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Home Loan Master Circular Page | 1

DEPARTMENT: RETAIL CREDIT

Circular No. HO:Retail:04:2015-16:31 Date: 08.04.2015

TO: ALL BRANCHES/ OFFICES

ORIENTAL HOME LOAN SCHEME

1. BACKGROUND__________________________________________________________

The undernoted Circulars including Master Circular have been issued on Oriental Home

Loan Scheme since 10.05.2012.

S. No. Title Circular No. and Date

1Master Circular: Oriental Home LoanScheme

HO:Retail:05:2012-13:77 dt: 10.05.2012

2Financing of Group Loan Protection Planfor Home Loan Borrowers

HO:Retail:08:2012-13:123 dt: 25.05.2012

3 Issuance of In Principle Sanction Letter HO:Retail:23:2012-13:487dt: 03.10.2012

4 Home loan - DLF Ltd. - Home Buyers HO:Retail:45:2012-13:822 dt: 05.03.2013

5

Home Loan - Specific Location- Noida

and Greater Noida

HO:Retail:12:2013-14:196 dt: 26.06.2013

6 Modification In LTV Ratio & Margin HO:Retail:13:2013-14:203 dt: 26.06.2013

7KYC guidelines and Due Diligenceexercise to be completed whilesanctioning the housing loan

HO/RT/14/2013-14/331 dt: 30.06.2013

8 Upfront Disbursal of Housing Loans HO:Retail:19:2013-14:540 dt: 04.09.2013

9Modifications in Retail Credit Schemes-Financing to HUF & Discretionary powers

HO:Retail:22:2013-14:578 dt: 17.09.2013

10Modifications in Terms of Retail CreditSchemesRepayment Period

HO:Retail:26:2013-14:647 dt: 11.10.2013

11

Modifications In Retail Schemes-

Takeover guidelines & CIBIL default

HO:Retail:40:2013-14:994 dt: 23.01.2014

12Modifications In Retail Credit Schemes-Net Take Home Criteria

HO:Retail:44:2013-14:1126dt: 06.03.2014

13Retail Credit- Due Diligence exercise tobe completed while sanctioning HousingLoans

HO:Retail:01:2014-15:02 dt: 01.04.2014

14Housing loans under residential projectsfinanced by our bank

HO:Retail:06:2014-15:18 dt: 09.04.2014

15Oriental Home Loan Scheme- Change inNet Take Home Criteria

HO:Retail:10:2014-15:127 dt: 23.05.2014

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16Oriental Home Loan Scheme-Modification in Terms (Rate of Interest(Normal & CRE) & Construction Period)

HO:Retail:18:2014-15:425 dt: 27.08.2014

17Oriental Personal Loan Scheme for HomeLoan Borrowers

HO:Retail:21:2014-15:441 dt: 29.08.2014&HO:Retail:32:2014-15:610 dt: 27.10.2014

18 Oriental Home Loan Scheme- ReviewFormat

HO:Retail:31:2014-15:589 dt: 17.10.2014

19 Modification in Retail Credit schemes-Discretionary Powers & Extn. of chargeover Home Loan property / HomeFurnishing Loan

HO:Retail:32:2014-15:610 dt: 27.10.2014

20Modification in retail credit schemes-Components of Finance & Takeovernorms

HO:Retail:39:2014-15:764 dt: 19.12.2014

21Home Loan: Clarification on Income TaxReturn - In Case of Professionals, Self-

Employed Persons & Businessmen

Circular Letter No. HO: Retail:11:2014-15dt. 29.12.2014

22Oriental Home Loan Scheme PrioritySector Definition

HO:Retail:41:2014-15:792 dt: 30.12.2014

23Retail Credit Schemes: Operative

Account of ApplicantsHO:Retail:45:2014-15:924 dt. 21.02.2015

24

Housing Loan- Modification in Termsa) Inclusion of stamp duty & othercharges in LTV ratiob) Construction linked disbursal ofhousing loan

HO:Retail:46:2014-15:952 dt: 07.03.2015

25Modifications in Retail Credit Schemes-

inspection charges

HO:Retail:47:2014-15:979 dt: 17.03.2015

26

Oriental Home Loan Scheme -Modification in Terms: Assessment ofMPBF, Net Take home Criteria,Construction period, Penal Interest &discretionary powers

HO:Retail:48:2014-15:980 dt: 17.03.2015

2. Consolidation of Scheme_______________________________________________

To obviate frequent references, the instructions advised through aforesaid Circulars

containing guidelines on Oriental Home Scheme have been consolidated. This Circular

will supersede all the previous circulars. Following schemes are annexed herewith:

Scheme Page No.

