personal
married, the spouse name is to be provided lease basis.
mandatorily. The spouse will be the default HRM.13/2015-16 Dt.14.05.2015
nominee if the subscriber is married irrespective of
Reimbursement of Conveyance expenses – Increase
whether the subscriber has provided any other in quantum of fuel for Branch Managers
nominee name in the Nominee field. As per the
scheme, the nominee (other than the spouse) will The Branch Managers have been permitted
be considered for return of pension wealth when to use their own vehicle for official use and claim
both the subscriber and the spouse have expired. fuel reimbursement as per their eligibility, as given
The APY subscriber registration form has been below:
suitably revised by PFRDA taking into account the 1. Increasing the quantum of fuel eligibility for
above clarification. Branch Managers who use their own vehicle
for official use by 10 litres for 4 wheelers and 5
Branches shall refer this circular for other litres for 2 wheelers, over and above their
guidelines on Atal Pension Yojana (APY). otherwise eligibility as officer and
CRA.39/2015-16 Dt.23.06.2015
1010
 APRIL-JUNE 2015
2. To do away with the provision of Two Business Criteria
Category of (average aggregarte depsoits Incumbency
Wheelers to Branch Managers. branch and advances during the last Scale
two years)
Accordingly, Branch Managers who are
a. Small Below `.5 crore I
using Two Wheelers provided by the Bank are b. Medium `.5 crore and above but II
permitted to surrender the vehicles provided by the below `.25 crore
Bank and are permitted to claim reimbursement of c. Large `.25 crore and above but III
conveyance expenses for using their own vehicle below `.75 crore
for official purpose on production of fuel bills as d. Very Large `.75 crore and above but IV
Branch (VLB) below `.250 crore with
per their eligibility. minmum advance level of
HRM.14/2015-16 Dt.15.05.2015 `.25 crores
e. Exceptionally `. 250 crores and above V
Policy on payment of compensation to staff working Large Branch with minium advance level
(ELB) of `.50 crores
on Holidays or Extended Working Hours
The Zone wise list of branches falling
The “Policy on Payment of Compensation
under different categories/Scales is furnished as
to staff working on Holidays or Extended Working
Annexure to this circular.
Hours” for Officers who are called upon to perform
duties as warranted by Government/RBI directions HRM.19/2015-16 Dt.11.06.2015
has been approved by the Board. FX
The policy is placed as Annexure to this Modifications in “XPRESS MONEY” Website
circular.
HRM.15/2015-16 Dt.15.05.2015 To keep up with the current regulatory
requirements in India, the following changes were
National Voter’s Service Portal – Linking of Aadhaar deployed in the system, while processing Xpress
number with EPIC (Electors Photo Identity Card) Money transaction by branches:
Number
 ID issued by.
As a part of nation-wide campaign for
perfect and error free authenticated electoral roll,  ID issued at.
Election Commission of India through the  Address Line 1 and 2
Government of India/Ministry of Finance/
Department of Financial Services has advised to  City/District.
link the Aadhaar number of our Bank employees  Zip/Pin code.
with EPIC (Electors Photo Identity Card) number
 State.
through National Voter’s Service Portal (NVSP). It
is also advised that in the portal, employees can  Phone or Mobile number.
modify their addresses or remove entries and
The necessary modifications were made in
correct any other error in their data. The details of
the website in conformity with current regulatory
the scheme are in ECI website www.eci.nic.in.
requirements in India.
All the employees shall utilize the service FX.03/2015-16 Dt.15.04.2015
of NVSP and link their Aadhaar number with
Electors Photo Identity Card number and facilitate Restrictions on receipt of foreign contributions
easy registration and error free electoral rolls. under FCRA (Foreign Contribution (Regulation) Act),
2010 – Recent communication from RBI
HRM.16/2015-16 Dt.15.05.2015
Credit of any funds flow from the Geneva
Catergorisation of Branches as on 31.03.2015 based donor agency “Bertha Foundation, Geneva”
Categorisations of Branches, including and its affiliates and associate organizations to any
Specilised Branches, have been reviewed as on person, NGO / Organization, should be brought to
31.03.2015 as per norms approved by the Board. the notice of Ministry of Home Affairs so that the
funds are allowed to be credited to the accounts of
The existing norms of business criteria for the recipient only after obtaining clearance from
categorization of Branches are furnished below: Ministry of Home Affairs, Foreigners’ Division,
FCRA Wing, Government of India, New Delhi.

11
 Recollect
Further Government organizations can physical presence of the account holder at the time
avail of foreign funding only with clearance of of closure of deposits. However branches have to
Department of Economic Affairs and any instance ensure bonafides of the transaction.
of Government organization receiving funds These instructions are issued under
directly from the above mentioned donor agency Sections 10(4) and 11(1) of the Foreign Exchange
may be withheld and brought to the notice of Management Act, 1999(42 of 1999) and is without
MHA. prejudice to permissions/approvals, if any, required
FX.04/2015-16 Dt.16.04.2015 under any other law.
Restrictions on receipt of foreign contributions FX.08/2015-16 Dt.16.05.2015
under FCRA (Foreign Contribution (Regulation) Act),
2010 – Recent communication from RBI Rupee Drawing Arrangement-Increase in Trade
related remittance limit
Credit of any funds flow from the donor
agency “Ford Foundation, USA” to any person, RBI has revised the ceiling on Trade
NGO / Organization in India, should be brought to transactions from `.5,00,000/- to `.15,00,000/- per
the notice of Ministry of Home Affairs so that the transaction with immediate effect.
funds are allowed to be credited to the accounts of Further, RBI has decided to permit AD
the recipient only after obtaining clearance from banks to regulate payments exceeding the
Ministry of Home Affairs, Foreigners’ Division, prescribed limit under Rupee Drawing
FCRA Wing, Government of India, New Delhi. Arrangement provided the AD banks are satisfied
Further Government organizations can with the bonafide of the transaction and ensure
avail of foreign funding only with clearance of additional precautions as under:
Department of Economic Affairs and any instance  AD banks must ensure the remittances received
of Government organization receiving funds under RDA are from FATF compliant
directly from the above mentioned donor agency countries.
may be withheld and brought to the notice of
MHA.  KYC/AML/CFT and other due diligence
FX.06/2015-16 Dt.05.05.2015 concerns should be taken care of by AD banks.

Closure of USD Nostro Accounts with HSBC, NYK,  Individual exchange houses which are
RBS, NYK and BNY, Mellon A/c 1 & 2 frequently sending large value trade related
remittances must be reviewed and reported to
Branches should not route any transaction RBI.
through the USD Nostro Accounts as mentioned
below since the accounts are marked for closure:  AD banks must contact their correspondents
that maintain accounts for, or facilitate
1. HSBC, New York A/c No 000053694. transactions on behalf of Exchange Houses in
2. Royal Bank of Scotland, New York A/c No order to request additional information
574071768142. regarding high value trade related transactions
and the parties involved. The collected details
3. Bank of New York, Mellon (I), A/c No
should be kept on record and it may be made
8900555947.
available for scrutiny.
4. Bank of New York, Mellon (2), A/c No
8900555955.  AD banks must ensure that the proceeds of
export payment through RDA is applied to the
As per arrangement, Treasury Branch will outstanding export finance if any, availed by
be sending a notice of closure to all these Nostro the exporter from any bank for the concerned
Correspondent Bank after complete reconciliation export transaction and obtain a declaration to
of the pending entries. that effect from the exporter.
FX.07/2015-16 Dt.13.05.2015 FX.17/2015-16 Dt.02.06.2015
Foreign Currency (Non-Resident) Account (Banks) Opening of New CAD Nostro Account with Bank of
FCNR (B) Scheme Montreal – Canada
Branches should not insist for the Bank have opened a new CAD Nostro
submission of A2 form, purpose of remittance and account with Bank of Montreal, Toronto, Canada.
1212
 APRIL-JUNE 2015
The details of which is given below: mechanism in the Bank, the Board has given
various directions for improving the customer
Details Bank of Montreal service as below:
Account No. 3144 1044 369
1. to sensitize & train the field level
SWIFT Code BOFMCAT2
functionaries so as to reduce the complaints to
The general mailing address and the mailing improve the customer service.
address for cash letters and cheque transactions are 2. To identify and list out the parameters where
given in this circular.
the customer service is poor and put in place
FX.19/2015-16 Dt.29.06.2015 necessary mitigatory measures for the same.
GENL 3. To find out the repeated deficiencies and take
Cheque Drop Box up with the Zonal Managers/ Branches for
It is reiterated that the Branches should rectification
ensure that: 4. To adhere to the commitment given to BCSBI
 The extant instructions given in the circulars as they will be publishing their report in
referred above are meticulously followed public domain
without any exception. 5. Incognito visits to the branches need to be
 The drop boxes are kept under lock and key more critical and analytical
and the key to be in the custody of an
Branches shall refer this circular with
authorized officer of the branch.
regard to major areas of complaints and action
 The drop boxes are opened in the presence of points suggested.
an officer to ensure that the cheques lodged for
GENL.05/2015-16 Dt.29.04.2015
collection are handled with utmost care and
responsibility. The sub staff members are not Launching of "IB Smart Remote": Android
allowed to open the drop box. application for controlling debit card parameters
 Any request for returning the cheques dropped through mobile
in the drop box from anybody, may be dealt In order to provide a better technology
with care and caution. oriented service to our debit card holders, our bank
developed a mobile application exclusively for
 There is CCTV coverage focused in the area
debit cards for giving a direct and secure access to
where cheque drop box is kept. The present
the customers for controlling their card status and
location of cheque Drop Box / CCTV Camera
to change the withdrawal limit within the overall
may be repositioned, if required, to get a clear
limit of the card. “IB Smart Remote” is bank’s
view of the Drop Box.
technically smart initiative and user friendly
 There is a notice on the cheque drop box that solution for preventing misuse of debit cards.
the cheques should be crossed before dropped
“IB Smart Remote” provides following
inside the box. As an additional precaution,
services to our customers:
notice may be put up on the BOX advising
customers to get the cheques “specially  Toggle the card status between restricted
crossed” by the Branch officials before mode and open mode. Only non-financial
dropping the cheque. PLEASE DO NOT transactions can be performed using the card
PLACE ANY ROUND STAMP/ CROSSING when the card is in restricted mode.
STAMP NEAR THE BOX AS THIS WOULD
 Increase / decrease the withdrawal limit for
BE MISUSED.
ATM & POS channels within the maximum
GENL.01/2015-16 Dt.07.04.2015
limit permitted by our Bank for each card
type.
Improving Customer Service – sure Strategy for
At present “IB Smart Remote” is available
Growth
for Android based Smartphone users.
With regard to review of matters relating to
GENL.11/2015-16 Dt.20.05.2015
Customer Service – Internal Grievance redressal

13
 Recollect
Launching of “On line Net Banking facility with Upward Revision of Service Tax on Service Charges
Green PIN"
Service charges presently levied by us on
The existing Retail Customers need not 27 basic banking services and for services other
visit the branches for availing online Net Banking than 27 services which are inclusive of Service tax
facility. They can directly apply online through our are being revised upward from 12.36% to 14%,
net Banking website, set their own PIN for both effective from 01 06 2015.
login and transaction through Net Banking &
The amended service charges consequent
enable their net banking with ATM Card
to the said revision in service tax are enclosed in
credentials. There is no work load at branch in this
the Annexure to this circular.
process. Alternately after creating the net banking
facility and PIN, the customers can take a print and GENL. 15/2015-16 Dt.29.05.2015
visit the branch to activate their Net Banking
ADMIN
facility. For availing this facility the mobile
number, email id, date of birth or pan number must The Banker’s Indemnity Policy for the financial year
have been registered correctly in their CIF number. 2015-16
This will enable our Bank to contribute towards The Banker’s Indemnity Policy for the year
Green Initiative to save trees. 2015-16 has been taken with M/s United India
The Detailed Write Up on the Work Flow Insurance Co. Ltd., 340, Anna Salai, Chennai
with Screenshot is given in the Annexure to this 600035. A detailed circular for the same would be
circular. issued shortly in due course.
GENL.12/2015-16 Dt.20.05.2015 One of the Provisions of the Policy for the
year 2014-15 was that M/s The New India
Launching of "e-purse Debit Cards" Assurance Co. Ltd is that they shall not be liable
Our Bank has launched a technology based for the losses not discovered within six calendar
initiative named e-purse - Debit Cards. months following the date of expiry in the event of
non-renewal with them. The effect of this provision
Under the e-purse facility, Customers can is that the loss occurred before 31.03.2015 but
have multiple Debit cards backed by Virtual claim preferred after 30.09.2015 would not be
Accounts opened through Net Banking. Nick Name considered for settlement by M/s The New India
can be given for these Virtual accounts based on Assurance Co. Ltd.
the usage either on Purpose Basis or on Person
basis. Cards with Nick Name printed on it can be In view of the above, branches who have
detected the losses during the period ending
given to the ultimate users by the account holder.
31.03.2015 but not preferred claim with M/s. The
Allocation can be done for each purpose / New India Assurance Co. Ltd so far should send
person and transfer funds to these Virtual accounts the claim form to their Zonal Office immediately.
through Net banking. Transfer back to main ADMIN.05/2015-16 Dt.08.04.2015
account is also enabled through Net Banking. By
using these Debit cards of virtual accounts, it will Business Plan 2015-16
enable the customers to have better control over The budgeting exercise for FY-2015-16
their expenses and will help them in Easy way for has been set in motion with a Corporate Goal of
Budgeting. reaching a Business level of ` 3.56 lakh crore. This
By transferring the required amount to e- envisages a growth of 19.5 per cent in Global
purse account, Main account’s balance is not Business comprising 20.1 per cent growth in
getting exposed to risks of skimming, phishing & Deposits and 18.6 per cent growth in Credit.
other online frauds. Any growing organization can achieve the
Detailed Write Up on the Work Flow with desired level of growth only by effective
Screenshot of the product is given in the Annexure participation and contribution by each and every
to this circular. unit of the organization. Hence the Business Plan -
Let us all work towards 100% of 2015-16 have to be initiated keeping the following
Customers to have Net Banking. aspects:

GENL.13/2015-16 Dt.20.05.2015
1414
 APRIL-JUNE 2015
 Assessing the business potential in the area of b. 0118001115P101087527(Commercial
operation Buildings)
 Ascertaining the potential target groups and All owned Buildings (Commercial and
Residential) of Indian Bank located all over India
 Approach/ strategy to tap the potential to the are covered under this Standard Fire and Special
Bank’s advantage Perils Policy. The Policy also covers damages due
Another important point that Branch to earthquake and Terrorism.
Managers should factor in and which we have The Policy covers damage to the building
always been reiterating is that the growth recorded or any part thereof due to:
should be sustained throughout. This requires us to
1. Fire
plan towards increasing our business right from the
beginning of the financial year. 2. Lightning
3. Explosion/Implosion
ADMIN.13/2015-16 Dt.11.05.2015
4. Aircraft damage
Branch Manager’s Diary for the period 2015-2018 5. Riot, Strike and Malicious damage
The Branch Manager’s diary provides the 6. Storm, Cyclone, Typhoon, Tempest,
Branch Manager with a snapshot tool to assist in Hurricane, Tornado, Flood and Inundation
business development in the command area, in 7. Impact damage
terms of the parameters set under various
8. Subsidence and landslide including rock
categories. The diary also provides the branch
slide
manager to note down complete Branch Profile,
important meeting dates, reminders in follow up of 9. Bursting and/or overflowing of water
critical activities, list of important customers who tanks, apparatus and pipes
may be useful in identifying business prospects, 10. Missile testing operation
recovery, follow-up, product preferences etc. To 11. Leakage from Automatic sprinkler
enhance productivity and efficiency, format for installation
recording major functional areas have been 12. Bush fire
provided. Contact Register is given at the end of the
diary for noting the details of contacts made by the On the occurrence of loss or On the
Branch Manager. detection of any damage or any events or acts that
are likely to cause a loss to the Bank’s Building
The diary meant for the period from April branches should immediately report to the nearest
2015 to March 2018 had already supplied to all branch of United India Insurance Company
Branch Managers through their Zonal Offices. Limited under copy to the addresses given in this
ADMIN.22/2015-16 Dt.14.05.2015 circular.
ADMIN.23/2015-16 Dt.16.05.2015
Renewal of Standard Fire and Special Perils Policy of
the Bank’s Own Buildings Service Tax Rate Increase with effect from
The Standard Fire and Special Perils Policy 01.06.2015
for the Bank’s Owned Buildings all over India has Branches/Offices should compute Service
been renewed for the financial year 2015-16 for the Tax at the revised rate of 14% with effect from
period 01/04/2015 to 31/03/2016 with 01.06.2015 on the following items - Manpower
M/s United India Insurance Company Ltd Supply/Security Services, Works Contract Services
Divisional Office No. 011800 and Hiring of Motor Vehicles, if any, under
“Sathguru Complex” 1st Floor Reverse Charge Mechanism (RCM) and account
New No.640, Anna Salai, Nandanam, the same in the respective BGL heads.
Chennai 600 035 ADMIN.33/2015-16 Dt.25.05.2015
Tel:044 – 24349073/9846
Fax:044-24349078 Regular Inspection of Branches - Zero Tolerance
areas
The new Policy Numbers are -
Zonal Audit Committee of Executives
a. 0118001115P101087397 (Residential
(ZACE) will close the Inspection Report of a
Buildings)
branch subject to ensuring that at least 80% of the
irregularities / deficiencies pointed out in the report

15
 Recollect
are rectified to the satisfaction of ZACE. But, corporate level by CO: Accounts Department. The
there are certain types of irregularities like non above claim and related matters henceforth shall be
creation of EM, non registration of MOD where handled by CO: Banking Operations Department
applicable, etc., (full list furnished in Internal Audit for the operational convenience. Hence all the
Policy 2015-16 Page No.47 and also furnished Zonal Offices / Branches should send their Claim
below) which are considered as serious
and any Communication / Query/ Clarification with
irregularities and these are called “Zero Tolerance
regard to claim under Banker’s Indemnity Policy
Areas”. A Branch will be classified under ‘High
Risk’ if even one of the deficiencies / irregularities directly to CO: Banking Operations Department.
in the zero tolerance area is not fully rectified.
ADMIN.38/2015-16 Dt.17.06.2015
Below are the areas which are grouped Amendments made in the Finance Act 2015 in
under zero tolerance category: respect of TDS Provisions
1. Non creation of EM / Non registration of The following amendments have been
MOD (where applicable) / Non registration of made in respect of TDS provisions relating to
ROC, except in cases where the original title deeds interest paid on deposits u/s 194A of Income Tax
pertaining to primary security could not be Act, 1961 in the Finance Act, 2015.
obtained as the loan is not disbursed in full or
where the seller is a Housing Board (Govt. Body), 1. From 01.06.2015, the “Exemption Limit”
etc., where normally there is a time delay in of `.10000/- is to be considered for the interest
passing on the title deeds. paid/payable on all the Term Deposit accounts held
2. Non conduct of Pre-release Audit (in at various branches of the Bank.
exceptional cases where pre-release audit is not 2. From 01.06.2015, RD has been brought
conducted, feed-back report should be obtained under the definition of Time Deposits and hence
which ensures compliance of all terms and interest paid / payable on RD and VRD has been
conditions) brought under the purview of TDS provisions and
3. Non-adjustment of books accordingly TDS has to be deducted on the interest
4. Existence of unauthorized parking paid / payable on such RD / VRD accounts
accounts subject to
“Exemption Limit of `.10000/- per annum for
Irregularities under zero tolerance category
all the Term Deposit accounts opened at
should be 100% rectified before closure of RBIA /
various branches of the bank, for a customer.
special reports. However, in genuine cases,
despite pending irregularities under “Zero 3. Form 15G
Tolerance Category”, ZACE is empowered to Self declaration in Form 15G can be
close RBIA reports subject to their recording submitted by all the customers except ‘Firm’ and
specific reasons for closure. In respect of pending ‘Company’ in respect of domestic deposits. System
non compliance of Zero Tolerance Areas related will not deduct TDS, if the total interest
to advances, closure of reports can be considered paid/payable on all the accounts attached to the
by ZACE subject to approval / ratification of the CIF, does not exceed `.2.50 Lakhs for the FY
branch action by ZLCC in respect of advances 2015-16.
sanctioned by authorities up to ZLCC level, and 4. Form 15H
Self declaration in Form 15H can be
the reasons shall be duly minuted. Similarly, in
submitted only by Resident individual customers
case of special reports also, ZACE should give
with the age of 60 years and above. As per the
specific recommendations to CO: Inspection
existing provisions, no TDS is to be deducted
department justifying closure of special report
irrespective of the amount of interest paid/payable
despite pending irregularities in zero tolerance to a customer during a Financial Year, by the Bank.
areas, for taking a view.
ADMIN. 39/2015-16 Dt.23.06.2015
ADMIN.35/2015-16 Dt.02.06.2015 Though due care has been taken in the
Claim under the Banker’s Indemnity Policy – transfer preparation of Recollect, the version given in the
circular is final.
to CO: Banking Operations Department.
Compiled by CO: O&M Division
The Claim and related matters under
Banker’s Indemnity Policy is presently handled at
1616
 a Volume 21 Issue 1

For Private Circulation Only

April – June 2008 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
CONTENTS OF THIS ISSUE
CRA 29.04.08 Mandatory electronic payment of 8
Cir No. Date Subject Pg. 3 tax by certain Categories of
DEP 12.04.08 Policy on Deposits taxpayers with effect from
1
3 01.04.2008
8 14.06.08 Prevention of Money Laundering 2 10 29.05.08 Revised Procedure for 8
Act 2002 - Obligation of banks submission of AROGYA
ADV 09.04.08 Creation of Equitable Mortgage 2 RAKSHA proposals
3 (EM) – stamping and registration 11 13.06.08 Levy of Service Tax on Foreign 9
4 09.04.08 Discontinuance of Prime 2 Exchange Transactions.
Minister's Rozgar Yojana (PMRY) HRM 02.04.08 Perquisite on account of interest 9
6 15.04.08 Differential Rate of Interest 3 2 free loan or a loan on
Scheme - Revision of the income concessional rate of Interest
limits 5 03.04.08 Value of perquisite on 10
8 23.04.08 Wrong Classification of Accounts 3 accommodation provided to
9 23.04.08 Credit Risk Management Policy 3 employees by the Bank
2008 – 09 10 19.04.08 Sanction of Loan against 10
10 28.04.08 Recovery Policy 2008-09 3 Provident Fund (PFL AND
11 29.04.08 Swarnajayanti Gram Swarozgar 3 RWPFL)
Yojana (SGSY)- Revision in Rate 13 09.05.08 Performance Appraisal Forms – 10
of Interest on Group Accounts Revised
12 29.04.08 IB Swarna Mudra – Systems and 4 21 22.05.08 Bonus to staff for the year 10
Procedures - Addendum 01.04.2007 to 31.03.2008
13 28.04.08 Continuation of Credit Linked 4 22 29.05.08 Nomination of Disciplinary 10
Capital Subsidy Scheme Authority for award staff
(CLCSS) for Technology FX 19.05.08 Loans to Non Residents/ third 11
Upgradation of Micro, Small & 4 parties against security of Non
Medium Enterprises during XI Resident (External) Rupee
Plan. Accounts (NRE)/Foreign
15 30.04.08 Classification of advances: 4 Currency Non Resident (Bank)
secured/unsecured (FCNR(B)) deposits
17 05.05.08 Strategies for improving growth in 4 6 10.06.08 Revaluation of Foreign Currency 11
Structured Loan Products. Assets & Liabilities for the quarter
21 08.05.08 Introduction of PMEGP in place 5 ending 30.06.08 in compliance
of Rural Employment Generation with Accounting Standard 11
Programme (REGP) GENL 30.06.08 Revision of Service Charges on 11
22 09.05.08 Self Employment Scheme for 5 20 Loans and Advances
Rehabilitation of Manual ADM 10.04.08 Formation of Treasury Branch 11
Scavengers (SRMS) 3
24 12.05.08 IB Vehicle Loan Scheme – 6 4 15.04.08 Annual Programme for the 12
Modifications implementation of the Official
25 12.05.08 IB Ind Mortgage and IB Rent 6 Language for the year 2008-2009
Encash Schemes – modifications 17 21.05.08 The Banker’s Indemnity Policy for 13
30 19.05.08 Amendments to certain ceilings 6 the financial year 2008-09
/Restrictions in Credit Card 20 05.06.08 Second Annual General Meeting 13
Operations & Authorization of all of the Bank
branches – reg. MD/ED 01.04.08 Achievement of Rs.One Lakh 13
41 07.06.08 Bearing One Time Guarantee 7 1 Crore in Business.
Fee on Loans Covered under
Credit Guarantee Scheme (CGS)
of CGTMSE DEPOSITS
49 21.06.08 Coverage under Crop Insurance 7
Schemes of the Government of Policy on Deposits
India-implemented by AIC
54 30.06.08 Revision in Benchmark Prime 8 Board has approved the addition of
Lending Rate ‘PREFERENTIAL DEPOSITS’ in our Policy on
 Recollect
Deposits under sub-head ‘Types of Deposit preferred form of mortgage due to its
Accounts’ as under: uncomplicated procedures.
f. any term deposit of over Rs. 5 Crores A letter confirming deposit of title deeds
accepted at higher rate given by HO: Treasury with intention to create mortgage is taken in
Department. formats viz. D- 32 or D-33 as the case may be.
Branches to incorporate the addition in the Some states have amended the relevant
Policy on Deposits sent as annexure to the circular provisions of the Stamp Act to the effect that
dated 24.05.2007 of HO: Customer Service Cell creation of equitable mortgage i.e. deposits of title
Cir.No. DEP.09/2007-08. deeds and which is reduced to writing will attract
stamp duty.
The Policy has been displayed in our
website for information to viewers. In Tamil Nadu with effect from 16 12 2004
as per amendment made to Stamp Act any writing
(DEP. 03/ 2008-09 dated 12.04.2008)
evidencing creation of mortgage by deposit of title
Prevention of Money Laundering Act 2002 - deeds required to be stamped at the rate of 0.5%
Obligation of banks with a cap of Rs 5,000/-. Hence on and from that
date any document taken evidencing creation of
Reserve Bank of India has directed that all
EM in the form of D-32 etc is to be compulsorily
cash transactions, where forged or counterfeit
stamped. Though stamping is compulsory,
currency notes have been used as genuine should be
registration of document evidencing creation of EM
reported to FIU-IND immediately in the format
in the form of agreement is only optional.
Counterfeit Currency Report (CCR). These cash
transactions should also include transactions where While introducing the said amendment
forgery of valuable security or documents has taken Govt. also provided for concessional registration
place and may be reported to FIU-IND in plain text charges of 1% with a cap of Rs 1000/ to encourage
form. In some cases transactions are abandoned / registration of such documents. Non registration of
aborted by customers on being asked to give some EM will not vitiate the mortgage but registration
details or to provide documents and branches will be an added advantage as entry will appear in
should report all such attempted transactions in the Register of Encumbrances maintained by the
Suspected Transaction Report (STR), even if not officer of Sub Registrars.
completed by customers, irrespective of the amount Further details/clarifications are available
of transaction. in the circular.
Branches should make Suspicious In respect of branches in other states, where
Transaction Report (STR) if they have reasonable payment of stamp duty is compulsory, branches
ground to believe that the transactions involve shall take the advice of their panel advocate and
proceeds of crime generally irrespective of the have the document duly stamped as per the law
amount of transaction and/or the threshold limit applicable locally, before or at the time of
envisaged for predicate offences in schedule of execution of document by the parties. Wherever
PMLA 2002 (HO:O&M circular No.Genl 75/2005- registration of EM document is compulsory as per
06 dated 2.3.2006). law or stipulated as per sanction terms the same has
These guidelines are issued under Sec 35A to be complied with. Branches can avail the
of the Banking Regulations Act, 1949. Any services of HO: Legal Department on the above.
contravention of the said guidelines may attract (ADV.03/2008-09 dated 09.04.2008)
penalties under the relevant provisions of the Act.
Discontinuance of Prime Minister's Rozgar Yojana
(DEP.08/2008-09 dated 14.06.2008)
(PMRY)
ADVANCES RBI vide their letter RPCD PLNFS 9280 /
Creation of Equitable Mortgage (EM) – stamping and 09.04.06 /2007-08 dated March 05, 2008 informed
registration –reg. that Government of India had decided to merge
PMRY with REGP into a new scheme to be called
Mortgage by deposit of title deeds, which
as Prime Minister’s Employment Generation
in common parlance called Equitable Mortgage is a
Programme (PMEGP). The proposal in this regard

2 2
 APR-JUNE 2008
is at advance stage of consideration and approval of The CRP for 2008-09 is approved by Risk
Government of India. Management Committee of the Board and the
In view of the position, Ministry advised policy is enclosed as annexure to this circular.
that PMRY is not to be implemented anymore in its (ADV.09/2008–09 dated 23.04.2008)
present form during the year 2008-09.
Recovery Policy 2008-09
(ADV.04/2008-09 dated 09.04.2008)
Better standards of credit appraisal and
Differential Rate of Interest Scheme - Revision of the
close monitoring of Standard Assets will enable the
income limits
branches to restrict the Non-Performing Assets to
RBI has communicated the revision in the the minimum level. Concurrently recovery of
annual family income eligibility for Differential existing NPAs has to be given utmost importance in
Rate of Interest scheme vide their notification no. view of the likely impact on the profitability.
RBI/2007-08/279-RPCD.SP.BC.No.55/0909.07.01/
Recovery Policy aims at expediting recovery while
2007-08 dated 10.04.2008 as follows:
pegging the sacrifice at the lowest possible level.
Classification Existing Revised With this objective in focus, the policy guidelines
Rural Rs. 6400 Rs.18000
Urban Rs. 7200 Rs. 24000 are re-visited and refashioned at least once in a year
The other terms and conditions of the so as to equip the branches for efficient handling of
scheme remain unchanged. the NPA portfolio. While framing recovery policy
guidelines, the feed back received from the field
The target for lending under DRI scheme level functionaries, our experience in handling
continues to be 1 % of the previous years’ total proposals received from branches all over the
advances as hitherto. country and the corporate goals are factored in
(ADV.06/2008-09 dated 15.04.2008) besides the market developments, economic
scenario etc. Board reviewed the Recovery Policy
Wrong Classification of Accounts of the Bank and approved the revised guidelines for
Classification of accounts as Priority and 2008-09.
non priority is vital and the basic requirement to Most important modification is on account
comply with the RBI guidelines/stipulations. Under of implementation of RBI guideline dated October
non priority classification also more attention and 4, 2007 on One Time Settlements (OTS) directing
importance to be given for classifying accounts the Banks that the OTS amount arrived at should
falling under the category of Medium generally be not less than the net present value
(Manufacturing) Enterprises and Medium (Service) (NPV) of the realisable value of securities.
Enterprises.
The policy 2008-09 encompasses major
Circular ADV 19/2007-’08 dt 14.06.’07 by improvements over the existing policy, which are
SMEDD have brought out in detail the revised detailed in this circular.
guidelines on classification of SME advances along
with RBI guidelines. (ADV.10/2008-09 dated 28.04.2008)

The definition for the eligibility of the Swarnajayanti Gram Swarozgar Yojana (SGSY)-
accounts to be classified under the above categories Revision in Rate of Interest on Group Accounts
as stated in the loan policy 2008-’09 is listed in the As per the revised guidelines of RBI, the
circular. rate of interest to be charged on Group loans under
(ADV.008/2008-09 dated 23.04.2008) SGSY is to be linked to per capita size of the loans.

Credit Risk Management Policy 2008 – 09 The revised guidelines of RBI on charging
interest rate on Group loans under SGSY is with
The Credit Risk Policy of the Bank has immediate effect and the revised interest rate is
been framed and reviewed annually. The policy applicable to fresh as well as existing Group Loans
document includes identification, measurement, under SGSY.
monitoring and control of the credit risk exposures.

3
 Recollect
Other SHG-Bank Linkage Programme will sub-sectors. SIDBI / NABARD were designated as
continue to be charged with the rate of interest as Nodal Agencies for channelising assistance under
per our Circular Adv.153/2005-06 dated these schemes.
01.03.2006. Consequent upon the enactment of the
The details on revision of interest rate are MSMED Act 2006 the name of “Credit Linked
Capital Subsidy Scheme for Technology
illustrated in the annexure to the circular.
upgradation of Small Scale Industries” (CLCSS)
(ADV.11/2008-09 dated 29.04.2008) has been changed as “Credit Linked Capital
Subsidy Scheme (CLCSS)”
IB Swarna Mudra – Systems and Procedures -
Addendum The salient features of the scheme are given in
the circular.
The IB Swarna Mudra Scheme is now
(ADV.13/2008-2009 dated 28.04.2008)
operational through 899 branches in 27 circles. The
details are available in IB Swarna Mudra Scheme Classification of advances: secured/unsecured
link of our Bank’s website / CBS Helpdesk.
From the MIS reports compiled from the
For systems and procedure in relation with CBS as on 31.03.2008, it is observed that there are
sale of gold refer to the Circulars ADV – 167/2005- wrong classification of accounts for some of the
06 dt. 23.03.06 and ADV – 92/2007-08 dt. secured advances as unsecured advance.
14.03.08. The share of branch income to be Any exposure covered to the extent of more
appropriated at the time of sale, is revised upward. than 10% security including margin can be treated
as secured advance for the purpose of classification.
With effect from 1st May 2008 the income
The same is reiterated in loan policy 2008-09.
to be appropriated by the branches at the time of
sale of gold coins/bars is revised as under: Kindly verify the classification of the
(in Rs.) (in Rs.)
accounts as on 31.03.2008 and carry out
Denomination Existing Amt Revised Amt rectification wherever needed. Wrong classification
2g 50 180 has been critically commented by our Statutory
4g 100 360
Central Auditors.
5g 125 450
8g 200 720 This classification is not applicable for
10g 250 900
20g 400 1350 exercising discretionary powers. Classification of
50g 1000 2700 secured advances for the purpose of exercising
discretionary powers is as per book let on credit
Except for the revision in branch income, powers (page c-8).
there is NO change in the accounting procedure for
(ADV.15/2008-09 dated 30.04.2008)
sale of gold coins/bars. Branches to strictly adhere
to the systems and procedures as per the earlier Strategies for improving growth in Structured Loan
circulars. This is an opportunity for the branches to Products.
book Non-Interest Income on the date of sale itself.
The Personal Banking Department had
(ADV.12/2008-09 dated 29.04.2008) given a Strategy Plan for Structured Loan
Products during the Performance Budget Plan.
Continuation of Credit Linked Capital Subsidy
Scheme (CLCSS) for Technology Upgradation of Branches/Retail Banking Segments/
Micro, Small & Medium Enterprises during XI Plan. Circles are free to implement area specific
programmes/methods to achieve monthly
The “Credit Linked Capital Subsidy
Scheme” for Technology upgradation of Micro, targeted growth of SLP, both in Disbursements
Small Enterprises will continue during the XI Plan and Balance Outstandings.
(2007-2012). Home Loans
Under the Scheme, capital subsidy would • Thrust on Home Loans to be stepped up in a
be available to the loans advanced to the SSIs for big way. Priority to be given for financing
technology upgradation in certain select products /
4 4
 APR-JUNE 2008
Home Loans in approved projects by having Branches/Retail Banking Segments/Circle
tie-up with reputed builders / upfront Offices should exercise adequate care to achieve
clearance for projects. Circle Heads to scout growth in Home Loan and other Structured Loan
for Home Loan business through this route Products with QUALITY.
and take up quick tie-up with reputed
The various risk mitigation measures
builders for approval of projects. Fast track
should be adopted, in order to totally avoid frauds,
Home Loan sanctions (5 days) for customers
accounts becoming NPA,
bringing in more than 25% margin. Massive
improvement of turn around time for (ADV.17/2008-09 dated 05.05.2008)
sanctions at Retail Banking Segments for all
Introduction of Prime Minister Employment
Home Loan proposals. All Circle Heads to
Generation Programme (PMEGP) in place of Rural
interact with RBS Chiefs on
Employment Generation Programme (REGP)
weekly/fortnightly basis and bring pendency
to NIL. REGP ceases to exist w.e.f. 1.4.2008.
Hence, branches to ensure that no proposals under
• Formation of Home Loan desks at various
the scheme are accepted or sanctioned w.e.f.
intervals at Reputed Institutes. Deploying a
1.4.2008. Margin money will not be available from
dedicated Circle Task Force for the purpose.
Govt. of India for the same, even if the proposal is
• Home Loan Fairs at Regular intervals. sponsored by KVIC / KVIB during the year 2007-
(Atleast 2 Fairs per month in every Circle) 08.
• Special attention on High Networth Head Office will be intimating about the
Individuals (HNIs). new scheme of PMEGP on hearing from Ministry
of MSME, Govt. of India.
• Cross Selling of Home Loans, Salary Loans
and other Personal Loans, Insurance Products (ADV. 21/2008-09 dated 08.05.2008)
through good clients of Credit Division, SME
Self Employment Scheme for Rehabilitation of
and RBD. Circle Offices should guide the
Manual Scavengers (SRMS)
branches by providing required information
to approach the clients and also emanate Government of India desires that the
contacts from their end. scheme for rehabilitation of manual scavengers
should be administered as a national priority.
Vehicle Loans and Personal Loans
Details of the scheme have already been
• Channel Financing of Vehicle Loans to be
communicated to Branches vide circular Adv.127/
taken up. Major reputed vendors to be tied
2006-07 dated 26.3.2007. Salient points of the
up for Vehicle Loans to prospective buyers.
scheme along with additional information
• Proactive canvassing by Circles for Personal communicated by RBI vide letter RBI/RPCD.
(salary) loans for good Business Groups, SP.BC.No.57/09.03.01/ 2007-08 dated 15th April
Limited Companies etc. Renewals of Salary 2008 are given in the annexure to this circular.
Loans for all existing groups having record of
The successful implementation of the
zero overdues/NPAs.
scheme would depend upon effective participation
Mortgage Loans by all the Branches especially in view of
• The Reverse Mortgage Loan for Senior Government’s objective of implementing the
Citizens should be popularized. Proactive scheme in a fixed time period by identifying
measures like holding Seminars for various scavengers and their dependents and their aptitude
Retired Officials, Associations/Segments for alternative trade by March 2009. Simple &
should be adopted in various important Cities. transparent procedure should be adopted to
HO has already provided a CD in this regard eliminate middlemen. Time norms prescribed for
to all Circles. disposal of applications should be strictly adhered
and proper record of receipt and disposal of
applications should be maintained. Any rejection

5
 Recollect
should have the approval of Circle Head. In any Beyond Rs. 7.50 lakhs
case of rejections, reasons should be properly For the portion of loan beyond Rs, 7.50
recorded. lakhs, 100% collateral security in the form of EM
of Properties / NSC / Fixed Deposits or Surrender
(ADV.22/2008-09 dated 09.05.2008) Value of LIC Policies to be stipulated.
IB Vehicle Loan Scheme – Modifications Waiver of such collateral securities for
Considering the market trend and in order Vehicle Loan up to Rs.15 lakhs may be permitted
to increase the rate of return on this portfolio, the by Circle Head on merits, strictly based on risk
interest rate and certain other parameters stand mitigation being available in the instant case.
revised with effect from 15.05.2008 as under for Take-home pay: 40% of gross salary, after
fresh Vehicle Loans: deducting all the dues including the proposed EMI.
Category Existing Rate Revised Rate Entry Level scoring for Vehicle Loan to
Two Wheelers 12% Fixed 12% Fixed (i.e. No
change) be applied to determine eligibility.
Four Wheelers Up to 36 months Up to 36 months : Processing Charges: Rs.250 per lakh or
(Car/Jeep/Van) :10.50% Fixed 11.50% Fixed
part thereof (subject to revision shortly).
Above 36 months: Above 36 months:
11.00% Fixed 11.75% Fixed All other terms and conditions applicable
for the Scheme remain unaltered. For ready
Two Wheeler reference, gist of the salient features and other
Incidence of NPAs is more in Two Wheeler terms are annexed to the circular.
loans. Hence Branches to exercise caution and give
loans on selective basis to this category. Only new (ADV.24/2008-09 dated 12.05.2008)
two wheelers are to be financed and the practice of IB Ind Mortgage and IB Rent Encash Schemes –
financing second hand two wheelers has been
dispensed with immediately. modifications

• Margin Considering the market trend, Risk Weight

of 150% applicable for the captioned Schemes and
Minimum 15% (in place of existing 10%)
in order to increase the rate of return on this
Four Wheeler portfolio, the interest rate stand revised with effect
• Margin from 15.05.2008 as under for fresh Ind Mortgage
The margin requirements will be as under: and Rent Encash Loans.
Four Wheelers Minimum 10% (No change) Scheme Existing Rate of Revised Rate of
(New Vehicles) Interest Interest
(used Vehicles) Minimum 40% (No change) Ind Mortgage BPLR + TP i.e. BPLR+TP+1.50%
13.00% (Floating) i.e. 14.50%
(age of used Four wheeler not to exceed 3 years)
(Floating)
• Loan Value: IB Rent Encash BPLR + TP i.e. BPLR+TP+1.00%
13.00% (Floating) i.e. 14.00%
New Four Wheelers: Cost of Vehicle (In case (Floating)
of need, one time Road Tax, Registration Fee,
Insurance premium and accessories can be added to All other terms and conditions applicable
cost of vehicle for finance) minus Margin as above. for the schemes remain unaltered.
Used Four Wheelers: Certified Market Value (ADV.25/2008-09 dated 12.05.2008)
minus margin
Marketing of Credit Cards--Amendments to certain
• Security: ceilings /Restrictions in Credit Card Operations &
Up to Rs. 7.50 lakhs: Hypothecation of Vehicle Authorization of all branches – reg.
If considered necessary by the sanctioning In order to give thrust to the marketing
authority, based on the risk perception of the efforts of our Bank’s Credit Card and to expand the
individual proposal, tangible security / guarantee to card base, the following amendments in respect of
be made available for the advance.

6 6
 APR-JUNE 2008
some of the areas of credit card operations are Bearing One Time Guarantee Fee on Loans Covered
implemented with effect from 01.05.2008: under Credit Guarantee Scheme (CGS) of CGTMSE
Areas of credit card Details of Amendments Bank’s policy on bearing one time
operations where guarantee fee has been revised as under with effect
amendments are from 01.06.2008.
implemented
Branches designated All the branches of the Bank are now Revised sharing Pattern
to handle Credit Card designated to market Credit Cards since
1. For Micro & Small Enterprises with limits upto
operations all are connected under CBS.
Ceilings / Restrictions The following ceilings are removed:
Rs.5.00 lakhs
fixed for transactions 20% of the credit limit for purchase of gold % guarantee fee to be borne
on our Credit Card Usage of Credit Card to an extent of 50% Interest charged on the
account By the
of the overall limit per day By the Bank
Borrower
Usage of Credit Card to a maximum of five
transactions in a day Upto 11% 1.00% 0%
Cash withdrawals for two times in a day Above 11% to 12.5% 0.5% 0.5%
Credit Card to The concerned branch may recommend Above 12.5% 0% 1.00%
customers whose for issue of Credit Card to customers, 2. For Micro & Small Enterprises with limits
association with Bank whose association with the Bank is less located in North Eastern States
is less than one year. than one year, directly to HO: Credit Card
Centre, marking copies of such
applications to respective Circle Heads. Interest charged on the % guarantee fee to be borne
The Circle Heads in turn shall send their account By the
By the Bank
recommendations regarding issue of cards Borrower
to these customers for appropriate action Upto 11% 0.75% 0%
by HO: Credit Card Centre. Above 11% to 12.5% 0.25% 0.5%
If no recommendations /comments are Above 12.5% 0% 0.75%
received from the Circle Heads within a
week from the date of the letter of the 3. For other loans covered under CGTMSE
branch, HO: Credit Card Centre shall take
% guarantee fee to be borne
decision on issue of Credit Card based on Interest charged on the
the merits of the case. By the
account By the Bank
Credit Card to Home Credit Card can be issued to the existing Borrower
Loan customers and Home Loan customers and other
other customers customers enjoying credit limits of Rs.10 Upto 11% 1.50% 0%
enjoying facilities fully lacs and above, fully secured by assets,
secured by assets. even though their association with the Above 11% to 12.5% 1.00% 0.5%
bank is less than 1 year. Application for
Above 12.5% to 13.5% 0.5% 1.00%
such customers to be sent directly to HO:
Credit Card Centre. Circle Head’s views/ Above 13.5% 0% 1.50%
recommendations are waived.
For new Home Loan applications, at the Field level functionaries should cover all
time of submitting their proposal to the eligible accounts under the scheme by taking
concerned Retail Banking Segment (RBS)
the branches should also endeavour to advantage of the scheme and the above
forward credit card applications of the amendments.
willing applicants to RBS who, after
sanctioning the Home Loan, will forward
Further, the lock in period has also been
the card application to HO: Credit Card reduced from 2 years to one year.
Centre for issue of Credit Card. (ADV.41/2008-09 dated 07.06.2008)
The Credit Cards, after personalization,
would be forwarded by HO: Credit Card Coverage under Crop Insurance Schemes of the
Centre to the concerned branches and the
same shall be handed over to the
Government of India-implemented by AIC
respective customers by the branch, when National Agricultural Insurance Scheme
the branch disburses the Home Loan (NAIS) and Weather Based Crop Insurance Scheme
sanctioned by the RBS.
In respect of other 100% secured (WBCIS) are being implemented through
sanctioned limits of Rs.10 lacs and above, Agriculture Insurance Company of India Ltd (AIC)
Branch Manager has to recommend for aiming at provision of risk mitigation solutions to
issue of credit card to HO: Credit Card the farming community against crop failures on
Centre directly along with the copy of the account of natural calamities, pests and diseases
sanction letter. etc. Both the crop insurance schemes i.e. NAIS and
WBCIS (wherever implemented) are compulsory
(ADV.30/2008-09 dated 19.05.2008)

7
 Recollect
for “loanee” farmers and optional for “non-loanee made electronic payment of taxes mandatory for the
farmers”. following categories of taxpayers w.e.f 01.04.2008:
Branches should cover all the eligible crop ¾ A Company
loans under the schemes. There is a wide gap
¾ A person (other than a company) to whom
between the crop loans insured and crop loans
provisions of Section 44AB are applicable
disbursed which indicates the need for coverage of
all eligible farmers. In this connection, please note that
All loanee farmers including sharecroppers, • the status of all corporate taxpayers can be
tenant farmers and SHGs/JLGs growing the notified identified from the name itself. Further, the
crops should be covered under the Scheme on a 4th digit of the PAN of all corporate assessee
compulsory basis. Even Agricultural Jewel Loans would necessarily be “C”. Physical challans
sanctioned for crop production purpose should be from such assesses shall not be accepted
compulsorily covered under the scheme. The across the counter.
farmers who do not agree for coverage/payment of
• In case of taxpayers covered under Section
premium may be given Jewel loan under non-
44AB, there should be no insistence of any
agriculture at the applicable interest.
proof of eligibility to pay tax through
All other (Non-Loanee) farmers growing physical challans at the bank counters. The
notified crops may also be covered under the responsibility of making e-payment rests
Scheme on a voluntary basis. primarily with the taxpayer. Hence, the word
of taxpayers should be taken as final.
Circle Offices to monitor the progress
under the scheme, submit a progress report on a All branches authorized to collect Direct
monthly basis 5th of every month as per the format Taxes to follow the above instructions
enclosed to the circular and send a certificate to the meticulously.
effect that all the notified crops in the notified areas
Our bank is authorized for e-payment of
have been covered by their branches without any
taxes. Account holders of all the branches
omission.
(including branches which are not authorized to
(ADV.49/2008-09 dated 21.06.2008) collect taxes) can make e-payment of taxes using
internet banking facility to pay their taxes (Income
Revision in Benchmark Prime Lending Rate Tax, Corporate Tax, Wealth Tax, Excise Duty,
Further to HO: CPGD Circular ADV.106 / Service Tax etc.) through our bank.
2006–07 dated 29.01.2007, the following guidelines (CRA.03/2008-09 dated 29.04.2008)
are now put in place.
Revised Procedure for submission of AROGYA
1. In the light of the increase in cost of Deposits,
RAKSHA proposals
tightening money market situations, trend in the
industry etc., and also keeping in view of the cost Branches to submit zero error Arogya
structure, Bank’s Board has approved the increase Raksha proposals and eliminate delays encountered
of Benchmark Prime Lending Rate by 75 basis in issue of Policies as per the revised procedure.
points (bps) from 12.50% to 13.25% per annum.
The Revised Procedure involves the
2. This revision will be effective from 01.07.2008 following steps:
for all existing and new advances linked to BPLR
1. Arogya Raksha Proposal Screen has been
under Floating Rate method including Export
made available in CBS Help Desk.
Credit / Gold Card Scheme, other Structured Loans
other than Home Loans, SHG Loans, SSI Sector, 2. Application Form with full particulars are
Advances to Third Parties against our Deposit, to be collected from the Customers in
Rupee Loan to third parties against FCNR Deposits duplicate.
etc. For further details refer the circular.
3. Details furnished in the Application have to
(ADV.54/2008-09 dated 30.06.2008) be keyed in the Proposal Screen. The
CRA
system has built in checks to ensure the
data is error free. Errors pointed out by the
Mandatory electronic payment of tax by certain system are to be rectified then and there.
Categories of taxpayers with effect from 01.04.2008
4. Branch to click the “Get the Premium” key.
Central Board of Direct Taxes vide their The Premium amount to be collected from
Notification no.34/2008 dated 13.03.2008 have
the Party pops up.
8 8
 APR-JUNE 2008
5. Then, click the ‘Submit” key. The system Arogya Raksha policy are given in the annexure to
will generate a unique Reference No. in the this circular.
following Format:
(CRA.10/2008-09 dated 29.05.08)
“AR/IBGL Code/ 6 digit continuous
number” Levy of Service Tax on Foreign Exchange
Transactions.
Example: The Reference Number for an
Application submitted by Harbour Branch Income generated out of Foreign Exchange
will read like this“AR/H003/ 000100” transactions except "Exchange (Misc) on other
FOREX Transactions", forms part of the list where
6. This Reference Number has to be written
on the First page of the Application and Service Tax is applicable.
also on the second page in the space for Encashment (Purchase) of Travelers
“Office Use only” Cheques & Purchase or Sale of Foreign Currency
7. The Premium has to be directly credited to Notes & Coins from the Customers, towards
“Arogya Raksha Premium Collection consideration for the service provided, per
(Parking) A/c. No. 774559955” with our transaction Service Charge of Rs. 10 + Service Tax
HARBOUR Branch mentioning the above at applicable rates (presently 12.36%) shall be
Reference No. in full. (Please note this recovered from the customer and total amount shall
change carefully. On present stock of be credited to the following P&L heads introduced
earlier printed Arogya Raksha Application for this purpose.
Form page 2 under “For Office Use Only”,
please ignore the words “remitted by Credit 1. Commission on encashment of TC's
advice No……… dated……..on OSB, 2. Commission on FC Notes & Coins exchanged
Chennai.” IBGA Credit Advices need not
be generated). Branches to take note of the amendment to
Service Tax rules as well as the revised procedure
8. All applications received in a day are to be
sent in one bunch to HO: BASC on the and recover service charges and Service Tax with
same day. Only on receipt of the hard copy, immediate effect.
UIICo will start processing. (CRA.11/2008-09 dated 13.06.2008)
9. The present Application form has provision HRM
for furnishing details of the earlier policy.
Branches should compulsorily get this Perquisite on account of interest free loan or a loan
column filled up in case of renewals. In on concessional rate of Interest
addition to this, if details of the previous In view of the Court Order, branches/
two Policies (max. of three previous offices to note that no interest on any loans will be
policies, if applicable) are also furnished, it treated as perquisite except Interest Free
will make Pre Authorization and Claim Festival/Salary advance for which the rate of
settlements easier. interest to be taken is 4.70% instead of the 15.25%
Applications with Credit Advices will not rate of interest of State Bank of India.
be entertained with effect from 16.06.08. The perquisite value on interest free/
concessional rate of interest should be recalculated
Designated Officers For Arogya Raksha:
and the income tax thereon if recovered in excess
Assistant Branch Managers of all Branches should be refunded to the employees.
(in case of one man branches, the Branch Please also inform the concerned
Managers) are nominated as the Designated employees that it is on account of the Court’s order,
Officers responsible for receiving Arogya Raksha the Tax at source is being deducted in accordance
Policies and ID cards from UIICo/TPA and with to the cost to the employer and that is subject
delivering them to the Policyholders. to final order to be passed by the Hon’ble High
Court in the pending Writ Petition.
Some of the attractive features and a
Summary of the Terms and Conditions governing (HRM.02/2008-09 dated 02.04.2008)

9
 Recollect
Value of perquisite on accommodation provided to the Appraising / Reviewing authorities to award
employees by the Bank marks accordingly. Qualitative factors include
internal control, efforts taken to improve business
In view of the Court Order, Branches/
and leadership qualities.
Offices to note that the perquisite value towards
quarters perks for tax deduction at source shall be The KRA page in the above forms has been
taken into account from 07.11.2007 only and not kept open. A suggestive list of KRAs has been
from 01.04.2007. annexed to the Performance Appraisal forms to
enable the Appraising Authority fix the KRAs
The perquisite value should be recalculated
according to the job roles played by individuals.
and income tax thereon if recovered in excess shall
The supportive role played by individuals on
be refunded to the concerned employees.
various aspects shall be measured in terms of
Please also inform the concerned qualitative factors.
employees that it is on account of the Court’s order
The soft copy of the revised Performance
the tax at source is being deducted for the quarters
Appraisal formats in non-editable PDF form is
perks from 07.11.2007 as the deduction for the
uploaded both in the Bank’s Intranet and CBS Help
earlier period stayed as an ad interim measure and
Desk. The respective forms can be downloaded
that is subject to final order to be passed by the
from the Branch / Office itself for use for the
Hon’ble High Court in the pending Writ Petition.
Appraisal Year 2007– 08.
(HRM.05/2008-09 dated 03.04.2008)
(HRM.13/08-09 dated 09.05.2008)
Sanction of Loan against Provident Fund (PFL AND
Bonus to staff for the year 01.04.2007 to 31.03.2008
RWPFL)
Board has approved payment of the
Bank’s HR processes have come under
statutory minimum Bonus for 2007-2008 to all
SAP and PF module has also been integrated with
eligible employees of our Bank in India at 8.33% of
it. By taking advantage of the technology, with
eligible emoluments paid from 01.04.2007 to
effect from 12.05.2008, it has been decided to
31.03.2008 subject to a maximum of Rs.3,500/- per
credit all PF and RWPF loan proceeds to the
employee. The Bonus amount is to be paid by the
respective SB accounts of the employees centrally
Branches /Offices immediately. For ascertaining the
from HO: HRM Department.
eligibility of the employees and for calculation of
The salient features of the new procedure Bonus amount, etc., Branches / Offices are advised
are detailed in the circular. to follow the guidelines given in the annex to the
(HRM.10/2008-09 dated 19.04.2008)
circular meticulously without any deviation.
Branches /Offices are to debit their
Performance Appraisal Forms – Revised
‘Sundries Receivable –II’ Account and submit their
Performance Appraisal plays a pivotal role claims for reimbursement through their concerned
in measuring the performance and potential of each Circle Offices.
and every staff member for objectively facilitating
(HRM.21/2008-09 dated 22.05.2008)
an unbiased reward / recognition system.
Over a period of time, the changing Nomination of Disciplinary Authority for Award Staff
business environment, organizational needs and In exercise of the powers conferred on our
feed back received from functionaries of various Chairman and Managing Director under provisions
levels have determined the evolution of of Clause 14 of the Bipartite Settlement dated
Performance Appraisal system. 10.04.2002, Chairman and Managing Director has
Against such backdrop, the existing nominated Shri. K.Srinivasa Raghavan, Assistant
Performance Appraisal forms have been revised as General Manager, (presently working in HO: MIS
part of the on going efforts to align HR with the Department) as the Disciplinary Authority in
corporate objectives and to make the contents and respect of disciplinary cases for Award Staff
design of the performance appraisal forms simple. working in Head Office and Concurrent
The self appraisal form would reflect the Disciplinary Authority for all the Award Staff of
actual performance of Circle / Branch and facilitate our Bank in place of Shri.K.R.Ramachandran,

1010
 APR-JUNE 2008
AGM(HRM), who has retired from the services of read with modification circulars issued from time to
the Bank. time.

(HRM.22/2008-09 dated 29.05.2008) The charges prescribed are inclusive of

service tax payable to Government of India.
FX Branches should credit the appropriate income
heads like interest on BP, interest on other
Loans to Non Residents / third parties against
advances/recovery of postages/recovery of out of
security of Non Resident (External) Rupee Accounts
pocket expenses etc., in order to keep an eye on
(NRE) / Foreign Currency Non Resident (Bank)
wrongful / excess recovery of service tax payable to
(FCNR(B)) deposits
GOI to the debit of our income account.
As per RBI’s directives, Banks are The service charges to be recovered by
prohibited from granting fresh loans or renewing system / manually are ported in the Help Desk. For
existing loans in excess of Rupees 20 lakhs against the charges to be recovered manually branches have
NRE and FCNR(B) deposits, either to depositors or to recover the service charges manually without
to third parties. Banks are also advised not to fail.
undertake artificial slicing of the loan amount to Field level functionaries have no power to
circumvent the ceiling. waive or reduce the service charges.
(FX.04/2008-09 dated 19.05.2008) Discretion to grant concession in service
charges can be considered only at Head office level.
Revaluation of Foreign Currency Assets & Liabilities
for the quarter ending 30.06.08 in compliance with The revised charges will be effective from
Accounting Standard 11 ( AS 11 ) guidelines- Our 01.08.2008
Circular FX 25/ 2007-08 Dated 04.12.07 (GENL.20/2008-09 dated 30.06.2008)
Foreign Currency Liabilities in the books of ADMIN
branches in the form of deposit accounts,
FCNR(B), EEFC, RFC and assets in the form of Formation of Treasury Branch
FCPC / FCFBD / FCL are to be revalued at the Bank has opened a Treasury Branch on
FEDAI closing Spot rate at the end of every 17.03.2008, with the following details:
quarter.
Name of the Branch Treasury Branch
All branches have completed the exercise
of migrating FCNR(B) and EEFC accounts to IBGA Code C-101
BANCS under CBS and hence the branches need Date of Opening 17.03.2008
not do the exercise of revaluation of FCNR(B) and Full Postal Address No.2, Krest Building, Jehangir
EEFC accounts. This will be taken care of at CDC Street, Chennai 600 001.
level. However, such branches which are yet to be Name of the Centre Chennai
migrated to CBS are required to revalue other Classification Metropolitan
foreign currency deposits such as RFC, and assets District & State Chennai, Tamil Nadu
like FCPC/FCFBD/FCL/ FCLOD etc. Circle Under HO : GM ( T&I)
Basic guidelines on revaluation procedure, CBS Code 9913
Revaluation of other foreign currency assets and Category of FX Category “A”
liabilities and General operational guidelines are authorization
given in the circular.
(FX.06/2008-09 dated 10.06.2008) Forex Treasury will function as part of
Integrated Treasury in Treasury Branch.
GENL Segregation of functions between our Overseas
Revision of Service Charges on Loans and Advances Branch Chennai, which is functioning as “A”
category branch so far and Treasury Branch has
Revision of charges to be levied on
been made with effect from 07.04.2008.
borrowal related services and borrowal accounts are
enclosed to the circular. Criteria of credit limits We furnish below the functional areas
given for levy of service charges do not tantamount handled by Treasury Branch and Overseas Branch,
to delegated discretionary power. For delegated Chennai w.e.f. 07.04.08 and the branches to take
credit and credit related administrative powers, note of the same and route their transactions as
credit functionaries are to refer to power booklet applicable.

11
 Recollect
TREASURY BRANCH Branches ( NABs) of Chennai, Kancheepuram
FX DEALING Reporting for obtaining rates for all FX and Vellore Circles for the following activities:
transactions of Authorised and Non-
Import / Export NABs of the Chennai, Kancheepuram
authorised Branches to be made to
and Vellore Circles to direct their
Treasury Branch.
Import/Export transactions to OSB,
INWARD Inward remittances, MT103/202 received at Chennai.
REMITTANCES Treasury Branch to be handled at
FOBC / FBP NABs of the Chennai, Kancheepuram
Treasury. and Vellore to send their Clean
RDPA All Authorised Branches to prefer their Collection and Purchase instruments to
Claims only to Treasury Branch. OSB, Chennai.
FOBC / FBP Copy of Schedules / Cash Letters handled EEFC / FCNR /RFC EEFC/ FCNR/ RFC accounts of NABs in
by all Authorised Branches to be Chennai, Kancheepuram & Vellore
forwarded to Treasury Branch. Circles to be handled by OSB, Chennai
EEFC / FCNR / Transactions handled by Authorised along with the existing EEFC/
RFC/ Branches to be directed to Treasury FCNR/RFC accounts of OSB, Chennai.
FCFBD/FCPC/FCL Branch. Outward NABs of the Chennai, Kancheepuram
LC/DD/FIBC Authorised Branches handling Import / Remittances (Non- and Vellore Circles to route their
Outward Remittances to originate advices Import) outward remittances to OSB, Chennai.
on Treasury Branch. Foreign Currecy & NABs of the Chennai, Kancheepuram
ACU Dollar Customer / Trade related remittances to be Coins and Vellore to route Foreign Currency
handled by Treasury Branch and Coins to OSB, Chennai.
NOSTRO Nostro related functions including supply of
Reconciliation numbered items (FDD) to Authorised
All the user branches to take note and route
Branches to be handled by Treasury transactions appropriately through Treasury/OSB,
Branch. Chennai, as the case may be.
FX Back Office Authorised Branches to send the Forward
functions relating to Contract Utilisation/ Cancellation (ADMIN.03/2008-09 dated 10.04.2008)
Forward Contracts /settlement advices to Treasury Branch
Utilisation/ Annual Programme for the implementation of the
Cancellation / Official Language for the year 2008-2009
Settlements
The Annual Programme for the
We furnish below FX Holding accounts of Treasury implementation of the Official Language for the
Branch for your ready reference. year 2008-2009 is available on the website
FX HOLDING ACCOUNTS OF TREASURY BRANCH www.rajbhasha.gov.in of the Department of
Official Language, Ministry of Home Affairs.
97614099139 USD
97612099131 GBP Branches to take necessary action in respect
97613099130 EURO of the following points as per the targets given in
97617099136 CAD the annexure to the circular.
97616099137 AUD ¾ Achieving the target of Hindi correspondence
97611099132 INR Letters received in Hindi to be replied in Hindi
97615099138 JPY
97618099135 SGD ¾ Noting in Hindi. Purchase of Hindi books
97619099134 CHF
¾ Organising quarterly meetings of the Official
Language Implementation Committee
NABS should not send any Purchase Or Collection
Item directly to Treasury Branch.
¾ Selection of 20% sections for doing entire work
in Hindi.
OVERSEAS BRANCH, CHENNAI
¾ Hindi Training (Language, Typing,
1. Overseas Branch Chennai would continue to be Stenography)
the nodal branch for the following operations, Working knowledge of Hindi to be given
for branches all over in India. by the end of the year 2008
VOSTRO FIRRPRIA claims in respect of Singapore More emphasis is to be laid by the
Accounts and / Exchange Houses from all branches Branches on Hindi training as all the staff members
Exchange House and DD drawing arrangements to be have to be trained in Hindi by the year 2008. The
Accounts handled by OSB/ Chennai
staff members who have working knowledge of
SPEED REMIT Speed Remit from Singapore to be Hindi may give a declaration to that effect and they
of Singapore handled by OSB, Chennai. need not appear for Hindi exams.
2. Further, Overseas Branch, Chennai shall cater Action should be taken on the other points
to the FX requirements of Non-authorised of the Annual programme also.
(ADMIN.04/2008-09 dated 15.04.2008)

1212
 APR-JUNE 2008
The Banker’s Indemnity Policy for the financial year Department, to enable them to take up at
2008-09 appropriate level in the Insurance Company.
The Banker’s Indemnity Policy for the (ADMIN.17/2008-09 dated 21.05.2008)
financial year 2008-09 commencing from 01-04-
2008 has been taken with Second Annual General Meeting of the Bank

The New India Assurance Company Limited, The First Annual General Meeting of the
Shareholders of the Bank was held on 27th June,
Divisional Office : 710800,
2007 at Chennai. The Second Annual General
Ratna Building, Meeting of the Shareholders of the Bank was held
372, T.T.K. Road, on Monday, the 30th June 2008 at IMAGE.
Alwarpet,
Chennai-600 018. During the year 2007-08, the Bank
continued its impressive performance and achieved
Phone: 23456795 / 23456796.
a new milestone with its total business crossing
Fax: 23456794 – E-Mail: niaco800@vsnl.net Rs.1,00,000 crore mark to Rs.1,01,274 crore,
The new policy number is registering a growth of 32.22%. Few other
710800/46/08/62/00000010
important performance highlights of the Bank
The branches should mention the above during the year 2007-08 are given below:
number, whenever claims are reported to the above
→ The total Deposits of the Bank grew by
company during the financial year 2008-2009. This
Rs.13955 crore to Rs.61046 crore, with a
policy covers losses occurred on or after
growth of 29.63%.
01/04/2008 and discovered subsequently.
→ The Gross Advances were at Rs.40228
Losses occurred up to 31.03.2008 and
crore, registering an increase of 36.36%.
discovered after six months i.e. after 30.09.2008 are
not eligible for any cover (Please also refer → The Operating Profit of the Bank has
retroactive clause given in the circular). registered an increase of 22.13% to
Rs.1659.30 crore.
BASIC SUM INSURED:
→ The net profit for the year has grown up by
In respect of the clauses viz.(A) to (H) of
32.77% to Rs.1008.74 crore, highest ever
the circular, the basic cover available is Rs.10.00
registered in the history of the Bank.
crore (Rupees Ten crore only), for the Bank as a
whole. → Bank’s Gross Priority Sector Advances
grew by 26.09% to Rs.15129 crore,
ADDITIONAL SUM INSURED:
constituting 53.72% of the Adjusted Net
Additional cover available in respect of Bank Credit.
Clause A (loss on premises) is Rs. 23.00 crore and
→ The Bank’s performance under recovery
in respect of Clause B (loss in-transit) is Rs.10.00
front continued to be good and the net
crore.
NPAs level as on March 31, 2008 has come
Clauses/Features/Details of the policy, down to 0.24% from 0.35%.
claims procedure, maintenance of records etc., are
→ Earning per share and Book Value per
elaborated in the circular.
share as of March 31, 2008 was Rs.22.52
Separate Insurance Policy to cover and Rs.100.13, respectively.
properties of our Bank against Burglary risk
→ Capital Adequacy Ratio was at 12.86%,
including terrorism cover and theft is taken by HO:
much above the stipulated level of 9%.
Premises, Expenditure & Estate Department. The
current policy number is (ADMIN.20/2008-09 dated 05.06.2008)
010503/46/07/04/00000172, with United India
Insurance Company Ltd., 64, Armenian Street MD/ED
Branch, Chennai –1, valid up to 15/02/09. Achievement of Rs.One Lakh Crore in Business.
Branches that have claims pending for Indian Bank has crossed one more
settlement are instructed to follow-up with the milestone and added one more feather in its cap
Insurance Company concerned for appointment of with Business of more than Rs.One Lakh Crore. My
surveyor, completion of survey and settlement of Heartiest Congratulations to each member of our
the claims by submitting the copy of staff on this very significant and remarkable
documents/papers as required by the Insurance achievement.
Company/Surveyor. Wherever Branches experience
any difficulty for getting settlement after fulfilling My sincerest appreciation to all of you who
all the formalities, they may inform HO: Accounts left no stone unturned to reach this magical figure.

13
 Recollect
Indeed, the dynamism of any team is largely CBS CIRCULARS
dependent on its members.
Introduction of Net Banking for
1 CRA 1 16.04.08
The Bank on successful completion of its RTGS and NEFT
Centenary Year embarked upon yet another goal of Introduction of Cash Remittance
achieving the figure of Rs. One Lakh Crore in 2 CRA 4 30.04.08 under National Electronic Funds
business, to join the comity of banks that have Transfer (NEFT) System
crossed this figure. It must be said that the decision RBI's Fair Pricing Policy on ATM
3 DEP 1 01.04.08
usage
to achieve the coveted figure was taken only a few
Increasing the ATM Card Base
months back. 4 DEP 9 24.06.08
and Hits
We have proved yet again that “Team Enabling Funds Transfer through
Indian Bank” is second to none in reaching any 5 GENL 3 12.04.08 Mobile banking - An Additional
objective. With this achievement we have moved Feature
ATM Cards and Customer
one notch higher in the Banking Industry to be 6 GENL 8 03.05.08
Complaints
reckoned as one amongst the strong and big banks. Real Time Gross Settlement
Going forward, we see tremendous 7 GENL 10 13.05.08 (RTGS) and National Electronic
business opportunity in the markets, both within the Funds Transfer (NEFT)
country and abroad. We need to position ourselves Value Added Services to Net
8 GENL 11 17.05.08 Banking Customers - Tie up with
to garner these by strengthening our competitive "APOnline"
capability in all areas. With the requisite skill and Importance of Checking of
the will, we can definitely emerge as the “Top Best 9 GENL 14 29.05.08 Voucher Verification Report
Bank” in the country. (VVR) at Branches
Guidelines for a virus free
Our immediate concern is to maintain and 10 ADMIN 25 26.06.08
environment
improve our market share. I seek your continued
efforts to pursue the journey with renewed
dedication and vigour. Here I would like to quote Circulars on Agricultural Debt Waiver and Debt
the message from the book “The Alchemist” by Relief Scheme 2008
Paul Coelho –
1 Union Budget 2008-09 - Debt
“If you dream of achieving something then ADV 31 19.05.08 waiver and Debt Relief Scheme
sow the seeds of intention in the universe by always for Farmers
being positive about that dream and always 2
ADV 34 24.05.08
Agricultural Debt Waiver and
thinking of that dream, the universe will conspire to Debt Relief Scheme 2008
help you. Therefore, keep dreaming, and always 3 Agricultural Debt waiver and
ADV 38 30.05.08
have the burning desire to succeed.” debt relief Scheme 2008
4 Agricultural Debt Waiver and
“Nothing great was ever achieved ADV 39 02.06.08
Debt Relief Scheme-2008
without enthusiasm.” -Ralph Waldo Emerson 5 ADV 43 13.06.08
Agricultural Debt waiver and
Debt Relief Scheme 2008
I wish you all success in your endeavours Agricultural Debt Waiver and
to achieve the corporate objectives. Debt Relief Scheme 2008-
6 ADV 44 13.06.08
(MD/ED. 01/2008-09 dated 01.04.2008) Introduction of Template for Data
Uploading
Agricultural Debt waiver and
7 ADV 45 13.06.08
Debt Relief Scheme 2008
Agriculture Debt Waiver and
8 ADV 46 16.06.08
debt Relief Scheme 2008
NPA Recovery - Agricultural
9 ADV 47 20.06.08 Debt Waiver and Debt Relief
Scheme - 2008
Agricultural Debt Waiver and
10 MD/ED 3 20.06.08
Debt Relief Scheme 2008

Though due care has been taken in the preparation of Last numbers of circulars issued as on 30.06.08
Recollect, the version given in the circular is final. MD/
Compiled by HO: O&M Division DEP ADV HRM CRA FX GENL ADMN
ED

Printed & circulated by HO: Circular Issue Cell 9 55 28 13 6 20 25 3

1414
 Volume 25 Issue 1
a
For Private Circulation Only

April – June 2012 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Pg
CONTENTS OF THIS ISSUE C.No Date Subject
No
Pg 25 22.05.12 Sabbatical Leave (Govt) Scheme
C.No Date Subject 9
No for Women Employees
DEP 30.04.12 Account Portability within our Bank CRA 10.04.12 Revision of interest rates - PPF,
2 9
02 01 1968 and SCSS, 004
03 09.05.12 Opening Term Deposit Account (e- 03 12.04.12 Cheque Drop Box facility 9
2
TDA) through Retail Net Banking
08 19.04.12 Discontinuance of Collection of ESI
04 16.05.12 Launching of “IND PREMIUM & contributions of employers by 10
3
IND EXCEL” Indian Bank branches
ADV 07.04.12 IB Home Loan scheme – Revision 18 25.04.12 Pension payments to Central /
02 in norms for Group Mortgage 3 State Govt. pensioners by Agency 10
Redemption Assurance Banks-Compensation for delay
05 17.04.12 Revised Scoring Model for 26 15.05.12 Validity Period of Demand Draft /
4 10
Educational Loan (IBA & Non-IBA) Bankers's Pay Order
10 23.04.12 PMEGP scheme - Extended for 31 21.05.12 Cheque Drop Boxes in the ATM
4 10
2012-13 premises
24 07.05.12 Guidelines for issuance of "Weaver 35 28.05.12 Rationalization and Revision of
4
Credit Card" Agency Commission Payable to 10
26 09.05.12 IB SWARNA MUDRA - Sale of Banks on Government
4
Gold Coins / Bars Transactions
27 14.05.12 Home loans and loan for purchase 36 28.05.12 Clarification regarding acceptance
of House site – Modification of 4 of “Third Party remittance” for 10
House site making payment of Central Excise
28 14.05.12 Separate Product code for opening Duties and Service Tax
SB No Frills – cum – OD account to 5 41 08.06.12 Special Deposit Scheme (SDS),
the workers under MGNREGS 1975 - Revision of Rate of Interest 11
29 14.05.12 Revised Kisan Credit Card (KCC) FX 16.04.12 Termination of Rupee Drawing
5
scheme Arrangement with Exchange
02
30 22.05.12 Educational Loans – Sanctioning Houses – Lodging of claims with 11
6
Powers OSB, Chennai for DDs paid by
33 09.06.12 Guidelines on establishment of branches
Ultra Small Branches (USBs) in the 05 09.05.12 Transfer of funds from Non-
villages covered through Business 6 Resident Ordinary (NRO) account 11
Correspondents under Financial to Non-Resident External (NRE)
Inclusion Plan Account
34 11.06.12 Revival, Reform and Restructuring 06 09.05.12 Release of Foreign Exchange for 11
6
Package for Handloom Sector Miscellaneous Remittances
36 13.06.12 Adjustment of Margin Money 09 22.06.12 2% Interest Subvention on Rupee 12
7
Subsidy under PMEGP Scheme Export Credit
41 25.06.12 Sanctioning Authority Codes in GENL 12
7 30.04.12 Annual Maintenance Contract
CBS 08
43 30.06.12 IBA Model Loan Scheme for 25 22.06.12 De-duplication of CIF Nos. in CBS 12
8
Vocational Education and Training
26 28.06.12 Service Charges for Electronic
HRM 30.04.12 Introduction of New Capability 12
8 Payment Products
11 Level - Head Cashier II ADMIN 10.04.12 Tax Deducted at Source (TDS) –
22 18.05.12 Group Savings Linked Insurance 03 Centralisation of TDS
12
Scheme for Officers/Award staff- 8 Administration at Zonal / Corporate
Renewal Year 2012-13 Office-Opening of New BGL Heads
 Recollect

C.No Date Subject

Pg Opening Term Deposit Account (e-TDA) through
No Retail Net Banking
06 16.04.12 Banker’s Indemnity Policy for the
13 A new product, “Online Opening of Term
Financial Year 2012-13
17 21.04.12 Security Guidelines for Movement Deposit Account (e-TDA)” has been introduced to
13
of Gold Coins our net banking customers. Our retail net banking
26 25.04.12 Tax Deducted at Source (TDS) – customers who have funds transfer facility can
Self-declaration in Form 15H 14 open electronic Term Deposit Account (e-TDA)
submitted by Senior Citizens by using their login and transaction passwords.
27 25.04.12 Online Indenting of Stationery Items 14
Facilities available in e-TDA module are
29 03.05.12 Centralisation of TDS
Administration at Zonal / Corporate given below -
Office – Porting of Saral TDS 14 • Individuals and Sole Proprietor concerns
Software for Financial Year 2012-
are permitted for opening e-TDAs.
13
30 25.05.12 Disposal of applications appeals • Domestic as well as NRE Term Deposits
received under Right to Information can be opened under e-TDA facility
Act, 2005 by branches Zonal offices 15
/ Depts at Corporate Office • Customers can close their e-TDA
accounts either through online mode or
31 28.05.12 Sorting / Processing of Notes and
issue of machine processed
through branch counters.
genuine / authentic notes in the 15 Presently e-TDA opening / closing alone
denomination of Rs.100/- and are permitted through online mode. Facilities like
above to customers
availing of loan against e-TDA submission of 15G
32 29.05.12 Tax Deducted at Source (TDS) – / 15H forms, collecting Interest Certificates / TDS
Centralisation of TDS
Administration at Zonal / Corporate 15 certificates & registration for nomination can be
Office - Opening of New BGL done through the branch only.
Heads Home Branch of e-TDA will be the Home
38 25.06.12 Monitoring of Bank balance at Branch of the Customer ID (CIF number). The
16
Branches
Funding Account for opening of e-TDA should be
DEPOSITS fully KYC compliant. i.e., Photograph, Address
proof, PAN Details/Form 60-61, properly
Account Portability within our Bank introduced account etc. The user has to register
With regard to Transfer and Closure of his/her IT PAN with the Home Branch, if PAN is
Deposit accounts and Account Portability within not already registered with the Bank.
our Bank, Branches hereby informed that- While opening e-TDA, the user has to key
1. KYC once done by one branch of our bank in the required details viz. Deposit type, Customer
should be valid for transfer of the account Category, Amount of deposit, Debit Account
within our bank as long as full KYC has been (Funding account), Period of deposit and Interest
done for the concerned account. transfer credit account (in case of FD). Deposit
Interest rate, Maturity date and Maturity Amount
2. The customer should be allowed to transfer
are fetched by the system as per the parameters set
his account from one branch to another
branch without much hassle like fulfilling the in CBS.
KYC process once again which causes On successful opening of e-TDA, the
inconvenience to them resulting in poor customer can print / download the “e-TDA
customer service. acknowledgement” which can be used as proof
of deposit. The Bank will not issue / print any
3. In order to comply with KYC requirements of
other Certificate / Receipt as “Deposit Receipt”
correct address of the customer, fresh address
proof may be obtained from him/her upon separately for the e-TDA opened through Net
such transfer by the transferee branch, if the Banking. Provision is available for downloading/
present address is different from the one taking print-out of the e-TDA acknowledgement
which is in the Bank’s record. through the cyber receipt menu in Net Banking.

DEP.02/2012-13 Dt.30.04.2012
The option “Close e-TDA” has to be
selected to close / pre-close the accounts opened
2 2
 APR-JUNE 2012
under Net Banking. For closure, the user is 1. The Loan to Value (LTV) ratio in respect of
required to select one of the accounts linked with Home Loans & Plot Loans,
the CIF to credit the maturity amount. The entire (a) should not exceed 80% for loans above
maturity amount (with interest compounded) less Rs.20.00 lakhs and
applicable TDS, will be credited to the account (b) should not exceed 90% for loans upto
selected by the user. In case of pre-closure of e- Rs.20.00 lakhs
TDAs, applicable charges for pre-closure of term 2. Stamp duty, registration charges, one-time
deposits & TDS will be deducted and only the premium payment for Group Mortgage.
remaining amount will be credited to the selected Redemption Assurance (IB Griha Jeevan / IB
account. Home Suraksha) etc. should not be included
On maturity, e-TDA account will be in the Project cost for arriving at the eligible
renewed automatically for a further period of loan amount.
similar tenor with the interest rate applicable on 3. However, Stamp duty and Registration
the date of maturity. charges (either in full or part, based on the
Accounts opened through branch counters request of the applicant/s) may be added to
cannot be closed through Net Banking. eligible loan amount subject to fulfilling the
following conditions:
DEP.03/2012-13 Dt.09.05.2012 (a) The overall loan amount to Market value of
Launching of “IND PREMIUM & IND EXCEL” property (as per Engineer’s Valuation Report -
If valuation is obtained from 2 panel
Two new domestic term deposit products engineers, lowest of the two is to be reckoned
have been launched and the details are – as market value of property) fulfils the
maximum LTV ratio requirement
Name of the Period Rate of Interest
Product pa (b) Repayment capacity of the applicant/s to
IND PREMIUM 333 days 9.50 % service the EMIs & take home income norms.
(c) Illustrations are given in the Annexure to this
IND EXCEL 200 days 9.25 %
circular.
The minimum amount of deposit under 4. The revised margin requirements for Home
these products is Rs.1000 (Rupees One Thousand Loans are as under:
only) with no maximum ceiling. Limit
Upto Rs.20 lakhs > Rs.20 lakhs
Other Conditions:
For purchase of new
 Senior Citizen / Staff / Senior Citizen Ex Staff house or flat /
construction of house 10 % 20 %
are eligible for applicable additional rate of (LTV 90 %) (LTV 80 %)
interest in the respective categories. For purchase of existing
house or flat
 Account should be opened only under the
deposit product code allotted specifically for Home Loan for repair & renovation 30 %
each product. Plot Loan for Resident Indians 33 %
Plot Loan for NRIs 50 %
 All other terms and conditions of existing
IB Home Improve 15 % on the cost of the
domestic term deposit scheme are applicable articles to be purchased.
to these products also.
* The revised margin will be applicable for fresh sanctions
DEP.04/2012-13 Dt.16.05.2012 henceforth.
The one-time premium payment for
ADVANCES Group Mortgage Insurance under (GMRA) may
IB Home Loan scheme – Revision in norms for be financed as a separate “Clean Loan” (instead of
Group Mortgage Redemption Assurance financing as part of Home Loan), with the
following terms:
As per RBI guidelines, IB Home Loan
Eligible Home Loan borrowers who opt for covering
scheme have been modified for fresh sanctions on applicants their loan under any of the Group Mortgage
non-inclusion of Stamp duty, registration and Redemption Assurance scheme being offered
other documentation charges in the cost of house by the Bank with Interest Rate as Base Rate
property to be financed by banks and maintenance (variable).
of LTV (Loan to Value) Ratio for Home Loans: Margin NIL

3
 Recollect
Maximum Premium payable by the Home Loan period up to 3 years payable for guarantee cover
loan amount applicant/s under CGTMSE.
Repayment Maximum 60 months – Repayable in 60 EMIs
period (maximum) commencing from the next month ADV.24/2012-13 Dt.07.05.2012
of disbursement of loan (No Holiday period
permitted) IB SWARNA MUDRA - sale of Gold Coins / Bars
Others EMI for both the loans is to be taken into
account while assessing the repayment
According to RBI, all the branches
capacity for Home Loan as well as the above designated to sell Gold Coins / Bars, should
Term Loan. display on a daily basis (either electronically or
Charges as applicable for Home Loan. through notice boards) the prevailing price of gold
ADV.02/2012-13 Dt.07.04.2012 coins / bars of the different denominations
available for sale. Further, the fact that buyback
Revised Scoring Model for Educational Loan (IBA & of gold sold by the bank to its customers is not
Non-IBA) permitted, should be mentioned as a condition in
In view of the introduction of Non-IBA the gold indent / purchase form prescribed for the
educational loan scheme, new scoring models for customers as well as in the cash memo / sales
IBA and Non-IBA scheme have been ported invoice to promote greater transparency in gold
separately in Help Desk. Henceforth, branches sale by the banks. Hence, branches shall -
should Rate the educational loans through the
i) display the daily gold coin rates, ported in the
revised scoring model only. The revised
parameters and the related scores are annexed to CBS Help Desk on a daily basis, in the Notice
this circular. Board of the branch.

ADV.05/2012-13 Dt.17.04.2012 ii) deliver Gold coins to the customers along with
the invoice (which is mandatory), the format
PMEGP scheme - Extended for 2012-13
of which is available in the CBS Help Desk
The Prime Minister Employment (Reports Æ Gold Coin Rates Æ Invoice
Generation Programme (PMEGP) scheme has Format).
been extended for 2012-13 also and has been
proposed for continuation in the 12th five year ADV.26/2012-13 Dt.09.05.2012
plan with ambitious target of 4 lakhs projects with Home Loans and Loan for Purchase of House Site –
a fund outlay of Rs.9700 crore and providing Modification in Scheme
employment opportunity of 32 lakh persons. Home Loan and Loan for purchase of House
The details of key issues to enable quality site schemes have undergone the following
implementation of the scheme along with the modifications -
proposed course of action are furnished in the Home Loans to Residents & NRIs
Annexure to this circular. Loan for purchase of flats under construction
ADV.10/2012-13 Dt.23.04.2012 a) If the registration of Undivided share of land
Guidelines for issuance of "Weaver Credit Card" (UDS) / flat in favour of the flat purchaser
(home loan borrower) is already done before
Revised guidelines for issue of “Weaver disbursal of loan OR to be done at the time
Credit Card” (as per correction communicated by of first disbursal of loan, such proposals shall
Ministry of Textiles) are as follows - be sanctioned by respective sanctioning
Out of funds allotted for development of authorities, including Branch Managers upto
clusters in many places, cash support is being their delegated powers.
offered to Weavers to facilitate availment of bank Subsequent loan instalments should be
loan. disbursed only after creation of valid
These could be in the form of margin Equitable Mortgage in Bank’s favour by
money support up to Rs.4200/- per Weaver and depositing the original registered deed
Interest subsidy up to 3% on Bank loans and executed in favour of the borrower.
reimbursement of One Time Guarantee Fee as b) If the registration of flat is to be done at a
applicable (1% at present) & Annual Service later stage, while considering such proposals,
charges as applicable (0.5% at present) for a Branch Managers / Second-in-command at
4 4
 APR-JUNE 2012
ZO should obtain prior Administrative Separate Product Code for opening SB NoFrills-
clearance from Zonal Manager. cum-OD account to the workers under MGNREGS
While according Administrative clearance, All Branches (except the branches in
Zonal Manager should Chittoor implementing Andhra Pradesh Smart
(i) Get satisfied with the antecedents of the Card Project) should open SB No frills accounts to
builder, timely completion of project, timely Mahathma Gandhi National Rural Employment
handing over of possession etc. Guarantee Scheme (MGNREGS) workers under the
(ii) Ensure that Tripartite Agreement (TPA) product code “2247 – 1321 for SB No–Frills-cum-
between the Borrower, Builder and Bank will OD (MGNREGS) A/c” only. Branches are also
be available to protect the interest of the Bank advised to change the product code for all the SB
during the period upto which Registration is No frills accounts already opened to workers
done in favour of the borrower. The TPA, under MGNREGS to the above new product code.
inter-alia, should contain commitment from
ADV.28/2012-13 Dt.14.05.2012
the builder to
• deliver the original sale deed to be executed Revised Kisan Credit Card (KCC) Scheme
and registered, in favour of the purchaser of
The salient features of the revised
flat (our home loan borrower), directly to Bank
guidelines on Indian Bank Kisan Credit Card
• convey Bank’s security interest to the Society, Scheme are as follows:
if any, proposed to be formed after the
• Assessment of crop loan component based on the
completion of construction for noting Bank’s
scale of finance for the crop plus insurance
charge in the Society’s record and
premium x extent of area cultivated + 10% of the
• insist on NOC from the Bank before limit towards post-harvest/household/consumption
cancellation of the Sale Agreement, if any and requirements + 20% of limit towards maintenance
refund of payment received there under expenses of farm assets.
directly to Bank.
• Flexi KCC with simple assessment prescribed for
The limit is to be classified as unsecured Marginal Farmers.
till registration is done in favour of borrower.
• Validity of KCC for 5 years.
Loan for purchase of house site by Residents &
NRIs (Plot Loan): • For crop loans, no separate margin need to be
Parameter Modification in norms recommended insisted as the margin is in-built in scale of
Maximum The cap on Plot Loan per borrower has been fixed as under: finance.
quantum of
loan
For purchase of property in Rural area : Rs.50.00 lakhs • No withdrawal in the account to remain
For purchase of property in Semi-urban : Rs.100.00 lakhs outstanding for more than 12 months; no need to
For purchase of property in Urban area : Rs.200.00 lakhs bring the debit balance in the account to zero at
For purchase of property in Metro : Rs.300.00 lakhs any point of time.
ED/CMD may permit relaxation in the above ceiling subject • Interest subvention /incentive for prompt
to a maximum of cap of Rs.300.00 lakhs per borrower.
repayment to be available as per the Government
Margin For both residents and NRIs : 25% on cost of Plot
of India and / or State Government norms.
• LTV ratio should not exceed 75%
• If the value of Plot to be purchased is more than • No processing fee up to a limit of Rs.3.00 lakh
Rs.25.00 lakhs, valuations from 2 independent panel
• One time documentation at the time of first
valuers are to be obtained and lowest of 2 valuations is
to be reckoned for arriving at LTV ratio. availment and thereafter simple declaration (about
• Branches should ensure that the purchase price in the crops raised/ proposed) by farmer.
agreement to sale is incorporated as the value of the
property in the Sale Deed to be registered in the name of • KCC cum SB account to be provided to farmers
the borrower. instead of having two separate accounts. The
Functional GM at CO is empowered to permit relaxation in credit balance in KCC cum SB accounts is to be
margin by 5 % subject to LTV ratio not exceeding 80%.
allowed to fetch interest at savings bank rate.
All other norms of the respective schemes, • Disbursement to be effected through various
delegation of powers for sanction remain delivery channels, including ICT driven channels
unchanged. like ATM/ PoS/ Mobile handsets.
ADV.27/2012-13 Dt.14.05.2012 Operational guidelines of the revised Kisan
Credit Card (KCC) scheme including illustrations

5
 Recollect
on assessment of KCC limit, Action points for USB. Further, one more board incorporating the details
various functionaries to implement the scheme, of the Field BCs like name of the FBC, contact number,
Additional guidelines on documentation and date of visit of Bank official, etc., to be displayed inside
product codes are given as annexure to this the USB for information of the customers visiting the
circular. USB.