Oriental Home Loan Scheme 12-47

Oriental Home Furnishing Scheme 48-50

Oriental Personal Loan Scheme for Home Loan Borrowers 50-52

List of Documents 53-63

Annexure 64-134

FAQs 135-136

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______________________________________________________________________

3.ACTION TO BE TAKEN AT FIELD LEVEL AND CONTROLLING OFFICES_______

3.1 All the field functionaries are advised to ensure meticulous compliance of theabove guidelines.

3.2 The contents of this circular be got noted from all the staff members at theBranches / Regional Offices.

3.3 All inspecting officials from the Inspection & Control Deptt. at Head Office as wellas the Regional Inspectorates should verify the compliance of the above duringtheir visits to Branches / Regional Offices.

(B N Jha)

General Manager

(Retail, Marketing & Services)

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Modifications in the scheme after 10.05.12 (Details are given in the updated scheme)

S.No. Particulars Existing Norms Modifications

1. Tie-up withBuilders

(HO:Retail:12:2013-14:196 dt:26.06.13)

&

(HO:Retail:39:2014-15:764 dt:19.12.14)

Project Approval: No pre-condition of having Tie-uparrangement with Builders

for sanctioning Home loan.

Approving Authority: ForBulk marketing of Homeloan, Tie-up with builders isa marketing strategy (not apre-condition). The RLCC-RH is authorized for

approving tie-uparrangements with theBuilders/ Developers forextending Home Loans tothe prospective buyers /borrowers, except in case ofNoida / Greater Noidalocations.

Apart from residential projectslocated at Noida & GreaterNoida locations, no Tie-up

arrangement with Builders isrequired for Home loansanction. In case of Noida &Greater Noida locations,following guidelines are to becomplied:

a) If the project in Noida /Greater Noida is alreadyfinanced by the Bank, thenthe housing loan may beconsidered for sanction for

residential property in theproject by the delegatedauthority.

b) If the project in Noida /Greater Noida is notfinanced by the Bank, thenthe project shall be firstapproved by the HLCC-EDat Head Office. Onlythereafter the housing loanmay be considered forsanction for residentialproperty in the project bythe delegated authority.

Except Noida / Greater Noidalocation, wherein existingguidelines remain unchanged, inother cases, Regional Headshall explore all possibilities totie-up with all reputed builders inhis regions.

To speedup the process, allthose projects, which have beenapproved by any two of theBanks/ institutions namelyHDFC Bank / HDFC Ltd., SBI,LICHF, ICICI, Punjab NationalBank / PNB Housing FinanceLtd. based on their stand alonesanction letters, be approved.

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The approval be accordedsubject to compliance offollowing conditions that:

a) Above banks approvalshould not be older than sixmonths from the date ofconsideration of ourapproval;

b) The visit to the project sitehas been undertaken by theBank officials and visit reportis held on record; It shouldbe ensured that no adversefeature is observed duringthe visit.

2. Margin

(HO:Retail:13:2013-14:203 dt:26.06.13)

Loan Limit Margin

Loans Upto ` 20.00Lacs

15%

Loans Above `20.00 Lacs

25%

Loan Limit Margin

Loans Upto` 20.00 Lacs 15%Loans Above ` 20.00Lacs & Upto ` 75.00Lacs

20%

Above`75.00 Lacs 25%

3. Financing to

HUF

(HO:Retail:22:20

13-14:578 dt:

17.09.13)

Home Loan to HUFconcerns may beconsidered on selectivebasis, provided the incomeof HUF only is reckoned forthe purpose of arriving at

eligible loan amount. Inindividual case, income ofHUF shall not be added toarrive at eligible loanamount.