ADV.29/2012-13 Dt.14.05.2012 ™ Minimum infrastructure facilities like one table, one

chair for the FBC and three chairs for the customers are
Educational Loans – Sanctioning Powers to be provided in the USB for convenience of the
Henceforth, Educational Loans should be customers visiting the USB.
sanctioned at Zonal Office level only (ZLCC), ™ Field Business Correspondent (FBC) engaged in the
upto delegated powers. Hence, Branches shall - village shall operate from the Ultra Small Branch and
• comply with the KYC guidelines of the Educational will deal with all cash transactions.
Loan applicants ™ Zonal Office shall issue an Office order to the Officer of
• carefully analyze the information collected from the base branch to visit the villages on a predetermined
the applicants / from other sources date and time. The designated Officer of the base branch
• prepare credit reports of borrower / guarantor will visit the USBs on prefixed date and time with a
• obtain Legal Scrutiny Report, Engineer Valuation laptop which should have connectivity to the CBS. The
Report for property to be mortgaged, wherever Officer would clear applications for new account
applicable and forward the proposal with Branch opening, loans, recovery follow up and business
Manager’s recommendation to Zonal Office for development. He/She can give information to the
sanction. While doing so, Branch Managers shall account holders about the account balance or a print out
ensure submission of relevant information and of the bank statement, etc.,
enclosures in one set, thereby avoiding delay in ™ The Officer would not do any cash transactions, which
decision making at Zonal Office level for want of would be handled by the Field Business Correspondents.
additional information/clarification from branches ™ It has to be ensured that all the villages covered by the
ADV.30/2012-13 Dt.22.05.2012 Branch under Financial Inclusion Plan should be visited
at least once in a week by the Officer and the concerned
Guidelines on establishment of Ultra Small Branch Manager shall visit at least one village in a week
Branches (USBs) in the villages covered through for monitoring the activities in the villages.
Business Correspondents under Financial Inclusion ™ As the volume of business grows, the visits by the bank
Plan officials could be increased in duration and /or days, till
With a view to providing banking services such time setting up of a regular brick and mortar branch
to the unbanked populace in the villages, Bank is is considered feasible. When the branch reaches the
implementing the Financial Inclusion Plan (FIP). desired level of business, the Ultra Small branch can be
At places where opening a brick and mortar upgraded into a regular bank branch.
branch is presently not viable under FIP, we may ADV.33/2012-13 Dt.09.06.2012
set up Ultra Small Branches (USB). The following
are the characteristics of an USB: Revival, Reform and Restructuring Package for
™ Ultra Small Branch has to be setup in all villages with
Handloom Sector
population over 2000 covered by Business With regard to Revival, Reform and
Correspondents under Financial Inclusion Plan and also Restructuring package for Handloom Sector,
to be covered in future (less than 2000 population) NABARD has informed that Govt. of India has
™ This Ultra Small Branch (USB) will have an area of released first tranche of money and expects Banks
100-200 Sq.ft. to make substantial progress in at least those
States which have given Letter of Commitment
™ The base branch shall identify a place in the village for
and indicated their willingness to implement the
the USB. The local bodies in the Panchayat may be
package.
requested to provide such place free of cost. Wherever,
the space is not available at free of cost, Branch may fix The detailed operational guidelines for
the premises on lease for establishing the USB. settlement of claims to be followed under the
Package is given by NABARD along with the
™ A permanent name board indicating the name of the
Minutes of the Fourth Meeting of National
USB and base branch has to be displayed in front of the
Implementation, Monitoring & Review
6 6
 APR-JUNE 2012
Committee (NIMRC) which was held on 18.04.12 on the sanctioned cash credit limit and the subsidy
and the details in this regard are furnished in on the admissible limit, should be undertaken at
Annexure of this circular. the end of three year period from the date of first
Branches shall consider the eligible cases disbursal of the loan or date of ending of lock-in
as per scheme guidelines to support the Handloom period whichever is earlier.
Sector as per GoI objectives / directives and In this regard KVIC has informed the
follow the operational guidelines as laid down following-
under the package for smooth implementation of • The directives of MSME also needs to be kept in view
the scheme. while adjustment of the margin money subsidy of
PMEGP units.
ADV.34/2012-13 Dt.11.06.2012
• If the units verified are not as per norms, the margin
Adjustment of Margin Money Subsidy under money need to be called back in respect of ineligible
PMEGP Scheme PMEGP units from Banks by the implementing agencies
(KVIC, KVIB & DIC as the case may be) and the same
KVIC has informed that the Ministry of should be refunded to KVIC.
MSME has communicated certain issues in • In case of units not traceable FIR should be lodged in
connection with adjustment of Margin Money such cases in consultation with the local empanelled
Subsidy which are re-produced below for advocate
necessary compliance while adjusting the Margin
Money Subsidy under PMEGP. ADV.36/2012-13 Dt.13.06.2012
1. Computation of admissible margin money Sanctioning Authority Codes in CBS
subsidy on Working Capital / Sanctioned
Cash Credit limit (para 8.4 of the guidelines As per the Ministry of Finance, GOI
of PMEGP) directions, the following Credit approval
If the working capital availment touches committees have been formed at Corporate and
100% of the sanctioned cash credit limit at least Zonal office levels.
once, and the average working capital available is Corporate Credit Approval Committee (CAC)
at least 75%, then the margin money subsidy Office
Corporate Office Level Credit
would be calculated on 100% of the sanctioned Committee –
cash credit limit. The obvious rationale is that the Executive Director (COLCC-ED)
Corporate Office Level Credit
average availment should fall within a band Committee –
between 75% and 100 % for the subsidy to be General Manager (COLCC-GM)
calculated on 100% of the cash credit limit Zonal Offices Zonal office level Credit Committee
2. Computation of average working capital (ZLCC/GM/DGM/AGM)
availment • With approval and implementation of Zonal and
Corporate office level credit committees, delegated
The average working capital availment should lending powers vested in officers posted other than
be calculated on the basis of daily average of the Branches shall cease to exist.
actually availed cash credit limit • The officers / Executives at Branches shall
3. Period for calculating average working continue to exercise Grade / Scale wise powers
capital availment (para.11-1(ii) (m) of the hitherto delegated by the Board.
guidelines ) Consequent to the formation of the
Committees at Corporate and Zonal Level,
The average working capital availment should
Project Office has since created Sanctioning
be calculated over a period beginning with the
authority Codes in CBS as follows:
first drawal of cash credit and ending on the
completion of the three year period from the date Code Sanctioning Authority
of the first disbursement of the loan(that is, term 16 Credit Approval Committee
loan) or date of ending of lock-in period, 17 COLCC – ED
whichever is earlier. 18 COLCC – GM
55 ZLCC – GM
4. Adjustment of Margin Money subsidy on
Working Capital 56 ZLCC - DGM
57 ZLCC – AGM
Adjustment of margin money subsidy on
Project Office has provided the revised
Working Capital, that, is refund of the margin
drop down list in CISLA screen in CBS which
money subsidy on the difference between subsidy
populates Sanctioning Authority Codes. These

7
 Recollect
codes are available for branches for new accounts Existing Post Name New
to be opened. Capability Capability
level level
ADV.41/2012-13 Dt.25.06.2012 -- Head Cashier-II 7
IBA Model Loan Scheme for Vocational Education 8 SPL. Assistant 8
and Training
Accordingly, existing clerks with
The salient features of the IBA Model Loan capability levels 5, 6 and 7 will be assigned new
Scheme for Vocational Education and Training capability levels as follows:
are:
a) All the Clerical staff in existing capability level 5
ƒ Student Eligibility: Should be an Indian National and 6 will be assigned new capability level 3 by
and admission secured in a course run or which they will get passing powers of SWO-A,
supported by a Ministry / Dept/Organisation of the except for cash transactions (Receipts &
Govt. etc., preferably leading to a Certificate Payments) - for which there will not be any
/Diploma/Degree etc.. individual passing powers. Queue will be
ƒ Courses Eligible: Vocational / Skill Development generated to the next higher level.
courses of duration from 2 months to 3 years
b) All the Clerical staff in existing capability level 7
ƒ Course duration and Quantum of Finance will be assigned new capability level 5 (SWO-B).
For courses of duration Amt. in Rs.
up to 3 months 20,000 Upgrading the Capability Level beyond
3 to 6 months 50,000 “9” during the Probation Period for Probationary
6 months to 1 year 75,000 Officers in the Third Phase is strictly prohibited.
above 1 year 1,50,000 Only on confirmation in the service, POs can be
assigned capability level beyond “9” depending
Branches shall refer the circular, for other upon the need/exigency.
Terms and Conditions.
HRM.11/2012-13 dt.30.04.2012
ADV.43/2012-13 Dt.30.06.2012
Group Savings Linked Insurance Scheme for
HRM Officers/Award staff- Renewal Year 2012-13
Introduction of New Capability Level-Head Cashier II In terms of Appointment Order, all the
A new post Head Cashier II, with newly recruited Award Staff Members as well as
capability level “7” has been introduced in CBS Officers, i.e. those who have joined the bank
with effect from 07.05.2012, with the following between 01.04.2011 and 31.03.2012 should enroll
passing powers: themselves under the GSLI scheme compulsorily.
Capability
Financial Powers The application to enroll as a member of the GSLI
Post Name
level Cash Cash
Clearing Transfer Scheme, irrevocable letter of authority to deduct
Receipt Payment
monthly premium from salary and the nomination
Head form are hosted in the HRM website.
7 25000 20000 50000 50000
Cashier-II
Those who have been promoted during
Branches shall refer CO: HRM circular the year 01.04.2011 to 31.03.2012 from clerical to
No.PRNL:19/92-93 dated 06.05.1992 on the officer cadre and Sub staff to Clerical cadre have
assignment of special allowance carrying post to switch over to the corresponding category in the
especially in cash department which are to be higher cadre compulsorily. The details are
given on turn basis for a period of Three months. available in the annexure as well as in the HRM
In order to introduce the new capability Website.
level in CBS, structure of the existing capability As regards nomination, all the staff
level is re-organised as follows: members who are members of the GSLI Scheme
Existing Post Name New are requested to submit the nomination form for
Capability Capability
level level
the GSLI through online even if they had already
submitted it earlier. The form intended for
5 Teller 1
Nomination is available in the HRM Website and
6 SWO – A 3 the procedure for submitting the nomination is
7 SWO – B 5 furnished in the annexure as well as in the HRM-
8 8
 APR-JUNE 2012
Website. In case the nomination is incomplete / other emoluments and any consequential
ambiguous / defective, the Bank reserves the right monetary and non-monetary benefits.
to reject the nomination. 2. The entire period of Sabbatical leave availed
The procedures for enrollment, switch- under this scheme will not qualify for active
over, nomination and other connected details are service for the purpose of promotion,
furnished in the annexure to this circular. seniority, terminal benefits etc.
HRM.22/2012-13 Dt.18.05.2012 3. No other kind of leave can be suffixed or
prefixed to the Sabbatical leave.
Sabbatical Leave (Govt) Scheme for Women
4. The balance under Privilege and Sick Leave
Employees
as on the date of proceeding on leave will be
Sabbatical Leave Scheme exclusively for protected. The employee will not earn any
women employees has been implemented to meet kind of leave while on Sabbatical leave under
their special needs during their career, as the scheme.
recommended by Government of India. 5. The employees / officers have to make their
A. Eligibility own arrangements for remitting monthly
1. Permanent female employees / officers with subscription towards SEED and GSLI in order
minimum of 5 years of completed service. to continue in the schemes and also to pay
recovery of rent, furniture and instalment of
2. Only in exceptional circumstances, various loans so as to keep the loan accounts
permanent female employees / female in “standard’ status.
officers with less than minimum of 5 years of
service can apply. Staff members shall refer this circular for
further details.
However, sanctioning of the leave under the
captioned scheme shall be at the sole discretion of HRM.25/2012-13 Dt.22.05.2012
the Bank depending on the merits of individual
cases. CRA
Revision of interest rates - PPF, 1968 and SCSS,
B. Purpose 2004
The Sabbatical leave (Govt.) may be The rates of interest on Public Provident
availed for any purpose like medical grounds, care Fund, 1968 and Senior Citizens Savings Scheme,
of family members or children, higher studies, 2004 for the financial year 2012-13 effective from
visit spouse etc. April 01, 2012, has been revised as 8.8% p.a and
C. Period of Leave 9.3% p.a respectively.
The period of Sabbatical leave (Govt.) CRA.01/2012-13 Dt.10.04.2012
shall be for a minimum period of 3 months at a
time and the leave shall not be taken more than Cheque Drop Box facility
once in a year. Branches shall adhere to the following
Under this Sabbatical (Govt) Scheme, guidelines with regard to Cheque drop box facility
leave upto 2 years is permissible during the entire provided at branches:
career. However, for officers, the total leave
period including the leave availed under the 1. Branches should invariably display on the
earlier Sabbatical Scheme of the Bank / EOL cheque drop box itself that ‘Customers can
Scheme shall not exceed three years in the entire also tender the cheques at the counter and
career. In the case of award staff the total period obtain acknowledgment on the pay-in-slips’.
including the leave availed under earlier 2. No branch should refuse to give an
Sabbatical Scheme, EOL and the extra ordinary acknowledgment, if the customer tenders the
leave envisaged under Bipartite shall not exceed cheques at the counters.
three years in the entire career.
3. Customers are not compelled to drop the
Some of the Terms and Conditions
cheques in the drop box.
1. During the period of Sabbatical leave, the
employee shall not be eligible for salary and CRA.03/2012-13 Dt.12.04.2012

9
 Recollect
Discontinuance of Collection of ESI contributions of 4) A slit 10” x 1” – big enough for deposit of
employers by Indian Bank branches multiple cheques.
ESIC have communicated that the 5) Slit to have guides so that the cheques drop
collection of contributions through non-SBI into the box and get naturally stacked.
branches including Associate SBI branches should 6) Provision to securely fix it on the wall or rivet
be discontinued, due to implementation of it to a metal frame.
collection of contributions through system In view of the above, all the Zonal Offices
generated challans. should advise the branches to
Hence, the branches collecting ESI i. Use the existing cheque drop boxes wherever
contributions should not accept collection of any available and arrange for re-fixing the boxes
payment towards ESI Fund Account no.1. securely.
CRA.08/2012-13 Dt.19.04.2012 ii. Provide new cheque drop boxes as suggested
by GOI, wherever boxes are not available.
Pension payments to Central / State Government
pensioners by Agency Banks-Compensation for iii. Zonal Offices / CO: TMD to include the
delay specification of cheque drop boxes suggested
According to RBI, penal interest for by Government in the site preparation for new
delayed credit of pension / revised pension / ATMs, in future.
arrears has been de-linked from ‘the Bank Rate
CRA.31/2012-13 Dt.21.05.2012
plus two percent’ and fixed as 8% (eight percent).
CRA.18/2012-13 Dt.25.04.2012 Rationalization and Revision of Agency
Commission Payable to Banks on Government
Validity Period of Demand Draft / Bankers's Pay Transactions
Order
RBI has prescribed a revised agency
Reserve Bank of India, directed that with commission rate structure as under, w.e.f
effect from 01.04.2012, banks should not make 01.07.2012 and will remain valid till the next
payment of cheques / drafts / pay orders / banker’s review:
cheques bearing that date or any subsequent date, Sl Type of Unit Existing Revised
if they are presented beyond the period of three No Transactions Rate Rate
months from the date of such instrument. 1 (i) Receipts – Per Rs.45 Rs.50
Physical mode transaction
Accordingly, the revalidation of the said
(ii) Receipts – Per Rs.45 Rs.12
instruments should also be for a maximum of
e-mode transaction
three months only.
2 Pension Per Rs.60 Rs.65
CRA.26/2012-13 Dt.15.05.2012 Payments transaction
3 Payments other Per Rs.100 9 paise 5.5 paise
Cheque Drop Boxes in the ATM premises than Pension turnover

Ministry of Finance advised all the banks CRA.35/2012-13 Dt.28.05.2012

to provide Cheque Drop Boxes in onsite ATMs
particularly in Metro and Urban areas, in order to Clarification regarding acceptance of “Third Party
improve customer service and facilitate the remittance” for making payment of Central Excise
customers to deposit cheques as per their duties and Service Tax
convenience. It is clarified that there is no bar on the
Suggested Specifications for cheque drop box assessee to make payment from any other account
1) Sheet metal body powder coated to match the other than that mentioned in the Registration
ATM room décor. application.
2) Dimensions: 12” wide, 6” depth and 18” / 30” However, the challan for making such
height (to accommodate 100 / 200 cheques) payment must clearly indicate the Permanent
Account Number (PAN) of the assessee on whose
3) Locking system preferably numeric on the behalf the payment is made. Banks should follow
openable front panel. KYC norms and procedures for opening accounts

1010
 APR-JUNE 2012
and those laid down by RBI for the operation of claims with OSB, Chennai and to bring the
bank accounts. outstanding under their FIRRPRIA head to ‘NIL’.
Branches shall provide e-payment facility If any new request for DD payment is
for payment of various Government Taxes made to the branch by any customer, branches
through our Bank as third party remittance and should take up with the concerned exchange
augment the collection and thereby improve non- houses for revalidation. All the DDs issued by the
interest income. However, branches which are not exchange houses under the erstwhile DD drawing
authorized under EASIEST and routing the arrangements had a validity period of 3 months
Service Tax and Central Tax collections through only. Hence, by now all the DDs issued hitherto
e-payment should ensure capturing correct details would have completed the validity period.
as reversal of e-payment transaction is not Branches has to exercise caution, as the funds of
possible. the exchange houses relating to the unpaid DDs
have been transferred to the concerned exchange
CRA.36/2012-13 Dt.28.05.2012
houses by OSB, Chennai.
Special Deposit Scheme (SDS), 1975 - Revision of It is to be noted, that any expired DD paid
Rate of Interest by the branch and outstanding under FIRRPRIA
The interest rates on the deposits under left unreversed by the branch will be at the sole
the Special Deposit Scheme for Non-Government responsibility of the concerned Branch, as OSB,
(Provident, Superannuation and Gratuity) Funds Chennai will not be able to entertain any claim for
have been revised as follows: reimbursement.
FX.02/2012-13 Dt.16.04.2012
Notification Details Rate of With effect from
Interest Transfer of funds from Non-Resident Ordinary
Government of India, Ministry 8.6% per December 01, 2011 (NRO) account to Non-Resident External (NRE)
of Finance (Department of annum
Economic Affairs) Notification Account
No.5(4) – B (PD)/2011 dated According to RBI, NRIs are permitted to
March 13,2012 transfer funds from NRO account to NRE account,
Government of India, Ministry 8.8% per April 01, 2012
of Finance (Department of annum until further orders
within the overall ceiling of USD one million per
Economic Affairs) Notification financial year subject to payment of tax, as
No.5(4) – B (PD)/2012 dated applicable (i.e. as if funds were remitted abroad).
May 22,2012 (to be published
as a Gazette Notification) Such credit of funds to NRE account shall
be treated as eligible credit in terms of paragraph
CRA.41/2012-13 Dt.08.06.2012
3(j) of Schedule 1 of notification No. FEMA.
FX 5/2000 – RB dated 3 May 2010.

Termination of Rupee Drawing Arrangement with FX.05/2012-13 Dt.09.05.2012

Exchange Houses – Lodging of claims with OSB,
Release of Foreign Exchange for Miscellaneous
Chennai for DDs paid by branches
Remittances
Earlier, bank had entered into rupee The limit for foreign exchange
drawing arrangements with the following remittances for miscellaneous purposes without
exchange houses - documentation formalities has been raised from
1. M/s UAE Exchange Centre WLL, Kuwait. USD 5000 to USD 25000, with immediate effect.
2. M/s National Exchange Co, WLL, Qatar It is also clarified by RBI that Authorised Dealer
3. M/s UAE Exchange Centre LLC., Abu Dhabi
4. M/s Musandam Exchange, Ruwi banks need not obtain any document including
5. M/s Bahrain India International, Bahrain Form A-2, except a simple letter, as long as the
As we have terminated the arrangements foreign exchange is being purchased for a current
with these exchange houses they are not issuing account transaction (Not included in schedules I
DDs on our branches, with effect from the and II of Government Notification on current
respective closure dates. account transactions) and the payment is made by
a cheque drawn on the applicant’s bank account or
In this regard, CO: ID had earlier directed by a Demand Draft.
the branches to ensure completion of all their
FX.06/2012-13 Dt.09.05.2012

11
 Recollect
2% Interest Subvention on Rupee Export Credit stipulated for opening of ClFs have certain inherent
limitations being region specific & without any
The Government of India has extended distinctive pan–Indian characteristic and identifying the
the Scheme of 2% Interest Subvention on Rupee uniqueness is not possible as there is no unique serial
Export Credit with effect from 01 04 2012 to 31 number in many of these documents.
03 2013, on the same terms and conditions to the
¾ Provision for querying to ascertain the record linkage in
following EIGHT SECTORS only (as against 4
CBS Database of existing CIF Numbers attached to a
sectors earlier):
particular PAN, will be enabled in CBS Help Desk
(i) Handicrafts (ii) Carpet (iii) Handlooms
(iv) Small & Medium Enterprises (SMEs- as The Role of Branches with regard to de-
defined in page 2) (v) Readymade Garments duplication under Phase 1 is given below:
(vi) Processed Agriculture Products (vii) Sport ¾ For New Customers, provision for verifying the
Goods (viii) Toys. customer database is available in CBS Help Desk to
FX.09/2012-13 Dt.22.06.2012 confirm whether existing CIFs are linked to the same
PAN and a tool has been provided in CBS Helpdesk for
GENL querying, in this regard. In case no record linkage is
established, the New CIF can be opened. In cases where
Annual Maintenance Contract
the System throws linkages, Branches can consider
AMC and its renewal process to be adopted by opening the New Account only with the existing CIF.
branches ¾ Reports furnishing data on Multiple CIFs attached to the
Branches should act strictly as per the same PAN will be pushed by CBS PO to facilitate the
terms and conditions stipulated in the respective de-duplication exercise by Branches
Purchase Orders. Once the warranty period is ¾ For the existing customers wherever Income Tax PAN
over, the Branches have to necessarily release Card is available the same should be entered in CBS to
payments to the Vendor(s) towards AMC for track duplication of ClF. lf the PAN details are not
continuous support of such hardware as per the available the branch has to contact the customer to
rates agreed, till the stipulated period, as obtain the PAN details and enter the same in CBS.
mentioned in the Purchase Order. Once the period
mentioned in Purchase Order is over, the Zones GENL.25/2012-13 Dt.22.06.2012
have to necessarily take steps for renewing AMC Service Charges for Electronic Payment Products
as per terms and conditions of purchase orders
either with the same Vendor or by calling Service charges for NEFT transaction has
competitive quotes from the vendors who are been revised as follows:
having service facility at the respective places and Upto Rs.1 lakh Free
providing AMC support to other Banks/Financial NEFT Above Rs.1 lakh to Rs.12 per transaction
institutions after obtaining necessary sanctions Rs.2 lakhs
from the concerned Sanctioning Authority.
At any point of time, the hardware which Above Rs.2 lakhs Rs.28 per transaction
is presently used at Zones/Branches should not be The above charges will be all inclusive.
kept without the coverage of AMC after the expiry Additional charges such as service tax, out of
of the Warranty period. pocket expenses etc. should not be levied from the
In this regard, it is to be noted that AMC customers.
for all ATMs and branch routers are being GENL.26/2012-13 Dt.28.06.2012
centrally handled by ATM Section and Network
section respectively. ADMIN

GENL.08/2012-13 Dt.30.04.2012
Tax Deducted at Source (TDS) – Centralisation of
TDS Administration at Zonal/Corporate Office -
De-duplication of CIF Numbers in CBS Opening of New BGL Heads
De-duplication of existing CIFs should be In the process of Centralisation of TDS
taken up as per the following procedure. Administration certain expenditure heads
¾ Income Tax Permanent Account No (PAN) will be the attracting TDS were blocked for operation by
primary indicator for de-duplication in view of its branches and only Zonal Offices can make
uniqueness, widespread acceptance / usage and payment under these heads after deducting TDS.
provision for external validation. Other KYC documents In order to facilitate branches to meet certain petty
1212
 APR-JUNE 2012
expenses, which are not attracting TDS, the contain the details of personnel
following new BGL Heads have been introduced: accompanying the vehicle, the time of
S BGL HEAD BGL Purpose for MAPPED TO CGL departure and arrival at respective Branch
.NO NAME CODE which opened locations.
1 Fuel 88106 To meet fuel “Maintenance of
ii. Gold should be transported in covered
Expenses expenses of Generator” -
for Generators 3502505002 vehicle. Minimum two employees should
Generator accompany gold coin remittance.
2 Office 88107 To meet the “Maintenance of iii. One Armed Guard should accompany all
Cleaning house keeping Office Premises”
Expenses and related - 3502505003 gold coin remittances exceeding Rs.40 lakhs
expenses of the value.
branches
iv. Two armed guards should escort gold coin
3 Stationery 88054 To meet “Printing &
Expenses expenses on Stationery” -
remittance exceeding the value of Rs.50
Stationery, 3207505001 lakhs. One of them should sit along with the
Xerox, Binding driver and the other in the rear where the
charges etc. gold container is kept. Guards should not be
4 The existing BGL Head 98054 - Printing & Stationery – used as carriers of gold container. They
3207505001” is renamed as “Printing Expenses” and
mapped to the existing CGL “Printing & Stationery” and will should remain alert with their weapon, which
be blocked for branches as it attracts TDS provisions and is should be kept loaded as long as it is being
to be dealt at Zonal Offices. used for protection of Banks’ Assets.
ADMIN.03/2012-13 Dt.10.04.2012 v. The gold coins should be transported in a
steel box duly locked and chained to the
Banker’s Indemnity Policy for the Financial Year body of the vehicle. No unauthorised person
2012-13 i.e. one who is not a Bank employee or a
The Banker’s Indemnity Policy for the Bank employee but not officially detailed on
financial year 2012-13 has been renewed with The remittance duty, should be allowed to enter
New India Assurance Company Limited, or take a lift in the vehicle. If the same
Alwarpet, Chennai – 600018. Phone: 044- vehicle is used for transporting gold to more
23456795/ 23456796 than one Branch, it is necessary that there are
The new policy number is no delays at any one point and that security
710800/46/12/04/00000001. precautions are not slackened at any of those
places.
This policy covers losses for the period
01.04.2012 to 31.03.2013 and also for losses vi. The driver and the escort must be on their
occurred on or after 01.04.2009 and reported guard against fake accidents, bogus police
within three years from date of loss. Losses officials, unexpected traffic diversions,
occurred upto 31-03-2009 are not eligible for roadblocks and suspicious vehicles following
claim with any of the insurance companies. the vehicle. In case of doubt / suspicion, the
The basic cover available is Rs.10.00 gold coin remittance should be taken back or
crore (Rupees Ten crore only), for the Bank as a the driver should drive his vehicle to the
whole and a Additional cover available (loss on nearest Police Station, market area / Post
premises) is Rs.50.00 crore and in respect of (loss Office etc.
in-transit) is Rs.20.00 crore. vii. The gold coins on arrival at POS Branches
Further information regarding Risks must be immediately shifted to Strong Room
covered, important features of the policy, and grill gate closed before opening the box.
Exceptions, Claim procedures to be followed / viii. The gold coins should be kept in a suitable
Maintenance of records and Special instructions sized box and lodged in a Safe under dual
are given in the circular. custody.
ADMIN.06/2012-13 Dt.16.04.2012 ix. At POS Branch, depending upon the demand,
only limited number of coins should be taken
Security Guidelines for Movement of Gold Coins out from the Safe.
i. The movement of vehicle carrying gold must x. Adequate security arrangements for holding
be recorded in a register which should the gold coins at the sale counter must be

13
 Recollect
ensured and the drawer should have proper Centralisation of TDS Administration at Zonal /
locking arrangements. Corporate Office – Porting of Saral TDS Software
xi. All Branches should understand the need to for Financial Year 2012-13
maintain utmost secrecy regarding movement Zonal Offices will make vendor payments
of gold coins and must keep the plan a relating to branches like Rent to Landlord,
closely guarded secret. This is very Contract Payments (like AMC / Courier Charges),
important for ensuring the safety of the Commission payments & Professional fees
remitting staff members and Bank’s gold coins. payments such as fees to lawyers, Auditors etc.
Some other guidelines and guidelines on coin and the relative Expenditure heads attracting TDS
remittance by Train and Air are available in the are blocked for the branches. CO: TMD has
Circular. ported the related Saral Web TDS software
enhanced patch for the year 2012-13. The URL is
ADMIN.17/2012-13 Dt.21.04.2012
“http//10.141.7.77/SaralTDSWeb”. Branches /
Tax Deducted at Source (TDS) – Self-declaration in Zonal Offices shall use the URL for making
Form 15H submitted by Senior Citizens payments and deducting TDS.
It is being conveyed that as per the In order to facilitate Zonal offices to make
provisions of Section 197A (1C) of the Income branch payments, first, Branches have to create
Tax Act, 1961, in respect of Senior Citizens who Deductee Master for each vendor for the first
have filed Form 15H, TDS need not be deducted, time. The vendor details created by one branch
irrespective of the quantum of interest paid, in a will be the same for all branches in the Zone in
branch. respect of the same vendor. In this Deductee
Hence, branches may refund the TDS master, the details of the vendor like the Name,
deducted by the system from Senior Citizens in Address, PAN, Status (company or non company),
respect of RIP / FDR on 31.03.2012, who have Bank account details (Account number, name of
filed Form 15H for the Financial Year 2011-12, if Bank and Branch, IFSC code), concessional TDS
the same is not remitted into Government Account rate if any, to be applied, concessional limit, if
till date and inform the Senior Citizens any, etc are to be provided.
accordingly.
While forwarding of Bills to Zonal office,
ADMIN.26/2012-13 Dt.25.04.2012 the branch has to enter the bill details in the
“Report Payment” menu provided in the software.
Online Indenting of Stationery Items
The details of various bills are to be entered one
CO: Technology Management Dept. has by one and saved by the branch. Branches have to
developed the software for online indenting of send original bills / invoices etc. to the Zonal
Stationery items. The User Manual and necessary offices concerned for their processing and
effecting payment.
codes for the stationery items have been provided
in the Login Page. On receipt of the bills from the Branches,
Zonal office has to verify the same with the bills
The website will be accessible through the entered in the system by the branches through the
URL - http://10.141.7.247:5121/ select payment facility provided in the deduction
Officers can login using their Assets & details. If any discrepancy is observed by the
Liabilities: username and password. Zonal office, the same has to be informed to the
Clerks can login using their EASIEST or concerned Branch and only the Branch can edit
Bank Assurance projects (like IB Griha Jeevan / the bills entered by them. Zonal office has to
ensure the correctness of the bills entered by the
Home Suraksha / IB Arogya Raksha) username
branches with the physical copy of bill/letters for
and password.
payments. The arithmetical aspects like TDS
The programme flow chart and the computation, net payment etc has to be verified by
authorization level details are given in this Zonal Offices. On saving the transaction,
circular. Deduction Report will appear and print out of the
ADMIN.27/2012-13 Dt.25.04.2012 said report has to be taken at Zonal Office and
entries are to be passed in CBS on the same day.

1414
 APR-JUNE 2012
Further, Zonal Offices have to credit the which is recoverable from the salary of the person
branches under c2c for the net amount of the bills responsible for the delay.
passed by them on a daily basis. However,
Further as per the provisions of RTI Act,
crediting the net amount to the respective
deductee’s bank account centrally from Zonal the reply has to be furnished to the applicant
Office will be taken up in due course. Branch wise within 30 days from the date of receipt of
/Section Wise / Vendor wise reports will be application by the PIO. The information sought by
generated on a monthly basis and a copy may be the applicant is to be collected from the concerned
provided to the Vendor. branches/Zonal Offices/Departments of Corporate
The total TDS shown in statement relating Office. It is to be noted that the officer holding the
to deductee wise payments and the amount information and not submitting the information
outstanding TDS BGL A/c 98949 should tally for shall be treated as deemed PIO as per section 5 (5)
each month. Then the TDS amount lying in this of the RTI Act and personally liable for penal
BGL account will be transferred to BGL Account provisions of the Act.
No 98949 of CO: Accounts Dept by CO Project
ADMIN.30/2012-13 Dt.25.05.2012
Office for enabling remittance to Government
Account before 7th of the following month by Sorting / Processing of Notes and issue of machine
CO: Accounts Department. processed genuine / authentic notes in the
After remittance of TDS, the deductee and denomination of Rs.100/- and above to customers
Challan data required for Form 26Q (e-TDS Based on the directions of RBI, branches
Return to be filed by ZO) will be pushed to the should not use the cash received over the counter
respective Zonal Offices. The Zonal Offices to for making payment before subjecting the note for
generate the e-TDS Return Form 26Q for each machine processing. Branches attached to
quarter and file the same with TIN-FC of NSDL currency chests and branches already provided
through on line upload facility provided by NSDL. with Note Sorting Machines (NSMs) are to
Zonal Offices should submit a process the banknotes of Rs.100 and above
”Compliance Report” on a quarterly basis to CO meticulously and issue only clean and genuine
Accounts Department for having filed the e-TDS notes to customers. Branches not provided with
Returns of Zonal Office for Non Interest Non NSMs are advised to process banknotes of Rs.100
Salary deductions and for having filed the e- and above with fake note detector machines (with
Returns for branches relating to interest paid on infra red / ultraviolet recognition/watermark
deposit, by providing the details such as Recognition/Security Thread Detection) to comply
Provisional Receipt Nos (PRN) and Date of filing with the directions of RBI for authenticity.
etc. The above instruction of RBI has come
Detailed “Operational instructions” into effect immediately and is applicable to all
alongwith screenshot based User Manual are branches, irrespective of the volume of daily cash
given as Annexure to this circular. receipt. Any non compliance will be construed as
ADMIN.29/2012-13 Dt.03.05.2012 violation of directions of RBI.

Disposal of applications/appeals received under ADMIN.31/2012-13 Dt.28.05.2012

Right to Information Act, 2005 by branches/Zonal Tax Deducted at Source (TDS) – Centralisation of
offices/Departments at Corporate Office. TDS Administration at Zonal / Corporate Office -
As per provisions of RTI Act applications Opening of New BGL Heads
received should be forwarded to PIO at Corporate To facilitate branches to meet certain
Office immediately on their receipt in any case not court related expenses incurred for recovery of
later than 5 days; failing which the person/s Advances / legal aspects and petty repair
received the application shall be personally expenses, which is not attracting TDS, the
responsible for the delay and liable for penalty @ following new BGL Heads have been introduced
Rs.250/- per day to the maximum of Rs.25000/-, in CBS.

15
 Recollect
S BGL HEAD NEW Purpose for which MAPPED TO
N NAME BGL opened CGL
CODE (b) Member banks having favourable
1 Court / 88047 To meet Court related “Legal
Statutory Fees / expenses such as Expenses – clearing balances may be permitted to draw there
Charges filing fees / charges, Advances” – against, on the same day subject to the following
relating to Legal evection expenses, 3502505002
Proceedings / EC fees etc. relating conditions:
Aspects to recovery of
advances initiated i. After settlement of related return Clearing
under SARFAESI
/Other legal ii. Debtor banks’ cheques should be received
proceedings / aspects. and Clearing House account settled and
2 Petty Repairs – 88109 To meet petty repair “Maintenance
Sundries expenses for Office of Office iii. The minimum balance, as prescribed by
Equipments / Vehicles Equipments– the Clearing House Rules, should be
(Restricted to 3502505005 maintained by Member banks as a reserve
Rs.1000/- per bill / per for settlement of Clearing House Account.
occasion)

ADMIN.32/2012-13 Dt.29.05.2012 Hence, Branches shall request the bank

maintaining Clearing House to remit the funds
Monitoring of Bank Balance at Branches through RTGS – R42 (inter bank) transanction.
The cash and bank balances should For inter-bank transactions, RTGS time window is
always be maintained within the limits fixed to 9.00 am to 6.00 pm on week days and 9.00 am to
respective branches / zones, so that the funds can 3.00 pm on Saturdays.
not remain idle and can be productively used. The
effective management of cash and bank balance Branches shall take up the matter with
plays a vital role in improving profitability. Zonal Offices concerned for the practical
According to Rule 10(a) of Uniform difficulties, if any, experienced with other banks
Regulations and Rules for Bankers’ Clearing for transfer of funds on the same day. Zonal
Houses governing drawals from our accounts - Offices may take up the same with controlling
Settlement of Clearing offices of other banks maintaining Clearing House
(a) The presentation Clearing and Return for resolving the difficulties faced by branches.
Clearing shall be settled by passing entries ADMIN.38/2012-13 Dt.25.06.2012
through the banking accounts which the member
banks maintain with the bank managing the
Clearing House. Clearing balance against Though due care has been taken in the preparation of
members shall be debited and clearing balances in Recollect, the version given in the circular is final.
favour of members shall be credited to their
accounts with that bank as soon as the Compiled by HO: O&M Division
presentation / return clearing is struck.

1616
 a Volume 23 Issue 4

For Private Circulation Only

Jan – March 2011 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the following circulars”
Cir
Date Subject Pg
CONTENTS OF THIS ISSUE No.
174 14.03.11 Educational Loan – Life
Cir
Date Subject Pg Insurance coverage to Student 7
No.
Borrowers
DEP 24.02.11 Customer Service in banks –
24. 2 181 21.03.11 Manual of Instructions - III on
Cheque Drop Box Facility
Priority Sector Advances other 7
25 04.03.11 Printing the name of the
than Agri. & MSME 2011
Nominee in Deposit Receipts/ HRM
3 20.01.11 Improvements in Certain Staff
Pass Books / Statement of 177 Welfare Schemes and
Accounts 7
Implementation of a New
26 23.03.11 Revision of Interest Rates on
3 Scheme
Domestic Term Deposits
178 20.01.11 Scheme for Provision of Shoes,
27 28.03.11 Discontinuance of IAPTD Payout
3 Towels and Toilet Soaps to the
Account 8
Part-Time Full-Time Sweepers
ADV 05.01.11 Introduction of new formats for
142 of the Bank.
appropriation of PF, Gratuity
3 182 01.02.11 Modification in the Nomination of
etc., towards loan dues of staff
Disciplinary Authority/Concurrent
members
Appellate Authority for Officers
144 07.01.11 Simplified Loan Account 8
and Disciplinary Authority/
Opening Procedure for Non-Agri. 3
Concurrent Disciplinary Authority
Jewel Loan
for Award Staff
145 10.01.11 Modification in Structured Loan 186 04.02.11 Reimbursement of Lodging
Products of MSME Sector and
4 Expenses to Top Executive 8
Ready Reckoner for such Loan
Grade Scale VI and VII.
Products
191 12.02.11 Income Tax for the financial year
146 19.01.11 Introduction of New Loan
ending 31.03.11 corresponding 9
Product - IB - BAL Commercial 4
to Assessment year 2011-12
Vehicle
201 19.03.11 Festival Advance to Staff
148 20.01.11 Revision in Benchmark Prime
4 Members for the Financial Year 9
Lending Rate
2011-2012.
152 29.01.11 NPA Management - Assignment 202 19.03.11 Officers’ Travel under LFC by
to Asset Reconstruction 5 9
Own Cars
Companies (ARC)
205 31.03.11 Income Tax for the financial year
153 29.01.11 Manual of Instructions- XVI
ending 31.03.11 corresponding
Documentation 2008 correction
5 to Assessment year 2011-12 -
in the description of F 149 on 10
Writ petition with regard to TDS
Page no.5.36
on the amount appropriated
154 31.01.11 Review of Base Rate 5 towards corpus of pension fund.
158 02.02.11 End Use of Funds—Monitoring 5 CRA 06.01.11 Improving commission earnings
160 08.02.11 Classification of Loans Against 69 through sale of General
Gold Jewellery to Non-Banking 6 10
Insurance Products of United
Financial Companies (NBFCs) India Insurance Co. Ltd (UIICo)
161 15.02.11 Introduction of New Loan 70 08.01.11 Commencement of family
6 10
Product - Ind Auto pension and procedure thereof
164 17.02.11 Revision in Benchmark Prime 71 10.01.11 Enhancing the scope of Speed
6
Lending Rate Clearing 11
169 02.03.11 Enhancement of advance rate
6
per gram of Jewels
 Recollect
Cir Cir
Date Subject Pg Date Subject Pg
No. No.
74 19.01.11 Introduction of new Toll Free 95 08.02.11 Procedural Guidelines on ATM
11 16
Number 1800 425 00 000. cards
76 27.01.11 TDS on Pension Payment - 98 11.02.11 Monitoring of Customer
Income Tax for the Financial Transactions and filing of 16
11
Year ending 31.03.2011- Suspicious Transaction Report
Assessment Year 2011-12 99 17.02.11 Capability Level in Eximbills 17
80 19.02.11 Provision of Cheque Drop Boxes 104 01.03.11 Operational issues in respect of
11 17
at Branches NEFT transactions
84 01.03.11 Outstation Cheque Collection 105 04.03.11 Alteration in the name of The
11
Services Dhanalakshmi Bank Limited' to
85 02.03.11 Obtention / Updation of 'Dhanlaxmi Bank Limited' in 17
Mandates from Customers for Second Schedule to the
12
Electronic Clearing Services and Reserve Bank of India Act, 1934
Other purposes. 106 04.03.11 Implementation of e-Stamping
95 14.03.11 “IB HOME SURAKSHA” - Group project in Chennai Registration 17
Life Cover to Home Loan Zone
Borrowers –from M/S. Kotak 107 11.03.11 Service Charges for Outstation
12 18
Mahindra Old Mutual Life Cheque Collection
Insurance Limited - Relaxation in 114 29.03.11 Cash Handling Charges -
norms for Medical Requirements Revised charges w. e. f 18
99 22.03.11 Processing of Electronic 01.04.2011
Clearing Services (ECS) 12 MD/ED 01.02.11
12 Staff Suggestion Scheme 18
under RECS
ADM 12.01.11 Reporting Fridays - Section 42
101 22.03.11 Merger of Attur & Namakkal 19
64 of RBI Act
Clearing Houses with Salem 13
MICR centre 69 02.02.11 Call in from circulation coins of
102 22.03.11 Pension Payments to the denomination of 25 paise 19
Central/State Government and below
13 72 11.02.11 Risk Classification and
Pensioners by Agency Banks-
Compensation for delay Enhanced Monitoring of
19
103 23.03.11 Clearing arrangement for Local accounts of "Bullion Dealers
13 and Jewellers"
Cheque Collection
113 31.03.11 Electronic payment of tax 80 18.03.11 TDS Assessments by Income
13 tax Authorities - adhering strict
deducted / collected at Source
FX 03.01.11 Expansion of Wealth compliance to the Tax Deducted 20
36 Management Services (WMS) to 14 at Source (TDS) provisions of
other Centers Income tax Act 1961
37 07.01.11 Agreement with Weizmann DEPOSITS
Forex Limited for money transfer
14
through Western Union – Customer Service in banks – Cheque Drop Box
Product Roll out Facility
39 02.02.11 2% Interest Subvention on
14
Rupee Export Credit According to the instructions of RBI, under no
41 09.02.11 Reduction in Commission circumstances, the branch should refuse to accept
earned under “Xpress Money” 15 cheques over the counter and give proper
transactions acknowledgement. Further, customers should not be
42 15.02.11 Inclusion of Japanese Yen (JPY) forced to drop the cheques in the cheque drop box.
15
under FCNR (B) deposit
47 16.03.11 Country Risk policy - Problems Banks are also advised by RBI to make absolute
in West Asian and North African fool proof arrangements for accounting the number
(WANA) countries as well as 15 of instruments each time the box is opened so that
Greece and Spain and OFAC there are no disputes and the customer’s interests are
sanctions on Libya not compromised.
GEN 08.02.11 Identification of VIP Customer in
94 15 In the context of customer awareness in this
the CBS system
regard, banks should invariably display on the
2 2
 JAN-MAR 2011
cheque drop-box itself that “Customers can also
tender the cheques at the counter and obtain
444 days & 9.40 9.40

445 days to 554 days 8.50 8.50

acknowledgement on the pay-in-slips” in English,
Hindi and the concerned regional language of the 555 days 9.50 9.50
State.
556 days to 5 years 8.50 8.50
DEP.24/2010-11 dt. 24.02.2011
Above 5 years 8.00 9.00
Printing the name of the Nominee in Deposit Receipts/ Special Deposit Products now introduced &
Pass Books / Statement of Accounts
• applicable for single bulk deposit of Rs.1 lakh and
Reserve Bank of India has advised Banks above
that in addition to printing the legend “Nomination All other terms and conditions remain
Registered”, should also indicate the name of the unchanged as per Circular No.Dep.18/2010-11 dated
nominee in the Pass Books / Term Deposit Receipts/ 01.12.2010.
Statement of Account in case the customer is DEP.26/2010-11 dt.23.03.2011
agreeable to the same.
Discontinuance of IAPTD Payout Account
Hence, branches are advised to write the
name of the nominee in the Pass Book, Deposit
Branches should discontinue the opening of
Receipts, Statement of Account, in case the
“IAPTD (Payout) Account” and instead BPO/DD
customer is agreeable to the same, in addition to the
shall be issued for the payment of interest on FDs as
printing of the legend “Nomination Registered”, till
per customer’s instructions, either monthly,
such time the same is system enabled. Branches quarterly or yearly wherever payment of interest is
should record such requests of customers in the not by way of credit to an account (SB, CA, OD,
Nomination Register itself. OCC).
The revised procedure is given in the
DEP.25/2010-11 dt. 04.03.2011
annexure to this circular.
Revision of Interest Rates on Domestic Term Deposits
DEP.27/2010-11 dt. 28.3.2011
The interest rate on domestic term deposits
stands revised as under with effect from 23.03.2011. ADVANCES

Period Less than ` 1 Crore to

Introduction of new formats for appropriation of PF,
` 1 Crore ` 5 Crore Gratuity etc., towards loan dues of staff members
7days to 14 days 3.50* 3.50 HO: HRM Department, in consultation with
15 days to 29 days 3.50 3.50
HO: Law Department, replaced Form F 200 by
Forms F 200A, F 200B and F 200C and all the
30 days to 45 days 4.00 4.00 branches should obtain these revised Forms from the
46 days to 90 days 5.00 5.00 staff members availing the Staff Housing Loans and
Staff Vehicle Loans with effect from 10th January
91days to 110 days 6.25 6.25
2011. Form F 200 is discontinued from the same
111 days & 9.10 9.10 date.
112 days to 120 days 6.25 6.25 Copies of Forms F 200A, F 200B and
121 days to 180 days 7.50 7.50 F200C are enclosed to this circular.

181 days to 221 days 7.50 7.50 ADV.142/2010-11 dt. 05.01.2011

222 days & 9.20 9.20 Simplified Loan Account Opening Procedure for Non-
223 days to less than 9 months 7.50 7.50 Agri. Jewel Loan
9 months to 332 days 7.50 7.50 Considering the comfort experienced by the
branch staff in the simplified Loan opening
333 days & 9.30 9.30
procedure for Agri-Jewel Loan / STPL leading to
334 days to less than 1 year 7.50 7.50 quicker customer service and the good feed back
1 year to 443 days 8.50 8.50 received, the same simplified procedure is extended

3
 Recollect
for Non-Agri Jewel loans also with effect from • The MOU shall be initially for a period of
10.01.2011. one year and review shall be based on
recovery performance.
Detailed write up on the simplified
• Due diligence / compliance with KYC
procedure is hosted in the CBS Help Desk.
norms shall be ensured by the BM.
ADV.144/2010-11 dt.07.01.2011 • For close monitoring, separate product code
(5437 – 001) has been assigned.
Modification in Structured Loan Products of MSME • A threshold level of overdues at 2.50% of
Sector and Ready Reckoner for such Loan Products the outstanding advances of the branch
To enhance the efficacy of the SLPs under under this loan product is proposed. In case
MSME Sector, based on discussions with field level overdues under the proposed loan exceed
functionaries and Industrial Development officers, 2.50%, sanctioning powers of the BM shall
CMD has approved modifications and the same is automatically stand withdrawn and all
given in Annexure A of this circular. further proposals for sanction shall be
referred to the ZM.
Salient features of all the existing SLPs • BMs shall have close liaison with the
under MSME Sector (with latest modifications dealers of BAL in their areas of operation
incorporated therein) are consolidated for ready and seek required assistance from them for
reference as per Annexure B of this circular. recovery.
• Max. Ceiling of MTL proposed for one
Branches shall - commercial vehicle per borrower and
• take proactive steps for marketing various maximum group ceiling proposed for two
MSME / SLPs and monitor recovery commercial vehicles, subject to maximum
performance under the SLPs closely. of Rs.10 lac.
• Prospective buyers to be educated that no
Accounts under this segment need close
commission / charges should be paid by
monitoring by BMs / ZMs, since overdues –
them either to the dealers or to the Bank
though presently meagre in amount – are towards loan processed by Indian Bank.
spread over a large number of accounts. • Sanctioning authority will strive to insure
• ensure that Administrative Clearance for the the vehicles purchased under this tie up
specified sectors, as spelt out in Credit Risk arrangement through our Bank’s Corporate
Management Policy / Loan Policy, is obtained Agency with United India Assurance Co.
Ltd.
from competent authority.
• As an incentive for prompt payment of
• shall not refer to RBS with regard to SLPs in interest and installments, rebate in interest
MSME sector and shall be decided at the BM / rate @ 1% shall be reimbursed by Bank to
ZM level as per delegated discretionary the borrower as back ended incentive.
powers. Detailed guidelines of this Loan Product are
All Specialised SME branches shall be focus annexed to this circular.
branches for all SLPs of MSME Sector and this ADV. 146/2010-11 dt. 19.01.2011
circular overrides all previous circulars covering
various SLPs of MSME Sector. Revision in Benchmark Prime Lending Rate
ADV.145/2010-11 dt. 10.01.2011
1. Bank’s ALCO has increased Benchmark Prime
Introduction of New Loan Product - IB - BAL Lending Rate by 25 basis points (bps) from
13.25% to 13.50% per annum.
Commercial Vehicle
2. This revision will be EFFECTIVE FROM
Our Bank will be preferred financier for
21.01.2011 for the advances linked to BPLR
three wheelers manufactured by M/s Bajaj Auto Ltd.
under Floating Rate method including Export
(BAL) by virtue of MOU signed with them.
Credit / Gold Card Scheme, Advances to
CMD has approved the Loan Product, IB – THIRD PARTIES against our Deposit, Rupee
BAL Commercial Vehicle, with the following Loan to third parties against FCNR Deposits
salient features: etc.
4 4
 JAN-MAR 2011
3. For the advances sanctioned on or after recourse’ in page No.5.36 of the Chapter on
01.07.2010 interest Rate will be linked to Base “Documentation Chart” in the Manual of
Rate and guidelines issued vide circular Instructions- XVI Documentation 2008.
ADV.129/2010-11 dated 13.12.2010. ADV.153/2010-11 dt. 29.01.2011
4. Under Fixed Rate wherever re-set clause is
Review of Base Rate
stipulated as per terms of sanction the re-
pricing may be reviewed sufficiently in advance Considering the current interest rate scenario,
and taken up with sanctioning Authority. ALCO in the meeting held on 31.01.2011 approved
5. For the BPLR linked advances the Spread and revision of Base rate from 9.00% to 9.50% with
Tenor premium will continue as per extant effect from 01.02.2011.
guidelines. There will be no change in spread/ tenor
ADV.148/2010-11 dt. 20.01.2011
premium and other guidelines except specifically
exempted by respective departments. All new loans
NPA Management - Assignment to Asset should be opened as base rate linked loans only in
Reconstruction Companies (ARC) the CBS.
The change in Base rate should be informed
As part of the strategy for efficient handling to all the customers by way of notification in the
of NPA portfolio, our Bank has roped in two Asset Branch Notice Board.
Reconstruction Companies (ARCs) viz. Asset
Reconstruction Company of India Ltd., (ARCIL) & ADV.154/2010-11 dt. 31.01.2011
Reliance Asset Reconstruction Co., (Reliance ARC)
End Use of Funds—Monitoring
and assigned NPAs up to Rs.10 lakhs (Rupees ten
lakhs) outstanding as on 30.06.2010 along with According to RBI, the efficacy of the
underlying securities. existing machinery in the Bank for post-sanction
All the NPA accounts with book balance up supervision and follow-up of advances to be
to Rs.10.00 lakhs as on 30.06.2010 (excluding evaluated and made robust, wherever considered
certain categories viz., NPAs where incidences of necessary. The systems and procedures to include:
Fraud have been reported, assets upgraded to (i) meaningful scrutiny of the periodical
standard category after 30.06.2010 and accounts progress reports and operating/financial
where cases are pending before Debt Recovery statements of the borrowers;
Tribunals (DRT), etc.) have been carved out from
the advance portfolio and transferred to ‘Contra (ii) regular visits to the assisted units and
Agency NPA Account’ in the Balance Sheet. Details inspection of securities charged/
of assets (NPAs) assigned to ARCs have already hypothecated to the banks;
been made available to branches. (iii) periodical scrutiny of the books of accounts
Recovery efforts in these assigned debts of the borrowers;
should be continued relentlessly as has been done (iv) introduction of stock audits depending
hitherto, as the Bank had entered into a separate upon the extent of exposure
Service Level Agreement (SLA) to act as ‘Agent’
for the ARCs. (v) obtention of certificates from the borrowers
that the funds have been utilised for the
Guidelines for treatment of assigned debts purposes approved and in case of incorrect
and accounting procedure for recording Recovery, certification, initiation of prompt action as
Closure etc., are given in this circular. may be warranted, which may include
ADV.152/2010-11 dt. 29.01.2011 withdrawal of the facilities sanctioned and
legal recourse as well. In case a specific
Manual of Instructions- XVI Documentation 2008 certification regarding diversion/siphoning
correction in the description of F 149 on Page no.5.36 of funds is desired from the auditors of the
Branches shall correct the name of the form borrowers, a separate mandate may be
F-149 as “Format of Inland Irrevocable, Confirmed awarded to them and appropriate
Letter of Credit” by deleting the words ‘without covenants incorporated in the loan
agreements; and

5
 Recollect
(vi) examination of all aspects of diversion of proposals for sanction shall be referred to the
funds during internal audit/ inspection of ZM.
the branches and at the time of periodical
reviews. • BMs shall have close liaison with the dealers of
TVSMCL in their areas of operation and seek
Hence, end use of funds should be required assistance from them for recovery.
ascertained in all the borrowal accounts to ensure
that the credit disbursed is utilized for the purpose • Max. Ceiling of MTL shall be one commercial
for which it was sanctioned. vehicle per borrower (upto Rs.2 lacs) and
maximum group ceiling shall be for two
ADV.158/2010-11 dt.02.02.2011 commercial vehicles, subject to max. of Rs.4
lac.
Classification of Loans Against Gold Jewellery to
Non-Banking Financial Companies (NBFCs) • Prospective buyers to be educated that no
commission / charges should be paid by them
RBI has clarified the following with regard either to the dealers or to the Bank towards loan
to lending to Priority Sector: processed by Indian Bank.
Loans sanctioned to NBFCs for on-lending • For borrowers who have not been residing long
to individuals or other entities against gold in the locality where the vehicle will generally
jewellery, are not eligible for classification under ply and do not possess any proof of residence at
agriculture sector. work centre, but who otherwise fulfill KYC
Similarly, investments made by banks in norms, reference can be taken from one or two
securitised assets originated by NBFCs, where the persons for whom KYC can be established to
underlying assets are loans against gold jewellery, the satisfaction of BM.
and purchase/assignment of gold loan portfolio from • As an incentive for prompt payment of interest
NBFCs are also not eligible for classification under and instalments, rebate in interest rate @ 1%
agriculture sector. shall be reimbursed by Bank to the borrower as
ADV.160/2010-11 dt.08.02.2011 back ended incentive.
Introduction of New Loan Product - Ind Auto • For close monitoring, separate product code
(5434 – 002) has been assigned.
Bank has entered into an MOU with M/s
TVS Motor Company Ltd. (TVSMCL) for financing Detailed guidelines under this Loan Product are
the three wheelers / commercial vehicles annexed to this circular.
manufactured by them and our Bank will be ADV.161/2010-11 dt.15.02.2011
preferred financier for three wheelers manufactured
by them. Revision in Benchmark Prime Lending Rate
Salient features of this new product: Bank’s ALCO has approved the increase of
• The MOU shall be initially for a period of one Benchmark Prime Lending Rate by 25 basis points
year and review shall be based on recovery (bps) from 13.50% to 13.75% per annum.This
performance. revision will be EFFECTIVE FROM 18.02.2011 for
• Due diligence / compliance with KYC norms the advances linked to BPLR. All other existing
shall be ensured by the BM. guidelines on spread, tenor, re-set clause for fixed
• For close monitoring, separate product code Rate, etc., for the BPLR linked advances shall
shall be assigned. continue.

• A threshold level of overdues at 2.50% of the ADV.164/2010-11 dt.17.02.2011

outstanding advances of the branch under this Enhancement of advance rate per gram of Jewels
loan product is proposed. In case overdues
The advance rate per gram of Jewels has
under the proposed loan exceed 2.50%,
been revised with immediate effect as follows:
sanctioning powers of the BM shall
automatically stand withdrawn and all further
6 6
 JAN-MAR 2011
Æ Rs.1300/- per gram or 70% of the market Manuals viz., Rural Banking and Small and Medium
rate whichever is lower for 22 carat Enterprises respectively. Hence, the name of the
fineness. manual is changed as - Manual of Instructions III -
Priority Sector Advances – (Other than Agri. &
Æ Rs.1350/- per gram or 70% of the market MSME) 2011.
value whichever is lower for Hall Mark
Jewels of 22 carat fineness/ gold coins of 24 Branches shall be guided by the contents of
carat fineness. the Manual for their operational requirements in this
ADV.169/2010-11 dt.02.03.2011 sector of lending which is already ported on the
Educational Loan – Life Insurance coverage to Intranet.
Student Borrowers ADV.181/2010-11 dt.21.03.2011

On scrutinizing the MIS data, it is observed HRM

that insurance coverage under Bank’s group
Improvements in Certain Staff Welfare Schemes and
insurance (IB Jeevan Vidhya/ New IB Jeevan Implementation of a New Scheme
Vidhya) has not been taken for many of the student
borrowers and the premium amounts collected are Following are the improvements in certain
not being sent to HO: Bancassurance service centre Staff Welfare Schemes and introduction of a new
then and there. Data Entry is also made in the ‘On scheme for the welfare of retired Staff member:
line data entry system’ belatedly. In such cases in 1. Health Check up Scheme to all Award Staff
the event of untimely demise of any student and officers upto Scale III
borrower, the insurance company shall not settle the
With effect from the year 2011, the
claims quoting delayed remittance of premium.
eligibility age level for the staff has been brought
Hence, it is the responsibility of the Branch down to 40 from the existing 45.
Managers / sanctioning authority to ensure that
insurance coverage is taken for all educational loans The eligible amount per staff member will
sanctioned. Sanctioning authorities at RBS / Zonal be `.3,500/- inclusive of service Tax (for Staff –
`.1750/- and for Spouse – `.1750/-) and the health
Office have to include insurance coverage under
check up package will be the same for staff
terms and conditions of sanction ticket and ensure
members and their Spouses. All other terms and
that Branches cover all the eligible educational loan
conditions of the scheme remain unaltered.
accounts under life insurance policy by insisting
compliance. 2. Health insurance premium to retired staff
members
Inspecting officials have to point out in their
report non-compliance, if any, in this regard. Non As the premium on Arogya Raksha Policy
coverage of insurance if noticed by the inspecting has been revised with effect from 01.11.2010,
officials for the educational loan accounts reimbursement of premium also has been revised to
sanctioned and disbursed after the issue of our `.4,586/- (from `.4,000/-) up to the age of 65 years
circular dt.02.07.2009, the concerned official will be and `.10,764/- (from `.9,373/-) above the age of 65,
held accountable for such lapses. without any change in the Sum Assured.
ADV.174/2010-11 dt.14.03.2011 3. New scheme for annual health check up to
retired staff members
Manual of Instructions - III on Priority Sector
Advances other than Agri. & MSME 2011 A new Welfare Scheme for ‘Annual Health
Check Up’ to our ex-Staff members retired under
In order to meet the present day
Superannuation has been formulated.
requirements, the existing Manual on Small
Borrowers of our Bank has been revised to serve the The amount of reimbursement under the scheme
needs of the branches. for the medical check up to retired Staff members
would be restricted to `.3,500/- per annum with the
The revised version consists of 15 chapters. following conditions:
These chapters were prepared with topics on Priority
¾ Scheme is operative from 01.01.2011.
Sector advances, excluding Agriculture and MSME,
as these topics are already covered in our earlier

7
 Recollect
¾ Only one claim per year at consolidated Branches shall refer this circular for
position will be entertained and the guidelines for implementation of the Scheme.
reimbursement will be made accordingly.
HRM.178/2010-11 dt. 20.01.2011
¾ Any unavailed amount / part amount in any
year can not be carried over to the Modification in the Nomination of Disciplinary
subsequent years Authority/Concurrent Appellate Authority for Officers
¾ This facility will be available to retired staff and Disciplinary Authority/Concurrent Disciplinary
members from the succeeding calendar year Authority for Award Staff
of their retirement.
Our Chairman and Managing Director, in
Procedure: exercise of the powers conferred under Regulation
5(1) of the Indian Bank Officer Employees’
™ The retired staff member shall apply with a (Discipline & Appeal) Regulations, 1976 and as per
consolidated claim for reimbursement of para 14 of the Memorandum of Settlement –
charges for “Health check up” undertaken Disciplinary action and Procedure therefor, dated
by him/spouse during the entire year
10.04.2002 has effected the following nominations
supported with bills.
of the Disciplinary Authority/Concurrent Appellate
™ The claim should be received by the Bank Authority for Officers and Disciplinary Authority/
within the same year. Concurrent Disciplinary Authority for Award staff
™ The application for reimbursement is to be with effect from 01.02.2011.
sent through the Branch where the ex-staff To function as Name of the Official
member draws pension and in the case of PF > Disciplinary Authority for Shri K.G.Balasubramanian
optees through any Branch where the ex- Officers in Scale IV, for HO DGM., Head Office
cases and Zonal cases Legal Department, Chennai
staff member maintains Savings Bank
Account.
To function as Name of the Official
™ Branches shall forward the same to HO: > Concurrent Appellate Dr.U.A.Balasubramanian,
HRM Dept for reimbursement by credit to Authority for Officers in DGM/Principal, I M A G E,
respective SB accounts of the retirees Scale I, II & III for HO cases Chennai
through C2C. >Concurrent Appellate
Authority for Zonal cases
™ The application format is enclosed as (Where the Disciplinary
Annexure to this circular. Authority is AGM at Zonal
Office)
HRM.177/2010-11 dt. 20.01.2011 To function as Name of the Official
Scheme for Provision of Shoes, Towels and Toilet > Disciplinary Authority for Shri T.Chandrasekaran, AGM
Award Staff for HO cases Head Office, Legal
Soaps to the Part-Time Full-Time Sweepers of the
> Concurrent Disciplinary Department
Bank. Authority for Award Staff, Chennai
New Welfare Scheme has been introduced Zonal cases
for Provision of Shoes, Towels and Toilet Soaps to HRM.182/2010-11 dt.01.02.2011
all Part-Time / Full-Time Sweepers of our Bank.
Reimbursement of Lodging Expenses to Top
As per the new scheme, all the Part-Time / Executive Grade Scale VI and VII.
Full-Time Sweepers (PTS/FTS) are eligible for the
following: Board of Directors approved enhancement
in room tariff reimbursable to executives in Top
Ceiling Executive Management Grade VI and VII with
Item Quantity Periodicity
Amount (`) effect 24.01.2011, with the ceilings in amount as
Shoes / One Pair 500 Two Years follows:
Foot wear
Maximum Room Tariff Permissible (Amount in Rs.)
Socks Two Pairs 50 Every Year Eligibility Major ‘A’ Class
Area – I Other Cities
Towels Two Towels 50 Every year to Stay Cities *
Toilet Soap Two 20 Every Exist Revised Exist Revised Exist Revised
Month Four Star
4000 6800 2000 4000 1750 3000
Hotel

8 8
 JAN-MAR 2011
* In respect of Delhi, Mumbai, Kolkata and Chennai, the An additional surcharge called Education
executives in Scale VI and VII may be reimbursed Cess at 2% and higher education cess of 1% in all
actual Lodging Expenses subject to a maximum of totalling 3% is leviable on the amount of income
125% of the applicable ceilings for Major ‘A’ Class tax. For all other guidelines, branches are advised to
Cities. refer this circular.
HRM.186/2010-11 dt.04.02.2011
HRM.191/2010-11 dt 12.02.2011
Income Tax for the financial year ending 31.03.2011
Festival Advance to Staff Members for the Financial
corresponding to Assessment year 2011-12
Year 2011-2012.
The Bank is under statutory obligation to
deduct Income-Tax at source from the salaries paid Branches/Offices have been authorized to
to staff members and pension paid to pensioners, permit Interest Free Festival Advance to staff
as per the provisions of Sec 192 of Income Tax Act members for the financial year beginning
1961.The salient features of the Finance Act, 2010 01.04.2011 to 31.03.2012 for the following festivals:
are as follows:
Rates of Income Tax S.No. Name of the Festival Date of the Festival
Total Income (Rs.) Rates of Income Tax 01. Ugadi (2011) 04.04.2011
Upto 1,60,000/- NIL 02. Baisaki 14.04.2011
1,60,001/- to 10% of the amount by which the 03. Sinhalese New Year 14.04.2011
5,00,000/- total income exceeds Rs.1,60,000/- 04. Bohag Bihu 14.04.2011
5,00,001/-to Rs.34,000/- plus 20% of the amount 05. Hari Raya Pusa 30.08.2011
8,00,000/- by which the total income exceeds 06. Ramzan 31.08.2011
Rs.5,00,000/- 07. Ganesh Chaturthi 01.09.2011
Above 8,00,000/- Rs.94,000/- plus 30% of the amount 08. Onam 09.09.2011
by which the total income exceeds 09. Durga Pooja 05.10.2011
Rs.8,00,000/- 10. Deepawali 26.10.2011
11. Christmas 25.12.2011
Rates of Income Tax for Women Employees
12. Pongal/Tamil New Year 14.01.2012
Total Income (Rs.) Rates of Income Tax 13. Chinese New Year 23.01.2012*
Upto 1,90,000/- NIL 14. Milad-Un-Nabi 04.02.2012*
1,90,001/- to 10% of the amount by which the 15. Holi 08.03.2012*
5,00,000/- total income exceeds Rs.1,90,000/- 16. Ugadi (2012) 23.03.2012*
5,00,001/-to Rs.31000/- plus 20% of the amount (**Exact date will be known only during January, 2012)
8,00,000/- by which the total income exceeds Only permanent confirmed employees and
Rs.5,00,000/-
part time employees who are in scale wages and
Above 8,00,000/- Rs.91,000/- plus 30% of the amount
by which the total income exceeds
contribute to Provident Fund are eligible for the
Rs.8,00,000/- advance.
HRM.201/2010-11 dt.19.03.2011
Resident Individual who is of the Age of 65 Years or
more at any time during the Financial Year Officers’ Travel under LFC by Own Cars
Where the total Nil
income does not
Officers in JMG Scale I and MMG Scale
exceed Rs.2,40,000/- II&III are also permitted to travel by their own cars
Where the total 10% of the amount by which the while availing LFC subject to the following terms
income exceeds total income exceeds Rs.2,40,000/- and conditions:
Rs.2,40,000/- but
does not exceed 1. The vehicle should strictly be in the name of the
Rs.5,00,000/- officer.
Where the total Rs.26000 plus 20% of the amount 2. Copy of the RC book has to be submitted.
income exceeds by which the total income exceeds
Rs.5,00,000/- but Rs.5,00,000/- 3. Prior permission should be obtained from the
does not exceed concerned Zonal Office / HO: HRM Dept as the
Rs.8,00,000/- case may be.
Where the total Rs.86,000/- plus 30% of the amount
income exceeds by which the total income exceeds 4. Fuel bills, Log Sheet containing details like
Rs.8,00,000/- Rs.8,00,000/- opening and closing km. reading, date of
journey, places visited, etc., and toll receipts
should be submitted.

9
 Recollect
5. Reimbursement will be restricted to the actual Pension Fund, if the tax element has not been
fuel expenses incurred subject to the ceiling deducted so far, the same has to be deducted
prescribed for use of personal vehicle for and kept in sundry deposit account pending
official purpose (`.3.60 per km for 800 CC and disposal of above referred writ petition.
`.4.50 per km for 1000 CC and above vehicle)
2. If the tax element has been already deducted
or the II AC train fare for the shortest and most
and remitted to the Income tax authorities, then
direct distance between the place of work and
the amount of tax recovered in the month of
the destination whichever is lower.
March 2011 to be kept in sundry deposit
6. Officers as well as their dependent family account. Ensure that the total tax for an
members should necessarily undertake the employee now kept in sundry deposit account
proposed journey in their own cars. No two in any case is not more than the Income Tax
separate journeys will be permitted for self and element calculated on pension load (2.8 times
dependent family members. Nov 2007 pay) for that employee.
7. Actual toll charges will be reimbursed over and 3. Please ensure that there is no short recovery in
above the LFC eligibility subject to production respect of Income Tax from the salary of the
of bills. employees.
HRM.202/2010-11 dt. 19.03.2011 4. Form 16 should be issued with suitable
modifications so as to reflect the amount of tax
Income Tax for the financial year ending 31.03.2011
element on 2.8 times of Nov 2007 pay and also
corresponding to Assessment year 2011-12 - Writ
as to whether the said amount has been remitted
petition with regard to TDS on the amount
to Government account or not and if not, the
appropriated towards corpus of pension fund.
amount held in sundry deposit account as per
In a writ petition (W.P.(c) No.9791/2011(y)) the directions of Hon’ble High court of Kerala
filed by All India Indian Bank Officers Association, at Ernakulam.
the Hon’ble High Court of Kerala at Ernakulam
HRM.205/2010-11 dt.31.03.2011
vide its order dated 28.03.2011 has passed an
interim stay order restraining the Bank from CRA
deducting TDS amount for a period of three months
towards the amount appropriated to the corpus of Improving commission earnings through sale of
General Insurance Products of United India Insurance
the pension fund following extension of Pension
Co. Ltd (UIICo)
scheme. Further the Hon’ble High Court of Kerala
has also directed that the amount equivalent to the Henceforth, Branches should ensure that in
tax element shall not be disbursed to the employees cases where Bank arranges for Insurance, it has to be
out of the arrears of salary. taken through UIICo only. It has been decided that
the principle of leakage of income will be invoked
It is probable that all the branches/offices when branches fail to do so.
might have already remitted the tax collected on the
arrears of salary including 2.8 times of the Nov.2007 Zonal Managers are advised to ensure the
salary, wherever applicable, to Income Tax implementation of the above directions.
authorities. Further tax collected on salary of the
employees till February 2011 also might have been It should be ensured that SPs/Marketing
remitted to Income tax authorities. Hence only the Officers/BMs and all other Staff/officers involved
residual part of the tax amount recovered in the in selling Third Party Products are transparent in
salary for the month of March 2011 i.e. the explaining the features of these Products
difference amount between the total amount of Tax (including Disclaimer Clauses) to the customers
and the total tax paid up to the month of February so as to enable them to take a considered
2011, will be pending with the branches/offices for decision.
remitting to Income Tax authorities.
CRA.69/2010-11 dt.06.01.2011
In view of the foregoing we advise the branches
as follows: Commencement of family pension and procedure
thereof.
1. For those employees who have contributed 2.8
Central Pension Accounting Office (CPAO),
times Nov 2007 pay towards corpus of the
New Delhi, vide their Office Memorandum under
1010
 JAN-MAR 2011
letter No.CPAO/Tech/Grievances/2010-11 dated TDS on Pension Payment - Income Tax for the
24.12.2010 directed the procedure to be adopted by Financial Year ending 31.03.2011- Assessment Year
the authorised banks for the commencement of 2011-12.
family pension on the demise of the pensioner.
Bank is under statutory obligation to deduct
CPAO points out that some banks are
Income-Tax at source from pension paid to
insisting on additional certificates/documents from
pensioners as per the provisions of the Finance Act
the family pensioner in addition to those already
2010, (Read with Income-Tax Act, 1961).
prescribed; and also insisting joint account holders
to open a separate account for commencement of The Pension paying branch will be
family pension. Such independent action is in responsible for deduction of Income Tax at source
contravention of the spirit of the procedure laid out from pension payments in accordance with the
in para 24.1 of the Scheme for payment of pension rates prescribed from time to time & remit through
to Central Government Civil Pensioners. e-TDS, before the 7th of the succeeding month.
While deducting such tax from pension payments,
All authorised banks are requested to the pension paying branch will also allow deduction
comply and adhere to the provisions contained in on account of relief available under Income Tax Act
Scheme Booklet so as to avoid any undue hardship from time to time on production of proper and
to the family pensioners. acceptable evidence of eligible savings.

CRA.70/2010-11 DT. 8.1.2011 The pension paying branch has to issue such
pensioners a certificate of tax deducted (TDS) in the
Enhancing the scope of Speed Clearing form prescribed in the Income Tax Rules, in April
every year.
Reserve Bank of India, instructed as under:
Branches should deduct the proportionate
“Speed Clearing is currently enabled for
Income Tax every month from the pensioners and
cheques issued by account holders with remit to Income Tax Department as per extant
transaction codes 10 (savings bank), 11 guidelines. Failure to deduct tax at source will
(current account) and 13 (cash credit). attract penalty under the Income Tax Act. Hence
Keeping in view the benefits to customers as branches should ensure strict compliance of the
also the infrastructural and processing above statutory obligation.
preparedness of banks, it has been decided to
extend the scope of Speed Clearing to cover CRA.76/2010-11 dt.27.01.2011
all transaction codes, other than those
relating to government cheques. Banks may Provision of Cheque Drop Boxes at Branches
exercise usual care and caution while
handling such instruments.” In the context of customer awareness in this
regard, branches should invariably display the
The revised instructions will be effective
following message on the Cheque Drop Box itself:
from 01.02.2011.
“Customers can also tender the
In view of the above, all the branches are cheques at the counter and obtain
requested to adhere to the Reserve Bank of India acknowledgement on the pay-in-slips”
instructions and utilise the Speed Clearing service
Branches should ensure that the above
wherever available.
message is displayed in English, Hindi and
CRA.71/2010-11 dt.10.02.2011 Vernacular language of the State.
Introduction of new Toll Free Number 1800 425 00 000.
CRA.80/2010-11 dt.19.02.2011
Bank has taken a new toll free number to Outstation Cheque Collection Services
facilitate our customers to easily remember, which is Branches shall request the other bank branch
as given below - 1800 425 00 000 concerned to remit the clearing proceeds through
CRA.74/2010-11 dt.19.02.2011 RTGS / NEFT while sending the cheques for
collection. Please furnish the IFSC code of your
branch and other details in the covering schedule to

11
 Recollect
enable the other bank to remit the proceeds through “IB HOME SURAKSHA” - Group Life Cover to Home
RTGS / NEFT. Loan Borrowers –from M/S. Kotak Mahindra Old
Mutual Life Insurance Limited - Relaxation in norms
Accordingly, branches shall remit the
for Medical Requirements
proceeds of the instruments received from other
banks through RTGS / NEFT only. This will reduce Kotak Mahindra Old Mutual Life Insurance
considerable amount of work load in the branches Limited has now made the following liberalization
and help to improve the customer service by speedy in non-medical limits:
collection. Age Existing Non Medical Revised Non
CRA.84/2010-11 dt.01.03.2011 Group Limit Medical Limit
Obtention / Updation of Mandates from Customers for 18 to 35 Loan Upto Rs.40.00 Loan upto Rs.60.00
Electronic Clearing Services and Other purposes. Years Lakhs lakhs
Reserve Bank of India has advised to Loan Upto Rs.30.00 Loan Upto Rs.40.00
36 to 50 lakhs upto the age of lakhs for age upto
implement the processing of ECS credit and debit years 45 years 40 years
entries of all banks in Tamil Nadu and Puducherry Loan upto Rs.20.00 Loan upto Rs.30.00
centralised at Chennai from 01.04.2011. lakhs upto the age of lakhs for age upto
Accordingly, all ECS transactions shall be processed 46 – 55 years 50 Years.
and credited to the accounts based solely on account
Please refer Annexure of this circular, for
number. Originating bank is responsible for the
full details on revised medical requirements. This
correctness of the account number.
Annexure replaces Annexure K3 of our Circular
As per RBI guidelines, destination bank CRA/42/2009-10 dated 23/10/2009. All other terms
branches (where debits are to be posted or centrally and conditions, procedures etc. remain unchanged.
from a single location) to hold debit mandates based
Officers involved in selling this insurance
on which the debits are to be posted. Mandates
cover should be transparent in explaining the
wherever taken with Old Account Numbers shall
features of both - IB Griha Jeevan and IB Home
obtain fresh mandates with New Account Numbers.
Suraksha Products - (including the Statutory Risk
Accordingly, Destination branches should - factors) to the customers so as to enable them to take
i) Obtain Mandates with New CBS Account a considered decision to avoid complaints.
Numbers wherever necessary duly signed CRA.95/2010-11 dt.14.03.2011
by the customers.
Processing of Electronic Clearing Services (ECS)
ii) Update / Add the ECS Debit mandate under RECS
details in the Mandate Management
System as per the procedure given in Help Reserve Bank of India has advised to
desk -> Other Web Sites -> Service implement the processing of ECS credit and debit
Branch Helpdesk. entries of all banks in Tamil Nadu and Puducherry
centralised at Chennai from 01.04.2011 under
iii) Preserve the Mandates properly so that RECS. Accordingly, all ECS transactions shall be
branches shall be in a position to retrieve processed and credited to the accounts based
the physical mandates whenever necessary. solely on account number. Originating bank is
iv) Authorise the mandate details after responsible for the correctness of the account
thorough verification and ensure that the number. Service Branch, Chennai will process the
details entered are similar to the details RECS of Tamil Nadu and Puducherry branches.
available in the physical mandate. As per RBI guidelines, destination bank
v) Ensure all the Debit transactions in ECS branches (where debits are to be posted or centrally
are supported by Debit mandates registered from a single location) to hold debit mandates based
in the System. on which the debits are to be posted. Mandates
wherever taken with Old Account Numbers shall
Branches / Offices should refer the Mandate obtain fresh mandates with New Account Numbers.
handling Policy carefully and adhere to the
guidelines / instructions contained therein. Destination branches should -

CRA.85/2010-11 dt.02.03.2011

1212
 JAN-MAR 2011
1. Obtain Mandates with New CBS Account Authorities after taking all precautions regarding
Numbers wherever necessary duly signed by KYC norms and obtaining necessary documents, etc.
the customers. so as to avoid complaints from pensioners /
Pensioners’ Associations.
2. Update / Add the ECS Debit mandate details
in the Mandate Management System as per All Link Branches / Nodal Branches / Zonal
the procedure given in Help desk -> Other EDPs are requested to send the Government Orders
Web Sites -> Service Branch Helpdesk -> issued by the respective State Governments
ECS Debit Mandate Entry. regarding revision of Dearness Relief / Revision of
Pensions and other allowances to our Department
3. Preserve the Mandates properly so that
for implementing the same through CPPC
branches shall be in a position to retrieve the
immediately.
physical mandates whenever necessary.
CRA. 102/2010-11 dt. 22.03.2011
4. Authorise the mandate details after thorough
verification and ensure that the details Clearing arrangement for Local Cheque
entered are similar to the details available in Collection
the physical mandate. Taking in to consideration, the time factor
5. Ensure all the Debit transactions in ECS are and interest loss on account of discounting of drafts
supported by Debit mandates registered in and to abide by the RBI guidelines, branches shall
the System. request the other bank branch concerned to remit the
Branches / Offices shall go through the Mandate proceeds of local / outstation instruments through
Handling Policy carefully and adhere to the RTGS / NEFT only while sending the cheques for
guidelines / instructions contained therein. collection. Please furnish the IFSC code of your
branch and other details in the covering schedule to
CRA.99/2010-11 dt.22.03.2010
enable the other bank to remit the proceeds through
Merger of Attur & Namakkal Clearing Houses with RTGS / NEFT.
Salem MICR centre
Accordingly, branches shall remit the
As per the directions of Reserve Bank of proceeds of the instruments received from other
India, Union Bank of India, MICR CPC and banks through RTGS / NEFT only. This will reduce
Bankers’ Clearing House, Salem has allotted MICR considerable amount of work load in the branches,
codes for bank branches coming under Attur and
avoid interest loss and help to improve the customer
Namakkal areas.
service by speedy collection.
On account of this the non-MICR clearing
CRA.103/2010-11 dt.23.03.2011
houses at Attur & Namakkal are merged with Salem
MICR CPC and our Bank branches at the above Electronic payment of tax deducted / collected at
locations are covered under Service Branch Salem. Source
Hence branches shall take note of this and Attention is drawn with regard to Rule 125
issue demand drafts on Service Branch Salem, of the Income-tax Rules, 1962, where in from April
instead of Attur & Namakkal unless specifically 1, 2008 onwards, all companies and persons (other
requested for and henceforth send the instruments than a company) who are required to get their
drawn on other banks at Attur and Namakkal to accounts audited are required to pay tax
Service Branch Salem for clearing. electronically.

CRA.101/2010-11 dt.22.03.2011 E - payment of tax reduces instances of

mismatch of challan while processing of TDS
Pension Payments to Central/State Government statement.
Pensioners by Agency Banks- Compensation for
In view of the above, branches shall make
delay. payment of tax through e-mode only and avoid
Branches should credit the first payment of complaint from Government.
pension / Gratuity / Commutation etc immediately CRA.113/2010-11 dt.31.03.2011
on receipt of PPO from the Pension Sanctioning

13
 Recollect
FX 2. Branches will be provided with forms “To
Expansion of Wealth Management Services (WMS) to Receive Money” by Weizmann Forex Ltd.
other Centers
3. The beneficiary shall fill in the “To Receive
Money” form and submit to the branch
Presently the Wealth Management Services along with necessary documentary
are available at Chennai, Mumbai, New Delhi, evidences as part of KYC / AML procedure.
Chandigarh, Bengaluru and Hyderabad Centers.
WMS operations at Zones are headed by 4. The branch will then access the Western
Dy.Administrators leading a team of Wealth Union website and verify the details given
Managers under them, reporting to 2nd in Command by the beneficiary and confirm the
at Zonal Offices. Recognizing the need to ensure transaction, if the same is in order and
wider participation at regional levels, a decentralised matches with the details in the Western
set up have been put in place for WMS in our Bank, Union website.
with administrative reporting to Zonal Office and
functional reporting to HO:WMS. Zonal offices 5. After confirming the transaction, branch has
would be directly responsible for administration, to take a print out of the receipt (in
marketing and achievement of business targets, with duplicate) and obtain signature of the
periodic reporting to HO:WMS. WMS targets will customer in both copies.
be incorporated as a measurable parameter under
Zonal targets from next year onwards. Both income 6. Then the designated account maintained by
and expenditure relating to WMS operations would Treasury Branch shall be debited and
be budgeted and booked in Zonal Office books. beneficiary paid.
Review of WMS operations will be included as an 7. Beneficiary could be either the account
agenda, whenever Zonal performance is reviewed. holder or walk in customers.
HO: WMS (at Treasury branch) would
undertake policy & strategy formulation, goal Software requirement, accessing Western Union
setting for Zones, monitoring and reporting of Zonal website, Operational guidelines etc. are available
performance, Centralised product selection and in the circular.
advisory services. FX.37/2010-11 dt.07.01.2011
FX.36/2010-11 dt.03.01.2011
2% Interest Subvention on Rupee Export Credit
Agreement with Weizmann Forex Limited for money As per the extant guidelines of Reserve
transfer through Western Union – Product Roll out Bank of India governing the Rupee Export Credit,
exporters are eligible for 2% Interest Subvention
Our Bank has entered into an agreement UPFRONT for the Packing Credit and Post
with Weizmann Forex Limited for handling Money Shipment credit availed by them under 8 Sectors viz.
Transfer Services through Western Union Money 1. Handicrafts, 2. Carpets, 3. Handlooms, 4. Small
Transfer. and Medium Enterprises, 5. Leather and Leather
As per the scheme of roll out, which will be Manufacturers, 6. Jute Manufacturing including
taken up in phases, all our branches will be acting as floor covering, 7. Engineering Goods and 8.
“Point of Sales (POS)” and handle the remittances Textiles.
received through Western Union Money Transfer.
Interest subvention of 2% should be
The process involved is almost similar to extended to all the eligible exporters on monthly
what the branches are presently following in respect basis by the branches on the first working day of
of Xpress Money and Money Gram. the following month without fail to the debit of
Overview of the Process their Sundries Receivable II account (Interest
Subvention on Rupee Export Credit – GL No.
1. The beneficiary under Western Union 96217).
Money Transfer will be approaching the
branch with a 10 digit Money Transfer Points to be followed by the branches are
Control Number (MTCN). given under:

1414
 JAN-MAR 2011
1. Branches should submit their claims to the Further, Board has directed that all branches
Zonal Office on or before 5th of every month have to improve the number of transactions under
strictly in the format annexed to circular “Xpress Money” to ensure that the income of the
FX 19/2010-11 dated 14 08 2010. Bank from this segment is not reduced.
FX.41/2010-11 dt.09.02.2011
2. 2% interest subvention is eligible only under
the eight sectors referred to above. Inclusion of Japanese Yen (JPY) under FCNR (B)
3. The amount of subvention is to be deposit.
calculated on the amount of export credit Bank has introduced FCNR(B) deposit in
from the date of disbursement : Japanese Yen (JPY) also with immediate effect.
a. upto the date of repayment OR Branches are advised to canvass more business
under this scheme.
b. upto the date beyond which the
FX.42/2010-11 dt.15.02.2011
outstanding export credit becomes over due
OR Country Risk policy - Problems in West Asian
and North African (WANA) countries as well as
c. for pre-shipment credit upto 270 days and Greece and Spain and OFAC sanctions on Libya.
post-shipment credit upto 180 days
whichever is earlier. In terms of our bank’s policy on “Country
4. The claims should be accompanied by Risk Exposure” branches are advised to obtain HO
Concurrent/Statutory Auditor’s certificate permission for taking exposure on “moderate,
(IN TRIPLICATE) certifying that “the moderately high, high and very high” risk categories
claims for subvention of Rs………... for the of countries.
respective month is true and correct”. In view of 1. Protests against ruling regime,
Settlement of the claim will be done based 2. OFAC sanctions on Libya and 3. Downgrading of
on this certificate only. Greece and Spain, branches are advised as under:
5. The consolidated claim for the Zone – • Not to take fresh exposure on Libya, which
branch-wise and sector-wise along with the falls under OFAC sanctioned country.
Auditors certificates submitted by the
• To be cautious on taking exposure on
branches (IN DUPLICATE) should be sent
to HO/Credit Division in time so as to reach countries where demonstrations and protests
before 10th of every month. directed against ruling regime.

6. For certification at branches, the Zonal • To take permission for taking exposure on
Office in co-ordination with Inspection countries which falls under “moderate,
Centre should arrange to depute concurrent moderately high, high and very high“ risk
auditors to the branches where there is no categories of countries based on latest
concurrent audit. revision of classification of countries by
FX.39/2010-11 dt.02.02.2011 ECGC (will be published during April 2011 )

Reduction in Commission earned under “Xpress • To take up the matter with foreign banks and
Money” transactions. customers for early realization of bills, which
were already sent for realization.
M/s UAE Exchange & Financial Services
Ltd., has conveyed that they will be paying • To take up issue with ECGC and prefer claim
commission only at the reduced rate of Rs.85.00 per wherever necessary.
transaction instead of Rs.100/- w.e.f 01.11.2010, due
FX.47/2010-11 dt.16.03.2011
to their various business reasons.
As operations under this arrangement do not GENL
involve any cost and as this offers good scope for Identification of VIP Customer in the CBS system
improving our non-interest income, Board has
approved continuance of this arrangement, despite As a customer friendly measure and to
identify VIP customers for preferential treatment,
reduction in commission earned under the product.
our Bank has developed the functionality for
ensuring quicker customer service to VIP customers

15
 Recollect
both at Home and Host Branches. Accordingly, no:1800-425-4422 and email to - idibatm@indian
whenever the following transactions are done by a bank.co.in , atmhotlist@indianbank.co.in
VIP customer, the system gives the prompt “VIP
CUSTOMERS – GIVE PRIORITY” at the time of b) On receipt of the information of loss of card,
authorisation: the branch should Hot List the Card through CBS
Help Desk->Other websites-> ATM-> Main Menu->
S Transaction Details of the Transaction Modifications / Hot listing, Update Card Data menu
No Code (ATM Cards Web Site) or Contact Immediately
1 1010 Cash Deposit
HO/TMD/ATM Section Ph. 044-25260335,
2 1060 Cash Withdrawal
3 51072 Cash withdrawal through
25251185, 25222841 Toll Free No.18004254422 or
cheque email: atmhotlist@indianbank.co.in (Please Use this
4 1045 Transfer from / to his email id for hot listing. Advise customers also to use
deposit account this email id for Hot Listing). The Service is
5 21031 Deposit to GL (for DD / available 24 X 7 and 365 Days. Customers can also
BPO issue) directly contact the above Numbers for Hot Listing
For this purpose, the “VIP Code” in the c) In case of ATM card PIN getting corrupted,
Customer Master has to be updated with a “yes” the same is got changed through HO: ATM Section
flag. Project Office will be updating the branch wise after getting a request letter from the customer. In
customer records of top 100 customers as a one time
case the card is corrupted / damaged, the card should
measure. The top 100 customers are arrived at based
on the following logic: be obtained from the customer and destroyed. A
fresh card may be issued to the customer.
™ In a Branch, under a single CIF (irrespective
of CIF of the home branch), total term d) Whenever a customer closes his account, the
deposit is taken and grading is given branch should take back the card, note the details
and destroy the card immediately in front of the
™ Customers having deposits in other branches customer. Branch should disable / hot list the card
are not taken in to account for arriving at the in the system through the menu provided and inform
top 100 customers HO: TMD ATM Section immediately.
™ Groups / Associates / Family are not taken Guidelines for Issue of Cards and list of
in to account for arriving at the top 100 circulars on the subject are available in the circular.
customers. These are only indicative and not exhaustive.
Branches shall contact HO: TMD, ATM card section
Branches shall update the flag for VIP status of for any help / clarifications.
customers as and when there are changes in the
GENL.95/2010-11 dt.08.02.2011
deposit holding of a customer.
GENL.94/2010-11 dt.08.02.2011 Monitoring of Customer Transactions and filing of
Suspicious Transaction Report.
Procedural Guidelines on ATM cards
One of the obligation for the bank under the
Loss of cards Prevention of Money Laundering Act, 2002
a) The customers should be advised to inform (PMLA) is to file Suspicion Transaction Report
the branch / HO: TMD ATM card section by the (STR) to Financial Intelligence Unit-IND.
fastest mode of communication, in case the ATM Presently Suspicious Transactions are identified
card is lost or stolen. The contact number of the with the reply received from branches, for the AML
Branch / ATM officer, HO: TMD ATM Card Alerts. Two parameters are being replied by the
Section etc are to be displayed in the branch as well branches for the alerts as follows
as in the ATM room. ATM Help desk at Head 9 Whether the account is complied with all
Office is working round the clock and the contact KYC norms
numbers for any assistance are- 044-25251185, 044-
9 Whether the transaction is genuine and in
25260335, 044-25222841, 044-25245929 Toll Free
conformity with the declared customer
profile.
1616
 JAN-MAR 2011
Invariably, all our branches are Alteration in the name of The Dhanalakshmi Bank
systematically replying to the above parameters as Limited' to 'Dhanlaxmi Bank Limited' in Second
account is complied with KYC norms and the Schedule to the Reserve Bank of India Act, 1934
transactions are genuine. In this regard, we wish to
Reserve Bank of India vide its letter
exhort all our branches to apply appropriate due
dt.01.03.2011 informed that the name of ‘The
diligence and scrutinize the transaction before
replying and if the transaction falls within the ambit Dhanalakshmi Bank Limited’ has been changed to
of Suspicious transactions, STR should be filed ‘Dhanlaxmi Bank Limited’ in the Second Schedule
within seven days of arriving at a conclusion. to the Reserve Bank of India Act, 1934.
Genl.105/2010-11 dt.04.03.2011
AML alerts should be replied by the
branches within two days .Timely attending of Implementation of e-Stamping project in Chennai
AML alerts by the branches will mitigate the Registration Zone
operational risk to a greater extent. E-stamping is the state-of-the-art internet
Branches should ensure that all our application that gives public, the convenience of
customers are KYC compliant. Any activity of the paying stamp duty without hassles involved in
customer inconsistent with that of the declared obtaining a stamp paper or franking a document.
customer profile should be detected immediately and The system is secure, reliable and ensures
STR is to be filed with FIU-IND within the the stamp duty paid by public reaches the
stipulated time frame. government safely. The system has done away with
GENL.98/2010-11 dt.11.02.2011 the risks associated with the physical stamping of
documents.
Capability Level in Eximbills
The e-stamping system provides the e-stamp
The Bank has developed a functionality
certificate in place of physical stamps. The e-stamp
wherein capability level in BANCS is linked to
certificate is tamper-proof, secure and comes with
Eximbills package also w.e.f 21.02.2011. Hence
authorisation (release) in Eximbills package also certain security features making it secure and safe.
will now take place on the basis of the Capability Stock Holding Corporation of India Limited
Level assigned to the officer in BANCS. was appointed as the sole Central Record-keeping
Agency (CRA) for Computerisation of Stamp Duty
GENL.99/2010-11 dt.17.02.2011
Administration System (C-SDAS) by Government
Operational issues in respect of NEFT transactions of India in December 2005.

Since the remittances made through the Our Bank is one of the Authorised
debit of deposit parking account are not being Collection Centres (ACC) to issue e-stamp
credited back to the deposit parking account on certificates. The e-stamping project is implemented
account of returns due to security reasons, in Chennai Zone from 28.02.2011. Chennai Zone
instructions given under circular no. CRA – 04 / consists of three revenue districts viz. Chennai,
2008-09 dated 30.04.2008 are being withdrawn. Kancheepuram and Tiruvallur with 60 SROs.
Zonal Offices Chennai - North & South and
Branches should not generate any NEFT Kancheepuram identified 49 branches nearer to the
transactions through deposit parking account. 60 SROs in Chennai Zone.
Remittance received under cash should be routed
Bank is getting 0.15% of the e-stamp
through BGL 99634xxxxxx only. No other BGL or certificate value as commission for the certificates
deposit parking account is permitted for generating issued in addition to the float fund. Also there is an
NEFT outward remittance. avenue for new clients and business prospects while
issuing the e-stamp paper, Branch Managers and all
Inter bank transactions for any amount shall staff members shall popularise the e-stamping
be routed through RTGS and branches should project vigorously and derive the benefits out of it.
reverse the FIT entries then and there.
As per Tamil Nadu Government guidelines,
GENL.104/2010-11 dt.01.03.2011
we can issue e-stamp for Rs.500 and above.
Additional e-stamp can be issued for any value.

17
 Recollect
Branches / offices in Chennai South, Chennai North Cash Handling Charges - Revised charges w. e. f
and Kancheepuram Zones shall execute the 01.04.2011
documents wherever required with e-stamp only. During recent visits by our Top
Genl.106/2010-11 dt.04.03.2011 Management to various circles, customers have
expressed that cash handling charges levied by our
Service Charges for Outstation Cheque Collection bank is on the higher side and requested for
Based on RBIs notification, the frame work downward revision.
of charges for outstation cheque collection service is
Based on views expressed by Zonal
revised as under with effect from 01.04.2011.
Managers, our Top Management have reduced and
Outstation Cheque Collection
pleased to effect the cash handling charges for bulk
(a) Charges:
S.No Value Service
receipts as under w.e.f 01.04.2011
Charge
1 Upto and Including Rs.5000 ` 28 Amount of charges on cash remittance
Type of
2 Above Rs.5000 and upto and ` 55 Account Existing Revised / Enhanced
Including Rs.10000 (w.e.f 01.04.2011)
3 Above Rs.10000 and upto and ` 110 Current For First 10 > For First 10 sections
Including Rs.1 lakh account / sections in a day in in a day in any
4 Above Rs.1 lakh `165 OD / any denominations denominations – free.
OCC – free
(b) The above charges are applicable only to account From 11th section > From 11th section on
transactions originated and payable within India. onwards in a day wards in denomination
in any of Rs.1000/- or
(c) The charges will be all inclusive. No additional denomination – Rs.500/- - Rs.15/- per
charges such as Courier Charges, Out of Pocket Rs.25/- per section section and in
Expenses, Service Tax etc should be levied from (inclusive of denomination of
service tax) without Rs.100/- and below –
the customers. any ceiling. Rs.20/- per section
(d) Outstation Cheques / Bills received for collection (inclusive of service
tax)
has to be sent to our branches only if there is a
branch of our Bank in the drawee centre / place. These charges should be uniformly followed
If there is no branch of our Bank in a drawee in respect of all customers falling in the above
centre / place, the cheque has to be sent to other category irrespective of any previous arrangements
with the bank. No exemption is permitted from levy
PSU Banks. The sharing of commission will be
of charges.
on 50:50 basis. In case if there is no branch of
our Bank / other PSU Bank, then only the Till the software is modified to take care of
cheque has to be sent to other Private Sector the downward revision, branches are instructed to
Banks located in the drawee centre / place. In modify the batch file and apply / post the correct
charges as per this circular.
any case, the total commission should not
exceed 50% of our commission plus 50% of the GENL.114/2010-11 dt.29.03.2011
other Bank commission or actual charged by
MD/ED
other Bank whichever is higher. Out of pocket /
postage, if any, charged by the other Bank Staff Suggestion Scheme
should be recovered in full on actual basis.
Successful organizations are found to be
(e) To reduce the clearing cycle and to promote those which exploit the potential of the Human
electronic modes of payment, the drawee banks Resources. Contributions can take any form. One
should use electronic modes like RTGS / NEFT, of those would be the suggestions of staff members
wherever available, to remit proceeds to the whose intellectual potential is enormous. The
collecting Bank branch, quoting OBC / BP / performance of the organization is the sum total of
REF number. its human resources. It has to be acknowledged that
GENL.107/2010-11 dt.11.03.2011 suggestions from staff contribute to the efficiency
both in terms of quality and cost.