No Housing / any other RetailLoan be considered to HUFentities or to Partnership firmswhere HUF is a partner.

* Refer circular no. HO/RMD/38

/ 2013-14/ 494 dated:23.08.2013.

4. Loan Tenure

(HO:Retail:26:2013-14:647 dt:11.10.13)

Overall upto 25 years Overall up to 30 years subjectto the age of dwelling unit

Age of thedwelling unit

Repaymentperiod

Less than 10 yrs Maximum 30Yrs

Older than 10yrs

Maximum 25yrs

5. Repayment Age

(HO:Retail:26:2013-14:647 dt:11.10.13)

i. Maximum repaymentage is 60 years or uptosuperannuationwhichever is earlier andupto 65 years if youngerco-borrower is available.

ii. For Pensioners upto 65years

i. For Salaried (With Pension)& other Individuals upto 70years

ii. For Salaried (NonPensionable) upto 60 yearsor superannuation.

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6. Takeover Norms

a) SanctioningAuthority forTakeover Cases

under HomeLoan

(HO:Retail:40:2013-14:994 dt:23.01.14)

&

(HO:Retail:39:2014-15:764 dt:

19.12.14)

Authority Disc.Powers

Branchincumbent

NIL

For cases fallingunder the powersof Branch &Regional Office

RLCC-RH

For cases ofHead Officepower

HLCC-ED

Authority Disc. Powers

Branchincumbent

The branchincumbent isempowered fortakeover of home

Loan whereworking capitallimit is availed byborrowers fromour bank &housing loanfrom other banks.Subject tocompliance oftakeoverguidelines andcondition thatworking capital

limit must bestandard for last3 years.

For cases fallingunder the powerof Branch (otherthan above) &Regional Office

RLCC-RH

For cases ofHead Officepower

HLCC-ED

b) DeviationAuthority(HO:Retail:40:2013-14:994 dt:23.01.14)

CAC HLCC-ED

RLCC-RH is empowered forpermitting following deviationsin takeover of Home LoanCases.

1. Takeover of home loan underImplementation Stage(construction based houses /flats) and additional Loan forthe same house.

2. Takeover of home loansanctioned for purchase ofplot (subject to condition thatthe loan is sanctioned underhome loan scheme in otherBank) and additional Loan forconstruction of house, onaccount of increase in thecost of project due to costescalation of construction/Builder and any additionalconstruction, thereon.

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S.No. Particulars Existing Norms Modifications3. Sanction of additional Loan

(at the time of takeover orafter the takeover) by way ofOBLS, OMLS, EducationLoan etc. by extension ofcharge on the same property.However, it shall be ensuredthat all other terms of therespective retail schemes viz.Margin, LTV etc. shall becomplied with.

c) Relaxation ofNorms

(HO:Retail:39:2014-15:764 dt:19.12.14)

a) The conduct of theaccount with the existingFI / Bank had beenstrictly regular andborrower had notdefaulted/delayed in

payment of anyinstallment.

b) There should not be anyrephasement /reschedulement in theloan account.

a) The account to be takenover should be classified asStandard Regular by theprevious banks / FIs and acertificate to this effect betaken from the existing bank.

b) There should not be anyrephasement /reschedulement in theaccount in the last 3 yrs.

7. Default in CIBILreports otherthan Credit cardaccount

(HO:Retail:40:2013-14:994 dt:23.01.14)

The Credit ApprovalCommittee (CAC) shall bethe sole competent authorityto allow any exception /relaxation in case of Fresh

Borrowers or theirassociates who adjustedtheir accounts with otherBanks or the accounts are inwritten off/settled status.

HLCC-ED shall be the solecompetent authority to allow anyexception / relaxation in case ofRetail Borrowers, Co-borrowers & Guarantors who

adjusted their accounts withother Banks or the accounts arein written off/settled status.