1818
 JAN-MAR 2011
Suggestions improve in a) procedure b) cost denomination of 25 paise and below, issued from
reduction c) reduce waste and d) customer service. time to time, with effect from June 30, 2011.
Some useful steps are to (a) note down ideas All branches / currency chests are advised
as and when they emerge in mind (b) define through to make arrangements for exchange of these coins
consultative process (c) notwithstanding acceptance for their face value at the counters, display of board
or otherwise communicate under the Staff for information of public, maintain a record and
Suggestions Scheme. such other arrangements as may be considered
All the staff in the Bank must encourage necessary. The said coins should be accepted on
promotion of innovative ideas and Branch Managers all working days during the usual business hours till
must facilitate participation in Suggestion Scheme. close of business of June 30, 2011. The coins shall
It has been decided to incentivize the cease to be legal tender thereafter.
suggestions which are accepted. The incentive shall
be Rs.2000/- and Rs.1000/- for every month for the The coins so received by branches may be
best suggestions and the recognition will be deposited to the appropriate Small Coin Depot for
rewarded in their Service Register. The format for onward transmission to India Government Mints,
suggestion is enclosed to this circular. for melting, under intimation to the concerned Issue
Office of RBI.
MD/ED 12/2010-11 DT. 1.2.2011
ADMIN.69/2010-11 dt.02.02.2011
ADMIN
Risk Classification and Enhanced Monitoring of
Reporting Fridays - Section 42 of RBI Act accounts of "Bullion Dealers and Jewellers"
The amount of CRR and SLR to be Reserve Bank of India advised that in view
maintained by the Bank is arrived at, on the basis of of the risks involved in cash intensive businesses,
its Demand and Time Liabilities (DTL) as on every accounts of “bullion dealers (including sub-dealers)
alternate Fridays called reporting Friday. The first and jewellers” should also be categorized by banks
reporting Friday fixed by RBI was as on 29.3.1985 as “High Risk” accounts requiring enhanced due
and every alternate Friday subsequent to this date is diligence.
known as reporting Friday. Further RBI has clarified that, in terms of
An awareness of the dates of reporting Para 2.8(a) of the their Master Circular dated
01.07.2010 on KYC/AML/CFT Obligation of banks
Fridays at the branch level will enable the field level
under PMLA, 2002, transactions involving large
functionaries to monitor all major inflows and amounts of cash inconsistent with the normal and
outflows of funds in such a manner so as not to expected activity of the customer should particularly
unnecessarily inflate the DTL of the Bank on attract the attention of the Bank, as it may indicate
reporting Fridays. Such inflating of DTL will only that funds are being washed through the account.
increase the required level of CRR and SLR and High risk associated with such accounts should be
ultimately will lead to increase in cost of taken into account by banks to identify suspicious
maintaining reserve requirements. transactions for filing Suspicious Transaction Report
(STRs) to FIU – IND.
Branches should report all transactions
In view of the above, all our branches
above ` 5 crores to Treasury branch to enable
should:
maintaining of CRR in a better way.
¾ Classify the existing as well as new
The list of reporting Fridays for the year accounts of “Bullion Dealers (including sub-
2011 are furnished in the Annexure to this circular. dealers) and Jewellers” as HIGH RISK
ADMIN.64/2O10-11 dt.12.01.2011 Accounts.
¾ Transactions in such accounts should be
Call in from circulation coins of the denomination of subjected to intensified monitoring for
25 paise and below identifying suspicious transactions.
Reserve Bank of India, Mumbai has ADMIN.72/2010-11 dt.11.02.2011
informed that the Government of India has decided
to call in from circulation the coins of the

19
 Recollect
TDS Assessments by Income tax Authorities - 4. Arrange to file corrected e-TDS returns for
adhering strict compliance to the Tax Deducted at the relevant quarters
Source (TDS) provisions of Income tax Act 1961.
5. Intimate the Income tax Authorities the
According to Income tax Authorities many details of corrected returns filed so as to
of our branches are neither replying to the show
enable them to drop the interest / penal
cause notices issued by them in connection with
proceedings initiated.
completion of TDS Assessments nor appearing
before them on the stipulated hearing dates for The deficiencies noticed by the Income tax
completion of TDS assessments from the Financial Authorities in the e-TDS Returns filed by our
Year 2007-08.
branches are given in this circular along with the
Wherever show cause notices have been guidelines to the branches for submission of error
received from Income tax Department on TDS free e-TDS return in future.
Assessments, branches are advised to:
1. Acknowledge receipt of the notices, ADMIN.80/2010-11 dt.18.03.2011

2. Appear before the Assessing Officer to find

Branches before acting on the gist are advised to go through
out the reasons for issuing such show cause
the full text of the circulars.
notice/s to sort out the issues
Though due care has been taken in the preparation of
3. Verify the data entry in the relevant e-TDS Recollect, the version given in the circular is final.
returns for the deficiencies mentioned below
& identify the corrections to be made in the Compiled by HO: O&M Division
TDS returns

2020
 Volume 24 Issue 4
a
For Private Circulation Only

January – March 2012 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
C.No Date Subject PgNo
CONTENTS OF THIS ISSUE
184 10.02.12 Migrattion towards CTS 2010 Standard 8
C.No Date Subject PgNo
185 14.02.12 Amedment to Para 15.2 submission of
8
DEP 28.01.12 Back End Updation in CBS – Need to Life certificate - regarding
ensure proper checking 2
35 189 17.02.12 Indo-nepal remittance system –
8
36 15.02.12 Foreclosure of Ind Double - Centenary Measures to enhance usage
2
Certificate 212 31.03.12 Frauds in payment of truncated cheques 8
39 05.03.12 Opening of “Small Account” 2 FX 12.01.12 Modifications in parameters- NRE Term 8
41 12.03.12 KYC requirement and facilitating opening 37 Deposits
/ operation of accounts of Migratory 2 40 09.02.12 FCRA ( Foreign Contribution (Regulation) 9
workers Act), 2010 EFFECTIVE FROM 01 05
42 16.03.12 Enhancement of Funds Transfer Limit 2011.
under Retail & Corporate Net Banking 2 43 22.02.12 Sale of Travellers’ cheques– 9
Facility Empanelment of various agencies
43 16.03.12 Displaying list of Unclaimed Deposits / GENL 21.01.12 Wireless Access Protocol (WAP) Based 10
3
Inoperative Accounts Mobile Banking Facility
92
44 27.03.12 Nomination Facility – Witness in
3 93 23.01.12 Guidelines on Customer Risk 10
Nomination Form
Catergorisation review
ADV 02.01.12 Home Loans – Withdrawal of Pre-closure
3 99 04.02.12 Amendment in Rule 114B of the Income 11
138 Charges
Tax Rules 1962
140 03.01.12 Sanctioning of Retail Loans in bulk / to a
3 100 09.02.12 Service charges on attestation of e- 11
group of borrowers – Policy guidelines
payment mandate form
141 05.01.12 Issue of acknowledgment of Loan
4 114 26.03.12 Claririfcation on obtention of PAN for 11
applications to MSME borrowers
issue of Debit cards
142 10.01.12 Educational Loan – System generated 115 26.03.12 Disabling Cash retraction feature in 11
product change and repayment schedule 4 ATMs
regeneration
HRM 02.01.12 Joining of Shri B Raj Kumar as ED of our
144 20.01.12 Educational Loan – Uniform Loan Policy bank 11
4 101
for Hostel and Mess charges
104 04.01.12 Presentation of Memento to staff
145 23.01.12 2% Interest Subvention Scheme and 3% 11
members at the time of retirement
additional incentive Subvention for Short- 4
Term Crop Loans disbursed during 11-12 105 07.01.12 Implementation of SAP-HRMS-Staff work
12
profile
147 25.01.12 On Line Home Loan application 5
118 19.01.12 Correctness of PAN no. and
150 08.02.12 IB Swarna Mudra Scheme – Submission
responsibility of staff members to have 12
of Form F to the Sales Tax Authorities
5 PAN Card
while transferring gold coins from one
state to another state 120 23.01.12 Promotion policy for officers 12
154 20.02.12 Revival, Reform and Restructuring 122 27.01.12 Staff Vehicle loan scheme to Officers and
12
Package for Handloom Sector- Scheme 5 workmen employees
from Ministry of Textiles 131 10.02.12 Presentation of Milestone award to staff
13
155 28.02.12 Personal Segment Loan Products – members
Delegation of sanctioning powers to 141 23.02.12 Joining of new Chief Vigilance Officer 13
6
Branch Managers and Discontinuance of ADMIN 11.01.12 Detection of Counterfiet Bank Notes and
RBS forwarding to Police authorities 13
79
157 06.03.12 IB Home Loan Scheme – Revision in
80 18.01.12 Centralisation of TDS Administration at
processing charges for Home Loans with 6
Zonal / Corporate Office with effect from
limits above Rs.10.00 lakhs 13
01.04.12. Implementation of revised
161 26.03.12 Conversion of IBKC loans on account of system
Natural Calamity- Introduction of new 7
83 07.02.12 Fire Safety Measures of Generators In
Loan product ‘Restructured IBKC loan’
Branches / Currency Chests / 14
CRA TDS on Pension Payment - Income Tax Administrative Offices
169 14.01.12 for the Financial Year ending 31.03.2012 7
84 14.02.12 Issue of clean / sorted notes to
- Assessment Year 2012-13
customers and remittance of Cash by 14
170 19.01.12 NEFT between RRBs and Indian branches into Currency Chest
7
Bank/Other Banks
87 27.02.12 Discontinuance of re-issue of 1996 series
171 19.01.12 Separate entry for Tax Deducted at 15
7 of Rs.100 denomination Banknotes
Source
 Recollect
C.No Date Subject PgNo KYC requirement and facilitating opening / operation
92 08.03.12 SFVM – Revised Accounting Procedure of accounts of Migratory workers
15
for Coin Vending Machine (CVM)
The instructions issued by the Government
93 10.03.12 Waiver of Cash Handling Charges to
RRBs (sponsored by our Bank) accounts 15 of India, for opening of accounts of the migratory
maintained at our branches workers are as under:
97 27.03.12 Provision of Burglar Alarm Panic 1. A migratory worker may visit any branch of the
Switches In The Strong Room / Safe 15
Room / Dining Room bank servicing the area of his/her permanent
101 31.03.12 Issue of Non Sequential Numbered Notes residence for opening a bank account.
15
in Denomination of Rs.1000 2. The branch will open his / her account on self-
certification basis, or on introduction basis, and /or
DEPOSITS on the basis of the documents made available by
Back End Updation in CBS – Need to ensure proper the individual including a proof of permanent place
checking of residence, as the case may be, and allow
operation immediately.
According to AFI, some of the instances
3. The branch at the time of opening such an account
that warranted backend updation are given in the
may get the details / proof of permanent place of
circular, which could have been averted, if the residence verified through an ‘on-line’
branch officials had ensured proper checking of communication to the branch of the bank servicing
data input at the time of authorisation. the area of permanent domicile of the customer,
There will be time lag from the request of within 30 days of opening of an account, within
which the customer may be allowed operations as
branch till back end updation. This may lead to
permissible for ‘small account’ to enable him/her
customer dissatisfaction and deficiency in service.
to meet basic day-to-day requirements of funds.
Moreover it attracts adverse remarks from
Inspecting officials. 4. On receipt of ‘On-line’ verification of documents,
the bank branch will allow full operational
Henceforth, request for backend updation facilities in the account, which are available to a
will be entertained ONLY in exceptional normal account.
circumstances, if it is duly recommended by the DEP.41/2011-12 Dt.12.03.2012
General Manager of the respective user department
and not as a matter of routine. Enhancement of Funds Transfer Limit under Retail &
Corporate Net Banking Facility
In order to avoid back end updations,
Henceforth, SB, CA, OD, OCC accounts
Branches should ensure correct data entry and
are permitted for funds transfer under Retail Net
proper checking before authorisation.
banking or Corporate Net banking.
DEP.35/2011-12 Dt.28.01.2012 Funds Transfer Facility has now been
permitted to Trusts, HUF, Societies, Clubs, and
Foreclosure of Ind Double - Centenary Certificate Association of Persons etc. These customers shall
Foreclosure of ‘Ind Double-Centenary be provided with Transaction Password on request
Certificate’ is now permitted and suitable under Retail Net Banking facility, to be operated by
enablement has been made at product level (0311- an individual in the official capacity, as Principal or
1751) in the system. The existing terms and Correspondent or Secretary or Karta (as the
conditions of foreclosure of term deposit are authorised person) to do the funds transfer.
applicable for this scheme also. Those with Corporate Net Banking (CNB)
DEP.36/2011-12 Dt.15.02.2012 with multiple level authorisation facility, can do one
to one funds transfer, Government Payments like
Opening of “Small Account” direct/indirect taxes only.
Reserve Bank of India has issued detailed The facility to make bill / merchant
guidelines on opening of small accounts. payments through aggregators (Bill Desk, Tech
Accordingly, a new product “Small Account” has Process etc.) is available under Retail Net Banking
been introduced. The product profile along with only.
terms and conditions are given in the circular.
Branches should obtain an authorisation
DEP.39/2011-12 dt.05.03.2012 agreement signed by all the trustees/executive
committee members/governing board members (as

2 2
 JAN-MAR 2012
the case may be) in the format given in the circular Displaying list of Unclaimed Deposits / Inoperative
as annexure I, from the Trust/HUF/ Society/ Club/ Accounts
AOPs, nominating a person who will operate the Reserve Bank of India advised vide their
Net Banking facility. The Transaction Password notification that -
will be given to the authorised person in his/her
™ Banks should display the list of unclaimed
official capacity for making funds transfer. deposits/inoperative accounts which are inactive /
In case of Retail Net banking, the debit inoperative for ten years or more on their respective
websites. The list so displayed on the websites must
authorisation in the said account will be confirmed contain only the names of the account holder(s) and
by entering the OTP as a second factor his/her address in respect of unclaimed deposits /
authentication and sent to the registered mobile inoperative accounts.
number of the authorised person. ™ In case such accounts are not in the name of individuals,
The revised default per day funds transfer the names of individuals authorized to operate the
accounts should also be indicated. However, the account
limit, with powers to Zonal Managers to enhance number, its type and the name of the branch shall not be
the same are as follows: disclosed on the bank’s website.
Revised Funds
Default Per Day ™ The list so published by banks should also provide a
transfer Limit
Funds Transfer “Find” option to enable the public to search the list of
Type of Customer (Upper Limit)
Limit (SB, CA, OD,
Zonal Managers accounts by name of the account holder.
OCC Accounts)
can permit **
™ Banks should also give on the same website, the
Individuals (Retail net Rs.5 lakhs Rs.15 lakhs
Banking) information on the process of claiming the unclaimed
deposit /activating the inoperative account and the
Sole Proprietorship Rs.5 lakhs Rs.20 lakhs
concerns (Retail net necessary forms and documents for claiming the same.
Banking) Banks are required to have adequate operational
Trusts, HUF, Societies, Rs.5 lakhs Rs.25 lakhs safeguards to ensure that the claimants are genuine.
Clubs & AOP (Retail / ™ Banks should complete action as above by June 30, 2012
Corporate net Banking)
and keep their websites updated at regular intervals.
Partnership Firms Limit applied by the No Upper Limit -
(Corporate net banking) firm under Zonal Managers DEP.43/2011-12 Dt.16.03.2012
Corporate net can sanction
banking subject to enhanced limit on Nomination Facility – Witness in Nomination Form
the maximum of BM’s
Rs.5 lakhs recommendations Reserve Bank of India has clarified that
Pvt / Public Limited Limit applied by the No Upper Limit – Nomination forms with respect to Deposits, Safe
Company (Corporate net company under Zonal Managers
banking) Corporate net can sanction Deposit Lockers and Safe Custody Accounts, shall
banking subject to enhanced limit on be attested by two witnesses, only in case of
the maximum of BM’s
Rs.5 lakhs recommendations
account holders with Thumb-impressions(s).
Signatures of the account holders need not be
** Based on the BM’s recommendation, Zonal Manager can
approve the request for the enhanced limit as mentioned above attested by witnesses.
and forward the same to Project Office directly for enabling the DEP.44/2011-12 Dt.27.03.2012
limit recommended.
The above funds transfer limits are ADVANCES
applicable per CIF per day irrespective of the
Home Loans – Withdrawal of Pre-closure Charges
number of accounts linked to the CIF/mapped to the
User. There is no restriction on the number of Pre-closure charge for all kinds of Home
transactions per day. In the case of Govt Loans (Home Loans, Plot Loans & Home Improve)
transactions, per day funds transfer limit is not has been abolished. All other norms of the
applicable for all the above categories. respective schemes remain unchanged.
ADV.138/2011-12 Dt.02.01.2012
Staff shall refer the circular for other
guidelines / instructions in this regard. Formats of Sanctioning of Retail Loans in bulk / to a group of
Application for enhancement of per day funds borrowers – Policy guidelines
transfer limit from the customer, Branch
The policy guidelines for sanctioning of
Recommendation Letter to ZO and ZO sanction
Retail Loans in bulk / to a group of borrowers are
letter are given in the annexure to this circular.
applicable for -
DEP.42/2011-12 Dt.16.03.2012 ™ Retail loans sanctioned to a group of borrowers
(employees of a company, etc.) – ‘Group of borrowers’

3
 Recollect
means more than 5 borrowers for applicability of this our Bank has accorded approval for Uniform Hostel
policy guidelines. and Mess charges as below:
™ Home Loans sanctioned to allottees in a Project developed Maximum Hostel and Mess Charges** (Areas where College/ Hostel
by a builder / developer / Development Authority, if the is located)
number of units in a particular project is more than 5 and Major A Class Cities Area I Other Places
/ or our finance is for more than 20% of the total area of Upto Rs.60,000 Upto Rs.50,000 Upto Rs.40,000
the project. ** Policy rates (Maximum Hostel and Mess charges as above) or Hostel and
Mess charges prescribed by the colleges whichever is less is eligible for
Branches shall refer this circular for other consideration.
guidelines / instructions.
In order to bring flexibility in terms, in
ADV.140/2011-12 Dt.03.01.2012 genuine and needy cases relaxation can be
considered on a case-to-case basis as below:
Issue of acknowledgment of Loan applications to
1. Upto 10% in the maximum charges by the Zonal
MSME borrowers Manager concerned.
According to RBI, banks should 2. Upto 20% in the maximum charges by the Functional
mandatorily acknowledge all loan applications, General Manager at Corporate Office.
submitted manually or online, by their MSME
borrowers and ensure that a running serial number ADV.144/2011-12 dt.20.01.2012
is recorded on the application form as well as on the
2% Interest Subvention Scheme and 3% additional
acknowledgement receipt.
incentive Subvention for Short-Term Crop Loans
ADV.141/2011-12 Dt.05.01.2012 disbursed during 2011-12
Educational Loan – System generated product Reserve Bank of India has issued
change and repayment schedule regeneration notification for 2% Interest subvention Scheme and
3% additional subvention as an incentive to those
The procedure adopted by the system for
farmers who repay their short-term crop loans as
change of product for educational loans from simple
per schedule in 2011-12. Salient features of the
interest product to compound interest is as below:
notification are:
One month prior to the Principal repayment
2% Interest subvention:
start date, System will
™ Government will provide interest subvention of 2% p.a to
™ Capitalise up-to date interest. Banks in respect of short-term production credit up to
™ Shift the entire interest bucket to the principal bucket. Rs.3.00 lakhs provided per farmer during the year 2011-
™ Regenerate the repayment schedule under EMI 12.
™ Change the product from simple interest product to ™ This amount of subvention will be calculated on the crop
compound interest product in respect of all the accounts loan amount from the date of its disbursement / drawal
for which Principal repayment start date commence up to the date of actual repayment of the crop loan by the
from 05.02.2012. farmers or up to the due date of the loan fixed by the
™ Generate report of list of accounts wherein product banks for the repayment of the loan, whichever is earlier,
change has been effected. subject to maximum period of one year.
™ Notice to customer for revised EMI will be pushed to ™ This subvention will be available to Banks on the
branches on daily basis. Branches have to take printout condition that they make available short-term production
of notices and send the same to customers. credit up to Rs.3 lakhs at ground level at
7% p.a.
ADV.142/2011-12 dt.10.01.2012
Additional 3% incentive subvention to prompt
Educational Loan – Uniform Loan Policy for Hostel paying farmers who repay their short-term
and Mess charges production credit as per schedule:
With regard to IBA educational loan ™ Government will also provide additional incentive
scheme, IBA has clarified that ‘Reasonable lodging subvention of 3% p.a. to Banks in respect of those
and boarding charges will be considered in case the prompt paying farmers who repay their short-term
student chooses / is required to opt for outside production credit within one year of disbursement /
accommodation’. drawal of such loans.
Since the fee structure has not been ™ This subvention will be available to such farmers on the
stipulated for hostel and mess charges by short-term production credit up to a maximum amount of
Government / Govt. approved regulatory bodies, Rs.3.00 lakhs availed of by them during the year, from
the date of disbursement /drawal of the crop loan up to

4 4
 JAN-MAR 2012
the actual date of repayment by farmers or up to the due IB Swarna Mudra Scheme – Submission of Form F to
date fixed by the bank for repayment of crop loan, the Sales Tax Authorities while transferring gold
whichever is earlier, subject to a maximum period of one coins from one state to another state
year from the date of disbursement.
Whenever gold coins are moved from
™ This additional incentive subvention will be available to branches of one state to branches of another state
Banks on the condition that the effective rate of interest for sales to be effected at their end, Form F need to
on short-term production credit up to Rs.3.00 lakhs for
be produced by the receiving branch, in order to
such farmers will now be 4% p.a.
consider the movement of coins as stock transfer. If
™ Banks may credit the additional 3% incentive subvention Form F has not been produced, the stocks so
to the farmers account only after prompt repayment. transferred will be treated as sales and sales tax will
™ This benefit would not accrue to those farmers who repay be levied for the same as per the provisions of
after one year of availing such loans. Section 6 (A) of CST Act.
Branches shall refer this circular for other Hence, all the branches, who receive gold
guidelines and instruction. coins from the branches of other States, are
instructed to submit Form F to the transferor branch
ADV.145/2011-12 dt.23.01.2012
to enable the transferor branch to file the same to
On Line Home Loan application their concerned Sales Tax Authorities.
Prospective home loan customers can apply ADV.150/2011-12 dt.08.02.2012
online through our website, www.indianbank.in for
in-principle approval. Prospective home loan Revival, Reform and Restructuring Package for
borrowers can log on to the Bank’s web site and Handloom Sector- Scheme from Ministry of Textiles
apply for home loan through web-access, Revival, Reform and Restructuring Package
facilitating speedy clearance of the request by the for Handloom Sector- Scheme has been approved
Bank. for implementation in our Bank. The scheme is
On receipt of the online home loan applicable for Regional Rural Banks also. The
application the same will be processed at the Package comprises of two parts –
Corporate office, PBD and an in-principle approval Revival of Handloom Weavers Cooperative Societies
for the eligible loan amount (based on the data Scheme-1
(Primary and State Level Apex)
furnished) will be given to the applicant quoting a Revival of Handloom Weavers by Waiver of Working
reference number and also marking a copy of the Scheme- II
Capital and Term Loans of Individual Weavers, Self
same to the allotted / preferred Branch through e- Help Groups (SHGs), Joint Liability Groups (JLGs)
and Master Weavers.
mail, for further follow up. The draft in-principle
approval is enclosed for ready reference as The scheme will be implemented once the
Annexure to this circular. MOU is signed by the major stake holders. viz,
Government of India, State Governments and
Follow up action at Branches
NABARD.
ƒ The applicant, as per our in principle approval letter is
The Bank Branches have to display the list
required to submit the duly filled in regular, prescribed of eligible Weavers within 60 days from the date of
application form available in our web site along with signing the LOC by the respective State
necessary credentials to the preferred / allotted branch for Government. The implementation of the package is
regular sanction quoting the reference number received to be completed by 31st Dec.2012.
from CO/PBD. As per the scheme, funds will be provided
ƒ However on receipt of the in principle approval letter copy by the Government for repayment of 100% of
through e-mail from CO/PBD the Branch has to contact principal and 25% interest as on date of loan
the customer and follow up for his submission of regular becoming NPA which is overdue as on 31.03.2010
proposal with relevant papers.
in respect of viable and potentially viable Primary
Weavers Cooperative Societies and Apex Societies
ƒ On receipt of the completed application, Branch has to as well as in respect of individual Handloom
give sanction at the earliest and if any clarifications are Weavers, Master Weavers, Self Help Groups
required, it may be collected in a single lot by the quickest (SHGs) and Joint liability groups (JLGs), provided
mode. the banks agree for sanctioning fresh loans. The
balance 75% of overdue interest and the entire penal
ADV.147/2011-12 dt.25.01.2012
interest, if any, will be written off by the Bank.

5
 Recollect
There would be an overall ceiling of Educational Loan proposals of branches where NPA
Rs.50,000 per individual beneficiary in respect of level under PSLP is more than 5% of balance
waiver of overdues of individual handloom outstanding under PSLP, are to be referred to the
weavers. Advance against pledge or hypothecation next higher sanctioning authority for sanction. The
or any other collateral would be included under the branches and Zones, where NPA level under PSLP
scheme for waiver. is more than 5% balance outstanding, have to take
Waiver of loan and interest for a particular prior permission from CMD before considering
beneficiary as above will be done only if the Bank sanction of fresh Personal Segment Loans other
simultaneously agrees to extend a fresh loan of than Educational Loans.
Rs.20,000 or more to that beneficiary. Rejection Apart from existing guidelines, the
of fresh loan application / loan waiver (if any) will following additional control measures shall be
be done at Zonal Manager level. adopted by Branches / Zonal Offices:
The scheme will not apply to loans All the sanctions under PSLP are to be reported under
disbursed after 31.03.2010. The scheme will also AUW-1 (Audit control return) by the branches for post
sanction scrutiny by the Audit Department of Zonal Offices.
not applicable to the loans restructured and
While scrutinizing, Zonal Offices should ensure the NPA
rescheduled in the normal course by the Bank in the levels under PSLP of the branch and Zone is as given
past under GoI/ State Government scheme or under above.
OTS of the Bank as per the RBI guidelines, being Zonal Office should verify the sanctions and disbursals
covered under SARFAESI Act / Legal recourse by made by the Branch Managers under PSLP on random
the Bank as on date of the scheme. basis.
The Government has further approved an Pre-release audit for PSLP advances of Rs.10 lakhs and
above (presently Rs.50 lakhs and above) is to be conducted.
interest subvention of 3% for 3 years to be extended
For PSLP advances of Rs.10 lakhs and above and less than
from the date of disbursal of the fresh loan extended Rs.50 lakhs, the pre-release audit may be carried out by
by banks. The Government will make necessary Officers other than the processing officer/s and sanctioning
provision towards payment of Guarantee Fee and authority. For the limits of Rs.50 lakhs and above, the pre-
Annual Service fee to be paid to CGTMSE, for release audit should be conducted as per the existing
guidelines.
credit guarantee for a period of three years for the
fresh loans. Branches shall be guided for the norms,
The operational guidelines / Minutes of terms and conditions for sanction of Personal
meeting of National Implementation, Monitoring Segment Loans by some of the important circulars /
and Review Committee (NIMRC) received from manual listed in the Annexure to this circular.
NABARD & detailed guidelines on both the In respect of relaxation in norms of the
Schemes are given as Annexure to this circular. scheme for individual proposals, branches have to
submit the relaxation proposals in the Relaxation
ADV.154/2011-12 dt.20.02.2012
Format Annexed to this circular, to the respective
Personal Segment Loan Products – Delegation of authorities.
sanctioning powers to Branch Managers and ADV.155/2011-12 dt.28.02.2012
Discontinuance of Retail Banking Segment
IB Home Loan Scheme – Revision in processing
In order to quicken the process of sanction
charges for Home Loans with limits above Rs.10.00
of Personal Segment Loans and to improve our
lakhs
retail credit exposure, with effect from 1st March
2012 - The Processing and Administrative Charges
has been reduced on Home Loans sanctioned
o Branch Managers are empowered to sanction various
Personal Segment Loans – Powers delegated to various henceforth with limits above Rs.10.00 lakhs as
sanctioning authorities will be communicated to branches under:
by Zonal Offices and Home Loan Existing Revised
o Retail Banking Segment (RBS) has been Discontinued. Processing fee* 0.25% For limits upto Rs.10.00 lakhs:
(To be collected of loan 0.25% of loan amount
The proposals falling beyond the powers of along with the amount For limits above Rs.10.00 lakhs:
Branch Managers are to be referred to Zonal Office. application, 0.20% of loan amount with a
which is non- minimum of Rs.2,500/- and
The powers delegated to field level refundable) maximum of Rs.20,000/-
functionaries are subject to NPA level under Administrative 0.32% For limits upto Rs.10.00 lakhs:
Personal Segment Loan Product (PSLP) of the fee* of loan 0.32% of loan amount
Branch and Zone is within the tolerance level of 5% (To be collected amount For limits above Rs.10.00 lakhs:
on sanction of 0.25% of loan amount with a
of total balance outstanding under PSLP.
6 6
 JAN-MAR 2012
Home Loan Existing Revised Total Income (Rs) Rates of Income Tax
loan–before minimum of Rs.3,200/- and Up to 2,50,000 Nil
disbursement) maximum of Rs.25,000/- 2,50,001 to 5,00,000 10% of the amount by which the total
* inclusive of Service Tax. All other norms of the scheme remain income exceeds Rs.2,50,000/-
unchanged. 5,00,001 to 8,00,000 Rs.25,000/- plus 20% of the amount by
which the total income exceeds
ADV.157/2011-12 dt.06.03.2012 Rs.5,00,000/-
Above 8,00,000 Rs.85,000/- plus 30% of the amount by
Conversion of IBKC loans on account of Natural which the total income exceeds
Calamity- Introduction of new Loan product Rs.8,00,000/-
‘Restructured IBKC loan’ Rates of income tax for resident individual
To facilitate the branches for restructuring who is of the age of 80 years or more at any time
the IBKC limits (by converting IBKC limits into during the financial year
term loans), a separate loan product namely Total Income (Rs) Rates of Income Tax
“Restructured IBKC loan” has been introduced. Up to 5,00,000 Nil
The salient features of the “Restructured 5,00,001 to 8,00,000 20% of the amount by which the total
IBKC loan” are - income exceeds Rs.5,00,000/-
9 Product has been created under Loan Module. Above 8,00,000 Rs.60,000/- plus 30% of the amount by
which the total income exceeds
9 Product Code is 5903-0050. Rs.8,00,000/-
9 Repayable in annual instalments with initial moratorium
period of at least one year. There is no surcharge on Income Tax for
9 Repayment period will be 3-10 years. the financial year 2011-12 for individuals, whereas
9 Rate of interest to be charged will be the same as Education Cess at 2% and Higher Education Cess of
applicable to short term loans and is linked to Base Rate. 1% totalling to 3% on the amount of tax is to be
Branches should identify the eligible IBKC deducted without fail.
accounts and extend relief by restructuring/ Branches shall ensure that tax deducted
converting the IBKC limits into term loan. The amount appears in “View Tax Credit Statement
Branches have to close the existing IBKC account (Form 26AS)” to enable the pensioners to view their
and open a fresh account under the “Restructured tax credits.
IBKC loan” product. The limit for the new product Branches should deduct proportionate
will be equal to the balance outstanding in the Income Tax every month from the pensioners and
existing IBKC limit + interest up to the date of remit to Income Tax Department as per extant
conversion of IBKC limit into Restructured IBKC guidelines. Failure to deduct tax at source will
loan. attract penalty under the Income Tax Act.
Branches shall ensure that necessary
CRA.169/2011-12 dt.14.01.2012
request letter from the borrower for conversion of
the IBKC loan and F-117 along with D11 is NEFT between RRBs and Indian Bank / Other Banks
obtained from the borrower and guarantor at the Our Bank has already extended facility of
time of conversion. funds transfer through NEFT system to all the three
ADV.161/2011-12 Dt.26.03.2012 of our sponsored RRBs through Sponsor Bank
infrastructure and the IFSC (Indian Financial
CRA System Code) for the three RRBs are given below:
TDS on Pension Payment - Income Tax for the ¾ Saptagiri Grameen Bank, Chittoor : IDIB0SGB001
Financial Year ending 31.03.2012 - Assessment Year ¾ Pallavan Grama Bank, Salem : IDIB0PLB001
2012-13.
¾Puduvai Bharathiar Grama Bank, Puducherry : IDIB0PBG001
Bank is under statutory obligation to deduct
Income-Tax at source from pension paid to CRA.170/2011-12 dt.19.01.2012
pensioners as per the provisions of the Finance Act
Separate Entry for Tax Deducted at Source (TDS) in
2011, (Read with Income-Tax Act, 1961)
Bank Pass Book of Pensioners.
The salient features of the Finance Act
In order to avoid inconvenience to the
2011 are as follows:
pensioners, Reserve Bank of India directed the
Rates of income tax for resident individual
pension paying branches to show the amount of
who is of the age of 60 years or more but less than
TDS on pension payments as a separate and distinct
80 years at any time during the financial year
entry in the passbook of the pensioners.
CRA.171/2011-12 dt.19.01.2012

7
 Recollect
Migration towards ‘CTS 2010 Standard’ i. Our Bank Commission – R6/-
According to RBI, all banks providing ii. SBI Commission– In case the Beneficiary
Account is with Nepal State Bank Ltd A/c –
cheque facility to their customers have been advised Rs.20/-
to issue only ‘CTS-2010 Standard’ cheques not later
iii. If the beneficiary account is Other Bank A/c
than April 1, 2012 on priority basis in northern and
(a) Remittance upto Rs.4999/-: Commission
Southern region which will be part of the northern
is Rs.70/-
and southern CTS grids respectively and across the
(b) Remittance of Rs.5000 and above upto
country by September 30, 2012 through a time Rs.50000/-: Commission is Rs.95/-.
bound action plan.
In any case the total amount including both
Since “CTS-2010 Standard” is applicable to commission should not exceed Rs.50000/-.
the cheques issued by Government Department 5. Senders to Receiver information - all the fields are
(Central & State) it is instructed to suitably advise mandatory. Viz. (i) Beneficiary ID, (ii)Contact
the Government Departments to migrate towards Number, (iii) Nepal State Bank Ltd (NSBL) A/c No
the “CTS-2010 Standard” within the target dates or Other Bank A/c No & Other Bank Name.
indicated above. CRA.189/2011-12 Dt.17.02.2012
Branches handling the payments for Frauds in payment of truncated cheques
Government Departments shall guide the Reserve Bank of India after examining the
Government Departments to migrate towards the suggestions relating frauds in payment of Truncated
‘CTS 2010 Standard’. Cheques, guided as below:
CRA.184/2011-12 dt.10.02.2012 i. Since the information in respect of frauds will be with the
paying bank, the present system of reporting frauds by the
Amendment to Para 15.2- Submission of Life paying bank may continue. However, in cases of frauds due
to fake / forged instruments sent in clearing, the presenting
Certificate- regarding bank will be required to immediately hand over the cheque
According to Central Pension Accounting to the drawee / paying bank as and when demanded to
enable the drawee / paying bank to file an FIR with the
Office, New Delhi, the following wordings shall be police authorities and report the fraud to the RBI. The
inserted as S.No.(v) under para 15.2 (i) of the Department of payment and Settlement System of RBI
Scheme Booklet for submission of Life Certificate would be advising the procedural guidelines in this regard,
in November each year by the pensioner (which to the respective entities.
deals with the list of specified persons, if signed the ii. On the issue of returning the money of the fraudulent
Life Certificate in the prescribed form in exemption cheque to the paying bank by the collecting bank, the RBI
from personal appearance of the pensioner):- has stated that the collecting bank should immediately
make the payment of the disputed amount to the drawee /
(v) A Postmaster, a Departmental Sub- paying bank and recover the money later from its customer.
Postmaster or an Inspector of Post
CRA.212/2011-12 Dt.31.03.2012
Offices.
CRA.185/2011-12 Dt.14.02.2012 FX
Modifications in parameters- NRE Term Deposits
Indo-Nepal Remittance System - Measures to With regard to NRE term deposits, the
enhance usage following modifications are affected with
In order to minimise the errors, the immediate effect:
following changes are made in the NEFT remittance • The maximum term of the NRE term deposits is extended
screen for Indo-Nepal Remittance scheme. up to 10 years.
1. Please select the Account Type – 51. INDO NEPAL • The rate of interest on NRE term deposits as applicable to
from the drop down. The following details - Our
“3 years and above up to 5 years” is applicable for above 5
Bank commission, Beneficiary A/c No, IFSC code,
Branch Name and Bank Name etc. will be displayed years period also.
automatically. • The minimum period for which NRE term deposits can be
2. Fill up the Name and Address of the Beneficiary & opened continues to be 1 year as stipulated by RBI.
Remitter in detail.
• In case of premature closure before completion of 1 year
3. Fill the amount column taking into account the total term, no interest is payable on the deposit, as per the
amount including our commission plus SBI
existing RBI guidelines.
commission (should not exceed Rs.50000/-).
4. Commission: will be displayed automatically on • In case of premature closure after completion of one year,
selection of account type. Commission column is the existing procedure as applicable for domestic term
made numeric. deposits is applicable for NRE term deposits also i.e
8 8
 JAN-MAR 2012
™ Up to Rs.15 lacs – Eligible rate will be the applicable remittances in the prescribed format to Govt, of India
card rate for the actual period run prevailing on the date within the stipulated time. All our branches should send
of deposit less 0.75% p.a as foreclosure charges. the details of such foreign contributions received, every
™ Above Rs.15 lacs and up to Rs.5 crores – Eligible rate half year as at the end of March and September to CO/ ID
will be the applicable card rate for the actual period run through the concerned Zonal Offices.
prevailing on the date of deposit less 1% p.a as
¾ For more accuracy and monitoring of FCRA data, separate
foreclosure charges.
CBS product codes are introduced and branches should
™ Above Rs.5 crores – Eligible rate of interest will be the migrate the existing FCRA accounts to the new product
applicable rate of interest at the time of deposit for above
codes.
Rs.5 crores or Rs.15 lacs to Rs.5 crores which ever is less
FX.40/2011-12 Dt.09.02.2012
minus 1% as foreclosure charges.
• In case NRE term deposits are pre closed for renewal the Sale of Travellers’ cheques– Empanelment of various
renewal will be permitted at the applicable rate on the date agencies
of renewal without penalty, provided the deposit is renewed Arrangements have been made with the
for a period longer than the balance period of the original following authorised money changers located in
deposit. different parts of the country to provide Travellers’
• While prematurely closing the deposit for the purpose of Cheques at the door steps of our branches directly.
renewal, interest on the deposit for the period it has ƒ M/s India Cements Capitals Limited
remained with the bank will be paid at the rate applicable to ƒ M/s FRR Forex Pvt Ltd.
the period for which the deposit has remained with the bank ƒ M/s Transcorp International Ltd
and not at the contracted rate.
ƒ M/s Medpat Finance Limited
• Branches are to note that w.e.f 28 12 2011, interest rates on ƒ M/s TT Holdings and Services Ltd.,
NRE term deposits for periods 1 year and above are aligned (Subsidiary of TATA Capitals Ltd)
with interest rates on domestic term deposits and any future
Process under the arrangement:
revision in the domestic deposits will be automatically
™ Branches shall place orders with the nearest branch of the
applicable for NRE term deposits for periods 1 year and
agency for their requirement for further supply to
above.
customers.
• Also, interest rates on NRE term deposits cannot exceed the ™ The TCs will be supplied within a short duration to our
interest rates on domestic term deposits as per the extant branch by the agencies.
RBI guidelines.
™ The required documentation as per KYC/AML guidelines
FX.37/2011-12 Dt.12.01.2012 will be collected from the customers by the agencies.
™ The relative sale voucher will be raised in the name of the
FCRA (Foreign Contribution (Regulation) Act), 2010 - respective customer and acknowledgement of the customer
Effective From 01.05.2011 will be obtained for having delivered the exchange. A
According to RBI, guidelines on Foreign remark will be made on the sale agreement mentioning as
Contribution (Regulation) Act, 1976 stands repealed “Indian Bank reference”
and Foreign Contribution (Regulation) Act, 2010 ™ Bank will make payment in equivalent Indian rupees on
has come into force with effect from May 1, 2011. the same day as per agreed rate.
Most important salient features of the said ™ In case of EEFC settlement (in foreign currency), they will
Act are given in the Annexure to this circular. Some prevail upon our bank to provide swift copy of the relative
of the points are given below for the immediate settlement on the same day and submit settlement details.
reference of staff: ™ In case of EEFC settlements, charges will be levied by
¾ Registration certificates have validity period under the them, in lieu of exchange and applicable service charges.
new Act. It is the responsibility of the branches concerned ™ The agencies take only exchange margin, service charge
to ensure that the foreign contributions are received in the and service tax. Charging of commission at 1% is left to
the bank and the entire commission will be income for
accounts which have valid, unexpired registrations only.
the branch.
¾ Branches shall go through the details on the individual ™ In addition to the exchange margin (maximum 40-50
FCRA accounts and block credits into the accounts in paisa) charged by the agencies over and above the
CBS system if the related FCRA certificates are found prevailing inter-bank rate, our branches can add some
expired and follow up with the customer for renewal of the cushion and take this margin as exchange commission.
FCRA certificates. ™ Under this arrangement, no stock holding of TCs is
¾ It is mandatory for every bank receiving foreign required, which saves us from problems related to house
contributions under FCRA, 2010 to report details of such keeping considerably. Further holding of stocks of TCs in
odd currencies involve high risk.

9
 Recollect
™ The reimbursement in foreign currencies towards sale of banking, user has to send SMS through his mobile
TCs will be taken care by the agencies themselves and our as: OTT <MPIN> to 9444394443 (eg. OTT 1234).
bank need not send any payment message for the same. After receiving the OTT, the user can login to WAP
FX.43/2011-12 Dt.22.02.2012 site and make funds transfers using the OTT
received. The OTT received is valid for 20 minutes
GENERAL only and the customer can use the same OTT for
more than one transaction also, if done within the
Wireless Access Protocol (WAP) Based Mobile
validity time. Hence, within 20 minutes, the user
Banking Facility
has to complete the transactions (by using the same
Indian Bank’s WAP based Mobile Banking OTT) through WAP module.
is an innovative and comprehensive module
Branches shall refer this circular for the
providing Enquiry Services, Funds transfers (Intra
detail write-up regarding the main menus which are
bank & Other bank) and Utility Bill Pay Services
displayed in the mobile banking screen.
through Mobile Phone.
With the above options, the customer can
Customers eligible for accessing WAP based
enquire about his/her accounts linked with his CIF,
Mobile Banking:
make funds transfers (Intra bank & Other bank) and
WAP based Mobile Banking is presently pay his/her utility bills.
available to Individuals/Sole Proprietary concerns GENL.92/2011-12 dt.21.01.2012
and Joint accounts with E or S facility only.
Partnership Firms, Companies, Trusts, Clubs, Guidelines on Customer Risk Categorization Review
SHGs, HUFs, and accounts operated by persons in Bank has adopted the following quantitative
fiduciary capacity are not permitted. parameters for Review of Customer Risk
Categorization:
Our existing mobile banking customers
having valid MPIN can avail our WAP based Turnover in the Accounts (Credit Summations)
Mobile Banking services immediately by exceeding Rs.10.00 lacs in an Individual/
submitting “Request Letter - Cum - Undertaking for Association / Clubs Account and Rs 50.00 lacs in
Enabling Funds Transfer through Mobile Banking”. other accounts in the past twelve months (twelve
Months preceding the Risk Review Date)
The customers who do not have mobile banking
facility need to apply for mobile banking along with Turnover / Income based parameter, for reviewing
the request letter for mobile funds transfer and then the Customer Risk Categorisation, as indicated in
avail WAP mobile banking. the KYC / AML Policy, is furnished below:
Category /
Providing the mobile number in the Constitution
High Risk Medium Risk Low Risk
application is mandatory since the same has to be Above Rs.10 Upto and
Above Rs.50
updated in customer details menu in CBS by the Individuals
lakhs
lakhs and below inclusive of
Rs.50 lakhs Rs.10 lakhs
branch. Sole Above Rs. 1 Upto and
Above Rs.5
Proprietary Crore and below inclusive of
Branch shall process the request through concerns
Crores
Rs.5 Crores Rs. 1 Crore
RM module by selecting the user group as “mobile Above Rs.5
Upto and
funds transfer group - 444 (or) 555”. With regard to Partnership Above Rs.10 Crores and
inclusive of
firms Crores below Rs.10
delivering of MPIN to the customer and activation Crores
Rs.5 Crores
of services in RM module are as per existing Above Rs.10 Upto and
practice. Limited Above Rs 50 Crores and inclusive of
Companies Crores below Rs.50 Rs.10
Login to WAP based Mobile Banking: Crores Crores
Above Rs.10 Upto and
Associations, Above Rs.50
The customers have to access Clubs, etc. lakhs
lakhs and below inclusive of
Rs.50 lakhs Rs.10 lakhs
https://www.indianbank.net.in/wap to login to our All accounts
Trusts
WAP mobile banking module through their GPRS (Private
irrespective of
enabled mobile handsets. The customer has to login their income / NA NA
Trusts)
receipts / turn
by entering his Login ID (CIF No), Password over
(MPIN) & Image Text (Random Text). Trusts
All accounts
irrespective of
(Public
OTT is a One Time Token to be used as Trusts)
---- their income / NA
receipts / turn
additional security while adding beneficiary / over
making funds transfers. Before login to WAP

1010
 JAN-MAR 2012
While reviewing the risk classification, submitted by person who have only agricultural
based on the above turnover criteria, in conjunction income and are not in receipt of any other income
with the Customer Type (constitution), Branches chargeable to tax) or Form 60 from others, in lieu
are advised to bear in mind that other parameters, of PAN, for issuing ATM / Debit Cards. ATM cards
that do have a bearing on customer risk perception, can be issued to NRE (SB) customers without
such as social / financial status of the customer, obtention of PAN or Form 60 / 61.
nature of business / activity, domicile status & type GENL.114/2011-12 dt.26.03.2012
of product / service availed by the customer should
be also given due consideration. Besides, the Disabling Cash Retraction Feature in ATMs
turnover in the account is indicative and capital Cash retraction feature in all the ATMs has
receipts, if any, are to be factored, while reviewing been disabled. Hence branches shall educate the
the risk categorisation. The Indicative ‘Risk Matrix’ customers on the consequences of cash retraction
on Customer Risk categorization process is given in and the reasons for disabling this facility.
the Annexure 1 to this Circular, for immediate The following action plan for disabling the
Branch Reference and guidance. cash retraction feature in various models of ATMs
GENl.93/2011-12 dt.23.01.2012 installed by our bank:
¾ For Lipi and Vortex ATMs, Necessary software will be
Amendment in Rule 114B of the Income Tax Rules, installed by engineers in each ATM.
1962 ¾ For NCR ATMs, the message mode settings are to be
It is mandatory to quote PAN for persons changed by the branch in the supervisory mode of the ATM
entering into those transactions which are covered as instructed vide CO,TMD letter HO/TMD/ATM/452/
2010 -11 Dated 12.03.2012, addressed to all the zonal
under Rule 114B of the Income Tax Rules, 1962 offices.
and such transactions are -
¾ For Diebold ATMs, the Cash retraction feature has been
• Payment in cash exceeding Rs.25000/- at any one time to a disabled centrally at the ATM switch.
tour operator or to an authorised person as defined in
clause (c) of Section 2 of the Foreign Exchange Branches shall verify that the cash is not
Management Act, 1999 in connection with tour to any getting retracted, if not collected by the cardholders.
foreign country. Message as given in the Annexure to the circular
• Making application to Banking Company to which the has to be displayed in the ATM room for the
Banking Regulation Act, 1949 apply or to any other attention of the ATM users.
company for issue of debit card. Whenever the ATM software is modified or
• Payment of an amount aggregating fifty thousand rupees re-installed by ATM engineers, branches should
or more in a year as life insurance premium to an insurer ensure that the cash retraction feature has been
as defined in clause (a) of Section 2 of the Insurance disabled in the new software also.
Act,1938 (4 of 1938).
• Payment to a dealer-
GENL.115/2011-12 dt.26.03.2012
o Of an amount of five lakhs rupees or more at any one HRM
time or, Joining of Shri B Raj Kumar as Executive Director of
o Against a bill for an amount of five lakhs rupees or our Bank
more for purchase of bullion or jewellery. In terms of the Notification issued by
GENL.99/2011-12 dt.04.02.2012 Government of India, Ministry of Finance, Shri B
Service Charges on attestation of e-payment mandate Raj Kumar has been appointed as Executive
form. Director of our Bank and has assumed charge on
In order to comply with Government 01.01.2012.
direction, the charges on attestation of e-payment HRM.101/2011-12 dt.02.01.2012
mandate form is waived with immediate effect for Presentation of memento to staff members at the
individuals including special category of customers time of retirement
like pensioners, rural customers opting for e- The value of Memento to be presented to
payment. However the charges for non individuals staff members retiring on superannuation, has been
opting for this facility remain unchanged. increased from Rs.5000/- to Rs.7500/-, with effect
GENL.100/2011-12 dt.09.02.2012 from January 2012, for all cadres. Permanent Part
Clarification on obtention of PAN for issue of Debit time employees drawing scale wages will be
cards presented with Memento for an amount
Based on the opinion given by our Tax proportionate to their scale wages.
Consultants, branches can obtain Form 61 (to be

11
 Recollect
HRM Department, Corporate office will be Promotion Policy for Officers
granting the amount through C2C to the respective
The revised Policy for promotion of officers
branches from where the staff members are retiring,
from one scale to another in terms of Regulation 17
during the last week of every month. Branches
of the Indian Bank (Officers’) Service Regulations
need not debit SR-II account to pay the cost of
1979, comes into effect in the place of existing
the memento.
Promotion Policy for officers.
HRM.104/2011-12 dt.04.01.2012
The promotion policy for officers - Scale I
Implementation of SAP-HRMS- “Staff Work Profile” to III is given in the annexure – A and the
A new online portal have been introduced promotion policy for officers - Scale IV and above
viz., “Staff Work Profile” which is to be utilized is given in the annexure – B of this circular.
for,
a) Entering the work allocation details alongwith the
HRM.120/2011-12 Dt.23.01.2012
reporting structures of all the staff members in
branches/offices and generating the office orders in the
Staff Vehicle Loan Scheme to Officers and Workmen
form of a report for getting it acknowledged by the staff Employees
members;
The quantum of Conveyance Loan has been
b) Mapping reporting structures which can be effectively increased, Car Loan for Clerical Staff has been
utilized for Performance Management, Appraisals etc;
introduced and the eligibility criteria modified. The
c) Generating multi-dimensional reports relating to work
salient features of which are given below:
allocation in various entities at any point of time by the
respective controlling offices for effective monitoring of 1. Car Loan
the human resources; Category Limit Margi Rate of Recovery
of Staff n Interest
d) Build a comprehensive skill repository based on the areas
Officers Rs.7,00,000 20% Base Rate 180 equal
of work performed by the staff members and use it for All (simple) monthly
various HR initiatives like Competency Mapping, Skill Set confirmed instalment.
Analysis, Training Needs Analysis, Training Nominations officers Principal
etc.; drawing and Interest
Basic Pay accrued in
e) Incorporation of the details of areas of exposure/areas in of the ratio of
which a staff member had worked/gained knowledge in Rs.19400/- 3:2.
the personnel profile/bio-data; & p.m or
more.
f) Full fledged implementation of Organizational Clerks Rs.3,50,000 20% Base Rate 180 equal
Management (OM) module in SAP-HRMS. Clerical staff (simple) monthly
members instalments.
The operational guidelines, in this regard, drawing Principal
are given in this circular. Basic Pay and Interest
of accrued in
HRM.105/2011-12 dt.07.01.2012 Rs.15,100/- the ratio of
p.m 3:2.
Correctness of PAN number and responsibility of (IX BPS) or
Staff members to have PAN Card more.
2. Two Wheeler Loan
Furnishing of PAN number of employees is Category of Limit Margin Rate of Recovery
mandatory in all our statutory returns to Income Tax Staff Interest
Officers 90,000/- 10% Base Rate 84 months.
department and in Form 16. All Confirmed (simple) Principal
Officers in the and Interest
Newly recruited employees on joining the Bank’s service accrued in
Branch / Office, PAN number has to be entered in the ratio of
5:1.
the salary site along with the first month salary Award Staff Clerks: 10% Base Rate 84 months.
input. In case, the newly employed staff members All confirmed 75,000/- (simple) Principal
do not have PAN numbers, Branch Managers shall employees. and Interest
Substaff: accrued in
instruct them to apply for PAN number forthwith. 40,000/- the ratio of
5:1.
In case PAN number is not available in 3. Loan for Repair of Motor Car
salary database for any staff member then no Eligibility Loan Periodi Rate of Margi Repay
remittance of Income Tax can be done for that Amount city Interest n ment
individual. In case of non compliance the erring All confirmed 1,00,000/- Max. Base 20% 84
officers in the for Officers Twice Rate mths.
employee will be held responsible for any loss / Bank drawing and in (simple) Principa
punitive action initiated by Income Tax authorities. BP of entire l and Int
19400/- pm 50,000/- for career. acc. in
HRM.118/2011-12 Dt.19.01.2012 or more. Clerical Staff the ratio
Clerical staff of 5:1.

1212
 JAN-MAR 2012
Eligibility Loan Periodi Rate of Margi Repay a single transaction and to retain the counterfeit
Amount city Interest n ment
members notes with the branch, as under:
drawing
Basic Pay of As the counterfeit notes are required to be
15,100/- p.m. forwarded to the police in compliance with Section
(IX BPS) or 39 of Criminal Procedure Code, Banks shall submit
more.
these notes also along with the monthly
4. Take Over of Existing Car Loan Availed Under Vehicle Loan
Scheme
consolidated report. For cases of detection of
The employees who have already availed counterfeit notes of five or more pieces, in a single
car loan under vehicle loan scheme from our Bank / transaction FIR should be lodged with the police
other Banks (with prior permission where authorities along with the notes immediately. The
applicable) shall be allowed to convert their existing detected and impounded notes should not be
loan under revised loan scheme subject to retained in the branches / currency chests.
compliance of other provisions of this scheme. The Branches / currency chests are advised to
maximum amount permitted to be taken over shall maintain a register and enter the particulars of fake
not exceed the maximum ceiling as provided for in notes impounded and Xerox copy of the same shall
the scheme. be kept in a file for future reference.
5. Loan for Second Hand Car ADMIN.79/2011-12 dt.11.01.2012
There is no restriction for purchase of used Tax Deducted at Source (TDS) – Centralisation of
cars/second hand vehicles under the scheme. TDS Administration at Zonal / Corporate Office with
However, such requests received from effect from 01.04.2012. Implementation of revised
officers/award staff shall be considered, subject to system - Regarding
fulfilment of certain conditions. The important
terms and conditions of the revised scheme are In view of the deficiencies, noticed in the
furnished in the annexure of this circular. Terms present system of decentralised TDS administration,
and conditions for Conveyance Loan stand modified due credit for the TDS deducted is not reflected in
accordingly and employees will be eligible for the deductee’s PAN Account (Form 26AS). Further,
sanction of Vehicle Loan only under this scheme. the Income tax Authorities may initiate penal
The scheme shall come into force with immediate proceedings on our branches for non-compliance of
effect. TDS provisions, such as charging interest, levying
HRM.122/2011-12 Dt.27.01.2012 penalty and prosecution leading to rigorous
imprisonment. This not only affects customer
Presentation of Milestone Award to Staff Members relations but also has an inherent reputation risk to
The revised guidelines on presentation of the Bank.
Milestone Award, w.e.f 01.02.2012 is as follows: Centralization of payment of expenses and TDS
“Staff members, on completion of 25 years of service or administration
at the time of superannuation whichever is earlier, Hence, all the expenditure attracting TDS
subject to a minimum service of at least 10 years and provisions and TDS administration in respect of
fulfilling other terms and conditions, shall be presented
non-salary expenditure transactions at the respective
with Milestone Award”
Zonal Offices & on Salary payments at Corporate
HRM.131/2011-12 Dt.10.02.2012 Office (CO HRM) has been centralised. The
Joining of New Chief Vigilance Officer proposed centralised TDS administration will be
put in place to take effect from 01.04.2012.
Smt Chitra Subramaniam has assumed
charge as General Manager (Vigilance) / Chief Similarly, in order to avoid leakage of
Vigilance Officer of our bank on 23.02.2012, on income at branches, certain income heads like Rent
deputation from State Bank of India. received on Bank’s own / leased premises,
HRM.141.2011-12 Dt.23.02.2012 commission receivable on insurance business,
Pension Payment Services, Collection of utility
ADMIN payments/taxes etc would be centralized at ZO/CO
Detection of Counterfeit Bank Notes and forwarding to levels. However, pro-rata share of income relating
Police authorities
to services rendered by the branches, would be
RBI has clarified, regarding to its earlier directly credited to concerned branch’s income
guidelines of sending a consolidated report in case account.
of detection of counterfeit notes up to four pieces in

13
 Recollect
Centralisation of different Expenditure vendors by debiting SR II and reverse the same
Transactions & TDS after getting credit from Zonal Office. Advance
1. At CO: HRM - Salary to all employees of the Bank & Pension Paid payment made should be prominently recorded on
to the retired staff of our Bank.
the face of Bills/Invoices. In such cases, payment
Remarks - The Payroll is already centralized at CO HRM and they to vendors by Zonal office should be routed through
will deduct & remit TDS, and file Quarterly e-TDS Return under single CO:TAN.
TDS certificates (Form 16) shall also be issued by CO: HRM for distributing branches only to ensure adjustment of balance, if
through ZO/Branch. However, the branches have to furnish the details of any in SR II, if any. For further details/instructions
investments made u/s 80C etc. for each employee/pensioner as per the
requirement of CO HRM.
staff may refer this circular.
2. At CO: CPPC- All Pension Payments (other than our Staff pension ADMIN.80/2011-12 dt.18.01.2012
and EPF Pension).
Remarks - The TDS Administration is centralised at Centralised
Fire Safety Measures of Generators in Branches /
Pension Payment Cell (CPPC). Branches have to furnish the details of Currency Chests / Administrative Offices
investments etc as per the requirement of CO: CPPC.
3. At Zonal Office –
Branches having Generators in their Branch
premises shall take the following security measures
(i) Interest on Domestic and Non-Resident Deposits
immediately, to avoid fire accidents:
Remarks – (a) Presently Project office deducts TDS centrally in
respect of interest on Domestic Deposits and this will continue. (b) PO will 1. The Generator should be located outside the Branch premises.
facilitate deduction of TDS on NRO Deposits centrally. (c) Corporate Office will 2. Due to unavoidable circumstances, if the Generator is located
remit TDS centrally relating to interest on domestic/ non resident deposits in within the premises, the room should be well ventilated and the
respect of all branches. (d) ZO would file TDS returns on behalf of all branches exhaust should be outside the premises.
under the Branch TAN, Download TDS Certificates (Form 16A) and push the 3. The fuel of the Generator should not be stored next to it.
same to branches / offices for distribution to the deductees. (e) Branches to 4. Old records / loose papers / cloth / any other inflammable
enter in CBS the PAN and Form 15G /15H obtained from the customers on a materials should not be stored near the Generator.
day-to-day basis and report compliance to Zonal Office on weekly basis.
5. There should not be any oil spillage next to the Generator.
(f) Branches to file copies of Form 15G / 15H and Form 60 / 61 to the
respective Income tax Authorities. 6. Generator should be cleaned everyday with a dry cloth.
7. The Generator should not be used for more than its intended
(ii) Rent on Premises
capacity which may cause overheating leading to fire accident.
Remarks – (a) Payment of rent on premises and TDS thereon 8. Regular servicing / maintenance should be carried out.
relating to branches / offices is paid as ZO expense and centralised at the
respective ZOs. (b) CO TDS cell will remit the TDS into Government Account. 9. Vintage Generators should be replaced after obtaining necessary
Filing of e-TDS Returns etc will be done by ZO under the Zonal office TANs. sanctions.
(c) Branches will not be permitted to debit the expenditure head “Rent on ADMIN 83/2011-12 dt.07.02.2012
Premises” from 01.04.2012.
(iii) Payment towards AMC Contracts/ Courier charges/ Issue of clean / sorted notes to customers and
Professional fees/ Stock Auditors/ Expenses of local Staff Training Centre/ remittance of Cash by branches into Currency Chest
Computer Lab/ Others attracting TDS, of all branches/ offices in the Zone.
To comply with the directions of RBI,
Remarks – same as above.
Branches attached to currency chests and branches
(iv) Various payments attracting TDS provisions made at ZTC / having daily average cash receipts of Rs.50.00 lakhs
Computer centres
& above and upto Rupees one crore already
Remarks – same as above.
provided with / proposed to be provided with Note
4. At Zonal Insp. Centre - Payment of all expenses attracting TDS
provisions like Rent, Fee to Concurrent Auditors, Courier Charges, AMC Sorting Machines shall issue only machine
Contracts, Professional Fees, etc processed notes to public / customers across the
Remarks – No change in existing practice. Inspection Centres will counter or through ATMs. The above branches
continue to comply with all the TDS provisions. should act as a feeder branch to nearby needy
5. At IMAGE / Credit Card Centre / ATM Serv. Centre - As above branches for issuing ATM fit notes for loading into
Remarks – No change in existing practice. Respective office to ATMs.
comply with all the TDS provisions in respect of their expenses.
While remitting cash to currency chest, the
6. At CO: Expnd./ CCD / Accounts - Payment of all expenses
attracting TDS provisions like Rent, Courier Charges, AMC Contracts, Audit / remitting branch should ensure that
Legal fees, other professional Fees, etc. 1. the notes are sorted as issuable and soiled
2. defective or mutilated notes are not mixed with other
Remarks – No change in existing practice
notes
7. At Treasury Br. - Payment of all expenses attracting TDS 3. the packets are securely banded as per the laid down
provisions like interest payments (Treasury Operations), Courier Charges, AMC procedure
Contracts, Professional Fees, Rent etc.
4. each packet bears the denomination slip with the name
Remarks – same as above of the branch signature (s) of the shroff / officer,
Branches should ensure timely inputs of denomination, value and date of counting
Form 15G /15H in CBS as no refunds to the Branches provided with Note Sorting
customers can be made beyond 4th of next month. Machines should ensure the following:
In case of exigency branch/office may make a. Sorted notes only (re-issuable / soiled) are to be sent to
currency chests.
advance payment of not exceeding Rs.1000/- to

1414
 JAN-MAR 2012
b. If the branch has been designated as feeder branch, please at any point of time and the age of which shall not
issue only sorted / ATM fit notes for loading into ATMs to exceed 7 working days.
our branches.
c. Maintain a register for entering the number of bundles ADMIN.92/2011-12 Dt.08.03.2012
sorted on daily basis.
Waiver of Cash Handling Charges to RRBs
Currency Chests while accepting notes (sponsored by our bank) accounts maintained at our
from branches provided with sorting machines branches
should accept only machine sorted notes and soiled
notes separately. Unsorted notes should not be Cash handling charges for remittance by the
accepted. RRBs (sponsored by our bank) into their Current
ADMIN.84/2011-12 Dt.14.02.2012 Account / OD / OCC accounts maintained with the
respective branches of our Bank, has been waived.
Discontinuance of re-issue of 1996 series of Rs.100
ADMIN.93/2011-12 Dt.10.03.2012
denomination Banknotes
Branches shall strictly comply with the Provision of Burglar Alarm Panic Switches in the
directions of the RBI on retrieving 1996 series of Strong Room / Safe Room / Dining Room
Rs.100/- denomination banknotes from circulation Dacoities / Robberies are committed after
in a prompt, smooth and non-disruptive manner - carrying out detailed planning and reconnaissance
without any inconvenience to the public. of the target. The culprits choose the path of least
resistance considering the security arrangements in
However, the banknotes of Rs.100/- in the Branch, awareness of the staff, amount of cash /
series 1996 shall continue to be legal tender and, valuables kept and easy get away after committing
therefore, acceptable for all transactions and no the crime.
member of the public be denied exchange facility.
Generally the strong room or stationary
ADMIN.87/2011-12 Dt.27.02.2012 rooms are being used by culprits for locking up the
SFVM – Revised Accounting Procedure for Coin staff before escaping. Hence, branches shall have 1
Vending Machine (CVM) or 2 panic switches of the burglar alarm fixed inside
each room, so that in case of any eventuality, the
Branches should not capitalize the total staff members can use the switch to activate the
purchase cost of the Coin Vending Machine under alarm and draw the attention of nearby Public and
SFVM and subsequently request CO: Accounts Police. This is in addition to the panic switches
Department for guidance in respect of accounting provided in the Cash Cabins.
the subsidy amount received from RBI in SFVM.
ADMIN.97/2011-12 Dt.27.03.2012
As RBI reimburses 50% / 75% cost of Coin
Vending Machines installed by Banks by way of Issue of Non Sequential Numbered Notes in
capital subsidy, branches should claim the eligible Denomination of Rs.1000
subsidy for installation of Coin Vending Machine
from Regional Offices of RBI through Link Offices Reserve Bank of India, has communicated
of Currency Chests maintaining Current Account of that they had, issued Rs.500/- denomination notes in
RBI and adopt the following accounting procedure: non-sequential numbering in June 2011 and decided
to issue banknotes of Rs.1000/- denomination also
i. To capitalize only the net value of the purchase cost of on similar lines. Packets of Bank notes in non-
SFVM (instead of total purchase cost as is being done now)
on installation. i.e. Total cost minus the subsidy amount. sequential number will, as usual, have 100 notes.
ii. To debit Sundries Receivable II a/c towards subsidy portion The bands of the packets containing the banknotes
of the cost ( to be received from RBI) and in non-sequential number will clearly be
iii. To reverse the SR a/c once the subsidy is received from superscribed with the legend, “The packet contains
RBI. 100 notes not numbered sequentially”.
Zonal Offices should follow up with
branches that capital subsidy from RBI has been ADMIN.101/2011-12 Dt.31.03.2012
received for all the CVMs installed and also contact
CO: Accounts Department for clarifications for the Compiled by CO: O&M Division
pending items, wherein the capital subsidy received
from RBI has not been accounted so far. Though due care has been taken in the
preparation of Recollect, the version given in the
Branches shall reverse the SR II entry in
circular is final.
FIT Coins, whenever Coins are loaded into the
CVM. Branches shall have only one entry pending

15
a Volume 21 Issue 4

For Private Circulation Only

January–March 2009 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
RBI at all MICR Cheque
CONTENTS OF THIS ISSUE Processing Centres
67 27.02.09 Reduction of Premium of “Arogya 9
Raksha “Mediclaim Policy due to
Cir No. Date Subject Pg.
reduction in Service Tax Rates
DEP 12.01.09 Customer Service - separate line 1
68 28.02.09 Provision of Free Home Loan 9
65 for Senior Citizens.
Insurance to eligible borrowers
68 24.01.09 Furnishing of appropriate details 2
under “Special Home Loan
in the Statement narrative field of
Scheme” as per IBA guidelines –
transactions
operational guidelines.
72 27.02.09 Policy on Deposits –Revision 2
69 05.03.09 Revision of Service tax rate from 9
75 03.03.09 Improving ATM Debit Card Base. 3 12% to 10% with effect from
76 04.03.09 Display of Grievance Notice 3 25.02.2009.
Board with details of Nodal HRM 21.01.09 Categorisation of Branches as on 10
Officer of the Bank and the Circle 107 31.03.2008
Head.
122 21.02.09 Reimbursement of Conveyance 10
ADV 03.01.09 Central Govt Sponsored Scheme 3 expenses to Officers
160 - Rejuvenation, Modernisation
124 28.02.09 Conveyance Allowance to the 10
and Technology Upgradation
Blind and orthopaedically
(REMOTE) of Coir Industry
163 09.01.09 Revision in Benchmark Prime 4 handicapped employees.
Lending Rate 137 18.03.09 Modification in Nomination of 10
169 19.01.09 Verification of Jewel Loan 5 Disciplinary Authority/Appellate
packets Authority/Reviewing Authority for
170 20.01.09 Modifications in Credit Guarantee 5 Officers and Disciplinary
Scheme (CGS) of Credit Authority/Appellate Authority for
Guarantee Fund Trust for Micro Award Staff.
and Small Enterprises 138 24.03.09 Festival Advance to Staff 11
(CGTMSE) Members for the Financial Year
173 24.01.09 Collateral Free Loans - Micro and 5 2009-2010.
Small Enterprises FX 03.02.09 Export Credit- Notification/ 11
174 29.01.09 Service Charges of Loans and 6 35 approval of sanctioned limits to
Advances – Revision of Charges ECGC
for 1. Priority Sector advances - GENL 11.02.09 Authorized usage of software 11
Agri Term Loans, SHGs, J.L 53 assets
(Agri) 2. Non Priority – Jewel 61 24.03.09 Reduction of Service Tax on 11
Loan (NP). Service charges
178 03.02.09 Interest Subsidy Eligibility 6 ADM 02.03.09 Compliance Policy 12
Certificate (ISEC) Scheme of 93
KVIC 99 18.03.09 Issue of Rs.500 denomination 12
194 19.02.09 Restructuring of SME accounts – 6 banknotes in Mahatma Gandhi
Powers for lending at SUB BPLR series – 2005 bearing the
rates. signature of Dr. D Subba Rao,
196 20.02.09 Loan against pledge of Gold 6 Governor
Coins DEPOSITS
210 28.03.09 Loan Policy 2009-10 7
211 30.03.09 Credit Risk Management Policy 7 Customer Service - separate line for Senior
2009 – 10 Citizens.
CRA 05.01.09 Online Payment of Electricity Bills 7
57 of Tamilnadu Electricity Board by Branches should adhere to the following
Registered Net Banking
Customers having Transaction guidelines to provide hassle free service to senior
Password citizens:
61 05.02.09 Distribution Network and 7
Marketing of Services of Indbank ™ To display a notice in banking hall that a
Merchant Banking Services facility of separate line is available to senior
Limited, our Subsidiary
63 19.02.09 Introduction of Speed Clearing by 8
citizens in our Bank.
 Recollect
™ To provide a separate line for senior citizens received from Service Branch. In such cases, it
in front of every counter with the counter clerk should be clearly indicated in the narrations
attending to customers alternatively from both column - “To / By - Name of the user institution”.
the lines.
Whenever Branches are finding that the
™ Passbooks issued to senior citizens should statement narrations are not exhibited in
be stamped as “Senior Citizen”. Senior Citizens Statement of Account or Pass Book even after
should invariably bring the passbook for entering the same as narrated above, the same may
availing the benefiting of standing in the be brought to the notice of Project Office for
separate line. sorting out the problem.
™ Senior Citizens who visit the branch without (DEP.68/2008-09 dated 24.01.2009)
passbook should take prior permission from the
Branch Manager/ ABM/ officer-in-charge to Policy on Deposits –Revision
avail the facility of standing in the separate line.
Please refer our Circular No.
™ Locker operations: As there would be Dep.03/2008-09 dated 12.04.2008 advising the
limited operations and a designated officer is branches about the addition of ‘Preferential
available in every branch for this purpose, the Deposits’ to our earlier Circular No.DEP. 09 /
present system of “first come and first serve” 2007-08 dated 24.05.2007 on our Policy on
may be continued. However, if a senior citizen Deposits.
insists for the facility, then the designated
Board in its meeting held on 20.02.2009
officer may allow the senior citizen after
informing politely to the persons already in the approved addition/ substitution / modification for
the Policy on Deposits as under:
queue about the facility to senior citizens.
Addition:
™ Execution of documents: A specific time
may be given to senior citizens for execution of A. The guidelines of RBI/ Government issued
the documents and Branch Manager has to from time to time shall automatically form part of
ensure the compliance. the Policy.
(DEP.65/2008-09 dated 12.01.2009) B. The following information has been added to
the Policy under the Subhead ‘Types of Deposit
Furnishing of appropriate details in the Statement Accounts’:
narrative field of transactions
g. ‘Retail Deposits’ are all those deposits accepted
With a view to avoid inconvenience to at Card Rate up to and inclusive of Rs. 5 Crores.
customers, branches have to ensure that brief,
understandable particulars are invariably entered h. ‘Wholesale Deposits’ are all those deposits
in the statement narrative field of the transaction which are above Rs. 5 Crores.
screen, which will be reflected in the passbooks Substitution:
/statements of accounts, for reference of the
The following information has been
customers.
substituted to the Policy under the Sub-head
Tellers initiating the transactions have to ‘Premature Withdrawal of Term Deposit’.
clearly indicate the details, in the statement ’”The Bank on request from the depositor, at its
narrative field, such as discretion may allow withdrawal of term deposit
Type of Cash / before completion of the period of the deposit
Narration
transaction Others agreed upon at the time of placing the Deposit
Credit Cash By (Name of the remitter is to be
transaction given) Prevailing foreclosure charges for
Debit Cash To (Payee’s name as appearing premature withdrawal of term deposits in our
transaction on the instrument) Bank are as under:
Credit Others By (Name of the transferor )/
transaction Brief details of transaction Period run Deposits of less Deposits of Rs.15
Debit Others To ( Name of the transferee / than Rs.15 Lakhs Lakhs and above
transaction Brief details of transaction 7 days to 14 No interest No interest
In case of ECS transactions, which cannot days
15 days and Eligible rate will be Eligible rate will be
be cleared at centralised location, branches are above applicable card rate the applicable card
making the entries based on the hard copy for the actual period rate for the actual

2 2
 JAN-MAR 2009
run prevailing on the period run prevailing FOOTING, which will help us to retain our
date of deposit less on the date fof deposit customers within our Bank’s fold.
0.75% p.a. as less 1% p.a. as
foreclosure charges foreclosure charges. All new Savings account holders should
be issued ATM Debit Cards by obtaining the
Authority for waiver of foreclosure charges: ATM card request option and in Customers
The authority for waiver of foreclosure Management Menu in CBS must be
charges is vested with Executive Director on the simultaneously clicked by the authorised officers
basis of the recommendation of the Committee of in the branches – this will facilitate quick handling
General Managers to be approved by Chairman & of ATM request by HO/TMD.
Managing Director. The waiver is restricted to the In respect of our existing SB account
Corporates for deposits of Rs.25 Crore and above. holders who have not been provided with ATM
Modifications in Non-resident Indian Deposit Debit Cards till now, they should be encouraged
Schemes: to opt for the same by following the procedure as
mentioned in the circular.
Interest rates on NRE Deposits: The
guidelines given for Term Deposits are modified Pensioners also should be given ATM
as under: Card invariably to utilise this alternate channel.
Rate of Interest payable on NRE Term (DEP.75/2008-09 dated 03.03.2009)
Deposits will be in accordance with the directives
issued by Reserve Bank of India and as informed Display of Grievance Notice Board with details of
by HO: International Division from time to time. Nodal Officer of the Bank and the Circle Head.

Foreign Currency Non-Resident (FCNR) Deposit As per Regulatory Directions, Banks have
Account: to nominate and display the details of the Nodal
Officer for Customer Service, Principal Code
The guidelines given under Rate of Compliance Officer for implementation of the
Interest are modified as under:
Code of Bank’s Commitments as per BCSBI and
The rate of interest payable on FCNR Public Information Officer under Right to
deposits will be in accordance with the directives Information Act along with the details of
issued by Reserve Bank of India and as informed respective Circle Heads for information of the
by HO: International Division from time to time. customers and the general public.
Interest on balances held in these accounts Circle Heads should ensure that the
may be paid half-yearly or an annual basis as Branches display the Grievance Redress Board
desired by the depositor. correctly at a prominent place in the banking hall
Branches are advised to note the changes and be of the branches.
guided accordingly. The revised ‘Policy on The name of the Circle Head should also
Deposits’ is ported in our Intranet and also in our be properly displayed.
website.
(DEP.76/2008-09 dated 04.03.2009)
( DEP. 72 : 2008-09 dated 27. 02. 2009)
ADVANCES
Improving ATM Debit Card Base.
Central Govt Sponsored Scheme - Rejuvenation,
With effect from 01.04.2009 the
Modernisation and Technology Upgradation
customers using debit cards in other Bank’s ATM
(REMOTE) of Coir Industry
for cash withdrawal shall not be levied any
charges. Similarly the use of Master Debit Card A. Central Sector Scheme on
(intra Country) also is made free of charge with Rejuvenation, Modernization & Technology Up
effect from 01 April 2009. (However, it should be gradation of the Coir Industry was launched
noted that the charges for cash withdrawal with during 2007-08 on a pilot basis to facilitate the
the use of Credit Cards and cash withdrawal in an sustainable development of the Spinning and
ATM located abroad remains unchanged). Tiny/Household Weaving Units of the coir
Branches should ensure that all our industry by providing proper work sheds and
customers get our ATM debit cards on a WAR enabling replacement of traditional age old ratts

3
 Recollect
with motorised ratts in the Spinning sector and Deposit, Rupee Loan to third parties against
replacement of traditional looms with the FCNR Deposits etc.
mechanised looms in the Tiny/Household sector
3. Crop loans including Agri Jewel Loan upto Rs.
in the first phase during XI Plan. The scheme aims
3 lakhs will continue to be priced @ 9.00% p.a
to develop the supply of basic raw material at the
less interest subvention.
grass root level of the coir industry to ensure
continuous supply of quality coir yarn throughout 4. For Export advances the rate of interest will be-
the year. The Scheme will be implemented among Pre-shipment Rupee Export Credit up to 270 days
the major coir producing States of the country. -250 bps below BPLR
Our Bank has signed an MOU with the Post-shipment Rupee Export Credit
Coir Board for implementation of the scheme in
our bank. a. on demand bills for transit period (as
specified by FEDAI) - BPLR minus 2.50%
B. Salient features of the scheme:
b. usance bills up to 180 days- BPLR
The scheme would cover the spinning and minus 2.50%
tiny/household sectors of the coir industry with an
outlay of Rs.2.00 lakhs for the spinning sector and c. Post shipment rupee export credit –
Rs.5.00 lakhs for tiny/household sector. Overdue bills upto 180 days from the date of
advance - BPLR minus 2.50%
40% outlay will be met by Government
grant, 55% outlay by term loan from Bank and 5% 5. The existing guideline to quote not more than
will be promoter’s margin. BPLR for credit limits (of all Working Capital and
Term Loans) to a single borrower enjoying a
The coir Board shall select the
consolidated / Total credit limits upto Rs.2.00 lakh
beneficiaries under the Scheme and shall prepare a
should continue to be complied. This ceiling of
project report.
“not more than BPLR” is NOT applicable for
The candidates selected by the Coir Board consumer and personal loans.
will be referred to the Bank and term loan will be
sanctioned by the Bank based on its norms. 6. All advances above Rs.2.00 lakh and consumer
/ personal loans irrespective of size are to be
Term Loans sanctioned under the scheme priced with the applicable full spread except
shall be covered under CGTMSE scheme. where finer pricing is part of the scheme or
The grant released by Coir Board shall be sanctioned/approved by the competent Authority.
kept in an exclusive reserve fund account with the
7. The existing Fixed Rate advances will continue
Bank and shall release the term loan to the
at the contracted rate till the contracted period or
beneficiary, after collecting his margin.
reset date whichever is earlier.
The grant amount shall be credited to the
8. Under Fixed Rate wherever re-set clause is
loan account of the beneficiary 2 years after the
stipulated as per terms of sanction the repricing
disbursement of the term loan by the Bank.
may be reviewed sufficiently in advance and taken
(ADV.160/2008-09 dated 03.1.2009) up with sanctioning Authority.
Revision in Benchmark Prime Lending Rate 9. Fixed Rates for new advances will be
1. Bank’s Board has approved the reduction of determined based on the revised BPLR, prevailing
Benchmark Prime Lending Rate by 75 basis on the date of DISBURSEMENT unless the
points (bps) from 13.25% to 12.50% per annum in Sanction Ticket stipulates that the ROI prevailing
the light of the steps taken by RBI. on date of sanction is applicable.

2. This revision will be EFFECTIVE FROM 10. For all general advances other than Structured
17.01.2009 for all existing and new advances Products the delegation to price at Fixed Rate
linked to BPLR under Floating Rate method continues to be at the level of Executive Director
including Export Credit/Gold Card Scheme, and above upto their credit sanctioning powers.
Advances to THIRD PARTIES against our
4 4
 JAN-MAR 2009
11. TENOR PREMIUM (TP): Tenor Premium Lending Institution(s) to a single eligible borrower
(TP) of 0.50% should be added to all Term Loans in Micro and Small Enterprises sector for credit
facility not exceeding Rs. 100 lakhs (extended by
with total contracted maturity of 36 MONTHS
Scheduled Commercial Banks and Select
AND ABOVE inclusive of holiday / moratorium Financial Institutions) by way of Term Loan
period, if any. and/or working capital facilities, without any
collateral security and/or third party guarantee.
12. SPREAD: The maximum spread continues to
be 4.0% (above the BPLR) for general advances 3. Extent of guarantee:
and 2.00 % (above the BPLR) for Agri. advances The Trust shall provide guarantee as
above Rs.3 lakhs /SSI/SME (priority advances) as under:
hitherto. The penal interest rate continues to be the
Category Maximum Extent of Guarantee where Credit
same as per the extant guidelines. For various Facility is
products, the existing product specific spread will Upto Rs. 5 Above Rs. Above Rs. 50
lakhs 5 lakhs and lakhs and upto
continue. upto Rs. 50 Rs. 100 lakhs
(ADV.163/2008-09 dated 09.01.2009) lakhs
Micro 85% of the 75% of the Rs. 37.50 lakhs
Enterprises amount in amount in plus 50% of the
Verification of Jewel Loan packets default default amount in default
With regard to the procedure related to subject to a subject to a above Rs. 50
maximum maximum lakhs subject to
handling of jewels pledged at the branches, of Rs.4.25 of Rs. overall ceiling of
specific reference is invited to “Rural banking lakhs 37.50 lakhs Rs. 62.50 lakhs
Women 80% of the amount in Rs. 40 lakhs plus
Manual -2008 – Chapter - 4-para 6.13.6 and
entrepreneurs default subject to a 50% of the
6.13.7. /Units located maximum of Rs. 40 lakhs amount in default
in North above Rs. 50
In addition to the above guidelines, Eastern lakhs subject to
Branch Managers should also tally the number of Region overall ceiling of
(including Rs. 65 lakhs
packets in the safe with the Jewel loan accounts
Sikkim) (other
(from Loan Balance report file– CBS) so as to than credit
ensure that the number of physical jewel packets facility upto
Rs.5 lakhs to
tallies with the control register as well as with the Micro
jewel loan accounts Balance report. Enterprises)
All other 75% of the amount in Rs. 37.50 lakhs
The Branch Managers should ensure that categories of default subject to a plus 50% of the
Jewel loan verification exercise is strictly carried Borrowers maximum of Rs. 37.50 amount in default
lakhs above Rs. 50
out periodically as per the guidelines and lakhs subject to
compliance is submitted to concerned circle office overall ceiling of
in time. Rs. 62.50 lakhs
All proposals for sanction of guarantee
(ADV.169/2008-09 dated 19.01.2009) approvals for credit facilities above Rs. 50 lakhs
Modifications in Credit Guarantee Scheme (CGS) of and upto Rs. 100 lakhs shall have to be rated
Credit Guarantee Fund Trust for Micro and Small internally by the Member Lending Institute (MLI)
Enterprises (CGTMSE) and should have minimum entry level rating.
Proposals approved by MLIs on or after
In terms of Economic Stimuli Packages December 8, 2008 shall be eligible for the
announced by Government of India, following coverage upto Rs. 100 lakhs.
changes have been made in the Scheme, by
CGTMSE: All other terms and conditions under the
scheme remain unchanged.
1. “Guarantee Cover” means maximum cover
available per eligible borrower of the amount in (ADV.170/2008-09 dated 20.01.2009)
default in respect of the credit facility extended by
the lending institution. Collateral Free Loans - Micro and Small Enterprises

2. Credit facility eligible under the scheme: The Field level functionaries should extend
Trust shall cover credit facilities (Fund based credit facilities upto Rs. 5.00 lakh to new MSEs
and/or Non fund based) extended by Member without any collateral security and such accounts

5
 Recollect
should be covered under Credit Guarantee ¾ However in case KVIC’s assessment of
Scheme of CGTMSE, as per guidelines of RBI Working Capital exceeds the Banks assessment
and MSE Code. by more than 10% - the quantum of Working
(ADV.173/2008-09 dated 24.01.2009)
Capital arrived at by mutual dialogue between
the bank, KVIC and borrower.
Service Charges on Loans and Advances –
¾ In case of sharp differences between peak
Revision of Charges for 1. Priority Sector advances
level and lean season credit requirements,
- Agri Term Loans, SHGs, J.L (Agri) 2. Non Priority –
additional credit limits may be sanctioned by
Jewel Loan (NP).
the Banks for peak season. KVIC will indicate
Bank reviewed the processing charges on such peak level credit requirements also in the
SHG loans and Jewel Loans (Non Priority), as ISEC.
mentioned in the annexure I to the circular. The
(ADV.178/2008-09 dated 03.02.2009)
revised charges come into effect immediately.
The applicable service charges for the Restructuring of SME accounts –Powers for lending
loan products of Agriculture under Priority Sector at SUB BPLR rates.
have also been given in annexure II to the circular Accounts for which the card rate itself is
for ready reference. Sub BPLR, under Micro and Small Enterprises,
For the charges to be recovered manually, the same need not be referred to Head Office by
branches have to recover the charges manually Circle Heads as communicated.
without fail. Accounts for which the card rate itself is
(ADV.174/2008-09 dated 29.01.2009) Sub BPLR & in case further reduction in rate of
interest is proposed, such proposals need to be
Interest Subsidy Eligibility Certificate (ISEC) referred to Head Office.
Scheme of KVIC
For proposals under restructuring, if Sub
To assist existing Khadi Institutions as BPLR rates are recommended which otherwise
well as the newly created ones and to mobilise falls under BM/CH powers, then proposal for
their requirement of funds through banks, finer rate of interest alone may be sent to HO after
Government of India introduced Interest Subsidy sanction of the restructuring package by the
Eligibility Certificate (ISEC) scheme in 1977, respective authorities.
wherein the institutions have to bear only 4% of (ADV-194 /2008-09 dated 19.02.2009)
the interest amount with provision for the Banks
to claim the remaining part of interest directly Loan against pledge of Gold Coins
from KVIC. Institutions registered with the With effect from 01.03.2009, Branches
KVIC/State Khadi and Village Industries Boards are permitted to lend against pledge of gold coins
(KVIBs) can avail of financing under the ISEC also subject to the terms given below:
scheme. “Gold coin” means all the gold coins of
The gist of the modalities for calculation 24 carat fineness with 99.999 % purity sold by our
of Bank credit requirements under the ISEC Bank and other banks where the Logo of the
bank/name of the Bank is embossed. In case when
scheme is as under:
some other symbols like God/Goddess etc are
¾ Interest Subsidy Eligibility Certificate embossed, branches should ensure that coins are
(ISEC) is issued by KVIC. Along with ISEC, sold by bank before accepting for pledge. Coins
KVIC also furnishes the worksheets based on marketed by other agencies are not eligible for
which the assessment of Working Capital has loan purposes.
been made by them. Loan against pledge of gold coins can be
sanctioned for all approved and non –speculative
¾ In case KVIC’s assessment exceeds upto purposes as presently specified for Jewel Loan.
10% of that made by the bank – as per banks
extant guidelines, the assessment of KVIC is All the coins produced for the loan
purposes should be appraised properly as done for
accepted as such.
other gold ornaments and articles.
6 6
 JAN-MAR 2009
Since gold coins are of 24 carat fineness Rating Confirmation of RAM
and 99.999% purity, the rate per gram applicable rating
3. Entry Barrier 5.4 / 13-14 SLPs entry barrier
for “Hall marked jewellery” will be applicable for also defined
loan against gold coins. Rate of interest, margin, 4. Method of 5.6.2 / 14 MPBF method of
appraising fees, service charges, repayment etc. assessment lending introduced
are as prescribed for the particular Jewel Loan 5. Restriction for 5.8 / 15 Without recourse only
type. Opening LC to be considered
6. Selective 5.9 / 15 Sectors / Authority to
Branch should take an undertaking in the Financing consider defined
Jewel Loan application form that he/she has no 7. Forward Cover 9.1.4 / 26 Powers for waiver
defined
objection to the gold coins being taken out of the
8. Insurance 9.1.7 / 26 Powers for waiver
sealed packets for the purpose of appraisal and is Cover defined
fully aware that the coins cannot be repacked. 9. Agricultural 9.2.2 (c) / 27 Powers to consider
Land as obtention stated
(ADV.196/08-09 dated 20.02.09) Collateral
10. Monitoring 9.2.3 (b) / 28 Agricultural property
Loan Policy 2009-10 Value of valuation
Securities
Board approved Loan Policy for 2009-10 11. Monitoring 10 (e) / 33- Stock & Book debt
guides field level functionaries for the growth of 34 Audit
the business in order to achieve the set targets.
The policy deals with clear guidelines on (ADV. 211 / 2008 – 09 dated 30.03.2009)
Strategies, thrust areas for lending, standards for CRA
presentation of credit proposals, financial
Online Payment of Electricity Bills of Tamilnadu
benchmarks etc., Policy for Micro Small Medium Electricity Board by Registered Net Banking
Enterprises (MSMEs) is separately given in Customers having Transaction Password
Annexure I to the circular and shall form part of
the Bank’s Loan Policy for the year 2009-10. Payment of electricity bills through net
banking was launched on 04-01-2009. Customers
The policy has a direct linkage with of Indian Bank, who have registered for net
Credit Risk Management Policy for 2009-10. banking and have transactions password enabled
Field level functionaries are to use both Credit can pay their electricity bills.
Risk Management Policy for 2009-10 and Loan Procedure for registration, payment of
Policy for 2009-10 for their day to day operations. bills through net banking, viewing the details of
A copy of the policy with annexure I to paid bills, adding new connections, updating user
profiles, changing passwords etc., are furnished in
VI and a summary of the changes from the Loan
the annexures to this circular.
Policy 2008-09 read with Mid Term Loan Policy
2008 – 09 is enclosed to the circular. Customers of our bank can pay the bills of
any connection i.e., connections in the name of
(ADV.210/2008-09 dated 28.03.2009) landlords can be paid by tenants. Also a customer
Credit Risk Management Policy 2009 – 10 can add any number of connections and pay them.
Provision is available on the TNEB
Board approved Credit Risk Management
website for generation and printing of e-Receipt
Policy (CRMP) for 2009-10 is enclosed as for the bills paid.
annexure to this circular. The policy document
includes identification, measurement, monitoring This facility is available for consumers of Chennai
and control of the credit risk exposures. City presently. This is likely to be extended to
other parts of the state by year-end.
The major areas of concern for the Circle
(CRA.57/2008-09 dated 05-01-2009)
/ Branch offices which have undergone certain
changes in the current policy are given below: Distribution Network and Marketing of Services of
S Area Para / Page Remarks Indbank Merchant Banking Services Limited
No reference
1. Credit Steering 4.5.1(b) / 9 Circle Level Steering
Our Subsidiary, Indbank Merchant
Committee Committee proposed Banking Services Ltd., (Indbank) inaugurated
2. Important 5.2.1 / 9-11 Validity / Frequency / their new branches and Indbank online stock
Guidelines on Assignment / trading points at Tiruchirapalli and Pune, last

7
 Recollect
week. With this, Indbank Merchant Banking Helpdesk. All our branches should use this facility
Services has increased its network to 13 branches and effectively utilise Speed Clearing for early
and 16 trading terminals. The list along with the realisation of outstation cheques to our customers.
addresses of the branches and terminals are If it is a CBS branch, the cheque should
enclosed as Annexure I and Annexure II be booked in local clearing and sent to service
respectively to the circular. branch/main branch. Details of such cheques (A/c
Indbank, has launched an exclusive No., Customer Name, Cheque No. date,
product – Indbankonline – the Online trading Bank/branch, amount, etc) should be noted
portal, which enables the clients to trade on stocks separately in a register, date-wise. If the drawee
branch is not a CBS branch, the cheque should be
online. For this purpose, Indbank has entered into
taken in OBC in Exim bills applications.
an agreement with the bank for providing online
trading facility to the clients of Indian bank and Service Branch Centres
share the income earned through online trading At all service branch centres, booking of
with the Bank in the ratio of 40:60. As this outward clearing cheques (other than high value
product was launched exclusively for the clinets clearing– wherever in force) is done through the
of Indian Bank, the fee-based income will be in-house software provided by HO: TMD. In the
increased, only if the untapped segment is software, the first 3 digits representing the city
effectively utilised. All our branches should code in the MICR sort code field is hard coded
actively canvass and open at least 1 online trading and displays the respective centre’s first 3 digits
account per day per branch, which transform to of postal pincode by default. As of now, this field
more than 1500 accounts per day to the cannot be edited. Until modification of the
subsidiary. software, all branches should note down details of
cheques presented in Speed Clearing (A/c No.,
For any details / clarifications please Customer Name, Cheque No. date, Bank/branch,
contact Shri P N Patel, President, Indbank amount, etc) separately in a register, date-wise.
Merchant Banking Services Ltd., The Phone Nos. Charges to be levied for cheques presented and
are: 24313094 to 097 Fax:044 24313093. MailId: cleared under Speed Clearing
registered@indbankonline.com
Reserve Bank of India has directed that
(CRA.61/2008-09 dated 05.02.2009) effective from 17.11.2008, under Speed Clearing,
Introduction of Speed Clearing by RBI at all MICR 1. For cheques of value upto and inclusive of
Cheque Processing Centres Rs.1 lakh, no charges should be levied
Concept of Speed Clearing 2. For cheques of value above Rs. 1 lakh, a
maximum of Rs.150 per instrument can
Speed Clearing is a facility by which be levied as charges (exclusive of Service
cheques drawn on any outstation CBS branch of a Tax)
Bank (which is a member of the local MICR
Branches should manually recover the
clearing house), can be presented by other banks
charges as above, without fail, till it is system
through local clearing. Utilising the access
enabled.
available to the accounts through CBS network,
the designated branch of the other Bank (normally B. Inward Speed Clearing
service branch or the main branch conducting In our Bank, all service branches and the
MICR clearing in that centre) has to process such main branches acting as clearing house branch at
cheques, treating them as local cheques. MICR Cheque Processing Centres are the
designated branches to process the inward
A. Outward Speed Clearing-At the Booking
cheques received under Speed Clearing from the
Branch Clearing House.
In order to present an outstation cheque of The cheques received under Speed
the other bank under Speed Clearing, it is a pre- Clearing should be processed as a normal cheques
condition that the drawee branch should be CBS received in local clearing. The officer(s)
enabled. To identify whether it is a CBS branch or designated for passing the cheques should adhere
not, Project Office has provided facility in the to all the guidelines and precautions prescribed in
8 8
 JAN-MAR 2009
the Deposits Manual for payment of cheques. For work and acknowledgement to be obtained from
the purpose of accounting and reconciliation, staff concerned.
Service Branches/Main Branches should open a
(CRA.63/2008-09 dated 19.02.2009)
deposit parking a/c in the name of “Speed Clg –
Inward” under product code 2711-1721 in Current Reduction of Premium of “Arogya Raksha
account. Please refer our circular GENL.36/06-07 “Mediclaim Policy due to reduction in Service Tax
dated 23.06.2006 in this regard. Rates
A transfer batch should be created for the The Govt. of India has reduced Service
total number of cheques received, Cheques should Tax by 2% from the then prevailing 12%. This
be debited through “cheque mode” only (i.e., works out to 10.30% (Service Tax @10% with
using txn No.51082: CAS: Debit Through Education Cess thereon at the applicable 3% rate)
Cheque”). The payee’s name should be entered in
as against the 12.36% charged earlier.
the Statement Narrative field without fail. It is the
responsibility of the designated officer to ensure Consequently, there is a reduction of
that payee’s name is filled in properly by the Total Premium payable across all slabs. The
maker. revised table is given in Annexure 1 to this
With regard to signature verification, Circular.
normally, the decision is taken by respective (CRA.67/2008-09 dated 27.02.2009)
officers at service branch dealing with centralised
inward clearing. For returning a cheque due to Provision of Free Home Loan Insurance to eligible
technical reasons (like signature differs, not borrowers under “Special Home Loan Scheme”
signed, post dated, stale, materially altered, The Bank has taken a Master Policy from
property not marked, payee’s name missing, mode LIC of India to cover the eligible borrowers of the
of operation/ mandate is irregular, etc), generally, above Scheme with effect from 01.03.2009.
there is no need for the officers to refer to the Policy is effective for the period upto 28th Feb.,
branches for taking a decision. However, should 2010 and is renewable every year thereafter.
circumstances warrant, officers of service branch
may use their discretion to refer to branches This cover is applicable only for
concerned. borrowers under the Special Home Loan Scheme
with a minimum limit of Rs.10000/- & a
In respect of cheques processed through
maximum of Rs.20.00 lakhs.
centralised inward clearing at service branch,
Salient Features of the scheme and the
i. the officer who had authorised the data entry
Operational Procedure & Guidelines are given in
and verified the signature in the in-house
the circular.
software, should affix his/her signature with name
and SS No on the instrument; he/she cancel the (CRA.68/2008-09 dated 28.02.09)
drawer’s signature(s) also.
Revision of Service tax rate from 12% to 10% with
ii. in respect of cheques where the amount effect from 25.02.2009.
exceeds the powers of officer, who had authorised
the data entry and verified the signature in the Government of India, vide their
software, the cheques have to be physically Notification No.8/2009 – Service tax dated
countersigned by another officer having the 24.02.2009 has reduced the rate of service tax
requisite passing power or by ABM/BM. from 12% (effective rate 12.36% including Cess)
to 10% (effective rate 10.30% including Cess)
iii. the first passing officer and the with effect from 25.02.2009 on all taxable
countersigning officer/ABM/BM should verify the services subject to the provisions of Service tax.
apparent tenor of the cheque for its technical
details like date, amount in words and figures, Branches / Offices are therefore advised
signatures, Mode of Operation/Mandate, payee’s to pay service tax at 10.30% to the service
name, material alteration if any, etc. providers in respect of services availed with effect
from 25.02.2009 on input services such as
The allotment of various works at service Courier, Telephone, Rent to landlords, Contracts
branch (including centralised inward clearing) is including Annual Maintenance (AMC) &
desirable in writing, specifying their nature of Advertising contracts, Professional fees paid to

9
 Recollect
Auditors & Architects, MICR Charges levied by 2. Reimbursement of Conveyance Expenses on
other Banks, etc. Production of Fuel Bills:
(CRA.69/2008-09 dated 05 03 2009) In terms of the scheme, officers owning a
Two/Four wheeler will be reimbursed the cost of
HRM
fuel (petrol/diesel) subject to the following
Categorisation of Branches as on 31.03.2008 conditions:
Branches have been categorised as on ¾ The registration of the vehicle should be in the
31.03.2008 based on the following business name of the officer and the proof of the same
criteria, approved by the Board at its meeting should be furnished to the Bank.
dated 20.04.2006.
¾ The reimbursement will be made on
CATEGORY OF BUSINESS CRITERIA INCUMBEN production of bills, evidencing purchase of
BRANCH (Average aggregate fuel during the concerned month. The bill
CY Scale
deposits and advances
during the last two years) should bear the vehicle number.
a) Small Below Rs.5 Crore I ¾ Officers who are on leave during the whole
Rs.5 Crore and above, but II
month will not be eligible for the same.
b) Medium
below Rs.25 Crore
Rs.25 Crore and above, but ¾ While producing fuel bills, officers should
c) Large III
below Rs.75 crore submit a self declaration quoting the opening
d) Very Large
Rs.75 Crore and above, but IV and closing meter readings and the total
below Rs.250 Crore kilometers run during the month.
e) Exceptionally V
Rs.250 Crore and above
Large Cost of motor oil is not reimbursable.
The classification of Specialised branches Subject to the terms and conditions cited above
is furnished in Annexure I to this circular. The the reimbursement of Conveyance Expenses on
names of the branches falling under different Production of Fuel Bills stands revised as given in
Categories/ Scales are furnished in the Annexure the circular.
II to this Circular.
(HRM.122/2008-09 dated 21.02.2009)
(HRM.107/2008-09 dated 21.01.2009)
Conveyance Allowance to the Blind and
Reimbursement of Conveyance expenses to orthopaedically handicapped employees.
Officers
The Government of India has revised the
The Bank has revised the reimbursement conveyance allowance payable to the Blind and
of conveyance expenses to officers with effect orthopaedically handicapped employees from Rs.
from 01.03.2009 as detailed below: 200/- to 400/- per month on the existing terms and
1. Reimbursement of Conveyance Expenses on a conditions.
Declaration Basis: In view of the cited guidelines, the
Officers are eligible to claim eligible Blind and orthopaedically handicapped
reimbursement of conveyance expenses incurred Employees are allowed to draw conveyance
by them upto a maximum of Rs.500/- per month allowance at 5% of Basic pay subject to a
subject to the following conditions: maximum of Rs.400/-p.m with effect from
01.03.2009. Other terms and conditions as stated
¾ The reimbursement of expenses incurred by in our earlier circular No.HRM.101/2008-2009
them can be claimed on monthly consolidated dated 05.01.2009 remain unaltered.
basis for the journeys while on duty.
(HRM.124/2008-09 dated 28.02.2009)
¾ The claim should be supported by a
declaration given by the officer at the end of Modification in Nomination of Disciplinary
the month. Authority/Appellate Authority/Reviewing Authority
for Officers and Disciplinary Authority/Appellate
¾ Officers who are on leave for one full Authority for Award Staff
calendar month will not be eligible to claim
reimbursement of conveyance expenses, for The Bank has revised
that particular month. nomination/reallocation of jurisdiction of

1010
 JAN-MAR 2009
Disciplinary Authority / Appellate Authority / and contribute to Provident Fund are eligible for
Reviewing Authority in respect of Award Staff the advance.
and Officers from Scale I to V. The quantum of advance and the terms
The features of the revision are that : and conditions governing the facility of Festival
Advance are also set out in the circular.
¾ The disciplinary jurisdiction of all authorities
is now defined on the basis of the place where (HRM.138/2008-09 dated 24.03.2009)
cause of action arose, instead of the present FX
parameter of the place of working of the
employee. Export Credit- Notification/ approval of sanctioned
limits to ECGC
¾ The appellate jurisdiction is centralized at
Head Office for both Award Staff and To protect our export credit portfolio, the
Officers need for proper and timely reporting to ECGC is
emphasized and the branches:
¾ The Disciplinary Authority for Scale IV
1. To review their export credit portfolio and to
officers shall be in the level of Deputy
ensure that the relevant limits/enhancement of
General Manager, instead of the present
limits/ reduction of limit of all accounts are
arrangement where the General Manager is notified/approved by Export Credit Guarantee
the Disciplinary Authority for Scale IV Corporation of India Ltd.
officers.
2. To ensure that advance premium is paid
¾ These modifications shall come into effect regularly in all the accounts, which are
from 01.04.2009. covered under ECGC, as per our above
The table showing the modification circular.
details is given as annexure to the circular. Branches have to comply with the above
(HRM.137/2008-09dated 18.03.2009) along with the guidelines issued in circular No.
FX.20/2008-09 dated 17.09.2008, so that the
Festival Advance to Staff Members for the Financial claims, if any, may be settled by ECGC promptly.
Year 2009-2010. (FX.35/2008-09 dated 03.02.2009)
Branches/Offices shall permit Interest GENERAL
Free Festival Advance to staff members for the
financial year beginning 01.04.2009 to 31.03.2010 Authorized usage of software assets
for the following festivals. No unlicensed or unauthorized user
Sl.No. Name of the Festival Date of the Festival developed software pirated software should be
01. Baisaki 14.04.2009 used in bank’s computer.
02. Tamil New Year 14.04.2009
Software installed on system should be
03. Sinhalese New Year 14.04.2009 used for bank purposes only and should not be
04. Bohag Bihu 14.04.2009 copied other than for backup purposes.
05. Ganesh Chaturthi 23.08.2009
Personal and private CD/DVD, USB
06. Onam 02.09.2009 Devices etc should not be allowed inside the bank
07. Hari Raya Pusa 20.09.2009 premises.
08. Ramzan 21.09.2009 All system users at branches/offices have
09. Durga Pooja 27.09.2009 to use only the authorized and licensed software
10. Deepawali 17.10.2009 and to remove immediately if any such unlicensed
11. Christmas 25.12.2009 software like MS Office (Word, Excel, Power
12. Pongal 14.01.2010 Point, etc) is installed and running in the systems.
13. Chinese New Year 14.02.2010 (GENL:53/2008-09 dated 11.02.2009)
14. Milad-Un-Nabi 27.02.2010
Reduction of Service Tax on Service charges
15. Holi 28.02.2010
16. Ugadi 16.03.2010
Government of India has revised the
service tax to 10% and the effective rate works out
Only permanent confirmed employees to 10.3% including education and higher
and part time employees who are in scale wages education cess.