8. Ceiling on ageof the Co-Borrower

(HO:Retail:44:2013-14:1126 dt:06.03.14)

Co-borrower with maximumage of 70 years ispermissible

In case the owner of property isbeing made as co-borrower,only because property isstanding in his/ her name, thereshall be no ceiling on age ofsuch owner/co-borrower.

9. Rate of interest(Upto 2 houses)

(HO:Retail:18:2014-15:425 dt:27.08.14)

Loan Limit Rate ofInterest

Up to`75 Lacs BR=10.25%

Above`75 Lacs-`3.00 Crore

BR+0.50%=10.75%

Above`3.00Crore

Rate ofinterest shallbe decided bythe Authorityat H.O.

Loan Limit Rate ofInterest

Irrespective ofloan limit

Base Rate

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10. Home Loan(CRE)

(HO:Retail:18:2014-15:425 dt:27.08.14

&(HO:Retail:39:2014-15:764 dt:19.12.14)

BR+3.50% Base Rate + 0.50%

The respective sanctioningauthorities as per the powersdelegated under Oriental HomeLoan Scheme can consider

Home Loan proposal underCRE.

11. Property

mortgaged in

Home loan to be

kept as security

in other loans

(HO:Retail:32:2014-15:610 dt:

27.10.14)

Housing loan account shallremain 143% backed byvalue of acquisition costof the house / flat andresidual value will beavailable for collateralsecurity in other loan

accounts.

Value to Loan Ratio (VTL) shouldbe kept at 150% minimum (orLoan to Value Ratio be kept at66.67% minimum) of presentoutstanding of home loan andresidual present realizablevalue(as per latest valuation of

property) will be available forcollateral security in other loanaccounts.

Note:

a) If the property is to bemortgaged in OBLS /OMLS,RLCC-RH shall be thesanctioning authority.

b) Latest Valuation: Theguidelines regardingfrequency of valuation ofproperty be guided by RMDDeptt.

12. a) Discretionary

power for HL

(HO:Retail:48:2014-15:980 dt:17.03.15)

HLCCED

RLCC-RHBranch Incumbent-

(Scale)

FULLGM

GMGM VII VI V IV III II I

300 150 100 300150100 50 40 20 10

HLCC-ED

RLCC-RHBranch Incumbent-

(Scale)

FULL GM DGM AGM VI V IV III I I I

500 300 150 300 150 100 50 20 10

b) Discretionary

powers of home

furnishing loan

(HO:Retail:32:20

14-15:610 dt:

27.10.14)

For Regional Office:

RLCC-RH `15.00 Lacs

For Branch Incumbents

Location /CityCategory Loan Limit

Metro `15.00 Lacs

Urban `10.00 Lacs

Semi Urban `8.00 Lacs

Rural `5.00 Lacs

Discretionary powers for homefurnishing loan shall be over &above the discretionary powers

vested with the BranchIncumbent/ Regional Head forHousing loan and shall be linkedto the scale of BranchIncumbent as under:

(`in Lacs)HLCC-ED

RLCC-RH

III- VII II I

Full 15 5 3 2

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However, this loan facility shallbe restricted upto 75% of thetotal cost of renovation /furnishing OR upto 30% ofpresent realizable value of

House / Flat, whichever isless, subject to a maximumamount of`15.00 Lacs.

13. Components of

finance

(HO:Retail:39:20

14-15:764 dt:

19.12.14

&

HO:Retail:

46:2014-15:952

dt: 07.03.15)

a) Purchase price ofplot/house.

b) Construction cost of thehouse.

c) Financing of conversioncharges payable toGovernment Authorityonly for conversion of

the house/flat / plot fromleasehold to freehold.d) For furnishing, repair,

renovation & additionalconstruction.

e) Premium of GroupSecure Scheme (GSS)-Canara-HSBC with OBClife insurance company(JV), if opted byborrower.

Apart from all existingcomponents of finance, a newcomponent has been includedwhich is as under:

Purchase price & installationcharges of Rooftop Solar PVsand Non-Solar Lighting,

wiring and other such fittings.It is relevant that existing homeloan may also be covered forfinancing this component ashome improvement loan subjectto compliance of other termsand conditions of the home loanscheme.