11
 Recollect
In order to give effect the above 2. Issue of Rs.1000/- denomination banknotes
downward revision of service tax rate, the existing without inset letter in both numbering panels
service charges needs to be reduced across the in Mahatma Gandhi Series – 2005 bearing the
Board by 0.98%. However, as the impact of such signature of Dr. D. Subbarao, Governor
revision will result in fraction of a rupee for the
3. Issue of Rs.500/- denomination banknotes
existing service charges are less than Rs.100/-, it
has been decided to apply the reduction only to with”R” inset Letter in both numbering panels
the following domestic operations: in Mahatma Gandhi Series – 2005 bearing the
signature of Dr. D. Subbarao, Governor.
Only 27 basic banking service charges
such as remittances / collections etc., specified (ADMIN. 99/ 2008-09 dated 18.03.2009)
by RBI and where the charges are beyond CBS Circulars
Rs.100/- per transaction.
ADV 29.01.09 Interest Calculation Under C.B.S.
The list of revised service charges 175 Environment - Loans & Advances
effective from 1.04.2009 is enclosed as Annexure 180 06.02.09 Obtention of stock statements
to the circular. 190 12.02.09 Loan against NSC, KVP, LIC Policy, RBI
Bonds – New Product Codes in CBS
(GENL.61 /2008-09 dated 24.03.2009) 203 11.03.09 Flagging Of Fresh NPAs
204 12.03.09 C B S Environment - Know Loans
ADMN Portfolio Better
212 30.03.09 Introduction of Template for reporting of
Compliance Policy details of Structured Loan Applications
processed at Retail Banking Segments
Reviewed Bank’s Compliance Policy for (RBSs).
the year 2009-10 is enclosed to the circular for 213 31.03.09 Introduction of web based status view
information and necessary action at all Branches. facility to applicants of credit limits-
procedural guidelines
Officers who have been nominated as CRA 19.02.09 Introduction of Speed Clearing by RBI at
compliance officers at Branches, Circle Offices & 63 all MICR Cheque Processing Centres
Head Office Departments are advised to carry out 64 24.02.09 CMS Plus - Marking Realisations /
their functions as detailed in the Compliance Returns through CMS
Policy. In brief, the compliance officers should 71 17.03.09 Reconcilable BGL Heads to get
outstanding details
ensure the following: GENL 06.01.09 Utilisation of Web Camera provided to
¾ all Regulatory, Statutory and internal 51 Branches for obtention of customer
photographs
guidelines governing the various functions as 53 11.02.09 Authorized usage of software assets
spelt out in the various Manuals, Circulars and 55 11.02.09 ATM – ' HOW AND WHY' of trouble
Letters should be complied with. free operations.
56 16.02.09 Introduction of Core to Core System for
¾ non-compliances/breaches, if any, should be Inter Branch transactions in lieu of
reported to the higher authorities immediately. IBGA.
60 12.03.09 ATM Cards -One Time Authorisation for
The monthly compliance certificates and Operations
quarterly on-line compliance reports as prescribed MD/ED 21.03.09 Statement Generation through MIS
by HO: Compliance Department should be 16 Website
submitted within the stipulated time.
Last numbers of circulars issued as on 31.03.2009
(Admin. 093 /2008-09 dated 02.03.2009)
MD/
Issue of Rs.500 denomination banknotes in ADMN ADV CRA DEP FX GEN HRM
ED
Mahatma Gandhi series – 2005 bearing the
signature of Dr. D Subba Rao, Governor 101 213 72 76 39 63 141 17

Reserve Bank of India will shortly put

into circulation, the following denomination of
Though due care has been taken in the preparation of
Bank notes : Recollect, the version given in the circular is final.
1. Issue of Rs.500/- denomination banknotes Compiled by HO: O&M Division
without inset letter in both numbering panels
in Mahatma Gandhi Series – 2005 bearing the Printed & circulated by HO: Circular Issue Cell
signature of Dr. D. Subbarao, Governor.

1212
 a Volume 22 Issue 4

For Private Circulation Only

Jan – March 2010 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
Cir
Date Subject Pg
CONTENTS OF THIS ISSUE No
66 26.02.10 NEFT System - Refinement of 8
Cir Process-flow
Date Subject Pg
No FX 28.01.10 Request from branches to handle 8
DEP 01.03.10 Quoting of PAN in the Account 2 35 China Gold Unit Bond.
48 Opening Forms
37 31.01.10 Introduction of new product - offer 8
50 19.03.10 Procedure for dealing with 2 on opening of “Student Account“ by
dishonoured cheques our US Dollar correspondent bank
51 30.03.10 Payment of Interest on Savings 2 GEN 09.01.10 ATM-Customer care and complaint 9
Bank A/c on Daily Product Basis 48
ADV 06.01.10 Certificates issued by Chartered 2
143 49 09.01.10 Service Charges for Outstation 10
Accountants - IBA Communication
Cheque Collection
dt 22.12.09
50 19.01.10 Electronic Voucher Verification 10
145 07.01.10 Bank’s MOU with Hyundai Motors 2
India Limited (HMIL) 51 23.01.10 Enhancement of Limit for Funds 10
Transfer through Mobile Banking
146 12.01.10 Comprehensive guidelines on 3
Payment of Advocate fee and 54 29.01.10 Acceptance of ‘Postal Identity 11
revision of Delegation of Powers Card’ as ‘Proof of Address’ for
opening of accounts
150 29.01.10 Revision in Delegation of Credit 3
and Credit Related Administrative 55 03.02.10 PMLA Rules, 2009 - Obligation of 11
Powers Banks / Financial Institutions
152 04.02.10 Revised Guidelines for 4 73 15.03.10 Updation of Customer Records - 11
"Entrepreneurship Development RBI Observation
Programme" (EDP) under 75 31.03.10 Adherence of KYC Norms - 11
"PMEGP" Scheme opening of Accounts of
154 18.02.10 Modifications in "IB-STAR Rice 4 Properietary Concerns
ADM 30.01.10 Tax Deducted at Source (TDS) – 12
Mill" Scheme 61
158 18.02.10 Introduction of DPN for advances 4 Quoting of PAN made mandatory –
with both fixed and floating rates of Deduction of TDS at a higher rate
interest of 20%, if the PAN is not provided
by the customers from 01.04.2010.
159 20.02.10 Launching of " IB- BEML- EQUIP - 4
FINANCE" (SLPs) 69 20.03.10 Discontinuance Of Printing 12
Circulars From 1st April 2010
160 23.02.10 Capital Investment Subsidy 5
Scheme (CISS) for Rural Godowns 71 26.03.10 Document for credit of Tax 13
– Farmers Category and Multi- Deducted at Source (TDS) in our
storey Godowns Clarifications PAN with National Security
Depository Ltd (NSDL)
163 10.03.10 Launching of VISA Business Credit 6 HRM
Card for SME and Corporate 05.02.10 New Holiday Homes At Tirumala 13
152 and Puri
Customers
164 11.03.10 Interest Rates on Export Credit in 6 175 15.02.10 Modification In Nomination Of 13
Foreign Currency Disciplinary Authority / Appellate
CRA Authority / Reviewing Authority For
09.02.10 Mandatory electronic payment of 7
61 Officers
tax by certain categories of
taxpayers w.e.f from 01.04.2008 181 03.03.10 Canteen Subsidy To Staff 14
Members
62 09.02.10 Launching of new Travel Group 7
Insurance Product – “IB YATRA 187 08.03.10 Improvements In Staff Welfare 14
SURAKSHA” Policy. Schemes
63 12.02.10 Obtention / Updation of Debit 7 204 31.03.10 Categorisation of branches as on 14
Mandates from our Customers for 31.03.2010
Electronic Clearing Services and MD/ 01.03.10 Launching of VISA Business Credit 15
Other purposes ED Card for SME and Corporate
14 Customers
 Recollect
DEPOSITS payment of interest on Savings Bank account is
revised as under with effect from 01.04.2010.
Quoting of PAN in the Account Opening Forms
EXISTING REVISED
As quoting of Permanent Account Number
(PAN) is made mandatory from 01.04.2010 on all Interest is calculated as on every Interest is calculated on a daily
transactions attracting TDS and also in the 31st January and 31st July and product basis for the period
declaration in “Form 15G / Form 15H” submitted by credited on any day before 10 the from 1st February to 31st July
the customers, Branch should ensure that the 10 February and 10th August and credited on any day before
digit column in all the Account Opening Forms respectively. The six months 10th August and for the period
meant for PAN is filled in by the customers. products eligible for interest from 1st August to 31st
should be added up and the total January, on any day before
Further, in all the Account Opening forms,
products should be arrived at. 10th February. The daily
after due verification, the following is to be added in
Interest is calculated on monthly products for the six months
the column for Bank’s use
products on the minimum period (Ending 31st July and
“PAN validated and entered “ balance in the account between 31st January) should be added
10th and the last day of the up and the total products
and the officer has to sign below this.
month. The interest so arrived should be arrived at. Interest is
HO: Stationery Dept. is making should be rounded off to the calculated on the daily product
arrangements for printing the PAN column on all the nearest rupee. An account is not for the six months period. The
opening forms and until such forms are made entitled to interest, unless it earns interest so arrived should be
available, Branches are advised to get the PAN a minimum of Re.1 as interest rounded off to the nearest
entered on the presently available opening forms. per half year. rupee. An account is not
entitled to interest, unless it
DEP.48/2009-10 dt.01.03.2010 earns a minimum of Re.1 as
interest per half year.
Procedure for dealing with dishonoured cheques
The procedure in dealing with frequently DEP.51/2009-10 dt.30.03.2010
dishonoured cheques including those of the value of ADVANCES
Rs. One crore and above was explained, in para 25
in Chapter 4 of Manual of Instructions – Deposits Certificates Issued By Chartered Accountants - IBA
2006. RBI vide their circ. No.DBOD.No.Leg. Communication No C&I/Icai/2009-10/2410 Dt 22/12/09
BC.59/09.07.005/2009-10, dt.09.11.2009 advised all Branches are obtaining Certificates from the
the Banks to have a Board approved policy for Chartered Accountants in the normal course of
dealing with frequent dishonour of cheques of value business. The Certificates are to be issued only by
of less than Rs.1 crore also. the Chartered Accountants who are members of the
RBI further advised that the policy should Institute of Chartered Accountants of India (ICAI).
deal with frequent dishonour of ECS mandates With a view to strengthening the process,
too.Considering the fact that the existing procedure the Institute has hosted a link
in para 25 referred to above, takes care of this advice http://220.227.161.82/locm.asp on ICAI Website.
of RBI, the Board of Directors of our Bank By logging on to this website, it can be ensured that
reiterated its meticulous implementation. the certificate being received by the Branch has been
The Board of Directors adopted the same issued by a member of the Institute holding full time
procedure in respect of dishonour of ECS mandates Certificate of Practice (i.e. a member authorised to
also. issue a Certificate).

DEP. 50/2009-10 dt.19.03.2010 ADV.143/2009-10 dt.06.01.2010

Payment of Interest on Savings Bank Account on Bank’s MOU with Hyundai Motors India Limited (HMIL)
Daily Product Basis Our Bank has entered into a Memorandum
RBI vide their notification has informed that of Understanding (MOU) with M/s. Hyundai Motors
payment of interest on Savings Bank account may India Limited (HMIL) on January 4th 2010 and has
be made by Banks on a daily product basis with become a ‘Preferred Financier’ for financing all
effect from April 01, 2010. Accordingly the
2 2
 JAN-MARCH 2010
models of Hyundai Cars, which is expected to be cases to Advocates must henceforth be done purely
helpful in increasing the volume under Car Loans. based on their performance in recovery of money.
The Preferred Financier status provides ADV.146/09-10 dt.12.01.2010
ample scope for contacting the prospective Car Loan
borrowers right at the Point of Sales of Hyundai Revision in Delegation of Credit and Credit Related
Cars viz. at the Showroom concerned. Also, the Administrative Powers
purchasers of Hyundai Cars enjoy the benefit of The Delegated Power Booklet was last
simultaneously choosing our Bank as their Car Loan brought out in 10th August 2005 and subsequent
financiers. amendments / modifications have been intimated
For the sake of generating MIS on Hyundai from time to time. In the light of corporate objective
Cars financed by our Bank, a separate product code of consistent and qualitative credit growth and
in CBS (Product Code: 4002 0019) has been delegating powers to field levels based on the credit-
allotted for the Hyundai Car Loans. rating of borrowers, the review of the existing
Discretionary Power Structure is done. Board at the
Car Dealers play an active role in helping
meeting held on 23.01.2010 approved the revision in
the prospective buyers to identify their financiers.
delegated powers for sanction of credit facilities.
Officers-in-charge of Retail Banking Segments may
The revised powers will come into force with effect
therefore coordinate with HMIL Dealers operating
from 01.02.2010. The exercise of powers is subject
in their jurisdiction and strategize to popularize our
to the specific guidelines given herein.
Car Loans. Corporate Clients may be contacted,
i.e., Car Loans to employees of Corporates and Salient features of the Revised Delegation of
reputed institutions under tie-up arrangement for Powers include the following:
recovery. Speed of sanction is extremely critical for Powers based on credit-rating of
success in Car Loans. borrowers: No change in the existing guidelines for
Branches / RBS/ Circles should utilize this exercise of powers in Chart I. However, the Credit
opportunity for increasing our Car Loans Functionals upto the level of General Manager can
substantially and achieve the targets set. They are to exercise the varied percentage of powers as per
be careful enough to ensure that only quality loans credit rating of the borrowal accounts: Rating is
are financed and that there is no dilution in our applicable for Accounts with exposure of Rs.25 lakh
appraisal and adherence to systems and procedures. and above.
a) For high rated accounts with ‘AAA’&’AA’
ADV.145/2009-10 dt.07.01.2010 (obligor) all sanctioning authorities are
Comprehensive guidelines on Payment of Advocate delegated with full powers.
b) For ‘A‘& ’BBB’ rated accounts (obligor) all
fee and revision of Delegation of Powers - Reg.
sanctioning authorities are delegated with only
The detailed structure of the fee schedule 90% of powers.
and the revised delegation of powers are outlined in c) For ‘B’ &’BB’ rated accounts (obligor) all
the Annexure A to this circular. An abstract / quick sanctioning authorities are delegated with only
70% of powers.
reference of the fee and delegation of powers are d) For ‘C’ &’CC’ rated accounts (obligor) all
detailed in Annexure B to this circular. sanctioning authorities are delegated with
The field level functionaries are advised to only 50% of powers.
exercise the powers judiciously and appropriately so 1) More powers for Agricultural Sector: Branch
as to expedite the process of recovery of NPA Managers upto Scale-III have been vested with
blocked in suit filed accounts, as recovery in suit more powers for exercise of certain categories of
filed accounts is less due to lack of ownership and agricultural loans, as detailed in the relevant
inadequate follow up with the Advocates. Concrete chart.
steps to be taken to expand the panel of advocates
and let us have for every Civil Court, a minimum of 2) Review / Renewal of accounts: With effect from
two to three leading advocates of the area in our 01.04.2010 only the respective sanctioning
approved list, besides a battery of junior Advocates authorities shall be the competent authority to
exclusively to attend to filing of EPs. We should not renew/ review the accounts.
depend on any one Advocate and entrusting the 3) Credit Administrative Powers are modified
based on latest guidelines and requirements

3
 Recollect
4) Reporting of granting of excess: Exercise of period of EDP training is reduced from 2
powers delegated for granting excess shall be weeks (14 days) to 3 days for the projects
reported immediately on the same day and shall up to Rs 2.00 lakhs for Service activities
not in any event, await adjustment of excess under PMEGP.
granted for reporting the excess sanctioned. In
respect of accounts sanctioned by MC, the ADV.152/2009-10 dt.04.02.2010
reporting of excess allowed immediately and its
Modifications in "IB-STAR Rice Mill" Scheme
adjustment thereof shall be monitored and where
the excess granted is not so adjusted within the Rice mill advances (hitherto classified under
time frame, it shall be reported to MC SSI/ OPS) are now being classified under “Direct /
immediately thereafter. Indirect Agriculture” as the case may be as per the
revised guidelines of RBI, the captioned loan
The power booklet to be supplied shall be kept
product is permitted for transfer to HO: RBD for
under the custody of Credit Functional / Credit Desk
further handling in respect of policy and other
Official and the contents should not be parted with
related matters relating to this segment.
outsiders except Inspecting Officials without the
written approval from HO: Credit Division. In order to make our scheme more attractive
to cope up with the competition posed by other
ADV.150/2009-10 dt.29.01.2010
Banks in garnering the rice mill business certain
Modifications in “IB-STAR Rice Mill Scheme”
Revised Guidelines for "Entrepreneurship have been approved as detailed in the Annexure to
Development Programme" (EDP) under "PMEGP" this circular.
Scheme
ADV.154/2009-10 dt.11.02.2010
M/s. Khadi and Village Industries
Commission, Mumbai (vide their Addendum to Introduction of DPN for advances with both fixed and
Office order No: 2027 dated 24.12.09) has informed floating rates of interest
the revised guidelines for conducting the EDP
Training programme under “Prime Ministers’ On special occasions, like festival period
Employment Generation Programme” (PMEGP) as offers, bank is offering Home Loans and Vehicle
under- Loans with fixed rate of interest for initial period of
To reduce the time lag for release of Margin loan and later floating rate of interest.
Money from Nodal Branches the following decision For such advances, there is a need to
has been taken by KVIC- introduce a DPN with both fixed and floating rates
of interest. The following DPN is introduced to take
1. Sanctioning authority need not wait for the
care of such situations:
completion of EDP for disbursement of the
loan to beneficiaries, claiming as well as D 1G – Single / Joint DPN (for advances
settlement of subsidy by Nodal Branches. with fixed and floating rates of interest)
However, if such Bank authorities feel that A proforma of the D 1G is enclosed to this
EDP is necessary before disbursal in some circular.
specific projects, the same can be insisted
upon by them. Final adjustment of subsidy ADV.158/2009-10 dt.18.02.2010
kept in Term Deposit Receipt (TDR), after
physical verification of the project should Launching of " IB- BEML- EQUIP - FINANCE "
not be made till EDP is completed. (Structured Loan Products)

2. However, looking to the importance of Our Bank has entered into an MoU with M/s
EDP training as well as to ensure BEML Limited the Company on 04.02.2010 for
profitability of the project, the said training financing to contractors for purchase of the
should be invariably completed by the Company’s products. This enables us to become a
respective implementing agencies within “preferred financer” for financing all models of their
12 months of release of first instalment commercial construction equipments to the
prospective buyers from the company throughout the
3. Further, KVIC, Chennai (vide their letter country.
dated 05.01.10) has informed that the

4 4
 JAN-MARCH 2010
Salient features of the scheme are as The Monitoring Committee Meeting
follows: convened by GOI has reviewed on documentary
1. A Structured Loan Product (SLP) named “IB-BEML -EQUIP evidence to be taken in respect of farmer and non
FINANCE” is launched. farmer category promoters of Rural Godowns and
2. The product details are furnished in the enclosed annexure. revised the same as furnished below:
3. The product can be under priority (with original investment in
equipment up to Rs.2 crores) or non priority (with original ♣ The criteria for a person to be categorized as
investment in equipment above Rs.2 crores but below Rs.5 a farmer, would continue to be a person,
crores). who earns a major share of his income from
4. The Minimum credit rating of the borrower should be “BBB”
Agriculture, as indicated in paragraph no.5
5 The scheme is made operational through out the country.
(i) of operational guidelines issued vide GOI
6 Under the scheme, the Branch Manager shall exercise only
letter no.19011/2/2007-MII (Vol.II) dated
upto his/her normal delegated powers and the proposals
beyond the MDL powers should be referred to Circle Office/
28.07.2008.For categorizing a borrower,
Head Office as the case may be. who was filing income tax returns, copies of
7 All extant guidelines of the Loan Policy/Credit Risk the IT returns of the last three years would
Management Policy/ Discretionary Power Booklet should be be scrutinized for deciding his / her major
adhered to except DSCR as stipulated in the scheme. source of income.
8 Eligibility criteria and all KYC norms are to be adhered to by
♣ However, in case of a borrower who was not
the sanctioning authority to ensure the compliance in this
filing IT returns, an affidavit indicating /
respect.
9 Any deviation in the scheme has to be referred to HO by
affirming / declaring the following would be
Circle Head and the functional General Manager at HO in obtained.
charge of SME is vested with powers to consider such i. Details of Agriculture land holding
deviations on merits. owned by the borrower
10 Product Code allotted for the Scheme is 5017-0001 ii. Main source of income is from
11 BEML has 10 Regional Offices, 16 District Offices, 11 Agriculture
Activity Centres and 4 Zonal Offices spread all over the iii. Not an Income Tax assessee and does
country. As per MoU with the company: not file IT returns
¾ They provide support in identifying the prospective iv. Declaration to the effect that in case
borrower, give sufficient publicity to our Bank in their information furnished is found to be
advertisement campaigns incorrect at any stage- the entrepreneur
¾ They will also help in finding alternate buyers/ resale of shall be liable to repay the subsidy
equipments in case of default by any borrower. amount together with interest
¾ They also offer maintenance solutions, repair & applicable as per prevailing norms
rehabilitation services and customer training. and shall also be liable for
12 The price range of Company’s products is between Rs.17.00 prosecution.
lakhs to Rs.85.00 lakhs.
13 The loan component would be between Rs.15 lakhs to
In addition to this, Banks have also to
Rs.300 lakhs per borrower. exercise normal due diligence process while
recommending the category in which the
Branches / RBS / Circles are requested to entrepreneur falls for subsidy purpose under the
make use of the scheme for financing to contractor scheme.
customers for purchase of the array of equipments
manufactured by BEML Ltd. It is further clarified that -
Cases that have been settled (i.e where
ADV.159/2009-10 dt.20.02.2010 advance and final subsidy have been released)
would not be reopened.
Capital Investment Subsidy Scheme (CISS) for Rural
Godowns – Farmers Category and Multi-storey These clarifications would be applicable for
Godowns Clarifications fresh cases only. The final subsidy would be
applicable for fresh cases only.
NABARD Mumbai vide letter The final subsidy claims would be processed
NB.ICD/1794/RG-4/2009-10 Circular as per the category under which advance subsidy
No.23/ICD09/2009 dated 28.01.2010 have was earlier released or in certain cases as the Joint
communicated certain clarifications on Farmers Monitory Committee finds and recommends
category and Multistorey godowns. otherwise.

5
 Recollect
It is also advised that multi-storey godowns for onward submission to HO CCC with Circle
built under the scheme should be structurally sound Head’s recommendation.
on engineering considerations and functionally
Up - to a maximum of 5 cards can be issued
suitable to store the agricultural produce in
accordance with operational guidelines of the to the executives and / or employees of an
scheme for availing subsidy. undertaking and the overall limit of Rs 3.00 lakhs
will be apportioned to individuals as desired by the
ADV.160/2009-10 dt.23.02.2010 company.

Launching of VISA Business Credit Card for SME For further details regarding Revolving
and Corporate Customers Credit, Cash Advance Facility, Documentation etc.,
Please refer circular.
To address the credit card and payment
requirements of our Corporate and SME Clientele, ADV.163/2009-10 dt.10.03.2010
our Bank will be launching VISA Business Credit
Card, which would offer several additional Interest Rates on Export Credit in Foreign Currency
advantages and features to facilitate regular use by Based on RBI circular the ceiling rate on
these clientele segment for business needs. export credit in Foreign Currency will be at LIBOR
Eligibility: plus 200bps (2.00%) w.e.f 19.02.2010 subject to no
other recovery like Service Charges, Management
¾ Corporate & SMEs (Limited Companies, Charges etc. Out of Packet expenses if, any, incurred
Partnerships & Sole Proprietary Concerns) may be recovered.
having credit facilities with limits of Rs 10.00 Branches are advised that similar changes
lakhs & above and classified as Standard may be effected in interest rates in cases where
Assets EURO LIBOR / EURIBOR have been used as the
benchmark for Export Credit in Foreign Currency.
¾ Corporate current accounts with satisfactory The revision in interest rates would be applicable for
track record of operations FRESH ADVANCES WITH EFFECT FROM
19.02.2010.
¾ Compliance with KYC Norms
Schedule of interest rates on Export Credit
¾ The value of securities available to be at least in Foreign Currency
125% of the aggregate of credit facilities N Category of Advance Interest Rates (percent p.a.)
sanctioned to the unit plus card limit
recommended 1 Pre-shipment Credit Not exceeding 200 bps over
a Upto 180 days LIBOR/EURO LIBOR /
Cards will be issued as per the request of the EURIBOR
above clientele segments – viz. Corporate & SMEs b Beyond 180 days and upto Rate for initial period of 180
Loan Accounts & Corporate current accounts - in 360 days days prevailing at the time of
the name of its executives and / or employees and extension plus 200 bps
the name of the Business undertaking will be printed 2 Post-shipment Credit Not exceeding 200 bps over
on the card. a On demand Bills for transit LIBOR/EURO LIBOR /
period (as specified by EURIBOR
Credit Limit FEDAI)
Card Limit will be in the range of Rs 75001 b Usance bills (for total period Not exceeding 200 bps over
comprising usance period of LIBOR/EURO LIBOR /
– Rs.300000/-.
export bills, transit period as EURIBOR
Card Limits shall be recommended by the specified by FEDAI and grace
Branch Manager to HO Credit Card Centre taking period wherever applicable)
into account the eligibility criteria as prescribed upto 6 months from the date
above for Corporate & SMEs having credit facilities of shipment.
with limits of Rs 10.00 lakhs & above and classified c Export bills (demand or Rate for 2 (b) above plus 200
usance) realised after due bps
as Standard Assets.
date but upto date of
In case of corporate current accounts with crystalisation
satisfactory track record of operations Branches 3 Export Credit Not Otherwise Repayment of crystallised
should submit the application through Circle Office, Specified (ECNOS) liability in Rupee shall be at
6 6
 JAN-MARCH 2010
a Pre-shipment credit the rate specified for ECNOS Business/ Professional Tours, study/educational
b Post-shipment credit under Rupee Export Credit – tours by Students etc.
i.e at BPLR + 4% + 2% from
the date of crystallisation Sponsor/tour operator/leader of the Group
(who should be our customer) can apply for “IB
ADV.164/2009-10 dt.11.03.2010 YATRA SURAKSHA” travel insurance cover in
CRA advance before commencement of the journey.

Mandatory electronic payment of tax by certain “IB YATRA SURAKSHA” offers

Categories of taxpayers with effect from 01.04.2008 compensation subject to the limits specified in the
respective plan towards
Central Board of Direct Taxes vide their
Notification no.34/2008 dated 13.03.2008 have ¾ death due to accidents while on Journeys
made electronic payment of taxes mandatory for the and resultant Medical expenses (Plan A)
following categories of taxpayers w.e.f 01.04.2008: ¾death or Permanent Total Disability due to
accidents while on Journeys and resultant
¾ A Company Medical expenses (Plan B)
¾ A person (other than a company) ¾death or Permanent Total Disability or
to whom provisions of Section Permanent partial Disability and/or loss of
limbs etc due to
44AB are applicable
¾accidents while on Journeys and resultant
In this connection, please note that the status
Medical expenses (Plan C)
of all corporate taxpayers can be identified from the
¾Extension of cover for (i) loss of baggage
name itself. Fourth digit of the PAN of all and (ii) Detour expenses are available on
corporate assessee would necessarily be “C”. payment of additional premium.
Physical challans from such assesses shall not be ¾Customers can choose Capital Sum Insured
accepted across the counter. of Rs.1.00 lakh or Rs.1.50 lakh or Rs.2.00
In case of taxpayers covered under Section lakhs.
44AB, there should be no insistence of any proof of ¾Rates of Premium are given in the
eligibility to pay tax through physical challans at the Annexure.
bank counters. ¾To give an example, Premium payable for a
Capital Sum Insured (CSI) of Rs. 1.00 lakh
The responsibility of making e-payment under PLAN C policy (covering all the
rests primarily with the taxpayer. Hence, the word of above risks) will be Rs.24/-per person
taxpayers should be taken as final. including applicable Service Tax – presently
@ 10.30%).
CRA.61/2009-10 dt.09.02.2010
¾Branches are eligible to get Commission @
Launching of new Travel Group Insurance Product 10% of the Premium collected (net of
for our customers – “IB YATRA SURAKSHA” Taxes) and the same will be periodically
Policy. credited by HO: BASC to the Branch
Income A/c – “Commission on Non Life
As a Value added service to our customers Insurance business” through direct credit.
undertaking group travel, our Bank is offering a
Group Travel Insurance Policy by arrangement with For further details regarding operational guidelines,
the United India Insurance Co (UIICo) - our Terms and conditions etc please refer to the circular.
Corporate Tie up Partners for Non Life Insurance CRA.62/2009-10 dt.09.02.2010
business - under the brand name of “IB YATRA
SURAKSHA”. Obtention / Updation of Debit Mandates from our
Customers for Electronic Clearing Services and Other
“IB YATRA SURAKSHA” offers travel purposes
insurance cover for domestic travel by road, rail and
inland waterways (but not by Air) to a group of In view of the 100% Core Banking Solution
persons - minimum five persons – maximum 20 completed in our bank ECS Debits / Direct Debits
persons per group in the age group of 3 years to 70 processing is / proposed to be centralised at some
years undertaking travel for purposes like Religious centres. Also with the proposed introduction of
tours, Family Picnics, Holiday Package tours, RECS in some states and proposed NECS (Debit)
centralised processing will become essential.

7
 Recollect
Further recent guidelines of RBI requires We are also informed by branches that the
Destination Bank Branches (Where debits are to be customers holding such paper bonds assure the
posted or centrally from a single location) to hold branches of huge deposits in crores if the bonds are
debit mandates based on which the debits are to be handled by them for encashment. Also in certain
posted. Mandates wherever were taken with Old instances the customers have directly approached
Account Numbers (before migration to CBS) shall Reserve Bank of India with various documents for
obtain fresh mandates with New Account Numbers. facilitating encashment and such requests are re-
directed to our AD Branches/HO:ID. In this regard,
To facilitate centralised processing and
we have taken up the matter with some of the
smoother migration to RECS (Debit) and NECS
correspondent Banks having presence in China and
(Debit), a mandate management system providing
received the feedback as follows:
for entry / updation / deletion of mandates is put in
place by HO: TMD. The mandates for ECS • They are not aware/ familiar with and also
transactions can be entered / updated / deleted have not come across such bonds.
through Service Branch Help Desk link available in
• These bonds might have been issued 60 – 70
Help Desk. Mandates for other transactions are years ago and some prior to 1949.
available at HO: TMD server.
• At present, no Bank in China may be able to
The Mandate Handling Policy laying down handle the encashment of such Bond.
the instructions for handling the mandates approved
by our Board is placed in the Annexure to this • The holders of such bonds are advised to
approach the People’s Bank of China
circular.
directly and are unable to comment on the
CRA.63/2009-10 dt.12.02.2010 reaction of the above bank on presentation.
National Electronic Funds Transfer (NEFT) System - • And the correspondent Banks are not in a
Refinement of Process-flow position to handle such bonds for collection.
Necessary changes in the CBS/system Under the above circumstance, we advise the
interfaces to handle the enhancements of features branches as follows:
with regard to NEFT, is carried out by our Project 1. Branches SHOULD NOT entertain any
Office according to the communication from RBI. request for either collection or encashment of such
The NEFT operating hours have been China Gold Unit Bond until any of our
extended from 9 am to 7 pm on week days and from Correspondent Banks agree for taking such
9 am to 1 pm on Saturdays. instruments for collection.
Branches shall to compulsorily collect the 2. Due to uncertainity of collection and
mobile number and / e-mail address of the remitters payment by the Central Bank of China, branches are
while receiving applications for NEFT with effect advised not to make any payment nor advance nor
from March 01,2010 for the purpose of sending re-imburse any amount based on such bonds. Any
acknowledgements after credit of NEFT remittances. violations in this regard will put the Bank in to loss
These details collected from existing customers are and hence, branches are cautioned to be utmost
to be entered in the CBS customer details before vigilant in this matter.
creation of NEFT message. In the absence of Branches shall bring to notice of HO, any
customer contact details, originating branch should such request for encashment of either China Gold
give its email address in the relevant field while Unit Bond or any such instrument for suitable
creating the outgoing NEFT message. guidance. At the same time, Payment should not be
CRA.66/2009-10 dt.26.02.2010
made towards such bonds.
FX.35/2009-10 dt.28.01.2010
FX
Introduction of new product - offer on opening of
Request from branches to handle China Gold Unit “Student Account “by our US Dollar correspondent
Bond. bank
We have been receiving requests from Branches are aware that M/s Wachovia
branches for encashment of China Gold Unit Bond Bank, one of our US Dollar correspondent banks is
purportedly issued by the Central Bank of China. in the process of merger with M/s Wells Fargo
Bank, Newyork. Now, they have offered a new
8 8
 JAN-MARCH 2010
initiative viz “Students Account” under which Wells To expedite account opening time, branches
Fargo Bank is willing to open foreign currency can scan the completed application and required
account in US for Indian students going to US for documents to their IPB Hong Kong office.
higher studies even before they leave the Indian
shores. Taking into consideration the advantages in FX.37/2009-10 dt.31.01.2010
the new initiative, our bank has entered into an GENL
agreement with M/s Wells Fargo Bank.
ATM - Customer Care and Complaints
The salient features of the product are
detailed below: Given below are some of the repeated errors for
major number of customer complaints and
; Wells Fargo Bank is willing to open a
dissatisfaction, with regard to ATM and its products:
foreign currency account in US for Indian
students going to US for higher studies even • Omission of user code changes from ‘0’ to ‘1’ in
before they leave the Indian shores CBS menu immediately after the issue of card to
; Our Bank shall refer to them on a non- the customer.
exclusive basis, only the customers who are
individuals and who maintain a formal • Not informing the customer that only after he
banking relationship with our bank does a transaction first in ATM at least once, his
card will be processed at POS centres.
; Our Bank will not refer such customers
having bad track record involving money • Complaints regarding ATM operations – Non-
laundering etc, meaning proper KYC norms adherence of procedures in exhibiting important
to be undertaken by our bank before such notices in ATM cabin as well as in Bank
reference is made to them.
premises referred in Circulars No: Genl.45/09-10
; Similarly Wells Fargo Bank will carry out dated 30.12.09, Genl.39/09-10 dated 11.12.09,
such due diligence according to their Genl.27/09-10 dated.16.10.2009 and Genl.07/09-
account opening standards and procedures. 10 dt.02.06.2009.
Further details regarding Standard account
opening process, List of documents to be collected • Suspect transactions – Account debited cash not
from student, Formalities to be completed at branch received - non-acceptance of complaints by
level, A/c opening / tracking procedure at IPB etc branches other than host and registering online
are provided in the circular. complaint to ATMSC.
The handling of the transaction is restricted
• Customer is not informed of the mandatory 12
to Authorized branches only. Non-authorized
days time required for reversal of amount if the
branches may route the transactions through the
authorized branches for handling the transactions. transaction is done in other bank ATMs. Not
highlighting the facility of immediate credit in
The specimen account opening form the case of transaction in our ATMs, prompting
enclosed is only for reference. Branches are advised
to use our customers to use our ATMs
to download application form from the website at
“www.wellsfargo.com/ipb” as the bank insists on predominantly.
submission of latest version of form. • Non-receipt of Card and Pin Mailers - Non-
Branches are required to indicate on the submission of full data, application for minor
reference letter, the details of the account holder accounts, Partnership accounts, sole trader
who are banking with us for five years or over. In accounts with name of the concern, request for
the event of the applicant is a student, please provide dehotlisting of the card by e-mails, /IP messages,
the reference letter for the parent who has been request for duplicate card through CBS menu,
banking with our bank for at least five years
etc., are some of the reasons for delay in service
In the event of existing relationship is less to the customers.
than 5 years, two monthly statements from two
separate banks will suffice. • Not using the modification menu in the ATM
website for requests for changes in ATM card
data.

9
 Recollect
• Non-delivery of the cards to the customers and All other terms and conditions as
not informing them and keeping the cards communicated vide our circular Genl.38 / 2008–09
undelivered for more than two months. dt.15.10.2008 regarding outstation cheque collection
remain unchanged.
• Destoying of cards at the time of home branch
account change and seeking new cards results in GENL.49/2009-10 dt.09.01.2010
delay in customer service. The same card can be
used after home branch change. Electronic Voucher Verification (EVR)

• Not taking up the disputed transactions In order to ensure daily Voucher

immediately with ATM switch and settle the Verification at branches, HO: TMD has introduced
issue with ATM Service Centre. an “in-house” developed software for the Electronic
Voucher Verification (E-VVR Version 1.2.1 on 18
• Not passing on the information to customers 12 2009). Branches have to log-in with the
regarding ATM card facility extended to Minors following URL http://10.100.7.199/cnet/vvr/
under IB Smart Kid Account.
vvrlogin.aspx. Branches can refer to the user manual
• Not attending all the requests on the same day already made available in the e-vvr web page.
and not registering complaints online to avoid Some of the special advantages of e-vvr are
delay in settlement of complaints. as follows:
• Not keeping the ATM in order 24 X 7 resulting • Tampering of soft copies of the e-vvr is not
declining of transactions due to errors such as possible
not loading of journal paper, cash
replenishment before ATM getting dry, etc., • Centralised Monitoring of the checking of e-
vvr by branches on daily basis by Circle
ATM officers at branches are requested to Offices is facilitated.
be conversant with all regulations and be well
informed with all circulars issued by HO from time • Status of voucher verification can be
to time. monitored branch-wise and date wise.
• Status of voucher verification can be
It should be our endeavour to keep up the
monitored officer-wise (including Special
ATM functioning 24 hours and provide all the
facilities extended through ATM to the delight of Assistant, if any in the branch).
our customers. In order to make ATM viable, card It should be noted that e-vvr checking
holders of other Banks are to be attracted and should be completed by the next day.
service rendered.
In this context it is to be noted that Cash
Reports of SWOs /Tellers should be generated and
GENL.48/2009-10 dt.09.01.2010
printed on the same day, tallied with their physical
Service Charges for Outstation Cheque Collection cash balance and the report should be duly signed by
The service charges for outstation cheque respective SWOs/Tellers and checked by the
collection are revised as under with immediate designated cash officer without fail, before they
effect, according to RBI clarification: leave the branch for the day. Cash related reports are
front-end reports and so should be generated and
1 Rs.1 to less than Rs.10,000 Rs.55 per instrument saved by branches daily before EOD and print out
should be taken without fail and filed serially for
2 Rs.10,000 to Rs.1,00,000 Rs.110 per instrument
future reference.
3 Above Rs.1,00,000 Rs.164 per instrument GENL.50/2009-10 dt.19.01.2010

The above charges will be all inclusive. No Enhancement of Limit for Funds Transfer through
additional charges such as courier charges, out of Mobile Banking (INDMobile)
pocket expenses, service tax etc., should be levied
from the customers. The enhanced Mobile banking facility
(INDMobile) has been introduced in our Bank using
1010
 JAN-MARCH 2010
J2ME (Java 2Micro Edition) application which prescribed format every month by the 15th of the
works on a secured, menu based and user friendly succeeding month.
J2ME technology. It is compatible to all ii. to verify the customers Identity and Address in
GPRS(General Packet Radio Service)/Java enabled case of transactions carried out by a non-account
mobile phones using both SMS & GPRS modes. based customer, that is a walk- in customer,
In tune with the above RBI directions, the where the amount of transaction is equal to or
funds transfer limit through Mobile Banking exceeds rupees fifty thousand, whether
(INDMobile) is increased to Rs.50,000/- per day for conducted as a single transaction or several
both funds transfer and transactions involving transactions that appear to be connected.
purchases of goods and services. Further, if a bank has reason to believe that
customer is intentionally structuring a
This funds transfer limit of Rs.50,000/- transaction into series of transactions below the
through Mobile Banking is independent of the per threshold of Rs 50,000/- the bank should verify
day funds transfer limit of Rs.50,000/- permitted identity and address of the customer and also
under the Net Banking facility. All other extant consider filing a Suspicious Transaction Report
guidelines remain unaltered. (STR) to FIU-IND.

GENL.51/2009-10 dt.23.01.2010 The Amendment explains a ‘Non profit

Organization’ as any entity or organization that is
Acceptance of ‘Postal Identity Card’ as ‘Proof of registered as a Trust or a Society under the Societies
Address’ for opening of accounts Registration Act, 1860 (21 of 1860) or any similar
State legislation or a company registered under
The Department of Posts has launched a section 25 of the Companies Act, 1956 (1 of 1956).
new scheme for issue of Postal Identity Card with In our Bank, generation of reports as
latest technological means. This was introduced in mentioned in (i) is centrally done by the Project
Chennai City from 15.10.2008. The Postal Identity Office and so the Branches need not send any CTR
Card is issued to the public after due verification by to HO: AML Cell in this regard.
the field officers of the Department. The cards are
prepared in ultra silk finish touch containing the The Branches should be very discreet in
particulars of the holder, issued under the signature handling transactions as mentioned in (ii) above by
of Head Postmaster. The name and address of the due verification of customer identity and address
holder is available in the main portion and in the and they should send STRs to HO: AML Cell
back side, the details like Card number, date of through their Circle Offices, in cases considered by
issue, date of birth, telephone number of the holder them as suspicious within 7 days of the transaction.
(both landline & mobile number) and Blood group.
GENL.55/2009-10 dt.03.02.2010.
The cards can be renewed after the validity of three
years. Updation of Customer Records- RBI Observation
Branches shall accept the Postal Identity In Core Banking Solutions environment
Card, as a document for address proof in addition to updating data is easy and delays are unwarranted.
the list mentioned in our account opening form. All branches are therefore advised to ensure that
current information is duly collected and customer
GENL.54/2009-10 dt.29.01.2010
records are updated immediately on receipt of
intimation of change of address, Mobile Number, e-
Prevention of Money Laundering Amendment Rules,
mail id and other details by the customers in order to
2009 - Obligation of Banks/ Financial Institutions
avoid customer complaints, so that quality customer
The Amendment to the Prevention of Money service is rendered.
Laundering Rules 2005, as notified by the GENL.73/2009-10 dt.15.03.2010
Government of India
Adherence of KYC Norms - opening of Accounts of
i. to maintain proper record of all transactions Properietary Concerns.
involving receipts by non-profit organizations of
value more than rupees ten lakh or its equivalent It has been decided by Reserve Bank of
in foreign currency and to forward a report to India to lay down criteria for the customer
FIU-IND of all such transactions in the identification procedure for account opening by

11
 Recollect
proprietary concerns. Accordingly, apart from 2 If “PAN” is not provided / quoted by the
following the extant guidelines on customer customers / clients to the Bank, then TDS at a
identification as applicable to the proprietor, higher rate of 20% shall be deducted by us from
branches should call for and verify the following 01.04.2010.
documents before opening of accounts in the name
3 The law is applicable to all Resident & Non-
of a proprietary concern.
resident payments / remittances liable to TDS
i) Proof of the name, address and activity of for existing and new customers.
the concern like,
In order to comply with the above provisions which
will come into force from 01.04.2010, branches /
¾ Registration Certificate (in the case of a
offices are advised to:
registered concern)
1. Inform all the Customers /Senior Citizens /
¾ Certificate / licence issued by Municipal
Professionals / NRIs etc. by way of letters /
Authorities under Shop & Establishment
mobile alerts /e-mail etc. (as per specimen letter
Act.
/ Alert Message enclosed) to furnish their PAN
¾ Sales / Income tax returns. alongwith with a copy of PAN Card / PAN
¾ CST/VAT certificate. Allotment letter, by quoting the above
provisions of the Section 206AA.
¾ Certificate / registration document issued by
Sales Tax / service Tax / Professional Tax 2. Place the above information in the Notice Board
authorities. to keep the customers apprised of the above
revised guidelines.
¾ Licence issued by the Registering authority
like Certificate of Practice by Institute of ADMN.61/2009-10 dt.30 01 2010
Chartered Accountants of India, Institute of
Cost Accountants of India, Institute of Document for credit of Tax Deducted at Source (TDS)
Company Secretaries of India, Indian in our Permanent Account Number (PAN) with
Medical Council, Food and Drug Control National Security Depository Ltd (NSDL)
Authorities, etc. Branches are advised to ensure the
ii) Any two the above documents, which are in following immediately.
the name of the proprietary concern, would be 1. In respect of income earned such as
sufficient. commission received from Insurance /telecom
These guidelines will apply to all new company, ECGC, processing charges,
customers with immediate effect. For the existing evaluation fees other fees, rent, etc the total
customers, the above formalities should be amount (including TDS) should be accounted
completed before 31.12.2010. as income, TDS certificate should be received
and properly claimed from HO:Accounts
GENL.75/2009-10 dt.31.03.2010
Department. If TDS Certificate is not received
ADMIN and not accounted as part of total income for
past transactions, branch / office has to take up
Tax Deducted at Source (TDS) – Quoting of
with the deductor for receiving the TDS
PAN made mandatory – Deduction of TDS at a
certificate and claim reimbursement from HO:
higher rate of 20%, if the PAN is not provided by the
Accounts Dept.
customers from 01.04.2010.
2. To ensure that the deductor is filing corrected e-
The gist of the provisions of Section TDS return, wherever they have filed e-TDS
206AA, which comes into force from 01.04.2010, is return with incorrect data.
reiterated below: 3. To verify the e-TDS filed by our branch / office
1 Quoting of Permanent Account Number (PAN) themselves, to ensure that customer’s PAN is
has been made mandatory on all transactions correctly furnished in the e-TDS return. In case
attracting TDS including the declaration in of any discrepancy, to file revised e-TDS return
“Form 15G / Form 15H” submitted by the by providing the correct PAN number of our
customers for availing exemption from the customer / beneficiary to whom the payment
purview of TDS u/s 194A on interest paid on was made.
deposits.
1212
 JAN-MARCH 2010
Further, branches should take care of the Darjeeling, Guruvayur, Kodaikanal,
following: Mahabaleshwar, Shimla and Udhagamandalam
besides one guest house at Tirumala.
1. Wherever, TDS is deducted on the income
Our Bank has established Holiday Homes in
received, Branches to ensure that the gross
yet another two places for the benefit of our staff
income (including TDS) has to be accounted on
members. Staff members may avail the facility of
the same day of transaction (by debiting TDS
the new Holiday Homes established at PURI and
portion to the debit of SR II Government
TIRUMALA, the details of which are given below:-
transactions). Before accounting for TDS,
branches have to ensure that our Bank’s PAN is No Details PURI TIRUMALA
correctly mentioned in the TDS certificate, and, 1 Location Hotel Suv Palace Sri Kanchi
if not, it should be taken up with the deductor New Marine Kamakoti Mutt,
concerned for inclusion/ correction as the case Drive Road, (New Building)
Near Swargwar, Ring Road,
may be. Puri – 752 001 TIRUMALA –
2. In respect of cases where the TDS has been 517 504
deducted from our bank’s income by the 2 Phone No. 06752-254 341 0877- 2277 370
deductor, branches have to verify with the 06752-694 386
3 Number of Rooms 3 3
deductor as to whether they have filed their e-
4 Controlling office CO:Bhubaneswa Tirumala Branch
TDS return correctly furnishing our PAN r
(AAACI1607G) 5 Check in time 10.00 AM 09.00 AM
3. Branches shall utilise the facility “tax credit 6 Max no of days 2 days only 2 days only
“(Form 26AS) provided at NSDL web site 7 Rent Rs.10/- per day Rs.10/- per day
per room per room. Not
(www.tin-nsdl.com) to verify whether tax available for 15
deducted by the deductor is credited to our days during the
Bank’s tax credit account by entering the user Brahmotsavam
id : AAACI1607 and password IND 190769. festival in a yr
8 Date of 01.01.2010 10.01.2010
4. In respect of TDS deducted by branches, while commencement
filing e-TDS returns, branch/offices should
ensure that correct PAN of the customer is To avail the facility of the Holiday Homes at
furnished in the related column concerned. Puri and Tirumala, staff members have to apply to
Circle office, Bhubaneswar and to Tirumala Branch
ADMIN.69/2009-10 dt.20.03.2010
respectively with the remittance of Rs.10/- per day
and the respective controlling office shall allot the
Discontinuance Of Printing Circulars From 1st April
rooms ‘on first come first served’ basis as in the
2010 case of other Holiday Homes, based on availability.
Hitherto printed copies of Circulars issued
by various Departments were sent to our It may also be noted that the allotment of
Branches/Offices. Rooms in the Holiday Home at Guruvayur, another
As our Bank has achieved 100% CBS, the pilgrimage centre, shall also be restricted to 2 days
existing practice of printing and sending hard copy only in view of the continuous demand through out
of circulars to all our branches is discontinued from the year, enabling the benefits of the Holiday Homes
1st April 2010. to be utilized by maximum number of staff
HO:TMD will port the circulars in the members.
respective `Main’ heads in Intranet as and when the
HRM.152/2009-10 dt.05.02.2010
circulars are issued by various Head Office
Departments. All staff members are advised to use Modification In Nomination Of Disciplinary Authority /
Intranet to go through the circulars issued so as to Appellate Authority / Reviewing Authority For Officers
have upto date knowledge on the
developments/guidelines etc. Our Chairman and Managing Director, in
exercise of the powers conferred under Regulation
ADMIN.71/2009-10 dt.26.03.2010 5(1) of the Indian Bank Officer Employees’
HRM (Discipline & Appeal) Regulations, 1976 has
effected the following nominations of the
New Holiday Homes at Tirumala And Puri Disciplinary Authority/ Appellate Authority/
Under staff welfare scheme our Bank has Reviewing Authority for officers:
extended the facility of Holiday Homes at

13
 Recollect
check-up undertaken in any of approved Hospitals
To function as Name of the Official stands increased to Rs.5,000/- (Staff – Rs.3,000/-
> Concurrent Appellate Authority for Shri DD.Deshpande and Spouse Rs.2,000/-) from 01.04.2010. Circle
Officers in Scale I, II & III, for HO cases DGM., Head Office offices may please approve more number of
> Concurrent Appellate Authority for Marketing Department
Officers in Scale I, II & III, for Circle Diagnostic Centres / Hospitals in their centres to
cases (where the Disciplinary Authority have smooth functioning of the scheme. All other
is AGM at Circle Office) terms of the scheme remain unaltered.
> Appellate Authority for Officer in Scale Shri K.Manoharan
I, II & III, for HO cases DGM., Head Office 2. Medical Check-Up for all Award Staff Members
> Appellate Authority for Officers in Premises & and Officers from Scale I To Scale III
Scale I,II & III, for Circle cases (where Expenditure
Disciplinary Authority is AGM at Circle Department The charges for the Health Check Up stands
Office) increased to Rs.3,500/- (Staff – Rs.2,000/- and
These modifications are w.e.f 12.02.2010. Spouse Rs.1,500/-) from 01.04.2010. Circle offices
are advised to approve adequate number of
HRM.175/2009-10 dt.15.02.2010 Diagnostic Centres / Hospitals in their centre
enabling the staff members to have the fruits of the
Canteen Subsidy to Staff Members welfare facility. Circle Heads, where the
Keeping in view of the cost escalation, our arrangement is working successfully on the existing
Chairman & Managing Director has kindly approved rates, may judiciously use their discretion whenever
the enhancement of the Canteen subsidy from Rs 6/- a request is received from the Diagnostic Centres /
to Rs 10/- (Rupees ten only) per employee per Hospitals to increase the rates within the stipulated
working day to be administered as per the ceiling. All other terms of the scheme remain
prescribed norms. This enhancement in Canteen unaltered.
Subsidy comes into effect from 03.03.2010. 3. Provision for Eye Check Up and Purchase of
As is being done, the subsidy would be Spectacles for Employees above 40 Years of Age
made available to the Subsidy Administration The amount towards reimbursement for the
Committee on submission of proper accounts for the consultations and Purchase of Spectacles stands
administration of funds every month. Branches/ increased to Rs.3,000/- from 01.04.2010. All other
Staff Training Centres should submit the details of eligibility conditions remain unaltered.
the subsidy every month to the respective Circle
Offices. Circle Administration, after satisfying itself 3. Health Insurance Premium to Retired Employees
about the functioning of the subsidy Administration The reimbursement of Health Insurance
Committee, will authorize payment of subsidy to premium to Staff Members retired on
branches/offices under its control. superannuation for Mediclaim policy value
Officer-in-Charge of the Inspection Centres increased to Rs.2 lakhs from the existing Policy
and IMAGE can release subsidy to the staff value of Rs.1 lakh from 01.04.2010. Accordingly the
members working under their control. premium reimbursement stands enhanced (as per
the rate applicable to our Arogya Raksha policy) to
Circle Offices, Inspection Centres and Rs.4,000 (from Rs.2,516) to the Retirees up to the
IMAGE should submit the details of the subsidy age of 65 years and Rs.9,373 (from Rs.5,336) to
released pertaining to their office to HO: HRM retirees above the age of 65, without any change in
Department on a monthly basis. the eligibility norms. It may be reiterated that the
All other guidelines stipulated in the earlier reimbursement will be only for renewal of existing
circulars in the matter of grant of subsidy should be policies or fresh policies taken on after 01.04.2010
followed meticulously.
HRM.187/2009-10 dt.08.03.2010
HRM.181/2009-10 dt.03.03.2010
Categorisation of Branches as on 31.03.2010
Improvements In Staff Welfare Schemes Categorisation of branches including
1. High Risk Medical Check Up for Officers from Specialised branches has been reviewed as on
Scale IV and above with their Spouse 31.03.2010 as per norms approved by the Board.
The reimbursement under the scheme to The details of the branches falling under different
Officers in Scale IV / Executives towards the health Categories/ Scales accordingly are furnished in
1414
 JAN-MARCH 2010
Annexure I and Specialised branches in Annexure II ) Consolidated monthly Billing statements
of this circular. facilitates effective cost control and better
management of finances for the company
Category Of Business Criteria Incumbency
Branch (Average Aggregate Deposits Scale and minimize paperwork.
And Advances
During The Last Two Years)
) No joining or annual fees and competitively
priced.
a) Small Below Rs.5 crore I

b) Medium Rs.5 crore and above but below II

) Convenience of revolving credit..
Rs.25 crore ) Transparent Reward Points Administration
c) Large Rs.25 crore and above but III and Insurance Benefits and cover to Card
below Rs.75 crore Members – absolutely free.
d) Very Large Rs.75 crore and above but IV The launching of Business Cards in our
below Rs.250 crore Bank offers significant business opportunities for
our Bank to improve its credit card base. Our Bank
e) Exceptionally Rs.250 crore and above V
has a good number of SMEs and Corporates having
Large
credit facilities with our Bank who could be the
HRM.204/2009-10 dt.31.03.2009 target group for cross selling the Business Cards.
Business Cards apart from improving the
MD/ED
quality of our assets, and, in view of the relatively
Launching of VISA Business Credit Card for SME more assured prospects of healthy conduct of the
and Corporate Customers account, could also offer significant business
A brief overview of the salient features of opportunities for improving the non interest income.
IB Business Card includes the following: Higher interchange at 1.85% of transaction levels
plus finance charges on the revolving credit could
) The cards will be issued in association with result in substantial increase in income levels of the
VISA providing a highly sophisticated Bank.
state-of-art global payment system round
the clock. MD/ED.14/2009-10 dt.01.03.2010
) Cards will carry the name of the Business Though due care has been taken in the preparation of
undertaking besides its nominated Recollect, the version given in the circular is final.
executives / employees and up-to five cards Compiled by HO: O&M Division
can be issued per Business entity.

15
 Volume 25 Issue 4
a
For Private Circulation Only

January – March 2013 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
C.No Date Particulars Pg
CONTENTS OF THIS ISSUE 160 20.03.13 Standardisation and Enhancement of
C.No Date Particulars Pg Security Features in Cheque Forms- 7
Migrating to CTS 2010 Standards
DEP 19.03.13 Premature withdrawal of Domestic Term
2 162 23.03.13 Defence Pensions - Grant of Dual (two)
32 Deposits 8
family pensions from military side as well
33 21.03.13 Uniform Customer Identification and as Civil employment.
Customer Acceptance Procedure for 169 30.03.13 Introduction of “Payable At Par” Cheques
individuals at the time of opening of 2 under CTS-2010 Standard - Guidelines 8
Accounts and Modified Simplified for the Host Branches
Uniform SB Account Opening Form
HRM 05.01.13 Modification in Ceiling on Passing
ADV 07.01.13 Revision in existing investment limits in Powers through “Transfer Batch 9
117
123 plant and machinery / equipment for 2
lending to Micro Enterprises 121 09.01.13 Introduction of new BGL head for
payment of Provision of Shoes, Towels
127 07.01.13 Modifications to the Credit Guarantee 9
2 and Toilet Soaps to the Part Time
Scheme (CGS) Sweepers of the BanK
132 08.02.13 Revision in B P L R 2
142 27.03.13 Mandatory requirement on updation of
133 08.02.13 Review of Base Rate 3 details of Separated Employees on real 9
138 13.02.13 Need for immediate empanelment of time basis
more than one Jewel Appraiser in all 3 GENL 08.02.13 Know your customer (KYC) documents 10
jewel loan lending branches required for entry and exit under National
91
144 26.02. 13 Amendments to SARFAESI Act and Pension System (NPS)-revision
3
DRT(Amendment) Act, 2012 92 08.02.13 Closure of Intermediary Parking Account 10
145 27.02.13 Appearance of Advocates / Liaison and BGL Parking Account – General.
Officers/Nodal officers before Consumer 4 Introduction of Reconcilable BGL
Courts etc “Routing Account”
150 11.03.13 Applications Supported by Blocked 93 14.02.13 Standardised Public Grievance Redress 10
Amount (ASBA) - services across all our 4 System (SPGRS)
branches
95 23.02.13 Procedural Guidelines for entering ATM 11
159 30.03.13 Modifications in structured products of
Card Requests through Debit Card
MSME sector and ready reckoner for 4
Management System (DCMS)
such loan products
CRA 03.01.13 Defence Pensioners - Fixation of Fx 28.01.13 2% Interest Subvention on Rupee Export 11
enhanced family pension to pre-2006 5 33 Credit
126
family pensioners 35 27.02.13 RBI Guidelines on Opening of NRO 12
127 05.01.13 Fixing timeline for redressal of accounts by individuals of Bangladesh
5
grievances received from pensioners Nationality
128 07.01.13 “IB Arogya Raksha” - Renewal of MOU ADMIN 24.01.13 TDS Exemption on certain income 12
for a period from 01.01.13 to 31.12.13 5
79 accruing to Banks
133 22.01.13 Implementation of Single Window
80 15.02.13 Renewal of burglary and house breaking
System for Reimbursement of Telecom 6 12
policy
Pension Payments
141 29.01.13 Direct credit of Refund / Rebate to the 81 22.02.13 Audit policies 13
Exporters'- credit by way of e-payment 6 83 25.02.13 Facility for Exchange of Notes and Coins
under RTGS / NEFT facility Adjudication of notes as per RBI Note 13
143 14.02.13 Collection of original pension documents Refund Rules (2009)
6
at CPPC through Zonal Offices 89 22.03.13 Obtention of Tax Residency Certificate
146 06.02.13 Onboarding onto National Automated for application of Double Taxation
7
Clearing House (NACH) of NPCI Avoidance Agreement (DTAA) rates in 14
158 18.03.13 Fee collection from Subscribers directly respect of payment of interest, fees etc
7 to Non-residents
for TN Arasu Cable TV Corporation Ltd
 Recollect

when the customer visits the Branch to open the

DEPOSITS
account.
Premature Withdrawal of Domestic Term Deposits
DEP.33/2013-14 Dt.21.03.2013
There shall be no penalty on premature
withdrawal of domestic term deposit of all ADVANCES
categories including senior citizen and capital gain
deposit scheme with effect from 01.04.2013. In Revision in existing investment limits in plant and
case of premature withdrawal, interest at applicable machinery / equipment for lending to Micro
Enterprises in the 40:20 proportion
card rate at the time of opening of deposit for the
actual period run shall be paid. According to RBI, existing investment
limits in plant and machinery / equipment for
DEP.32/2012-13 Dt.19.03.2013
lending to Micro Enterprises has been revised in
Uniform Customer Identification and Customer the 40:20 proportions within the existing overall
Acceptance Procedure for individuals at the time of ceiling for Micro enterprises as defined in the
opening of Accounts and Modified Simplified MSMED Act, as detailed below:
Uniform Savings Bank Account Opening Form Revised sub targets for lending to MSE sector
Ministry of Finance reviewed the existing (i) 40 percent of total advances to micro and small enterprises sector
“Simplified Account Opening Form (AOF)” for should go to Micro (manufacturing) enterprises having
opening of savings bank account and a new investment in plant and machinery up to R 10 Lakh and micro
(service) enterprises having investment in equipment up to R 4
“modified Simplified Account Opening Form
Lakh;
(AOF)” has been devised. This AOF has been
designed on the presumption that all the Banks will (ii) 20 percent of total advances to micro and small enterprises
sector should go to Micro (manufacturing) enterprises having
put in place adequate system to enable the customers
investment in plant and machinery above R 10 Lakh and up to
to fill the account opening form on an ‘online’
R25 lakh, and micro (service) enterprises having investment in
mode. equipment above R 4 Lakh and up to R 10 lakh.
Acceptable Documents for “Proof of
ADV.123/2012-13 Dt.07.01.2013
Identity” and “Proof of Address” approved by RBI
is given in the Annexure I of this circular. The Modifications to the Credit Guarantee Scheme (CGS)
modified simplified uniform savings bank account There have been certain modifications in
opening form for small accounts, normal accounts, the Credit Guarantee Scheme (CGS) of CGTMSE
additional information sheet for normal accounts and shall be applicable to credit facilities
and supplementary form for joint account holders is sanctioned on or after January 01, 2013.
given in as Annexure II of this circular. The existing and modified provisions of
the Scheme are given in the Annexure to this
Software will be provided by CO: TMD
circular.
enabling the prospective customers to fill in the
Account Opening Form on an online mode with ADV.127/2012-13 Dt.19.01.2013
necessary drop-down menus, in our Bank’s internet
Revision in Benchmark Prime Lending Rate
site.
Duly filled in applications by the There has been reduction in the
Benchmark Prime Lending Rate by 25 basis points
prospective customer may be printed by the
(bps) from 14.75% to 14.50% per annum. This
customer himself or may be printed at the branch,
revision will be effective from 09.02.2013 for the
where the customer intends to open the account. The advances linked to BPLR. All other existing
specimen signatures, affixing of photographs and guidelines on spread, tenor etc., for the BPLR
obtaining copies of the KYC documents (where linked advances shall continue.
applicable) as well as other formalities like
ADV.132/2012-13 Dt.08.02.2013
Nomination, Form 60, 61 etc. may be completed

2
 Jan-March 2013

Review of Base Rate and based on the same, orders for substitution may
There has been reduction in the Base Rate be passed.
from 10.50% to 10.20% per annum with effect ¾ Under Sec.13 (3A) of SARFAESI Act hitherto if
from 09.02.2013. any objection or representation is made by the
There will be no change in spread / tenor borrower / guarantors / mortgagors to the demand
premium and other guidelines except specifically notice, the same will have to be considered and
exempted by respective departments. replied within one week.
In view of the amendment, this time period to give
ADV.133/2012-13 Dt.08.02.2013
a reply for any objection / representation has been
Need for immediate empanelment of more than one extended to ‘within 15 days’.
Jewel Appraiser in all jewel loan lending branches
¾ Sec.13 under new Sub-Sections viz. Sub-Sections
5A, 5B & 5C have been added.
Jewel loan implementing branches should
ensure the following with regard to empanelment of ¾ In instances of Consortium Lending / Multiple
second jewel appraiser: Financing dealt with under Sec.13(9) involving
9 Identify/engage additional appraiser in their more than one secured creditor hitherto
panel Secured Creditors representing not less than
9 The availability of both the appraisers on all 3/4th in value of amount outstanding should
working days. agree / give consent for Sec.13(4) measures, to
9 Jewel loan should be disbursed to all needy
make it binding on other Secured Creditors. In
view of the amendment, this percentage has
customers on all working days as per the existing
been reduced to 60%.
guidelines.
9 Both the appraisers should be given equal ¾ In Sec.14 of SARFAESI Act, which deals with
opportunity for appraising jewels there by the moving an application before CMM / DM
time taken for disposing the customers is seeking assistance, the details of how such an
minimised.
application have to be made before CMM /
DM is elucidated.
9 Both the appraisers should be engaged
simultaneously on daily basis and not on rotation. ¾ The CMM / DM have been empowered to
authorize officer sub-ordinate to them to take
ADV.138/2012-13 Dt.13.02.2013 possession of the assets and documents and
The Enforcement of Security Interest and Recovery of hand it over to the Bank / Secured Creditor.
Debts Law (Amendment) Act, 2012 – Amendments to
The filing of caveats before High Courts were not
SARFAESI Act
facilitated uniformly pan India. However, owing to
Government of India has come out with an this new enabling provision, caveats can now be
amendment to SARFAESI Act as well as DRT filed before all High Courts.
Act, titled “The Enforcement of Security Interest
¾ Sec.23 of SARFAESI Act deals with registration of
and Recovery of Debts Law (Amendment) Act,
transactions viz. creation of security interest,
2012” which comes into force w.e.f 15.01.2013.
securitization or asset reconstruction with Central
The gist of the amendments in both the Acts is Registry. New provision has been added by which
enumerated hereunder: such transactions that are subsisting on or before
the date of establishment of Central Registry are
SARFAESI Act
also mandatory.
¾ The Multi State Co-operative Banks are brought
within the ambit of SARFAESI Act.
¾ The omission to file with Central Registry of any
particular transaction normally attracts penalty.
¾ In Sec.5 of SARFAESI Act, an enabling provision However, provisions have been added to the effect
has been added as Sub-Section 5 by virtue of which that if such omissions were only owing to
it is stated that on acquisition of financial assets by inadvertence or accidental nature and there are
an ARC, the said ARC, they may file an application other just and equitable grounds, the Central Govt.
on an application from Secured Creditor or ARC

3
 Recollect

Company may extend time frame. However, it has is left un(re)presented and if our Bank is set ex-
also been made clear that such extension of time parte owing to absence of our Advocate/our
and / or non registration shall not prejudice any officials, such order, will be viewed seriously and
rights of the Secured Creditor. appropriate staff action will be initiated.
Recovery of Debts due to Banks and Financial If any proceeding against the Bank –
Institutions Act (DRT Act) whether it is pending before Civil Court / DRT /
High Court / Consumer Forum or any other quasi
¾ Multi-state Co-operative Banks have been brought
judicial authority, it is absolutely mandatory that
within the ambit of DRT Act.
presence of our dealing/ monitoring Officers and/or
¾ In Sec.19 of DRT Act, a new provision has been panel advocates is ensured and that our Bank is
added to the effect that if there is a settlement prior adequately represented.
to commencement of hearing before DRT or at any
stage, before final order is passed, the applicant ADV.145/2012-13 Dt.27.02.2013
(Bank) may be granted refund of fees at such rates Applications Supported by Blocked Amount (ASBA)
as may be prescribed. - services in our Bank across all our branches
¾ Stipulation has been made that defendants shall file “Applications Supported by Blocked
their written statement within 30 days of date of Amount” (ASBA) is a supplementary process for
service of summons and in exceptional cases, applying in public issues. ASBA facility can be
Presiding Officer (PO), for reasons to be recorded used for Initial, Follow-on Public Offers (IPO and
in writing, allow not more than two extensions to FPO) and Rights Issue. Under ASBA, funds will
file the written statement. continue to earn interest during the application
¾ Likewise, it has been clearly stipulated that after the processing period, if held in an interest bearing
hearing of Recovery Application commences, it account. Bank will mark lien on the deposit
shall be continued on day to day basis until hearing account of the investor to the extent of the
is concluded. The DRT may grant adjournments, if application money. The lien will be removed
sufficient cause is shown / made out, but no immediately after finalization of the basis of
adjournments shall be granted beyond three times allotment. If bid is successful, the deposit account
and if there is more than one party, the total number will be debited and the allotted shares will be
of adjournments shall not exceed 6. Such transferred to the applicant’s Demat account.
adjournments also shall only be on cost being Branch shall refer the earlier circulars
imposed. ADV.106/2009-10, dt.30.09.2009 on the launch of
¾ Where it is proved to the satisfaction of DRT that ASBA Phase I services and ADV.11/2010-11,
claim of the Bank / FI is adjusted wholly or partly dt.22.04.2010 on ASBA Phase II services.
by lawful agreement or compromise in writing, the As per the directions of SEBI, ASBA
DRT shall pass orders recording such agreements / service is extended across all our branches. Our
compromise or satisfaction of the claim. Nandanam Branch will continue to act as a Nodal
Branches shall refer this circular for further
Branch for ASBA facility.
details. ADV. 150/2012-13 Dt.11.03.2013

ADV.144/2012-13 Dt.26.02.2013 Modifications in structured products of MSME sector

Appearance of Advocates / Liaison Officers/Nodal and ready reckoner for such loan products
officers before Consumer Courts etc All the SLPs under MSME sector was last
Wherever proceedings are going on reviewed in 2011 and details were communicated
whether initiated by Bank or against the Bank, vide CO: MSMED Circular nos. ADV.145/10-11
Officers who are dealing the matter should dated 10.01.11, ADV.12/2011-12 dated 26.04.11,
meticulously follow-up with dealing advocates, and ADV.47/2011-12 dated 13.06.11.
diarise the date of hearing and ensure that our Bank Subsequently, based on feedback received
is well represented before the Consumer Courts / from field level functionaries, a need was felt to
all legal forums. It shall be ensured that no hearing

4
 Jan-March 2013

review the Structured Loan Products of MSME Office of the PCDA(Pension), Draupadighat,
Sector for greater efficacy. Accordingly, our higher Allahabad for advice and further action.
authorities have approved modifications in SLPs of
CRA.126/2012-13 Dt.03.01.2013
MSME sector, as per Annexure A of this circular.
Further, salient features of all existing Fixing timeline for redressal of grievances received
SLPs under MSME sector (with latest from pensioners
modifications incorporated therein) are
Govt. of India, Ministry of Personnel,
consolidated for ready reference as per Annexure B
emphasized that a fully functional redress
of this circular.
mechanism needs to be in place in all Ministries of
In view of low business off take, following Government of India and in the Department /
SLPs of MSME Sector have been discontinued: Organisations under the Ministries for expeditious
1. IND Vahana redressal of public grievances. It has further
emphasized that the system of grievance redress
2. Annapoorna & Arogya
mechanism should be well publicized to ensure
3. IB Caterer that the citizens are aware of the system and can
4. IB Professional special. interact with the Department to settle their
5. IB ALL CV Autostar
grievances.

6. IB BEML Equipment Finance Government has directed that the

following steps, among others, may be taken to
ADV.159/2012-13 Dt.30.03.2013 ensure that grievance redress machinery is in order
CRA for prompt redressal of grievances of citizens:

Defence Pensioners - Fixation of enhanced family 1. A grievance should be acknowledged

pension to pre-2006 family pensioners immediately and at the most within three days
of the receipt of the grievance. A grievance
The Department of Pension & Pensioners should be redressed within a period of
Welfare (P&PW) have clarified that the revised maximum of two months of its receipt. If
enhanced family pension shall not be less than finalization of a decision on a particular
50% of the sum of the minimum of the pay in the grievance is anticipated to take longer than two
pay band plus the grade pay or 50% of the months, an interim reply should invariably be
minimum of the pay scales in case of HAG and sent.
above, corresponding to the pre-revised pay scale
in which the pension / deceased employee has last 2. In case it is not feasible to accede to the request
worked. made in the petition, a reasoned reply may be
issued to the aggrieved citizen within this
Branches shall refer the following Annexures stipulated time limit.
to this circular:
CRA.127/2012-13 Dt.05.01.2013
♦ A copy of Govt. OM dated 25th May 2012
♦ A concordance table (Annexure-A) “IB Arogya Raksha” - Renewal of MOU for a period
of One Year w.e.f. 01.01.2013 to 31.12.2013
Pension paying branches shall refer the
above, to facilitate payment of revised enhanced Bank has renewed MOU with United India
family in all cases where fixation of enhanced Insurance Company governing “IB - Arogya
family pension under above OM is more Raksha” Mediclaim Policy for further period of
beneficial. While fixing the family pension as per twelve months w.e.f 01.01.2013 to 31.12.2013
table, Note-I & Note-II mentioned therein may be with all existing features of the scheme remaining
kept in view. same except for the following:
In case of any doubt about the fixation of 1. Additional Load @ 5% on the existing base rates of
enhanced rate of Family pension, the cases may premium uniformly across all the Plans/ Slabs.
with full details of the Pensioner / Family pension Revised Premium Chart is annexed to this circular
and PPO No. may be referred to Audit Section of and also has been ported in the Help Desk.

5
 Recollect

2. Pre-existing disease coverage will not be available Direct credit of Refund / Rebate to the Exporters'-
for an insured person during the first 48 months credit by way of e-payment under RTGS / NEFT
(instead of 36 months applicable earlier) of facility
continuous coverage of such insured person prior to With effect from 01.01.2013, all refund /
his / her first policy with the insurance company as rebate to exporters should directly be credited to
per IRDA norms. the claimant’s account through RTGS / NEFT.
3. To be issued as GROUP POLICY on a Monthly For this purpose, the following procedure has
basis from January 1, 2013 onwards favouring been prescribed by the Commissioner of Service
Indian Bank as the Master Policy holder with a Tax.
minimum group size of 100 having validity of 12
months covering all the A/c holders subscribing for i) The Commissioner has advised all the claimants to
the Scheme as beneficiaries. submit ‘One Time Authorisation with claim of
refund / rebate filed by the assessee’ (in duplicate),
4. Accidental Risk for New Members joining the duly certified by the beneficiary bank branch
Scheme however to start from the date of actual authorities, in the prescribed format (as Annexure
remittance of premium by the policy holder. A to the Trade Notice), at the time of filing such
5. Issue of IT Certificates under Sec 80 D of IT Act: It refund / rebate claims, in favour of the
is important to note that under Group Policy, Bank Jurisdictional Division Deputy Commissioner /
is required to issue IT Certificate to the policy Asst. Commissioner. For all subsequent refund /
holders. Branch Managers in this regard are hereby rebate claims, the claimant shall submit self
advised to countersign on behalf of the Bank at the attested copy of the Authorisation already
space provided in Certificates of Insurance (COI) submitted to the Division DC / AC. The
forwarded by UIICO to the respective branches authorisation shall be valid for one financial year
before delivering same to the policy holders. and a fresh authorisation shall be filed along with
the first refund claim filed in the subsequent
Branches shall refer this circular for further guidelines.
financial year.
CRA.128/2012-13 Dt.07.01.2013 ii) Authorisations filed for each financial year shall
Implementation of Single Window System for be given a serial number and maintained in the
Reimbursement of Telecom Pension Payments Division office. In case of any change in the
details of Authorisation, new authorisation, duly
The following corrigendum have been certified by the Bank, shall be submitted by the
issued by Reserve Bank of India with regard for assessee.
information and necessary action implementation
of Single Window System for disbursement of iii) In case of pending refund / rebate claims as on
pension to the pensioners of Department of 01.01.2013, the payment will be made through
Telecom through Public Sector Banks: RTGS / NEFT facility.
For Read iv) All the jurisdictional DC / AC have been
Para 4.4 of SWS Document: A pensioner availing / preferring authorised to remit the refund / rebate through
A pensioner availing / to avail this facility will have to authorised branch of State Bank of India, Mumbai
preferring to avail this facility open a savings (Joint account
with spouse optional) in whose through RTGS / NEFT after deducting the bank
will have to open a savings
(Joint Account optional) favour an authorisation for family charges.
pension exists in the PPO.
CRA. 141/2012-13 Dt.29.01.2013
Certificate The Banks will obtain a certificate
from the pensioners before Collection of original pension documents at CPPC
opening / crediting the joint
account for pension, a certificate
through Zonal Offices
to be inserted as Annexure- “N” As per Para 6.1.2 of the Accounting and
(copy enclosed for ready
reference) Operating Procedure for Centralised Pension
Processing Centre of Authorized Banks for
Copy of the “Annexure –N” is given as
Pension Disbursement to Central Government
annexure to this circular. (Civil) Pensioners, issued by CPAO, New Delhi,
CRA.133/2012-13 Dt.22.01.2013 CPPC should provide for the safe custody of all

6
 Jan-March 2013

pension papers and it is a basic requirement that 1) Subscribers have to generate the challan from
the Disburser’s half of the PPO portion and TNACTCL website and remit the payment across
revisions thereto, all SSAs, and all papers the counter.
pertaining to one pensioner be securely placed in
2) The MUP reference number will be available in
one file and storage of these files should be within
the challan and branches should not generate the
the precincts of the CPPC.
MUP reference number again.
The list containing field wise correct
3) Branches have to collect the fees as per the
details, implication of entering wrong data and
challan (which includes bank’s service charge of
method of correcting the same in the pension
R 5/- per challan) through the Screen No.1009
website are given as annexure to this circular.
Multiutility Financial Transaction.
CRA.143/2012-13 Dt.14.02.2013
4) All branches in India are authorised to collect the
Onboarding onto National Automated Clearing fees thru’ the Multi Utility Payment Module.
House(NACH) of NPCI
5) Subscribers who have net banking facility with
According to Govt. of India, Ministry of our bank can also remit the fees through internet
Finance, NPCI has shifted the transaction banking after generating the MUP reference
processing of routing the entitlement of citizens number.
from APBS platform to National Automated
6) Fee collection starts from 01-04-2013.
Clearing House (NACH). NACH provides for
debit and credit transactions based on both 7) Amount to be collected R 70/- (excluding bank
Aadhaar number as also Account number and can charges of R 5/-)
process 10 million transactions a day. NACH thus
CRA. 158/2012-13 Dt.18.03.2013
provides for interoperability between different
codes such as MICR code, IFSC, Institute Standardisation and Enhancement of Security
Identification Number (IIN) etc. Features in Cheque Forms- Migrating to CTS 2010
As the file processing is similar to ECS Standards
transactions, Service Branch, Chennai has been Reserve Bank of India informed that it has
identified as nodal branch for processing the files been decided to put in place the following
under NACH system. Under the NACH system, arrangements for clearing of residual non-CTS-
User Departments can provide the detail of 2010 standard cheques beyond the cutoff date of
payments either on Aadhaar number or Account March 31, 2013:
number basis.
a. All cheques issued by banks (including DDs /
In the case of payments based on Aadhaar POs issued by banks) with effect from the date of
number, NPCI will map the IIN and transactions this circular shall necessarily conform to CTS-
will be processed accordingly. In the case of 2010 standard.
payments based on Account number the User
b. Banks shall not charge their savings bank account
Departments have to furnish IFSC / MICR code /
customers for issuance of CTS-2010 standard
IIN to process the transactions. CO: TMD has
cheques when they are issued for the first time.
already made necessary arrangements for
However, banks may continue to follow their
processing the files based on Aadhaar number.
existing policy regarding cheque book issuance
CRA.146/2012-13 Dt.06.02.2013 for additional issuance of cheques, in adherence
Fee collection under MUP from Subscribers to their accepted Fair Practices Code.
directly for TN Arasu Cable TV Corporation c. All residual non-CTS-2010 cheques with
Ltd (TNACTCL) customers will continue to be valid and accepted
The process for collection of subscription in all clearing houses [including the Cheque
from Subscribers directly for TN Arasu Cable TV Truncation System (CTS) centers] for another
Corporation Ltd (TNACTCL) is detailed below: four months up to July 31, 2013, subject to a
review in June 2013.

7
 Recollect

d. Cheque issuing banks shall make all efforts to eligible family pensioners and forward the claim
withdraw the non-CTS-2010 Standard cheques in on the prescribed form through concerned Service
circulation before the extended timeline of July Hqrs., to Pension Sanctioning Authority along with
31, 2013 by creating awareness among customers following documents / information:
through SMS alerts, letters, display boards in 1. NOK and family details from service Head
branches / ATMs, log-on message in internet Quarters.
banking, notification on the web-site etc. 2. A certificate regarding grant / non-grant of
e. A progress report in this regard to be submitted to family pension from re-employed along with
RBI in the prescribed format, enabling family details or details of grant of family
monitoring of the progress made by banks in pension for civil service with the following
respect of migration to CTS-2010 standard details:
cheques.
f. In addition, the bank-wise volume of inward ♦ Name and address of Civil
clearing instruments processed in the Cheque Dept/PSU/Autonomous body where
Processing Centers will be monitored with officer was re-employed after discharge
respect to the CTS-2010 / non CTS-2010 from military service.
standard cheques presented on them. ♦ Death certificate of the officer.
g. No fresh Post Dated Cheques (PDC) / Equated ♦ PDA details along with Account No.
Monthly Installment (EMI) cheques (either in old
format or new CTS-2010 format) shall be ♦ BSR code of the paying branch.
accepted by lending banks in locations where the
facility of ECS / RECS (Debit) is available. ♦ PPO No. notifying family pension for
Lending banks shall make all efforts to convert civil service and name and address of
existing PDCs in such locations into ECS / RECS PPO issuing authority. A copy of PPO
(Debit) by obtaining fresh mandates from the should also be enclosed.
borrowers.
3. PPO No. under which retiring pension was
CRA.160/2012-13 Dt.20.03.2013 granted from defence side.
Defence Pensions - Grant of Dual (two) family 4. Current PDA details along with A/c No. from
pensions from military side as well as Civil where pension now desired.
employment.
Last payment certificate by PDA in respect
According to Principal Controller of of ordinary family pension from military service
Defence Accounts (Pension), Allahabad, family of indicating date upto which family pension was paid
Armed Forces officers who got reemployed in to, if pension was sanctioned, name of family
Civil Dept/PSUs/Autonomous bodies/Local funds pensioner, date of stoppage of family pension, PPO
of Central/State Govt. after getting retired from No. notifying family pension must be clearly
military service and were in receipt of military mentioned.
pension till death, shall be allowed to draw family
CRA.162/2012-13 Dt.23.03.2013
pension from military service in addition to the
family pension, if any authorised from the Introduction of “Payable At Par” Cheques under
reemployed civil Dept. subject to fulfilment of CTS-2010 Standard - Guidelines for the Host
other prescribed conditions as hitherto fore. Branches
They also informed that the provision of Hence forth “CTS-2010 Standard”
the above letter are applicable to the Armed Forces Cheques will be issued for those whose accounts
Personnel who got discharged/retired/invalided out which are opened under the products eligible for
from the service with effect from 24.09.2012 or issue of cheque books, with notation “Payable At
thereafter. Benefit of this provision has also been Par At all our Branches” in lieu of the existing cheque
allowed in past cases. However, the financial books.
benefits shall be granted from 24.09.2012 only.
Branches should entertain such ‘payable at
Pension paying branches and CPPC, par’ cheques drawn on any of our branches, either
Chennai shall obtain the application from the presented for collection by our customers or

8
 Jan-March 2013

received for payment (Including cheques received lakhs has to be made through “Transfer Batch”
under clearing) to effect the transactions, if only, for which a queue will be generated.
otherwise in order, subject to the following
Hence, a Teller/SWO/Officer has to
guidelines:
necessarily enter such transaction beyond R 2 lakhs
¾ No charge should be levied for any type of only through Transfer Batch mode for which
transactions viz. cash/transfer/ clearing. maker/checker condition is enabled. The system
¾ In case of transfer and clearing transactions, there is will not allow the user to generate any transaction
no per day restrictions on the number of instruments beyond R 2 lakhs under voucher/cheque (single
and on the upper limit for the amount. window screens) transaction mode. It should also
¾ In case of cash withdrawals for Self Cheques (to be noted that for Cash and Clearing transaction
the account holder alone), payment is restricted to through Single Window screens, the existing
a 50000/- per occasion, for SB/Current account powers/controls will continue.
holders.
¾ It should be noted that No Cash payment is permitted HRM.117/012-13 Dt.05.01.2013
to a third party, even when the cheque is a “bearer” or
Introduction of new BGL head for payment of Provision of
“payable to self”. Shoes, Towels and Toilet Soaps to the Part Time
¾ Branches are advised not to make Cash payments to Sweepers of the Bank
a third party at a Host Branch, even if it is a ‘payable at Henceforth, branches should debit the
par’ cheque payable to a ‘bearer’. below given BGL accounts to make payments to
¾ In case of Multicity account, cash payment can be
PTS/FTS for providing shoes, socks towels and
made upto a 50000/- per occasion for Self / Third
soaps, as per the extant guidelines in force:
Party, at a Host Branch, irrespective of the type of 1. CGL 3137505001 – PROVN OF TOWELS ETC – PTC.
account.
2. BGL 96163 - PROVN OF SHOES TO PTS
Transactions permitted under “Payable at
Par Cheque” facility at Host Branch 3. BGL 96164 - PROVN OF SOCKS TO PTS
Transaction 4. BGL 96165 - PROVN OF TOWELS TO PTS
Savings Bank / CA / CC / OD
Type
• Allowed ONLY to self i.e., the 5. BGL 96166 - PROVN OF TOILET SOAPS – PTS.
account holder himself / herself
ALONE can withdraw cash. All the above 4 BGLs (item No.2 to 5) are
Cash
Withdrawal • Amount of single cheque shall not mapped to the CGL 3137505001.
exceed R.50,000/-. No cash
payment is permitted in the case of There shall be no debit to SR-II either at
OD/OCC accounts at Host branch. Branches or Zonal Offices. All other terms and
• Restricted only to those instruments conditions of the subject scheme remain
crossed “a/c payee” - No upper
Clearing
limit for single cheque amount,
unchanged.
Debit
aggregate amount and number of
cheques.
HRM.121/2012-13 Dt.09.01.2013
• Restricted to only those instruments Mandatory requirement on updation of details of
crossed “a/c payee”. No upper limit
Transfer
for single cheque amount,
Separated Employees on real time basis
Debit / Credit
aggregate amount and number of A new Data entry Screen has been
cheques.
introduced for furnishing the details of separated
CRA.169/2012-13 Dt.30.03.2013 employees (Retirement/ VRS / Resignation / CRS /
Dismissal / Removal from service etc.,) on real
HRM time basis. The link is provided in the HRM
Modification in Ceiling on Passing Powers through Online website. Branches/ offices should enter the
“Transfer Batch” SR Number of the separated employee on the day
Effective from 06/01/2013, any transfer of separation/relief, select the mode of separation
transaction (single window screens) beyond s.2 (Superannuation, VR, Dismissal etc.,) from the
drop down list provided therein and enter the date

9
 Recollect

of separation and submit. The above exercise is and appropriate staff accountability will be
Mandatory. fixed for disciplinary action.
HRM.142/2012-13 Dt.27.03.2013 • Effective from 10/02/2013, a new
Reconcilable BGL Account (No.98741)-,
GENL
“ROUTING ACCOUNT” will be enabled to
Know your customer (KYC) documents required for the branches/offices for doing such
entry and exit under National Pension System (NPS)- transactions hitherto made through the
revision Intermediary Parking account/BGL General
Parking Account. This new BGL Routing
Pension Fund Regulatory & Development
Account is enabled with system generated
Authority (PFRDA) the administrative authority
for implementation of the National Pension System reference number facility and thus branches
need not enter any manual reference number.
(NPS) scheme has informed that in order to bring
in uniformity and align the KYC documents • It should be ensured that the entries more
required for opening of accounts under NPS with than 2 days are not allowed to remain in the
those required by other financial sector institutions, new BGL Routing Account and should be
has decided to replace the existing KYC document brought to NIL. This has to be monitored by
list with a new set of documents as per the the Branch Manager/ABM with the Age-
Annexure to this circular. The revised guidelines wise BGL report pushed by CDC on a daily
will be applicable for both entry and exit under basis without fail.
NPS and will come into effect from 10.02.2013.
• It should be noted that the BGL Eximbill
GENL.91/2012-13 Dt.07.02.2013 Parking Account (BGL No.97955xxxxxx)
Closure of Intermediary Parking Account and BGL will continue to be in operation.
Parking Account – General, Introduction of Zonal Offices should monitor the newly
Reconcilable BGL “Routing Account” introduced BGL Account (No.98741)-“ROUTING
On a review of the maintenance of the ACCOUNT” apart from other identified Critical
Parking Accounts at branches, the Top BGL Heads on a daily basis. Any violation should
Management has directed the following: be reported to CO: Banking Operations
Department, who monitors the Critical Heads at
• Branches are prohibited to make any fresh Corporate Level.
credit entry in their existing Intermediary
Deposit Type Parking account and BGL The revised methodology, for doing
Parking Account - General effective from transactions through the new BGL “Routing
10/02/2013. Account” (BGL No.98741) is explained in the
Annexure of this circular.
• Branches should reverse all the outstanding
entries in the said account immediately and GENL.92/2012-13 Dt.08.02.2013
close the Intermediary Parking Account. Standardised Public Grievance Redress System
This process should be completed latest by (SPGRS)
17/02/2013, we repeat, by 17/02/2013
without fail. Indian Bank has put in place an updated
• Zonal Offices should ensure that all the inhouse software Standardised Public Grievance
branches under their control close the Redress System (SPGRS).
Intermediary Parking Account by In the present updated version of SPGRS
17/02/2013 and submit a compliance complaints received through various modes like
certificate to this effect to CO: Banking telephonic complaints, e-mail, letters, online
Operations Department without fail.
grievance redress site of Banking Ombudsman,
• Any branch/office found keeping balance Govt. of India (CPGRAMS) etc will be integrated
outstanding in the Intermediary Parking and the maximum time given for redress of
account / BGL Parking Account-General
complaint is only 21 Days.
beyond 17/02/2013 will be held responsible

10
 Jan-March 2013

SPGRS is operational wef.18.02.2013.

The Salient features of the SPGRS are given in CBS Help Desk Î ATM Website Î
Annexure-I of this circular. Main Menu Î ATM Debit Card
GENL.93/2012-13 Dt.14.02.2013
Modification Request (DCMS)

Procedural Guidelines for entering ATM Card Henceforth, any modification request
Requests through Debit Card Management System received through Letters / Emails / IP messages
(DCMS) will not be entertained for security reasons.

Request for new ATM Debit cards from Branches should ensure the following:
branches was routed through CBS which is • On receipt of the Cards/ Pin mailers, enter
processed using “Debit Card Management System the Batch ID/Number (furnished in the
(DCMS)” software provided by the vendor M/s cover and Pin/Pan Generation Report) in
Financial Software Systems P. Ltd (M/s FSS P the relevant column as confirmation of
Ltd). receipt of cards and pin mailers by
Branches are currently submitting branches.
modification request, issuance of Platinum Debit • Physically verify the cards and pin mailers
cards, Issuing of Senior Citizen cards, Issuance of received are tallying with attached list and
Rupay Kissan cards, etc. through a separate web enter the Batch ID/Number in the system.
portal provided by CO: TMD (CBS Help Desk Î
ATM Website). This site has certain limitations However, for issuing new ATM Debit cards,
like uploading photo, delay in processing, absence branches has to continue the existing practice and
of maker and checker concept etc. should submit their request only through CBS.
GENL.95/2012-13 Dt.23.02.2013
Debit Card Management system (DCMS)
has been introduced for the branches to overcome FX
limitations in submitting modification requests
relating to ATM Debit cards. In the DCMS 2% Interest Subvention on Rupee Export Credit
software, the following facilities are provided in RBI has been informed that the 2% Interest
addition to the existing facilities available in the Subvention on Rupee Export Credit to eight sectors
ATM Website: Scheme would also be available to the Engineering
1. Enablement of Maker and checker concept Sector on pre and post shipment export credit, on
2. Processing of request then and there in a the same terms and conditions as available to other
speedier manner. sectors. A list of 134 tariff lines of Engineering
products approved for inclusion in Interest
3. Software support for issuance of various Subvention for the period 1st January 2013 – 31st
types of products March 2013 is enclosed as (Annexure I) to this
4. Various MIS reports for Branches / Zonal circular.
Offices / Corporate Office This is also to inform that the Scheme is
5. Monitoring of cards issuance, despatch extended for a further period of one year from
modules, target, etc. 01.04.2013 to 31.03.2014 on the same terms and
6. Informing customers through SMS of conditions for the following sectors:
issuance of cards/pin mailers, wherever 1. Handicrafts 2. Carpets 3. Handlooms
Mobile numbers are furnished in CBS. 4. Small & Medium Enterprises – SMEs (as defined at the bottom
of this circular)
Effective from 01.03.2013 all branches
should submit all the modification requests for 5. Readymade 6. Processed Agriculture
7. Sports Goods
Garments Products
Cards/Pin mailers including the request for the
9. 134 Tariff lines on Engineering Goods (as
New Senior Citizen ATM Debit cards, Platinum 8. Toys
per Annexure I)
ATM Debit cards, Rupay ATM cards, Chip ATM
cards ETC. through the following navigation: As per the extant guidelines governing the
Rupee Export Credit Interest Rates, the rate of

11
 Recollect

interest after subvention of 2%, should not go o Complete address and contact number
below the floor rate i.e.7% and the entire of the branch where the bank account
subvention amount should be passed on to the is maintained.
eligible exporters. FX.35/2012-13 Dt.27.02.2013
The procedure for claiming interest
ADMIN
subvention is available in the circular.
FX.33/2012-13 Dt.28.01.2013 TDS Exemption on certain income accruing to Banks

Opening of NRO accounts by individuals of CBDT, Delhi vide its Notification has
Bangladesh Nationality – Latest RBI Guidelines exempted, the following banking transactions, the
income accruing to the banks (listed under the
Reserve Bank of India has communicated, Second Schedule to the RBI Act, 1934 excluding
with regard to opening of NRO accounts by foreign banks) from deduction of tax at source
individuals of Bangladesh Nationality, that Prior (TDS), with effect from 01.01.2013.
approval of RBI is not required subject to
compliance of RBI stipulations, as detailed below: 1. Bank Guarantee Commission
™ The bank concerned should satisfy itself that 2. Cash Management Service Charges
the applicant is holding valid visa and valid 3. Depository Charges on maintenance of
residential permit issued by Foreigner DEMAT Accounts
Registration Office (FRO) / Foreign Regional
Registration Office (FRRO) concerned. 4. Charges for warehousing services for
commodities
™ Proper record of such accounts opened should
5. Underwriting service changes
be maintained and details of such bank
accounts opened should be reported to “Under 6. Clearing charges (MICR Charges)
Secretary (Foreigners), Ministry of Home 7. Credit Card or Debit Card commission for
Affairs (MHA), NDCC-II Building, Jai Singh transaction between the
Road, New delhi-110 001” on a quarterly 8. Merchant Establishment and Acquirer Bank
basis.
ADMIN.79/2012-13 Dt.24.01.2013
™ To enable the branches to report to MHA,
relevant BBMIS screens are made available Renewal of burglary and house breaking policy
under the menu Quarterly Æ ID. Branches are
required to submit the quarterly data without The Burglary and House Breaking Policy
necessitating reminders to enable Corporate for the Bank has been renewed for the financial
Office to submit the consolidated data in this year 2013 – 2014. The period of Insurance is from
regard to MHA in time, beginning from the 16/02/2013 to 15/02/2014 with M/s United India
quarter ending March 2013. Insurance Company Ltd

™ The data required to be reported to MHA are as The New Policy Number is
below: 010503/46/12/04/00000133

o Name/s of the individual/s Assets Covered:

o Date of arrival in India Furniture, Fittings, Fixtures inclusive of

Electrical fittings, Books, Stationery, Office
o Passport Number Equipment including Electrical Equipment and
o Place and Country of issue such other machinery whilst Stored and/or
installed and /or lying in the premises owned by
o Residential permit reference and / or leased to the Bank which includes all
o Date and place of issue Administrative Offices, Branches, Training/
Inspection/ Stationery Centres, Guest Houses,
o Name of the FRO / FRRO concerned
Extension Counters, Satellite Offices, ATMs,
Quarters etc. situated all over India.

12
 Jan-March 2013

Exemption Clause: Salient features / highlights of the Policies

are given in the circular
The premises shall not include any yard,
garden, open space or out – building not connected ADMIN.81/2012-13 Dt.22.02.2013
with the Main Building occupied as other Offices Facility for Exchange of Notes and Coins
and Residences. Adjudication of notes as per RBI Note Refund Rules
Foreign Branches are excluded from this (2009)
policy. Broad features of the Policy are given in With regard to the Facility for Exchange of
the circular. Notes and Coins, the scope of the guidelines
ADMIN.80/2012-13 Dt.15.02.2013 contained in Para 1 (a) of the Master Circular have
been enlarged by RBI, as detailed under:
Audit policies
The faciity of exchange of cut / mutilated
Department of Financial Services, Ministry banknotes, in addition to soiled notes and issue of
of Finance, Govt of India has forwarded a Model good quality clean banknotes / coins, should be
Audit Manual consisting of the Model Audit made available at all bank branches (including
Policies for customization and adoption by all the those of co-operative banks and RRBs). In case a
Public Sector Banks uniformly. The salient branch, for any reason, is not able to immediately
features of the revised Audit Manual are given adjudicate the cut / mutilated notes across the
below. counter, it may accept and send such notes to the
currency chest to which it is linked, for
• Internal Audit should be strengthened so that adjudication and in any case ensure that the
it works as a strong deterrent and preventive tenderer receives the exchange value as per RBI
mechanism for frauds Note (Refund) Rules, 2009. within a reasonable
• Audit system should help Management focus time, say a fortnight. This above facility should be
on High Risk Areas. It should critically provided to all member of public without
analyse the high frequency low severity as discrimination on all working days. The other
well as low frequency high severity areas. instructions contained in the referred RBI Master
Circular remain unchanged.
• The Audit System should be supported by
Off Site Monitoring Unit through system In this regard, Branches are advised to
generated reports/MIS. adhere the following:
• Banks should give adequate attention to IS 1. As per revised guidelines of RBI, facility of
Audit as many of the frauds are IT related exchange of cut / mutilated banknotes
which have shown substantial increase in the (adjudication) to be carried out at all branches
recent times. and on all working days. In case of need,
• The Bank should move towards software branches may seek the expertise of Currency
based audit. Chest (CC) / branches attached to CC for
adjudication.
Accordingly, the following Policies have
been approved for implementation in our Bank as 2. A separate register (Form DN 2) to be maintained
per the Model Audit Manual for Public Sector for notes taken for adjudication.
Banks: 3. Cut / mutilated notes which could not be
1. Internal Audit Policy (Previously Inspection adjudicated at the branches for any special
& Audit policy) reasons alone are to be referred to the CC / Chest
attached branches. All the cut / mutilated notes
2. Concurrent Audit Policy tendered across the counter shold not be sent to
3. Information System Audit Policy the CC as a matter of routine.