As per RBI guidelines, Incases where the cost of the

house/dwelling unit does notexceed

`

10.00 Lacs, stampduty, registration and otherdocumentation charges maybe added to the cost of thehouse/dwelling unit for thepurpose of calculating LTVratio.

14. Priority Sector

(HO:Retail:41:2014-15:792 dt:

30.12.14)

Housing loan to individualsetc. upto` 25.00 Lacs shallbe classified under Priority

Sector subject toclassification guidelines/directives issued by RBIfrom time to time.

Following housing loans shall beeligible under Priority Sectorsubject to classification

guidelines/ directives issued byRBI from time to time.

a) Housing Loans toindividuals etc. up to ` 25Lacs in metropolitan centreswith population above tenLacs and` 15 Lacs in othercentres

b) Loans for repairs to thedamaged dwelling units of

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families up to ` 2 Lacs inrural and semi- urban areasand up to` 5 Lacs in urbanand metropolitan areas.

Note: The classification ofadvance under Priority sectorwill depend on location of theproperty and not on the locationof the branch.

15. Cash DownPayment ToBuilder/Govt.Authority

(HO:Retail:19:201

3-14:540 dt:04.09.13

&

HO:Retail:

46:2014-15:952 dt:

07.03.15)

Branches can make cash-down payment in case ofthose buyers who plan topurchase flats from reputedbuilders in order to facilitateborrowers to take

advantage of the huge cashdiscount being offered bybuilders

In case of incomplete/under-construction /green field housingprojects of private builders-Disbursal of housing loanssanctioned to individuals shouldbe closely linked to the stages

of construction of the housingproject / houses and upfrontdisbursal should not be made.

In cases of projects sponsoredby Government / StatutoryAuthorities, loans may bedisbursed as per the paymentstages prescribed by suchauthorities, even wherepayments sought from housebuyers are not linked to thestages of construction, providedsuch authorities have no pasthistory of non-completion ofprojects.

16. Construction

Period for Govt. /

Builder Flats

(HO:Retail:48:201

4-15:980 dt:

17.03.15)

Upto 24 months.

The RLCC-GM shall beempowered to extendconstruction period upto 36months on merit of thecase.

The sanctioning authority shallbe empowered for permittingmaximum permissibleconstruction period as per thebuilder construction plan /schedule or 48 months from thedate of first disbursement,

whichever is earlier.17. Construction

Period for other

than builder flats

(self

construction)

(HO:Retail:48:201

4-15:980 dt:

Upto 24 months.

The RLCC-GM shall beempowered to extendconstruction period upto 36months on merit of thecase.

1. In case of already ownedplot /purchase of plot &construction thereon, thepermissible constructionperiod shall be 24 monthsfrom the date of firstdisbursement.

2. In case of plot/ land beingallotted by Govt. authorities

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17.03.15) e.g. HUDA, PUDA, GDA,GAMADA etc., thepermissible constructionperiod shall be 24 monthsfrom the date of possession

or period allowed by govt.authority, whichever isearlier.

The RLCC-RH shall not haveany power to further extendconstruction period.

18. Commercial Rat

of Interest

(HO:Retail:48:201

4-15:980 dt:

17.03.15)

In case construction of thehouse is not completed asper sanction terms from thedate of possession of theplot/land or the plot/land isalienated, commercial rate ofinterest shall be chargedfrom the date ofdisbursement of the loan andloan shall be recalled as perthe normal procedure of thebank (subject to complianceof guidelines mentioned inconstruction clause).

In case construction of the houseis not completed as per sanctionterms from the date ofpossession of the plot/land or theplot/land is alienated, commercialrate of interest @ Base Rate+3%shall be charged from the date ofdisbursement of the loan andloan shall be recalled as per thenormal procedure of the bank(subject to compliance ofguidelines mentioned inconstruction clause).

19. Assessment ofMPBF(HO:Retail:48:20

14-15:980 dt:17.03.15)

A) Gross Income CriteriaB) Margin CriteriaC) Net Take Home Criteria

The criteria for assessing MPBFby Gross Income is removed.MPBF be assessed on the basis

of Margin & Net Take HomeCriteria only, whichever is less.