4. Fraud Risk Management Policy 4. On adjudicating the cut / mutilated notes at the
branches, these notes should be sent to CC then
5. Document Handling and Retention Policy
and there during cash remittance and C2C advice
(previously Policy on Record Maintenance)

13
 Recollect

should be obtained. The branches not attached to Certificate should contain the following
our CC and falling under RBI Linkage Scheme of particulars:
other Banks, may send the adjudicated notes to
1. Name of the NRO depositor/non-resident
such other Banks for getting the exchange value.
service provider
ADMIN.83/2012-13 Dt.25.02.2013
2. Status (Individual, Company, firm etc) of the
Obtention of Tax Residency Certificate for NRO depositor/non-resident service provider
application of Double Taxation Avoidance
3. Nationality (in case of individual)
Agreement (DTAA) rates in respect of payment of
interest, fees etc to Non-residents 4. Country or specified territory of
With effect from 01.04.2013, as per incorporation or registration (in case of
section 90(4) of the Income Tax Act read with others)
Rule 21AB to Income Tax Rules the NRO 5. Assessee’s Tax identification Number in the
depositors having valid PAN has to obtain Tax country or specified territory of residence or
Residency Certificate from the Government of the in case no such number, then, a unique
Country of domicile of the NRO depositor for number on the basis of which the person is
availing Income Tax benefit of application of identified by the Government of the country
DTAA rates. Since the Tax Residency Certificate or the specified territory
has been stipulated by CBDT, the self declaration
6. Residential status for the purposes of tax
sought by as per existing provisions conveyed vide
Circular ADMIN 04/2011-12 dated 11.04.2011 is 7. Period for which the certificate is applicable
now not required and henceforth dispensed with. and
Further, in view of the said amendments 8. Address of the applicant for the period for
made to TDS provisions, non-resident service which the certificate is applicable.
provider also shall obtain “Tax Residency
The said certificate shall be duly verified by
Certificates” from the Government of the country
the Government of the country or the specified
of domicile of the non-resident service provider for
territory of which the depositor claims to be a
availing DTAA rates for deduction of tax at source
resident for the purposes of tax.
on payment of fees. The persons covered under the
said category include, Master Card International, ADMIN.89/2012-13 Dt.22.03.2013
VISA international (if payments made falls under
the category of technical services), KSDEE Though due care has been taken in the preparation of
Software Services etc., and will include such Recollect, the version given in the circular is final.
persons depending upon the contract entered into.
Compiled by CO: O&M Division
As per Income Tax Notification
No.39/2012 dated 17.09.2012, the Tax Residency

14
 Volume 26 Issue 4
a
For Private Circulation Only

January – March 2014 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Pg
CONTENTS OF THIS ISSUE S.No Date Subject
No.
Pg 133 27.03.2014 Data Inconsistency between CBS
S.No Date Subject 7
No. and Exim bills
DEP. 20.01.2014 Legal Guardian Certificate issued 138 31.03.2014 Review of Base Rate 7
20 under the National Trust Act, 1999
HRM 08.01.2014 The Revised Procedure for claiming
empowering the disabled persons 2
101 the Reimbursement of Fuel
with Autism, Cerebral palsy, Mental
Expenses to Award Staff and Outfit 7
Retardation and Multiple Disabilities
and Dress Maintenance expenses to
21 23.01.2014 Cheque Book request through net- Officers under Staff Welfare Scheme
2
banking
102 17.01.2014 Provision for single leased
22 23.01.2014 Collection of Account Payee accommodation to officers posted in
Cheques - Prohibition on Crediting 2 8
North Eastern region (NER) - revision
Proceeds to Third Party Account in rental ceilings
23 23.01.2014 Inoperative accounts 3 111 12.02.2014 Enhancement in the Ex-gratia
ADV 02.01.2014 Non Agriculture loans against Gold amount paid to the Pre-1986 8
106 ornaments and Jewellery - Bullet 3 retirees/surviving spouses
repayment of loans 112 14.02.2014 Formation of Women Cell at 8
110 06.01.2014 Directions of the Board in the Special Corporate Office – Change of
Committee (Monitoring Large Value 3 members
Frauds) 120 25.03.2014 Centralization of Reimbursement of 8
111 07.01.2014 Irregularities in issuing Financial Domiciliary claims & Reimbursement
Capacity Certificate for submission to of Hospitalization expenses from
3 01.04.2014
Foreign Universities – Education
Loan. CRA 28.01.2014 Central Plan Scheme Monitoring 9
112 13.01.2014 MoU with M/s INDIA RATINGS & 77 System (CPSMS) revised
RESEARCH PVT LTD for Rating of 4 procedure - under Centralised
SME Customers Processing System - Guidance to
113 13.01.2014 Assignment of NPA Management to branches
4 84 01.03.2014 Co-branded “Arogya Raksha 9
ARC
114 22.01.2014 CIBIL DETECT – use of the Mediclaim Policy” with United India
5 Insurance Co.Ltd (UIIC) - Renewal of
reports
MOU for the period w.e.f. 01.03.2014
116 31.01.2014 ECS Mandate, Security Post Dated to 28.02.2015
Cheques (PDCs) and Recovery of 5
EMIs from the borrowers 85 20.03.2014 Procedure for Outstation Cheque 10
Collection
117 01.02.2014 Implementation of NRLM - Aajeevika
6 86 21.03.2014 Amendments to Public Provident 10
– Interest Subvention Scheme
Fund Scheme, 1968 (PPF 1968) and
118 14.02.2014 Educational Loans for studies abroad Senior Citizens
6
to pursue courses in Medicine
FX 27.01.2014 KYC Procedure for opening bank 10
119 28.02.2014 Re-Introduction of processing accounts for Foreign Students
and 35
and charges for all Personal Segment 6 studying in India
124 11.03.2014 Loan Products 37 25.02.2014 Instructions received through email 10
126 14.03.2014 Audited claim of interest subvention from customers
for short-term crop loans disbursed GENL 25.01.2014 Alteration in the name of
6
under 7% products - for the year and “Development Credit Bank Limited”
ended Mar-2014 82 and 11
86 06.02.2014 and “Mizuho Bank Corporate Bank
127 15.03.2014 Capital Optimization 7 Ltd”
132 22.03.2014 Credit proposal tracking system for 91 06.03.2014 BCSBI code compliance rating 11
MSMEs 7 92 14.03.2014 Anonymous and Pseudonymous
11
complaints
96 28.03.2014 BCSBI CODE Compliance 11
 Recollect

Pg Hence, branches while opening bank

S.No Date Subject
No. accounts of (i) ‘mentally ill persons’ are advised to
ADMIN 04.01.2013 Installation of Coin Vending obtain the prescribed orders/certificates, appointing
Machines 12
52 the guardian / manager to operate the account, issued
55 27.01.2014 Withdrawal of all old series of by the District Courts / District Collectors and (ii) for
and and Banknotes issued prior to 2005 12 ‘person with disability’ by Local Level Committees
60 04.03.2014
of the area. Branches can download the details of the
57 12.02.2014 Issue of a. 50 Banknotes with
incorporation of Rupee symbol (a) 12 Local Level Committees of the area from the website
without inset letter ‘www.thenationaltrust.in’. They should preserve the
58 18.02.2014 Exemption of TDS on the service tax true copy of the orders for their records along with
13
component the opening form. Stipulated KYC guidelines should
62 08.03.2014 Usage and Maintenance of AC units also be strictly adhered to.
13
in Branches/Offices
64 17.03.2014 Compliance issues and mitigation DEP.20/2013-14 Dt.20.01.2014
13
measures
Cheque Book request through net-banking
DEPOSITS
A new utility to make a cheque book request
Legal Guardian Certificate issued under the National through net banking has been provided to the
Trust Act, 1999 empowering the disabled persons Savings Bank Customers using such facility. A
with Autism, Cerebral palsy, Mental Retardation and menu "Cheque Book Request" is created in the net
Multiple Disabilities banking screen.
Branches should follow the under mentioned A new screen will be displayed for inputting
guidelines while opening / operating of bank accounts the details of Account Number, Account Type and
of the “mentally ill person” and “person with Branch name are displayed in the window by
disability”: fetching the details from CBS system. Validation
“Mentally ill person” will be provided to populate above details by
According to the Mental Health Act, 1987 a checking Cheque book eligibility parameters set up
person who is in need of treatment by reason of any in CBS linked to CIF. A radio button will be
mental disorder other than mental retardation is a provided for the each account displaying in the
“mentally ill person”. Provision of appointment of screen to facilitate the customer to select the
guardians for mentally ill persons and in certain account. The service is available only in day mode
cases, managers in respect of their property are of the CBS.
provided vide Sections 53 and 54 of the said Act and On confirming the details presented to the
the prescribed appointing authorities are the district customer the navigation is moved to the OTP screen
courts and collectors of districts. to confirm the request for initiating the Cheque
“Person with disability” book. On submitting the request by customer the
request will be added to the other cheque book order
According to the National Trust for Welfare by the Branches and will be processed by CDPC.
of Persons with Autism, Cerebral Palsy, Mental
Retardation and Multiple Disabilities Act, 1999 a A separate report for the cheque books ordered
person suffering from any of the conditions relating through net banking will be provided to the Home
to autism, cerebral palsy, mental retardation or a Branch.
combination of any two or more of such conditions DEP.21/2013-14 Dt.23.01.2014
and includes a person suffering from severe multiple
disabilities is a “person with disability”. Provision of Collection of Account Payee Cheques - Prohibition
appointment of guardians to a person with on Crediting Proceeds to Third Party Account
disabilities, who shall have the care of the person and Branches should meticulously follow the
property of the disabled person are provided in the below given RBI guidelines on collection of
said Act and the prescribed appointing authorities are account payee cheques:
the Local Level Committee.

2
 April
Jan – March 2014

Ž Branches are prohibited from crediting price fluctuations, interest that will accrue
'account payee' cheques to the account of during the tenure of the loan etc.
any person other than the payee named
5. The account would be classified as Non-
therein.
Performing Asset (sub-standard category)
Ž Branches should strictly collect ‘account
even before the due date of payment, if the
payee’ cheques only for their payee
prescribed margin is not maintained.
constituents.
Ž Branches may, however, consider collecting 6. The interest income on such loans shall be
account payee cheques drawn for an amount recognised in profit and loss account only
not exceeding R.50,000/- to the account of on collection.
their customers who are co-operative credit 7. Such loans shall also be governed by other
societies, if the payees of such cheques are extant norms pertaining to income
the constituents of such co-operative credit recognition, asset classification and
societies. provisioning which shall be applicable once
DEP.22/2013-14 Dt.23.01.2014
the principal and interest become overdue.
INOPERATIVE ACCOUNTS ADV.106/2013-14 DT.02.01.2014
Further to the circular Dep.33/2011-12 dt. Directions of the Board in the Special Committee
25.11.2011 detailing the guidelines to be followed (Monitoring Large Value Frauds)
on Inoperative accounts, the below given Board
directions shall also be adhered to: All loan applications should be supported
by sworn declaration regarding loans availed from
I. No payment should be made to non KYC other banks in the name of self and relatives, as
compliant accounts. detailed in Power Booklet with details of PAN
II. Payment of unclaimed / inoperative deposit number of the applicant / guarantors.
accounts should be authenticated by two
officers of whom one should be Branch Till such time the details are incorporated
Manager / Assistant Branch Manager. in the prescribed / printed loan application form,
branches shall obtain the declarion (annexed to this
DEP.23/2013-14 Dt.23.01.2014
circular) and the same should be enclosed along
with the loan application.
ADVANCES
Non Agriculture loans against Gold ornaments and List of family members / relatives is also
Jewellery - Bullet repayment of loans given in this circular.
ADV.110/2013-14 Dt.06.01.2014
Bullet repayment of loans extended against
pledge of gold ornaments and jewellery for other
Irregularities in issuing Financial Capacity Certificate
than agricultural purposes, has been permitted by
for submission to Foreign Universities – Education
Reserve Bank of India, subject to the following
Loan.
guidelines:
The salient points of the guidelines on
1. The amount of loan should not exceed
issuance of financial Capacity Certificate for
R.1.00 lakh at any point of time.
submission to Foreign Universities are given
2. The period of loan shall not exceed 12 below:
months from the date of sanction. Central Vigilance Commission (CVC) has
3. Interest will be charged to the account at observed glaring irregularities being committed by
monthly rests but will become due for several banks with regard to issuing financial
payment along with principal only at the capacity certificate to students intending to pursue
maturity. further studies with foreign universities. Loans are
granted against third party FDs and further FDs are
4. A minimum margin should be maintained
made in the name of the intending beneficiary to be
in such accounts and the loan limit to be
able to issue financial capacity certificate. Once the
fixed taking into account the market value
financial capacity certificate is issued, the FDs are
of the security (gold ornaments), expected

3
 Recollect

closed prematurely within a day. All such assign ratings on 8- point scale with 1
transactions are carried out through Chartered being the Highest rating and 8 being
Accountants and Travel Agents who work as Default.
intermediaries for fees.
The rating scale and rating fee structure of
Commission has further observed that CRISIL are furnished in Annexure I & II
Banks should not be allowed to create FDRs out of respectively to this circular.
overdraft allowed which defeats the purpose when
ADV.112/2013-14 Dt.13.01.2014
certificate of financial capacity to support the
students study abroad is being issued. Third party Assignment of NPA Management to ARC
loans against FDRs or certificates being issued for
this purpose should be barred as it is nothing but to As part of the strategy for efficient
hoodwink the foreign universities by dubious handling of NPA portfolio, our Bank has roped in
Chartered Accountants and Travel Agents for two Asset Reconstruction Companies (ARCs) viz.
admission of courses. This not only brings Asset Reconstruction Company of India Ltd.,
disrepute to concerned Bank but also image of the (ARCIL) & Reliance Asset Reconstruction Co.,
country as well. Indirectly or directly this also (Reliance ARC) and assigned Retail Loan NPAs up
results in our youth going abroad and trying to find to a.10.00 lakhs (Rupees ten lakhs) as on
work while studying to earn so that they can 31.03.2013 and with balance as on 28.12.2013
support their studies financially. In many cases along with underlying securities to Reliance ARC
such students are working illegally which is not and SME NPAs with book balance of above
allowed under student visa. a.10.00 lakhs and up to a.1.00 crore as on
31.03.2013 and with balance as on 28.12.2013
Hence, branches should curb such practices along with underlying securities to ARCIL on
and also take up appropriately with ICAI to 30.12.2013.
blacklist such CAs who acts as middlemen for such All the NPA accounts with book balance up
activities. to a.10.00 lakhs as on 31.03.2013 (excluding
certain categories viz., NPAs where incidences of
ADV.111/2013-14 Dt.07.01.2014
Fraud have been reported, DRT suit filed accounts,
MoU with M/s INDIA RATINGS & RESEARCH PVT Staff Loans, Loan/OD against deposits accounts,
LTD for Rating of SME Customers Jewel Loans) and NPA accounts in SME portfolio
Bank had entered into a MoU arrangement with book balance of above a.10.00 lakhs and up to
with M/s India Ratings & Research P Ltd. on rating a.1.00 crore (excluding accounts where incidences
of Fraud have been reported), have been carved out
of SMEs
from the advances portfolio and transferred to
Terms of MoU signed between our Bank ‘Contra Agency NPA Account – 2013’ in the
and M/s India Ratings & Research P Ltd: Balance Sheet.
In respect of NPA’s assigned to Reliance ARC:
(A) For registered SSI units, M/s India Ratings
assigns “NSIC – India Ratings Bank has entered in to a separate service
Performance & Credit ratings for SSIs” - level agreement with Reliance ARC for
These ratings indicate financial strength undertaking recovery as authorized resolution agent
(on a three point scale from A to C with A and hence all the recovery efforts in these assigned
being High and C being Low) and debts should be continued relentlessly as has been
Performance capability (on a five point done hitherto.
scale from 1 to 5 with 1 being the Highest In respect of accounts assigned to ARCIL:
and 5 being Poor). As per this scheme, a
portion of the rating fee would be paid by Recovery will be undertaken by ARCIL
NSIC. and branches are required to HANDOVER ALL
THE ORIGINAL DOCUMENTS along with
(B) Small and Medium Enterprises which are underlying securities to ARCIL after completion of
not registered as an SSI in India, M/s India all the formalities. Branches shall keep all the
Ratings, on referral by Indian Bank will documents ready for handing over to ARCIL after

4
 April
Jan – March 2014

receiving communication from CO: Recovery level. At organizational level, it will act as a
Department through Zonal Office. comprehensive nationwide repository that can be
Where there are few facilities which are used to check if the business prospect has been
with our Bank & Asset Reconstruction Company involved in any spurious activity. At the industry
and/or where there are few facilities which are level, it will accelerate the regulatory body’s effort
retained either at our Bank and/or ARCIL, the towards creating a healthy and sound credit culture
branch has to seek specific clearance from by effectively identifying, recording and sharing
Corporate Office, Recovery department through information on high-risk activities.
their Zonal Office before handing over of document
to ARCIL. CIBIL Detect reports are generated by
CIBIL for all the enquiries made by the user and
Guidelines for treatment of assigned debts made available generally within 2 days time. The
and accounting procedure for recording Recovery,
daily reports are ported by CIBIL in their server
Closure etc., are given in this circular.
and can be accessed at https://tuftp.cibil.com using
Details to be followed by the branches the user id and password provided for this purpose.
while transferring the assets to the ARC (contra) Branches, after generating/verifying the CIBIL
accounts and Accounting entries to be made for the Commercial/Consumer reports have to take up with
above transactions are given as Annexure to this their Zonal Office for further mandatory
circular.
verification of the CIBIL detect report.
Staff members shall also refer the circular
Branches shall refer this circular with
with regard to (i) Difference In Contra Accounts,
(ii) Voucher Verification, (iii) Recovery Measures, regard to issuance of User ID and other guidelines.
(iv) Documentation / Legal matters, (v) Renewal of ADV.114/2013-14 Dt.22.01.2014
Documents, (vi) Waiver of Legal action,
(vii)SARFAESI Action, (viii) One Time ECS Mandate, Security Post Dated Cheques (PDCs)
Settlement, (ix) Upgradation, (x) Furnishing of and Recovery of EMIs from the borrowers
Security details and (xi) Recovery of charges etc. Under Section 138 of Negotiable Act 1881,
ADV.113/2013-14 Dt.13.01.2014 Banks have an option of filing one complaint by
clubbing multiple dishonored instruments issued by
CIBIL DETECT – use of the reports the borrower. In case of ECS mode of repayment, if
Banks do not take security PDCs, then separate
To strengthen the process of selection of
complaint for each instance of dishonor has to be
borrowers, one of the major mitigating factors is filed. Moreover in case of ECS Mandate, if the
strict adherence to KYC norms. Branches shall Customer withdraws his ECS mandate from his
utilise the services of CIBIL to verify the banker without notifying the Bank, in the absence
antecedents of the customers. of PDCs, legal action under Payment and
Branches should mandatorily furnish error Settlement Act may not be maintainable.
free Credit information date of all the borrowers to Taking into account the operational
CIBIL, in the formats formulated by them. concerns expressed by IBA, RBI has permitted
banks to take a few additional cheques (in CTS-
CIBIL generates two types of reports 2010 standard format) as security. Such instruments
namely, CIBIL Commercial Credit Information are to be used only for that purpose and they
Report (for all non-individuals), CIBIL Consumer should not be presented in inter-bank clearing as a
Credit Information Report (for individuals) and matter of routine.
CIBIL Detect Reports. Branches / Zonal Offices
Branches should obtain at least two Post
shall access the Credit Information Reports.
Dated Cheques (in CTS-2010 standard format only)
CIBIL Detect report on confirmed frauds, in addition to ECS mandate from the borrowers
cases of misuse etc. has been designed to help at towards payment of monthly EMIs.
both at organizational level as well as at industry ADV.116/2013-14 Dt.31.01.2014

5
 Recollect

Implementation of NRLM - Aajeevika – Interest A copy of the Public Notice regarding grant
Subvention Scheme of eligibility certificate to Indian citizens
intending to acquire primary medical
The existing Swarnajayanti Gram qualification from foreign countries published by
Swarozgar Yojana (SGSY) scheme has been the Medical Council of India has been enclosed
restructured as National Rural Livelihoods Mission to this circular.
(NRLM) – Aajeevika – Interest Subvention Scheme
and implemented through Public Sector Banks ADV.118/2013-14 Dt.14.02.2014
(PSBs) and Regional Rural Banks (RRBs).
Re-Introduction of processing charges for all
Interest subvention is being provided to Personal Segment Loan Products
women SHGs at 7 % per annum who avail credit
upto a.3 lakh. Additional subvention of 3 % is Processing Charges for all Personal
available to the SHGs on prompt repayment. First Segment Loan Products (Including Special Combo
phase is being implemented in 150 most backward Loans) has been re-introduced from 01.04.2014
districts (Category I districts) for the financial year onwards (which was earlier waived w.e.f
2013-14. All the women SHGs promoted by 04.10.2013) at the same rate which was charged
NRLM or other Central or State Government line earlier, applicable for both fresh sanctions and for
departments or NGOs or by NABARD under loans sanctioned where disbursement is yet to
Women Self Help Group (WSHG) programme, commence.
which are linked with the banks are eligible to avail ADV.119/2013-14 Dt.28.02.2014 & ADV.124/2013-14 Dt.11.03.2014
the benefits of the scheme.
Audited claim of interest subvention for short-term
The salient features and operational crop loans disbursed under 7% products - for the
guidelines in respect of interest subvention for year ended Mar-2014
implementation in 150 Category I Districts and in
Category II Districts (Other than 150 Districts) are Calculation of 3% additional incentive subvention
given in the circular.
Branches should debit the BGL
ADV.117/2013-14 Dt.01.02.2014 96379XXXXX or BGL 86379XXXXX for making
incentive subvention payment [3% incentive
Educational Loans for studies abroad to pursue subvention for the short-term crop loans availed
courses in Medicine during the year 2012-13 and 3% incentive
subvention for the Short-term crop loans availed
According to Medical Council of India, any
during the year 2013-14] to the loan account of the
Indian citizen who intends to obtain primary
farmers who promptly repay their loan at the time
medical qualification from any foreign country on
of closure of loan.
or after 15th May, 2013 are not required to obtain
Eligibility Criteria from the Medical Council of At the time of closure of loan, branches
India. should debit the BGL 96379 XXXXX for making
3% additional incentive subvention payment to the
Zonal Offices and Branches shall make
loan account of the farmers who promptly repay
note of the above modification while sanctioning
their loan.
educational loan. The other two conditions
mentioned below hold good. For the accounts closed already, branches
should debit the BGL 86379 XXXXX for making
1. The Medical degree should be one that is
3% additional incentive subvention payment to
recognized in the respective country for
eligible farmers.
registration and practice.
Similar to the previous year (2012-13), the
2. After completion of the course, if the students
benefits of interest subvention will also be available
wish to practice in India, they have to undergo
to small and marginal farmers having Kisan Credit
a screening test conducted by National Board
card for a further period of up to six months post
of Examinations for obtaining registration.
harvest on the same rate as available to crop loan
This test is applicable to all who obtain their
degrees from any country except India.

6
 April
Jan – March 2014

against negotiable warehouse receipt for keeping the system for both online applications
their produce in warehouses. received and applications received at branches
physically
ADV.126/2013-14 Dt.14.03.2014
™ Credentials received status and date of
Capital Optimization credentials received should be compulsorily
entered in the system by the branch (as the
As on December 2013, Bank’s CRAR number of applications received is picked by
under Basel II and Basel III is 12.96% and 12.49% up the system based on the credentials
respectively. Even though Bank is maintaining received date)
CRAR more than the level prescribed by RBI (@
9%), Bank’s future expansion requires more ™ In case of proposals sent to Zonal Office /
capital. Raising capital from external sources will Corporate Office, the reference number of the
be costly and will have to wait for conducive application generated by the system should be
markets. Hence it makes sense to optimize capital incorporated in the proposal.
for future requirements. Staff shall refer this circular for further information.
Branch Managers shall arrange for proper ADV.132/2013-14 Dt.22.03.2014
attention of the following points to enable our Bank
to optimize the capital. Data Inconsistency between CBS and Exim bills
1. Reversal of expired guarantees Since the break up balance relating to trade
2. Marking of security value in CBS finance facilities (Both non Fun Based and Fund
3. Un-availed Limits Based ) (available in Exim Bills) are not matching
4. Classification of Guarantees with the control GL balance (available in CBS) due
5. External rating to reason that the branches are not routing the
6. Accounts Guaranteed by Central Govt/ transactions through Exim Bills and are directly
transacting through the contingent accounts/Limit
State govt/ Banks
accounts/BGL in CBS.
7. IBCODE.
8. Exim Bill Reports ADV.133/2013-14 Dt.27.03.2014
Staff members shall refer this circular for
further guidance. Review of Base Rate
ADV.127/2013-14 Dt.15.03.2014 Considering the current interest rate
scenario, Base Rate has been revised from 10.20%
Credit proposal tracking system for MSMEs to 10.25% per annum with effect from 01.04.2014.
Customers can now submit MSME There will be no change in spread / tenor
applications online and can also track its status. In premium and other guidelines except specifically
this connection, all the physically received exempted by respective departments.
applications should also be included / entered, by
the branches, in the credit proposal tracking system. ADV.138/2013-14 Dt.31.03.2014

Hence, branches should follow the HRM

following instructions in this regard:
The Revised Procedure for claiming the
™ In respect of applications received by the Reimbursement of Fuel Expenses to Award Staff and
branches, physically, from MSME customers, Outfit and Dress Maintenance expenses to Officers
the applications are to be entered and under Staff Welfare Scheme
reference number of the application to be
generated to facilitate the customer to track Branches / Offices shall continue to obtain
their application using that reference number. declarations from the employees and preserve the
same, based on which the Reimbursements are
™ Status of the application like credentials claimed.
awaited / credentials received / sanctioned/
disbursed / rejected etc; are to be updated in

7
 Recollect

Based on the Salary Data, reimbursement Enhancement in the Ex-gratia amount paid to the
of expenses for the above mentioned schemes will Pre-1986 retirees/surviving spouses
be credited to the respective SB accounts of the
With the effect from 17.12.2013 the Ex-gratia
employees after taking into account entries reported
payable to the following retirees has been revised
by branches for INELIGIBLE / Claims for less than
as given in the table:
prescribed minimum, through HRM ONLINE
website. i. Surviving the Pre 01.01.1986 retirees
A separate common format covering both ii.Surviving spouses of Pre 01.01.1986 retirees
the schemes is provided in HRM ONLINE Applicable to Existing Revised
Website, to report the following (to be submitted on Surviving Pre a.300/‐ plus a.350/‐ plus
or before 5th of every month.) 1.1.1986 applicable applicable
retirees Dearness relief dearness Relief
I. Claims lesser than prescribed maximum thereon Thereon
(for employees where amount to be
Surviving a.1000/‐ fixed a.175 /‐ plus
reimbursed is below a.375 ) spouses of Pre without applicable applicable
• SR No. of the employee and amount to be 1.1.1986 Dearness relief Dearness relief
reimbursed to be submitted. retirees thereon thereon

[Reimbursable amount = Declaration amount less Accordingly, with effect from 17.12.2013,
conveyance allowance paid through Salary in case of the revised EX-gratia amount is being paid to the
Reimbursement of Fuel Expenses to Award Staff] Pre.01.01.1986 staff retirees and Surviving spouses
[Reimbursable amount = Declaration amount, if it is of Pre 01.01.1986 staff retirees.
less than a.375/-, in case of Reimbursement of Outfit
and Dress Maintenance expenses to officers] HRM.111/2013-14 dt.12.02.2014

II. INELIGIBLE: Formation of Women Cell at Corporate Office –

• SR No. of employees who have not Change of members
submitted declaration form.
Women Cell has been functioning at
• SR No. of employees who have not Corporate Office to take care of the special needs of
attended office for the whole month under the women employees working at Branches /
report. Offices and to redress their grievances. The Women
This revised procedure comes into effect Cell at Corporate Office is in addition to the
from 01.04.2014. Complaints (Women) Redressal Committee
functioning at all Zonal Offices and Corporate
HRM 101/2013-14 Dt.08.01.2014 Office.

Provision for single leased accommodation to Women Cell at Corporate Office has been
officers posted in North Eastern region (NER) - reconstituted as under:
revision in rental ceilings 1. Ms V.N. Maya, Assistant General Manager,
The rental ceilings for single leased CO: Legal Department.
accommodation to Officers posted in NER has been 2. Mrs N. Padma, Senior Manager, CO: OLC
revised upward to 50% of their otherwise Department.
eligibility, with effect from 01.01.2014 3. Mrs S.Sarasswathi, Clerk / Shroff / Typist,
CO:HRM Department.
The revised eligibility may be worked out
based on 50% of their otherwise eligibility as per HRM.112/2013-14 Dt.14.02.2014
Annexure attached to CO: HRM Circular 80/2012- Centralization of Reimbursement of Domiciliary
13 dated 10.10.2012. Field level functionaries shall claims & Reimbursement of Hospitalization expenses
refer this circular for the terms and conditions in from 01 04 2014
this regard. As part of centralization of HRM functions,
HRM.102/2013-14 Dt.21.01.2014 for Reimbursement of Domiciliary claims &

8
 April
Jan – March 2014

Reimbursement of Hospitalization expenses, a new Payment Advice No. as reference for information
web application will be launched and it can be of user agency and reconciliation purpose.
accessed through (URL: http://10.141.47.22/
Since payments to beneficiaries are closely
medical).
monitored by the Government, branches should
Zonal offices have to enter the details of ensure that CPSMS Print Payment Advices is
reimbursement of Domiciliary claims and attended immediately on receipt without giving
Hospitalization expenses sanctioned by them in the room for any complaints in this regard.
menus provided in the site (URL:
The Screen shots as mentioned above are
http://10.141.47.22/medical). Entries have to be
attached to this Circular for guidance.
authorized by Officers only at Zonal Office.
Branches may contact Project Office /
The sanctioned reimbursement amount
GBSB / CO: BOD for any clarification/guidance in
towards Domiciliary claims and Hospitalization
this regard.
expenses will be credited net of TDS (wherever
applicable) to Staff Savings Bank Account of the CPSMS payment files with the
employee concerned directly by CO: HRM. authorisation of Digital Signature (DSC files) and
our Net Banking CPSMS authorized files will be
The list of BGL heads blocked wef 01 04
directly handled under the Centralised platform by
2014 are given in this circular.
GBSB.
The existing practice of forwarding the CRA.77/2013-14 Dt.28.01.2014
applications, received from staff, by branches and
offices to the Zonal Office concerned will continue Co-branded “Arogya Raksha Mediclaim Policy” with
and sanctioning powers on reimbursement of United India Insurance Co.Ltd (UIIC) - Renewal of
Domiciliary claims and Hospitalization expenses MOU for the period w.e.f. 01.03.2014 to 28.02.2015
will continue to be vested with Zonal Authority.
MOU for Arogya Raksha Mediclaim Policy
The flowchart and method of entry and with UIIC has been renewed for the period of One
authorization will be dealt with in detail in the Year w.e.f. 01.03.2014 up to 28.02.2015 with the
above mentioned site. same terms and conditions.
HRM.120/2013-14 dt.25.03.2014 Significant changes / improvements / benefits in
the existing Arogya Raksha Scheme are as follows:
CRA
• Premium Rates slashed by 5 to 59% under all
Central Plan Scheme Monitoring System (CPSMS) the Plans
revised procedure - under Centralised Processing • Revised Plans:
System - Guidance to branches
¾ Plan A: A/c holder + Spouse + Two
The revised system for handling CPSMS
dependent children (1+3) for age group
files comes into effect from 18 02 2014.
up to 35 years
With a view to reduce working process at
¾ Plan B: A/c holder + Spouse + Two
the branches, the CPSMS payments are processed
dependent children (1+3) for age group
by Government Business Service Branch through
>35 years
Centralised Platform. GBSB will handle payments
once it is authorised at the Branches. ¾ Plan C: A/c holder + Spouse + Two
dependent children + dependent parents
Step by Step REVISED PROCEDURE in
(1+5) for age group >35 years
handling ‘CPSMS Generated DBT Payment
Advice/Authority’ (CPSMS Payment Print • Entry Level: Reduced from existing 80 years
Advice) is given in this circular. to 65 years
After completion of processing at GBSB, • Age limit: 3 months up to 65 years & renewal
the amounts of the failed transactions up to lifetime
(DTR/NEFT/ECS/APBS) will be credited back to
the user agency account separately with the

9
 Recollect

• Minimum Insurance Slab: Increased to a.1 there, which will also avoid payment of penal
lakh from a.0.50 lakh under all three Plans interest for delayed collection.
• Hospitalisation for Major Illnesses: Existing The covering schedule may be suitably
cap of a.4 lakhs stands removed and now it modified to enable the other bank to remit the
will be either the actual expenses incurred or proceeds through RTGS (R42) only. Branches shall
80% of the sum insured whichever is less remit the proceeds of the instruments received from
other banks through RTGS (R42).
• Additional Benefits:
CRA.85/2013-14 Dt.20.03.2014
¾ Ambulance Charges up to a.1,000/- for
emergency transport of the patient from Interest on Public Provident Fund Scheme, 1968
the residence/place of accident/illness to (PPF 1968) and Senior Citizens
the hospital where treatment is taken.
The rates of Interest on PPF, 1968 and
¾ Hospital Cash at a.100/- per day subject
SCSS, 2004 for the financial year 2014-2015,
to a maximum of a.1,000/- to the
effective from April 01, 2014, on the basis of the
parents/guardians in case of
interest compounding / payment built in the
hospitalisation of children up to 12 years
Schemes, remains same as that of last financial
of age provided there is a valid claim
year, which is as given below:
under the policy.
¾ Funeral Expenses of a.1,000/- in case of Rate of Interest with effect from
Scheme
death following hospitalisation due to 01 04 2014
illness / accident and their eyes have been 5 Year SCSS 2004 9.2% p.a
donated to a recognised institution and is PPF, 1968 8.7% p.a
over & above the sum insured
¾ Reimbursement of expenses - Nepal & CRA.86/2013-14 dt.21.03.2014
Bhutan in Indian ‘a’ for treatment while FX
the insured is away at these places either
KYC Procedure for opening bank accounts for
on holiday our business purposes. Foreign Students studying in India
Cashless facility is not offered under this
extension. With regard to the guidelines for opening
bank accounts for foreign students studying in
Premium Rates for applicable Arogya Raksha India, RBI has clarified that in terms of section 2(v)
Policy and Scheme Details are annexed to the of FEMA 1999, definition of a person resident in
circular. India does not include a person who has come to or
CRA.84/2013-14 Dt.01.03.2014 stays in India for any purpose which would indicate
his stay for a definite period. Accordingly, foreign
Procedure for Outstation Cheque Collection students coming to India would be considered as
“non-resident” and a resident account cannot be
All the branches should present the cheques opened for them.
in CTS / Speed clearing, wherever available, to
avoid delay in collecting the outstation cheques. FX.35/2013-14 Dt.27.01.2014

While sending the cheques for collection, Instructions received through email from customers
branches are advised to request the other bank Branches should not act on the instructions
branch concerned to remit the proceeds of local / received from our customers through E-mail in
outstation instruments through RTGS R42 respect of financial transactions involving the
(interbank funds transfer) only. Any amount can be operations in the account.
remitted through RTGS (R42) and it will be
credited immediately to the RTGS payable account Hence, reiterate that all financial
of the branch. Branches have to verify the RTGS transactions should be executed only on the written
payable account everyday, frequently and ensure instructions of our customers.
reversal of the corresponding OBC items then and FX.37/2013-14 Dt.25.02.2014

10
 April
Jan – March 2014

GENL This indicates that it is on par with most PSBs

in terms of customer responses on banking
Alteration in the name of “Development Credit Bank
transactions.
Limited” and “Mizuho Bank Corporate Bank Ltd”
• The Bank’s score is low regarding Information
The name “Development Credit Bank
dissemination. This area has mainly pulled
Limited” has been changed to “DCB Bank
down our overall rating. Our score regarding
Limited” w.e.f. October 24, 2013 and the name of
information dissemination is low mainly
“Mizuho Corporate Bank Ltd.” has been changed to
because of reasons such as non display of
“Mizuho Bank Ltd.” in the Second Schedule to the
mandatory notices in trilingual/bilingual format
Reserve Bank of India Act, 1934.
and not providing a copy of the code while
GENL.82/2013-14 Dt.25.01.2014 & GENL.86/2013-14 Dt.06.02.2014 opening the accounts and on request by
customers.
BCSBI Code Compliance rating
• The areas require which require immediate
BCSBI made a Rating of Member Banks improvement and a list of mandatory notices
based on the implementation of Codes of Bank’s and contents of the Customer Services Folder
Commitment to Customers and Micro and Small are given as Annexure-I and Annexure-II to
Enterprises. The Branch visit findings and customer this circular.
responses obtained have been grouped by BCSBI
Staff members shall refer this circular for other
into five segments and allotted different weights in
guidelines
the rating.
GENL.91/2013-14 Dt.06.03.2014
Based on the overall score of the bank, a
rating has been awarded from out of four Anonymous and Pseudonymous
categories.
In respect of ‘Vigilance related’
1. High level of compliance (=> 85 marks) complaints, since they are sensitive and confidential
and as per DOPT guidelines, the genuineness of the
2. Above Average level of compliance (70 to less
complaint should first be verified and ascertained
than 85)
for which 30 days time is allowed, the same need
3. Average level of compliance (60 to less than 70) not be uploaded in SPGRS and in respect of these
4. Below Average level of compliance (Below 60). cases, the Vigilance rules/guidelines are to be
followed for time norms.
Our Bank has been assigned Average rating
with a total score of 67.4. However, there may be certain instances of
complaints with Vigilance overtone ported by the
On analysis of compliance levels across customers either directly on the complaints portal
parameters, it is observed as below: or by the branches/zones/corporate office, which
• The compliance levels are above average on may be identified as ‘Vigilance related’ and
three of the five parameters considered for the disposed accordingly in the normal course. Such
study viz., Customer centricity, grievance complaints are to be subsequently closed in SPGRS
redressal and transparency and it is on par with and transferred to Vigilance department for
most PSBs regarding Customer feedback. necessary action.

• It is observed that Indian Bank has a higher GENL.92/2013-14 Dt.14.03.2014

score than the average attained by PSBs in case
of Grievance Redressal. This indicates that it BCSBI CODE Compliance
has a robust redressal mechanism in relation to
The some of the actions required to be made by
other PSBs. However, at an aggregate level, its
the Bank on an ongoing basis to comply with the
compliance norms on grievance redressal fall
‘Codes of Bank’s Commitment to Customers and
short of private sector and foreign banks.
Micro and Small Enterprises’ are given below:
• In the case of Customer feedback, there is
minimum variation in relation to other PSBs. • A Board should be displayed at all Branches as
below:

11
 Recollect

INDIAN BANK MACHINE’ and depreciation rate @16.66%.per

is a Member of annum. The CVM is to be covered with one year
THE BANKING CODES AND STANDARDS warranty and 5 years AMC period. Branches
BOARD OF INDIA
should debit SFVM for the total cost minus capital
having adopted the Codes of Commitment to Customers
subsidy to be received from RBI. On receipt of
For implementation in letter and in spirit subsidy SR II amount to be reversed.
• Front line staff should be adequately
ADMIN.52/2013-14 Dt.04.01.2013
knowledgeable in BCSBI codes. All the staff
should endeavour to update their knowledge Withdrawal of all old series of Banknotes issued
about the codes. Zonal Offices/Branches prior to 2005
should discuss the codes in the staff meetings.
Reserve Bank of India has communicated that
• In the promotion tests/interviews, weightage all old series of banknotes issued prior to 2005 will
will be given for testing the knowledge of staff be withdrawn from circulation.
with regard to BCSBI codes.
Accordingly, the following plan of action has
Staff members shall refer this circular for been formulated:
further guidelines. (i) All older series of banknotes issued prior to
2005 would be acceptable for all kinds of
GENL.96/2013-14 Dt.28.03.2014 monetary transactions only till March 31,
2014 (since extended upto January 01, 2015)
ADMIN
(ii) Thereafter, the public will be required to
Installation of Coin Vending Machines (CVMs) approach bank branches which would
provide them exchange facilities on an
As per Monetary Policy for the year 2012- ongoing basis.
13, RBI has discontinued the services of
distribution of coins and exchange of mutilated (iii) These notes will continue to be legal tender.
notes across the counter to the general public in (iv) From July 01, 2014, to exchange more than
their issue department of RBI and advised the 10 pieces of a. 500 and a. 1000 notes, bank
banks to extend this service by installation of branches should obtain from non-customers,
additional CVMs preferably at commercial / market proof of their identity and residence.
areas for free flow of coins to general public.
(v) A Public notification informing public of the
As per the needs / demand of customers for exercise and soliciting their co-operation and
want of coins, branches may take up the matter for enabling them to identify the older series is
installation of CVM after getting the permission issued vide notification dated January 22,
from their Zonal Office and assess the availability 2014.
of coins from the nearest currency chest. At present
RBI is offering the incentives as under: Staff members shall refer these circular for
further instructions.
a. Capital cost Particulars of
subvention / incentives ADMIN.55/2013-14 Dt.27.01.14 & ADMIN.60/2013-14 Dt.04.03.14

i) Urban / Metro / 50% of capital cost Issue of a. 50 Banknotes with incorporation of Rupee
Centres
symbol (a) without inset letter
ii) Rural and Semi 75% of capital cost
urban Centres Reserve Bank of India will shortly issue
b. Operational cost @ a.25 per bag of coins a.50 denomination Banknotes incorporating ‘a’
distributed to customers symbol on the obverse and reverse, without inset
letter in both the numbering panels, in the Mahatma
While communicating the sanction for Gandhi Series – 2005 bearing the signature of
purchase of CVM to branches, Zonal offices should Dr.Raghuram G. Rajan, Governor, Reserve Bank of
quote the Item Code as ’850’, Identity Code ’15’ India, and the year of printing ‘2013’ printed on the
Machinery with description “COIN VENDING reverse of the Banknote.

12
 April
Jan – March 2014

The design of these notes to be issued now the Control Circuit for the Alternative switching of
is similar in all respects to the a.50 Banknotes in AC machines, so that overloading of Individual AC
Mahatma Gandhi Series 2005, issued earlier. Units can be avoided. Also, Voltage Stabilizers of
suitable capacity to be fixed from the date of
All banknotes in the denomination of a.50 installation of Air – Conditioners to overcome the
issued by the Reserve Bank in the past will “High Voltage /Low Voltage” issues.
continue to be legal tender.
All the AC units should be in AMC
GENL.57/2013-14 Dt.12.02.2014
contract with the Original Equipment
Exemption of TDS on the service tax component Manufacturer/ Authorised Dealer and relevant
guidelines of the Bank to be followed in the
TDS need not be deducted on the service appointment of AMC vendors.
tax component of the bill when making the
payment to Residents attracting TDS under Income ADMIN.62/2013-15 Dt.08.03.2014
Tax Act, provided the service tax component is
shown separately by the payee in their bill as per Compliance issues and mitigation measues
contract. On scrutiny of the quarterly on-line
Necessary modifications have been carried compliance submitted by branches, it is observed
out in TDS Parameters of SARAL application in that many of the branches are maintaining cash
tune with the above decision of CBDT, Delhi. balance more than the prescribed level which may
Branches/Offices should advise the vendors lead to interest loss and also non compliance of
to submit their bills indicating the Service Tax RBIs directions. Further certain compliance failures
component separately. Further Branches/Offices have also been observed and only after follow up
should verify the availability of the Service Tax by Corporate Office, branches take up for
Registration Number in the Deductee Master of the compliance.
vendor, in SARAL, before entering the bill details
in “Report Payment” menu. If Service Tax Some of the non compliance reported, risk
Registration Number was not entered earlier, associated with it and its mitigation measures to be
branches may request their Zonal TDS Cell to enter taken up are furnished in this circular. Staff
the Service Tax Registration Number in the members shall refer this circular.
“Deductee Master” immediately and then make
ADMIN.64/2013-14 Dt.17.03.2014
report payment.
ADMIN.58/2013-14 Dt.18.02.2014
Though due care has been taken in the
Usage and Maintenance of AC units in preparation of Recollect, the version given in the
Branches/Offices circular is final.

The server room air conditioners shall be Compiled by CO: O&M Division
fitted with an Electronic Timer Control Device in

13
 Issue 4
a Volume 27

For Private Circulation Only

Jan – March 2015 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

CONTENTS OF THIS ISSUE C.NO. Date Details Pg no

C.NO. Date Details Pg no 183 02.03.15 Rationalisation of Cash Credit

Facilities – Adoption of revised 5
DEP 29.01.15 "Jeevan Pramaan" - Digital Life IBA guidelines
29 Certificate for pensioners- 2 184 02.03.15 Flexible Structuring of Existing
Seeding of Aadhaar Numbers in Long Term Project Loans to 5
Pension Software Infrastructure and Core Industries
ADV 05.01.15 Revised Restructured 188 07.03.15 Revision of Field-BC - Overdraft
154 Technology Upgradation Fund 6
limit
Scheme – RRTUFS – revised 2
192 12.03.15
guidelines for obtention of UID Farmers’ Club – an effective tool 6
number for business promotion
193 13.03.15 Master Policy on Personal
161 19.01.15 Incentive Scheme for Tracking
and Revival of Dormant SHGs
3 Accident Insurance Scheme 7
(PAIS) for KCC holders
163 03.02.15 Dispensing with ‘No Due 3 200 24.03.15 Simplification of loan application /
Certificate’ for lending by banks
documentation under Revised 7
164 03.02.15 Arbitration Clause in Forms and
3 Kisan Credit Card Scheme
Agreements 203 27.03.15 Educational Loan - Review of 7
169 17.02.15 Dealing with the borrower Educational Loan complaints
companies where there are 206 30.03.15
frequent changes in Management
4 Single Bank Account for DBT
8
structure Transactions
208 31.03.15 Life Insurance cover under
170 19.02.15 Provision of PMJDY benefits of
RuPay Cards, Life cover and Pradhan Mantri Jan-Dhan Yojana 8
4 (PMJDY) - Claim procedure
Overdraft facility to MGNREGS
workers HRM 05.01.15 Adhoc and Temporary Incentives
108 to Officers transferred/posted
171 20.02.15 Amendment in the rating matrix - 8
NGOs sponsoring Self Help 4 from other Regions to North
Groups (SHGs) Eastern Region (NER)
174 21.02.15 Pradhan Mantri Jan-Dhan Yojana 117 19.02.15 Issue of Uniform Power of Attorney 8
(PMJDY) – Over Draft facility up 4 123 26.02.15 Code of conduct for employees
to `.5,000/- in PMJDY Accounts for expressing views in Social 9
176 27.02.15 Launching of the facility, ‘Credit Media
Card payments through our 4 125 09.03.15 Use of Credit Card by Staff
9
Bank’s ATMs’ Members
177 02.03.15 Modified definition of Non- 133 25.03.15 Interest Free Salary Advance/
Cooperative Borrower - Policy for 4 Festival Advance To The Staff
9
Revitalising Distressed Assets Members For The Financial Year
178 03.03.15 Introduction of New Agri Loan 2015-2016
Product– “IB KISAN MITRA 5 CRA 03.01.15 Requirement of Life Certificate at
PRODUCERS’ LOAN” 10
69 the time of First credit of pension
182 05.03.15 Overdraft in PMJDY accounts-
5
classification under priority sector
Recollect

C.NO. Date Details Pg no

digital life certificate which is maintained in a
digital repository in NIC. It also provides facility
71 10.01.15 Procedural guidelines on for the bank to log in and access the digital life
Collection of Govt Revenue for certificate of the pensioner belonging to their bank.
Tamilnadu – Registration dept. – 10 They can access the repository both from the
in Offline (Physical) and Online desktop PC as well as mobile phone.
(E-Mode)
This is an additional facility for pensioners to
78 22.01.15 Restrictions on Acceptance of submit their Life Certificate digitally. In order to
Service Tax/Central Excise duty 10
provide / avail this facility, Pensioner’s PPO
in physical mode - Non availability Number must have been seeded with their Aadhaar
of EASIEST PACKAGE Number and the same has to be seeded in Pension
89 26.02.15 Implementation of NPS 11 Software.
Swavalamban Software
Process flow for seeding of Aadhaar Number
94 20.03.15 SUKANYA SAMRIDDHI 11
in Pension Software has been given in the circular.
ACCOUNT - A new Deposit
Scheme of Government of India All the pension accounts in Pension Software
for Girl Child must be seeded with Aadhaar number.
96 25.03.15 ATAL PENSION YOJANA (APY) 11 The screen shots for seeding Aadhaar Number
GENL 25.02.15 Procedure for allocating a break 12 in Pension Master are placed as annexure to this
69 open locker-Treating of existing circular.
dues
71 14.03.15 12 DEP. 29/2014-15 Dt.29.01.2015
BUNCH NOTE ACCEPTOR –
ATM (BNA – ATM) ADVANCES
78 27.03.15
Online submission of Assets and 12 Revised Restructured Technology Upgradation Fund
Liabilities Statement as on Scheme – RRTUFS – revised guidelines for obtention
31.03.2015 by Officers of the of UID number
Bank Office of the Textile Commissioner (OTC),
FX 29.01.15 Closure of Canadian Dollar 12
Ministry of Textiles, GOI, had come out with
43 Nostro Account No 09591-130- revised guidelines for plugging loopholes and
358-5 With Royal Bank Of
expediting implementation of the RRTUF Scheme.
Canada, Toronto
47 26.03.15 Empanelment of FFMC 13 The new guidelines have come into effect
ADMIN 03.01.15 Withdrawal of all old series of 14 from the date of their Office Memorandum i.e.
74 Banknotes issued prior to 2005 29.10.2014. Hence, branches should submit the
81 04.03.15 Extra-ordinary General Meeting of 14 details in the revised formats only, as indicated in
the Bank the circular, for all the applications made on or after
85 24.03.15 Service Tax on Security Guard 29.10.2014 to the CO: Credit Division, TUFS Cell
14 for according eligibility sanction under RRTUFS
Services
88 30.03.15 Permanent closure of multiple and also to submit the application, online, for
14 obtention of UID number.
entrances to branch premises
The revised guidelines and annexure are
DEPOSITS
attached to this circular.
"Jeevan Pramaan" - Digital Life Certificate for
ADV.154/2014-15 Dt.05.01.2015
pensioners- Seeding of Aadhaar Numbers in Pension
Software Incentive Scheme for Tracking and Revival of
On introduction of the “Jeevan Pramaan” - Dormant SHGs
Digital Life Certificate for pensioners portal, The following are the salient features of the
system provides biometric authentication by the Incentive Scheme for Tracking and Revival of
pensioner from a remote point and creation of a dormat SHGs:

2
 Jan – March 2015

1. Dormancy in SHG could be due to lack of However, the Bank branch should not have
affinity/homogeneity of members forming the received grant assistance from NABARD or any
SHG, domination of the group by a few other agency for promotion of SHGs identified as
members leading to other members becoming dormant & considered for revival under the project
inactive or disinclined, non-rotation of in the last 3 years. The period of 3 years would be
leadership, conflict among members, lack of reckoned from the date of closure of the previous
managerial capacity of members, non-receipt of project. The Bank branch has to submit a
loan requested by members, non-availability of declaration in this regard.
bank linkages and consequent lack of motivation
to continue. ADV. 161/2014-15 Dt.19.01.2015

2. The real reason for these could be due to Dispensing with ‘No Due Certificate’ for lending by
inadequate nurturing, hand holding by the SHG banks
promoting institution (SHPI), SHPI withdrawing In order to ensure hassle free credit to all
from the area without alternate arrangement, borrowers, especially in rural and semi-urban areas
closure of SHPI project before groups' and keeping in view the technological
sustainability, members dropping out of the developments and the different ways available with
group due to migration, marriage, ill health, banks to avoid multiple financing, banks shall
death etc. dispense with obtaining ‘No Due Certificate’ from
Approach the individual borrowers (including SHGs & JLGs)
Approach to revival of dormant SHGs would in rural and semi-urban areas for all types of loans
be a bank-led initiative so as to ensure continuance including loans under Government Sponsored
of banking support to dormant SHGs, after the Schemes, irrespective of the amount involved
revival. unless the Government Sponsored Scheme itself
provides for obtention of ‘No Dues Certificate’.
For the purpose of coverage under the
incentive scheme, revival of groups which are Banks shall note that while Service Area
dormant with outstanding NPA loan of 6 months or Approach continues to be applicable for
more with the banks only are considered. Government Sponsored Schemes, the borrower is
however free to approach any bank branch in his
For the purposes of quantification of the
service area for obtaining credit under Government
foregoing parameters of dormancy, the following is Sponsored Schemes.
suggested:
It has also been suggested that Banks may use
 Irregular meetings — not even once in every an alternative framework of due diligence as part of
month for the last 6 months. credit appraisal exercise other than the ‘No Due
 No meetings in the last 6 months or more. Certificate’ which could, among others, consist of
 Low attendance in the meetings - average one or more of the following:
attendance of members in group meetings  Credit history check through credit information
less than 25%. companies
 No regular savings - less than 25% of  Self declaration or an affidavit from the
members saving regularly. borrower
 Dormancy in savings bank operations - no  CERSAI registration
operation (credit or debit other than crediting  Peer monitoring
of periodic interest or debiting of service  Information sharing among lenders
charges) in S/B account of SHG in the last 6
 Information search (writing to other lenders with
months.
an auto deadline)
 Arrears in writing of the books of accounts -
Banks shall submit credit information/data to all
more than 6 months.
Credit Information Companies (CICS), as required
Branches shall refer this circular for essential in terms of extant instructions issued by RBI.
steps in the revival plan of dormant SHGs.
ADV.163/2014-15 Dt.03.02.2015

3
Recollect

Arbitration Clause in Forms and Agreements The revised Score Summary, Rating Matrix
and format of the Score Card for Rating of NGOs
In order to avoid any such adverse orders are available in this circular.
being passed owing to such an Arbitration clause in
ADV.171/2014-15 Dt.20.02.2015
future, the Branches are advised to affix rubber
stamp, without fail with the wordings given in the Pradhan Mantri Jan-Dhan Yojana (PMJDY) – Over
Box in respect of the list of Documents or Forms Draft facility up to `.5000/- in PMJDY Accounts
listed in the circular so as to protect Bank’s Interest. Under Pradhan Mantri Jan-Dhan Yojana, one
of the features is to Provide Basic Banking
Submitting to arbitration may be considered as an
additional remedy and it does not preclude the right
Accounts and overdraft facility to all the eligible
of the Bank to seek Redressal / other Recourse.
customers after satisfactory operation / credit
history of six months.
ADV.164/2014-15 Dt.03.02.2015
The Salient features of the scheme are given below:
Dealing with the borrower companies where there i. Over Draft up to `.5000/- after six months of
are frequent changes in Management structure satisfactory performance of Savings/Credit
history.
Field level functionaries should be more
vigilant and complete the process of due diligence ii. Over Draft to be granted to the earning
member of the family, preferably women of
while dealing with such borrowing companies
the house.
where frequent changes in management structure
are observed. iii. There should be regular credits under
DBT/DBTL scheme/other verifiable sources
Henceforth, all proposals should contain the
information with regard to the change of iv. Account should be seeded with Aadhaar for
avoiding duplicate benefit.
management, if any, subsequent to the last
sanction/review/renewal along with the v. BSBD account holders should not be
views/observations on the change in the maintaining any other SB accounts with any
management. Bank/Branch to ensure compliance with RBI
ADV.169/2014-15 Dt.17.02.2015 directions.
Provision of PMJDY benefits of RuPay Cards, Life vi. Age of applicant between 18 years to 60
cover and Overdraft facility to MGNREGS workers years.
vii. Minors, KCC/GCC borrowers, More than
All the branches shall issue RuPay Debit
one member of the same family are not
Cards to all the active MGNREGS workers having eligible under this scheme.
bank accounts with us, if they are not provided with
earlier, after obtaining requests in writing. The quantum of Over Draft is:
ADV.170/2014-15 Dt.19.02.2015 a) 4 times of Average monthly balance
Amendment in the rating matrix - NGOs sponsoring b) or, 50% of credit summations in account
Self Help Groups (SHGs) during the preceding 6 months or,
c) `. 5,000/- Whichever is lower.
Based on the field level feedback on the need
for amendment of certain guidelines to improve The detailed scheme guidelines on Overdraft
lending under SHG bank linkage programme, the are furnished in Annexure to this circular.
following amendments were made in the guidelines
for rating of NGOs for financing SHGs: ADV.174/2014-15 Dt.21.02.2015

Existing guidelines Revised guidelines Launching of the facility, ‘Credit Card payments
through our Bank’s ATMs’
Minimum score under Track Minimum score under Track
record in the rating matrix of Record in the rating matrix Bank has launched one more technology
NGO is 15 marks out of 15 of NGO is reduced to 6
marks. marks. linked initiative i.e. payment of Indian Bank Credit
Card dues through our Bank’s ATMs.

4
 Jan – March 2015

This will enable our credit card customers to Branches shall refer this circular with regard
pay their credit card dues by using their Indian to (i) Need for Producer Organisations (PO), (ii)
Bank Debit / ATM cards through our Bank’s ATMs Characteristics of Producer Organisations /
at any time by following a simple procedure. Credit Companies with regard to credit linkage & Credit
Card Customers would get payment confirmation Guarantee Cover, (iii) Advantages to the Banks
SMS on the next working day. (Eligible Lending Institution-ELI), (iv) Two major
components of the scheme, (v) Major benefits of
The process flow is enclosed to this circular.
the scheme and (vi) The Operational Guidelines on
ADV. 176/2014-15 Dt.27.02.2015 Equity Grant & Credit Guarantee Fund Scheme for
Farmer Producers Companies are annexed to this
Modified definition of Non-Cooperative Borrower -
circular.
Policy for Revitalising Distressed Assets
ADV. 178/2014-15 Dt.02.03.2015
The cut off limit for classifying borrowers as Overdraft in PMJDY accounts-classification under
non-cooperative would be those borrowers having priority sector
aggregate fund-based and non-fund based exposure
According to Reserve Bank of India overdrafts
of `.5 Crs and above from our Bank. extended by Banks upto `. 5000/- in Pradhan
A non-cooperative borrower in case of a Mantri Jan Dhan Yojana (PMJDY) accounts, will
Company will include, besides the Company, its be eligible for classification under Priority Sector
promoters and directors. Independent Directors and advances (others’ category) as also weaker sections
Directors nominated by the Government and the - provided the borrowers’ household annual income
does not exceed `. 60000/- for rural areas and
Directors representing the lending institutions are
`.120000/- for non-rural areas.
excluded.
ADV.182/2014-15 Dt.05.03.2015
Branches shall refer this circular with regard
Rationalisation of Cash Credit Facilities – Adoption
to (i) Procedure to be adopted for classifying a
of revised IBA guidelines
borrower as non-cooperative borrower,
The following structure shall be adopted along
(ii) Declassification of borrowers already classified
with a cancellability clause in respect of Working
as non-cooperative (iii) Reporting under CRILC Capital Limits exceeding `.250.00 Crores from the
and (iv) Revised provisioning norms for accounts Banking system:
classified as non-cooperative.
Threshold limit for Above `.250.00 Crores
CRILC data is collected and reported to RBI considering bifurcation (Borrowings from the entire
by Corporate Office. Non-adherence to reporting under the new method banking system)
instructions attracts penal provisions under the Act. WCDL / Bill Discounting 50 % of the Working Capital
ADV.177/2014-15 Dt.02.03.2015 structuring limit sanctioned
Period of the WCDL One to Six months (as may
Introduction of New Agri Loan Product– “IB KISAN
be mutually agreed between
MITRA PRODUCERS’ LOAN” the bank and customer)
Government of India has approved a new Commitment fee As per the existing guidelines
Central Sector Scheme titled “Equity Grant and Other Terms As per the existing guidelines
Credit Guarantee Fund Scheme for registered
For working capital limits exceeding `.10.00
Farmer Producer Companies” effective from 1st crs and upto `.250.00 crs, the existing guidelines
January, 2014. shall continue. The powers for waiver/relaxation of
The implementing agency for the same is the above guidelines are vested with CAC and
Small Farmers’ Agribusiness Consortium (SFAC) - above.
the Society sponsored by Department of Wherever we are the leader bank, the matter
Agriculture, Government of India. has to be taken up in the ensuing Consortium
meeting and the structure for adoption at the time of

5
Recollect

assessment during next renewal should be support and financial assistance of NABARD for
discussed. the mutual benefit of banks concerned and Rural /
ADV. 183/2014-15 Dt.02.03.2015 Semi Urban people.
Flexible Structuring of Existing Long Term Project Farmers’ Club helps farmers through credit,
Loans to Infrastructure and Core Industries
technology transfer, awareness creation and
According to Reserve bank of India, banks are capacity building.
permitted to flexibly structure the existing project
1. The programme aims at creating a cordial
loans to infrastructure and core industries with the
relationship between the banks and its
option to periodically refinance the same as per the
potential beneficiaries.
norms given in this circular.
2. Key role of Farmers’ Club relates to
The flexible structuring shall be considered
dissemination of locally appropriate
only at the level of Corporate office.
technology, development of skills for
enhancement of production and productivity
Branches shall refer this circular with regard
to (i) Norms for flexible structuring of existing in rural areas, formation of self help groups
Long term project loans to infrastructure and core and linkage with banks, credit counselling
and recovery of loans etc.
industries with the option to periodically refinance,
(ii) treatment of Non Performing accounts, and (iii) 3. Formation of Farmers’ Club not only
applicability clause. improves the image of the Bank through our
services to the farmers but also enhances the
ADV.184/2014-15 Dt.02.03.2015
rural business by tapping all potential
Revision of Field-BC - Overdraft limit
activities and clientele base.
Taking into consideration the feedback
The latest guidelines furnished by NABARD
received from the field and the genuine difficulties
regarding Farmers’ Club is enclosed to this circular
faced by the FBCs, it has been decided to revise the
and all the rural / semi urban Branch Managers and
FBC overdraft limit from the present level of
RDOs shall make note of the guidelines and
`.20000/- to `. 50000/- with immediate effect.
improve functioning of the Farmers’ Clubs.
However, branches shall permit only need based
withdrawal from the FBC-OD Account within the The monthly report on Farmers’ Clubs should
limit. Zonal Managers are permitted to enhance this be submitted by Zonal Offices, as per Annexure
limit up to `.1,00,000/- selectively on a case to case enclosed to this circular, to CO/RBD before 10th of
basis, depending on the field level requirement”. every month.
Under the renewed contract with the Service ADV.192/2014-15 Dt.12.03.2015
provider M/s TCS Ltd, the liability of TCS is
Master Policy on Personal Accident Insurance
restricted to `.20000/- for any acts of omission/ Scheme (PAIS) for KCC holders
commission of the FBCs. However, our Bank has
covered the “Cash Held with BCs “up to As per the Government of India/ Reserve
`.1,00,000/- per day per BC under “Banker’s Bank of India direction, all the KCC holders have
Indemnity Policy” of the Bank. necessarily to be covered under PAIS. The
premium for all the KCC holders will henceforth be
ADV.188/2014-15 Dt.07.03.2015 paid by the Bank to United India Insurance Co. Ltd.
Farmers’ Club – an effective tool for business
Bank has entered into a Memorandum of
promotion
Understanding (MoU) on 28.02.2015 for taking up
Farmers’ Club programme earlier known as Master policy on implementation of Personal
“Vikas Volunteer Vahini (VVV) Programme” was Accident Insurance Scheme (PAIS) pan India to
launched by NABARD in November 1982. cover all the existing and prospective KCC account
Farmers’ Clubs are organized by banks with the holders with a premium amount of `.8.50 (net) per

6
 Jan – March 2015

KCC holder. Copy of the signed MoU dated 28th Simplification of loan application / documentation
February 2015 is annexed to this circular. under Revised Kisan Credit Card Scheme
The insurance cover will be effective from To simplify the procedure and to reduce the
11.03.2015. work burden at our Branches and as per direction of
Salient features of the scheme are: the Top Management, our O&M Department in co-
ordination with CO:RBD, has brought out two files
1. Scope of Cover in excel format containing various features of loan
This is a Personal Accident Insurance Master application / documentation pertaining to KCC, as
policy covering all the kisan Credit Card Holders in part of simplification of systems and procedures to
India declared for insurance coverage by our Bank benefit our branches.
throughout India. This scheme will cover all the
i) Loan limit upto `. 1.00 lakh
KCC holders against death or permanent disability
from accident caused by external, violent and ii) Loan limit above `. 1.00 lakh,
visible means and occurring within the The salient features of the simplified KCC
geographical jurisdiction of India. loan application forms are as follows.
2. Persons Covered: 1. Branches have to enter the data in the excel
The policy will cover the KCC Holders upto master sheet, as per the information provided in
the age of 70 years and whose names are declared the loan application by the intending
by the Bank and in respect of whom the premium is borrower/s.
paid by the Bank to the Insurance Company. In
case of joint account holders, only the first account 2. Branches will work out the eligible KCC limit
holder is covered by the policy. in the excel master sheet as per applicable KCC
norms.
3. Risk Coverage:
3. After completing the above process, Branches
The benefit under the scheme is as under:
will go for printing of various forms/
(a) Death due to accident `. 50,000/- documents which will be generated from the
(within 12 months of the information provided in the master sheet.
accident caused by outward, 4. Branches will verify the output of the printed
violent and visible means) forms/ documents and only after satisfying
(b) Permanent total disability `. 50,000/- about the correctness, will execute the same for
(c) Loss of two limbs or two `. 50,000/- release of the loan limit.
eyes or one limb and one eye 5. Branches shall refer this circular with regard to
(d) Loss of one limb or one eye `. 25,000/- navigation of excel sheets for generation of
forms & documents for Kisan Credit Card
Branches shall refer this circular for
Loans.
(i) Exclusion clause, ADV.200/2014-15 Dt.24.03.2015
(ii) Period of the Policy
(iii) Operational Procedure Educational Loan - Review of Educational Loan
(iv) Claims Procedure complaints
(v) Disablement claims and
(vi) The Limit for Lodging Claims. The number of complaints/representations are
PAIS Master Policy No. is 011305/47/14/43/ 00000008 being received in Educational loans is on the
increase and very often complaints are mailed to
Branches should quote the number in all future the Office of Hon’ble Finance Minister/Home
correspondence related to claims and a copy of the Minister/Prime Minister/President of India
Policy has been annexed to the circular /RBI/Ombudsman and our Chairman and Managing
(ADV.201/2014015 dt.26.03.2015). Director. Legal notices are also being received for
ADV.193/2014-15 Dt.13.03.2015 rejection / non sanction of educational loans by
branches. In certain cases through such legal

7
Recollect

intervention, the courts give directions and pass HRM

orders to sanction loans.
Adhoc and Temporary Incentives to Officers
Major areas of complaints and Action to be transferred/posted from other Regions to North
initiated by our Branches/Zones have been neatly Eastern Region (NER)
tabulated in this circular for the benefit of the filed In partial modification to the Circular
level functionaries for their effective adherence. No.HRM/06/2014-15 dated 04.04.2014, the
ADV.203/2014-15 Dt.27.03.2015 following changes have been made with effect from
26.09.2014:
Single Bank Account for DBT Transactions
(i) The incentive shall be 20% of basic pay
According to Direct Benefit Transfer, with minimum `.3000/- p.m and maximum
Department of Expenditure, MOF on the captioned `.7500/- p.m
subject, only one account for receiving benefits
(ii) Officers belonging to a State in North
under various schemes of DBT may be opened and Eastern Region but posted in other states of North
separate account for each scheme shall in no case Eastern Region shall also be eligible.
be opened. These guidelines should be brought to
the knowledge of our customers, who are Other terms & conditions and benefits
beneficiaries of one or more scheme of the communicated remain unchanged.
Central/State Government and to dissuade them HRM.108/2014-15 Dt.05.01.2015
from opening multiple accounts for receiving Issue of Uniform Power of Attorney
cash/benefits under DBT.
Bank has introduced the issuance of Uniform
ADV.206/2014-15 Dt.30.03.2015 Power of Attorney to all the existing confirmed
Life Insurance cover under Pradhan Mantri Jan-Dhan Officers / Executives. Accordingly, Corporate
Yojana (PMJDY) - Claim procedure Office, HRM Department is in the process of
issuing Uniform Power of Attorneys. This Uniform
Further to CO: FID circular ADV-135/2014- Power of Attorney will hold good during the entire
15 dated 28.11.2014, on Life Insurance cover under service of the Officers till separation from service
PMJDY, LIC of India has circulated the claim of the Bank. Thus issuance of Power of Attorney
settlement procedure. on each promotion is obviated. Therefore, Officers
Claim Settlement Procedure of Branches / Offices have to take utmost care for
a. The Claim amount of `.30,000/- is payable to safe keeping of the Uniform Power of Attorneys.
the nominee(s) / Legal Heirs of the account To begin with, the Uniform Power of Attorney
holder. The Risk cover will be provided to will be issued to Officers / Executives promoted
the person from his/her age of 18 from the year November 2013 onwards to higher
(Completed) till the completion of his / her scales but not issued with fresh Power of Attorney
age 60 years i.e. eligibility will cease on on account of promotion and also all the confirmed
completing 60 years and he/she will exit the Officers in JMG Scale I. For other Officers /
scheme on the day he / she completes 60 Executives, the Uniform Power of Attorney will be
years of age. issued shortly.
b. The Death Claim benefit of `.30000/- will be The powers exercised by the Power of
settled by the designated Pension & Group Attorney Holder has to be strictly in consonance
Scheme (P&GS) Office of LIC. with and in furtherance to the objective conferred
on the Officer by virtue of his/her
Branches shall refer this circular with regard Scale/Grade/Designation and exercise of powers
to process to be followed and claim procedure.
shall be in accordance with Manual of instructions
ADV.208/2014-15 Dt.31.03.2015 and not beyond the scope of the
Scale/Grade/Designation of the Power of Attorney

8
 Jan – March 2015

Holder. The Power of Attorney Holders concerned Interest Free Salary Advance / Festival Advance to
should take sanctions / approvals from Competent the Staff Members for the Financial Year 2015-2016.
Authorities before exercise of the powers, where
Branches/Offices shall permit Interest Free
ever warranted / necessary.
salary advance/Festival Advance to staff members
On receipt of the Uniform Power of Attorney for the financial year beginning 01.04.2015 to
issued, Branches / Offices are requested to report 31.03.2016 for the following festivals.
compliance online in “HRM Online” for having
Sl.No. Name of the Festival Date
noted the same in the Branch / Office Documents
01. Baisaki 14.04.2015
Register as referred above.
02. Tamil New Year 14.04.2015
HRM.117/2014-15 Dt.19.02.2015
03. Sinhalese New Year 14.04.2015
Code of conduct for employees for expressing views 04. Bohag Bihu 14.04.2015
in Social Media
05. Hari Raya Pusa 17.07.2015
Code of conduct to be followed by the 06. Ramzan 18.07.2015
employees of the Bank while expressing views in 07. Ganesh Chaturthi 17.09.2015
Social Media has been introduced by the Bank. If
08. Onam 28.08.2015
any employee is found violating the code,
disciplinary proceedings will be initiated either as 09. Durga Pooja 21.10.2015
per the provisions available under Regulations 3 (1) 10. Deepawali 11.11.2015
and (4) of Indian Bank Officer Employees’ 11. Milad-Un-Nabi 24.12.2015
(Conduct) Regulations, 1976 or Clauses 5 (b) and 12. Christmas 25.12.2015
(j) of Memoranda of Settlements – Settlements on 13. Pongal 14.01.2016
Disciplinary Action and Procedure there for dated
14. Chinese New Year 08.02.2016
10.04.2002 as amended update, whichever is
applicable. 15. Holi 23.03.2016
The code of conduct approved by Board has 16. Ugadi 08.04.2016
been Annexed to this circular. The code of conduct Only permanent confirmed employees and
is applicable to all permanent and contract part time employees who are in scale wages are
employees and binds them to follow specific eligible for the advance.
instructions/guidelines while communicating in
social media. The quantum of advance and the terms and
HRM.123/2014-15 Dt.26.02.2015 conditions governing the facility of Interest Free
Salary Advance/Festival Advance are given in this
Use of Credit Card by Staff Members circular.
Staff shall market credit cards to the Public by HRM 133/2014-15 Dt.25.03.2015
explaining the salient features and thereafter to CRA
monitor the accounts and to regularly followup for
Requirement of Life Certificate at the time of First
recovery of the overdues and keep the credit card
credit of pension
accounts under standard category.
Ministry of Finance has clarified that as per
The Sanctioning Authorities before sanction of the existing arrangement, there is no such provision
loans to Staff Members shall arrange to comply –
of submission of life certificate at the time of first
If there are overdues in any one of the loans of credit of pension. Further, physical presence in the
a staff member including overdues in IB Credit paying branch is no longer required for
Card Account, such members of the staff shall not identification of pension and the bank has to
be eligible for any loan or advance including identify the pensioner with reference to the
Festival Advance/Interest Free Salary Advance information already available with bank obtained
unless the overdues are cleared. through KYC at the time of opening of bank
account.
HRM 125/2014-15 Dt.09.03.2015

9
Recollect

CPPC and all pension paying branches shall with Unique Identification Number (UIN) in
note the above modifications in respect of Central duplicate. He/she will bring the e-challan to
Civil Pensioners and Railway pensioners and not to the nearby Branch of our Bank (all branches in
insist on the pensioners to issue life certificate at Tamilnadu are authorised for acceptance of
the time of first credit of pension so that the delay collection in physical mode) for effecting
in commencement of pension be avoided. payment in physical mode (Cash/Transfer or
through clearing instruments) over the
CRA.69/2014-15 Dt.03.01.2015
counter.
Procedural guidelines on Collection of Government
Revenue for TAMILNADU – REGISTRATION Government Business Service Branch is the
DEPARTMENT – in OFFLINE (PHYSICAL) and identified Focal Point Branch and will upload
ONLINE (E-MODE) consolidated Scrolls of both Online and Offline to
RBI/Treasury and transfer funds to Government as
Our Bank has been accredited for Collection
per procedure.
of Tamilnadu State Government revenue in respect
of Registration Department both in OFFLINE Branches shall refer this circular for further
(PHYSICAL MODE) and ONLINE (E-MODE). guidelines in this regard.
The procedure for Collection of Registration CRA.71/2014-15 Dt.10.01.2015
Department Revenue in Offline/physical mode by Restrictions on Acceptance of Service Tax/Central
branches in Tamilnadu is as below: Excise duty in physical mode - Non availability of
1. The public/client wishing to make payment to EASIEST PACKAGE
Registration Department for availing of their Further to the Circular CRA-49/2014-15 dated
services will login www.tnreginet.net (website 07-11-2014 instructing all the authorised branches
of TN Registration Department). to stop accepting Service Tax/Central Excise duty
(Indirect Taxes) in physical mode as per the
2. After filling up basic details in the site, the Government Notifications, Ministry of Finance, has
public/client will select the mode of Payment made exception whereby the Assistant
either as ONLINE or OFFLINE and shall Commissioner / Deputy Commissioner, for reasons
select OUR BANK. to be recorded in writing, allow an assessee to pay
duty by a mode other than internet banking (i.e. in
3. If ONLINE, the public/client will be directed
physical mode).
to our Internet Banking Portal for effecting the
payment using the required credentials / In view of the Government Directions, it is
transaction password. On successful decided to
completion of payment, our system generates a. Stop access to EASIEST package by any of the
Challan Identification Number and sends authorised branches.
transaction successful response to Registration b. Allow access to EASIEST only to the identified
Department site. Our interface system sends Focal Point Branches for Indirect Taxes to
status of success alongwith return parameters handle such exceptional cases with required
to Registration Department website live. In proof / record in writing from the respective
case of successful payment, e- Assistant Commissioner / Deputy
acknowledgement will be generated in the Commissioner.
Registration Department site and the
Branches other than the Focal Point branches
customer/client is enabled for download of the
shall not handle such exception cases specified
e-acknowledgement and proceed for getting
above. If the public/tax payer brings physical
the required services from the Registration
challan for remittance of Service tax/central Excise
Department with this acknowledgement.
duty along with the record of exception permitted
4. If OFFLINE mode is selected, the by the competent authority, branch shall forward
client/public will be able to generate e-Challan the same to their respective Focal Point Branch for

10
 Jan – March 2015

updating the collection data in EASIEST package 2. Depositor means an individual who – on
and onward transmission of data and funds to behalf of a minor girl child of whom he or she
Nagpur. The collecting branch shall keep a Xerox is the guardian deposits money in an account
copy of the challan as a record for any future under the rules.
reference and to ensure/co ordinate with the Focal 3. Sukanya Samriddhi Account can be opened by
Point branch for prompt completion of collection branches handling PPF accounts.
process. Such physical challan collected with the Opening of Account
required record of exception shall be maintained at
the Focal Point Branch for audit by tax authorities. i. The account may be opened by the natural or
legal Guardian in the name of a girl child from
The EASIEST package access will not be the birth of the girl child till she attains the age
available in the in-house software for all the of ten years and any girl child, who had
collecting branches with immediate effect. attained the age of ten years, one year prior to
CRA.78/2014-15 Dt.22.01.2015 the commencement of these rules, shall also
be eligible for opening of the account under
Implementation of NPS Swavalamban Software these rules.
A new in-house software for NPS ii. A depositor may open and operate only one
Swavalamban is in operation with effect from account in the name of a girl child under these
26.02.2015. rules.
The software is ported in Helpdesk under iii. Birth certificate of the girl child in whose
Other websites > In-house Applications > NPS name the account is opened shall be submitted
Swavalamban > Initial Contribution. by the guardian at the time of opening of the
Branches shall enter all the details relating to account along with other documents relating
NPS in the In House Application, get MUP to identity and residence proof of the
Reference Number, collect the money & send the depositor.
application to GBSB after noting down the iv. Natural or legal guardian of a girl child shall
Membership Number in the application form. be allowed to open the account for two girl
Branches need to login with In-house children only.
Application’s User Module User ID and Password Branches shall refer this circular with regard to
(A & L password). The screen shots along with the other features of the scheme.
instructions to be followed are given in the
annexure to this circular for effective utilization by CRA.94/2014-15 Dt.20.03.2015
the branches. ATAL PENSION YOJANA (APY)
CRA.89/2014-15 Dt.26.02.2015
Government announced a new initiative called
SUKANYA SAMRIDDHI ACCOUNT - A new Deposit Atal Pension Yojana (APY) in which the
Scheme of Government of India for Girl Child
subscribers would receive the assured pension
Government of India had notified SUKANYA ranging between `.1000 to `.5000 at the age of 60
SAMRIDDHI ACCOUNT rules 2014. The copy of years depending on their contributions, which itself
Notification is attached as Annexure to this would vary on the age of joining the APY.
Circular for guidance to branches. Branches Government is launching the Atal Pension Yojana
authorised for handling PPF 1968, may handle on 1st June 2015.
Sukanya Samriddhi Account also.
Atal Pension Yojana is administered by
The highlights/salient features of the Scheme: Pension Fund Regulatory and Development
1. Scheme called: Sukanya Samriddhi Account Authority (PFRDA) and the PFRDA is in the
2014. process of finalizing a specially designed APY
Module to facilitate subscriber registration and

11
Recollect

subscriber servicing under APY. This module will management will be optimum. Presently Our Bank
be integrated with existing CBS platform of banks is configuring the following four denomination of
to help the branch level personnel to expedite currency notes for receipts through BNAs:-
subscriber registration, contribution upload and
[1] `.1000/-
transfer of funds under APY.
[2] `.500/-
Eligibility: The minimum age is 18 years and
the maximum age is 40 years for joining under [3] `.100/- and
Atal Pension Yojana. Any Citizen of India who is [4] `.50/-
having a bank account with us and who are not
members of any statutory social security scheme There will be an Universal Acceptance
can join under Atal Pension Yojana. Cassette which will accept all currency notes during
abnormal scenarios like transaction time-outs,
Branches shall refer this circular with regard power failure etc.
to other features of the scheme.
Branches shall refer this circular regarding
CRA.96/2014-15 Dt.25.03.2015 detailed transaction flow and operational guidelines
GENL for BNA ATMs, Cash payments through BNA-
ATMs etc.,
Procedure for allocating a break open locker- GENL.71/2014-15 Dt.14.03.2015
Treating of existing dues
Online submission of Assets and Liabilities
As an enhancement features in the existing Statement as on 31.03.2015 by Officers of the Bank
Locker module the following modifications have
been built up in the CBS. All officers of the Bank should submit their
Assets and Liabilities statement on or before
1. Provision to capture the caution deposit 30.06.2015 for the year ended 31.03.2015, failure
details has also been provided. of which will invite disciplinary action.
2. Separate menu has been provided for Online submission is the only acceptable
closing of break open lockers and the same mode of submission of Assets and Liabilities
can be allotted to the new customers after statement in respect of all officers in active service.
changing the Locker key ID. The step-by-step guide for submitting the statement
Branches should follow up for recovery of rent online for the year ended 31.03.2015 is given in the
arrears as per guidelines in the manual of annexure to this circular. Submission of hard copy
instructions to “Break open Lockers”. In case of of the statement is not necessary, unless called
non-recoverable rent arrears after disposal of upon to do so in specific cases.
contents / or no valuable available in the break
opened Lockers, branches should follow up with GENL.78/2014-15 Dt.27.03.2015
customers for recovery of rent arrears in the break FX
opened Lockers also. Closure of Canadian Dollar Nostro Account No
The screen shots along with the procedure to 09591-130-358-5 with Royal Bank of Canada, Toronto
be followed are given in the Annexure to this
Our Nostro account in Canadian Dollar with
circular.
Royal Bank of Canada, Toronto - account number
GENL.69/2014-15 Dt.25.02.2015
09591-130-358-5 - has been since closed.
BUNCH NOTE ACCEPTOR – ATM (BNA – ATM)
In view of the above, all our branches are
Bank has introduced BNA (Bunch Note instructed the following action points
Acceptor) which will do the job of accepting cash
and also dispensing cash. The received cash in 1. Not to issue any demand drafts on Royal Bank
BNA will be recycled and thereby cash of Canada, Toronto as any draft issued but not

12
 Jan – March 2015

presented before 17.02.2015 may not be having pan India presence with concentrated branch
honored by RBC, Toronto which will lead to network spread over different parts of India.
customer complaints. 1. M/s Transcorp International Ltd
2. We request all authorized branches to check 2. M/s Medpat Finance Ltd
up with our Treasury branch that all the drafts 3. UAE Exchange & Financial Services Ltd
issued by your branch have been presented for 4. Paul Merchants Ltd
payment If not presented please contact the The recommended empanelment is subject to
purchaser of the draft to arrange for presenting certain conditions. Branches shall refer this circular
the DD’s immediately, for further guidelines in this regard.
3. All the branches are requested not to open new The license copies of the FFMCs are attached
FCNR accounts in Canadian Dollars until in the Annexure to this circular. List of branches of
further instructions. the empanelled FFMCs can be accessed in RBI site
4. Branches should not collect or purchase any in Notification>FEMA>FFMC List.
Cheque in Canadian Dollar.
FX.47/2014-15 Dt.26.03.2015
5. Branches should not Purchase / Negotiate or
ADMIN
collect any documents / bills in Canadian
Dollar. Withdrawal of all old series of Banknotes issued
prior to 2005
6. No Letter of Credit should be opened by the
branches. According to Reserve Bank of India, the date
To reiterate no operation is permitted in the of exchanging the Pre-2005 banknotes has been
extended up to June 30, 2015.
above account from 01.02.2015 except for making
payments of LC documents and bills already These notes must be exchanged for full value
received. without causing any inconvenience to the public,
whatsoever. These notes will retain their legal
FX.43/2014-15 Dt.29.01.2015
tender status and the public can continue to use
Empanelment of FFMC these for any transaction / payment.
Authorised Money Changers or Full Fledged Hence, Branches shall –
Money Changers (FFMCs) are entities, authorised i. Provide exchange facilities to members of public
by the Reserve Bank of India under Section 10 of and stop re-issue of the pre 2005 series
the Foreign Exchange Management Act, 1999. In banknotes.
addition to Authorised Dealer Category -I Banks
ii. Such accepted notes are not dispensed through
and Authorised Dealers Category – II, FFMCs are
the ATMs / over the counters.
authorised by the Reserve Bank to deal in foreign
exchange for specified purposes, to widen the iii. Notes of such series tendered over the counters
access of foreign exchange facilities to residents may be sorted immediately and deposited in the
currency chests
and tourists while ensuring efficient customer
service through competition. iv. Currency chests are advised to accept such notes
from the bank branches that are linked to the
FFMCs are authorised to purchase foreign CCs under Linkage system.
exchange from residents and non-residents visiting
India and to sell foreign exchange for certain v. Sorted notes may be treated as soiled notes and
forwarded to RBI as Soiled remittance for
approved purposes. Accordingly, to cater to the
disposal.
requirement of our clients we have empanelled the
following FFMCs with branches spread all over the vi. Soiled note module in ICCOMS should be
country so that the branches can avail of their updated accordingly by the Currency chests.
services at their doorsteps. These companies are ADMIN.74/2014-15 Dt.03.01.2015

13
Recollect

Extra-ordinary General Meeting of the Bank In view of the above, it is recommended that
Extra-ordinary General Meeting of the Bank all branches must be provided with Single
was held on Monday, the March 23, 2015 at Entrance/ Exit only (ie) Branch must have only one
IMAGE, to obtain the approval of the shareholders point of entry and same used for exit also. This will
for the proposed preferential allotment of equity to not only ensure that restricted access but also
the tune of `.280 crores in favour of the Government reduce vulnerability of our branch premises.
of India. Branches having more than one entrance in the
same floor must permanently close the additional
The present paid-up capital of the Bank
entrances ideally with brick wall or the existing
consists of 46,48,48,488 Equity Shares of face value
arrangement must be welded permanently so that
of `.10/- each, amounting to `.464.85 crore and access to branch premises could be prevented.
Government of India is holding 37,88,98,488 Equity
Shares of face value of `.10/- each, amounting to Similarly, branches having extended premises
`.378.90 crore (81.51%). Upon completion of the
in the first floor and / or basement should
endeavour to strengthen the entrance / exit points to
proposed preferential issue, the Government’s stake
that particular floor with additional grill /
in the Bank will increase further.
collapsible gate / shutter etc., so as to fortify the
ADMIN.81/2014-15 Dt.04.03.2015 access point.
Service Tax on Security Guard Services Henceforth, it may be ensured that for the new
If the security services are provided by any branches (under construction) / sites identified as
individual, HUF or partnership firm to a body new alternate premises is provided with Single
corporate, the service receiver has to pay the entire Entrance / Exit only.
Service Tax(100%) under Full Reverse Charge All Windows / Ventilators / Exhausts etc.,
Mechanism (FRCM) w.e.f. 01.04.2015 must be adequately strengthened with Iron grills
strong enough to withstand any attempt to break-in.
Till 31.03.2015 From 01.04.2015 onwards Preferably, the iron bars of the grill should be 20
Service Tax Payable by Service Tax Payable by mm in diameter and with an inter spacing of 10-12
Service Service Service Service cms. These should be embedded in concrete in a
Provider Receiver Provider Receiver cross bar pattern.
25% 75% -- 100% Outdoor units of Window / Split ACs must be
If the service provider providing “Manpower secured with strong iron grills. Standalone Burglar
Supply / Security Services” is an individual, HUF alarm system should be installed in all branches.
or partnership firm, no service tax is to be paid to The control unit of Standalone system must be
them towards services rendered by them after installed in a concealed location so that it is not
31.03.2015 and however, if such service is easily traceable. Installation of additional PIR
provided by a company, then 100% of service tax is Sensors / Vibration sensors / Magnetic sensors may
to be paid to the company. be connected to branch standalone Burglar alarm
ADMIN.85/2014-15 Dt.24.03.2015 system with one Hooter.
Permanent closure of multiple entrances to branch It is recommended that a Pin hole IR camera
premises covers such additional entrances, if any.
Majority of the attempted Theft / Burglary ADMIN.88/2014-15 Dt.30.03.2015
incidents have occurred wherein criminals have Though due care has been taken in the
gained access to the Branch premises either through preparation of Recollect, the version given in
Rear entrance doors or Side windows including the circular is final.
Ventilators / exhausts. Compiled by CO: O&M Division

14
 Volume 22 Issue 2
a
For Private Circulation Only

July- September 2009 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
Cir No. Date Subject Pg.
CONTENTS OF THIS ISSUE 104 29.09.09 Accounting procedures for Devolved 7
Letter of Credit (DA)
CRA 15.07.09 Electronic Payment of Direct Taxes 7
Cir No. Date Subject Pg.
23 by Corporates and Assessees
DEP 03.08.09 Special Domestic Term Deposit 1
(Coming Under Section 44AB of IT
23 Scheme for Senior Citizens
Act) – E-Payment of TDS by our
26 28.08.09 Adherence to KYC / AML Guidelines 2
Branches/Offices Made Mandatory
while Opening and Conduct of the
34 30.09.09 Co Branded Mediclaim Policy 7
account of Multi Level Marketing
`Arogya Raksha‘ – Renewal of MOU
Firms (MLMS)
for 2009-10 with improved Features.
ADV 02.07.09 IBA Model Educational Loan Scheme 2
FX 04.07.09 Rupee Draft Drawing Arrangements 8
40 - Life Insurance Coverage to Student
10 with Exchange Houses.
Borrowers
GENL 24.07.09 Settlement of Failed ATM 9
44 04.07.09 Tata Motors Tie Up Car Loan 2
13 Transactions – Payment of
Scheme
Compensation
45 08.07.09 Lending to Micro Enterprises - Board 2
HRM 04.07.09 Issue of "Retired Employee Card" to 9
Direction
48 Retired Employees
49 09.07.09 One Time Settlement Scheme for 3
49 06.07.09 Bonus to Staff for the Year 2008-09 9
MSE NPAs
51 17.07.09 Credit Facilities for Micro, Small and 3 56 10.07.09 Leave Fare Concession – Visits 10
Medium Enterprises- Collateral free Abroad.
Loans for Prime Minister's 60 15.07.09 Nodal Officer for Customer 10
Employment Generation Programme Service/Principal Code Compliance
(PMEGP) Officer (BCSBI) and Public
52 20.07.09 Financing Handicrafts Artisans and 3 Information Officer under Right To
covering them under CGTMSE Information Act 2005.
Scheme 61 16.07.09 NISM–Series-I – Certification In 11
54 22.07.09 Hedging of Foreign Exchange 4 Currency Derivatives Exam. – Fee
Exposure of Clients Reimbursement and Cash Incentive
57 27.07.09 Lending to Priority Sector Advances - 4 to Officers
Revised Guidelines - Additions / 88 12.09.09 Categorisation of Branches as on 11
Amendments 31.03.2009
59 27.07.09 Rating of SME Customers by ICRA- 4 ADMIN 17.08.09 Deduction And Remittance of Tax 11
Rating Scale & Rating Fee Structure 36 Deducted at Source (TDS) -
61 01.08.09 IB Swarna Mudra -"Income On Sale 4 Amendments made in the Finance
Of Gold Coins Act 2009 to the TDS Provisions under
73 17.08.09 Renaming of IB-SHANTINIKETAN as 4 Section 194a to 195 of the Incometax
IB-HOSTEL PLUS Act, 1961.
79 31.08.09 Entry Level Scoring for Credit Card 5 44 24.09.09 Whistle Blower Policy 12
84 05.09.09 SGSY Scheme - Increase in 5
45 25.09.09 Capturing of Operational Loss Data 12
Exemption Limit of Collateral Security
in Respect of Individual and Group
Loans
87 09.09.09 Operational Guidelines for Issue of 5
Letter Of Comfort (LOC) / Letter of
DEPOSITS
Undertaking (LOU)
92 14.09.09 ‘I-Cube - A Comprehensive Database 6
of CMIE Special Domestic Term Deposit Scheme For Senior
96 18.09.09 Implementation of National 6 Citizens
Agricultural Insurance Scheme
(NAIS) Administrative Approval for With effect from 01.01.2009, additional rate
Rabi 2009-10
100 22.09.09 Categorisation of Retail Trade under 6 of interest of 0.50% has been extended to Recurring
Small (Service) Enterprises Deposits for Senior Citizens.
101 22.09.09 Financing Agri Term Loan against 7
Gold Ornaments and New Product DEP. 23/2009-10 dt. 03.08.2009
Code for J L for Traders Scheme
 Recollect
Adherence to KYC / AML guidelines while opening ™ The insurance clause should be incorporated in
and conduct of the account of Multi Level Marketing the Sanction Ticket and consent should be
Firms (MLMs) obtained from the student borrower/co-
borrower/Guarantor.
Branches shall undertake quick review, in ™ However, the student applicant will have the
cases where accounts have already been opened in choice of selecting the insurance company for
the names of the marketing agencies, retail traders, the purpose.
investment firms, following RBI guidelines. ™ For all the existing educational loan accounts
Wherever large number of cheque books has which are regular and which do not have
been issued to such firms, the relative decision may insurance coverage, the student borrowers
concerned shall be advised to get insurance
be reviewed in the light of the following:
coverage and the premium for which can be
i. Whether the cheque books have been issued sanctioned as additional loan in respect of all
to customers on the basis of their express regular educational loan accounts.
request and after following the internal
processes laid down in the matter. ADV.40/2009-10 dt.02.07.2009

ii. Whether the number of cheque books is Tata Motors Tie Up Car Loan Scheme
consistent with / matching the profile of the
customers as also their nature of business Car Loans to purchasers of new passenger
operations. cars of Tata Motors viz. Indica, Indigo etc. and Fiat
range of cars, a scheme, “TATA MOTORS TIE UP
Unusual operations noticed during the above
CAR LOAN” (PRODUCT CODE: 4002 0018) has
review may be immediately reported to HO: AML been formulated:
Cell and other appropriate authorities such as
Financial Intelligence Unit (FIU-IND), Department The highlights of the Scheme are:
of Revenue, Ministry of Finance, Government of
11.00% (Fixed, with reset
India, Hotel Samrat (6th Floor), Chanakyapuri, New Interest Rate
clause of 2 years)
Delhi – 110 021.
Repayment Period Maximum 84 EMIs.
DEP.26/2009-10 dt. 28.08.2009
Margin 15%
ADVANCES
All other norms are as applicable for IB
IBA Model Educational Loan Scheme - Life Insurance Vehicle Loan Scheme.
coverage to Student borrowers The salient features of the Scheme are given
in Annexure I of the Circular.
Under IBA Model Educational loans
scheme, loans upto a limit of Rs.7.50 lakhs do not ADV.44/2009-10 dt. 04.07.2009
require any tangible collateral security. In the event
of any unforeseen happenings resulting in the Lending to Micro Enterprises - Board Direction
untimely death of the student borrower, the Bank has
no fall back in such accounts to recover the dues of In order to encourage lending to Micro
the deceased student. In such cases, life insurance Enterprises, our Bank is bearing a portion of one-
coverage to the student borrowers will be of time guarantee fee under CGTMSE scheme
immense help to the Bank. according to the interest rate stipulated in the
account.
™ Branches should bring to the knowledge of
the student applicants, at the time of Target fixed by Circle Heads should be
applying for educational loan itself, that life achieved by the branches. The performance under
insurance coverage for the student applicant Micro, Small & Medium Enterprises (MSME) and
will be a part of the educational loan scheme the exercise of discretionary powers for advances by
and the insurance premium payable will be Branch Managers will be part of annual appraisal.
included as an eligible expense under the
loan that will be sanctioned. ADV.45/2009-10 dt.08.07.2009

2 2
 JULY- SEPT. 2009

One Time Settlement Scheme for MSE NPAs Branches shall refer the circular for other
guidelines and salient features of the policy.
1. Policy on One Time Settlement of NPAs
Reporting of Sanctions: Branch Managers
exclusively for the Micro and Small Enterprises
should report all the sanctions made and amounts
(MSE) sector: Compromise proposals covering
recovered in the prescribed formats on a monthly
Medium Enterprises shall be dealt as per guidelines
basis to Circle Offices. Circle Heads shall closely
stipulated in the general Recovery Policy guidelines
monitor the sanctions made and recovery effected by
2009-10. The salient features of the Policy are given branches.
in the Circular.
2. Coverage: The scheme will cover, ADV.49/2009-10 dt. 09.07.2009

¾ All NPAs falling under the MSE (Micro and Credit facilities for Micro, Small and Medium
Small Enterprises) sector as on 31.03.2008. Enterprises- Collateral free Loans for Prime
¾ The scheme will also cover cases where Minister's Employment Generation Programme
OTS have been sanctioned but not paid fully (PMEGP)
and lapsed, written off accounts and BOT-
NRR accounts, Cases where action under As per guidelines of RBI and MSE Code,
SARFAESI has been initiated and cases branch should extend credit facilities up to Rs. 5.00
pending before Courts / DRTs, subject to lakh to new MSEs without any collateral security
consent decree being obtained from Courts / and such accounts should be covered under Credit
DRTs. Guarantee Scheme of CGTMSE, including those
units financed under PMEGP scheme.
¾ Decreed / DRC obtained cases / Awarded
cases in Lok Adalat sittings / NPAs where ADV.51/2009-10 dt. 17.07.2009
consent decrees were obtained earlier are
also eligible under the scheme. Financing Handicrafts Artisans and covering them
under CGTMSE scheme
The following categories of accounts are
excluded from the policy coverage: Government of India enlarged the scope of
the Artisan Credit Card scheme and extended it to
¾ Cases of willful default, fraud and
cover artisans, weavers, fishermen, self-employed
malfeasance and Staff related and staff
persons etc. and it was subsumed by Swarojgar
guaranteed accounts.
Credit Card Scheme (SCC).
3. The scheme will be in force up to 31.03.2010. Due to the unorganised nature of the
4. Minimum Recoverable Amount (MRA): Branch / Handicraft Artisans, this sector is plagued with
Circle have the liberty to negotiate with the myriad problems but most crippling of them is non
borrowers for higher amount as this would help to availability of the credit in the absence of collateral
improve the bottom line of the Bank. The field level security. To address this problem, the Office of the
functionaries shall maximize the compromise Development Commissioner (Handicrafts) had
amount taking into account the paying capacity of launched “Credit Guarantee Scheme” which
the borrower / guarantor and the realisability of the provides Guarantee to the credit extended by the
securities held, keeping the MRA worked out as per Financial Institutions. The scheme has a provision to
guidelines, as the minimum. pay Guarantee Fee and Annual Service Fee (GF &
ASF) on behalf of the borrower which is charged by
Sub- Sub-standard as on Doubtful / Loss as on
Sector 31.03.08 31.03.08 M/s Credit Guarantee Fund Trust for Micro and
MICRO Book balance from the Book balance from the date Small Enterprises (CGTMSE) in lieu of guarantee
Enterprises date of NPA plus simple of NPA plus simple interest
interest at BPLR / at BPLR / applicable card extended against the loan sanctioned to them by
applicable card rate, rate, minus 5%. Member Lending Institutions (MLI).
minus 3%.
Small Book balance from the Book balance from the date Branch shall refer this circular for further
Enterprises date of NPA plus simple of NPA plus simple interest
interest at BPLR / at BPLR / applicable card guidelines.
applicable card rate, rate, minus 4%.
minus 2%. ADV.52/2009-10 dt. 20.7.2009

3
 Recollect
Hedging of Foreign Exchange Exposure of Clients a. Indirect Agriculture:

RBI advised Banks to have a policy which • Entire Credit outstanding under loans for
explicitly recognizes and takes into account risk general purposes under General Credit Cards
arising on account of unhedged foreign exchange (GCC)
exposures of their clients and to monitor the un- • Loans granted to RRBs for on-lending to
hedged foreign exchange exposure of their clients, agriculture and allied activities
by putting in place a suitable policy in this regard. • Overdrafts, up to Rs.25000 (per account),
granted against “no-frills” accounts in rural and
Policy of our Bank semi-urban areas
b. Housing
As a policy for hedging, Credit Risk
Management Policy 2009-10 stipulates the • Loans granted to Housing Finance Companies
following: (HFCs) approved by National Housing Bank
for the purpose of refinance, for on-lending to
Where there is no natural hedge, forward individuals for purchase / construction of
cover is suggested to customers in respect of dwelling units, provided the housing loans
import/export transactions. The forward cover will
granted by HFCs do not exceed Rs.20 lakh per
act as risk mitigation on exchange risk.
dwelling unit per family. The above
While sanctioning the facilities, it should be dispensation shall apply to loans granted to
ensured that all exposures (fund based and non fund HFCs up to 31.03.2010. Such loans granted till
based including letter of comfort and letter of 31.03.2010 will continue to be classified under
undertaking) in foreign currencies are covered by Priority Sector till they are repaid.
forward cover. Request for considering waiver of
forward cover can be considered only by the ADV.57/2009-10 dt. 27.07.2009
functional credit General Managers at Head Office.
Rating of SME Customers by ICRA- Rating Scale &
While reviewing the borrowal accounts, hedged and
unhedged exposures are to be captured and Rating Fee Structure
incorporated in the proposal. Our Bank has renewed the MoU with ICRA
towards rating of SME clients of our Bank and is
Salient Features of the Board approved valid till 31.03.2011.
Policy for Monitoring of Unhedged Exposure is
given in the circular. According to ICRA, minimum rating fee
after the subsidy by Govt. of India works out to a
Authorised Branches shall not book sum of Rs.5000/- (including taxes) for the smaller
forward cover unless the non authorized branches SMEs ie. for entities having turnover of up to Rs 50
confirm availability of limit for the customer. lakhs. The Rating Fee structure and the Rating Scale
ADV.54/2009-10 dt. 22.07.2009 of ICRA are given in Annexure to this circular.

ADV.59/2009-10 dt. 27.07.2009

Lending to Priority Sector Advances - Revised
Guidelines - Additions / Amendments IB SWARNA MUDRA -"Income On Sale Of Gold
Coins".
Revised Priority Sector Guidelines as given
Branches should credit the branch income
by RBI along with certain additional instructions
on sale of gold coins/bars to BGL No.96539
relating to Classification under Indirect Agriculture
"Income on sale of Gold coins" only and not to
and Housing are given hereunder.
any other head.
Guidelines relating to classification of
segments of Priority Sector and various activities ADV.61/2009-10 dt. 01.08.2009
covered under each segment remain unchanged
Renaming of IB-Shantiniketan as IB-HOSTEL PLUS
except the following amendments.
To enhance better reach of the product, the
In addition to earlier guidelines, following
existing IB-Shantiniketan has been renamed as IB –
are eligible to be classified under:
HOSTEL PLUS.
4 4
 JULY- SEPT. 2009

Guidelines and all other terms & conditions ¾ For all individual loans exceeding Rs.1 lakh
of the scheme remain unchanged and shall continue and group loans exceeding Rs.10 lakh, in
similar to the erstwhile product. addition to primary security such as
hypothecation / mortgage of land or third
ADV.73/2009-10 dt. 17.08.2009
party guarantee as the case may be, suitable
Entry Level Scoring for Credit Card margin money/other collateral security in
the form of insurance policy, marketable
1. The scoring model for Credit Card is rolled security / deeds of other property etc,
out for scoring by Branches and the same is equivalent to amount of loan sanctioned
available in the Help Desk of the Bank shall be obtained by the branches. Any
alongwith other Scoring Models. reduction in value of securities may be
2. The scoring model is proposed as a two-tier permitted by Circle Head on case to case
approval system with an initiator / assignor for basis based on the requirement.
assigning the score and an approver for score ¾ The upper ceiling of Rs.10 lakh in respect of
confirmation, as stated below: group loans is irrespective of the size of the
group or prorata per capita loan to the group.
Sanctioning Authority : H O, Credit Card Centre
Scoring Initiator : Branch (Loan Officer) ADV.84/2009-10 dt. 05.09.2009
Scoring Approver : H O, Credit Card Centre Operational guidelines for issue of Letter of Comfort
3. The entry barrier for the scoring model is (LOC) / Letter of Undertaking (LOU)
fixed as “BBB” and proposals below the entry
AD Banks can issue Guarantees/ Letter of
grade can be considered by the respective Undertaking (LoU)/ Letter of Comfort (LoC) in
functional Credit General Manager at Head favour of the overseas supplier, Bank and financial
Office. institution up to USD 20 million per import
transaction for a period up to one year for import of
ADV.79/2009-10 dt. 31.08.2009
all non-capital goods permissible, under the Foreign
SGSY Scheme - Increase in exemption limit of Trade Policy (except gold) and up to three years for
collateral security in respect of individual and group import of capital goods subject to prudential norms
issued by the Reserve Bank from time to time. The
loans
period of such Guarantees/LoUs/LoCs has to be co-
Reserve Bank of India raised the exemption terminus with the period of credit, reckoned from the
date of shipment.
limit of secondary collateral security (earlier referred
to as primary security) under SGSY as follows : Loan Policy on Letter of Comfort (LOC) and
Letter of Undertaking (LOU)
¾ For individual loans up to Rs.1 lakh and The General / Operational guidelines,
group loans up to Rs.10 lakh, the movable Settlement of Claims, Accounting procedure and
assets created out of bank loan would be Devolvement in LOC/LOU are given in this
hypothecated to the bank as primary circular.
collateral (earlier referred to as primary Service Charges
security).
“0.20% per month for the specified period
¾ In case where movable assets are not created of liability, with a minimum of 0.35% (subject to a
as in land based activities such as dug well, minimum of Rs.575/- per LOC / LOU). Refund of
minor irrigation, etc., Mortgage of land may commission for early redemption shall be as per the
be obtained. foreign guarantee service charges norms from time
¾ Where mortgage of land is not possible, to time. ”
branches should get prior permission from Besides the commission, the Branch shall
Circle Head to consider loans under SGSY collect processing fee as per norms in force,
with suitable third party guarantee whose provided the facility is considered as a Standalone
networth is atleast equal to loan amount. facility. If considered as sub limit under Import LC,
the processing fee need not be collected.

5
 Recollect
Commitment charges as specified in Service ¾ The existing premium rates i.e. flat rates for
Charges circular have to be levied on the unavailed food and oilseeds crops and actuarial
portion in the all the cases unless specifically waived premium for annual commercial and
in sanction. horticultural crops will be continued.
ADV.87/2009-10 dt. 09.09.2009 ¾ As provided in the scheme, indemnity
claims will be settled only on basis of yield
‘i-cube - a Comprehensive Database of CMIE data furnished by State Government based
Bank has subscribed to a new product of on requisite number of Crop Cutting
Centre for Monitoring Indian Economy Pvt. Ltd. Experiments (CCEs) conducted under
(CMIE), named i-cube, for a period of one year General Crop Estimation Survey (GCES)
(from Sep 09) which supports with information for and not on any other basis like
better decision making / credit marketing. A Annavari/Paisawari etc.
pamphlet briefly detailing the features of these
¾ Element of sharing risk, nature of coverage,
services is enclosed as Annexure to this circular..
seasonality discipline, submission of
The high light of the product is that an declarations by lending agencies etc. will
information specialist is provided by CMIE to assist remain same i.e as per provisions of the
the Bank in accessing and using the data. The
scheme.
information analyst will be stationed at Head Office,
Risk Management Department. Circle Offices / Government of India is attaching importance
Branches can avail i-cube services through any of to the implementation of the scheme as it mitigates
the communication channels detailed under. The the risks of the farmer. Hence, branches should
responses shall generally be provided to the Circle / cover 100% of all eligible farmers under NAIS.
Branch though e-mail only.
ADV.96/2009-10 dt. 18.09.2009
Customized reports shall be generated at
periodic intervals (eg. projects coming up in the
area) and the same would be sent to the concerned Categorisation of Retail Trade under Small (Service)
Circles. Branch Managers / Credit Relationship Enterprises
Officers can also request for details like major RBI has conveyed the decision to include
companies (including financial details / peer level loans granted by banks in respect of following
comparison) / projects coming up in any particular activities under Micro and Small (Service)
location, which may be used for marketing apart Enterprises within the priority sector, provided such
from making use of such information in credit Enterprises satisfy the definition of Micro and Small
appraisal. (Service) Enterprises in respect of investment in
equipment (original cost excluding land and
ADV.92/2009-10 dt. 14.09.2009
building, fittings and other items not directly related
to service rendered or as may be notified under
Implementation of National Agricultural Insurance MSMED Act 2006) (i.e., not exceeding Rs.10 lakh
Scheme (NAIS) Administrative approval for Rabi 2009- and Rs.2 crore respectively):
2010
i) Consultancy Services including
According to Reserve Bank of India the Management Services
National Agricultural Insurance Scheme (NAIS) ii) Composite Broker Services in Risk and
continue during Rabi 2009-10 as approved by the Insurance Management
Government of India, on the following terms and
iii) Third Party administration (TPA) Services
conditions: for Medical Insurance Claims of Policy
¾ Risk of implementing agency in meeting Holders
claims would be restricted to 100% of the iv) Seed Grading Services
premium in case of food and oilseeds crops v) Training –cum-incubator Centre
and 150% for annual commercial /
vi) Educational Institutions
horticultural crops.
vii) Training Institutes
6 6
 JULY- SEPT. 2009

viii) Retail Trade Drawing limit in Cash Credit shall be

ix) Practice of Law i.e. Legal services reduced to the extent of devolved LC liability after
15 days (from the date of debit) till adjustment. On
x) Trading in medical instruments (brand new) adjustment of the devolved letter of credit liability,
xi) Placement and Management Consultancy regular drawing limit in Cash Credit account shall be
Services restored. Drawing limit reduction is suggested to
xii) Advertising agency and Training Centres have effective monitoring of the account.
Accordingly, there will be no separate Accounting entries (existing and proposed)
category for “Retail Trade” under priority sector. for devolved Letter of Credit are given in annexure.

In CBS environment, sub sector code 52 is ADV.104/2009-10 dt. 29.09.2009

assigned to Retail Trade activity and branches shall
continue to allot this sub sector code. However, CRA
while reporting Quick Data / any other relevant
statement, branches / Circle Offices shall ensure that Electronic payment of Direct Taxes by Corporates and
amount outstanding for Retail Trade activity (under Assessees (coming under section 44AB of IT Act) – e-
Sub Sector code 52) is reported under Small Payment of TDS by our branches / Offices made
(Service) Enterprises only as per extant RBI Mandatory
guidelines.
According to Central Board of Direct Taxes
ADV.100/2009-10 dt.22.09.2009 electronic payment of taxes made mandatory for the
following categories of taxpayers w.e.f 01.04.2008:
Financing Agri Term Loan against Gold Ornaments
and New Product Code for Jewel loan for Traders ¾ A Company
scheme. ¾ A person (other than a company) to whom
In respect of the earlier allotted product provisions of Section 44AB are applicable.
code 4011-0003 stands withdrawn and a new Also, as per the recent Govt. guidelines, all
product code 4011-0005 has been introduced for TDS on Salary, TDS on Deposits, TDS on
financing Jewel loan for Traders scheme. Expenditure payments such as Rent, Professional
Branches should select the product code fees, contracts, services etc., are to be remitted
correctly and for sub-sector code of the products mandatorily through e-payment from 01.04.2008.
(Agri Term loan against Gold Ornaments and Jewel Payment of Direct taxes is made available to
loan for Traders), manually enter ‘5’, till modified our customers through Net banking facilitating them
in the system. to make e-payment.
ADV.101/2009-10 dt. 22.09.2009 Branches / offices need to open a designated
current account, in order to remit through e-payment
Accounting procedures for devolved letter of credit mode, the taxes deducted. Obtain Net Banking login
(DA) and transaction password for this designated current
account, credit the taxes to be paid to this account
The following modifications came into and pay through e-payment.
operation, in the accounting procedures of LC DA
(both inland and import), where the customer is not For other guidelines, branch shall refer this
arranging funds for meeting the LC commitment on circular.
due date: CRA.23/2009-10 dt. 15.07.2009
The dues under LC / DA will be debited to
“Devolved Liability under LC / DA account” and Co branded Mediclaim Policy ‘Arogya Raksha’ –
amount remitted to negotiating Bank / Branch. LC Renewal of MOU for 2009-10 with improved features
contra to be reversed. to make it more attractive.
Branches should immediately reverse the The MOU with the United India Insurance
devolved letter of credit liability by following up Company governing the issue of Arogya Raksha
with the party. Policies has been renewed for a further period of one

7
 Recollect
year from 01.10.2009 up to 30.09.2010 any claim made in respect of other members of
incorporating major improvements as given below: the family and for other diseases (other than Pre
Improved Features: existing diseases) will not affect Pre existing
Disease to be eligible under the Policy from the
1. Premiums: Premiums have been reduced by fourth year.
around 8% across all age Groups (Plan A, Plan 6. Restriction on Room rent: A ceiling has been
B & Plan C). Please refer Premium Chart introduced on daily Room Rent @ 1.5% of Sum
(Annexure 1) of this circular. Insured and daily rent for ICU @3% of Sum
2. Increased coverage : Sum Insured under Plan A Insured.
& B raised to Rs. 10 lakhs from the existing 7. For customers of 65 years and above, the
level of Rs. 5.00 lacs subject to the following existing Co-Pay at 20% for major illness has
conditions: been modified as “10% deductibles applied on
• Fresh Applicants can choose any amount all admissible claims”.
from Rs. 50,000/ to Rs. 10 Lacs 8. However, this deductibles clause will not be
• Existing Policyholders can increase the Sum applicable to policyholders migrating from Plan
Insured to the next slab only. B to Plan C on completion of 65 years.
3. Maximum Sum Insured for Plan C continues to 9. Personal Accident Death (PA) cover: It
remain at Rs.5.00 lakhs subject to the existing continues to be available for all Policies as
Terms and Conditions as below: follows: @100% of Sum Insured for
• For existing Policyholders in Plan C, Policyholder; @ 50% of Sum Insured for Spouse
enhancement on renewal is allowed as in the and @ 25% of Sum Insured for each child,
case of other Plans (to the next higher slab- subject to total payment not exceeding the Sum
e.g. . from Rs.3.00 lacs to 3.50 lacs and so Insured. PA cover is not available for Parents.
on) The Premium rates given in the Annexure are
• Policyholders migrating from Plan B to Plan inclusive of PA premiums.
C on completion of 65 years will continue to
CRA.34/2009-10 dt. 30.09.2009
have the same amount of Sum Insured, even
in Plan C subject to the maximum cover not FX
exceeding Rs.5.00 lakhs.
Rupee Draft Drawing Arrangements with
4. Benefit Increased For Major Surgery:
Exchange Houses.
Hospitalisation benefit in respect of ALL
MAJOR SURGERY was allowed with a ceiling Taking a view on the viability of operations,
of 70% of Sum Insured subject to a maximum of it was decided to withdraw from DD Drawing
Rs. 2.00 lacs. This has now been improved as Arrangement with the following Exchange
80% of Sum Insured subject to a maximum Companies after arriving at a consensus with them.
of Rs.4.00 lacs.
1. UAE Exchange Centre WLL, Kuwait
5. Pre-Existing Diseases: So far, Pre–existing
Diseases were covered from the 4th year 2. National Exchange Company WLL, Doha, Qatar
provided the policy has been in force
continuously for a period of consecutive three With effect from 06.07.2009, all branches
years and no claim has been reported. As a result are authorised as drawee branches for M/s UAE
of this, even if there was a small claim for other Exchange Centre LLC and M/s Bahrain India
Exchange Co., Bahrain. These two Exchange
members covered under the Policy, coverage for
Houses may draw DD and send by courier to any
the Pre existing Disease was lost/postponed.
branch. For making payment of these DDs,
Under the new MOU, this has been modified as branches shall be guided by HO: ID Circular No. FX
“However, this exclusion will be deleted after 3 29/2006-07 dated 23.01.2007 and HO:O&M
consecutive continuous claim free policy years, Circular No.CRA/56 2006-07 dated 20.10.2006 on
provided there was no claim for hospitalisation “Payment of At Par instruments in CBS branches”.
of the pre-existing ailment during these 3 years
of Insurance (Para No. 4.1)”. This means that FX.10/2009-10 dt. 04.07.2009

8 8
 JULY- SEPT. 2009

GENL 1. All staff members who retire on

superannuation alone are eligible.
Settlement of Failed ATM Transactions – Payment of
Compensation 2. The Retired Employee Card will be issued
to retiring staff only on surrendering of
Reserve Bank of India has made it
Bank’s Identity Card.
mandatory for banks to reimburse the customers the
amount wrongfully debited on account of failed 3. The Officers / Staff retiring from the
ATM transactions within a maximum period of 12 Branches / Offices have to submit the
working days from the date of receipt of the requisite details as per Annexure, along with
customer complaint. the Pension Papers to HO: HRM
Department.
For any failure to re-credit the customer’s
account within 12 working days from the date of 4. Two copies of the recent passport size color
photographs are to be enclosed, along with
receipt of the complaint, the bank shall pay
the format duly filled and signed by retired
compensation of Rs.100/- per day, to the aggrieved
employee and countersigned by the Branch
customer. This compensation shall be credited to Manager or Head of the Office.
the customer’s account automatically without any
claim from the customer on the same day when the 5. For those Officers / Staff already retired and
bank affords the credit for the failed ATM drawing pension, the concerned pension
disbursing branch may arrange to obtain the
transaction. The compensation will be paid by the
requisite proof / details from the pensioner.
ATM Service Centre only.
6. For those Officers / Staff who are PF
The issuer bank is entitled to claim such
optees, branches where the retired member
compensation paid to the customer from the acquirer
maintains / operates SB / Term Deposit may
bank, if the delay is attributed to the latter. By the arrange to collect the requisite details to
same logic, the ATM network operators shall forward to HO:HRM Department duly
compensate the banks for any delay on their part. certified.
Customer Complaint should be entered in 7. HO:HRM Department will issue the cards
the ATM webpage by the branches as per the and send it to the same Branch / Office from
procedure given in the circular. where the application is received.
The ATM Service Centre will register ATM 8. In case employees/officers retiring on or
complaints made through web page for failed after 01.07.2009, the format for issue of the
transactions reported by our customers as per the card duly filled in and signed /counter
existing procedure. signed may be sent to Settlement section of
Our customers can lodge their complaints at Head Office, HRM Department along with
papers meant for sanction of terminal
any of our branches, not necessarily at the Home
benefits.
Branch.
9. In case of loss of the card by the retired
The delay in settlement of claims attracts employees, duplicate card will not be issued
penalty and accountability will be fixed on the under any circumstances.
official responsible for the delay in registering the
10. The Bank does not undertake any
customer complaint. Hence the branches should
responsibility for any action of the card
follow the instructions meticulously as given in this holder. Any misuse of the card will be at
circular. the sole responsibility of the card holder.
GENL.13/2009-10 dt.24.07.2009 11. In case the card is not in use, it should be
surrendered to the Issuing Authority.
HRM
HRM.48/2009-10 dt.04.07.2009
Issue of "Retired Employee Card" to Retired
Employees Bonus To Staff For The Year 01.04.08 To 31.03.09
The following are the guidelines for the
Board has approved payment of Bonus for
issue of Retired Employee Cards:
2008-2009 to all eligible Employees of the Bank in

9
 Recollect
India at 8.33% of eligible Emoluments paid from be done on the basis of relevant tickets and
01.04.2008 to 31.03.2009 subject to a maximum of certification of the employee concerned and
Rs.3,500/- per Employee. For ascertaining the he shall be solely accountable for the same.
eligibility of the Employees and for calculation of
Bonus amount, etc., Branches / Offices are advised While applying for LFC, the staff members
to follow the guidelines given in the Annexure to who are desirous of availing LFC to visit abroad also
this circular without any deviation. should specifically mention in their leave application
that they intend to visit abroad and they would
Please refer to the guidelines in the comply with the instructions stipulated therefor.
Annexure enclosed to this circular, regarding the
maintenance of register in “Form C” showing details Staff members are advised to take specific
of Bonus paid and for submission of Annual Return permission / NOC, while applying for visa / visiting
in “Form D” to the Assistant Labour Commissioner abroad from the Competent Authority.
(Central) of the respective Circle.
No reimbursement will be allowed against
HRM 49/2009-10 dt. 06.07.2009 the claim until the sanctioning authority is fully
satisfied as to the genuineness and correctness of the
Leave Fare Concession – Visits Abroad. claim. Such authority shall make, if necessary, all
reasonable endeavour to ascertain the correct
Our Top Management has agreed to position with regard to travel abroad and the charges
consider the request of staff members to avail LFC claimed to have been incurred.
to visit abroad while visiting the declared
destination in India, subject to the following HRM 56/2009-10 dt. 10.07.2009
conditions:
Nodal Officer for Customer Service/Principal Code
1. So long as the designated place is anywhere Compliance Officer (BCSBI) and Public
in India and the employee actually visits the
Information Officer under Right to Information
place so designated, the employee can also
Act 2005.
travel to a foreign land enroute to his
designated place. The cardinal principle is The General Manager at Head Office,
that the employee must visit the
Sri.R.Venkataramanan, General Manager (MSME)
designated place which has to be in India.
has assumed charge as Nodal Officer for redressal
2. As long as the officer’s place of domicile or of complaints / grievances, Principal Code
designated place is anywhere in India and Compliance Officer for implementation of Code of
he/she actually visits the place so Bank’s Commitment to Customers and Public
designated, he/she may be reimbursed actual Information Officer under Right to Information Act
charges for his/her entire journey within and
2005. Branches have to modify in their notice
without India or the cost of fare to his/her
board and display as under:
hometown/designated place, by the shortest
route, by his/her entitled class, whichever is Sri R.Venkataramanan Sri R.Venkataramanan
Nodal Officer for Customer Principal Code Compliance
lower. service, Officer,
General Manager (MSME), General Manager (MSME),
3. For award staff the reimbursement would be Indian Bank, Head office, Indian Bank, Head Office,
restricted to the maximum eligible amount 66, Rajaji Salai, 66, Rajaji Salai,
CHENNAI – 600001. CHENNAI – 600001.
for the entitled distance according to 2 year / Telephone No.044-25231279 Telephone No.044-25231279
4 year block or the actual cost which ever is Email: venkataramanan@indian- Email: rvenkataramanan@indian-
bank.com bank.com
lower.
Sri R.Venkataramanan
4. Indian travel agencies who organize the Public Information Officer under RTI Act,
travel are also issuing certificates stating General Manager (MSME),
that foreign/inland travel has been Indian Bank, Head office,
66, Rajaji Salai,
undertaken and the amount of fare charged CHENNAI – 600001.
is also stated by them. In such cases the Telephone No.044-25231279
Email: rvenkataramanan@indian-bank.com
statements made by the travel agencies
should be confirmed by the employee
concerned. The processing of the bill will HRM.60/2009-10 dt.15.07.2009

1010
 JULY- SEPT. 2009

NISM–Series-I – Certification in Currency Derivatives ADMIN

Examination – Fee reimbursement and Cash Incentive Deduction and Remittance of Tax Deducted at Source
to Officers (TDS) - Amendments made in the Finance Act 2009 to
Bank has taken trading membership for the TDS Provisions under Section 194A to 195 of the
currency future trading from NSE and MCX-SE. Income Tax Act, 1961.
1. Abolition of Surcharge & Educational Cess for
As per SEBI requirement, all approved users
the purpose of deduction of TDS:
and sales personnel of trading members of currency
derivatives segments of recognized stock exchanges No Surcharge and Educational Cess need to
are required to obtain the necessary certification. be added to TDS amount with effect from
01.04.2009. It is enough only TDS at the prescribed
At present Currency Derivative Certification rates needs to be deducted as per the provisions of
Examination is being conducted by National Section 194A to 195 and remitted into Government
Institute of Securities Markets. Account.
Name of Module NISM-Series-I: Currency
Derivatives Certification 2. Amendments in rate of TDS on Contract Payments
Examination u/s 194 C of the Income Tax Act.
Fees (Rs.) 1000
Test Duration (in minutes) 120 With effect from 01.10.2009 the TDS rate
No. of Questions 60 on contract payments has been revised as under:
Maximum Marks 100 Payment to Contractors and Existing TDS Rate Revised TDS
Pass Marks * (%) 60 Sub-contractors u/s 194C (From 01.04.2009 Rate with
Certificate Validity (in years) 3 to 30.09.2009) effect from
* Negative marking – 25% of the marks assigned to the question. 01.10.2009.
To Individual /HUF Contractors
Officers are advised to qualify for the on advertisement contracts
1% 1%
NISM-Series-I: Currency Derivatives Certification To Individual / HUF Contractors
2% 1%
Examination, which is being conducted online at on other contracts
NSE, MCX-SX and BSE on payment of Rs.1000/- To Individual / HUF Sub-
per attempt by pursuing the course offered by NISM. contractors on advertisement 1% 1%
contracts
As an incentive to those officers who qualify in the
To Individual / HUF Sub-
examination conducted by NISM, a sum of contractor on other contracts
1% 1%
Rs.1000/- will be granted besides reimbursing the To Contractors other than
course fee of Rs. 1000/- on production of the marks Individuals & HUF on 1% 2%
advertisement contracts
sheet/certificate. Course material is available free of
To Contractors other than
cost on the website of National Stock Exchange of Individuals & HUF on other 2% 2%
India and other websites. contracts
To Sub-contractors other than
HRM.61/2009-10 dt 16.07.2009 Individuals / HUF on 1% 2%
advertisement contracts
Categorisation of Branches as on 31.03.2009 To Sub-contractors other than
Individuals / HUF on other 1% 2%
The norms of business criteria for contracts
categorisation of branches and classification of Further, TDS need not be deducted on
Specialised branches (Annexed to this circular) were payments made to Contractor for plying, hiring or
approved by the Board and is given below: leasing goods carriages provided that the contractor
CATEGORY OF BUSINESS CRITERIA INCUM- provides his Permanent Account Number (PAN) to
BRANCH (Average aggregate deposits and BENCY
advances during the last two Scale the Deductor.
years)
Small Below Rs.5 crore I 3. Amendments in rate of TDS on Rent Payments u/s
Medium Rs.5 crore and above but below II 194 I of the Income Tax Act.
Rs.25 crore
With effect from 01.10.2009 the TDS rate
Large Rs.25 crore and above but below III
Rs.75 crore on contract payments has been revised as under:
Very Large Rs.75 crore and above but below IV Existing TDS Rate Revised TDS
Rs.250 crore Payment of Rent u/s 194 I (From 01.04.2009 Rate with effect
to 30.09.2009) from
Exceptionally Large Rs.250 crore and above V 01.10.2009
On Plant or Equipment or
HRM.88/2009-10 dt. 12.09.2009 10% 2%
Machinery

11
 Recollect
Existing TDS Rate Revised TDS With regard to submission of Declaration in
Payment of Rent u/s 194 I (From 01.04.2009 Rate with effect
to 30.09.2009) from Form 15H by Senior Citizens, no change has been
01.10.2009
made on the applicability of TDS, except that the
On Building / Land and Furniture
to Individual / HUF
15% 10% minimum income subject to tax of Senior Citizens
On Building / Land and Furniture has been increased from Rs.2.25 lakhs to Rs.2.40
to any other person such as Firm 20% 10%
/ Company etc.
lakhs. Other earlier instructions continue to apply
except the above amendments.
4. Deduction to be made at higher TDS rate, if valid
PAN is not furnished with effect from 01.04.2010: ADMIN.36/2009-10 dt. 17.08.2009

A new Section 206AA has been introduced Whistle Blower Policy

in the Income Tax Act, to make PAN mandatory for
deduction of TDS which states that if the valid PAN IMAGE has sent a Power Point presentation
is not furnished by the deductees to the Deductor through an IP message and intranet which highlights
then TDS shall be deducted at a higher of the illustrative examples or improper practices; sensitive
following rates with effect from 01.04.2010. areas and essential controls in CBS.
i. At the rate specified in the relevant Branch Managers are advised to discuss the
provisions of the Act. item in their branch meetings and make all the staff
members aware of their responsibilities under the
ii. At the rate or rates in force
policy.
iii. At the rate of 20%
Circle Heads may make use of the power
Hitherto TDS exemption on interest paid on point presentation in their Branch Managers meeting
deposits u/s 194A based on Form 15G / 15H was or other staff meetings to create awareness.
given without insisting for PAN of the customers.
As per the amendments made to Section 206A, with ADMIN.44/2009-10 dt.24.09.2009
effect from 01.04.2010 TDS exemption u/s 194A,
based on Form 15G / 15H submitted by the Capturing of Operational Loss Data
customers, can be allowed only if the customer Though the system of collecting the loss
provides his / her PAN to the Bank. Otherwise, TDS data from the functional departments on a
has to be deducted at a higher of 20%, as against the consolidated basis is in vogue branches/ circles/ HO
stipulated TDS rates. functional Departments should submit all
operational losses in their area of operations through
The above requirement of PAN under Section
HO: MIS online. This data collection process will
206A / 206AA needs to be informed to all the
continue parallely for a period of one year along
Customers, Contractors, Landlords, Professionals
with the existing mechanism of reporting the loss
etc., and they are to be advised to submit their PAN
data to functional departments.
in order to avoid deduction of TDS at a higher rate
of 20% from 01.04.2010. HO: MIS has ported a template in the
BBMIS site – ISG ID 507- with the operational
However, during the current year 2009-10,
guidelines to fill up the template. A ready reckoner
branches can accept declaration in Form 15G from
for classifying the operational loss data is annexed to
our Deposit Customers (not being a Company &
this circular.
Senior Citizen), if the total Interest paid on deposits
to them per branch during the current financial year ADMIN.45/2009-10 dt. 25.09.2009
does not exceed the following amount, being the
minimum income level not subject to tax. MD
DEP ADV HRM CRA FX GENL ADMIN
/ED
a. Rs.1,60,000/- in the case of individual customers
not being Senior Citizen and 33 106 34 34 18 24 45 4
Women
b. Rs.1,90,000/- in the case of Women customer
not being Senior Citizen
In other words, if the total interest paid Though due care has been taken in the preparation of
exceeds the above amounts, TDS need to be Recollect, the version given in the circular is final.
deducted at the stipulated rates on the total interest Compiled by HO: O&M Division
paid during the year.
1212
 a Volume 23 Issue 2

For Private Circulation Only

July– Sept 2010 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
88 30.09.10 Revision In Benchmark Prime
9
CONTENTS OF THIS ISSUE Lending Rate
Preferential Rate Of Interest On
Cir HRM
No.
Date Subject Pg. 01.07.10 Deposits Of Senior Citizen Ex- 9
55
DEP Staff Members
06.07.10 Introduction Of “Supreme”
07 2 Performance Linked Incentive
Current Account 68 15.07.10 9
09 Scheme
15.07.10 Online Customer Complaint
2 Group Personal Accident
Redress
11 Insurance Policy For All Our
24.08.10 Modification In Supreme Current 81 09.08.10 10
4 Staff Members Under Staff
Account
ADV
Welfare Scheme
01.07.10 Agricultural Loans - Waiver of
48 4 Incentives to Lady Officers who
Margin/Security Requirements
51
accept posting as Branch
03.07.10 Restructured Advances 4 84 12.08.10 10
Managers–Revision in ceiling
53 06.07.10 Central Scheme to provide
amt
Interest Subsidy (CSIS) for the
Enhancement Of Medical Aid To
period of moratorium of 102 06.09.10 10
Retired Staff Members
educational loans taken by
Reimbursement of cost of
students from economically 5
106 08.09.10 subscription to a Newspaper to 10
weaker sections (EWS) under
Part- Time Employees
educational loan scheme of IBA,
to pursue Technical/Profssional 112 21.09.10 Staff Welfare Schemes 10
education studies in India. CRA 10.07.10 "Cheque Truncation System
56 07.07.10 19 (CTS) -2010 Standard" for 11
Projects Under Implementation -
5 Cheque Forms – Specifications
- Promoters Contribution
20 13.07.10 Agency Commission Claims –
61 26.07.10 Bank’s MoU With Toyota Claims to be submitted to
6
Kirloskar Motors Pvt Limited Regional Offices of RBI / CAS, 11
62 02.08.10 Bank's MoU with M/s.Ashok Nagpur, duly certified by
Leyland Ltd - Launching of IB- 6 External Auditor
ALL-CV-AUTOSTAR 27 13.08.10 Launching of On-Line Data
63 04.08.10 NEW MSME LOAN PRODUCT - Entry System for
6
IB CONTRACTORS Comprehensive House Holders’
68 13.08.10 Scheme of 1% interest Insurance Policy – provided free 11
subvention on Home Loans upto 7 as a Value Addition under
Rs.10 lakh – Guidelines Supreme Current Account
72 18.08.10 Lending under Multiple Banking Scheme
7
Arrangements (MBA) 29 07.09.10 Amendment to Senior Citizens
74 23.08.10 Modification in Legal Scrutiny Savings Scheme Rules, 2004 –
Report to be obtained from 8 Payment of interest in case of 12
Bank’s approved lawyer death of a depositor before
76 26.08.10 Sanctioning of Jewel loans for maturity
Agricultural purpose - Recording 30 18.09.10 Introduction of New Products in
8
details of land holdings in loan CBS- i) Multi Utility (CA) ii) Multi
application Utility (SB) - Collection of 12
82 15.09.10 Compromise/Negotiated/OTS of various types of payments with
Non-Performing Assets- details of payer
Compliance to RBI guidelines – 8 31 14.09.10 Dishonour of cheques- Need to
Append a certificate in all OTS mention ‘Date of Return’ in 13
proposals/ sanctions. Cheque Return Memo
86 27.09.10 Enhancement of advance rate FX 20.08.10 Renewal of ECIB (WT-PC) and
8
per gram of Jewels 20 ECIB (WT- PS) by ECGC from 13
87 30.09.10 Review Of Base Rate 9 01.07.2010 to 30.06.2011
 Recollect
GEN 01.07.10 Renaming of ABN Bank N.V SUPREME CURRENT
13
34 ACCOUNT
Name of the services
35 31.07.10 Service Charges for Electronic Plan Plan Plan Plan
13
Payment Products A B C D
38 07.08.10 NECS (National Electronic Benefits
Clearing Services)- Updation of 14 Benefit - 1
MICR codes by branches Free Insurance
Rs.3
43 16.08.10 Branches of Bank of Rajasthan AROGYARAKSHA Plan B - - -
lakhs
Ltd., to be Branches of ICICI 14 Comprehensive House Holders
Bank Ltd., from Aug 13, 2010 Rs.1 Rs.2 Rs.3
Policy - Limit specified against Rs.3
lakh lakhs lakh
45 19.08.10 RTGS / NEFT Return each centre lakhs
Transactions - Information for 14 Besides the above, FREE
Cover for Plate, Glass & Rs.25,000/- for all plans
Customer A/c Statement Baggage risk
46 24.08.10 Claiming Reimbursement of FIT Outward RTGS/ Free–All service
ATM Cash through RACS Benefit – 2
NEFT and host of charges
(Reconciliation Accounting & 14 service charges (excepting
Waiver of Service charges
given free refer mandatory
Cash Settlement) Web Based Annex of this circular ones)
Module
ADMN 05.08.10 Renewal Of Standard Fire And Product Features / Rules, Operational
25 Special Perils Policy Of The 15 guidelines, Proposal form, terms and conditions
Bank’s Own Buildings
for CHP and AR and Claim form for CHP are given
26 05.08.10 Renewal Of Burglary And House
15 in this circular as Annexure.
Breaking Policy
27 05.08.10 Comprehensive Centralised As the offer of Comprehensive
Insurance Policy for 'Safe, Householders’ Policy is first of its kind among all
Furniture & Machinery (SFM), Banks, Branches shall market the product
16
Books, Forms, Stationery &
aggressively highlighting the salient features to
Electronic Equipments' kept at
Bank's premises all over India make the product a success.
32 25.08.10 New Symbol for Indian Rupee - DEP.07/10-11 dt.06.07.2010
17
Propagating and popularising
33 08.09.10 Adherence of KYC Norms- Online Customer Complaint Redress
Opening of Accounts of 17
Retaining the existing customers is as
Proprietary Concerns
important as bringing new customers to our fold.
DEPOSITS Hence, a customer’s grievance has to be redressed
quickly and to his satisfaction. Immediate redress of
Introduction of “Supreme” Current Account
the grievance of the customer gives the customer a
A new Current Account product viz., satisfaction and ensures continuation of his/her
“Supreme” Current Account comprising of four patronage to the Bank. A satisfied customer not only
variants, each having a different average monthly continues association with the Bank but also
balance starting from Rs.1 lakh to Rs.10 lakhs and introduces/brings in new customers to the Bank. In
variable level of insurance cover and concession in our Bank we have a customer grievance redress
service charges had been launched. mechanism wherein the grievances of customers are
addressed/redressed by introducing Online
The Product is offered in four variants Customer Grievance Redress Mechanism.
namely Plan A, B, C & D.
Salient features of which are explained
SUPREME CURRENT below:
ACCOUNT
Name of the services a) Only our Bank’s Customers having either e-
Plan Plan Plan Plan
A B C D mail ID or Mobile No. or both can utilize
Required Average Monthly this facility.
Balance (AMB) Mode of
calculation: Average of daily
b) In order to register a complaint, the
closing clear balance in the customer has to login our website
Rs.1 Rs.2 Rs.3 Rs.10
account spread over a period of
lakh lakhs lakhs lakhs www.indianbank.in and access the
one month subject to
maintenance of 50% of the complaint Format by clicking the ‘Customer
stipulated AMB as the minimum complaints’ link provided in the Home
balance on every day Page.
2 2
 JULY-SEPT. 2010
c) Wherein, the customer has to provide the ¾ Sensitive data relating to the credentials of the
necessary details as per the format provided. Customers viz. Account number, ATM Card
Sl.Nos 3,10,11,12 are mandatory fields. Number, PIN Number or any financial data
d) On submission of a complaint by the relating to accounts should not be parted
complainant, a reference number will be through SMS, E-mail or any other Mode.
generated automatically by the system for
Role of the Circle Office
future reference and viewing the status by
the customer. ¾ Circle Offices are also provided with a link
through CBS Help Desk named as “Complaint
e) The customer gets acknowledgement
Redress”.
through e-mail immediately and SMS on
generation of Text file by HO.Customer ¾ Circle Heads may designate one or two officials
Service Cell from their Circle Offices to attend and monitor
the online complaints received. Circle Offices
Role of the Branch have to inform the names of the designated
¾ For the use of Branches, a link is provided officials to H.O. Customer Service Cell for
through CBS Help Desk under “Complaint creation of user IDs and Passwords. Changes of
Redressal”. designated officers are to be intimated to H.O:
¾ Branch Managers shall designate one or two Customer Service Cell then and there for
officers from their Branches to attend to the creation of user IDs and Passwords for the
Online complaints registered against their newly designated officers.
Branches. The name/names of designated ¾ Circle Offices are provided with centralized
officers have to be intimated to their Circle User Creation Module at Help Desk for creating
Offices for creating user IDs and Passwords. User IDs and Passwords for the designated
The designated officers can login with SR No. officers at Branch level.
and Pass Word. Changes of designated officers ¾ The designated officers at Circle Offices can
are to be intimated to the respective Circle view the communication / information
Offices then and there. exchanged between the Branch and the
¾ The designated official/s is/are expected to complainant.
verify the complaints received at frequent ¾ Circle Office can communicate to Branch / HO
intervals every day and to furnish information / CSC through the Link provided in the
respond / reply on line in the column “Reply Mechanism .
sent to customer” with the approval of Branch ¾ Circle Offices have to monitor the pending
Manager/ABM. Normally Branch has to complaints and take immediate steps for
ensure redress of the grievances lodged on the processing and closure of the same.
date of lodging/immediate next working day. ¾ Circle Offices cannot send any communication
¾ On viewing the complaint by Branch, the status directly to the complainant as no link is
of the complaint gets changed to “Processing”. provided for this purpose.
The Branch may send interim reply wherever Role of HO : Customer Service Cell
the grievance could not be redressed on the
same day. However, final reply with required ¾ HO : Customer Service Cell will maintain the
details of Designated officers at the Branches
details should be sent within a maximum period
and Circles, create user IDs and Passwords for
of seven days from the date of the complaint.
the designated officials of Circle Office and
¾ Written complaints (with mandatory details) add/delete, whenever there is any change, on
received from customers may also be registered receipt of intimation from Circle Offices.
Online by the designated officials of the Branch ¾ The designated officials will have the Link to
in the Online Facility. view all the complaints registered against all the
¾ On providing the reply/information, click ‘send Branches.
reply’. The system will forward the reply to the ¾ HO : Customer Service Cell will generate Text
customer according to the option given by him files and send acknowledgements to those
(E-mail/SMS/Both). The reply by SMS has to complainants who have furnished only Mobile
be restricted to 70 characters only. If need be, Numbers while registering their complaints.
Branch may also contact the customer on his ¾ Pending complaints and the communications
mobile and communicate details between Branches and Circles in connection

3
 Recollect
with the complaints received can be viewed by with regard to restructuring of advances. As per the
the designated officers at HO : Customer Reserve Bank of India guidelines on restructuring,
Service Cell. all the restructured accounts should satisfy the
¾ Besides Branches, HO : Customer Service Cell following conditions:
can also furnish replies to the complainants. Non-agricultural cash credit accounts : In
¾ HO : Customer Service Cell can send messages the case of non-agricultural cash credit accounts, the
to Circle Offices directing them to take account
necessary steps to resolve the pending should not be out of order any time during
complaints. the specified period, for a duration of more
¾ HO : Customer Service Cell will place a note than 90 days.
on the complaints received, resolved and In addition, there should not be any
pending position to the General Manager overdues at the end of the specified period.
(SP/P&D), Nodal Officer for customer
complaints on a weekly basis to review the Non-agricultural term loan accounts : In
complaints position. the case of non-agricultural term loan accounts:
no payment should remain overdue for a
DEP.09/2010-11 dt. 15.07.2010
period of more than 90 days.
Modification In Supreme Current Account
In addition there should not be any overdues
In order to facilitate branches to open more at the end of the specified period.
accounts under this product, the following All agricultural accounts: In the case of
modifications are made in the product with agricultural accounts, at the end of the specified
immediate effect. period the account should be regular.
EXISTING MODIFIED Specified Period: Specified Period means a
♣ A rural branch can open all ♣ A rural and Semi Urban
plans of Supreme Current branch can open all plans of
period of one year from the date when the first
Account. Supreme Current Account. payment of interest or installment of principal falls
♣ A Semi-Urban branch can ♣ An Urban / Metropolitan due under the terms of restructuring package.
open only Plan B, Plan C branch can open only Plan B,
and Plan D. Plan C and Plan D. There shall be no overdues in the
♣ An Urban / Metropolitan restructured account on completion of the one year
branch can open only Plan C
and Plan D. period. Account should be within the drawing limit.
DEP.11/2010-11 dt.24.08.2010 After completion of satisfactory
performance during the specified period of one year
ADVANCES from the date of interest or instalment due

Agricultural Loans - Waiver of Margin/Security a. the account continues as restructured

Requirements account
According to Reserve Bank of India, the b. diminution in the value of asset needs
waiver of margin/security requirements for to be recomputed (NPV provisioning)
agricultural loans stand revised from the existing on each Balance Sheet date till
level of Rs 50,000/- to Rs 1,00,000/- with completion of all repayment
immediate effect. obligations.
c. risk weight for the corporate
Wherever higher relaxations in margin and restructured accounts will come down
security for agricultural loans above Rs 1,00,000/- to 100% from 125% after satisfactory
are in force for specific schemes, the same will performance during the specified
continue. period.
d. Normal IRAC norms will be applicable
ADV.48/2010-11 dt.01.07.2010
for asset classification purposes after
Restructured Advances – Clarifications satisfactory performance during the
specified period.
Reference is invited to our HO Circular Example is given in the circular.
ADV 162/2008-09 dt 05/01/09 & ADV 109/2009-10
dt.19/10/10 wherein detailed guidelines are issued ADV. 51/2010-11 dt.03.07.2010
4 4
 JULY-SEPT. 2010
Central Scheme to provide Interest Subsidy (CSIS) for scheme is independent of any other schemes which
may cater to Economically Weaker Sections.
the period of moratorium of educational loans taken Eligibility for Interest The interest subsidy under the Scheme shall be
by students from economically weaker sections Subsidy available to the eligible students only once, either for
(EWS) under educational loan scheme of Indian Banks the first undergraduate degree course or the post
graduate degrees/diplomas in India.
Association (IBA), to pursue Technical/ Professional
education studies in India. Nodal Bank The Scheme shall be implemented through Canara
Bank, which is the Nodal Bank for the scheme.
Government of India, Ministry of Human
Resources Development, Department of Higher Branches shall update their records
Education, New Delhi has launched a scheme under including social category of borrowers, such as
the name “Central Scheme to provide Interest SC/ST/Minorities/Disabled etc. for the academic
Subsidy (CSIS)” for the moratorium period of year 2009-10, so as to prefer claim.
educational loans availed by students from EWS ADV.53/2010-11 dt.06.07.2010
under IBA educational loan scheme, to pursue
Technical/ Professional courses in India, so that the Projects Under Implementation-- Promoters
benefits of the Scheme accrue to the eligible Contribution
students. The scheme is effective from the academic In project financing, one of the major risk is
year 2009-10. the implementation risk leading to revision in
estimation of outlays, time limits and consequent
Banks Board has approved the scheme for
impairment of credit quality. The ongoing projects
implemention in our Bank in accordance with the
under implementation shall be monitored to ensure
guidelines of the Government of India.
that the credit disbursed is utilized for the purpose
Some of the salient features of the scheme are for which it was sanctioned. Monitoring of the
given below: project acquires importance to ensure proper / timely
Applicability of the The Scheme could be adopted by all scheduled implementation of the project. Hence, progress
Scheme Banks and would be applicable only for studies report on implementation of the project duly counter
recognised Technical/Professional Courses in India.
The interest subsidy shall be linked with the existing signed by the Lenders’ Engineer / Chartered
Educational Loan Scheme of IBA and restricted to Accountant shall be obtained and forwarded to the
students enrolled in recognised
Technical/Professional Courses (after Class XII) in
sanctioning authority on quarterly basis in the
India in Educational Institutions established by Acts of prescribed format. (given in Annexure ). The same
Parliament, other Institutions recognised by the was reiterated in the Loan Policy of 2010-11 also.
concerned Statutory Bodies, Indian
Institutes of Management (IIMS) and other institutions Promoters’ Contribution: As per the
set up by the Central/State Government.
Interest Rates The interest rates charged on the educational loan extant guidelines, the branches to ensure that the
shall be as per the BPLR/Base Rate of the Individual Promoters have brought in the adequate margin as
Banks and as per the provisions for interest rates per the sanction terms before release of the limits
under the IBA Model Educational Loan Scheme.
Moratorium Period Under the Central Scheme, the interest payable by towards the project.
the student belonging to EWS for availing of the
Educational Loan for Technical/Professional Courses In case of inability of the Promoters to bring
in India for the period of moratorium i.e. Course the entire money upfront, branches should ensure
Period plus one year or six months after getting job,
whichever is earlier, as prescribed under the
that the prior approval of the Sanctioning authority
Educational Loan Scheme for the Indian Banks’ is obtained for bringing in the Promoters
Association, shall be borne by the Government of Contribution proportionately.
India. After the period of moratorium is over, the
interest on the outstanding loan amount shall be paid a) Project finance credit proposals should consist of
by the student, in accordance with the provisions of the following details:
the existing Educational Loan Scheme of Banks and
as may be amended from time to time, whichever is
earlier.
• Details of promoters contribution-
Income Limit/Proof The benefits of the Scheme would be applicable to
those students belonging to economically weaker • Source of the contribution with quantum/
sections(EWS), with an annual gross parental/family expected period of infusion.
income upper limit of Rs.4.50 lakhs per year (from all
sources). Income proof shall be required from the b) Branches to ensure utilisation of term loan
students from such public authorities which are
authorised by the State Governments for certification proceeds/infusion of funds as projected in the
of income status for this Scheme, including Central proposal, by obtention of quarterly project
and State Sector Schemes. The present scheme is
intended to cater to the needs of students belonging implementation report duly signed by
to EWS with prescribed upper parental gross income CA/Lenders Engineer.
limit of the family from all sources, which is based on
economic index and not on social background. The

5
 Recollect
c) In respect of Projects under implementation Code in CBS (Product Code No: 5434-0001) has
involving acquisition of Capital Assets/Project been allotted for the loans under the scheme.
Cost of Rs.10 Crores and above, quarterly
progress report is to submitted as per the format ™ The validity of this MoU agreement is for
two years (ie) w.e.f-14.07.10-the date of
enclosed, without fail.
execution of MoU and can be renewed by
ADV.56/2010-11 dt.07.07.2010
both parties mutually on terms and
conditions as may be mutually agreed.
Bank’s MOU With Toyota Kirloskar Motors Pvt ™ The maximum exposure permitted under the
Limited scheme is Rs.1 crore per borrower for both
Our Bank has entered into a Memorandum of SME / Retail customers.
Understanding (MOU) with M/s. TOYOTA ™ The interest rate is linked to the limit
KIRLOSKAR MOTORS PVT LIMITED. Through sanctioned similar to other Banks so as to be
this MOU our Bank has become a ‘Preferred competitive.
Financier’ for financing all models of Toyota Cars. ™ The Minimum Credit rating of the borrower
The Preferred Financier status provides ample should be “BBB”& above
scope for contacting the prospective Car Loan The Scheme details are given in the
borrowers right at the Point of Sales of Toyota Cars Annexure of this circular
viz. at the Showroom concerned. Also, the
purchasers of Toyota Cars enjoy the benefit of ADV. 62/2010-11 dt.02.08.2010
simultaneously choosing our Bank as their Car Loan
New MSME Loan Product - IB Contractors
financiers.
To give fillip to Priority Sector Lending in
The competitiveness in rate of interest Micro & Small Enterprises Sector with a customer-
alongwith the Preferred Financier status of Toyota is friendly approach, our Board, has approved a new
expected to give leverage / edge in the marketing MSME Loan Product - IB Contractors. The salient
efforts for Car Loans. features of the scheme are as under:
For the sake of generating MIS on Toyota
Cars financed by our Bank, a separate product code • Only Contractors, carrying out work orders
in CBS (Product Code: 4402 0004) has been from Central / state Govt. and reputed PSUs,
allotted for the Toyota Car Loans. in Micro and Small Enterprise Sector, with
minimum 3 years of experiences and good
Car Dealers play an active role in helping the market standing, shall be covered under the
prospective buyers to identify their financiers. scheme.
Officers-in-charge of Retail Banking Segments may
therefore coordinate with Toyota Dealers operating • Per borrower exposure ceiling of Rs. 5.00
in their jurisdiction and strategize to popularize our crore and per group exposure ceiling of Rs.
Car Loans. Corporate Clients may be contacted, 10.00 crore shall be maintained.
i.e., Car Loans to employees of Corporates and
reputed institutions under tie-up arrangement for • Pre sale working capital limits shall be
recovery. granted by way of Secured Overdraft with
50% margin on property. Post sale limits
ADV.61/2010-11 dt. 26.07.2010
may be allowed by way of BP facility with
Bank's MoU woth M/s.Ashok Leyland Ltd - Launching 15% margin, subject to obtention of
of IB-ALL-CV-AUTOSTAR (Structured Loan Product undertaking from the debtors of the
for financing Commercial Vehicles of ALL Make) contractor viz. Central / State Govt.
departments / reputed PSUs to make
Our Bank has entered into a Memorandum payment directly to the Bank
of Understanding (MoU) with M/s. Ashok Leyland
Ltd (ALL) for financing their commercial vehicles. • Assessment of working capital limit shall be
based on turnover method.
An exclusive Structured Loan Product
(SLP) has been formulated for this purpose viz. IB- • Term Loan for procurement of equipments
ALL-CV-Auto Star and also a separate Product may be considered at relaxed margin of 20%
under the scheme.
6 6
 JULY-SEPT. 2010
• Relaxation in margin upto 10% from details provided under the scheme. A copy of the
prescribed levels on FB limits under the guidelines issued by RBI is enclosed as Annexure to
scheme may be considered on merits by this circular.
Circle Heads under the scheme. In this regard, it is advised as under:
• Working capital facilities shall be @ Base (i) Eligible Loans: All Home Loans of limits
rate+4.00+0.50 (presently 12.50%) and upto Rs.10.00 lakh sanctioned and
Term Loan @ Base rate+4.50+0.50 disbursed (partly / fully) during the period
(presently 13.00%). Concessional rate of from 1st October 2009 to 31st March 2011,
interest as per extant guidelines will be where the Project Cost does not exceed
applicable to this scheme also. Rs.20 lakh and the purpose of loan is for
Construction of House, Purchase of new or
• NFB limits may also be allowed as per existing house /flat, Extension / additional
extant guidelines. Uniform margin of 10% is construction in an existing house.
prescribed for NFB limits.
(ii) Eligible subsidy: 1% on the amount
• QIS, CMA and Stock audit may not be disbursed during the period from 1st
insisted upon. October 2009 to 31st March 2011. The
subsidy amount is to be credited to the
• Close monitoring of accounts shall be Home Loan account on receipt of the
ensured by scrutinizing turnover in the Sec subsidy from RBI.
OD account and examining books of
accounts of the contractors on monthly (iii) Claim of subsidy: Branches are required to
basis. Legal Audit shall be conducted and submit their claims on monthly basis as per
two valuation reports from different panel the formats enclosed in this circular to
valuers shall be obtained, irrespective of their Circle Offices on or before 3rd of the
limit. succeeding months. Circle Offices are
advised to submit the consolidated
Detailed guidelines of the scheme are given in this statement to Head Office on or before 7th
circular.
of every month.
ADV.63/2010-11 dt.04.08.2010 For the eligible loans sanctioned between 1st
October 2009 and 31st July 2010, the
Scheme of 1% interest subvention on Home Loans
monthly claim forms should be submitted
upto Rs.10 lakh – Guidelines
by the branches to their Circle Offices on
The Union Finance Minister during his or before 31st August 2010 and Circle
Budget Proposal for 2009-10, had announced a Offices should submit the consolidated
Scheme of 1 per cent Interest Subvention in respect monthly claims for the above period to
of individual housing loans upto Rs.10 lakh, Head Office on or before 10th September
provided the cost of unit (Project Cost) does not 2010.
exceed Rs.20 lakh. ADV.68/2010-11 dt. 13.08.2010
The objective of the Scheme is to provide
Interest Subsidy on Housing Loans as a measure to Lending under Multiple Banking Arrangements (MBA)
generate additional demand for credit and to Reserve Bank of India & IBA have brought
improve affordability of housing to eligible to the notice that certain unscrupulous borrowers
borrowers in the middle and lower income groups. It enjoying credit facilities under "multiple banking
is to be implemented through the Scheduled arrangement" have, after defrauding one of the
Commercial Banks and Housing Finance companies financing banks, continued to enjoy the facilities
throughout the country and will be in operation for with other financing banks and in some cases
the period beginning October 1, 2009 and upto availed even higher limits at those banks. In certain
March 31, 2011. The Reserve Bank of India (RBI) is cases the borrowers used the accounts maintained at
the nodal agency for the Scheme in respect of all the other financing banks to siphon off funds
Scheduled Commercial Banks (SCBs). fraudulently diverted from the bank on which the
fraud was perpetrated. This could be possible due to
Housing Loans sanctioned and disbursed
from October 1st 2009 up to March 31, 2011 would lack of a formal arrangement for exchange of
information among various lending banks.
be eligible for interest subsidy of 1% as per the

7
 Recollect
While the affected bank was engaged in applicants are agriculturists and the credit
recovery / criminal action at its end, the borrowers needs are genuine.
went about perpetrating fraud in their accounts with
¾ The details of land holdings (Survey No.,
the other financing banks. In some of the fraud cases
Crop cultivated etc.,) are to be mentioned in
reported by banks, it was revealed at a later stage
the loan application.
that the securities offered by the borrowers to
different banks were the same. ¾ Proof of land holding should be held with
the documents as we are claiming 2%
Branches should obtain declaration from the
interest subvention from RBI.
borrowers about the credit facilities already enjoyed
by them from other banks as per format. As regards ¾ Loan amount is to be arrived taking into
existing borrowers availing sanctioned limits of Rs.5 account the extent of cultivation, type of
crore and above, branches have to obtain declaration crops cultivated and the scale of finance
from the borrowers on an annual basis. approved for the particular crop
Subsequently, branches should exchange ¾ As this being a Short Term Production loan,
information about the conduct of the borrowers’ farmers should undertake to repay the loan
accounts with other banks in the format at half within two months after harvest of the crop.
yearly intervals.
¾ Borrowers not confirming to the norms of
Diligence report should be obtained from Agri Jewel loan may be sanctioned with
practising Company Secretary/Cost Accountants/ jewel loan under Non Priority sector.
Chartered Accountants every half year.
ADV.76/2010-11 dt. 26.08.2010
The formats are annexed to this circular.
Compromise/Negotiated/One Time Settlement of Non-
ADV.72/2010 -11 dt. 18.08.2010 Performing Assets- Compliance to RBI guidelines –
Append a certificate of compliance to RBI guidelines
Modification in Legal Scrutiny Report to be obtained
in all OTS proposals/sanctions.
from Bank’s approved lawyer
RBI, vide circular dated 21 06 10 advised all
Branches should add the following in the
Banks that, adequate care should be taken to ensure
Legal Scrutiny Report (LSR) format in case the
that the compromise settlements are done in a fair
property is acquired from Government / Local
and transparent manner and in full compliance with
Authorities:
RBI guidelines on the matter and henceforth, the
“If the property is acquired from officer/authority sanctioning a compromise/one
Government/Local Authorities, whether the
conveyance deed is verified with the
time settlement should append a certificate
Government records as to its genuineness and stating that the compromise settlements are in
whether executed by competent authority.” conformity with the RBI guidelines.
The same has been added as new clause
ADV.82/2010-11 DT. 15.09.2010
No.22 and the existing clauses 22, 23 and 24 are
renumbered consequently as Nos.23, 24 and 25. Enhancement of advance rate per gram of Jewels
ADV.74/2010-11 DT. 23.08.2010
Taking into consideration the increasing
Sanctioning of Jewel loans for Agricultural purpose trend of gold prices, branches are permitted to revise
Recording details of land holdings in loan application the advance rate per gram of Jewels with immediate
Branches should adhere to the lending effect as follows.
norms strictly while sanctioning Jewel loans for
Æ Rs.1200/- per gram (presently R.1000/- per
Agricultural purpose as adopted for Short Term gram) or 70% of the market rate whichever
Production Loan under Agriculture. is lower for 22 carat fineness.
The guidelines are given below for strict
compliance by branches. Æ Rs.1215/- per gram (presently R.1015/- per
gram) or 70% of the market value
¾ Jewel loans for Agricultural purpose are to whichever is lower for Hall Mark Jewels of
be sanctioned strictly to farmers holding 22 carat fineness/ gold coins of 24 carat
cultivable lands and after satisfying that the fineness.

8 8
 JULY-SEPT. 2010
All Branches shall go for auction of jewels Deposits of Ex-Staff Members, who are Senior
in cases wherever Jewel loan accounts are overdue Citizens as follows:
and remain unpaid beyond 15 months by following
prescribed procedure and bring down the percentage 1 All eligible Ex-staff Members who are Senior
in overdues below the tolerance level of 2% by 31st Citizens (who are eligible for staff rate of
October’2010. interest) are eligible for twin benefits in
Domestic Term Deposit Interest i.e.,1% for
ADV. 86/2010-11 DT. 27.09.2010 Exstaff status and 0.5% for Senior Citizen
Review of Base Rate status.
2 The twin benefits are applicable only for fresh
Considering the current interest rate scenario,
deposits and renewal of maturing deposits.
ALCO in the meeting held on 30.09.2010 approved
revision of Base rate from 8.00% to 8.50% with Please note that all other terms and
effect from 01.10.2010. conditions applicable to Special Domestic Term
Deposit Scheme for Senior Citizens as per Circular
There will be no change in spread/ tenor DEP:23/2009-10 dated 03.08.2009 are applicable to
premium and other guidelines except specifically Senior Citizen Ex-Staff members.
exempted by respective departments.(separate
circular will be issued by respective departments) The revision in the rate of interest takes
Consequent to the revision of base rate, Interest rates effect from 01.07.2010.
for all floating rate accounts other than exempted Project Office will be providing the product
category will increase by 0.50%. codes for deposits under Ex-staff Senior Citizen
ADV.87/2010-11 DT. 30.09.2010 Category.
HRM: 55 / 2010-11 dt.01.07.2010
Revision in Benchmark Prime Lending Rate
Performance Linked Incentive Scheme
Further to HO: Credit Division Circular
Coverage and design:
ADV.42 /2010-11 dated 30.06.2010, the following
guidelines are now put in place. The proposed `PLI Scheme', is intended to
reward the employees for their Performance under
1. Our Bank’s ALCO has on 30/09/2010 three variants of incentive schemes viz. Unit/ Group
approved the increase of Benchmark Performance, Individual Performance and Campaign
Prime Lending Rate by 25 basis points Specific. The scheme is envisaged with the intention
(bps) from 12.50% to 12.75% per annum. to cover all officers and award staff at branches,
specialised branches, circle offices, and head office.
2. This revision will be EFFECTIVE FROM
A. Unit / Group based Incentive Scheme:
01.10.2010 for the advances linked to BPLR
under Floating Rate method including This is intended to reward the teams/groups
Export Credit / Gold Card Scheme, that have delivered exceptional performance through
coordinated efforts. Incentive under this category,
Advances to THIRD PARTIES against our
would be payable only once in a year.
Deposit, Rupee Loan to third parties against
FCNR Deposits etc. The incentive scheme for units / groups is
proposed under the following three categories:
3. For the BPLR linked advance the Spread • Best performing General Banking Branches
and Tenor premium will continue as per under each segment in each circle
extant guidelines. • Best performing Specialised Branches /
ADV.88/2010-11 DT. 30.09.2010 Offices / Units
• Best performing Circle Offices
HRM
Preferential Rate of Interest on Deposits of Senior The administration and management of
Citizen Ex-Staff Members these three incentive scheme upto the level of
finalisation of groups eligible for incentive and on
Board, in the meeting held on 10.06.2010 finalisation, submission of the list of eligible
has approved certain modifications in respect of units/groups to HO: HRM for disbursement of
payment of preferential rate of interest of 1.5% on incentive lies with:

9
 Recollect
• General Manager (P&D) in respect of Circle Enhancement of Medical Aid to Retired Staff Members
Offices and General Banking Branches. With immediate effect, the medical aid to
• Concerned GMs in respect of Specialised retirees (under superannuation) has been increased
Branches / Offices / Units from Rs.3,000/- to Rs.4,000/- per annum and the
The application of the proposed scheme to retirees are to be informed to prefer the claim
each of the above categories is explained in detail in only for the current year.
this circular. Methodology of Awarding of Marks, Retirees who have already availed the
Quantum of Incentive for Staff is also given in this medical aid for 2010-11, are to be informed to send
circular. their applications to claim the difference amount of
B. Individual performance incentive scheme: Rs.1,000/- in the current year itself.
HRM:102/2010-11 dt. 06.09.2010
Under this category, incentive would be
payable to eligible staff only once in a year for Reimbursement of cost of subscription to a
his/her individual performance. Provision of this Newspaper to Part- Time Employees
type of incentive is intended to ensure recognition
and reward for exemplary individual performance. Board of Directors, during the meeting held
This scheme would reward employees under the on 28.08.2010, have accorded approval for
following categories: extension of the above facility of reimbursement of
cost of subscription to a Newspaper to Part-Time
• Officers and Executives (Other than GMs, Employees. Board has also accorded approval for
DGMs) and award staff reimbursement of cost of subscription to a
• General Managers and Deputy General newspaper for all the eligible staff members on
Managers declaration basis effective from the month of
Operational Guidelines and Other details are September 2010.
available in this circular. Pursuant to the above, eligible staff
members may claim the reimbursement of cost of
HRM: 68 /2010-11 dt. 15.07.2010 subscription to a newspaper on declaration basis
Group Personal Accident Insurance Policy for all our (without production of bills/receipts) from the month
Staff Members under Staff Welfare Scheme of September 2010.

We are pleased to inform a new policy with HRM:106/2010-11 dt. 08.09.2010

THE NEW INDIA ASSURANCE COMPANY LTD Staff Welfare Schemes –
has been taken w.e.f. 02.08.2010 and the policy No i. Opening of a New Holiday Home at
is GPA POLICY NO: 710600/42/1010/05/ Kanyakumari And
00000055. ii. Improvements made in the Scheme for Grant of
The Salient Features of the new Policy Scholarship For Education to the Wards of
remain unchanged with that of the previous year’s Staff Members
policy. i. Opening of a New Holiday Home at
The procedure to be adopted in reporting the Kanyakumari
claims, documents to be enclosed with the claim
forms are given in the annexure to this circular. We are glad to inform that our Bank has
HRM: 81/2010-11 dt. 09.08.2010 established a Holiday Home at Kanyakumari for the
benefit of our staff members. Details of the Holiday
Incentives to Lady Officers who accept posting as Home at Kanyakumari are enclosed in the circular.
Branch Managers – Revision in ceiling amount.
ii. Grant of Scholarship for Education to the
Grooming and Dress Maintenance
Allowances to Women Branch Managers are revised Wards of Staff Member
with immediate effect and the details are as follows: It has been decided to increase the number
Existing Ceiling Revised Ceiling of beneficiaries by 50 in each of the levels in higher
Monthly Dress Maintenance Rs. 250/- Rs. 500/- secondary and professional courses like B.E and
Monthly Grooming Allowance Rs. 250/- Rs. 500/- MBBS and also enhance the quantum of Scholarship
HRM: 84/2010-11 dt. 12.08.2010 by 50% over the existing level. The details of the

1010
 JULY-SEPT. 2010
number and quantum of the existing and the by the External Auditor (Chartered Accountants)
proposed levels are given in the circular. before submission to the RBI. In this context, it is
informed that the external auditor`s certificate to be
HRM:112/2010-11 dt. 21.09.2010 submitted by the agency banks along with the
CRA agency commission claims, should, inter-alia, state
that:
"Cheque Truncation System (CTS) - 2010 Standard"
for Cheque Forms – Specifications (a) ‘receipt’ and ‘pension payment’
transactions as also the agency commission claims
Reserve Bank of India, prescribed certain for ‘payments other than pension payments’
benchmarks towards achieving standardization of indicated in the agency commission claim
cheques issued by Banks across the country. application (as per Annexure I and II enclosed with
The benchmarks include provision of our circulars DGBA.GAD.No.H-751 and
mandatory minimum security features on cheque 754/31.12.010©/2005-06 both dated 30.08.2005
forms like quality of paper, watermark, and bank’s addressed to agency banks and SBI respectively)
logo in invisible ink, void pantograph etc., and submitted to the RBI are tallied with the records
standardization of field placements on cheques. maintained at the concerned branch/es of the agency
bank.
The set of minimum security features would (b) the agency commission claims made in
not only ensure uniformity across all cheque forms respect of volume (number) based transactions viz.,
issued by Banks in the country but also help ‘receipt’ and ‘pension payment’ transactions have
presenting Banks while scrutinizing / recognising been claimed only once and the same stands
cheques of drawee banks in an image based excluded while arriving at value based transactions
scenario. The homogeneity in security features is in respect of ‘payments other than pension
expected to act as a deterrent against cheque frauds, payments’.
while the standardization of field placements on
cheque forms would enable straight through Branches should adhere to the above
processing by use of optical / image character instructions while submitting their agency
recognition technology. commission claims for the quarter ended 30.06.2010
and onwards to Regional Offices of RBI / CAS,
The benchmark prescriptions shall be Nagpur. The other instructions already issued in this
known as “CTS-2010 Standard”, specifications. One regard from time to time remain unchanged.
of the specifications is regarding prohibition of
CRA.20/2010-11 dt. 13.07.2010
alterations and corrections on cheques explained
hereunder: Launching of On-Line Data Entry System for
Prohibiting alterations/corrections on cheques
Comprehensive House Holders’ Insurance Policy –
provided free as a Value Addition under Supreme
No changes / corrections should be carried Current Account Scheme.
out on the cheques (other than for date validation
purposes, if required). For any change in the payee’s In line with the system followed for IB
name, courtesy amount (amount in figures) or legal Arogya Raksha and other Group Insurance Schemes,
amount (amount in words), etc., fresh cheque forms a separate website have been developed for On Line
should be used by customers. This would help submission of CHHP Proposals and for direct credit
Banks to identify and control fraudulent alterations,” of Premium in the designated Premium Collection
A/c for CHHP policy also. This site is available
This prescription will be effective from
under Other Websites Î Bancassurance Î
December 1, 2010 and applicable only for cheques
CHHPolicy ÎData Entry.
cleared under the image based Cheque Truncation
System (CTS). Procedure for submission of CHHP
CRA.19/2010- 11 dt. 10.07.2010 Proposal: In partial modification of the Operational
Procedure outlined in the said Circular, the
Agency Commission Claims – Claims to be submitted following procedure is introduced:
to Regional Offices of RBI / CAS, Nagpur, duly
certified by External Auditor 1. From the CHHP proposal received from the
customer, Branches should enter data in the
According to Reserve Bank of India, agency
screen.
commission claims have to be audited and certified

11
 Recollect
2. Based on the Plan selected, the system will application in Form `F` along with
automatically pick-up the appropriate interest as applicable to the scheme
premium amount; till the date on which the depositor
expired, to the nominee or legal heirs
3. After successful data updation, the system
in case the nominee has also expired
will generate a unique reference number and
or nomination as provided in rule 6
Branches should note down this number in
was not made, as the case may be.
the hard copy of the proposal.
For the period between the day following
4. Then Branch should credit the premium
the date of death of the depositor and the date on
amount to the Comprehensive House
which refund is made, simple interest shall be paid
Holders policy Premium Collection a/c
at the rate applicable from time to time to savings
No: 896112715 quoting the system
accounts as provided in Rule 6 of Post Office
generated unique reference number.
Savings Accounts Rules, 1981.
As regards submission of Proposals for free
CRA.29/2010-11 Dt.07.09.2010
Arogya Raksha (AR) Mediclaim Insurance policy
available to PLAN-D holders of Supreme Current Introduction of New Products in CBS- i) Multi Utility
Account, Branches should follow the existing (CA) ii) Multi Utility (SB) - Collection of various types
procedure. of payments with details of payer
Proposal Forms in respect of CHHP policy Two new products have been introduced and
as well as IB Arogya Raksha should be sent in created in CBS System -
DUPLICATE to HO: Bancassurance Service Centre 1. 2211 7631 (Multi Utility – SB) and
on the same day without fail. 2. 2311 7631 (multi Utility – CA)
CRA.27/2010-11 dt. 13.08.2010 These products are created as ‘AT PAR’
Amendment to Senior Citizens Savings Scheme implying that the system will not charge (i) Inter-
Rules, 2004 – Payment of interest in case of death of a city transaction charges (ii) Minimum balance
depositor before maturity charges (iii) Folio charges (iv) Cheque Book issue
charges (v) Cheque return charges etc.,
According to RBI on the captioned subject,
a Notification received from Government of India, Various utility payments like (i) Insurance
Ministry of Finance, Department of Economic Premiums (ii) School / College / University Fee,
Affairs, is brought to the notice of all the branches Telephone bills, Electricity bills, Subscription to
for information and compliance as below: Newspapers, Dealer payments for supply of goods
and other B2B (Business to Business) and C2B
GSR.639(E) – In exercise of the powers (Customer to Business) payments can be collected in
conferred by Section 15 of the Government Savings the accounts under these products.
Banks Act, 1873 (5 of 1873), the Central
Government hereby makes the following rules to The advantages of these products are;
further amend the Senior Citizens Savings Scheme a. Payer ID details like Student / Dealer No /
Rules, 2004, namely: Agent code / Subscriber No etc. and other
1. (1) These rules may be called the Senior MIS information required by the Corporate /
Citizens Savings Scheme (Amendment) Institutions for reconciliation purpose can be
Rules, 2010. captured without omission. System will not
(2) They shall come into force on the date permit any credit in these accounts without
of their publication in the Official providing the information required for
Gazette. Copy of the Gazette reconciliation. Customer can withdraw
Notification is attached. money in these accounts.
2. In the Senior Citizens Savings Scheme Rules, b. Report / text file can be provided to them for
2004 in rule 8, for sub-rule 3 the following sub-rule
reconciliation of amounts with the
shall be substituted, namely:
Statement of Account provided by us.
(3) In case of death of a depositor before
maturity, the account shall be closed c. Amount can be collected by any branch and
and deposit refunded on an the amount will be automatically credited to
the Corporate / Institution account.
1212
 JULY-SEPT. 2010
d. Payment facility thru’ internet banking will ii) 65% for PC default above Rs.564.94 Lakhs
be enabled shortly However, in respect of packing credit
Details regarding precautions to be taken at advances granted to Small Scale exporters (Annual
Circle Office / branch level to ensure recovery of Export turnover not exceeding Rs.50 lacs) the cover
our charges wherever applicable is given in this available will be 90%.
circular. B. Claim coverage under ECIB (WT- PS)
Branches should seek permission from for the current period
Circle Offices for waiver / concession in service
i) Policy Holders* – 95% and Associates of
charges after obtaining the sanction and forward the
details as per the format to HO: BOD to configure Policy Holders – 60%
the product. ii) Non-Policy Holders – 75% and Associate
Detailed user manual and proforma for of Non-Policy Holders – 50%
furnishing information to HO:BOD for onward Note: Policy Holder means an exporter-client of the insured who is
submission to PO (CBS) are placed in the Annexure holding a valid and appropriate credit insurance policy of the
to this circular.
Corporation (Note: The onus of ensuring whether an exporter-client is a
CRA.30/2010-11 DT. 18.09.2010 policy holder and holds a valid cover shall lie with the insured).

Dishonour of Cheques - Need to mention the 'Date of General Guidelines and Salient feature are
Return' in the Cheque Return Memo given in the circular.
Reserve bank of India observed some
instances of banks not mentioning the date of return FX.20/10-11 dt. 20.08.2010
on the Cheque Return Memo and so advised the GENL
Banks, keeping in view the larger interests of the
customers, to ensure that uniform practices are Renaming of ABN Bank N.V.
adopted. Banks have to indicate the ‘Date of IBA vide their letter dt. 18.06.2010
Return’ in the Cheque Return Memo without informed that -
fail.
ABN AMRO Bank N.V., an ordinary
CRA.31/2010-11 DT. 14.09.2010 member of the association through its letter dated
March 29, 2010 that they have received formal
FX
approval from the Reserve Bank of India to rename
Renewal of ECIB (WT-PC) No.5029 and ECIB (WT- PS) ABN AMRO Bank N.V. to “The Royal Bank of
No.119 by Export Credit Guarantee Corporation of Scotland N.V.” vide its letter dated March 19, 2010.
India Ltd. (ECGC) from 01.07.2010 to 30.06.2011. The Reserve Bank of India’s Notification
Export Credit Guarantee Corporation of dated March 19, 2010 states that in pursuance of
India Ltd. (ECGC) has renewed ECIB (WT-PC) and clause (c) of sub section (6) of section 42 of the
ECIB (WT-PS) for a further period of one year from Reserve Bank of India Act, 1934 (2 of 1934), the
01.07.2010 to 30.06.2011. The salient features / Reserve Bank of India has directed the following
terms and conditions of the renewed ECIB (WT-PC) alterations shall be made in the second schedule to
and ECIB (WT-PS) for the current year are abridged the said act namely:
hereunder, and for full operational guidelines and For the words “ABN Amro Bank N.V.” the
details, Branches/Circle offices are advised to refer word “The Royal Bank of Scotland N.V.” shall be
Renewal Letter dated 13.08.2010 and Export Credit substituted”.
Insurance cover Documents of ECGC enclosed as
GENL.34/2010-11 dt.01.07.2010
Annexure to this circular.
A. Claims coverage under ECIB (WT-PC) Service Charges for Electronic Payment Products
for the current period The service charges for Electronic Payment
The normal percentage of loss payable by Products are revised as under with effect from
01.08.2010.
the Corporation as a claim is:
i) 75% for PC default upto Rs.564.94 Lakhs; a. Inward RTGS / NEFT / ECS transactions – free,
no charge to be levied.
and

13
 Recollect
b. Outward transactions – description in the account statement of customers for
RTGS and NEFT Return transactions.
i. RTGS Rs.1 to less than 5 Rs.28 per transaction RTGS / NEFT Description to be provided
lakh Rs.56 per transaction RTGS return transactions RTGS-RETURN-<Original UTR
Rs.5 lakh and >-<Intended Beneficiary
above Customer>-<Reason for Return>
ii. NEFT Rs.1 to less than Rs.6 per transaction NEFT Return transactions NEFT-RETURN-<Original UTR
1lakh Rs.28 per transaction >-<Intended Beneficiary
Rs.1 lakh and Customer>-<Reason for Return>
above RTGS customer outward R41 messages if
The above charges will be all inclusive. No returned by the receiving Banks for some valid
additional charges such as courier charges, out of reasons will come back to us as a inter bank
pocket expenses, service tax etc., should be levied transaction (R42) and get credited to branch RTGS
from the customers. payable BGL a/c. These messages contain the
Original UTR number, reason for the return and
GENl.35/2010-11 dt. 31.07.2010 beneficiary details. While reversing the entries
manually, branches are advised to write the Original
NECS (National Electronic Clearing Services)- UTR number, Beneficiary name and the Return
Updation of MICR codes by branches. reason in the statement narration field without fail.
Project Office has updated the available NEFT messages sent as cash transactions,
MICR codes and populated in the branch profile. when returned, get credited to the branch BGL a/c.
Branches are advised to verify their MICR Branches are advised to inform the Return reason,
code by viewing their branch profile. If any UTR number etc., to the remitter accordingly.
incorrect MICR code is noticed, branches can Branches are requested to follow the RBI guidelines
correct the same by choosing the option in CBS meticulously.
Help Desk -> Reports -> User Folder -> Branch
Champion -> Update My Branch Profile. GENL.45/2010-11 DT. 19.08.2010

After updating the code in branch profile Claiming Reimbursement of FIT ATM Cash through
this correction may be informed to Project office, RACS (Reconciliation Accounting & Cash Settlement)
Help New User desk to enable them to update the Web Based Module
database in production server. HO:TMD has developed a web based In-
We wish to bring to the notice of the house software for claiming the FIT ATM Cash by
branches that incorrect MICR codes may result in the ATM attached branches from our ATM Service
rejection of NECS credits which again may lead to Centre.
customer dissatisfaction. ATM attached branches can log in to
GENL. 38/2010-11 Dt.7.08.2010 http://10.141.7.247/racscashload for the guidelines
for claiming the FIT ATM Cash.
Branches of Bank of Rajasthan Ltd., to be Branches of
ICICI Bank Ltd., from August 13, 2010 Salient features of RACS Web based
Cash Load Module:
Reserve Bank of India vide its press release
informed that all Branches of Bank of Rajasthan 1. It is a web based solution to claim ATM FIT
Ltd., will function as Branches of ICICI Bank Ltd., Cash Load Amount.
with effect from August 13, 2010. This is 2. BM/ ABM will act as Admin Users with
consequent upon the Reserve Bank of India right to provide access to ATM officers.
sanctioning the Scheme of Amalgamation of Bank 3. MAKER CHECKER concept is enabled.
of Rajasthan Ltd., with ICICI Bank Ltd.
4. Both Cash Load and EOD details can be
GENl.43/2010-11 dt. 16.08.2010 entered.
RTGS / NEFT Return Transactions - Information for 5. Branches can view the entered Cash load
Customer A/c Statement and ATM EOD details at any point of time.
6. Provision for entering new ATM installation
According to RBI instructions all RTGS and details and updating details of existing
NEFT member banks should provide the following ATMs.
1414
 JULY-SEPT. 2010
ATM attached branches have been • on the detection of any damage or
instructed to do parallel run in this web based • any events or acts that are likely to cause a
module also, to get accustomed to the methodology. loss to the Bank’s building,
ATM attached branches should note that branches should immediately report to the nearest
effective from 26 08 2010, ATM FIT Cash will be branch of United India Insurance Company Limited
reimbursed by ATMSC, only if they claim under copy to the following addresses :
through the web based RACS module. 1. United India Insurance Company Limited
Catholic Centre,
GENL.46/2010-11 Dt.24.08.2010 No.64, Armenian Street,
ADMIN Chennai 600 001
Ph.044 25389795, 25384955
Renewal of Standard Fire and Special Perils Policy of 2. Indian Bank Head Office
The Bank’s Own Buildings. Estate Department,
The Standard Fire and Special Perils Policy 66, Rajaji Salai,
for the Bank’s Owned Buildings all over India has Chennai 600 001 Ph. 044 25270609
been renewed for the financial year 2010 – 2011 for After initial reporting and on receipt of
the period 01/04/2010 to 31/03/2011 with M/s claim form, records showing the value of damage /
United India Insurance Company Ltd, reinstatement value and relevant documents are to
Chennai – 600 001 be submitted along with completed claim form
The New Policy Number is : (without any omission).
010503/11/10/11/00000025 (Commercial Buildings)
010503/11/10/11/00000026 (Residential Buildings) To ensure hassle free settlement of our
claims, it should be ensured that all guidelines
Assets covered: relating to security matters are strictly adhered to
without any omission.
All owned Buildings (Commercial and Residential)
of Indian Bank located all over India are covered ADMIN 25/2010-11 Dt.05.08.2010
under this Standard Fire and Special Perils Policy.
The policy also covers damages due to Earthquake Renewal of Burglary and House Breaking Policy.
and Terrorism.
Broad features of the Policy The Burglary and House Breaking Policy
for the Bank has been renewed for the financial year
The Policy covers damage to the building or any 2010 – 2011. The period of Insurance is from
part thereof due to,
16/02/2010 to 15/02/2011 with M/s United India
1. Fire
Insurance Company Ltd., Chennai – 600 001. The
2. Lightning
3. Explosion / implosion New Policy Number is 0503/46/09/04/00000188.
4. Aircraft damage Assets Covered
5. Riot, Strike and Malicious damage Furniture, Fittings, Fixtures inclusive of
6. Storm, Cyclone, Typhoon, Tempest, Electrical fittings, Books, Stationery, Office
Hurricane, Tornado, Flood and Inundation Equipment including Electrical Equipment and such
7. Impact damage other machinery whilst Stored and/or installed and
8. Subsidence and landslide including rock /or lying in the premises owned by and / or leased to
slide the Bank which includes all Administrative Offices,
9. Bursting and/or overflowing of water tanks, Branches, Training/ Inspection/ Stationery Centres,
apparatus and pipes Guest Houses, Extension Counters, Satellite Offices,
10. Missile testing operation ATMs, Quarters etc. situated all over India.
11. Leakage from Automatic sprinkler
installation Exemption Clause
12. Bush fire • The premises shall not include any yard,
garden, open space or out – building not
Initial reporting on the occurrence of damage connected with the Main Building occupied
Even prior to determination of the magnitude, real as other Offices and Residences.
nature and the extent of loss, • Foreign Branches are excluded from this
• On the occurrence of loss or policy.

15
 Recollect
Broad features of the Policy: 4. Non traceable certificate from the
Police
The policy covers
1. Loss or damage to property or any part For any clarification, branches may contact
thereof that is kept/ stored / contained in the nearest branch office of United India Insurance
Bank’s owned/ leased premises caused due Company Limited or write to the Company’s branch
to burglary or house breaking (theft Office at Chennai at the above address under copy to
following upon an actual forcible and us for necessary follow up action at our end.
violent entry and/or exit from the premises) ADMIN.26/2010-11 Dt.05.08.2010
and hold up.
2. Terrorism and theft risks Comprehensive Centralised Insurance Policy for
'Safe, Furniture & Machinery (SFM), Books, Forms,
3. Damage to Arms and ammunitions kept at Stationery & Electronic Equipments' kept at Bank's
Bank premises/offices for security purpose premises all over India.
4. Damage caused to the premises resulting
from burglary and/or house breaking or any The Comprehensive Centralised Insurance
attempted threat at any time during the Policy has been taken at Head Office for the Safe,
period of insurance to be made good by Furniture & Machinery (SFM), Books, Forms,
Bank. Stationery & Electronic Equipments kept at Bank’s
premises all over India for the period 01/07/2010 to
5. Both the offices and residences already 30/06/2011 with UNITED INDIA INSURANCE
occupied by the Bank and to be occupied COMPANY LTD, CHENNAI 600 001
from time to time.
6. The Bank’s above referred assets for the The New Policy Numbers are
value of Rs.2 lakh (Rupees two lakhs only)
SFM & Books, Forms and 010503/11/10/11/00000140
in each of its offices and Rs.50,000/-
Stationery items
(Rupees Fifty Thousand only) for residence Electronic Equipment items : 010503/44/10/58/30000007
at any one time.
Initial reporting on the occurrence of loss: Coverage : The Policy covers all the existing SFM,
Books, Forms, Stationery and Electronic
Even prior to determination of the magnitude, real Equipments (including computer related items and
nature and the extent of loss, all ATMs) and accessories as well as all purchases
a. On the occurrence of loss or made on or after 01/04/2010. Hence all the
b. On the detection of any loss or Branches/ Offices must ensure that all
c. Any events or acts that is likely to cause a purchases/disposal made by them every quarter is
loss to the Bank duly reported to HO/TMD (from time to time).
branches should immediately report to the nearest Risks Covered : The risks covered are as per
branch of United India Insurance Company Limited Standard Fire & Special Perils Policy for SFM,
under copy to the following addresses : Books, Forms, Stationery and Electronic Equipment
United India Insurance Company Limited items Policy, including terrorism and earthquake,
No.64, Armenian Street, with reinstatement value. Details are given in
Catholic Centre, Chennai – 600 001. Annexure of this circular.
Initial/Immediate Reporting on the occurrence of
Indian Bank, Head Office,
Loss and Submission of Claim Forms:
Estate Department,
66, Rajaji Salai, Chennai 600 001. On the occurrence of loss or on detection of
After initial reporting and on receipt of any loss or any events/ acts that are likely to cause a
claim form, the following papers are to be submitted loss to the Bank notwithstanding the non –
in case of a claim under the above policy determination of the magnitude, real nature and the
1. Completed claim form extent of loss, at that point of time should find a
2. Police FIR place in the report of loss. Branches/Offices should
3. Records showing the value of the items lost or immediately report to the nearest Branch of United
damaged (Individual items value). India Insurance Company Ltd. quoting our

1616
 JULY-SEPT. 2010
Centralised Comprehensive Policy number to the New Symbol for Indian Rupee - Propagating and
following: popularising

1. Senior Branch Manager Government has approved the symbol for

United India Insurance Company Ltd. the Indian Rupee as depicted below:
Branch Office No.010503,
Catholic Centre, ‘`‘
64, Armenian Street, Chennai 600 001
Branches / Offices shall propagate and
Tel: 044 – 25389795, 25384955
popularize the use of the symbol for the Indian
2. Deputy General Manager Rupee in place of writing Rs. Re. etc., in the official
Indian Bank, Head Office, documents and in all correspondence with
Estate Department, customers.
66, Rajaji Salai, Chennai 600 001
Branches / Offices can download the Rupee
Tel : 044 – 25270609
Font from our intranet site and install / copy the
Fax :044 – 25245974
same in fonts folder.
3. Deputy General Manager
ADMIN.32/2010-11 Dt.25.08.2010
Indian Bank, Head Office,
Technology Management Department, Adherence of KYC Norms- opening of Accounts of
66, Rajaji Salai, Chennai 600 001 Proprietary Concerns
Tel : 044 – 25249660
Fax :044 – 25215554 Please refer Circular GENL.75 /2009 -10
dated 31.03.2010 regarding the documents to be
Claim for the loss incurred called for and verified before opening of Proprietary
Claim for the loss incurred must be Concern Accounts. As per Reserve Bank of India, in
submitted to the nearest Branch of United India addition to the documents listed in the above
Insurance Company Limited by the respective referred Circular for opening bank account in the
Branch/Office in the claim form. The claim should name of Proprietary Concern, branches shall also
be submitted in time and followed up meticulously accept, the following as an identity document for
till the same is forwarded by the local Branch of opening of the bank account.
United India Insurance Company Ltd. to their ¾ Any registration / licensing documents
Branch Office at Chennai (address given above) issued in the name of the Proprietary
where the claim will be settled. Concern by the Central Government or
A Copy of the claim may also be forwarded State Government Authority / Department.
to HO:Estate Department for taking up with the ¾ IEC (Importer Export Code) issued to the
Branch Office at Chennai of the Insurance Company proprietary concern by the office of DGFT.
for early settlement. ADMIN. 33/2010-11 dt.08.09.2010
Insurance Cover for Bank’s Vehicles: Please note
that this Policy does not cover Bank’s Vehicles. Though due care has been taken in the preparation of
Recollect, the version given in the circular is final.
Overseas Branches: Overseas Branches will
continue the existing system for insuring their assets.
Compiled by HO: O&M Division
ADMIN.27/2010-11 Dt.05.08.2010

17
 a Volume 28 Issue 2

For Private Circulation Only

July – September 2015 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”

CONTENTS OF THIS ISSUE Pg

S.No Date Details
no
Pg 34 31.07.15 X Bi-partite Settlement 6
S.No Date Details
no
Group Personal Accident Insurance Policy
DEP 35 03.08.15 for all our Staff Members under Staff 6
26.08.15 Splitting of Deposits 2
12 Welfare Scheme
ADV Know Your Customer (KYC) Compliance Encashment of LFC – Revised eligible
01.07.15 2 41 07.09.15 amount as per Xth bipartite settlement / 6
67 for Self Help Groups (SHG)
Joint Note dated 25.05.2015
Loan Tracking system – Revision of
70 04.07.15 2 Revision of Pension for employees who
Guidelines
retired on or after 01.11.2012 consequent
Opening of Current Accounts by Branches 43 08.09.15 upon the wage revision as per 10th 7
73 13.07.15 2
- Need for Discipline Bipartite Settlement and Joint Note dated
Strategic Debt Restructuring Scheme 25.05.2015
77 17.07.15 2
(SDR) CRA 01.08.15 Implementation of Pradhan Mantri Jeevan
Dr.Ambedkar Central Sector Scheme of 54 Jyoti Bima Yojana (PMJJBY) and Pradhan
7
Interest Subsidy on Educational Loan for Mantri Suraksha Bima Yojana (PMSBY) -
79 22.07.15 3 Submission of Claim forms and procedures
Overseas studies for OBCs and EBCs –
ACSISOBCEBC (effective from 2014-15) Insurance Focussed Deposit And Gift
56 01.08.15 7
Monitoring of Devolved LC liability - SMA Schemes For PMSBY AND PMJJBY
83 27.07.15 3
tracking based on Devolved LC Liability 64 04.09.15 Changes in RTGS time window 8
Discount Rate for Computing Present Life Insurance Business through LIC of
84 28.07.15 3
Value of Future Cash Flows 67 15.09.15 India – Data Entry system to be done on 8
Implementation of Crop Insurance the policies canvassed at our branches.
89 04.08.15 4
Schemes of Government of India 70 29.09.15 NACH –Revised New Mandate format 8
Pradhan Mantri MUDRA Yojana (PMMY) - Acceptance of deposits of taxes in cash by
92 10.08.15 4 71 30.09.15 8
MUDRA loans the authorized branches
Coir Udyami Yojana (CUY) – scheme by FX Amendments in applicability of form 15CA
94 10.08.15 4
Coir Board 01.07.15 & 15CB on payments made to Non 9
23 Residents or to a foreign company
Union Budget-2015-16- Interest
98 19.08.15 Subvention Scheme and Monitoring of end 4 Change in Swift Code in the name of
use of crop loans Relationship Manager of new CAD Nostro
24 03.07.15 9
Opening of new products under E L (IBA Account with Bank of Montreal, Toronto,
scheme) named “IB Educational Loan Canada
99 19.08.15 5
Prime” and “IB Educational Loan Prime - Revision in Service charges on credit
26 17.07.15 9
NIT” for Students of NIT transactions in EEFC account
Exchange of Credit Information Reports Routing of FOBC cheques transactions
101 21.08.15 5 29 31.07.15 9
(CIR) by Banks through EXIM menu
102 21.08.15 Udyog Aadhaar for MSME Registration 5 GENL KYC compliance of individual customers -
02.07.15 9
Revised Board Format for High Value loan 20 relaxed norms for Address Proof
106 29.08.15 5
proposals Alteration in the name of “The Ratnakar
PMJDY Scheme for Overdraft (OD) up to Bank Limited” to “RBL Bank Limited” in the
120 22.09.15 6 24 17.07.15 9
`.5000/- Aadhaar Seeding Non-mandatory Second Schedule to the Reserve Bank of
India Act, 1934
HRM
08.07.15 Air travel under LFC 6 Single User Bill Payment In Corporate Net
26 27 12.08.15 10
Banking
Salary Revision for Officer Employees
33 31.07.15 governed by Indian Bank (Officers) Service 6 29 22.08.15 Revision of Service Charges 10
Regulations 1979
 Recollect
Pg 2. Applications under Jewel Loans (all types
S.No Date Details
no including agri. Sector)
Comprehensive guidelines for KYC 3. All Types of Staff Loans
compliance of transactions by Walk-In
35 21.09.15 10 4. MSME Loans (for which Loan Tracking
Customers i.e. Non-Account Based
Customers System is available separately)
ADMIN 02.07.15 Comprehensive Centralised Insurance
47 Policy for Safe, Furniture & Machinery Reference number generated by the Loan
11
(SFM), Books, Forms, Stationery (BFS) & tracking system should be marked on all applicable
Electronic Equipments (EE)
applications/requests without fail, including for
Banker’s Indemnity Policy for the Financial
53 29.07.15 11 applications falling under the powers of Branch
Year 2015-16
Detection and Reporting of Counterfeit
Managers. When a new loan account is opened,
58 01.09.15 11 Loan reference number has to be entered in the
Notes
Banknotes with new numbering pattern CBS system in all applicable cases. The same will
67 25.09.15 and special features for the visually 12 be validated by the system referencing the loan
impaired
tracking system. Without a loan reference number,
DEPOSITS system will not permit opening of a loan account as
explained above.
Splitting of Deposits
The functionalities of the Loan tracking
In view of the imperative need to protect our system can be referred from Annexure to this
Net Interest margin, the interest burden is required circular. The software for Loan Tracking System is
to be reduced to the maximum extant possible and available in Help Desk > Other Websites > In
hence branches should desist from splitting large House Applications > Loan Tracking System (Non
value deposits and placing them in lower buckets. MSME).
This results in offering of higher rate of interest
when compared to acceptance of these deposits in ADV.70/2015-16 Dt.04.07.2015
bulk. From the profitability aspect, payment of Opening of Current Accounts by Branches - Need for
additional interest on account of such splitting Discipline
increases the interest expenditure coupled with
While opening a current account, branches
wider implications in funds management and results
should verify the data available in CRILC
in negative carry most of the times.
database whether the customer is availing of
DEP.12/2015-16 Dt.26.08.2015 credit facility from another bank. Further
branches may also seek ‘NOC’ from the
ADVANCES drawee bank where the initial deposit to
KYC Compliance for Self Help Groups (SHG) current account is made by way of a cheque.