20. Criteria forarriving at Nettake Home %agefor deduction

(HO:Retail:44:2013-14:1126 dt:06.03.14)

The individuals jointlyavailing the Home loan areseparately assessed basedon the income criteriatabulated as under:

GrossAnnualIncome

NetTakeHome

Maximumextent ofrelaxationby RLCC-

RH

Upto `5 lacs 50% 5%

Above` 5Lacs to` 10Lacs

40%

5%

Above` 10Lacs to`15lacs

30%5%

Above` 15

Lacs to`25lacs

25%No

change

Above` 25lacs

20% NoChange

After relaxation by RLCC-RH,the net take home income shallbe minimum 45%, 35% & 25%respectively for above threeslabs of Gross Annual Income.

In case of joint borrowers, theGross Annual Income of theindividuals can be clubbed toarrive at the slab for Net takehome criteria.

GrossAnnualIncome

NetTakeHome

Maximumextent of

relaxation byRLCC-RH

Upto `5lacs

50% 5%

Above` 5Lacs to` 10Lacs

40% 5%

Above` 10

Lacs

30% 5%

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THE SCHEME

NOMENCLATURE

Housing Finance Scheme shall be called ORIENTAL HOME LOAN SCHEME forall practical purposes including advertisement.

SCHEME OBJECTIVE- GOVERNMENT/RBI/BANK

The Government of India vide various National Policy Pronouncements have reinforcedthe primacy of the Housing sector and emphasized the need to provide shelteropportunities to all.

In pursuance of National Housing Policy of Central Government, RBI has beenfacilitating the flow of credit to housing sector. During recent years the housing hasemerged as one of the sectors attracting a large quantum of Bank finance. Therefore,the current focus of RBI regulation is to ensure orderly growth of housing loan portfolio

of the Banks with minimum risk.

PURPOSE

The Bank offers financial assistance for/to:

1. Purchase of land and construction of a house thereon.2. Construction of house, where in the plot/land already owned by the applicant.3. To buy built up (new / second hand) / semi built up house or flat.4. To extend/improve/repair, the existing house or flat.5. To buy a flat under construction or proposed to be constructed

6. For Home furnishing, furniture / fixtures embedded to structure or otherwise.7. To take over of housing loan from other Banks/ financial institutes.8. Installation of Rooftop Solar PVs and Non-Solar Lighting, wiring and other

such fittings.

A) Home Loan for construction of house (other than Rural areas)

Home Loan for construction of house shall be allowed only after ensuring bonafide

land/plot holding by the applicant and obtention of sanctioned plan by the competent

authority. The borrower shall construct the house upto a maximum period of 24 months

strictly as per sanctioned plan (subject to compliance of guidelines mentioned in

construction period clause) and shall submit the completion certificate of house within 3months of completion of construction. A registered architect preferably from Banks

panel must also certify at various stages of construction of building/home, that the

construction of the building/home is strictly as per approved plan.

B) Specific provision of loan for House construction in rural area.

Generally, in rural /village areas, there is no authority for approving the buildingplan/map and the documents of title of the land/house are also not available, in suchcases the prospective borrower should be asked to get the construction map prepared

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by architect confirming compliance of Government rulings. Permission from the villagepanchayat for the construction as per building plan/map shall be obtained along withtheir certification that there is no map approving authority existing for approving suchmap for the particular rural areas and the said plot on which construction will be made islocated in notified Abadi Area of the village. However, a due diligence in all such casesbe exercised by sanctioning authority.

C) Home Loan for purchase of built up house / flat

Home loan shall be allowed for purchase of flat / house after obtaining:

Certified copy of approved construction plan/mapOR

An affidavit-cum-undertaking that the house / flat has been constructed as persanctioned plan and /ORBuilding byelaws and as far as possible has a completion certificate. A registered

Architect appointed by the bank must also certify before disbursement of loan that the

built up property is strictly as per sanctioned plan and / or building byelaws.