Hence forth, branches should adhere to the For the purpose of verifying the CRILC
KYC norms for all the members of the SHGs (by database at the time of opening the account, a link
has been provided in Helpdesk with the following
verification of KYC) and not for office bearers of
Navigation: Desk officer >> Deposits >> CRILC -
the group alone.
Borrower. After verification, branches have to
ADV.67/2015-16 Dt.01.07.2015 make entry in the respective opening forms for
having verified the same.
Loan Tracking system – Revision of Guidelines ADV.73/2015-16 Dt.13.07.2015
The loan tracking system was introduced in
Strategic Debt Restructuring Scheme (SDR)
our bank w.e.f 01/07/2014 for all the types of loans
except MSME loan applications. The general principle of restructuring of
stressed asset should be that the shareholders bear
The Loan Tracking System is applicable
the first loss rather than the debt holders. With this
for all loans except
principle in view and also to ensure more
1. Applications under Loan against ‘skin in the game’ of promoters, JLF / Corporate
Deposits/Overdraft against Deposits Debt Restructuring Cell (CDR) may consider
the following options when a loan is restructured:
2 2
 JULY-SEPT 2015
 Possibility of transferring equity of the 4. The income ceiling for OBCs is `.3.00 lakh
company by promoters to the lenders to p.a., and for EBCs is `.1.00 lakh p.a.
compensate for their sacrifices;
Canara Bank has been nominated as Nodal
 Promoters infusing more equity into their
companies; Bank for implementation of the scheme. They have
 Transfer of the promoters’ holdings to a opened the web portal for submission of subsidy
security trustee or an escrow arrangement till claims and have enclosed DSD (Data Structure
turnaround of company. This will enable a Document) for submitting claims in Web.
change in management control, should lenders Branches shall refer this circular with
favour it.
regard to Govt guidelines on the schemes and
Branches shall refer this circular for further FAQs which is annexed to this circular and also the
guidelines in this regard. subsequent circular ADV.112/2015-16 dt.03.09.2015.
ADV.77/2015-16 Dt.17.07.2015 ADV.79/2015-16 Dt.22.07.2015

Dr Ambedkar Central Sector Scheme of Interest Monitoring of Devolved LC liability - SMA tracking
Subsidy on Educational Loan for Overseas studies based on Devolved LC Liability
for OBCs and EBCs (effective from 2014-15)
The total liability in the running account
Ministry of Social Justice and viz., OCC/KCC/PC/OD including Adhoc facility
Empowerment, Government of India has proposed and the devolved LC liability of the customer will
to implement the “Dr. Ambedkar Central Sector be clubbed together for the purpose of SMA
Scheme of Interest Subsidy on Educational Loan monitoring / compliance to IRAC norms. CO:
for Overseas studies for Other Backward Classes Project Office will push the reports on a periodical
and Economically Backward Classes” basis and branches / zonal offices should verify the
(ACISOBCEBC) on educational loans for overseas reports and discrepancies, if any, should be brought
studies to the students belonging to OBC/EBC to the notice of Project Office / Credit Division.
category, for the moratorium period of study, to ADV.83/2015-16 Dt.27.07.2015
pursue approved courses of studies abroad at
Masters, M.Phil and Ph.D Level and will facilitate Discount Rate for Computing Present Value of
to promote educational advancement of student Future Cash Flows
from Other Backward Classes and enhance their According to RBI, for the purpose of
employability. determining the diminution in fair value of
loans on restructuring, rate equal to the actual
The scheme is being implemented with
interest rate charged to the borrower before
effect from 01.04.2014, through M/s National
restructuring may be used to discount the future
Backward Classes Finance & Development cash flows. In cases where the existing credit
Corporation (NBCFDC), Ministry of Social Justice facilities to a borrower carry different rates of
and Empowerment, GOI. interest, the weighted average interest rate (with
As one time measure, Ministry permits share of each credit facility in the total
claim of interest subsidy with retrospective effect outstanding of the borrower as on the date of
restructuring being used as weights) may be used
from 01.04.2014 and during the year 2015-16,
as the discounting rate. This discount rate may be
submission of claims will be on quarterly basis. used to discount both the pre-restructuring cash
1. The scheme is applicable for educational flows as well as post-restructuring cash flows.
loans for studies abroad sanctioned under IBA
scheme only. The above methodology may be
consistently used wherever it is required to
2. Interest charged for the educational loans compute fair/present value of loans including for
during the moratorium period is provided as the purpose of computing net present value of
subsidy. project loans as required in terms of circular
3. The scheme is envisaged to provide interest ADV-184 / 2014-15 on Flexible Structuring of
subsidy to two target groups; OBCs and EBCs Existing Long Term Project Loans to Infrastructure
and Core Industries. This will be applicable to all

3
 Recollect
projects where changes in amortization schedule subsidy, 55% loan from the Bank and 5%
have been carried out under the above circular. beneficiary contribution.
ADV.84/2015-16 Dt.28.07.2015 The scheme will be implemented through
Implementation of Crop Insurance Schemes of GoI field offices of the Board. Coir Board has
developed software for on-line registration of the
As per the provision of the Scheme, all
loanee farmers including share-croppers, tenant application. Any applicant anywhere in India can
farmers and SHGs/JLGs growing the notified crops register their name through online in coir board
in notified areas should be covered under the website. The details of the Coir Udyami Yojana are
Scheme on a compulsory basis. Even Agricultural available at the website of the Board.
Jewel loans sanctioned for crop production purpose The applications received at the field
should be compulsorily covered under the scheme. offices of the Board will be referred to the
The farmers who do not agree for coverage /
committee constituted for the purpose viz.,
payment of premium, may be provided Jewel loan
under non-agriculture category at applicable Regional level Selection Committee (RLSC) for its
interest rate. consideration. The RLSC will scrutinize the
In the event of failure / damages to the applications and recommend for EDP training.
crops and non availability of crop insurance After the EDP training, the applications are
benefits to a farmer due to errors/omissions/ forwarded to the Banks for sanction of the loan.
commissions of the branches, staff accountability Branches shall refer this circular for further
will be fixed on the Branch Manager and the
guidelines in this regard.
Officer concerned in the Zonal Office.
ADV.94/2015-16 Dt.10.08.2015
ADV.89/2015-16 Dt.04.08.2015
Pradhan Mantri MUDRA Yojana (PMMY) Union Budget 2015-16- Interest Subvention Scheme
and Monitoring of end use of crop loans
IBA has devised a uniform application
format for MUDRA loans and the same is annexed Reserve Bank of India, has informed that
to this circular. Government of India has approved continuation of
Interest Subvention Scheme for the year 2015-16
SLBC of respective states are in the for short term loans upto `.3.00 lakh and
process of translating the application form in local accordingly,
languages. Zonal Offices shall obtain the translated
form and supply sufficient number of application  Interest subvention @ 2% per annum will
forms to branches under their control. This be made available to the Public Sector Banks
application form is ported at our Bank’s website (PSBs) and the Private Sector Scheduled
and Help Desk. Commercial Banks (in respect of loans given by
their rural and semi-urban branches) on their own
Applicants should be given a receipt / funds used for short-term crop loans up to
acknowledgement for having received the loan `.3,00,000/- (Rupees three lakh) per farmer
application and should enter in the Credit Proposal provided the lending institutions make available
Tracking System. short term credit at the ground level at 7% per
ADV. 92/2015-16 Dt.10.08.2015 annum to the farmers. This 2% interest subvention
will be calculated on the crop loan amount from the
Coir Udyami Yojana (CUY) – scheme by Coir Board
date of its disbursement/drawal up to the date of
The Rejuvenation Modernization and actual repayment of the crop loan by the farmer or
Technology Up gradation (REMOT) scheme of up to the due date of the loan fixed by the banks,
coir industry has been renamed “Coir Udyami whichever is earlier, subject to a maximum period
Yojana (CUY). The scheme would cover any coir of one year.
project with project cost upto `.10 lakhs plus
 Additional interest subvention @3% per
working capital, which shall not exceed 25% of the
annum will be available to the farmers repaying the
project cost. The pattern of assistance under the
loan promptly from the date of disbursement of the
scheme is 40% of the project cost as Govt of India
4 4
 JULY-SEPT 2015
crop loan up to the actual date of repayment or up shall refer this circular for further guidelines in this
to the due date fixed by the bank for repayment of regard.
crop loan, whichever is earlier, subject to a ADV. 99/2015-16 Dt.19.08.2015
maximum period of one year from the date of Exchange of Credit Information Reports (CIR) by
disbursement. This also implies that the farmers Banks
paying promptly would get short term crop loans
The revised parameters for the Net Means
@4% per annum during the year 2015-16. This
approved by the Managing Committee of IBA and
benefit would not accrue to those farmers who
a comparative detail of the existing guidelines and
repay after one year of availing of such loans.
revised guidelines for issue of Credit Reports to
Branches shall refer this circular for further
other banks/ Financial Institutions are furnished as
guidelines in this regard.
annexure to this circular.
ADV.98/2015-16 Dt.19.08.2015
All other existing guidelines on the subject
Opening of new products under Educational loan matter shall continue.
(IBA scheme) named “IB Educational Loan Prime”
ADV.101/2015-16 Dt.21.08.2015
and “IB Educational Loan Prime - NIT” for Students
of NIT Udyog Aadhaar for MSME Registration
To stay competitive in the market and also In consonance with the recommendations
to fall in line with majority of the banks, two new of the Kamath Committee and to improve ease of
products under educational loan, named as “IB doing business, the Ministry of MSME through
Educational Loan Prime” for the meritorious NIC has developed a web portal (http://
students of IITs/IIMs/ XLRI/BITS and IISc under em.msme.gov.in) for online filing of
IBA Scheme at Base Rate and “IB Educational Entrepreneurship Memorandum I and II – required
Loan Prime - NIT” for students of NITs at Base for obtaining MSME registration.
Rate plus 0.50 % have been introduced. In addition to simplifying the registration
The details of the new products are process, the MSME registration form has also been
furnished hereunder: simplified. Under one page simplified registration
Name of the Premier institutions namely
form “Udyog Aadhar”, the MSMEs will self
College/Institution IITs/IIMs/NITs/XLRI/BITS/IISc certify its existence, bank account details, business
Courses offered by the Under Graduate and Post activity details, promoter’s / owner’s Aadhaar,
College/ Institution Graduate courses, etc. employment and ownership details and other
Beneficiaries Students joining the aforesaid information required.
targeted premier institutions
Loan Limit Need based loan limit up to Based on the simple form submitted, the
`.20.00 lakh under the Unit would be issued a unique identifier or Udyog
framework of IBA educational Aadhaar making the unit formally registered as a
loan scheme.
Finer rate of Interest 1. For students of IITs/IIMs/
SSI or MSME.
Proposed XLRI/BITS and IISc Udyog Aadhaar registration will enable the
Interest at Base Rate units / enterprises to seek information and apply
i.e.9.95% p.a as at present
and
online for various services being offered by various
2. For students of NITs ministries and departments. It will also help in
Interest at Base Rate plus creation of a database for MSMEs.
0.50% i.e.10.45 % p.a. as at
present.
All the field level functionaries should
No further interest concession guide their MSME customers, especially MUDRA
to girl students is envisaged. and Micro Enterprise.
Relaxation in terms like eligibility, margin ADV.102/2015-16 Dt.21.08.2015
and security norms may be considered by the Revised Board Format for High Value loan proposals
concerned ZLCC on a case-to-case basis for
educational loans under IBA Scheme. Branches Our Management Committee has revised
the existing Board Format for credit proposal’s (for

5
 Recollect
limits of `. 1 cr and above) by suitably The provisions of the MOU/Joint Note
incorporating fields for Loan Tracking, CRILC signed between IBA and Officers Association on
status, Joint Lender Forum (JLF), Methodology for 25.05.2015 and Charts circulated by IBA have
Assessment of Working Capital, arrival of Drawing been reproduced as Annexure to this circular.
Power etc. alongwith the checklist for Project HRM.33/2015-16 Dt.31.07.2015
proposals particularly for Infrastructure. X Bi-partite Settlement
The revised Board format is given in the IBA for and on behalf of member banks
Annexure to this circular. The soft form of the and Workmen unions have entered into X Bi-
revised format is made available in the Helpdesk. partite Settlement on 25.05.2015. As per the terms
of settlement, revised salary and arrears of salary
Henceforth, all credit proposals of `.1.00 cr
with effect from 01.11.2012 payable to the
and above should be submitted in the revised
employees has been approved by the Bank’s Board
format only. While submitting the proposals,
by way of Circular Resoultion dated 26.06.2015
Branches / Zonal Offices should ensure that the
format is not altered and “NIL”/”Not applicable” The provisions of the X Bi-partite
may be furnished where there is no information to Settelment and Charts circulated by IBA have been
provide. reproduced as Annexure to this circular.
ADV. 106/2015-16 Dt.29.08.2015 HRM.34/2015-16 Dt.31.07.2015
Pradhan Mantri Jan Dhan Yojana – Scheme for Group Personal Accident Insurance Policy for all our
Overdraft (OD) up to `.5000/- under PMJDY - Aadhaar Staff Members under Staff Welfare Scheme
Seeding Non-mandatory Group Personal Accident Insurance Policy
Regarding Sanction of Overdraft up to has been renewed with THE ORIENTAL
`.5000/- to BSBD Account holders under PMJDY, INSURANCE COMPANY LTD for one year,
Department of Financial Services (DFS) vide their effective from 02.08.2015.
letter dated 25.08.2015 directed that in the context NEW GPA POLICY NO: 411104/48/2016/127
of an interim order dated 11.08.2015 passed by
PERIOD OF POLICY: 02.08.2015 TO 01.08.2016
Hon’ble Supreme Court of India that Aadhaar
number in the bank accounts should not be made All claim forms and claims related
mandatory or insisted upon for grant of overdraft. correspondences under this policy should be
addressed to M/s Oriental Insurance Company Ltd,
ADV.120/2015-16 Dt.22.09.2015
under copy to CO: HRM
HRM
The Oriental Insurance Company Ltd.,
Air travel under LFC Service Vertical Centre (SVC),
Staff members (Award staff/officers) II Floor, “Oriental House” No.216/115,
planning to travel by air under LFC facility should Prakasam Salai, Broadway, Chennai 600 108
apply for and get the leave / LFC sanction well in Telephone No 044- 2345 8231 & 23458207
advance (at least one month) and book the tickets Tele Fax 044 – 25383607
Email:svcchennai@orientalinsurance.co.in
sufficiently early in low cost carriers at low fares
only. The procedure to be adopted in reporting
HRM.26/2015-16 Dt.08.07.2015 the claims, documents to be enclosed with the
claim forms are given as annexure to this circular.
Salary Revision for Officer Employees governed by
Indian Bank (Officers) Service Regulations 1979 HRM.35/2015-16 Dt.03.08.2015
Indian Bank Association (IBA) for and on Encashment of LFC – Revised eligible amount
behalf of member banks has entered into a
As per terms of X Bi-partite Settlement for
Memorandum of Understanding/Joint Note with
authorized representatives of the Officers Award Staff and Joint Note for officers, entitlement
Associations on Salary Revision and other issues for LFC encashment has been revised to 100%
concerning service conditions of officers in Banks. (from 75%) of eligible fare for the class of travel
by train to which the officer / Award staff is
6 6
 JULY-SEPT 2015
entitled for the eligible distance with effect from Branches shall refer this circular for further
01.06.2015. The revised LFC encashment amount guidelines in this regard.
at current train fares are as follows: HRM.43/2015-16 Dt.08.09.2015
I Officers
CRA
Eligible Distance in Encashment per unit
Scale of
class by KMs (one Revised Rate (Both Implementation of Pradhan Mantri Jeevan Jyoti
Officers
train way) ways)
Bima Yojana (PMJJBY) and Pradhan Mantri
Scale I to III II AC 4500 `.8304
Scale IV and Suraksha Bima Yojana (PMSBY) - Submission of
I AC 5500 `.16750
Claim forms and procedures
above

II Award Staff
Branches shall submit the simplified claim
Encashment Per forms and discharge receipt for PMJJBY / PMSBY
Encashment Per Unit
Unit with all required documentary support as per the
Eligible For 4 Years Block
Designation For 2 Years Block
Class check list mentioned below:
By Dist In Revised Revised
Dist In PMJJBY PMSBY
Train Kms Amt. Amt.
Kms
(One (Both (Both
Way) Ways)
(One Way)
Ways)
Claim Form Duly filled Claim Form Duly filled

CLERKS II AC 2000 `.5288 4000 `.7698 Discharge Certificate duly Discharge Certificate duly
III AC 2500 `.3950 5000 `.6026 stamped & witnessed stamped & Witnessed
SUBSTAFF
PTS – 1/3 III AC 833 `.2060 1666 `.3164 Death Certificate In case of Death:
PTS – ½ III AC 1250 `.2626 2500 `.3950 (i) Death Certificate
PTS – 3/4 III AC 1875 `.3416 3750 `.4884
(ii) Original FIR/Panchanama
FTS III AC 2500 `.3950 5000 `.6026
(iii) Post Mortem Report
HRM.41/2015-16 Dt.07.09.2015
In case of Permanent
Revision of Pension for employees who retired on or Disablement:
after 01.11.2012 consequent upon the wage revision (i) Disability Certificate from
as per 10th Bipartite Settlement and Joint Note dated Civil Surgeon
25.05.2015
Nominee ID Proof and Nominee ID Proof and Xerox
As per the settlement / joint note, pending Xerox copy of Nominee A/c copy of Nominee A/c Details
amendments to Indian Bank (Employees’) Pension Details with IFSC Code with IFSC Code
Regulations, 1995, Bank has decided to give effect All the above documents are to be verified with originals
the revised pension, retaining the right to and counter signed by the Branch Manager with Seal.
adjustments, if necessary, at a later date. In this
The Claim form and discharge certificate
connection, it is observed that as a result of giving
are annexed to this circular.
effect to Incremental Commutation on revised
pension for eligible pensioners, the Revised Basic CRA.54/2015-16 Dt.01.08.2015
Pension after commutation together with Dearness Insurance Focussed Deposit and Gift Schemes for
Relief will be less than the pre-revised monthly PMSBY and PMJJBY
pension (including D.R.)
Government of India had introduced two
On account of such reduction in monthly deposit products and one gift cheque product.
pension after revision, payment made as pre- These products are relevant for festivals, social
revised pension (already paid) will be in excess occasions and family celebrations. The three new
over eligible revised monthly pension payable after products viz. Suraksha Deposit Scheme, Jeevan
such revision. Such excess amount of pension Suraksha Deposit Scheme and Jeevan Suraksha
(including D.R) already paid, over the revised Gift Cheque aim to make the insurance schemes
pension (including D.R) payable on revision, will PMJJBY and PMSBY sustainable.
be adjusted against the incremental commutation The Suraksha Deposit Scheme and Jeevan
amount payable on revised Basic Pension and the Suraksha Deposit Scheme are deposits in nature
balance amount will be paid to the pensioners. and meant for payment of premium under the

7
 Recollect
relevant insurance schemes over a period of time, Branches should fill up all the details in the
whereas, the Jeevan Suraksha Gift Cheque Scheme data entry screen provided in the Help Desk and
is in the form of a gift and meant for payment of mention the System Generated Reference No. on
premium for both the insurance schemes for a the proposal form without fail before handing over
period of one year. the same to LIC officials for processing and logins.
Suraksha Deposit Scheme and Jeevan CRA.67/2015-16 Dt.15.09.2015
Suraksha Deposit Scheme are aimed at enabling NACH - Revised new mandate format
account holders to deposit `.201 and `.5001,
respectively in their accounts either on their own According to NPCI, an annexure may be
initiative by cash, regular cheque etc. or based on added to the old Mandate format with the signature
of the customer which may be obtained and
cash / regular cheques etc. received as gifts during
preserved at the sponsor bank.
the festive seasons for long term subscription to
PMSBY and PMSBY + PMJJBY respectively. NPCI agreed for printing of the clauses on
the face of the mandate as below:
Please note that under the above two
products, gift cheque/DDs should not be issued and Above signature:
only deposits can be accepted. “I agree for the debit of mandate processing
Brief Details of the Schemes are provided charges by the bank whom I am authorising to
in this circular. debit my account as per latest schedule of charges
CRA.56/2015-16 Dt.01.08.2015 of the bank”.
Changes in RTGS time window Below Signature:
The RTGS time window with effect from 1. This is to confirm that the declaration has
September 1, 2015 will be as under: been carefully read, understood & made by me/us.
Customer Inter-bank I am / We are authorising the User entity/Corporate
Product Days
transactions transactions to debit my account.
Monday to Friday
and Working 2. I have understood that I am authorised to
Saturdays (except 08:00 hrs 08:00 hrs cancel /amend this mandate by appropriately
RTGS Second and Fourth to 16:30 to 19:45
hrs hrs communicating the cancellation / amendment
Saturdays of the
request to the User entity / Corporate or the bank,
month)
where I have authorised the debit.
CRA.64/2015-16 Dt.04.09.2015 CRA.70/2015-16 Dt.29.09.2015
Life Insurance Business through LIC of India – Data Acceptance of deposits of taxes in cash by the
Entry system to be done on the policies canvassed authorized branches
at our branches
CBDT (Central Board of Direct Taxes) has
“ON LINE DATA ENTRY” system has
made electronic payment of taxes mandatory for
been introduced in respect of the Life Insurance
Policies of LIC of India canvassed by the branches the following category of tax payers:
A Company
with immediate effect. This will facilitate A person (other than a Company) to whom
identification of the branches for crediting the provisions of Section 44 AB are applicable.
eligible commission in respect of the policies
canvassed by them in time and without any Branches can identify the status of the
omission. Corporate tax payers from the name and PAN
number. The 4th digit of PAN of all Corporate
The data entry has to be made in the assesses would be ‘C’. In these cases only, the tax
designated Screen in payers are to be requested to route their payment
CBS Help Desk >>>> through e-payment mode. In all other cases, the
In House Applications >>>> mode of payment is not to be enforced by the
Bancassurance >>>>> branch officials.
LIC Policies Canvassed CRA.71/2015-16 Dt.30.09.2015

8 8
 JULY-SEPT 2015

FX Existing charges as
per circular FX
Nature of Service Revised charges
16/2015-16
Amendments in applicability of form 15CA & 15CB dt.01.06.2015
on payments made to Non Residents or to a foreign
Inward Commission of Transaction charges
company remittances 0.1523% to be (as per circular FX
As per the amended section 195 (6) of credited to recovered in lieu of 16/2015-16 dated
EEFC account exchange benefit 01.06.2015) + Flat
Income Tax Act, reporting under Rule 37BB in
rate of `.254/-
form 15CA & 15CB is mandatory, irrespective of
whether the income is chargeable or not. Exports: Where 0.147% on the FC Bill collection
the proceeds of amount credited to charges (as per
Further, for non furnishing of information export bill EEFC account. circular FX 16/2015-
or furnishing of incorrect information under section credited to 16 dated
EEFC accounts 01.06.2015) + Flat
195(6) in respect of remittance to a non resident, a in part or full. rate of `.254/-
penal provision is incorporated in section 271-I by
the Finance Act, 2015 whereby a penalty of INR Fx.26/2015-16 Dt.17.07.2015
1,00,000 would be levied. Routing of FOBC cheques transactions through
Branches may issue a communication to all EXIM menu
their customers about the Income Tax department’s In order to streamline the FOBC
direction for submission of form 15CA & form transactions, a dedicated menu has been developed
15CB mandatorily in the absence of which the in the EXIM package for the AD branches to
remittance will not be effected by the branch. handle the transaction. The screen shot has been
FX.23/2015-16 Dt.01.07.2015 provided by Project Office as annexure to this
circular for handling the transactions by AD and
Change in Swift Code in the name of Relationship NAB branches.
Manager of new CAD Nostro Account with Bank of
Montreal, Toronto, Canada The detailed procedure to be followed by
AD & NAB branches is furnished in this circular.
Please be guided by the below given changes
with regard to the New Canadian Dollor Nostro Fx.29/2015-16 Dt.31.07.2015
Account with Bank of Montreal, Toronto, Canada.
GENL
Details Bank of Montreal
KYC compliance of individual customers - relaxed
Account No. 3144 1044 369 norms for Address Proof
SWIFT Code BOFMCAM2 (In place of BOFMCAT2) Branches shall refer this circular regarding
Mr. Sri Ravichelvan Vice President, IFI certain relaxations in KYC guidelines with regard
(In place of Sri Ravichandran Vice
to obtention of document proof of address for 'Low
President, IFI) International Financial Risk Customers' and also regarding definition of
Relationship
Institutions 100 king street west, First “Low Risk Customer” and “Medium / High Risk
Manager
Canadian place, 24th floor Toronto, Ontario, Customers”
Canada M5X 1A1 Ph:+1-416-867-4629 GENL.20/2015-16 Dt.02.07.2015
Email: sri.ravichelvan@bmo.com
Alteration in the name of “The Ratnakar Bank
FX.24/2015-16 Dt.03.07.2015 Limited” to “RBL Bank Limited” in the Second
Revision in Service charges on credit transactions in Schedule to the Reserve Bank of India Act, 1934
EEFC account The name of “The Ratnakar Bank
Branches shall take note of the revision in Limited” has been changed to “RBL Bank
service charges on credit to EEFC accounts due to Limited” in the Second Schedule to the Reserve
modification in service tax. Bank of India Act,1934.
GENL.24/2015-16 Dt.17.07.2015

9
 Recollect
Single User Bill Payment in Corporate Net Banking this circular. The charges prescribed are inclusive
of service tax payable to Government of India
To obviate the difficulties of CNB
which is presently 14%.
customers, Bank has introduced Single User Bill
GENL.29/2015-16 Dt.22.08.2015
Payment System in CNB, for implementation with
immediate effect. Under this system, the Account Comprehensive guidelines for KYC compliance of
Administrator will be given authority to enable any transactions by Walk-In Customers i.e. Non-Account
person among the makers into ‘SINGLE’ user for Based Customers
specific transactions as decided by the Corporate Based on the RBI guideline, DFS guideline
customer. Administrator can enable / disable any on NEFT and in tune with the Bank's commitment
maker into single user at any point of time for any to provide hassle-free remittance facilities to the
number of transactions. All the actions of the migrant labourers, students etc as part of financial
Account Administrator in the Single User inclusion, the following guidelines are put in place
operations will be wholly binding on the Corporate with immediate effect.
Company. In order to effect smooth operations in A. Remittances such as DD / NEFT / RTGS /
the Single User Bill Payment Bank has introduced BPO etc
two mandate forms to be obtained from Corporate
Nature of transaction KYC compliance requirement
Companies and Partnership firms as given in
Annexure – A & B respectively. For the operations Remittances such as Application must be filled up with
Demand draft / NEFT / proper details such as name,
executed under Single User Bill Payment System,
BPO etc above `. address, telephone number etc of
SMS will be sent to all the users. 20,000/- the applicant.
The Corporate Customer has to submit Copy of any one of the Officially
specific request for the Single User Bill Payment Valid Documents furnished in
facility. They have to submit the specific mandate Table-1 OR if the customer is
unable to produce any OVD, then
as per the format duly executed by the Authorized
copy of any one of the
persons specifying the name of the person documents furnished in Table-2,
nominated for performing single user transactions. to be obtained for the proof of
identity of the walk-in customer.
Partnership firms have to submit the specific
mandate to enable the partners jointly authorizing a B. Cash deposits into accounts by third Parties
Partner to operate the Accounts as the single user
The norms are arrived at after taking into
through CNB.
account the following.
These mandates have to be obtained in a) Probability of direct credit to accounts by
duplicate. One copy has to be sent to Project Office third parties in lieu of availing remittance
with due recommendation keeping the other copy facilities such as DD /NEFT /RTGS / BPO
for branch records. Project Office will inform the etc
branch after enabling the same.
b) Money laundering perspective is to be
GENL.27/2015-16 Dt.12.08.2015 verified at entry level to find out
Revision of Service Charges structuring of transactions by customers to
avoid complying with KYC & PAN
Service charges for both basic banking requirement.
services and other than basic banking services have
Cash deposits Deposit challan must be filled up with
been revised with effect from 21.09.2015.
above `. 20,000/- proper details such as name,
However, revision of Rent on lockers would be into accounts by address, telephone number etc of the
applicable from 01.09.2015. Branches shall recover third parties i.e. person depositing cash.
the arrears of rent on locker for the remaining persons other than Copy of any one of the Officially
period. Account holder or Valid Documents furnished in
employee/ Partner/ Table-1 OR if the customer is unable
The amended service charges consequent Director/ Trustee etc to produce any OVD, then copy of
to the said revision are enclosed as Annexure to in case of entities.
any one of the documents

1010
 JULY-SEPT 2015
furnished in Table-2, to be obtained For any claims /settlements branches shall
for the proof of identity of the walk-in contact
customer.
The Oriental Insurance Company Limited
nd
C. Payment of Cash against Un-crossed Claims Service Centre “Oriental House” 2 Floor,
instruments across the counter # 216/115 Prakasam Salai, Broadway,
Chennai -600108
A relaxed approach is adopted while Phone +91-4423458231
effecting the payment of instruments since it is
obligatory on the part of drawee / Banker to honour Policy Details
Period of
the cheques issued by the customer, as per Section Risk Covered Policy Certificate Number
Insurance
31 of NI Act, 1881.
Safe, Furniture & 01/07/2015 to
Payment of an un- Name, Address, telephone 411104/11/2016/104
Machinery (SFM) 30/06/2016
crossed instrument number, signature etc of the
payable to bearer person receiving cash is to be Book, Forms, 01/07/2015 to
411104/11/2016/105
where the amount is obtained on the reverse of the Stationery (BFS) 30/06/2016
`.50,000/- and above instrument.
Electronic 02/07/2015 to
Copy of any one of the 411104/44/2016/16
Equipments (EE) 01/07/2016
documents specified in Table-1:
Officially Valid documents OR Branches shall refer the circular for
Table-2: Documents other than
detailed guidelines in this regard.
OVD under relaxed norms, to be
obtained for the proof of identity of ADMIN.47/2015-16 Dt.02/07/2015
the walk-in customer.
Payment of an un- Name, Address, telephone
Banker’s Indemnity Policy for the Financial Year 15-16
crossed instrument number, signature etc of the Bankers Indemnity Policy for the financial
payable to Order person receiving cash is to be
year 2015-16 has been entered with
irrespective of the obtained on the reverse of the
amount instrument. The United India Insurance Company Limited
Copy of any one of the DO:011800, New No.640, Sathguru Complex
Officially Valid Documents as Anna Salai, Nandanam, Chennai 600035.
per Table-1 OR if the customer is
unable to produce any OVD, then The new Policy Number is
any one of the documents 0118002615P101381512
furnished in Table-2, to be
obtained for the proof of identity of This policy covers losses incurred and
the walk-in customer. discovered during the period 01.04.2015 to
Branches shall refer this circular with 31.03.2016
regard to other types of walk-in-customers and the Additional Sum (insured)
requirements KYC compliance, especially Additional cover available in respect of
regarding “Regular Walk in Customer”. Clause A (loss on Premises) is `.150.00 crore and
in respect of Clause B (Loss in Transit) is `.25.00
GENL.35/2015-16 Dt.21.09.2015
crore.
ADMIN Branches shall refer this circular for
detailed guidelines in this regard viz., The Risks
Comprehensive Centralised Insurance Policy
for Safe, Furniture & Machinery (SFM), Books, covered, the important features of the policy,
Forms, Stationery (BFS) & Electronic Exceptions, Claim procedures to be followed /
Equipments (EE) Maintenance of records and Clarifications/Special
The Comprehensive Centralized Insurance instructions etc.
Policy has been taken at Corporate Office for the ADMIN.53/2015-16 Dt.29.07.2015
Safe, Furniture & Machinery (SFM), Books,
Detection and Reporting of Counterfeit Notes
Forms, Stationery & Electronic Equipments (BFS)
kept at Banks premises all over India for the period Certain modified instructions as
01/07/2015 to 30/06/2016 and for the period communicated by RBI, in the existing procedure
02/07/2015 to 01/07/2016 for Electronic for detection and reporting of counterfeit notes and
Equipments (EEP) with OICL. penalty have been given in this circular for the

11
 Recollect
information of all staff members and for necessary them to identify banknotes, the size of the
implementation. Identification Mark in `.100, 500 and 1000
ADMIN.58/2015-16 Dt.01.09.2015
denominations has been increased by 50% and
angular bleed lines on both left and right of the
Banknotes with new numbering pattern and special front side of banknotes:
features for the visually impaired
- 4 lines in 2 blocks in `.100,
Reserve Bank of India is issuing Banknotes
in Mahatma Gandhi Series 2005 with a new - 5 lines in 3 blocks in `.500 and
numbering pattern and special features for the
- 6 lines in 4 blocks in `.1000 denominations,
visually impaired in `.100, 500 and 1000
denominations. have been introduced.

2. In the new numbering pattern, the numerals 4. The design of banknotes of `.100, 500 and
in both the number panels of these denominations 1000 denomination is similar in all other respects
ascend in size from left to right, while the first to the current design of banknotes in Mahatma
three alphanumeric characters (prefix) remain Gandhi Series 2005.
constant in size. Printing the numerals in ascending ADMIN.67/2015-16 Dt.25.09.2015
size is a visible security feature in the banknotes so Though due care has been taken in the
that the general public can easily distinguish a preparation of Recollect, the version given in the
counterfeit note from a genuine one. circular is final.

3. Special features for the visually impaired Compiled by CO: O&M Division
have been introduced in order to make it easier for

1212
 a Volume 24 Issue 2

For Private Circulation Only

July – Sept 2011 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
Cir
CONTENTS OF THIS ISSUE Date Subject Pg
No
Cir 52 08.08.11 Group Personal Accident Insurance
Date Subject Pg
No Policy for all our staff members under 7
DEP 06.08.11 Introduction of Redesigned Withdrawal Staff Welfare Scheme
Slip 2
21 54 09.08.11 Dearness Allowance payable for
22 06.08.11 Enhancement of Funds Transfer Limit Workmen and Officer Employees for the
2 7
for Retail Net Banking Customers months of August, September and
October 2011
23 16.08.11 Introduction of Sweep / Reverse Sweep
2 CRA 06.07.11 HDFC Standard Life Insurance
Facility in Supreme Current Account
50 Business – Data Entry to be done at 7
ADV 19.07.11 Technology Upgradation Fund Scheme
2 branches
67 - TUFS (New)
52 07.07.11 Levy of Processing Charges on
71 27.07.11 Obtaining Second Legal Opinion for
2 electronic payment system- NEFT / 7
advances of Rs.50 lacs & above
NECS / RECS / ECS
72 27.07.11 Management of Subsidy in Core
3 54 11.07.11 Withdrawal of Banking Cash
Banking Solution 7
Transactions Tax (BCTT) - regarding
77 28.07.11 Implementation of “Write off / Waiver
3 59 18.07.11 Opening of Service Branch/ Tirunelveli
Module” in CBS 7
& Issue of Demand Drafts on Tirunelveli
86 22.08.11 Reverse Mortgage Loan Scheme –
3 64 23.07.11 Distribution Tie up with SBI Mutual Fund
Revised Annuity Amount 8
for sale of MF products
87 05.09.11 Cent percent identification of NPAs by
3 65 23.07.11 Pension Master – Inputting correct
the CBS System
values to avoid wrong calculations/ 8
91 14.09.11 OTS Proposals in Accounts backed by disbursements
4
Securities
68 26.07.11 Inspection by RBI on conducting of
93 14.09.11 Additional Support Measures to MSE 8
4 Government business by Agency Banks
Sector
69 27.07.11 Front end changes in NEFT / RTGS
94 16.09.11 Revised IBA Educational Loan Scheme 8
4 screens
- 2011
76 06.08.11 Introduction of New Scheme - “ IB
96 17.09.11 Home Loans and NRI Home Loans with VIDYARTHI SURAKSHA “ by
variable ROI - Extension of repayment 9
4 arrangement with M/s MetLife India
period on upward revision of interest Insurance Co Ltd.
rate
82 17.08.11 Discretion to customers for selection
HRM 06.07.11 Reimbursement of Lodging Expenses to 9
between RTGS and NEFT
34 Officers in Scale I to Scale V, while 5
87 27.08.11 Green Initiative: use of Electronic
travelling on duty 9
Payment - e-Governance
35 06.07.11 Reimbursement of expenses towards
91 08.09.11 Collection of Direct Taxes through our
Transport of personal effects on 5 10
Bank’s ATM
Transfer of an Officer–Revision in Rates
94 14.09.11 Return Discipline in RECS (Debit) and
39 07.07.11 Reimbursement of TA / DA to serving 10
MICR - Imposition of Penalty
Employees/ Ex-Employees (Including
5 96 23.09.11 Dishonour of electronic funds transfer
Retired, Dismissed) in case of
Attendance before Courts / Tribunals for insufficiency of funds in the bank 10
accounts – clarification
40 07.07.11 Revised Fitment Formula for Officers on
5 103 28.09.11 Collection of one time deposit and
Promotion to Higher Scales of Pay
monthly subscription from the cable TV
46 15.07.11 Staff Housing Loan Scheme to Officers 11
operators for Tamil Nadu Arasu Cable
and Award staff – Introduction of
6 TV Corporation Ltd
Additional Features in the existing
scheme 104 28.09.11 Service charges for members 11
49 26.07.11 Implementation of SAP-HRMS 6 106 28.09.11 Merger of Indian Bank Depository
Services (DP ID: IN303093) with
50 03.08.11 Provisions of Furniture at the Residence 11
6 Indbank Merchant Banking Services Ltd
of Officers (Revised Scheme)
(IBMBS Ltd)
 Recollect
Cir Introduction of Sweep / Reverse Sweep Facility in
Date Subject Pg
No Supreme Current Account
FX 06.07.11 Introduction of more avenues for foreign
14 inward remittances – New Electronic Based on the feedback received from the
12
Funds Transfer Arrangement with UAE field level functionaries, sweep / reverse sweep
Exchange House, Abu Dhabi
facility is provided to Supreme Current Account
19 16.09.11 Exchange Earners Foreign Currency
(EEFC) A/c and Resident Foreign
with the following terms:
12
Currency (RFC) A/c– Liberalisation by MINIMUM MINIMUM
RBI regarding Joint Account Holders PLAN
BALANCE THRESHOLD LIMIT
20 16.09.11 Holding of NRE / FCNR(B) accounts by A Rs.1 lakh Rs.2 lakhs
NRIs / PIOs jointly with Indian resident 12
close relatives – liberalisation by RBI B Rs.2 lakhs Rs.4 lakhs
21 16.09.11 Savings Bank accounts maintained by C Rs.3 lakhs Rs.6 lakhs
Indian Residents– Liberalisation by RBI 13
regarding Joint Account Holders D Rs.10 lakhs Rs.20 lakhs
22 16.09.11 Foreign Investments in India – Transfer
of security by way of gift – Liberalisation 13 All other terms and conditions regarding
by Reserve Bank of India sweep / reverse sweep facility provided in
GEN 16.08.11 Sharing of information - Communication
13
Premium Current Account are applicable to
41 from Indian Banks' Association
Supreme Current Account also.
43 05.09.11 Adjustment of ATM Cash by ATM
attached branches Change in 13 DEP.23/2011-12 dt.16.08.2011
Accounting of Excess ATM Cash
44 13.09.11 Facility provided to enter the Aadhar
ADVANCES
14
Number (UID) in CBS Technology Upgradation Fund Scheme - TUFS (New)
ADM 25.07.11 Comprehensive Centralised Insurance
37 Policy for 'Safe, Furniture & Machinery Office of the Ministry of Textiles provided
(SFM); Books, Forms, Stationery & 14 new Reporting formats viz. R1, R2, R5, R6, R7,
Electronic Equipments' kept at Bank's
premises all over India R8 with respect to Technology Upgradation Fund
39 03.08.11 Detection of Counterfeit Banknotes – Scheme and the formats are annexed to this
14
Revised Procedure circular. Branches have to submit the details in
DEPOSITS these formats to HO, Credit Division for Non-SSI
Introduction of Redesigned Withdrawal Slip accounts and to HO/ MS & ME Department for
SSI accounts through Zonal Offices for obtention
Top Management Council has approved
of Unique ID (UID) No. without which claims for
the removal of the withdrawal slip from the
subsidy will not be accepted by MoT. As UID will
secured stationery items. The redesigned
be allotted by the Office of the Textile
withdrawal slip format is given in the annexure to
Commissioner on first come first served basis,
this circular.
Branches should submit the details in the
DEP.21/2011-12 dt.06.08.2011
prescribed formats.
Enhancement of Funds Transfer Limit for Retail Net
ADV.67/2011-12 dt.19.07.2011
Banking Customers
Subsequent to the introduction of One Time Obtaining Second Legal Opinion for advances of
Password (OTP), the Top Management has Rs.50 lacs & above
permitted for the enhancement of the default Per Based on the feasibility study to emphasise
Day Funds Transfer Limit from Rs.1 lakh to Rs.2 genuineness and enforceability of the security, Top
lakhs to all the Retail Net Banking customers (both Management Council directed that Second Legal
Individuals & Sole Proprietorship concerns). Opinion be obtained for securities/ properties to be
Zonal Managers are empowered to enhance charged to advances of Rs.50 lacs and above.
the per day funds transfer limit under Retail Net
Branches shall henceforth obtain Second
Banking facility up to Rs.10 lakhs (Rupees Ten
Legal Scrutiny Report in case of advances of Rs.50
lakhs only) for Sole Proprietorship concerns, on a
lacs and above.
case to case basis.
DEP.22/2011-12 dt.06.08.2011 ADV.71/2011-12 dt.27.07.2011
2 2
 JULY-SEPT 2011
Management of Subsidy in Core Banking Solution With the introduction of “Write off/Waiver
Maintenance of subsidy on different Module” in CBS, all the ARC transactions are now
loans/running accounts is made easy by fully automated. There is no need to make any
introduction of separate module. In this module, manual vouchers for closing of ARC accounts. The
management of subsidy can be done through the system will take care of all vouching, provided the
following menus: settlement amount is correctly entered in the
closure menu.
• Subsidy Claim,
• Receipt of Claim, ADV.77/2011-12 dt.28.07.2011
• Appropriation of Subsidy and Reverse Mortgage Loan Scheme – Revised Annuity
• Subsidy enquiry Amount
The loan products and running account The monthly annuity tables pertaining to
products (OD/OCC) for which Subsidy can be Reverse Mortgage Loan Scheme for various rates
entered and maintained are listed in the circular of interest (ranging from 9.50% to 13.00% with
with detailed screenshots and guidelines. 0.25% variation) are given in Annexure 1 & 2 of
If any subsidy eligible loan is opened this circular. For details & guidelines on Reverse
under any other product code wrongly, subsidy Mortgage scheme, branches shall refer the
processing can be done only if the product code is following circulars:
changed from the existing code to one of the 1. Circular No.ADV.34/2007-08 dated 04.08.2007
suitable subsidy enabled product codes. Making
use of the reports pushed by PO, Branches shall 2. Circular No.ADV.56/2007-08 dated 17.10.2007
adjust subsidy. Branches should use the subsidy 3. Circular No.ADV.70/2007-08 dated 03.01.2008
module correctly for better management of subsidy 4. Circular No.ADV.66/2009-10 dated 10.08.2009.
and correct MIS.
ADV.86/2011-12 dt.22.08.2011
ADV.72/2011-12 dt.27.07.2011
Cent percent identification of NPAs by the CBS
Implementation of “Write off / Waiver Module” in System
CBS w.e.f.01.08. 2011-
i) Provision in Bancs to fill up OTS amount for Project Office is working on a solution for
closure of Loans/Advances and ARC accounts – (ii) ensuring identification of NPA with Agri Crop
Automation of All ARC Transactions. Loan portfolio also to be System compliant.
Closure of loan/advance accounts under Hence, all the branches should mark the due dates
OTS involving write off / waiver has been made in all the crop loan accounts to enable the System
simple with the implementation of the “Write off to take over the function. Branches shall take the
/Waiver Module” in CBS. guidance of respective Zonal Office / HO:RBD
and correctly port the due dates so as to ensure
Under the simplified system, provision has
error free identification of distressed loans within
been made to feed the Settlement (OTS) Amount
in the Loan Closure Menu itself. System has been the crop loan segment as well. Many concessions
enabled now to vouch automatically for the waiver have been granted by the respective District
portion to the debit of Interest on loans/CC/OD and Consultative Committee / State Level Banker’s
debit of Write off Claim Account for the write off Committee (SLBC) including repeated
portion. Such transactions will be available in the restructuring / rephasement to the farming
VVR report. Branches should not make any community, wherever natural calamities have
manual transactions for these amounts of affected the area. Branches have to take care while
compromise. marking the due dates, as wrong information will
The above procedure is applicable to all inflate NPAs. Branch Managers shall contact the
the advances/NPA or Standard and ARC accounts farmers immediately and guide them for the
as well. Branches shall refer the circular for other renewal of the facilities, as many of the farmers
guidelines. Project office has ported screen shots have delayed/ defaulted repayment expecting
showing new procedure on the write off/waiver another debt relief.
module, in the CBS Help-Desk.
ADV.87/2011-12 dt.05.09.2011

3
 Recollect
OTS Proposals in accounts backed by Securities Concessions linked to Base Rate to Micro & Small
Management Committee of Board (MCB) Enterprises (being a Priority Sector) in partial
at the meeting held on 27.08.11 advised the modification of the earlier guidelines are permitted
following:- as given in this circular. Staff may refer the
circular for further details.
“wherever the recommendation is to accept lesser
ADV.93/2011-12 dt.14.09.2011
amount than the value of the property as per the
valuation report, the same must be accompanied by a Revised IBA Educational Loan Scheme - 2011
report of a committee consisting of the Branch Manager,
The revised IBA Educational loan scheme
Loan Officer of the Branch and a representative from
duly incorporating the modifications in the existing
Zonal Office about the condition of the property and the
scheme is enclosed as Annexure-1 to this circular.
need to accept a lesser amount and the report of the
committee be placed to SAC and also MC” Other important guidelines/clarifications
from IBA are enclosed as Annexure-2 to this
Branches should ensure strict compliance
circular.
of the above directions of the MCB while
submitting proposals for sanction of OTS in NPA Zonal Offices/ Retail Banking Segments/
Accounts. Branches shall implement the scheme in letter and
spirit and process the proposals strictly as per the
ADV.91/2011-12 dt.14.09.2011
revised guidelines.
Additional Support Measures to MSE Sector
ADV.94/2011-12 dt.16.09.2011
Board in its meeting held on 26.08.11 has
approved the following additional support Home Loans and NRI Home Loans with variable ROI
- Extension of repayment period on upward revision
measures to Micro & Small Enterprises Sector -
of interest rate
1. The loan for purchase of Genset on Whenever interest rates on advances are
softer terms linked to Base Rate with 10% margin revised upwards there will be increase in the EMI
for a period up to 30 months with reduced interest commitment of the borrowers, particularly for
rate for Micro & Small Enterprises (being a Home Loan borrowers who have opted for
Priority Sector) permitted as under- variable ROI, causing distress.
Rate of interest Rate of
Rate of permitted for interest In order to address the distress of these
Interest- Micro &Small permitted for borrowers, Bank has permitted extension of
Existing Enterprises Medium
(MSEs) Enterprises repayment period of the loan instead of increasing
Loans BPLR- 1.5% BR + 1.75 + 0.5 BR + 2.25 + 0.5 the EMI in respect of entire Home Loans and NRI
for (13.50% at (13.00% at (13.50% at Home Loans with variable Rate of Interest, subject
GenSet present) present) present)
to the following conditions:
2. As per SME Debt Restructuring
• Maximum repayment period of the loan should
Mechanism Banks may restructure the accounts not exceed 35 years including the extension
which are classified under Standard, Sub-Standard granted.
and Doubtful category. The SME accounts which • The enhanced repayment period should not go
are appearing in SMA-1 to be subjected to beyond the age of 70 years of the applicant &
necessary restructuring as per guidelines on SME co-applicant.
Debt Restructuring (Ref: HO Circular No: • If the repayment period goes beyond 35 years
ADV.117 dated 10.11.08) and such restructuring or age of the applicant / co-applicant goes
exercise to be completed before the account turns beyond 70 years, the enhancement of the
into SMA-2 to avoid any slippage. repayment period should be restricted to the
proposed guidelines as above and EMI is to be
3. The Reliefs & Concessions under Debt re-fixed accordingly.
Restructuring Mechanism for Sick SMEs have • There should be no revision of Rate of interest
been communicated vide HO: MSMED Circular due to elongation of the repayment period. In
No.ADV.117 dated 10.11.08. Further Reliefs & other words, in a Home Loan with 5 years’
4 4
 JULY-SEPT 2011
repayment, even if the revised repayment Details regarding classification of cities as
period extends to 7 years, the ROI will be that per 2001 census are given in the circular. All other
as applicable for the loan with 5 years extant conditions remain unchanged.
repayment only.
• Notice of enhancement in repayment period is HRM.34/2010-11 dt.06.07.2011
to be communicated to the borrower. Reimbursement of expenses towards Transport of
• Borrower may choose to remit higher EMI personal effects on Transfer of an Officer – Revision
without any additional charges (pre-payment in Rates
charges).
The revised rates communicated by Indian
The accounts with such extension in repayment Banks Association (IBA) towards transport of
period due to revision of interest need not be personal effects of officers on transfer from one
classified as ‘restructured accounts’. place to another has been approved by the Board as
The revision in interest rate / repayment under, which will be effective from 01.04.2011.
period is to be communicated to the respective Distance in Rate per Tonne
borrower in the format enclosed as Annexure to this Kilometres per Km.
circular. Upto 1000 Kms. Rs. 2.80
Wherever the applicant does not fulfill the Beyond 1000 kms. Rs. 2.00
above conditions, the EMI should be re-fixed for the The above rates will apply on slab basis.
residual period of repayment and the borrower The officers transferred to shorter distance upto
should be advised in writing by the Branch Manager 300 kms. the reimbursement may be permitted
about the change in interest rate as well as change in upto the amount chargeable for 300 kms, i.e. 300 x
EMI. (for specimen letter branch shall refer Circular weight x Rs.2.80.
No.ADV.39/2009-10 dated 30.06.2009) Officers who are transferred into and out
Other terms and conditions for the of hilly terrains will be reimbursed two times the
respective product remain unaltered. applicable rate for the distance covered in hilly
ADV.96/2011-12 dt.17.09.2011
terrain and the balance distance at normal rates. All
other extant guidelines remain unchanged.
HRM HRM.35/2011-12 dt.06.07.2011
Reimbursement of Lodging Expenses to Officers in
Scale I to Scale V, while travelling on duty Reimbursement of TA / DA to serving Employees/
Ex-Employees (Including Retired, Dismissed) in
Enhancement in the existing ceilings on case of Attendance before Courts / Tribunals
reimbursement of lodging expenses incurred by
officers in Scale I to Scale V while on official duty Payment of TA/DA to serving
when they stay in the non-ITDC hotels w.e.f. employees/ex-employees, including retired or
01.07.2011 has been approved by the Board as dismissed employees, in case they have to attend
under: proceedings before a Court of Law/Tribunal/
Maximum Room Tariff permissible Inquiring Authority so as to depose as a
Grades
Eligibility
(exclusive of admissible taxes) (in Rs.) prosecution witness or as a management witness
of
Officer
to Stay Major A Class
Area I Other Places has been approved by the Board. The
Cities
Exist Revis Exist Revis Exist Revis circumstances under which TA/DA shall be paid to
Junior
Manage 1 * Hotel serving employees/ex-employees are detailed in
1000 1600 750 1200 500 800
ment Gr
Scale I
(Non-AC) the annexure to this circular.
Middle
Manage
HRM.39/2011-12 dt.07.07.2011
2 * Hotel
ment Gr 1500 2500 1000 1500 800 1200
(Non-AC)
Scales II Revised Fitment Formula for Officers on Promotion
& III
Senior to Higher Scales of Pay
Manage
ment Gr 3 * Hotel 2500 3500 1500 2000 1300 1800 IBA has formulated a revised fitment
Scales
IV & V formula along with Fitment Table for Officers
promoted to higher scales of pay on or after 1st

5
 Recollect
November 2007 and the Board has approved the 4. Additional Housing Loan for repairs /
same for its implementation. Details of the renovations can be availed by staff for the work to
procedure for fitment of pay of officers on the existing property acquired under SHL with NIL
promotion and the fitment table / chart for holiday period.
promotions effected on or after 01.11.2007 are
Other details regarding Additional
given in Annexure I & II of this circular.
Housing Loan for Repairs / Renovations;
The basic pay and or due date of next
Availment of the Staff Housing Loan by Husband
increment advised earlier for officers / executives
and Wife; Mortgage Insurance and Registration of
promoted from Scale III and above on or after 1st
EM; Maximum Quantum eligible for Repairs /
November 2007 shall be reviewed and the eligible
Renovations of House/Flat not acquired under SHL
arrears shall be paid along with salary by the
and other conditions are furnished in this circular.
branch / office where the officers are working at
present / from where the officers retired. HRM.46/2011-12 dt. 15.07.2011

HRM.40/2011-12 dt.07.07.2011 Implementation of SAP-HRMS

Staff Housing Loan Scheme to Officers and Award While SAP-HRMS will be used to
staff – Introduction of Additional Features in the generate transfer orders as usual by Head Office
existing scheme and Zonal Offices, the processes that follow the
Staff Housing Loan Scheme has been transfer orders will be done through the transfer
modified as under: portal by the respective branches/offices which
1. Service Eligibility: All confirmed will automatically update the data in SAP-HRMS
employees with minimum 2 years of completed also. This will thus go a long way in ensuring there
service shall be eligible to avail SHL. are no mismatches in data at any point of time and
also bring in uniformity in the processes relating to
2. Second SHL for acquiring Second
transfers.
Property: Second Staff Housing Loan is allowed
This portal is to be utilized by all
to all employees for acquiring second property at
any place / centre provided the total number of branches/offices wherein the Salary Portal has
properties held in the name of staff and spouse been provided to,
(including the proposed one under the second ‘ View details of incoming/outgoing transfer
SHL) does not exceed two. orders for their branch/office
‘ Entering data relating to relief of staff
For acquiring second property under
members and generating relieving report
second SHL, the limit will be the maximum
eligible limit less already availed limit (including ‘ Preparation of LPC and generating LPC
for repairs / renovations availed already either ‘ Entering data relating to joining of staff
closed or live) by the employee. members and generating joining report
‘ Generate details of incoming and outgoing
Further, as a one time measure it has been
transfers for a particular Zone at Zonal
agreed to permit those employees who have not
Office level and also view bio-data of
kept the surplus gained from the sale of the first
property in an in-operative account to avail Second incoming staff members.
SHL. Branches and offices should do the process
3. Take-over of Loans: The take over of of preparing relieving report, generation of LPC
Home Loans availed by employees (for the and joining report through the transfer portal only,
purpose of purchase of second property) from our with effect from 1st August 2011,.
Bank / other Banks is permitted (No margin is HRM.49/2011-12 dt.26.07.2011
prescribed and no holiday period). In respect of
home loans availed from our Bank, take over of Provisions of Furniture at the Residence of Officers
part of the loan is also permitted. (Revised Scheme)
The scheme for provision of furniture at
Provided the total number of house / flat
the residence of Officers has been revised. The
properties (including the proposed) in the name of
new policy cum operational guidelines is furnished
staff and spouse does not exceed Two.
6 6
 JULY-SEPT 2011
in annexure to this circular. The scheme will come The data entry has to be made in the
into force with immediate effect and hence the old designated Screen in – CBS HELP DESK >>
scheme for this purpose shall stand withdrawn. Other Website >> Bancassurance >> HDFC
Policies Canvassed.
HRM.50/2011-12 dt.03.08.2011
Branches should fill up all the details in
Group Personal Accident Insurance Policy for all our the data entry screen now provided in the Help
staff members under Staff Welfare Scheme Desk and mention the system generated Reference
Round the clock Personal Accident No. on the proposal form without fail before
Insurance cover provided to all employees under handing over to HDFC SLI Officials for
“Group Personal Accident Insurance Policy”. A processing and logins.
new policy with THE NEW INDIA ASSURANCE
COMPANY LTD (NIAC) has been taken w.e.f. CRA.50/2011-12 dt.06.07.2011
02.08.2011 for a period of one year upto Levy of Processing Charges on electronic payment
01.08.2012 and the policy No. is - GPA POLICY system- NEFT / NECS / RECS / ECS
NO: 710600/42/11/010000007.
According to Reserve Bank of India the
The Salient Features of the new Policy clearing houses / processing centres are permitted
remain unchanged with that of the previous year’s to recover processing charges and compensate the
policy. destination banks on the retail electronic payment
The procedure to be adopted in reporting products like NEFT, NECS, RECS and ECS. The
the claims, documents to be enclosed with the charges payable by the Originating banks on the
claim forms are given in the annexure to this above transactions are given in this circular.
circular. Staff members are advised to refer the
circular for further details. The charges proposed are effective from
01.07.2011 and are exclusive of service tax. The
HRM.52/2011-12 dt.08.08.2011 participant banks are not permitted to pass on the
Dearness Allowance payable for Workmen and charges to customers.
Officer Employees for the months of August,
September and October 2011 The procedure for paying / collecting the
charges to / from other banks and other instructions
The confirmed All India Average
are given in the circular.
Consumer Price Index Number for Industrial
Workers (Base1960=100) for the quarter All the Service / Main branches and
ended June 2011 is 4314.10 branches participating in clearing are requested to
enter the details of compensation payable /
Consequently, dearness allowance to
receivable in the template no.553. The navigation
employees is payable for 360 slabs for the period
for the template is BBMIS–> Monthly -> BOD ->
of August, September and October 2011 i.e. an
553 NECS/RECS/ECS Compensation.
increase of 8 slabs over the current level and the
rate of dearness allowance payable to workmen CRA.52/2011-12 dt.07.07.2011
and officer employees shall be 54% of `pay’. Withdrawal of Banking Cash Transactions Tax
HRM.54/2011-12 dt.09.08.2011 (BCTT)
CRA As per Section 95(3) of Chapter VII of the
HDFC Standard Life Insurance Business – Data Finance Act 2008, no BCTT shall be charged in
Entry to be done at branches respect of any taxable Banking transaction.
‘On line Data Entry” system has been CRA.54/2011-12 dt.11.07.2011
introduced, in respect of the HDFC Life Policies
Opening of Service Branch/ Tirunelveli & Issue of
canvassed by the branches with immediate effect. Demand Drafts on Tirunelveli
This will facilitate identification of the branches
for crediting the eligible commission in respect of Service Branch/Tirunelveli (IBGA Code:
the policies canvassed by them in time and without S195) has started functioning covering the
any omissions. branches coming under Tirunelveli Clearing Zone
(List of the branches is given in the circular).

7
 Recollect
Henceforth, branches shall issue Demand have come across a number of discrepancies,
Drafts in respect of the listed drawee branches on which resulted in excess payment of pension and
Service Branch/Tirunelveli only. recovery of excess paid, causing inconvenience to
the pensioners.
Branches are also advised to send their
OBC cheques drawn on these centres to Service Data relating to all the pensioners is to be
Branch/Tirunelveli for realisation. reviewed and necessary corrections / rectifications,
wherever required, are to be carried out by the
CRA.59/2011-12 dt.18.07.2011
branches for accurate calculation and disbursement
Distribution Tie up with SBI Mutual Fund for sale of of pensions.
MF products
Some of the common errors noticed by the
Our Bank’s tie up with UTI Asset CPPC, Chennai while scrutinizing the pension data
Management Co. for selling MF products of UTI are annexed to this circular and the pension paying
MF and with Reliance Capital Asset management branches should correct / rectify the errors by
Ltd for Mutual Fund products of Reliance Mutual going through PPOs.
Fund (RMF) through our Branches has been
working well. CRA.65/2011-12 dt.23.07.2011
Inspection by RBI on conducting of Government
With a view to provide our customers a
business by Agency Banks
choice of MF Schemes, a Distribution Tie up
arrangement with SBI Funds Management Private All the branches, particularly pension
Limited has been approved for selling Mutual Fund paying branches, should submit the compliance
products of SBI Mutual Fund through our certificate to their Controlling Office after
Branches. rectifying the irregularities / discrepancies pointed
out by the Officials of RBI. In turn, Controlling
All the Applications canvassed should be
Office shall forward the compliance certificate to
stamped with the following:
the RBI indicating the number of irregularities
Box reading Stamp to be affixed rectified and outstanding with reasons thereof.
Name of Broker “INDIAN BANK – ARN Time limit for submission of this certificate to RBI
Code & ARN 17645” is 30 days from the quarter in which the inspection
Sub Broker/Sub IBGL Code of your has taken place.
Agent Code Branch & SR No of staff
who canvassed the CRA.68/2011-12 dt.26.07.2011
business. Front end changes in NEFT / RTGS screens
HO: Bancassurance Service Centre will On several occasions, branches have
distribute the commission to the respective originated NEFT / RTGS messages, with wrong
branches by direct credit to the branch Income on amount and commission, which caused financial
receipt of the same from SBI Mutual Fund. loss to the bank.
Branches shall refer the circular for further
instructions. These transactions were generated by the
makers and passed by the checkers after giving
CRA.64/2011-12 dt.23.07.2011 supervisory overrides, in a casual manner, causing
Pension Master – Inputting correct values to avoid inconvenience to the bank as well as to the
wrong calculations/ disbursements customers.
CPPC, Chennai is taking care of pension In order to eliminate such errors, the
processing and crediting Saving Bank accounts of following controls have been built in the NEFT /
the pensioners centrally based on the data given as RTGS screens.
input by the branches. Hence, Branches should be i) New Field “UNDER Rs.” is created at the
more careful while entering the data in Pension bottom of the screen. If the remittance amount
Master for the new pensioners as well as any (excluding commission) is with paise, next
modification in the existing data. CPPC, Chennai rupee amount is to be entered in “UNDER Rs.”
8 8
 JULY-SEPT 2011
Field. If the remittance amount is without complying with extant norms / guidelines. Details
paise, then remittance amount + 1 should be of such sanctions should be reported to the
entered in “UNDER Rs.” field. Click Original Educational Loan Sanctioning Authority
“VERIFY” amount button to compare these for confirmation. However, in cases where, by the
two figures and if the difference is less than or virtue of additional loan amount towards the
equal to 1, system will permit to generate the premium, if interest rate goes up, Branch Manager
queue. should discuss the same with the borrower’s
ii) Copy and Paste function is disabled. concerned for the payment of premium on a case to
case basis.
iii) Under commission field maximum 2 digits
are allowed. Maker has to calculate and enter Branch Manager / Loan Officer should
the commission correctly. explain the salient features of both New IB Jeevan
Vidya and IB Vidyarthi Suraksha Schemes to all
A default limit of Rs.1 Crore will be set up
the eligible fresh educational loan customers but
for each branch for transactions under
the choice of joining either of the two schemes
NEFT/RTGS. Branches will not be able to remit
must be left to them.
funds more than the limit fixed for the branch. In
case, if any branch wants to remit funds more than CRA.76/2011-12 dt.06.08.2011
the limit fixed, they have to contact Project Office Discretion to customers for selection between RTGS
through their Zonal Office, one day in advance. and NEFT
CRA.69/2011-12 dt.27.07.2011 Reserve Bank of India, reiterated that all
Provision of Group Life Cover to Educational Loan the participating banks should provide the option
Student Borrowers – Introduction of New Scheme- to the originating customer to choose between the
“IB VIDYARTHI SURAKSHA” by arrangement with two modes viz. RTGS and NEFT at the time of
M/s MetLife India Insurance Co Ltd. initiation of the funds transfer. The option should
A new Group Insurance Scheme branded be made available to all the customers who may
as “IB VIDYARTHI SURAKSHA” an originate remittance either at the branch or through
arrangement with M/s MetLife India Insurance co internet or any other means and the funds should
Ltd. has been introduced, to provide cover to those be transferred necessarily through the option
existing borrowers who have not been covered chosen by the customer.
under the Scheme so far. The scheme offers a Six CRA.82/2011-12 dt.17.08.2011
month Window to cover those existing uncovered Green Initiative: use of Electronic Payment - e-
Educational Borrowers. The salient features of “IB Governance
VIDYARTHI SURAKSHA” are given in
Annexure I while Procedures & Operational Government of India, Department of
guidelines to be followed are detailed in the Financial Services, Ministry of Finance has
Annexure II to this circular. informed that -
Public Sector Bank (PSBs), Financial Institutions, viz.,
Branches are advised to send letters as per
NABARD, SIDBI, EXIM Bank, and Public Sector
Annexure III of this circular, to the existing Insurance Companies would take up the e-Governance
educational loan student borrowers advising them initiatives in a pro-active manner, as part of the Green
to get the insurance cover under the “IB Vidyarthi Initiative. Through these initiatives, it is expected that on
Suraksha” Scheme within the time period allowed. one hand, the quality and efficiency of the service
Branch Manager / Loan Officer to explain the delivery will improve and on the other, banks will
gradually move towards less paper based transactions.
salient features of the Schemes to all eligible
educational loan customers and convince them to Hence, Departments at Head Office, Zonal
get the coverage and thus comply with the HO Offices and Branches should make payments /
instructions. disbursals only through electronic mode by way of
direct credit / RTGS / NEFT with effect from 1st
Branch Managers are permitted AS ONE
September 2011, except for petty cash. This will
TIME MEASURE to sanction premium amount as
include payments to the staff, vendors, suppliers
part of the existing educational loan after

9
 Recollect
and disbursement of loans and payments towards As per RBI guidelines, destination bank
instalments and investments. branches (where debits are to be posted or centrally
CRA.87/2011-12 dt.27.08.2011 from a single location) to hold debit mandates
based on which the debits are to be posted.
Collection of Direct Taxes through our Bank’s ATM Mandates wherever taken with old Account
Henceforth our customers may pay Direct Numbers, shall obtain fresh mandates with New
Taxes through our Bank ATMs. The process of Account Numbers.
payment involves two stages. In the first stage, the
tax payer who is the ATM card holder will submit Branches shall take the following measures to
a request to the home branch, for registration of curtail the return rate:
details like Permanent Account Number (PAN), i) Advise the customers to keep sufficient
Major Head / Minor Head of Income Tax (which balance in their accounts to meet the
he intends to pay) as per the format provided in debits.
CBS Help Desk. In the second stage, taxpayer ii) Call back the cheque books or take
uses the ATM card in ATM and makes the measures to cancel the debit mandates
payment as per the displayed label. wherever cheques / ECS items are returned
more than once.
Branches, after verification of the details, iii) Take necessary steps to close the
furnished by the customer in the required format, unremunerative and undesirable accounts
should access Universal Payment Service website as per procedure.
by choosing the URL - https://securevas.fssnet.
co.in/APS/ibkbanklogin.htm for the purpose of CRA.94/2011-12 dt.14.09.2011
registration. Dishonour of electronic funds transfer for
The user name for the branch should be insufficiency of funds in the bank accounts –
their IBGA code in Capital letters. Password has clarification
been sent to the branch e-mail ID by HO: TMD. In Government of India, Department of
case the password has not been received through e- Financial Services and Reserve Bank of India has
mail, branch has to send a request to atmtech@ issued clarifications with regard to the rights and
indianbank.co.in for getting the password. After remedies available to the payees against dishonour
first successful login, the branch has to of electronic funds transfer instructions as below:
compulsorily change the password. Operational
details and other guidelines are provided in this 1. The provisions contained in Section 25 of the
circular. Payment and Settlement Systems Act, 2007
accord the same rights and remedies to the
Since we are collecting tax only from payee against dishonour of electronic funds
Individual tax payers through ATMs, only PAN transfer as are available to the payee under
should be accepted from customers, and TAN Section 138 of the Negotiable Instruments
should not be accepted. The workflow / process Act, 1881.
flow with screen shots has been placed in Help 2. The sub-section (5) of Section 25 of the
Desk by HO/TMD for immediate reference by Payment and Settlement Systems Act, 2007
branches. provides for punishment of 2 years and twice
the amount of electronic funds transfer, or
CRA.91/2011-12 dt.08.09.2011
both for dishonour of electronic funds transfer
Return Discipline in RECS (Debit) and MICR - as has been stipulated for dishonour of
Imposition of Penalty cheques under Negotiable Instruments Act,
On review of the returns percentage, it is 1881.
observed that the returns in RECS (Debit) and 3. The Payment and Settlement Systems Act,
MICR for the month of June, July & August 2011 2007 accords legal recognition to electronic
are much above the tolerance level of 2% payment systems and legal recourse to a
beneficiary expecting electronic funds
prescribed by RBI. RBI has informed that penalty
transfer.
of Rs.1000/- per instrument will be imposed on the
returns above the prescribed level. CRA.96/2011-12 dt.23.09.2011

1010
 JULY-SEPT 2011
Collection of one time deposit and monthly A. Inward transactions - Free
subscription from the cable TV operators for Tamil
B. Outward transactions-
Nadu Arasu Cable TV Corporation Ltd.
(i) Rs.2 lakh to Rs.5 lakhs: Rs.25 +
An agreement has been executed with TN applicable time varying tariff subject to a
Arasu Cable TV Corporation Ltd. for collecting the maximum of Rs.30/-
Advance Deposit amount (3months subscription) (ii) Above Rs.5 lakhs: Rs.50 + applicable time
and monthly subscription from the subscribers. varying tariff subject to a maximum of Rs.55/-
The one time deposit and monthly The service charges will come into effect
subscription will be collected from the subscribers from 01.10.2011. Necessary changes have been
by the cable TV operators which will be remitted
effected in the CBS software to give effect to the
to the above account under Multi Utility Payment
time varying tariff. Staff shall refer this circular for
module. Nandanam branch has opened Account
No. 982906947, for this purpose. further details.

A. Cable operators can generate challan in two There is no need of including the time
methods: varying tariff in the challan and cheque since the
i) They can login into www.arasucable.com tariff will be automatically debited by the system
and select the option “click here to pay based on the time at which transaction is
subscription” and print the challan. authorised. Customers may be advised to avoid last
minute transactions in a particular time band, as
ii) Enter into Indian Bank website
there is a processing time involved for the
www.indianbank.in and select the option
transactions, which will take it to the next time
“Tamilnadu Arasu cable TV Corporation Advance
band involving higher time varying tariff.
Deposit Collection” which will lead them to print
the challan. CRA.104/2011-12 dt.28.09.2011

B. The payment can be made in two ways. Merger of Indian Bank Depository Services (DP ID:
IN303093) with Indbank Merchant Banking Services
1) Offline - generating the challan in the
Ltd (IBMBS Ltd)
above method and paying through branch counter.
Branches should select multi utility financial NSDL, Mumbai have approved the merger
transaction option and use only the MUP of Indian Bank DP with our subsidiary DP,
Reference No in the challan. Branches are not Indbank Merchant Banking Services Ltd (IBMBS
Ltd) with effect from 01.10.2011. All the DP
supposed to generate new reference number in the
operations of Indian Bank henceforth will be
MUP module.
handled by IBMBS Ltd. directly with NSDL from
2) Online - in which the cable operators can 01.10.2011.
use the internet banking facility of our bank.
However, some of the existing Indian
CRA.103/2011-12 dt.28.09.2011 Bank DP authorized branches would continue to
Service charges for members provide the minimum services to DP clients. As
per NSDL guidelines, Indian Bank DP (the
Reserve Bank of India, informed that it has transferor DP) is expected to extend the support
been decided to levy service charges for all services as to transferee DP (IBMBS Ltd) for
outward transactions of RTGS members. certain period till it makes its own arrangements
The RTGS service charges have three for establishment of their own service centres in
components (i) membership fee, (ii) transaction fee such locations.
and (iii) time-varying tariff. The rates of these The existing back office software of Indian
components are given in this circular. Membership Bank DP, viz. “DP Secure” would be discontinued
fees and transaction fees are not to be passed on to with effect from 01.10.2011.The branches are
customers. Bank has decided to pass on the time provided with DP back office link of IBMBS Ltd,
varying tariff to customers. viz. “SharePro” wherein all the client details such
The maximum customer charges that can as client master, holdings, balance of DP dues etc.,
be recovered by a member bank from its customer would be carried over. The DP transactions, bill
would be as under: details etc. would be available in the new IBMBS

11
 Recollect
Ltd DP software with effect from 01.10.2011 and even credits under trade transactions are
for requirement of these details, if any by clients permitted upto a maximum amount of
for the period prior to 01.10.2011; the branches Rs.2,00,000 per transaction.
may contact IBMBS Ltd, Chennai who will
The entire process is handled by Treasury
provide such information. The new IBMBS Ltd
back office URL is http://10.147.11.200/shrdbms. branch. Similar EFT arrangements with more
exchange houses are also in the pipeline. We
With effect from 01.10.2011, all new request the branches to sensitise their customers
demat accounts will be opened under DPID: and keep them informed to contact their relatives
IN300597 by using the account opening form
and friends circle abroad and request them to send
supplied by IBMBS Ltd.
money through Indian Bank EFT arrangement
List of Indian Bank DP authorized whenever they remit amounts to family/friends/
branches for providing minimum service to DP relatives in India.
Clients as a support to our subsidiary (IBMBS Ltd;
FX.14/2011-12 dt.06.07.2011
List of Indian Bank DP branches mapped with
nearest IBMBS terminals; Nature of minimum DP Exchange Earners Foreign Currency (EEFC) A/c and
services to be rendered – operational Guideline; Resident Foreign Currency (RFC) A/c– Liberalisation
Client Master Changes Request Form and Speed-e- by RBI regarding Joint Account Holders
Facility Application Form (for sending D I S
On a review of the “Facilities for
electronically to DP) are given as annexure to this
individuals under the Foreign Exchange
circular.
Management Act, 1999”, Reserve Bank of India
CRA.106/2011-12 dt.28.09.2011 has communicated the following liberalisation:
FX
Individuals resident in India are henceforth
Introduction of more avenues for foreign inward permitted to include their resident close relatives as
remittances – New Electronic Funds Transfer joint account holders in their EEFC / RFC bank
Arrangement with UAE Exchange House, Abu Dhabi accounts subject to the following conditions:
As part of offering quick customer service and ¾ Relatives as defined in Section 6 of the
mobilising more foreign inward remittance Companies Act 1956 only can be made
business, Bank has launched the “ELECTRONIC joint account holders.
FUNDS TRANSFER” arrangement with M/s ¾ The resident account holder can include
UAE Exchange Centre LLC., Abu Dhabi with the resident close relative as joint account
holder only on “Former or Survivor” basis.
effect from 28.06.2011. The highlights of this
arrangement are briefly given below: Such resident Indian close relatives who
™ The overseas remitter will remit funds through are made joint account holders are not eligible to
UAE Exchange, Abu Dhabi giving full operate the said accounts during the life time of the
particulars and beneficiary details. resident account holders.
™ The exchange house will provide sufficient FX.19/2011-12 dt.16.09.2011
funds to the Bank for making payment and the
file containing details of the transactions will Holding of NRE / FCNR (B) accounts by NRIs / PIOs
be sent to Treasury branch on a daily basis. jointly with Indian resident close relatives –
liberalisation by RBI
™ Treasury branch will process the file and the
accounts of the beneficiaries will be credited On review of the existing facilities to
immediately in the case of our customers and individuals under FEMA 1999, RBI has
in the case of customers of other banks, communicated that Non-Resident Indians (NRIs)
amounts will be credited to their accounts as defined in FEMA notification No.5 are now
through NEFT/RTGS. permitted to open NRE / FCNR(B) accounts with
™ Unlike other avenues, inward remittances their resident close relatives (relative as defined in
received under EFT can be credited to NRE Section 6 of the Companies Act, 1956) on “Former
accounts also. or Survivor” basis only.
™ Added feature under this arrangement is that The resident close relatives shall be
unlike other sources, as per RBI guidelines, eligible to operate the said joint accounts as Power
1212
 JULY-SEPT 2011
of Attorney holders in accordance with the extant Management (Transfer or issue of Security
instructions, during the life time of the NRI / PIO by a Person Resident outside India)
account holders. Regulations 2000 dated 03.05.2000 remain
FX.20/2011-12 dt.16.09.2011 unchanged.
FX.22/2011-12 dt.16.09.2011
Savings Bank accounts maintained by Indian
Residents– Liberalisation by RBI regarding Joint GENERAL
Account Holders Sharing of information - Communication from Indian
On a review of the “Facilities extended for Banks' Association
individuals under the Foreign Exchange IBA circulated the details of the cases,
Management Act, 1999”, Reserve Bank of India wherein instances of frauds in various functional
has communicated the following liberalisation: areas of banking perpetrated in various banks are
Individuals resident in India are now furnished in the annexure to this circular along
permitted to include their non-resident close with a note on the preventive vigilance measures to
relatives as joint account holders in their resident be adopted to avert such frauds.
Savings Bank accounts, subject to the following ¾ Staff members are advised to note that for
conditions: such negligence / indifference on their part,
they had to pay a heavy price in terms of loss
¾ Relatives as defined in Section 6 of the
of their career and peace in personal life.
Companies Act 1956 only can be made joint
¾ Further, they also become suspects in the eyes
account holders.
of the Police officials as the latter generally
¾ The resident account holder can include the consider negligence as a deliberate act of
non-resident close relative as joint account collusion and connivance of staff with the
holder only on “Former or Survivor” basis. criminals.
¾ Staff members are exhorted to free
Such non-resident Indian close relatives who are themselves from the mindset of “It will never
made joint account holders are not eligible to happen to me”.
operate the said accounts during the life time of
They are advised to learn the lessons from
resident account holders.
the instances of frauds and ensure that they
FX.21/2011-12 dt.16.09.2011 protect the interests of the Bank by scrupulous
Foreign Investments in India – Transfer of security adherence to systems and procedures of the Bank.
by way of gift – Liberalisation by Reserve Bank of GENL.41/2011-12 dt.16.08.2011
India
On a review of the “Facilities for individuals Adjustment of ATM Cash by ATM attached branches
under the Foreign Exchange Management Act Change in Accounting of Excess ATM Cash
1999”, Reserve Bank of India has communicated To overcome the procedural lapse by some
the following with regard to transfer of any of the ATM attached branches not transferring the
security by way of gift by an Indian resident to a excess ATM cash on the same day, the following
person resident outside India: change in the accounting procedure of reporting
¾ As hitherto, a person resident in India who excess ATM cash to ATMSC is put in place:
proposes to transfer any security including ATM attached branches should keep the excess ATM
shares/convertible debentures by way of gift, cash (if any) found in their ATM while doing EOD
to a person resident outside India is required operations, in the respective cassettes in the ATM
to obtain prior approval of the Reserve Bank itself and increase the ADMIN Cash to that effect. The
of India. Branches should ensure that admin balance, physical
¾ However, the maximum value of security cash balance and journal print balance are tallied
which can be transferred to any person after the above increase and the same should be
residing outside India by an Indian resident reported to ATMSC immediately.
by way of gift, during a calendar year stands
Henceforth ATM branches should not
enhanced from rupee equivalent of USD
transfer such excess ATM cash to their Sundry
25,000 to rupee equivalent of USD 50,000.
Deposit Account.
¾ All other conditions as specified in
Regulation 10 A (a) of Foreign Exchange GENL.43/2011-12 dt.05.09.2011

13
 Recollect
Facility provided to enter the Aadhar Number (UID) The risks covered are as per Standard Fire
in CBS & Special Perils Policy for SFM and Books,
Aadhaar is a 12 digit individual Forms, Stationery & Electronic Equipment items
identification number issued by the Unique Policy for Electronic items, including terrorism
Identification Authority of India on behalf of the and earthquake, with reinstatement value. Details
Government of India. This number will serve as a are given in the circular. Please note that this
proof of identity and address, anywhere in India. policy does not cover Bank’s vehicles.
Each Aadhaar number will be unique to an Other details regarding initial / immediate
individual and will remain valid for life. reporting on the occurrence of Loss; Submission of
System is now enabled to enter Unique Claim Forms; Claim for the Loss incurred;
Identification Number (Aadhar Number) while Insurance cover for Bank’s vehicle etc. are also
creating / amending CIF in CBS. Hence, Branches given in the circular.
should capture the Aadhar number wherever it is ADMIN.37/2011-12 dt.25.07.2011
available without fail. Detection of Counterfeit Banknotes – Revised
GENL.44/2011-12 dt.13.09.2011 Procedure
ADMIN In order to ensure that all cases of detection of
Comprehensive Centralised Insurance Policy for counterfeit notes at the bank branches / treasuries
'Safe, Furniture & Machinery (SFM); Books, Forms, are promptly reported to the police authorities, RBI
Stationery & Electronic Equipments' kept at Bank's has revised the procedure to be followed by the
premises all over India Bank on detection of counterfeit notes as follows:
The Comprehensive Centralised Insurance 1. For cases of detection of counterfeit notes
Policy has been taken at Head Office for the Safe, upto 4 pieces, in a single transaction, a
Furniture & Machinery (SFM), Books, Forms, consolidated report as per the format
Stationery & Electronic Equipments kept at Bank’s prescribed (annexed to this circular) should
premises all over India for the period 01.07.2011 to be sent to the police authorities at the end of
30.06.2012 with UNITED INDIA INSURANCE the month.
COMPANY LTD. BRANCH OFFICE NO.010503, 2. For cases of detection of counterfeit notes of
CHENNAI TEL: 044 – 25389795, 25384955. 5 or more pieces, in a single transaction,
The New Policy Numbers are: FIRs should be lodged with the Nodal Police
station / Police authorities as per jurisdiction,
SFM - 010503/11/11/11/00000080 in terms of RBI Master circular.
Books, Forms and Stationery items- 010503/
11/11/11/00000079 and Problems, if any, in implementation, may be
resolved in consultation with the Regional
Electronic Equipment items- 010503/44/11/ Director, RBI, of the State concerned.
58/30000004
Progress in the area of reporting should be
The scanned copies of the above policies discussed in the meetings of State level Banker’s
and 2010-11 policies are placed as Annexure to Committee, Standing Committee on Currency
this circular, for the benefit of Branches / Offices. Management and State Level Security Committee
Branches/Offices should mention the held in various states.
above number whenever claims are reported to the ADMIN.39/2011-12 dt.03.08.2011
above company during the period 01.07.2011 to
30.06.2012.
The Policies cover all the existing SFM,
Books, Forms, Stationery and Electronic
Equipments (including computer related items and Though due care has been taken in the preparation of
all ATMs) and accessories as well as all purchases Recollect, the version given in the circular is final.
made on or after 01.04.2011. Hence all the
Branches / Offices must ensure that all Compiled by HO: O&M Division
purchases/disposal made by them every quarter is
duly reported to HO (from time to time).
1414
 Volume 25 Issue 2
a
For Private Circulation Only

July – September 2012 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
“Branches before acting on the gist are advised to go through the full text of the circulars”
CONTENTS OF THIS ISSUE Pg
C.No. Date Subject
No
Employees
Pg 63 16.08.12 Bonus to Staff for the Year
C.No. Date Subject 8
No 01.04.2011 TO 31.03.2012
DEP 13.08.12 Discontinuance of Issue of “Gift 65 25.08.12 Group Personal Accident Insurance
2
07 Cheque” under Remittance Module Policy for all our Staff Members 8
08 24.08.12 Introduction of New Savings Bank Under Staff Welfare Scheme
2
Account Opening Form for individual CRA 16.08.12 Fee collection under Multi Utility
11 06.09.12 Premature Repayment of Term 73 Payment module for Department of
2 9
Deposits Technical Education (DOTE),
15 29.09.12 Opening of Basic Savings Bank Chennai
2
Deposit Account 77 25.08.12 Tax Deducted at Source (TDS) -
ADV 03.07.12 Issues relating to Margin Money Centralisation of TDS for payment of 9
3 Pensions at CPPC
44 Subsidy under PMEGP Scheme
46 09.07.12 Personal Segment Loans to 78 06.09.12 Standardisation and Enhancement of
employees of BSNL – Renewal of 4 Security Features in Cheque Forms - 9
Special Package Migrating to CTS-2010 standards
48 17.07.12 Amendments in existing IBA Model 86 26.09.12 Launch of Prepaid Gift Card (INR) &
Educational Loan Scheme for International Prepaid Travel Card (in 9
4 USD)
pursuing higher studies in India and
abroad FX 20.07.12 Revised RBI guidelines on Interest
50 25.07.12 Ind Mortgage Scheme–modified norms 5 12 Rates applicable on Staff Deposit 10
51 26.07.12 IB Pension Loan Scheme- accounts under NRO, NRE and
5 FCNR(B)
Modification
52 26.07.12 Reverse Mortgage Loan Scheme- 16 17.08.12 Restrictions on receipt of foreign
5 contributions under FCRA [Foreign 10
Amendment
Contribution (Regulation) Act], 2010
53 02.08.12 IB Rent Encash Scheme – Ready
5 17 17.08.12 Processing of Western Union
Reckoner
Payment Transactions – Revised 10
61 31.08.12 Enhancement of advance rate per
5 procedure
gram of Jewels
18 25.08.12 Elimination of Service Tax on foreign
63 03.09.12 Modifications in IBA Model Loan
currency conversion transactions 10
Scheme for Vocational Education and 6
w.e.f 25 08 2012.
Training
21 04.09.12 Renewal of Export Credit Insurance
65 12.09.12 Financing Self Help Groups- Revised
6 for Banks - WT-PC and WT-PS by 10
Guidelines 2012
ECGC
67 17.09.12 Compulsory Coverage of Crop loans
GENL 28.07.12 De-duplication of CIF Numbers in
including Agricultural Jewel Loan 6 11
39 CBS
under Crop Insurance Scheme
68 18.09.12 Inclusion of business / trading 42 01.08.12 Payment of Tamilnadu Electricity
activities under PMEGP for availing 7 Board (TNEB) Bill through Mobile 11
assistance. SMS
69 24.09.12 Memorandum of Legal and other 43 Payment of Compensation for
7 06.08.12 11
Expenses in NPA Recovery delayed collection of instruments
71 27.09.12 Launching of online submission of 44 06.08.12 Importance of attending E-mails and
11
MSME application - facility for 8 online complaints promptly
customers 50 24.08.12 Compensation for delay in clearance
11
HRM 04.07.12 Reimbursement of Outfit and Dress of Local Cheques
8 52 01.09.12 Implementation of Automatic Data
46 Maintenance Expenses to Officers. 11
Flow from Banks to RBI
47 04.07.12 Reimbursement of Fuel Expenses to
8 ADMIN 29.08.12 Comprehensive Centralised Insurance
Award Staff Employees
49 Policy for SFM, BFS & EE kept at 12
55 25.07.12 Concession and Benefits offered by
8 Bank's premises all over India
Apollo Pharmacy to Indian Bank
 Recollect
DEPOSITS capacity as ‘Agent’ and due diligence on KYC
and AML compliance have to be taken care by
Discontinuance of Issue of “Gift Cheque” under the Branch officials meticulously while opening
Remittance Module the account based on the Account Opening
forms.
The issue of “Gift Cheque” is discontinued with
immediate effect, as the demand for “Gift Cheque” has ¾ For Small Accounts and other Savings Bank
receded over the years. However the system will allow accounts, opened by branches, the signature of
the branches to make payment for the Gift Cheques Business Correspondents/Facilitator need not be
already issued. Branches should destroy the existing obtained at present.
stock of unused blank Gift Cheque leaves available with The existing CIF and Account opening forms
them as per the extant guidelines. Branches should continued to be used for opening Current Accounts and
ensure that the Gift Cheque BGL is reconciled.
Term Deposit Accounts as per the extant guidelines.
Dep.07/2012-13 dt.13.08.2012
Dep.08/2012-13 dt.24.08.2012
Introduction of New Savings Bank Account Opening
Premature Repayment of Term Deposits
Form for individual
Branches shall allow premature withdrawal
To facilitate opening of bank accounts by migrant
of term deposits by the surviving depositor without
labour, street hawkers, and other poorer sections of the
seeking the concurrence of the legal heirs of the
society so as to achieve the stated objective of universal
deceased joint deposit holder, provided the mandate
financial inclusion, a sub-Group of senior officers of has been obtained from the joint deposit holders
some select Public Sector Banks (PSBs) was formed by either at the time of placing fixed deposit or anytime
IBA, to suggest a simplified uniform Savings Bank subsequently during the term/tenure of the deposit.
account opening form to be introduced across all PSBs.
Branches can refer this circular for the
The IBA and the Ministry of Finance have
procedures for closure/foreclosure of Term Deposits
finalized the “Simplified Uniform Savings Bank Account
which have been reiterated.
Opening Form” for the use of all the PSBs. They further
suggested a list of KYC documents which can be used Dep.11/2012-13 dt.06.09.2012
for opening of Bank account by individuals.
Opening of Basic Savings Bank Deposit Account
The account opening forms can be used as
follows: The existing SB-VIKAS KHATA Product 2247-
1101 has been renamed as: BASIC SAVINGS BANK
¾ For Small/FI/No-frill accounts, the Account
Deposit account – 2247-1101 with effect from
Opening Form, suggested by MoF and IBA, is
01.10.2012.
to be used in addition to the Nomination Form
(DA1) and list of KYC Documents with Form The salient features of Basic Savings Bank
60 and 61 which will be stapled together for Deposit account are given below:
Branch use. For Joint accounts, the ¾ Initial deposit and Minimum balance – NIL
supplementary form for additional applicant
may be used. No separate CIF Application is to ¾ Mode of withdrawals - By way of withdrawal slips
be obtained from the customer. only accompanied by pass book.

¾ For other Savings Bank accounts of individuals, ¾ There is no limit on the number of deposits that can
the Branches have to take Additional be made in a month. Account holders will be
Information Form (for full KYC compliance) in allowed a maximum of 4 withdrawals in a month
addition to the above mentioned stapled including ATM withdrawals. Transaction charges
Account Opening Form under item No.(i). For of Rs.6/- will be levied for each transaction
Joint accounts, the supplementary form for (withdrawals) beyond 4 withdrawals in a month.
additional applicant may be used in addition to ¾ The services available in the account will include
the KYC Documents with Form 60 & 61. Other deposit and withdrawal of cash at Branches as well
than the above, no separate CIF Application is as ATMs (charges as applicable for normal savings
to be obtained from the customer. bank accounts). Receipt / Credit of money through
¾ In the account opening form, the signature of electronic payment channels or by means of deposit
Business Correspondence/Facilitator may be / collection of cheques drawn by Central / State
obtained for FI/No-Frill Accounts, in the Government Agencies and Departments. No
2 2
 JULY-SEPT 2012
charges will be levied for non operation / a)If the working capital availment does
activation of inoperative basic savings bank not touch 100% of the sanctioned cash
deposit account. credit limit atleast once, or if the
average working capital availment is
¾ If the account is opened on the basis of simplified
below 75%, proportionate amount of
KYC norms (Circular Genl.28/2005-06 margin money subsidy should be
dt.23.09.2005) then these accounts would be recovered by the Bank and refunded to
additionally be treated as small account and subject KVIC at the end of three years from
to conditions stipulated for such accounts as the date of disbursement of the loan
described vide circular Dep.39/2011-12 dated (that is, term loan) or date of ending of
05.03.2012. lock-in period, whatever is earlier.
¾ One DD/BPO shall be issued free of commission to b) Thus in all other cases the special
meet their payment to third parties. provision of giving subsidy on an
amount higher than the average daily
¾ ATM cards shall be issued to the account holders of working capital availment is not
basic savings bank deposit account. provided. In all such cases the margin
¾ Holders of Basic Savings Bank deposit account will money subsidy has to be computed as
not be eligible for opening of any other savings the admissible percentage of the
bank deposit account with us. If a customer has any average daily working capital
other existing savings bank deposit account with us, availment
he/she will be required to close it within 30 days 2. Computation of average working capital
from the date of opening a Basic Savings Bank availment
Deposit account. For availing the value added The average working capital availment
services offered to other SB accounts, the account should be calculated on the basis of daily
holders of this scheme have to fulfill full KYC average of the actually availed cash credit limit.
procedures and minimum balance requirements as 3. Period for calculating average working capital
applicable to such SB customers. availment (para.11-1(ii) (m) of the guidelines
DEP.15/2012-13 dt. 29.09.2012 refers)
The average working capital availment
ADVANCES should be calculated over a period beginning
Issues relating to Margin Money Subsidy under PMEGP with the first drawal of cash credit and ending
Scheme on the completion of the three year period from
While adjusting the Margin Money subsidy the date of the first disbursement of the loan
in respect of accounts financed under PMEGP (that is, term loan) or date of ending of lock-in
scheme, Branches shall adhere to the following period, whichever is earlier.
guidelines:
4. Adjustment of Margin Money subsidy on
1. Computation of admissible margin money Working Capital
subsidy on Working Capital / Sanctioned Cash Adjustment of margin money subsidy on
Credit limit (refer para 8.4 of the guidelines of Working Capital, that, is refund of the margin
PMEGP) money subsidy on the difference between
i) If the working capital availment touches subsidy on the sanctioned cash credit limit and
100% of the sanctioned cash credit limit at the subsidy on the admissible limit, should be
least once, and the average working capital undertaken at the end of three year period from
availment is at least 75%, then the margin the date of first disbursal of the loan or date of
money subsidy would be calculated on ending of lock-in period whichever is earlier.
100% of the sanctioned cash credit limit. 5. Adjustment of margin money subsidy on term
The obvious rationale is that the average loan (para 8.3 of guidelines refers)
availment should fall within a band between
a. Adjustment of margin money subsidy on
75% and 100 % for the subsidy to be
term loan, that is, refund of the margin
calculated on 100% of the cash credit limit.
money subsidy on the difference between
ii) For all other cases, the provision would be the sanctioned term loan and the actually
as follows: availed term loan (where the latter is less
than the former) should be undertaken

3
 Recollect
immediately after the disbursement of the one year ie. upto 26.05.2013. In the case of Salary
last installment of the loan. Loans irrespective of the Scale of the Branch
b. It should preferably be adjusted after Manager, he/she can exercise power to sanction up
physical verification. However, absence to the maximum amount of Rs.5.00 lakhs without
of / delay in physical verification should referring to the respective Zonal Office.
not impede / delay the adjustment / The product-wise details of concessions agreed
recovery of the excess margin money upon are given in Annexure of this circular. All
subsidy. other existing norms shall remain unchanged.
6. Issue of interest on margin money subsidy ADV.46/2012-13 Dt.09.07.2012
a. Bankers have to take into consideration the
total margin money subsidy (in lieu of both Amendments in existing IBA Model Educational Loan
Scheme for pursuing higher studies in India and abroad
term loan and working capital) and reduce
this figure from the term loan for the Some of the modifications introduced with
purpose of charging interest to the regard to processing of educational loan
borrower-entrepreneur on the term loan. applications from the student borrowers are given
(That is, the benefit of the total subsidy below:
lying with the bank has to be with the ƒ Admissions under Management Quota for all
borrower). courses including nursing courses are kept
b. Banks can charge interest only on that part outside the scope of the IBA Model
of loan which exceeds the margin money Educational Loan Scheme for pursuing higher
subsidy / TDR amount. The first instalment studies in India and abroad.
released by bankers should be at least equal
to or more than the margin money subsidy / ƒ While computing loan amount, Scholarship /
TDR amount. fee waiver, if any, available to the student
would be taken into account. Scholarship /
c. If the first instalment is less than the margin assistantship is to be included in margin.
money subsidy / TDR amount, Banks have Also margin may be brought-in on year-to-
to pay interest to KVIC (the nodal agency, year basis as and when disbursements are
which have provided funds) on the
made on a pro-rata basis.
difference (till such time the loan amount
becomes equal to or exceeds the margin ƒ In case of Part-time courses, research work
money subsidy / TDR amount). and job oriented specialized programs, loan
d. The rate at which (a) interest is paid to can be considered on merit and placement
KVIC on the funds lying with the nodal records of the institution, on a case to case
branches and (b) interest is paid to KVIC on basis by the Zonal Level Credit Committee
the difference between the margin money taking in to account the existing income
subsidy / TDR amount and first instalment sources of the applicant, placement / job
of the loan (in cases where the latter is less prospects after completion of the course etc.
than the former) should be firmed-up and ƒ If the student is not able to complete the
settled by KVIC with the banks. course within the scheduled time, extension
e. Interest on the excess margin money of time for completion of course may be
subsidy over and above the actual permitted for a maximum period of 2 yers. If
entitlement should be given by the Banks to the student is not able to complete the course
KVIC by recovering from the beneficiary. for reasons beyond his control, sanctioning
The rate of interest should be the same at authority may at his discretion consider such
which the loans have been sanctioned to the extensions as may be deemed necessary to
beneficiaries. complete the course. In case the student
ADV.44/2012-13 Dt.03.07.2012 discontinues the course midway, appropriate
repayment schedule is to be worked out in
Personal Segment Loans to employees of BSNL – Renewal consultation with the student/parent.
of Special Package
Branches shall refer this circular for other
All our Branches in India are authorized to
modifications.
sanction PSLP loans to the employees of BSNL up
to their delegated powers. This scheme is valid for ADV.48/2012-13 Dt.17.07.2012
4 4
 JULY-SEPT 2012
Ind Mortgage Scheme – modified norms house/flat to be located in India. India. However, inherited
residential property if it is
Consolidation of all the modifications issued
devolved on partition or owing to
on the “IND Mortgage” scheme has been updated being the sole legal heir also can
and a circular incorporating all the changes and be accepted provided the title of
amendments made to the product is issued vide this the property is free from any
circular. Branches shall refer this circular for any encumbrance.
clarifications on “IND Mortgage” scheme.
Any relaxation in norms of the scheme has to be
referred to Zonal Office / CO: PBD in the
prescribed Relaxation format with justification and If the inherited property is devolved on being
specific recommendations by the Branch / Zonal the sole legal heir the following documents are to be
Manager. obtained / verified:
ADV.50/2012-13 Dt.25.07.2012 ¾ Copy of death Certificate of the owner of
IB Pension Loan Scheme- Modification property/person in whose name the property
stands and the genuinity of the Death
The ceiling limit of IB Pension Loan has Certificate.
been increased as mentioned below:
¾ The legal heir of the deceased person will have
Existing Revised Terms to be ascertained.
10 times of monthly Pension with a 10 times of monthly Pension with a
maximum of Rs.1,00,000/- for maximum of Rs.3,00,000/- for All other terms and conditions of the
pensioners aged up to 70 yrs pensioners aged upto 70 yrs.
Scheme remain unchanged.
(a). Rs.60,000/- for pensioners (a) Rs.1, 50,000/- for pensioners
aged above 70 yrs & up to 75 aged above 70 yrs & up to 80 ADV.52/2012-13 Dt.26.07.2012
yrs. yrs #
(b). Rs.60,000/- for Family (b) Rs.1,00,000/- for Family IB Rent Encash Scheme – Ready Reckoner
pensioners aged up to 70 pensioners aged up to 70
years years $ Consolidation of all the modifications
# Apart from the guarantee of spouse eligible for family pension a third party issued on the “IB Rent Encash” scheme has been
guarantee from a person acceptable to the bank may be obtained.
updated and a circular incorporating all the changes
$ A third party guarantee from a person acceptable to the bank may be and amendments made to the product is issued vide
obtained.
this circular. Branches shall refer this circular for
Sanctioning powers for the revised ceiling any clarifications on “IB Rent Encash” scheme.
of Rs.3 lakhs is bestowed with the Branch Manager
irrespective of the Scale of the Officer. ADV.53/2012-13 Dt.02.08.2012

All other terms and conditions of IB Enhancement of advance rate per gram of Jewels
Pension Loan Scheme including repayment period Taking into consideration the increasing
remain unchanged. trend of gold prices, upward revision of the advance
ADV.51/2012-13 Dt.26.07.2012 rate per gram of Jewels has been permitted w.e.f
01.09.2012 as follows:
Reverse Mortgage Loan Scheme- Amendment
Æ Rs. 2050/- per gram (presently Rs.1750/-
Acceptance of inherited property also as per gram) or 70% of the market rate
security for sanctioning of Reverse Mortgage Loan whichever is lower for 22 carat fineness.
(RML) has been introduced and accordingly the
condition covering the acceptance of security for Æ Rs. 2100/- per gram (presently Rs.1800/-
RML Scheme is revised as under: per gram) or 70% of the market value
Existing guideline Revised Terms whichever is lower for Hall Mark Jewels of
The Senior Citizen could be The senior citizen should be the
22 carat fineness/ gold coins of 24 carat
owner of self acquired owner of a self acquired
fineness.
residential property with residential property with Branches have to ensure the following guidelines:
absolute, clear title/ absolute, clear title/conveyance
• Each branch to ensure that lending per gram
conveyance and self occupied and self occupied and it should
rate at any particular point of time does not
and it should be the principal be the principal residential
residential property. The property. The property should
exceed 70% of the market value.
property should be free from be free from encumbrance and • Branches should ensure fineness and purity
encumbrance and the the house/flat to be located in of jewels pledged.