No loan shall be granted for properties, which fall in the category of unauthorizedcolonies unless and until they have been regularized, and development and othercharges are paid. No loan shall be given in respect of properties meant forresidential use but which the applicant intends to use for commercial purposes.Loan to professionals like Doctors, CAs for the purpose of purchase

/construction of non-residential premises like nursing home/office unit bedelinked from housing loan facility.

ELIGIBLE PERSON(S)

Individuals or group of specified individuals (co-borrowers) having an assured source ofregular income viz. Salaried employees, Professionals, Self-employed persons,businessmen, farmers etc. Further,

1) The staff members of the Bank are also eligible under general public home loanscheme.

2) The NRI, PIO may also avail a housing loan in India subject to compliance ofspecific terms at par with those applicable to a person resident in India.

Note: No Housing Loan be considered to HUF entities or to Partnership firms

where HUF is a partner.(Amended vide circular no. Retail:22:2013-14:578 dated:17.09.2013).

RBI SPECIFIC GUIDELINES

The following types of Bank finance maybe included under direct housing finance:

1) Bank Finance extended to a person who is also owning a house in town/villagewhere he resides, for buying/ constructing a second house in the same or othertown / villages for the purpose of self occupation.

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2) Bank finance extended for purchase of a house by a borrower who proposes tolet it out on rental basis on account of his posting outside the headquarters orbecause he has been provided accommodation by his employer.

However, if the applicant intends to have more than two houses, the exposure for

third unit house onward may be treated as CRE exposure and falls under the

definition of income producing real estate as the borrower may be renting theseunits and the rental income would be the primary source of repayment. The

applicable interest for such units is mentioned under Rate of interest column.

Further, no loan should also be given in respect of the properties meant for

residential use, which the applicant, intends to use for commercial purposes, and

declares the same while applying for loan.

LOAN TO VALUE RATIO

As per RBI guidelines, the LTV ratio in respect of housing loans should not exceed75%. LTV Ratio for home loan shall be as under:

S. No. Loan Amount LTV Ratio

1. Upto`20.00 Lacs 85%

2. Above`20.00 Lacs & Upto`75.00 Lacs 80%

3. Above`75.00 Lacs 75%

(Amended vide Circular no. HO: Retail:13:2013-14:203 dated 26.06.2013).

All RBI guidelines/directives issued on home loan from time to time shall betreated an integral part of the home loan scheme of the Bank.

KYC /CIBIL / RATING

The compliance of KYC norms, extraction of CIBIL Reports, Central Registry Search

report and rating of the account are integral part of the Home Loan Scheme for

respective borrowers. As per Loan Policy, these tools are applicable in Home Loan

A/Cs and utilized to alleviate various risks and to exercise prudent decision on the loan

proposals. It is relevant that if a customer secures Credit Rating upto financing level,

his/her application will be considered eligible for further processing.

AGE CRITERIA

Minimum age:18 years as on date of application

Maximum age:

i. For Salaried (With Pension) & other Individuals - upto 70 yearsii. For Salaried (Non Pensionable) - upto 60 years or superannuation, whichever is

earlier.

(Amended vide Circular No. HO:Retail:26:2013-14:647 dated: 11.10.2013)

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The above Maximum age limit is permissible subject to the age by which the loan

should be fully repaid, availability of sufficient, regular and continuous source of income

for servicing the loan repayment to the satisfaction of Loan sanctioning authority.

Note:

In case the owner of property is made as co-borrower only because property is standingin his / her name, there shall be no ceiling on age of such owner / co-borrower (Incomeof co-applicant in such case cannot be considered for calculation of MPBF).


FINANCING BRANCH

Normally the financing branch shall be:

a) The branch located at the place of residence / posting of the applicant/ borrower.

ORb) By the branch located at the place of property / nearest to the property proposedto be purchased / constructed is situated.

However, registered / equitable mortgage shall be created at nearby Branch or

financing Branch situated in notified area.