5
 Recollect
• The revised advance rate may be displayed 6. Specific operational area with maximum
prominently along with rate of interest, as a operational jurisdiction of 25 kms from the
measure to promote jewel loan business and branch is stipulated.
also adequate publicity of the increased 7. Phasing of credit disbursement from the Bank
advance rates to be made. in such a way that not more than 50% of the
• Branches to initiate further steps to achieve SHG members take loan at a given time is being
substantial growth under Non Priority Jewel insisted in compliance with GoI directions.
loan.
8. Major portion of the first dose of loan is
ADV.61/2012-13 Dt.31.08.2012
permitted to be utilized for consumption
Modifications in IBA Model Loan Scheme for Vocational purpose and repayment of existing external
Education and Training debts based on actual need. From the second
dose onwards at least 75% of the loan should be
Modified Guidelines pertaining to IBA
used for income generating activities.
Model Loan Scheme for Vocational Education and
Training with regard Repayment of the Loan is as 9. Loans can be sanctioned as Cash Credit Facility
under: only except for (1) Govt. sponsored schemes
The loan has to be repaid, after the which have back ended subsidy (2) Wherein the
moratorium period in Equated Monthly Instalments SHG undertake a group activity, where term
as indicated below: loans can be granted.
Loans up to Rs.50000/- Up to 2 years 10. The quantum of loan is fixed at 4, 8, 10 times of
Loans between Rs.50,000/- to Rs.1 lakh 2 to 5 years corpus of the group for the first, second and
Loans above Rs.1 lakh 3 to 7 years third linkage respectively. Minimum period of
ADV.63/2012-13 Dt.03.09.2012 12 months between every dose is stipulated.
Maximum quantum of loan for first, second,
Financing Self Help Groups- Revised Guidelines 2012 third, fourth and fifth linkage without collateral
Revised guidelines on financing Self Help security is stipulated as Rs.1 lakh, Rs.3 lakhs,
Groups are given as Annexure to this circular. Rs.5 lakhs, Rs.7.50 lakhs and Rs.10 lakhs
respectively. For limits beyond Rs.5 lakhs
Some of the vital / key area of the revised
sanctioning power is vested with the ZLCC.
guidelines on financing to Self Help Groups is:
1. Two stage rating regimen has been introduced Branches shall refer the circular for detailed
to ensure only quality assets are acquired by guidelines.
branches, one for the sponsoring NGOs and the ADV.65/2012-13 Dt.12.09.2012
other for rating the SHGs. Compulsory Coverage of Crop loans including Agricultural
Jewel Loan under Crop Insurance Scheme
2. NGO Rating: Rating parameter for the selection
of NGOs/Voluntary Agencies (VAs) /Self Help Jewel loans (given for agricultural purpose
Promoting Institutions (SHPIs) have been and which are sanctioned at 7% rate of interest and
introduced, for assessment of Interest subvention is claimed from Reserve Bank
NGOs/VAs/SHPIs who sponsor the SHGs for of India) should also be covered under Crop
the purpose of entertaining them as facilitators Insurance Scheme.
for lending. The crop insurance premia are highly
3. As per the rating matrix, SHGs formed by “A” subsidized by the Government and are beneficial to
rated NGOs, are only permitted to open SB the farmers as well as Banks, as a risk mitigation
account with the branch. mechanism. Branches are advised to ensure 100%
coverage of all eligible crop loans including
4. Dual rating system for new and matured groups Agricultural Jewel loans under crop insurance
is stipulated. Entry level scoring has also been scheme.
raised from 50% to 75% and above. Non coverage under crop insurance scheme
5. Auditing of the books of account of the SHGs the farmer will be forced to forego interest
has been made compulsory from second credit subvention and have to classify the entire Agri
linkage onwards. Jewel Loans as non priority sector advances..
ADV. 67/2012-13 Dt.17.09.2012

6 6
 JULY-SEPT 2012
Inclusion of business / trading activities under Prime process of recovery of the dues. Central
Minister's Employment Generation Programme (PMEGP) Statutory Auditors have raised serious
for availing assistance objections to such debits being made to NPA
Guidelines for inclusion of business/trading accounts.
activities for availing assistance under Prime 2. Expenses incurred subsequent to classification
Minister’s Employment Generation Programme of a borrowal account as NPA are:
(PMEGP) are as follows:
i. Legal Expenses – Advocate’s Fees
i. Business / trading activities in the form of (attracting TDS) [Paid by ZO to the debit of
sales outlets may be permitted in NER, a/c “Legal Expenses – Advances” (BGL
LWE-affected districts and A&N Islands. 98047)]
The LWE (Left Wing Extremists) affected
districts, the extant classification on MHA ii. Court related expenses such as filing fees /
(Ministry of Home Affairs) may be charges, eviction expenses, EC fees, etc.,
adopted. Names of 83 districts under the relating to recovery of advances (not
SRE scheme are enclosed in Annexure II of attracting TDS). [Paid by branches to the
this circular. debit of a/c: “Court / Statutory Fees /
Charges relating to Legal Proceedings”
ii. Retail outlets backed by manufacturing (BGL 88047)].
(including processing) / service facilities
may be permitted (across the country). iii. Various Other Charges (not attracting TDS)
like (a) Inspection Charges, (b) Valuation
iii. The maximum cost of the project for Charges, (c) Premium paid for insuring
business / trading activities as above {(i) assets charged to the Bank, etc. [paid by
and ii)} may be Rs.10 lakh (at par with the branches to the debit of a/c: “Charges for
maximum project cost for service sector.) Other Expenses – Advances” (BGL
iv. Maximum 10% of the Margin Money 96175)].
allocation in a year in a state may be used 3. However, where the Bank has to defend our
for business / trading activities as above case against SARFAESI Appeal, if any filed by
{(i), (ii) and (iii)}. the borrower or other parties, the Advocate’s
v. The products sold from these sales Fees and Court Expenses etc. are to be dealt as
outlets/retail centers may not fall in the given in (i) and (ii) above.
negative list of PMEGP.
4. Amount paid towards Stamps, (if any claimed
vi. It may be ensured that the trading/business by the advocate in their bills alongwith his
units should not exceed 10% of the Advocate’s Fees), should be paid to the debit of
financial allocation of the Margin Money BGL 88047 and not to the “Legal Expenses-
allocated for the year to the State including Advances BGL 98047”.
the targets of KVIC, KVIB and DIC.
Margin Money targets for trading/business 5. All the above expenses are incurred by the Bank
activities Statewise and implementing in the process of recovery of our dues from the
agencies wise for 2012-13 is detailed as borrower/s. Hence, they should be recovered
Annexure to this circular. from out of the sale proceeds of assets charged
or from the borrower at the time of recovery /
Branches shall refer this circular for further settlement with him. For ensuring this, proper
guidelines. records should be maintained at the branch.
ADV.68/2012-13 Dt.18.09.2012
6. All such other expenses so incurred should also
Memorandum of Legal and Other Expenses in NPA
be recorded individually in a separate
Recovery
Memorandum Account for each borrowal
With regard to the issue of charging and account as is being done for legal expenses /
accounting of Service Tax, it is further clarified as court related expenses.
follows: Branches shall refer this circular for
1. Once a borrowal account is classified as NPA, detailed guidelines in order to have proper recording
no further debit of any nature is to be allowed in of all the recovery expenses on Memorandum basis.
the account whether towards debiting of interest ADV.69/2012-13 Dt.24.09.2012
or towards meeting expenses incurred in the

7
 Recollect
Launching of online submission of MSME application - Salient features of the scheme are given
facility for customers below:
Bank has launched to facilitate our Bank 1) All Award Staff Members including
customers (existing and potential) to submit their PTS/FTS are eligible for reimbursement of
application online through our Bank’s website and Fuel expenses with a cap for 5 litres of
also to track their application. petrol subject to a ceiling of Rs.375/- per
month.
Branches shall refer this circular for the
procedure and operational guidelines involved in 2) Award Staff who is on leave during the
online MSME application and its tracking. whole month will not be eligible for the
same.
The Simplified Common Application form
is made available at our Bank’s website at MSME Branches shall refer this circular for Operational
link namely http://indianbank.in/msme.php. Procedure.
Customers have to enter the requisite particulars in HRM.47/2012-13 Dt.04.07.2012
that prescribed application.
Concession and Benefits offered by Apollo Pharmacy to
Branch / Zonal Office / Corporate level Indian Bank Employees
reports are available to check the present status,
reference number etc. at URL Apollo Pharmacy, a part of Apollo
Hospitals is offering the following benefits
http://10.141.7.89:5502/msme_wan.
exclusively for Indian Bank employees who
ADV.71/2012-13 Dt.27.09.2012 purchase medicines from them:
• 10% discount on medicines purchased.
HRM
• 5% discount on FMCG products like Boost,
Reimbursement of Outfit and Dress Maintenance Expenses Horlicks, Baby Soaps, etc.
to Officers • 15% discount on Apollo Pharmacy private
A New Welfare Scheme named label products ranging from skin care to
“Reimbursement of Outfit and Dress Maintenance cosmetics (over 150+ products)
Expenses” has been introduced to all officers. The
scheme comes into effect from 04.06.2012. Our employees have to produce the ID Card
issued by the Bank while availing the facility. They
Salient features of the scheme are given below. have further informed that the discount will be
• Officers may claim reimbursement of the offered directly in the bill itself (only on cash and
expenses incurred by them towards carry basis and no minimum purchase). The
Outfit/Dress Maintenance during the month purchases can be made at all branches of Apollo
supported by a declaration. The claim Pharmacy across India except those pharmacies
made by the officers would be reimbursed attached to the Apollo Hospitals.
subject to a maximum of Rs.375/- per HRM.55/2012-13 Dt.25.07.2012
month.
Bonus to Staff for the Year 01.04.2011 tO 31.03.2012
• All Officers including those on probation Bonus for the year 2011-2012 shall be paid to
are eligible to claim reimbursement. all eligible Employees of our Bank in India at 8.33% of
• Officers who are on leave for one full eligible Emoluments paid from 01.04.2011 to
calendar month will not be eligible to claim 31.03.2012 subject to a maximum of Rs.3,500/- per
the same for that month. Employee. Branches / Offices shall follow the guidelines
given in the Annexure to this circular, for ascertaining
Branches shall refer this circular for Operational the eligibility and for calculation of Bonus Amount.
Procedure.
HRM.63/2012-13 dt.16.08.2012
HRM.46/2012-13 dt.04.07.2012
Group Personal Accident Insurance Policy for all our Staff
Reimbursement of Fuel Expenses to Award Staff Members under Staff Welfare Scheme
Employees
A New Welfare Scheme to Award Staff A new policy under ‘Group Personal Accident
Insurance Policy” with THE UNITED INDIA
Employees towards Reimbursement of Fuel
INSURANCE COMPANY LTD. has been taken w.e.f.
Expenses has been introduced. The scheme comes 02.08.2012 and the policy No. is
into effect from 04.06.2012.
GPA POLICY NO: 010500/42/12/05/00000007
8 8
 JULY-SEPT 2012
The Salient Features of the new Policy remain • To update the details received from the pensioners
unchanged with that of the previous year’s policy. in the pension site “Income Tax Savings /
Projection” on or before 18th September 2012.
The full address of The United India Insurance
Co. Ltd., to whom requests for claim forms and all claim • To collect the documentary proof of the savings
related correspondences should be addressed, is as made by the pensioners as per “proposed savings”
follows: from the pensioners.
The United India Insurance Company Ltd, • To report CPPC through a certificate to the effect
Divisional Office – 010500, No.64, Armenian Street, that documentary proof of savings made by the
Catholic Centre, Chennai – 600 001. Telephone No 044- pensioners have been verified, along with the
25389793, 25389794. copy of the documents / receipts etc.
The procedure to be adopted in reporting the • To report CPPC of any TDS already made at
claims, documents to be enclosed with the claim forms branch level and remitted to Government and also
are given in the annexure to this circular. quarterly return filed so far. The branches should
not accept form 15H/15G from the pensioners.
HRM.65/2012-13 dt.25.08.2012
TDS will be deducted by CPPC based on the
CRA information given by the branches through CPP Software
and the same will be remitted to the Government by
Fee collection under Multi Utility Payment module for CPPC. CPPC will file e-TDS returns within stipulated
Department of Technical Education (DOTE), Chennai due dates. Any TDS from pension / arrears will be
The account No.6053094846 (MUP Utility code deducted only with the prior approval of CPPC.
– 0055DOT1) under Multi Utility Payment module have CRA.77/2012-13 Dt.25.08.2012
been opened with DOTE campus branch for collection of
Fees from the students across the counter and through Standardisation and Enhancement of Security Features in
Indian Bank Internet Banking. Cheque Forms - Migrating to CTS-2010 standards
A separate link is provided in our web site
(www.indianbank.in) under Links -> Other Links -> RBI has advised all the banks to adhere to the
Department of Technical Education (DOTE) Multi following:
Utility Payment. Students have to visit the Indian Bank i) Arrange to issue only multi-city / payable at par
web site, enter the details and generate the MUP CTS-2010 standard cheques by 30.09.2012.
reference number following the guidelines given in this
circular. ii) Arrange to withdraw the non-CTS-2010 standard
cheques in circulation before 31.12.2012 by
CRA.73/2012-13 dt.16.08.2012 creating awareness among customers through
SMS alerts, letters, display boards in branches /
Tax Deducted at Source (TDS) - Centralisation of TDS for ATMs, log-on message in internet banking,
payment of Pensions at CPPC notification on the web-site etc. Progress in this
TDS Administration is centralised at Centralised regard is to be submitted to RBI by 30.11.2012.
Pension Processing Centre (CPPC) for payment of iii) Arrange to replace the post dated non-CTS-2010
pensions to Government Pensioners and branches have to standard EMI cheques with CTS-2010 standard
furnish the details of investments / savings etc. as per the cheques before 31.12.2012.
requirement of CO: CPPC.
In view of the above, all the branches should issue
Pension paying branches - only CTS-2010 standard cheques to the customers and
• To collect the PAN from pensioners coming arrange to withdraw / replace the existing non-CTS-2010
under Income Tax bracket and update the same in standard cheques immediately from the customers.
the pension master / CPP Software. CRA.78/2012-13 Dt.06.09.2012
• To update the savings details to enable CPPC to
allow deductions and to deduct tax on monthly Launch of Prepaid Gift Card (INR) & International Prepaid
basis from the pension payable to the pensioners. Travel Card (in USD)

• To display a Notice in the Banking Hall Two new customer-friendly products under
informing the Pensioners that TDS on pension Master Card Brand viz., Prepaid Gift Card (in INR) &
will be done by CPPC centrally. International Prepaid Travel card (in USD) have been
launched as a replacement to the traditional paper based
• To send notice to all eligible pensioners, product.
requesting them to submit the “Proposed Savings”
in the given format on or before 15th September The Prepaid Gift Card (in INR) has been
2012. introduced with the objective of gifting to any one, with
value ranging from Rs.1000/- to Rs.50000/- with a

9
 Recollect
validity period of one year from the date of issuance, Processing of Western Union Payment Transactions –
with no cross-border usage. The card is not reloadable. Revised procedure
The card can be used in Point of Sale (POS)/e-commerce The revised procedure for making payment of
portal for purchase of goods/services. Every time the Gift Western Union remittance transactions in case of our
Card is used, the purchase amount is deducted account holders is given below:
automatically from the card balance. Once this amount is
spent completely, the recipient can either dispose of the Steps to be carried out at paying branch level:
card or retain it as a keepsake or memento. ¾ When a beneficiary approaches the branch,
The issue of Gift Card is subject to submission of KYC/AML compliance to be ensured and related
KYC documents by the applicant along with the documents to be obtained.
application, if the purchaser is not our existing KYC ¾ Duly filled in “Receive Money Form” to be
compliant. The procedure for issuance of Prepaid Gift submitted by the customer.
Card (in INR) is given in Annexure I A of this circular.
¾ After satisfying itself as to the genuineness of the
Prepaid International Travel Card (in USD) transaction, Branch has to enter all the details of the
another product introduced, which can be used while in transaction in the appropriate fields in the “CBS
abroad in ATM / POS / e-Commerce, with a validity Help Desk templates” under “Western Union”.
period of 3 years from the date of issuance, with a
minimum initial load of $200 and with varying maximum ¾ In case the beneficiary is our account holder, the
limit (as per FEMA guidelines) depending upon the type account number to which the amount has to be
of travel undertaken abroad. Presently Prepaid Travel credited must be mentioned in the template in the
cards are issued with an issuance fee of Rs.150/- plus field “Beneficiary account number” other wise the
applicable tax. number “0” has to be entered i.e. for cash payments.
The Prepaid Travel Card will be available both to Role of the nodal branch:
customers and non-customers through any of our forex ¾ Treasury branch will access the website of Western
authorised branches which can issue the travel card Union and lock the reference numbers submitted to
through FOREX remittance menu. The card issue is them by the branches through the templates, after
subject to submission of KYC documents/FEMA cross checking the said details with those available
guidelines by the applicant along with the application. in the web site.
Within India, balance enquiry alone is possible through ¾ After locking as above, the remittance amount will
Indian Bank ATMs only. The procedure for issue of be directly credited to the accounts of the
International Prepaid Travel Card (in USD) is given in beneficiaries through CBS by the nodal branch itself.
Annexure 1 B of this circular.
¾ In case of cash payments the existing procedure will
CRA.86/2012-13 Dt.26.09.2012 be continued. i.e. after the status of the payment
request is displayed as “processed” in the Help Desk
FX template, branches can make payment through CBS
Revised RBI guidelines on Interest Rates applicable on – “Service Branch Menu – Dividend Warrant
Staff Deposit accounts under NRO, NRE and FCNR (B) option”.
Note: RBI has increased the maximum number of permitted inward
The benefit of additional interest rate of one remittance credits per beneficiary per calendar year under ‘MTSS’
percent per annum to bank’s own staff on deposits under scheme from 12 to 30 w.e.f. 08.06.2012.
NRE, NRO and FCNR (B) accounts stands withdrawn
FX.17/2012-13 Dt.17.08.2012
w.e.f 18.07.2012.
FX.12/2012-13 Dt.20.07.2012 Elimination of Service Tax on foreign currency conversion
transactions w.e.f 25 08 2012
Restrictions on receipt of foreign contributions under
FCRA [Foreign Contribution (Regulation) Act], 2010 Service tax on foreign currency conversion
transactions stands withdrawn, based on the latest
Any funds flow from a donor agency viz., Government of India Notification.
CORDAID to any NGO / Organisation except for Central
Government / State Government or Government bodies FX.18/2012-13 Dt.25.08.2012
should be effected only after obtaining clearance from Renewal of Export Credit Insurance for Banks - WT-PC and
Ministry of Home Affairs, Foreigners’ Division, FCRA WT-PS by ECGC
Wing.
These transactions are subject to AFI by RBI The ECIB Whole Turnover Packing Credit
and any violation attracts penal provisions as stipulated (WT-PC) and ECIB Whole Turnover Post-shipment
by RBI from time to time. Credit (WT-PS) Insurance policies have been renewed
for a further period of one year from 01.07.2012 to
FX.16/2012-13 Dt.17.08.2012
30.06.2013 with Export Credit Guarantee Corporation of
1010
 JULY-SEPT 2012
India Ltd. (ECGC). The salient features / terms and and MPIN are validated in our Mobile Banking Server
conditions / guidelines of the renewed ECIB (WT-PC) and the transaction will be processed.
and ECIB (WT-PS) insurance policies for the current GENL.42/2012-13 Dt.01.08.2012
year are given in this circular and for full operational
guidelines and details, Branches/Zonal offices shall refer Payment of Compensation for delayed collection of
instruments
ECIB-WTPC, WTPS Renewal Letter dated 10.08.2012,
ECIB Bond & Schedule dated 10.08.2012 and all The issuer bank is entitled to claim the
annexures enclosed to this circular. compensation paid by them to their customers, in the
case of ATM failed transactions, from the acquirer bank
FX.21/2012-13 Dt.04.09.2012 if the delay is attributed to the latter. A similar principle
may be adopted in the case of delayed collection of
GENL instruments also.
De-duplication of CIF Numbers in CBS GENL.43/2012-13 Dt. 06.08.2012

De-duplication means eliminating the Importance of attending E-mails and online complaints
duplicate/another CIF for the same customer. This will promptly
result in a Unique Customer identification code (UCIC). All the branches are given email ids like
As a first step Pan Number is taken as primary indicator. <branch>@indianbank.co.in and incoming emails can be
So, De-duplication can be done by linking the Accounts received through the Outlook Express. The procedure to
of the same customer and eliminating duplicate CIF with configure the Outlook Express is given in Intranet >
contacts > How to configure email id. Branches/offices
the same Pan Number.
should respond to their emails meticulously / instantly.
The points to be noted are:
Likewise, the system of “Online Customer
¾ INCOME TAX PAN Field in CBS Menu should Complaint Redressal” has been put in place which can be
be filled up with either “actual PAN Number” or accessed through the Help Desk > In House Applications
should be kept blank. > Online customer complaint redressal. All Branches/
¾ There should NOT be same PAN Number for Zones should promptly attend to the online customer
more than One CIF. complaints on a day to day basis.

¾ If same PAN Number is given for more than one GENL.44/2012-13 Dt.06.08.2012
account of the same person, then all the accounts Compensation for delay in clearance of Local Cheques
such CIF are to be linked to the Latest CIF in
which KYC compliance may be reasonably Branches shall manually compensate the
satisfactory. customers at savings bank interest rate for the
corresponding period of delay beyond the time frame
¾ After linking, the PAN number given in the old stipulated for Collection of Local Cheques/Instruments.
CIF need to be removed, retaining the latest CIF Branches shall refer Para No.7.1 of the Cheque
with KYC and PAN intact. Collection Policy for the year 2012-13.
¾ Branches should not enter any thing other than Since all terms and conditions applicable for
PAN Number. If any words are entered such as local clearing instruments will also apply to Speed
‘PAN APPLIED’, ‘PAN NUMBER’ etc. and in Clearing, branches should present cheques (drawn on any
case more than one account has such data, system outstation CBS branch of any Bank, which is a member
will pick those accounts as duplication. of the local MICR clearing house) through the local
¾ Branch should remove special characters and clearing system prevailing at the centre.
unwanted alphabets, numerals etc. in the PAN GENL.50/2012-13 Dt.24.08.2012
field, so that system reads exact PAN Number.
GENL.39/2012-13 Dt.28.07.2012 Implementation of Automatic Data Flow from Banks to RBI
The automation process of Flow of returns from
Payment of Tamilnadu Electricity Board (TNEB) Bill the Bank to RBI/Government of India, though a single
through Mobile SMS source ie. CO/ MIS Department, has commenced in April
2011 with the submission of action plan to RBI to
TNEB bill payment through SMS for Retail complete the automation by 31.3.2013. Progress is being
Customers has been launched by our Bank. To avail this reported to RBI periodically. To steer this project,
facility, our mobile banking customer has to register their Returns Governance Group (RGG) has been formed with
bank account number. The bank account number has to representations from key departments at Corporate
be linked to mobile number. Subsequent to the Office.
registration, the customer can pay the TNEB bill by
sending SMS with the necessary parameters viz., Service Branches must pay focused attention in entering
Connection No, Amount, and MPIN. The Mobile number correct and complete data in Core Banking System while

11
 Recollect
opening of fresh accounts and cleaning/correcting the The Policy covers all the existing SFM, Books
wrong data in the existing accounts. Branches should go Forms Stationery and Electronic Equipments (including
through the data gaps and update the required details, if computer related items and all ATMs) and accessories as
required by collecting the information from the well as all purchases made on or after 01/04/2012. Hence
customers. all the Branches / Offices must report to CO: TMD all
purchases / disposal made (from time to time) at their
The role of the Branches and Zonal Offices
end.
towards achieving the Automated Data Flow is given in
this circular. The risks covered are as per Standard Fire &
Special Perils Policy for SFM, Books Forms Stationery
GENL.52/2012-13 Dt.01.09.2012 and Electronic Equipment items Policy, including
terrorism and earthquake, with reinstatement value.
ADMIN On the occurrence of loss or on detection of any
Comprehensive Centralised Insurance Policy for SFM, BFS loss or any events / acts that are likely to cause a loss to
& EE kept at Bank's premises all over India the Bank notwithstanding the non-determination of the
magnitude, real nature and the extent of loss, at that point
The Comprehensive Centralised Insurance
of time should find a place in the report of loss. Branches
Policy has been taken for Safes, Furniture & Machinery
/ Offices should immediately report to the nearest Branch
(SFM), Books Forms Stationery (BFS) & Electronic
of United India Insurance Company Ltd., CO: Estate
Equipments (EE) kept at our Bank’s premises all over
Dept. and CO: TMD quoting our Centralised
India with UNITED INDIA INSURANCE COMPANY LTD.
Comprehensive Policy number.
CHENNAI 600 001- TEL: 044 – 25389795, 25384955.
Note: 1. This Policy does not cover Bank’s Vehicles.
POLICY DETAILS
2. Overseas Branches shall continue the existing
POLICY CERTIFICATE PERIOD OF system for insuring their assets.
RISKS
NUMBERS INSURANCE
COVERED ADMIN 49/2012-13 Dt.29.08.2012
01.07.2012 TO
SFM 010503/11/12/11/00000119
30.06.2013
Books Forms 01.07.2012 TO Though due care has been taken in the preparation of
010503/11/12/11/00000120
Stationery 30.06.2013 Recollect, the version given in the circular is final.
Electronic 02.07.2012 TO
010503/44/12/58/30000003
Equipments 01.07.2013
Compiled by CO: O&M Division
Branches/Offices should mention the above
number whenever claims are reported.

1212
 a Volume 21 Issue 3

For Private Circulation Only

October–December 2008 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”

CONTENTS OF THIS ISSUE 50 29.11.08 Standardisation of charges for 7

Cir No. Date Subject Pg. Transfer of Surplus Clearing
DEP 18.10.08 Compulsory quoting of PAN by 1 Funds
38 customers for specified Banking 51 15.12.08 Electronic payment of Direct 8
Transactions Taxes by Corporates and
39 20.10.08 Amendment to Manual of 2 Assessees -e-Payment of TDS
Instructions on Deposits - by our branches /Offices made
Obtention of Photographs Mandatory
41 28.10.08 Foreclosure of domestic term 2 HRM 01.11.08 Provision of Residential 8
deposits 74 Accommodation to Officers on
51 11.12.08 Introduction of new RD product 3 Lease Basis – Revision in Rental
for purchase of Gold Ceilings
ADV 13.10.08 Increase in margin requirements 3 82 02.12.08 Errors in Making & Passing / 9
105 for fresh Home loans & Authorising Transactions in the
guidelines relating to take over of CBS
Home Loans and RBI latest 83 03.12.08 Timely settlement of terminal 9
guidelines on Second Housing benefits
Loan 86 16.12.08 Canteen Subsidy to Staff 9
106 15.10.08 1) Ind-Smart Scheme and 2) OD 3 Members.
facility to Home Loan borrowers – 96 26.12.08 Promotion Policy for Officers 9
discontinuance FX 25.11.08 Payment of Demand Drafts 10
107 22.10.08 Internal control procedures for 3 26 drawn by Indian Bank, Singapore
Home Loans and other SLP's branch on branches in India
108 05.11.08 Policy on OTS for NPAs with 4 27 25.11.08 Credit to Non Resident (External) 10
book balance upto Rs.two lakhs Rupee Account – Clarification
109 05.11.08 Detailed Guidelines on Prime 4 GENL 15.10.08 Service Charges for (I) Electronic 10
Minister's Employment 38 payment products and (2)
Generation Programme Scheme Outstation Cheque Collection
110 05.11.08 Trade Related Entrepreneurship 4 43 29.11.08 Introduction of Relationship 11
Assistance and Development - Manager Module for Net Banking
Scheme for Economic ADM 31.10.08 Master Circular TDS under 11
Empowerment of Women. 58 Section 192 to 194J of the
118 10.11.08 Grameen Bhandaran Yojana – 5 Income-tax Act 1961, on various
Capital Investment Subsidy expenditure incurred by branches
Scheme for Construction/ 61 31.10.08 Issue of Rs.10 Denomination 11
Renovation/ Expansion of Rural Banknotes without Inset Letter -
Godown 69 24.11.08 Maintenance and Safe keeping of 12
127 18.11.08 Jewel Loan - Clubbing of 5 Vouchers in Branches
sanctioned limits advanced to a 73 19.12.08 Amendment - Detection & 12
borrower Impounding of Counterfeit Notes,
140 08.12.08 Revision of Interest Subvention 5 Issue of Receipt to tenderer.
from 2 % to 3 % on Short Term MD/ED 15.10.08 Appointment of Shri Anup Sankar 12
Credit to Farmers at concessional 10 Bhattacharya as Executive
ROI of 7 % p.a during 2008-09 Director of our Bank
143 17.12.08 Special Home Loan Scheme 5 DEPOSITS
148 19.12.08 Financial Support to Micro, Small 6
and Medium Enterprises Compulsory quoting of Permanent Account
154 29.12.08 Periodical valuation of Properties 7 Number (PAN) by customers for specified Banking
mortgaged to the Bank Transactions as required under IT Act, 1961
CRA 15.10.08 Centurion Bank of Punjab Ltd - 7
38 Exclusion from the second The banking transactions where the
schedule to the RBI Act,1934 Customers / Non-customers / Banking Public shall
39 16.10.08 Introduction of National Electronic 7 quote their PAN as specified under Section 139A
Clearing Service (NECS)
42 23.10.08 Renewal of AROGYA RAKSHA & 7
of the Income tax Act, read with under Rule 114B
HDFC Policies - Providing Policy of the Income tax Rules, 1962 are given below:
details in BBMIS web site
 Recollect
I. Quoting of PAN made mandatory under VII. Branch should ensure strict
Section 139A of the Income tax Act for certain compliance to the Income tax Provisions relating
transactions and accordingly CBDT inserted Rules to quoting of PAN.
114B, 114C and 114D in Income Tax Rules. For detailed guidelines refer this circular.
II. Responsibility of the Person entering (DEP. 38/2008-09 dated 18.10.2008)
into the specified Banking Transactions.
Amendment to Manual of Instructions on Deposits -
As per Rule 114B, every person shall
Obtention of Photographs
quote his permanent account number in all
documents pertaining to the following Banking Photographs should be obtained, at the
transactions. time of opening the accounts in the following
manner:
(a) A time deposit, exceeding fifty thousand
rupees– Rule 114B (c) Type of Account Photographs to be
obtained from
(b) Opening of an Account– Rule 114B (f) For Joint accounts All parties to the a/c

(c) Payment in cash for purchase of bank drafts or Partnership firms All partners
pay orders or banker’s cheques for an amount
aggregating to Rs.50,000/- (Rupees fifty Limited Companies All directors
thousand) or more during any one day – Rule
Clubs, Associations, Trustees, All members of Managing
114B (i) HUF Committee
(d) Deposit in cash aggregating Rs. 50,000/- (Rs.
For any waiver of the condition for
fifty thousand) or more, Rule 114B (j)
obtaining photographs from all the partners/
(e) Making an application for issue of credit cards directors / members etc., approval is to be
- Rule 114B (l). obtained from the respective Circle Heads.
However, in such cases the basic guidelines of
III. It is the responsibility of the officials
obtaining photographs from all the authorised
of the Bank to verify the correctness of the PAN
signatories who are authorised to operate the
quoted by the Customers, before accepting the
account are to be followed.
banking transactions specified in Rule 114B. (The
verification of PAN can be done through the (DEP. 39/2008-09 dated 20.10.2008)
“PAN/TAN Verification facility” provided in the
CBS Help Desk) – Clause (c) of Sub Rule (2) of Foreclosure of domestic term deposits
rule 114C. Foreclosure charges for domestic term
IV. Declaration in Form 60 in lieu of deposits are as follows with effect from
Quoting PAN. 01.11.2008.
V. Persons Exempted from Quoting PAN: Period Deposits of Rs.15 lakhs to Rs.2 Crores
run less than less than Rs. and above
The persons who have agricultural income Rs.15 lakhs 2 crores
only are exempted from quoting PAN provided 7 days No interest will No interest will No interest will
to 14 be paid on be paid on be paid on
they file declaration in Form 61 and the Non days foreclosure of foreclosure of foreclosure of
Resident Indians (NRIs), Central & State deposit deposit deposit
Governments, Consular Offices (in transactions 15 Eligible rate will Eligible rate will Eligible rate will
where they are the payers) are exempted from days be the be the be the
quoting PAN. However, the NRIs have to submit and applicable card applicable card applicable card
above rate for the rate for the rate for the
a copy of their PASS PORT to the Bank, as per actual period actual period actual period
proviso to Rule 114B. run prevailing run prevailing run prevailing
on the date of on the date of on the date of
The copies of the Declarations obtained deposit less deposit less deposit less
in Form 60 & Form 61 shall be submitted to the 0.75% p.a as 1% p.a as 1% p.a. as
Commissioner of Income tax (Central Information foreclosure foreclosure foreclosure
Bureau) having jurisdiction over the area in which charges charges charges
the transaction is entered into. (revised from (revised from
0.75%) 0.75%)
VI. PAN made Mandatory for opening of
DEMAT Accounts.

2 2
 OCT-DEC 2008
Note: Card rate for this purpose will be the rate of B.Take Over of Home Loans:
interest prevailing on the date of opening of the
(i) not to allow any weak and bad loans of other
account for the term deposits of less than Rs.15
Banks / Institutions to enter into our Books
lakhs category of deposit.
through this route and
On a case to case basis, the foreclosure
charges may be waived as follows: (ii) not to take over proposals without personal
accounts of the Applicants /other business
Deposit Amount Authority
Upto Rs.1 Crore Circle Head
connections /benefits particularly low cost
Above Rs.1 Crore Functional General Manager deposits. The other points to be looked into in the
The modified guidelines for foreclosure case of take over are as mentioned in the circular.
will be applicable for accounts opened on or after C. Second Housing Loan:
01.11.2002, if they are foreclosed on or after
01.11.2008. Branches / RBS / Circle Offices are
advised to take note of the revised guidelines
(DEP. 41/2008-09 dated 28.10.2008) (ported in RBI website). According to the
Introduction of new Recurring Deposit Products for revised guidelines, eligibility for second Home
purchase of Gold Loan arises
IB Swarna Nidhi RD and IB Swarna Nidhi i) If borrower is owning a house and
VRD – are the two variants of Recurring Deposit proposes the second house for self-
(RD) schemes for the purchase of GOLD, at a occupation
future date. ii) Alternatively, the house may be for letting
Purpose: The maturity proceeds of the out on rental basis due to his / her posting
schemes to be utilized by the customer for outside the head quarters or
purchase of Gold Coins from our Bank. accommodation is provided by the
Target Group: Salaried class/small Employer.
business owners/self employed persons etc. and (ADV.105/2008-09 dated 13.10.2008)
women who have a passion for the purchase of
gold. 1) Ind-Smart Scheme and 2) OD facility to Home
Loan borrowers – discontinuance
Period of Deposit: Accounts in monthly
instalments, for period from a minimum of 6 The two facilities viz (i) Ind-Smart
months to a maximum of 24 months. Scheme and (ii) OD Facility to Home Loan
Borrowers stand withdrawn with immediate
Minimum amount of Deposit: Rs.500/- or
effect. Branches need not market the above
above per month in multiples of Rs.100/-
mentioned Schemes or recommend any fresh
Other terms and conditions are available in Proposal under the above Schemes.
the circular.
(ADV.106/2008-09 dated 15.10.2008)
(DEP. 51/2008-09 dated 11.12.2008)
Internal control procedures for Home Loans and
ADVANCES
other SLP's
Increase in margin requirements for fresh home
loans & highlights on guidelines relating to take To build and maintain a healthy retail
over of Home Loans and RBI latest guidelines on portfolio, implementation of internal control
Second Housing Loan procedures strictly and adherence to prescribed
systems & procedures meticulously, are essential
A. Margin on Fresh Home Loans: ingredients, particularly in Home Loans and to
Margin on Home Loan has been increased have an inbuilt effective risk mitigation
with effect from 01.11.2008 as under for fresh mechanism to avoid frauds, pecuniary losses, etc.
Home Loans:
Branch should ensure achieving business
Loan amount up to Loan amount above expansion without diluting the internal control
Purpose Rs.20 lakhs Rs.20 lakhs
procedures and by following the prescribed
Existing Revised Existing Revised
Purchase / systems and procedures scrupulously.
construction of 15% 20% 20% 25% (ADV.107/2008-09 dated 22.10.2008)
new house / flat
Purchase of old
20% 30% 25% 30%
house / flat

3
 Recollect
Policy on one time settlement for NPAs with book Detailed Guidelines on Prime Minister’s Employment
balance upto Rs.two lakhs Generation Programme (PMEGP) Scheme
A policy on OTS for NPAs with Book Ministry of MSME, Govt. of India has
balance upto Rs.Two Lakhs called “OTS Policy launched a new scheme called “Prime Minister’s
for NPAs upto Rs.Two Lakhs”, was approved by Employment Generation Programme (PMEGP)” to
the Board. empower first generation entrepreneurs to set up
micro enterprises across the country by merging
Objective: Accelerating the pace of
KVIC’s REGP scheme and PMRY scheme. Some
recovery and sizeable reduction in the number
of the salient features of the new scheme are as
and amount of NPA accounts with book balance
under:
up to Rs 2,00,000/-.
¾ A Credit linked Central Sector Scheme.
Coverage: The OTS Scheme will cover
all NPAs under all sectors with book balance ¾ Rs 25 lakh maximum cost limit for project /
upto Rs 200000/- as on 31.03.2008, including unit under manufacturing sector and Rs 10
accounts where suit has been filed or decreed, lakh under business/service sector.
cases referred to Lok Adalat and awarded, cases
¾ Minimum educational qualification - VIII pass
where OTS has already been sanctioned but not
for manufacturing sector for projects costing
paid fully, Written off Accounts and BOT-NRR
above Rs 10 lakh and above Rs 5 lakh for
Accounts. Staff Accounts / Staff Related
Business / Service sector.
Accounts, Loans to salaried class, Home Loans,
Jewel Loan NPA and cases of ¾ BPL families are also eligible for assistance.
frauds/malfeasance are excluded from this policy ¾ The subsidy levels under PMEGP are as under:
coverage.
Own Rate of subsidy
OTS for loans to salaried class will be Categories of beneficiaries Contribution
considered at the level of Circle Head only on under PMEGP
(of cost of project)
merits.
Area Urban Rural
Settlement Formula: Minimum
Recoverable Amount (MRA). General 10% 15% 25%
Special (including 5% 25 % 35%
S. Asset MRA for NPAs
SC/STs/OBCs/Minorities/Wo
No Classifica-
a) Under Govt. b) Other than Govt. men, Ex-servicemen,
tion
Sponsored Scheme Sponsored Scheme Physically Handicapped,
upto Rs 2.00 lakhs and Loans above NER, Hill and Board Areas
and Small Loans Rs.0.25 lakh and upto
upto Rs 0.25 lakh Rs.2.00 lakhs The operational guidelines of the PMEGP
scheme and other features are enclosed to this
1 Sub- 90% of the Book NOT ELIGIBLE
Standard Balance
circular.
2 Doubtful 50% of the Book 60% of the Book (ADV.109/2008-09 dated 05.11.2008)
Assets Balance balance
Trade Related Entrepreneurship Assistance and
3 Loss 40% of the Book 50% of the Book
Development (TREAD) – Scheme for Economic
Assets Balance Balance
Empowerment of Women.
(Book Balance = Book balance as of 31.03.08
plus MLE. In the case of Govt. sponsored The scheme, envisages extension of loan
schemes, book balance net of subsidy to be facility to NGOs for on-lending to women, either
reckoned.) through self-help groups (SHGs) or individually
for setting up small and micro enterprises in the
The amount indicated above is the non-farm sector. The Ministry of Micro, Small
minimum. and Medium Enterprises (MSME) provides
The OTS scheme will come in to force assistance in the form of grant upto 30% of the
with immediate effect and will be valid up to 31 total project cost, as appraised by the lending
03 2009. Other guidelines and reporting details agency, for capacity building of NGOs for
are given in the circular. promoting entrepreneurship among target group of
women. The remaining 70% of the project cost is
(ADV.108/2008-09 dated 05.11.2008) to be financed by the lending agency as loan for
4 4
 OCT-DEC 2008
undertaking activities as envisaged in the project accounts and link all the facilities sanctioned to a
report. particular borrower.
Our Bank has signed MoU with Ministry Further, as per the current Booklet on
of MSME, for implementing the scheme. credit and Credit related Administrative powers,
Operational guidelines of the scheme are given in the discretionary powers for sanction of aggregate
the circular. limit under Jewel loan per borrower for branches
upto Scale-I, II, and III is Rs 3.00 lakhs. For all
(ADV.110/2008-09 dated 05.11.2008)
Jewel loans exceeding the aggregate limit,
GRAMEEN BHANDARAN YOJANA – Capital necessary sanction (either oral or written) has to be
Investment Subsidy Scheme for Construction/ obtained from the appropriate Higher Authorities.
Renovation/ Expansion of Rural Godown Wherever oral/telephonic permission is obtained
owing to business urgency, written approval
According to the revised guidelines, the should be obtained the very next day.
scheme is applicable for new projects sanctioned
(ADV.127/2008-09 dated 18.11.2008)
on or after 26.06.2008 upto 31.03.2012.
The changes relating to the project cost Revision of Interest Subvention from 2 % to 3 % on
calculation for subsidy computation and subsidy Short Term Credit to Farmers at concessional rate of
ceiling are as under: interest of 7 % per annum during 2008-09
RBI vide letter ref RBI/ 2008-09/305
Capital Cost for Rural Project Cost as appraised by
Godowns upto 1000 tonnes Bank or actual cost or Rs.2500 RPCD. No. PLFS.BC.72/05.04.02/2008-09 dated
capacity per tonne of storage capacity, Dec 3, 2008 has communicated that Govt of India,
whichever is lower Ministry of Financial Services has approved
Capital cost for Rural Project cost as appraised by interest subvention of 3 % (instead of 2 %) for the
Godowns exceeding 1000 Bank or actual cost or Rs.1875
tonnes capacity per tonne of storage capacity,
year 2008-09.
whichever is lower. The subvention of 3 % is available to the
Bank on its own funds used for short term credit
Rate of Eligibility Max. Subsidy
up to Rs.3.00 lakh provided to the farmers for the
Subsidy ceiling
33.33 % Projects in North East, Hilly Rs.62.50 lakh year 2008-09.
areas, women farmers and All other earlier conditions remain
their SHGs/Co-operatives &
SC/ST entrepreneurs and
unchanged.
their SHGs/Cooperatives (ADV.140/2008-09 dated 08.12.2008)
25% All categories of farmers Rs.46.87 lakh
(other than women farmers), Special Home Loan Scheme
agrl. Graduates, cooperatives The Special Home Loan Scheme shall be
and State and Central
Warehousing Corporations available to new eligible Home Loan borrowers
15% Individuals, companies, Rs.28.12 lakh (Residents only) with immediate effect and will be
corporations, etc., in force upto 30.06.2009 only and shall not apply
to swapping of loans.
Revised operational guidelines are annexed to the
circular. The Special Home Loan Scheme will be
for two categories of Home loan borrowers, for
(ADV.118/2008-09 dated 10.11.2008)
which the margin and rate of interest will be as
Jewel Loans - Clubbing of sanctioned limits follows:
advanced to a borrower
Category of Special Home Mar
All the branches should club the Agri Rate of Interest
Loan Scheme gin
STPL/IBKCC and Agri Jewel loan limits Sanctioned Limits upto Rs.5 8.50% p.a. (Fixed)* 10%
sanctioned to a single borrower under same CIF lakhs With first reset after 5 years
Sanctioned Limits above 9.25% p.a. (Fixed)* 15%
and apply applicable rate of interest for the
Rs. 5 lakhs to Rs. 20 lakhs With first reset after 5 years
combined limit and also recover appropriate
*The Rate of interest shall be re-set after 5 years
processing fees as per extant guidelines without
from the date of drawal of the first instalment and
giving any room for leakage of income.
the borrower will then have the option for going
In case of the existing borrowers who are for a fixed rate or a floating rate of interest
having more than one CIF, branch to find out such prevailing at that time.

5
 Recollect
The initial eligibility & EMI shall be The discretionary powers for
calculated treating this Rate of Interest for entire sanctioning such facility shall rest
with respective authorities as per
tenor of Special Home Loan. guidelines on delegation of credit
The main features of the Scheme are as sanctioning powers.
II Elongated In case of need for additional
follows: operating cycle working capital limits, the same
¾ Applicable to fresh Home Loan borrowers of business shall be considered on priority
impacting basis after a due assessment of
only for all tenors (Max. 20 years including working capital the increase in operating cycle.
admissible Holiday Period, if any) requirement The sanctioning powers shall be
needs vested with the respective
¾ Eligible for “First Time Buyers. sanctioning authorities as per the
¾ 100% waiver of processing charges. delegated powers.
III Margin norms on Relief by way of reducing margin
¾ No Prepayment charges / Penalty shall be inventory and on stocks & receivables from the
receivables. existing level of 25% minimum to
levied. 20% minimum and extended credit
on receivables up to 6 months,
¾ For Loans under Special Home Loan Scheme, may be permitted.
free Life Insurance Cover for the entire amount Margins on letters of
of outstanding Loan will be provided to the Credit/Guarantee may be relaxed
borrower, subject to conditions prescribed by up to 5% on selective basis.
Reduction in margin as above may
LIC. The insurance premium cost to be borne be considered by Circle Heads for
by the Bank. loans sanctioned upto Circle Head
powers.
The other parameters for Special Home IV In power deficit Loans for purchase of generator
Loan Scheme relating to eligibility, purpose etc., states, loan for with Rate of Interest of BPLR-1.5%
shall be as given in the circular. Gen sets on soft with 10% margin for a period up to
terms 30 months, shall be considered.
(ADV.143/2008-09 dated 17.12.2008) Powers to sanction term loans for
generator shall be vested with
Financial Support to Micro, Small and Medium Circle Heads for all accounts upto
CH powers and proposals falling
Enterprises under HO powers to be submitted
to HO for expeditious sanction.
To ease the pressure on our borrowers in
V Extended Due to current slowdown, the units
Micro, Small and Medium Enterprise sectors due gestation period where implementation period of
to melt down in the economy, the following for projects the project under finance has been
measures have been approved for implementation under delayed, shall be granted longer
with immediate effect. Implementation gestation period between 6 months
and 1 year, subject to the same
S No Particulars Approved Guidelines
I Additional An additional working capital being before the expiry of original
working capital demand loan upto the tune of 20% COD.
demand loan of the existing fund based limits for IV Restructuring For units unable to repay term loan
units having credit facility up to on time, repayments shall be
Rs.10 crores, may be sanctioned rescheduled/rephrased on a case
at interest rates as applicable for to case basis as per the Bank’s
existing working capital facility with policy.
following condition: In the face of current economic
The loan shall be repayable in one downturn, there are likely to be
year with a provision of moratorium instances of even viable units
of 6 months during which only facing temporary cash flow
interest to be serviced. problems. To address this
The loan shall enable holding of problem, as permitted by RBI as a
higher inventory and sustain onetime measure, we shall permit
increased carry period of second restructuring of deserving
receivables. accounts under MSME which will
In deserving cases, increase in continue till 30.06.2009 and such
non fund based limits may also be second restructuring also will be
permitted, subject to an overall eligible for exceptional/special
increase of 20% of the existing regulatory treatment of the asset.
indebtedness. The other aspects would be as per
The sanction shall be made at the the Bank’s policy.
request of the borrower only. (ADV.148/2008-09 dated 19.12.2008)
6 6
 OCT-DEC 2008
Periodical valuation of Properties mortgaged to the ¾ Initially only NECS credit would be processed.
Bank - Reporting in AUH2 ¾ The NECS system would leverage on core-
Branches should maintain a Due Date banking platform of member banks.
Diary for periodical follow up of revaluation of ¾ The exchange of data between NCC and
immovable properties mortgaged to the Bank. Member banks would be totally electronic
Branches should submit half yearly return through the NCC, Web server.
AUH-2 –“Report on Immovable properties ¾ Processing cycle of NECS transactions would
remaining without periodical valuation for 36 be on T+1 basis.
months or over from the date of original / previous
(CRA:39/2008-09 dated 16.10.2008)
valuation” during the half years ending June and
December, as per the prescribed format to Circle Renewal of AROGYA RAKSHA & HDFC Policies -
Office with notation wherever revaluation is not Providing Policy details in BBMIS web site
applicable or waived as per circular ADV.98/2008- Bank has entered into tie ups with HDFC
09 dated 27 09 08. Standard Life Insurance Company (HDFC SLI) for
Circle Offices should follow up with selling their Life Policies and with United India
erring branches and ensure obtention of half yearly Insurance Co. Ltd. (UIICo) for selling their Non
return AUH-2 during the half years ending June Life insurance cover called “IB Arogya Raksha”
and December and initiate appropriate action. Policy – at very competitive rates.
Concurrent auditors in their monthly Insurance cover has to be kept in force by
reports to report about the accounts, wherein the paying the required renewal premiums. Non-
immovable properties charged to the bank continue payment of renewal premium in time will forfeit
to remain without periodical valuation for 36 the Insurance cover. Branches should ensure that
months or over from the date of original /previous Premiums of HDFC policies are paid continuously
valuation, except in cases where it is not required / for at least two years to avoid claw back
waived. commission.
(ADV.154/2008-09 dated 29-12-2008) Policy details have been ported in the
CRA BBMIS website. This Site will display the details
pertaining to Arogya Raksha and HDFC SLI
Centurion Bank of Punjab Ltd - Exclusion from the policies in separate screens.
second schedule to the RBI Act,1934
(i) Branches should closely monitor this
Reserve Bank of India has communicated list, follow up with the customers and ensure
that “Centurion Bank of Punjab Ltd” has been payment of renewal premium by the customers
excluded from the Second schedule to the Reserve well before the due date.
Bank of India Act, 1934 by notification
DBOD.No.PSBD.17847/16.1.130/2007-08 dated (ii) HO will periodically upload details of
June 16, 2008. Arogya Raksha polices issued, so that Branches
will be able to view details of all policies
(CRA.38/2008-09 dated 15.10.2008) pertaining to them.
Introduction of National Electronic Clearing Procedure for viewing the AR & HDFC
Service (NECS) policy details is given in the annexure to the
Reserve Bank of India introduced a new circular.
system named “National Electronic Clearing (CRA.42/2008-09 dated 23.10.2008)
Service (NECS)” with Pan-India characteristic
with a view to centralize and bring in uniformity Standardisation of charges for Transfer of Surplus
and efficiency in the ECS processing. The new Clearing Funds
system went on live with effect from September Reserve Bank of India has informed the
29, 2008, for the settlement date October 1, 2008 following maximum charges to be levied by banks
(the next working day). Some of the salient for RTGS transactions with immediate effect.
features of the NECS system are as under: a. For Inward RTGS transactions - free,
¾ Processing of NECS transactions would be no charge to be levied.
centralised at National Clearing Centre, b. For Outward RTGS transactions -
Reserve Bank of India, Nariman Point,
Rs.1 to less than 5 lakhs Rs.25 per transaction
Mumbai. Rs.5 lakhs and above Rs.50 per transaction

7
 Recollect
These charges shall be applicable for all 01.11.2008. Revised rental ceiling details are given
types of transaction, including inter-bank fund as annexure to the circular.
transfers under RTGS. It is clarified by RBI that
these charges are also applicable for transfer of a) Terms & Conditions: The residential
Surplus Clearing Funds under Remittance accommodation should be taken on lease basis in
Facilities Scheme ( RFS) 2007. the name of the Bank. Where it is not possible to
get the lease in the name of the Bank, the Officer
(CRA.50/2008-09 dated 29.11.2008) will be permitted to take the lease in his individual
name by the sanctioning authority but the rent be
Electronic payment of Direct Taxes by Corporates paid directly to the landlord by Pay Order by the
and Assessees (coming under section 44AB of IT concerned branch/office.
Act) – e-Payment of TDS by our branches / Offices
made Mandatory In some cases, officers may have fixed
residential accommodation earlier at a rate in
Payment of Direct taxes was made excess of the rental ceilings and permitted to pay
available to our customers through Net banking the difference between the rent fixed and the
facilitating them to make e-payment. eligible rental ceiling to the debit of their SB
Apart from Direct Tax payable by the account or by recovery from salary to the landlord
Bank on its income, branches / Offices are through the Bank at the time of remittance of
deducting the Taxes from our Staff / customers / monthly rent. In such cases, even if the
service providers etc. As per the recent Govt. accommodation has been fixed before the date of
guidelines it is to be paid mandatory, through e this circular and the lease is subsisting, the
payment only from 01.04.2008. sanctioning authority can reimburse the rent within
the revised ceiling limit with effect from
Administrative offices who make 01.11.2008.
payments for the services like contracts, AMC,
rent, professional fees etc., are also required to This provision will not apply to payment
deduct TDS and pay through the e-payment mode. of difference in the excess rent advance paid by the
officer earlier at the time of fixing the existing
1. Opening of a designated account at the branch leased accommodation.
/ office
b) The rental ceilings in respect of
Each Branch and Administrative Office Ahmedabad, Chennai, Hyderabad and Kolkata,
(AO) (who deducts and remits TDS) needs to open earlier classified under ‘Other Metros’ (only for
a separate Current Account with the name & style the purpose of provision of residential
Indian Bank-Branch Name-e payment of TDS accommodation to officer employees on lease
AO, at the branch through whom they are basis) has been brought on par with ‘Major
transacting. Metros’ category.
2. Obtention of login & transaction password c) For Officers in Scale IV (Branch
Managers/exceptional cases) and Executives in
Branches / offices should request for Net Scale V and VI exceptions to the approved limits,
Banking Login and Transaction Passwords and for upto a maximum of 25% increase over and above
activation through the Relationship Module. User their entitlements may be considered by the
Instructions of Relationship Module is available in Chairman and Managing Director on a case to case
Help Desk and other details are given in the basis.
circular.
d) Considering their functional
(CRA.51/2008-09 dated 15.12.2008)
responsibilities, Branch Managers upto Scale III
will be eligible for an uniform additional rent of
HRM
Rs. 300/- over and above their eligibility.
Provision of Residential Accommodation to
Officers will be eligible for fresh lease
Officers on Lease Basis – Revision in Rental
arrangements for alternate residential
Ceilings
accommodation to enable them avail of the
An upward revision in the rental ceilings enhanced rental ceilings only after expiry of their
for leased accommodation provided to officers has present/subsisting lease.
been approved by the Board with effect from
8 8
 OCT-DEC 2008
Non-eligibility clause: Officers owning a Branches/Circle Offices should submit of
house in the place of posting either in his/ her information as per format, in time.
name or in the name of his/her spouse or
Similarly, when settlement amounts are
dependant child are not eligible for residential
received at Branches/Circle Offices, the
accommodation on lease basis.
information should immediately be passed on to
Officers who are placed under suspension, the separated staff/nominees of the deceased staff,
shall not be eligible for leased accommodation as the case may be and for this purpose the
provided by the bank or bank owned quarters address/contact details should be obtained,
during the period of suspension. without fail.
(HRM.74/2008-09 dated 01.11.2008) (HRM.83/2008-09 dated 03.12.2008)

Errors in Making & Passing / Authorising Canteen Subsidy to Staff Members.

Transactions in the CBS
Canteen Subsidy has been enhanced from
Each field level functionaries in the branch Rs. 4/- to Rs. 6/- (Rupees Six only) per employee
is expected to make/authorise transactions with per working day, as per the prescribed norms. This
due diligence and to adhere to all enhancement in Canteen Subsidy comes into effect
norms/precautions prescribed by Head Office from immediately.
time to time.
All other guidelines stipulated in the
In order to have control and proper earlier circulars in the matter of grant of subsidy
monitoring of high value transactions, transfer remains the same.
transactions of value above Rs.25 lakhs have to be (HRM.86/2008-09 dated 16.12.2008)
necessarily done through transfer batch mode for
which maker-checker condition is enabled. Promotion Policy for Officers
All the staff making/authorising In modification to the existing policy for
transactions in the system are expected to ensure Promotion of Officers from one scale to another in
that the amount of transaction posted in the system terms of Regulation 17 of the Indian Bank
tallies with the amount mentioned in the [Officers’] Service Regulations, 1979, revised
voucher/cheque/ document held in support of the policy has been approved by the Board.
relevant transaction.
1. Applicability: The promotion policy shall be
Facility is available in help desk, wherein applicable to all officers both in the Generalist
all transactions of Rs.1 Crore and above for the Cadre and Specialist Cadre for promotions upto
day are listed, under Reports > Current info at my Scale IV governed by the Indian Bank [Officers’]
desk > One Crore and above transactions for Service Regulations, 1979 and to India based
monitoring high value transactions. Branches officers working abroad.
should check this report at least twice a day and in
2. Period: The promotion policy shall be in force
any case, before EOD, and if any discrepancy is
for a period of three years from the date of
found, the same should be rectified immediately.
approval of the policy by the Board or till such
(HRM.82/2008-09 dated 02.12.2008) time it is reviewed and modified by the Board.
Timely settlement of terminal benefits 3. Channels for promotion: There shall be two
channels for promotions from Scale I to Scale II,
Bank’s endeavour is to settle the terminal
Scale II to Scale III and Scale III to Scale IV viz.,
benefits to retiring staff on the very day of their
Seniority Channel and Fast Channel for Officers in
relief and to other separated staff as early as
Generalist Cadre and as regards officers in
possible. Head Office has been mailing the
Specialist Cadre there will be only one channel i.e.,
format, well in advance, for submitting the
Fast Channel.
required information in duplicate by
Branches/Circle Offices concerned, within three 4 (a) Seniority Channel: 20% of the vacancies in
days from the date of receipt. the applicable scales will be filled in through the
Seniority Channel.
As any delay in settlement is bound to
cause hardships to the retiring staff and Eligibility for promotion under this
nominees/family members of the deceased staff, channel will be based on the Zone of
Consideration that will be arrived for the

9
 Recollect
respective scale purely based on the seniority of FX
officer as available in the seniority list of the bank.
Payment of Demand Drafts drawn by Indian Bank,
The Zone of Consideration shall normally Singapore branch on branches in India
be three times the vacancies that will be allotted to
this channel in the respective scale; and may be With effect from 01.12.2008, the details of
increased by the Chairman & Managing Director DDs issued by Singapore branch will be available
in case of need. in the CBS system. Henceforth, branches can
dispense with the procedure of claiming
Based on the vacancies that is to be filled reimbursement under FIRRPRIA. The demand
the list of officers who fall within the Zone of drafts should be paid to the debit of designated
Consideration will be prepared and letters to current account number 787180463 maintained at
participate in the promotion process will be issued OSB Chennai, as in the case of Exchange House
to the eligible officers. DDs, under Rupee Draft Drawing Arrangmeent.
Eligibility for Promotion and Qualifying Branches on receipt of the Demand Draft,
Factors under Seniority Channel: has to be paid immediately to the debit of the
Promotion Eligibility Weightage For Various designated current account, if it is otherwise in
From (Minimum No. Of Qualifying Factors order, based on the details uploaded in the system
Scale Years In The Performance Interview/ by OSB Chennai. In isolated cases, when the
Present Scale As Appraisal Potential
On The Cut-Off
details of the DD are not uploaded by OSB,
Date) Chennai, branches should, still make payment of
I TO II 4 60 40 the DD, to the debit of FIRRPRIA account.
II TO III 3 60 40 However there is no need to lodge any claim on
III TO IV 3 60 40 the Controlling Branch - OSB Chennai. Within a
4(b) Fast Channel: day or two, when the details of DD are uploaded
by OSB Chennai, the outstanding amount under
80% of the vacancies available in the FIRRPRIA should be reversed by debiting the
applicable scales will be filled in through Fast designated Current Account. In case of delayed
Channel. All officers who fulfill the eligibility uploading of DD details beyond two days after
criteria as on the cut off date can apply for payment, OSB Chennai has to be contacted
participation in the promotion process under Fast immediately for clarification and reversal.
Channel. However the Zone of Consideration will
be determined on the basis of the merit list which (FX.26/2008-09 dated 25.11.2008)
will be based on the marks obtained by the officer
Credit to Non Resident (External) Rupee Account –
in the Written Test plus the marks obtained in the
Clarification
performance appraisal. The Zone of Consideration
shall normally be 3 times the vacancy that will be RBI vide AP (DIR Series) Circular No.34
allotted for this channel in the respective scale or dated 10.11.2008, has clarified that AD Category I
in the respective area of specialization in the Banks may credit proceeds of account payee
particular scale and may be increased or decreased cheques also in addition to demand drafts /
by the Chairman and Managing Director in case of bankers’ cheques, issued against encashment of
need. foreign currency by FFMCs to the NRE Account
of the NRI account holder where the instruments
Eligibility for Promotion and Qualifying
issued to the NRE account holder are supported by
Factors:
encashment certificate issued by AD Category – I /
Promotion Eligibility Weightage For Various Category- II.
From Scale (Minimum No. Qualifying Factors
of years in the Written Perfor- Inter- (FX.27/2008-09 dated 25.11.2008)
Present Scale Test mance view /
As on the Cut- Appraisal Poten- GENL
Off Date) tial
I TO II 4 25 50 25 Service Charges for (I) Electronic payment
II TO III 3 25 50 25 products and (2) Outstation Cheque Collection
III TO IV 3 25 50 25
Basis for promotions and other guidelines The charges for offering various electronic
on the policy are available in this circular. products and for outstation cheque collection
service is revised as under with immediate effect.
(HRM.96/2008-09 dated 26.12.2008)
1010
 OCT-DEC 2008
1. Electronic Products official, on receipt of the Pin Mailers has to deliver
the same to the customer concerned and activate
a) Inward RTGS / NEFT / ECS
the same through the RM Module menu itself. All
transactions – free, no charge to be levied.
queries regarding Net Banking can be routed
b) Outward transactions – through this RM Module menu by the Branch
i. RTGS Rs.1 to less than 5 lakh Rs.25 per transaction Teller himself to Project Office. Upon approval of
Rs.5 lakh and above Rs.50 per transaction the service requests, the branch teller can view the
ii. NEFT Rs.1 to less than 1lakh Rs.5 per transaction status of such requests through RM Module itself.
Rs.1 lakh and above Rs.25 per transaction This will facilitate the branches to provide a better
c) ECS debit return charges are as and speedy service to the Net Banking Customers.
applicable as cheque return charges.
Other Salient Features of the module are
d) These charges shall be applicable for all given in the circular.
types of transactions, including inter-bank funds (GENL.43/2008-09 dated 29.11.2008)
transfers and Net Banking transactions of RTGS
and NEFT. ADMN
2. Outstation Cheque collection Master Circular on Tax Deduction at Source (TDS)
under Section 192 to 194J of the Income-tax Act
1 Rs.1 to less than Rs.50 per instrument 1961, on various expenditure incurred by branches
Rs.10,000
2 Rs.10,000 to Rs.1,00,000 Rs.100 per instrument Branch is under statutory obligation to
deduct tax at source under various heads for
3 Above Rs.1,00,000 Rs.150 per instrument
different types of customers at the prescribed rates
The above charges will be all inclusive. mentioned in the “Annexure 2 to 6” of the circular
No additional charges such as courier charges, out and remit the TDS into the Government Account
of pocket expenses, Service Tax etc., should be and file the Quarterly e-TDS Returns within the
levied from the customers. due dates. Quick review of the TDS provisions
under sections 192 to 194 J of the Income Tax Act,
The above charges are applicable only to 1961 are given in Annexure to the circular.
transactions originated and payable within India.
Further, the branches should file corrected
(GENL.38/2008-09 dated 15.10.2008) e-TDS Returns for the previous quarters relating to
Financial Year 2007-08 & 2008-09, where they
Introduction of Relationship Manager Module for have quoted invalid/wrong PAN for different
Net Banking deductees and uploaded the returns.
Bank has introduced new generation It is the responsibility of the Branch
technology based facilities such as Retail Net Managers to deduct & remit the TDS to
Banking, Mobile Banking, Phone Banking and Government Account within the stipulated due
Corporate Net Banking to our tech savvy dates on all banking transactions attracting the
customers for a better customer service. A new provisions of TDS under Sections 194A to 195 of
module “Relationship Manager (RM) Module” had the Income-tax Act by quoting the correct PAN in
been developed with the secured mechanism of the e-TDS Returns and avoid invocation of penal
Maker-Checker control at the branch level, to act provisions under the Income tax Act, 1961.
on the requests received from the customer. (ADMN.58/2008-09 dated 31.10.2008)
This module can be accessed by the branch Issue of Rs.10 Denomination Banknotes without
teller through the designated nodes of the branch Inset Letter - In both numbering panels in Mahatma
and the required service requests can be entered for Gandhi Series – 2005 - Bearing the signature of Dr.
his home branch customers only. D. Subbarao, Governor.
Branches need not send IP message/hard The Reserve Bank of India will issue
copy to Project office for Retail Net Banking, Rs.10 denomination bank notes without inset letter
Mobile banking and Phone banking of their in both numbering panels in Mahatma Gandhi
customers. series – 2005 bearing the signature of
Project office will track the requests made Dr.D.Subbarao, Governor. Except for the change
by the branches through the RM Module menu, in the signature, the design of these notes to be
generate the Pin Mailer and send it to the issued is similar in all respects to the banknotes in
concerned home branch by courier. The Branch Mahatma Gandhi series – 2005, with additional /

11
 Recollect
new security features issued on April 27, 2006. All Circular - 2008 on Detection and Impounding of
bank notes in the denomination of Rs.10 issued by Counterfeit Notes. The receipt, in running serial
the Reserve Bank in the past will continue to be numbers, should be authenticated by the cashier as
legal tender. well as by the tenderer. Notice to this effect
(ADMN.61/2008-09 dated 31.10.2008)
should be displayed prominently at the
offices/branches for the information to the public.
Maintenance and Safe keeping of Vouchers in Acknowledgement receipt may be issued
Branches even in cases where the tenderer is unwilling to
Some of the basic instructions relating to countersign the receipt.
Maintenance and safe keeping of vouchers by the Branches / Currency chests should file
branches are give below: FIR with the local police as per the formats
¾ On completion of checking of the day’s enclosed to the above master circular,
transactions, all vouchers should be properly immediately on detection and impounding of
arranged section wise, account wise and made counterfeit note and a copy of FIR should be
into one bundle by means of cross tieing with forwarded to HO: Cell for Government
a thick twine with a label in the front showing Transactions. In addition to filing FIR, a
the date, major section wise break up and the Counterfeit Currency Report (CCR) should also
total number of vouchers. be filed as per the format enclosed to HO: BOD
circular no.DEP 08/2008-09 dt.14.06.2008.
¾ A register should be maintained by the daftary
giving the date and the number of vouchers – (ADMIN.73/2008-09 dated 19.12.2008)
head-wise and total.
MD/ED
¾ It is very essential that after stitching, the
Branch Manager should scrutinise all the Appointment of Shri Anup Sankar Bhattacharya as
day’s vouchers. Executive Director of our Bank

¾ Vouchers relating to high value transactions, Shri Anup Sankar Bhattacharya has been
SR II, external clearing etc., must be perused appointed, as a whole-time Director (designated as
with special care. Perusal of vouchers relating Executive Director) of our Bank and has assumed
to the loan / EMI recovery would give the charge on 15.10.2008, in terms of the Notification
idea on SMA recovery. Branch Manager to issued by Government of India, Ministry of
ensure that all vouchers have been duly Finance, Department of Financial Services, New
authenticated and the powers for passing have Delhi.
not been transgressed and ensure that stitching (MD/ED.10/2008-09 dated 15.10.2008)
of vouchers is completed on a daily basis
without running into arrears. Last numbers of circulars issued as on 31.12.08
¾ As vouchers could be material evidence in MD/
case of any claim / complaint etc., it is the DEP ADV HRM CRA FX GENL ADMN
ED
primary responsibility of the Branch Manager
to ensure that the vouchers have been properly 61 157 97 55 32 50 79 15
stitched by daftary, preserved in a room and
are under the control of an officer nominated
for this purpose.
Though due care has been taken in the preparation of
(ADMN.69/2008-09 dated 24.11.2008) Recollect, the version given in the circular is final.
Compiled by HO: O&M Division
Detection and Impounding of Counterfeit Notes –
Issue of Receipt to the Tenderer – Amended. Printed & circulated by HO: Circular Issue Cell
When a bank note tendered at the counter
of a bank branch or treasury is found to be
counterfeit, an acknowledgement receipt in the
amended format enclosed as annexure to this
circular should be issued to the tenderer, after
stamping the note as “Counterfeit Bank Note
Impounded” as per para 2 of RBI’s Master
1212
 a Volume 22 Issue 3

For Private Circulation Only

Oct – Dec.2009 Digest of Circulars

“Non inclusion of a circular in Recollect does not reflect on its importance”
Cir No Date Subject Pg.
CONTENTS OF THIS ISSUE 46 02/11/09 Subscription to Tamilnadu 8
Government Pension Health Fund &
Family Security Fund Scheme
Cir No Date Subject Pg.
47 02/11/09 Collection of Home / Vehicle Loan 8
DEP 12/10/09 Movement `Banyan Vriksh 2010’ – 2
Instalments through Electronic
36 Staff Incentive Scheme
Clearing Service (ECS)
38 22/10/09 Combating Financing of Terrorism 2
49 01/12/09 Online Payment (of Utility Bills, LIC 8
(CFT) – Unlawful Activities
Premia, Mobile Bills, Fees, Charities /
(Prevention) Act (UAPA), 1967 –
Donations etc) by Net Banking
Obligation of Banks.
Customers having Transaction PW.
39 12/11/09 Inoperative Accounts 3
52 03/12/09 Provision of Group Life Cover to 9
42 25/11/09 BCSBI - Code of Bank's Commitment 3 Home Loan Borrowers – ‘IB Home
to customers-August 2009. Suraksha’– SHL A/cs. Now included
ADV 06/10/09 Loan against Deposits -- Purpose of 3 53 08/12/09 Scheme of Incentives for Officers 9
107 the Loan becoming licensed Specified Persons
111 21/10/09 Service Charges and Target Group 4 for sale of HDFC Life Policies
for IB Pension Loan Scheme 56 21/12/09 TDS on Pension Payment - Income 10
118 13/11/09 Enhancement of advance rate per 4 Tax for the financial year ending
gram of jewels and ceiling on 31.03.10 Assessment year 2010-11
appraisal fee GENL 15/10/09 RBI directions regarding Free 10
124 26/11/09 Approval of tractor models for Retail 4 25 Withdrawal of Cash from Other Bank
Financing. ATMs.
126 27/11/09 Swarna Jayanti Shahari Rozgar 4 29 10/11/09 Waiver of charges on Intra City 10
Yojana (SJSRY) - Revised guidelines Transactions
127 27/11/09 Extension Of Policy On One Time 5 30 14/11/09 Cash Handling Charges–Revised 10
Settlement For NPAs with Book Rates .w.e.f 15 December 2009.
Balance up to Rs. Two Lakhs 35 03/12/09 Payment Of Old Demand Drafts 11
129 09/12/09 Housing Loan – Interest Subsidy 5 Issued Upto 31.03.2008.
Scheme for Housing the Urban Poor 36 08/12/09 Supply of Statement of Loan Account 11
[ISHUP] to Borrowers
130 10/12/09 TRADEWELL Scheme – 5 41 21/12/09 Resolving complaints forwarded by 11
Clarifications RBI & the Banking Ombudsman.
135 17/12/09 Implementation of Interest Subsidy 6 44 30/12/09 IB Connect – A ‘Fast 12
Scheme for Housing the Urban Poor Communication’ portal for our Bank
[ISHUP] – Modification of guidelines 45 30/12/09 Display of information for lodging of 12
137 29/12/09 Continuation Of 2% Interest 6 ATM related complaints
Subvention Scheme and Introduction HRM 10/10/09 Staff Welfare Measure - Presentation 12
of 1% Additional Incentive 101 Of Memento On Superannuation -
Subvention for Short-Term Crop Modification In Procedure
Loans disbursed during 2009-10 132 30/11/09 Scheme for extending Legal and 12
141 31/12/09 New Product Codes in CBS for the 6 Financial Support to Officers of
PMEGP Scheme Banks against whom motivated false
CRA 06/10/09 Use of RTGS / NEFT / NECS / ECS 6 complaints have been made by
36 for Credit to NRE Accounts - people/agencies outside Bank
Compliance with FEMA Regulations FX 01/10/09 Relaxation of norms for Gold Card 13
and Wire Transfer Guidelines. 20 Scheme for Exporters
42 23/10/09 Provision Of Group Life Cover To 7 22 12/10/09 National Export Insurance Account 13
Home Loan Borrowers - (1) (NEIA) - operated by ECGC.
Introduction of New Scheme from M/s 27 27/11/09 Implementation of UNSCR 1718 13
Kotak Mahindra Old Mutual Life (2006) and UNSCR 1874 (2009)
Insurance Ltd - “IB HOME pertaining to Democratic People’s
SURAKSHA” (2) Modifications to the Republic of Korea (DPRK)
existing IB Griha Jeevan Scheme 30 23/12/09 KYC / AML / CFT / Obligations of 14
44 26/10/09 (i) Discontinuance of MT Code on 8 Authorised Persons under PMLA–
DDs issued for Rs.1 lakh and above Money changing activities / Xpress
(ii) Revised guidelines on the Money / Money Gram / DD Drawing
cancellation of BPOs in the system Arrangement
 Recollect
Cir No Date Subject Pg. A reward point is equivalent to Re.1/-.
MD/ED 07/12/09 Joining of Shri V. Rama Gopal as 14 However, the maximum cash incentive per staff
8 Executive Director of our Bank shall not exceed 20% of his annual gross salary.
ADMN 09/11/09 Discontinuance of re-issue of 14
49 banknotes of Rs.500/- denomination Regarding Additional Reward Point,
of Mahatma Gandhi Series 2000 Minimum Performance Level (MPL) and
59 30/12/09 Deduction and Remittance of TDS – 14 Operational guidelines are given in the circular.
Amendments under Section 194A
and 195 of the Incometax Act, 1961 DEP.36/2009-10 dt.12.10.2009
DEPOSITS Combating Financing of Terrorism (CFT) – Unlawful
Movement `Banyan Vriksh 2010’ – Staff Incentive Activities (Prevention) Act (UAPA), 1967 – Obligation
Scheme of Banks

The incentive scheme for the “BANYAN According to the amended Unlawful
VRIKSH – VISION 2010” movement has been Activities (Prevention) Act (UAPA), RBI advised
modified this year. Avowed objective should be to all the Banks to strictly follow the procedure laid
garner as much CASA deposits as possible during down in the UAPA Order dated August 27, 2009
the campaign. The guidelines for the scheme are issued by Government of India and ensure
detailed hereunder: meticulous compliance to the Order issued by the
i. Vision Government.
20 lakh CASA accounts for CASA deposits 1. Banks to maintain updated designated lists in
of Rs.6000 crore. electronic form and run a check on the given
ii. Period parameters on a regular basis to verify whether
individuals or entities listed in the schedule to the
The movement BANYAN VRIKSH – Order (referred to as designated individuals /
VISION 2010 shall come to close on 31.03.2010.
entities) are holding any funds, financial assets or
The Bank reserves the right to draw the curtains if
the vision of the movement is achieved at any time economic resources or related services held in the
during the movement. form of Bank accounts with them.
iii. Eligibility to participate 2. In case, the particulars of any of their
customers match with the particulars of designated
Open to all staff members including staff of individuals / entities, the Banks shall immediately
administrative units/offices and Designated not later than 24 hours from the time of finding out
Marketing Personnel entrusted with field level such customer, inform full particulars of the funds,
marketing activities. financial assets or economic resources or related
iv. Eligible Accounts services held in the form of Bank accounts, held by
such customer on their books to the Joint Secretary,
Current account and Savings Bank account
opened during the movement period. As we aim at Ministry of Home Affairs.
bringing in new clientele, New CIF/account opened 3. Banks shall also send a copy of the
during the campaign period will only be considered communication mentioned in (2) above to the
for award of reward points. UAPA Nodal Officer of RBI, Chief General
v. Reward Point: Manager, Department of Banking Operations and
Development, RBI, Mumbai.
There will be Basic Reward Points for each
CASA product as given below: 4. Banks shall also send a copy of the
communication mentioned in (2) above to the
CASA product
Basic Reward UAPA Nodal Officer of the State / UT where the
Points account is held as the case may be and FIU-India.
Regular Savings Bank A/c (with or without
cheque book) (other than no frill accounts and 1 5. In case, the match of any of the customers
smart kid accounts) with the particulars of designated individuals /
SB Silver and Power account 5 entities is beyond doubt, the Banks would prevent
NRE, NRO SB A/c and SB Platinum account 10 designated persons from conducting financial
Regular Current Account 10 transactions, under intimation to Joint Secretary,
Premium Current Account 25 Ministry of Home Affairs.
CMS Plus Account 250 6. Banks shall also file a Suspicious
Transaction Report (STR) with FIU – IND covering
2 2
 OCT-DEC. 2009
all the transactions in the accounts covered by e. To foster confidence in the banking system.
paragraph (2) above carried through or attempted as
per the prescribed format. Application of the Code:

To facilitate reporting as in (2) above, one This Code applies to all the products and
more table has been ported in the secured gateway services listed below, whether they are provided by
(in the Help Desk – in Other web sites – AML alerts branches or subsidiaries, agents acting on our
for BM/ABM) now being used by branches for behalf, across the counter, over phone, by post,
through interactive electronic devices, on the
replying to HO: AML Cell queries.
internet or by any other method.
Branches should report to HO: AML Cell
immediately after detection, so that HO:AML Cell a. Current accounts, Savings Bank accounts,
in turn can send its reports to all authorities within Term deposits, Recurring deposit, PPF
accounts and all other deposit accounts.
24 hours of such detection by the branches.
b. Payment services such as pension, payment
DEP.38/2009-10 dt.22.10.2009 orders, remittances by way of Demand
Drafts, wire transfers and all electronic
Inoperative Accounts
transactions e.g. RTGS, EFT, NEFT.
RBI had clarified regarding transactions that
c. Banking Services related to Government
are to be taken into account, while deciding the
transactions
status of an account, as inoperative, is as follows:
“Since the interest on Fixed Deposit account d. Demat accounts, equity, Government bonds
is credited to the Savings Bank accounts as e. Indian currency notes exchange facility
per the mandate of the customer, the same
should be treated as a customer induced f. Collection of cheques, safe custody
transaction. As such, the account should be services, safe deposit locker facility.
treated as operative account as long as the
interest on Fixed Deposit account is credited g. Loans, overdrafts and guarantees.
to the Savings Bank account. The Savings h. Foreign exchange services including money
Bank account can be treated as inoperative changing.
account only after two years from the date of
the last credit entry of the interest on Fixed i. Third party insurance and investment
Deposit account.” products marketed through our branches.

DEP.39/ 2009-10 dt.12.11.2009 j. Card products including credit cards, debit

cards, ATM cards, Smart Cards and services
BCSBI - Code of Bank's Commitment to customers- (including credit cards offered by our
August 2009. subsidiaries/ companies promoted by us).
The revised Code has already been ported in
Board has approved for adoption of the our website, www.indianbank.in and also in our
revised Banking Codes and Standards Board of Intranet under the head “Customer Centric
India (BCSBI). Services”.
Objectives of the Code:
DEP.42/2009-10 dt.25.11.2009
a. To promote good and fair banking practices
by setting minimum standards in dealing ADV
with customers. Loan against Deposits -- Purpose of the Loan
b. To increase transparency so that customer According to Loan Policy of the Bank,
can have a better understanding of what branches should take a declaration mentioning the
customer can reasonably expect of the purpose to ensure the end use of funds for Loan
services. against Deposits of above Rs.1 crore to commercial
c. To encourage market forces, through firms and corporate entities.
competition, to achieve higher operating Branches should add the “Purpose of the
standards. loan” as column No 9, in the Application/Pledge
Letter (F 29) with due authentication by the
d. To promote a fair and cordial relationship
borrower/s, since end use of funds is to be ensured
between customer and their Bank.

3
 Recollect
in respect of LODs also. In CBS, the relevant IB Approval of tractor models for Retail Financing
Code may be given in the CISLA details.
Ministry of Agriculture, Government of
ADV.107/2009-10 dt. 06.10.2009 India has approved the following tractor model of
M/S Mahindra Gujarat Tractors, Vadodara, Gujarat
Service Charges and Target Group for IB Pension for Retail financing:
Loan Scheme
Tractor Make and HP Specifications
The following are the revised terms with Model
respect to IB Pension Loan Scheme: Mahindra Gujarat 45 Suitable for dry land cultivation
Shaktimaan-45 only and not for wet land
Target Group: Central & State Pensioners,
Family Pensioners, Re-employed Pensioners, IB The above tractor model is also eligible for
Retirees both under VRS and superannuation whose subsidy under the Farm Mechanisation Programme
Pension accounts are maintained by our Branches. of Centrally sponsored ‘Revised Macro
Management of Agriculture (MMA) Scheme’.
Service Charges: Rs.250/-, if loan amount is Branches shall consider finance to the above
more than Rs.25000/-. model of tractor only for dry land cultivation
whenever approached by any borrower as per
All other terms and conditions are eligibility and norms applicable.
applicable as detailed in our Circular No.ADV
99/2009-10 dated 19.09.2009. ADV.124/2009-10 dt.26.11.2009
ADV.111/2009-10 dt.21.10.2009 Swarna Jayanti Shahari Rozgar Yojana (SJSRY) -
Enhancement of advance rate per gram of jewels and Revised guidelines
ceiling on appraisal fee. The Ministry of Housing & Urban Poverty
The advance rate per gram of jewels has Alleviation has comprehensively revised the SJSRY
been revised as follows: Scheme to overcome the difficulties faced by the
States/UTs and address certain drawbacks in the
¾ Rs.1000/- per gram or 70% of the market implementation of SJSRY.
rate whichever is lower for 22 carat
A Under Urban Self Employment Programme
fineness.
(USEP),
¾ Rs.1015/- per gram or 70% of the market ¾ Maximum allowable unit project cost is
value whichever is lower for Hall Mark enhanced from Rs.50000/- to
Jewels of 22 carat fineness / gold coins of Rs.2,00,000/-
24 carat fineness.
¾ Maximum allowable subsidy is enhanced
All branches shall conduct recovery from 15% of the project cost subject to a
campaign exclusively for Jewel loans and arrange to limit of Rs.7,500 to 25% of the project
auction the jewels in chronic cases to bring down cost subject to a limit of Rs.50,000/-
the overdues below tolerance level of 2% as and
when required. B Develpment of women and Children in
Urban areas has been renamed as Urban women
Ceiling on Appraiser fee: Self-Help Programme (UWSP).
At present jewel appraisers in our bank are ¾ There is no maximum allowable unit
collecting appraisal fee @ Rs.3/- per Rs.1000/- of project cost
loan sanctioned under jewel loans without any upper ¾ Maximum allowable subsidy is revised
ceiling. An upper ceiling on appraisal fee has been from Rs.1,25,000 or 50% of the project
fixed as below: cost whichever is less to Rs.3,00,000 or
Existing Revised
35% of the project cost or Rs.60,000 per
member of the group, whichever is less.
Appraisal Fee: No Change
Rs.3/- per Rs.1000/- of loan amount C In view of the Prime Minister’s New 15-
sanctioned. Point Programme for the Welfare of Minorities,
Maximum ceiling: Maximum ceiling of 15% of the physical and financial targets under the
No maximum ceiling. Rs.300/- per borrower. Urban Self Employment Programme at the national
level shall be earmarked for the minority
ADV.118/2009-10 dt.13.11.2009 communities.
4 4
 OCT-DEC. 2009
The revised guidelines are with effect from administration and release of subsidy under the
01.04.2009. The revised guidelines will assist in the scheme to the lending institutions. The bank-wise
effective implementation of SJSRY and make a dent progress of the scheme will be monitored by NHB.
on the urban poverty scenario in the country.
Some of the salient features of the scheme
Salient features of the revamped SJSRY are given below:
Scheme is enclosed to this circular.
¾ Target Group: Beneficiaries belonging to
ADV.126/2009-10 dt.27.11.2009
Economically Weaker Section and Lower
Extension Of Policy On One Time Settlement For Income Group segments in any urban area.
NPAs with Book Balance up to Rs. Two Lakhs ¾ Specification of dwelling units: The area of
each dwelling unit will be at least 25
The validity of the Scheme “One time Sq.mts. for EWS and at least 40 Sq.mts for
settlement for NPAs with Bank Balance upto LIG.
Rs.Two lacs has been extended up to 31.03.2010 in ¾ Maximum Loan amount: Rs.1.00 lakh for
its present form but covering NPAs outstanding up EWS & Rs.1.60 lakhs for LIG. However,
to 31.03.2009 instead of 31.03.2008. subsidy will be given for loan amount upto
In view of extension of coverage of the Rs.1.00 lakh only.
scheme and inclusion of NPAs outstanding up to ¾ Quantum of Subsidy: 5% p.a. on the
31.03.2009 under the scheme, the settlement admissible loan amount over the full period
formula (Paragraph ‘d’ of Cir. No. ADV.108 / 2008- of loan for construction/acquisition of a new
09 dated 05.11.2008) will be as follows: house.
¾ Repayment: Ranging from 15 to 20 years
a. Eligible NPAs upto Rs.2 lakhs outstanding depending on the repaying capacity of the
as on 31.03.2008: Settlement formulae will borrower.
be based on asset status of the respective ¾ Security: Mortgage of the dwelling unit as
accounts as on 31.03.2008. Primary Security. There would be no
b. Eligible NPAs upto Rs.2 lakhs that slipped collateral security/third party guarantee for
during 2008-09 and outstanding as on loans upto and inclusive of Rs.1 lakh
31.03.2009: Settlement formulae will be excluding group guarantee.
based on asset status of the respective ¾ Selection of Beneficiary: Identification of
accounts as on 31.03.2009. beneficiary will be by State Governments /
Urban Local Bodies (ULBs), as far as
Settlement formula (Minimum Recoverable possible in the ratio of 70% EWS & 30%
Amount) and other guidelines are given in this LIG. Preference will be given to SC, ST,
circular. Minorities, Persons with disabilities and
Women beneficiaries in accordance with
ADV.127/2009-10 dt.27.11.2009
their proportion in the total population of
Housing Loan – Interest Subsidy Scheme for Housing City / Urban Agglomerate during the 2001
the Urban Poor [ISHUP] census.
The scheme guidelines and procedure for
Government of India, Ministry of Housing claiming subsidy are given in detail in this circular
& Poverty Alleviation has launched a scheme under as Annexure.
the name ‘Interest Subsidy Scheme for Housing the
Urban Poor [ISHUP]’ which has been approved by ADV.129/2009-10 dt.09.12.2009
the Union Government for implementation by
TRADEWELL Scheme – Clarifications
public sector banks and other housing finance
institutions. Secured OD limit towards TRADEWELL
Scheme of 0.20 crore to Rs1.00 crore may be
The Scheme aims at enabling the
considered subject to specific conditions on security
Economically Weaker Section (EWS) and Low as detailed below:
Income Group (LIG) segments in the urban areas to
construct or purchase houses by providing an Primary: Immovable property: with margin
interest subsidy of 5% on loans upto Rs.1 lakh. The of 50% on market value or
National Housing Bank (NHB) and Housing and Other tangible security: as per existing
Urban Development Corporation (HUDCO) have Bank norms. i.e. IVP/KVP/NSC with margin of
been designated as the Nodal Agencies for 25% and Govt Securities with margin of 20%.

5
 Recollect
Collateral: Stocks & Book debts equal to schedule) during 2009-2010 to Banks in
the limit sanctioned. respect of short-term production credit up
to Rs. 3.00 lakhs provided per farmer.
All rural branches are having powers to
consider trade finance upto 0.20 crores. ¾ This amount of subvention will be
calculated on the crop loan amount from
ADV.130/2009-10 dt.10.12.2009 the date of disbursement/drawal up to the
date of repayment or up to the date beyond
Implementation of Interest Subsidy Scheme for which the outstanding loan becomes
Housing the Urban Poor [ISHUP] – Modification of overdue i.e March 31, 2010 for Kharif and
guidelines June 30, 2010 for Rabi respectively,
According to the Government of India, whichever is earlier, subject to maximum
period of one year.
Interest Subsidy Scheme for Housing the Urban
Poor [ISHUP] and Jawaharlal Nehru National Urban ¾ This subvention will be available to Banks
Renewal Mission [JNNURM] Scheme are mutually on the condition that they make available
exclusive schemes i.e. a single beneficiary cannot short-term credit at ground level at 7% p.a.
get benefit under both the schemes. In other words, Other guidelines, calculation of interest
beneficiaries who are availing capital subsidy under subvention and incentive subvention, submission of
JNNURM Scheme are not eligible for finance under claim etc., are given in this circular.
ISHUP Scheme. ADV.137/2009-10 dt.29.12.2009
The brief details about Jawaharlal Nehru New Product Codes in CBS for the PMEGP Scheme
National Urban Renewal Mission [JNNURM]’
The following new product codes for the
Scheme is as given below:
PMEGP scheme in CBS have been introduced:
¾ Jawaharlal Nehru National Urban Renewal
Mission [JNNURM] is a centrally shared Product Code Product Name
Government of India programme with the 4205-0001 PMEGP - TERM LOAN
following two sub missions 2511-1251 PMEGP-WC-CASH CREDIT
™ to provide ‘Basic Services to Urban The above product codes have been created
Poor’ (BSUP) to meet the massive with subsidy enabled provision to account for the
housing requirements of the urban subsidy to be received under the PMEGP scheme.
poor and
Hence, Branches are advised to ensure that if the
™ to provide ‘Urban Infrastructure and loan under the above scheme has already been
Governance’(UIG). opened in any other product codes, the same should
¾ The programme under BSUP includes be changed with the new product code as above as
Integrated Housing & Slum Development applicable to PMEGP scheme and the subsidy
(IHSDP), rehabilitation and resettlement details are entered properly in such loan accounts.
with grant assistance from Central
ADV.141/2009-10 dt.31.12.2009
Government, State Government / Urban
Local Body and beneficiary’s contribution. CRA
Commercial banks can finance the
beneficiary’s contribution of the total Use of RTGS / NEFT / NECS / ECS for Credit to NRE
project cost. Accounts - Compliance with FEMA Regulations and
Wire Transfer Guidelines.
ADV.135/2009-10 dt.17.12.2009
Text received from Reserve Bank of India is
Continuation of 2% Interest Subvention Scheme and furnished below:
Introduction of 1% Additional Incentive Subvention
for Short-Term Crop Loans disbursed during 2009-10 FEMA Regulations specify the nature of
credits that are permitted to NRE accounts which,
Salient features of the notification issued by inter-alia, include foreign inward remittances,
Reserve Bank of India are: transfers from other NRE accounts, funds received
from a local source (representing interest / dividend /
¾ Government will provide interest maturity proceeds of investments) that are eligible to
subvention of 2% p.a and 1% additional be remitted abroad, etc. Further, the Wire Transfer
subvention as incentive (to farmers who Guidelines issued by DBOD, RBI, necessitates
repay their short term crop loan on
6 6
 OCT-DEC. 2009
member banks to provide certain minimum Bank has entered into a tie up with M/s
information in the message formats while Kotak Mahindra Old Mutual Life Insurance Ltd.
originating electronic payment instructions. (Kotak Life) to provide insurance cover to our
Home loan customers. The scheme is branded as
Changes were made in the message formats “IB HOME SURAKSHA”.
for RTGS (field tag 7495 in R-41) and NEFT (field
7002 under transaction code 40) for identifying This new scheme will be available to all
transactions where the remittance has been received eligible existing home loan customers and to all
by an intermediary bank representing foreign inward borrowers who avail Home Loans in future. Full
details of this “IB HOME SURAKSHA” and
remittances. Similarly, as contained in the
Procedure & Operational guidelines are detailed in
Procedural Guidelines on NECS / ECS, the
Part B of this Circular.
mandate form to be filled in by the user institution
provides for a certification that NRE accounts of 1. Eligibility: (as on last birth day)
beneficiaries will be included in the input data only
after ensuring compliance with rules / regulations a. Minimum Age: 18 years
issued by FED-RBI. This, in turn, has to be certified b. Maximum Age at Entry: 65 years
by the sponsor bank as well.
c. Maximum Age at Exit: 75 years
The onus of ensuring that credits to NRE
accounts comply with the extant FEMA Regulations 2. Option to Existing Borrowers:
and the Wire Transfer Guidelines rests with the Option is available for the existing
originating institution / sponsor bank. RTGS, NEFT borrowers to join the scheme. They must join the
and NECS / ECS (Credit) are credit-push systems scheme within 6 (six) months from date of
and function efficiently if appropriate straight- implementation of this Scheme.
through-processing interfaces are in place. Filters, if
any, in the process flow would delay the clearing 3. Insurance Cover:
cycle and increase the load on the system. a. Minimum: Rs.1 lakh;
All banks participating in RTGS / NEFT / b. Maximum: Rs.200 lakh
NECS / ECS are, therefore, advised that when the 4. Insurance Term:
destination of funds is to an NRE account, the a. Minimum: 3 years
originating / sponsor bank must ensure that the
funds are eligible to be credited to an NRE account b. Maximum: 20 years
in India under the existing FEMA Regulations and Both these policies are single premium
Wire Transfer Guidelines. Beneficiary / Destination policies and premium can also be financed by the
banks have to make requisite changes to the Bank if required. The insurance cover is on
interface software, if not already done, so that all diminishing basis based on the repayment schedule
valid transactions indicating credit to an NRE of loan account.
account are not returned. Kotak Life’s “IB HOME SURAKSHA”
CRA.36/2009-10 dt.06.10.2009 scheme comes with many better features such as
reduced Premium rates, more borrowers covered
Provision Of Group Life Cover To Home Loan without Medical Checkup, Medical Checkup costs
Borrowers - (1) Introduction of New Scheme from M/s borne by Kotak Life, easy procedure etc. One
Kotak Mahindra Old Mutual Life Insurance Ltd - “IB notable important feature of the “IB HOME
HOME SURAKSHA” (2) Modifications to the existing SURAKSHA” scheme of Kotak Life is that it
IB Griha Jeevan Scheme. provides an opportunity to cover all existing eligible
accounts. (which have not been covered so far)
LIC has revised the premium rates within 6 months from date of this Circular.
downward, towards IB Griha Jeevan Group IB Special Home Loan Scheme
Insurance policy covering the life of borrowers
Home Loans financed under “IB Special
under IB Home Loan up to 10% with effect from
Home Loan Scheme” are NOT ELIGIBLE to be
01.10.2009. The revised rates are applicable only to
covered under these two Schemes, since Special
loans disbursed on or after 01.10.2009. Further, LIC
Home Loan borrowers are covered by a separate
has also notified certain modifications in medical
scheme where the Premium is borne by the Bank.
requirements with immediate effect. Full details are
available in Part A of this Circular. CRA.42/2009-10 dt.23.10.2009

7
 Recollect
(i) Discontinuance of MT Code on DDs issued for Rs.1 Scheme by General category TN State Govt
lakh and above (ii) Revised guidelines on the Pensioners.
cancellation of BPOs in the system As per the instructions in the PPO, the
subscription will be deducted for all the Tamilnadu
a. Application of MT Code on DDs : State Government Pensioners/Family Pensioners on
With immediate effect, application of MT code a compulsory basis. If any pensioner desires not to
on DDs of Rs.1 Lakh and above is make any subscription, he/she has to obtain the
discontinued, as validation of the details of the specific letter from the Directorate of Pension in this
DDs is provided in the system. regard and inform the branch where the pension is
drawn.
b. Cancellation of BPOs in the system: Branches can modify the changes only on
the death of the pensioner/family pensioner.
Presently, the system requires revalidation of Henceforth, any changes in the subscription will be
BPO for cancellation, if BPO is beyond 24 taken care of by CPPC.
months old. The same has been dispensed, with
immediate effect. Cancellation of BPO shall be CRA.46/2009-10 dt.02.11.2009
permitted at the request of the purchaser only.
Collection of Home Loan / Vehicle Loan Instalments
through Electronic Clearing Service (ECS)
CRA. 44/2009-10 dt.26.10.2009
Repayment towards Home / Vehicle loan
Subscription to Tamilnadu Government Pension
instalments from other Bank Accounts through ECS
Health Fund & Family Security Fund Scheme
is very convenient and there are instances where
Commencing from the month of November borrowers prefer to issue Debit Mandates
2009, subscription to the Tamilnadu Government authorising our Bank Branch to raise debits in their
Pension Health fund and Family Security fund will Accounts held with other Banks. This is facilitated
be recovered at CPPC by centrally debiting the by Electronic Clearing Services (ECS) operated by
pensioners account and the same will be paid as a Reserve Bank of India and Public / Private Sector
single amount to the Health Fund and Family Banks at various Centres.
Security Fund.
The penal provisions applicable under
Following are the changes in the Health Chapter XVII of N.I. Act in case of ‘Dishonour of
Fund Scheme of the Tamilnadu State Government:
Cheques’ and Sec. 25 of Payments and Settlement
Category of (A) Health Maximum Subscription Systems Act, 2007 in case of ‘Failed Electronic
Pensioners