COMPONENTS OF FINANCE

a) Purchase price of plot/house.b) Construction cost of the house.c) Financing of conversion charges payable to Government Authority only for

conversion of the house/flat / plot from leasehold to freehold.d) For furnishing, repair, renovation & additional construction (Please refer separate

para enunciating terms of finance under Home furnishing Loan)e) Purchase price & installation charges of Rooftop Solar PVs and Non-Solar

Lighting, wiring and other such fittings.(Amended vide circular no. HO:Retail:39:2014-15:764 dated 19.12.2014)

f) Premium of Group Secure Scheme (GSS)-Canara-HSBC with OBC life insurancecompany (JV), if opted by borrower. However the premium amount shall not betaken into account for arriving at LTV ratio on Home loan i.e. the margin shall bemaintained excluding the insurance premium cost.

(We further clarified that Premium of GSS (life insurance cover)for covering Housing loan

beneficiary can be financed by the Bank within the overall ceiling (i.e. total financingincluding GSS premium does not exceed the minimum required LTV ratio, which is as

under:

S. No. Loan Amount LTV Ratio

1. Upto`20.00 Lacs 85%

2. Above`20.00 Lacs & Upto`75.00 Lacs 80%

3. Above`75.00 Lacs 75%

Note:

1. Purchase of plot only or in isolation is not permissible.

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2. Stamp duty and registration expenses should not be included in the cost ofhousing property to be financed. However, In cases where the cost of thehouse/dwelling unit does not exceed ` 10.00 Lacs, stamp duty, registrationand other documentation charges may be added to the cost of thehouse/dwelling unit for the purpose of calculating LTV ratio. (Amended videcircular no. HO:Retail:46:2014-15:952 dt: 07.03.2015)

3. A personal loan scheme for financing the insurance premium under GSS is

also circulated vide circular no. HO:Retail:21:2014-15:441 dt: 29.08.2014 &

further modification vide circular no. HO:Retail:32:2014-15:610 dt:27.10.14.

MARGIN

(Amended vide Circular no. HO: Retail:13:2013-14:203 dated 26.06.2013).

i) Borrower shall contribute his margin upfront. However, the sanctioning authoritymay consider acceptance of proportionate margin with the release of loaninstalments on merits of the proposals.

ii) While taking over Home loan accounts from other financial institutions, it must beensured that the amount taken over fulfills the criteria of our stipulated marginirrespective of the margin imposed / not imposed by other financing institutions.

iii) Loan amount for purchase of residential plot shall not exceed 50% of the eligibleloan amount.

Since loan to value ratio, which is stipulated by RBI, is mandatory to comply anddetermines the provision percentage under risk weight assets, as such fieldfunctionaries meticulously comply the obtention of requisite margin.

iv) In case the charge on house is proposed to be extended in other loan accountsas collateral security, in such circumstances the margin will be maintained at33.33% irrespective of loan limit. Further, Value to Loan Ratio (VTL) should bekept at 150% minimum (or Loan to Value Ratio be kept at 66.67% minimum)of present outstanding of home loan and residual present realizable value(as per latest valuation of property)will be available for collateral security inother loan accounts. (Amended vide Circular no. HO: Retail:32:2014-15:610 dated

27.10.2014)

MAXIMUM ELIGIBLE LOAN AMOUNT

There is no ceiling on the amount of loan. However, Maximum loan amount permissibleunder the scheme shall be:

1) On Margin criteria:

a) 85% of the total cost of construction / purchase price excluding stamp dutyand registration charges, for loans upto`20.00 Lacs.

Loan Limit Margin

Loans Upto` 20.00 Lacs 15%

Above`20.00 Lacs & up to`75.00 Lacs 20%

Above`75.00 Lacs 25%

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b) 80% of the total cost of construction / purchase price excluding stamp dutyand registration charges, for loans above`20.00 Lacs & upto`75.00 Lacs.

c) 75% of the total cost of construction / purchase price excluding stamp dutyand registration charges, for loans above`75.00 Lacs.

2) Net Take Home Income Criteria:

The salaried person & Non salaried person falling under below mentioned slab of

Gross Annual Income shall have to maintain minimum net take home income

(Gross Annual Income minus all existing deductions, income tax deduction &

deduction of proposed loan instalment)

(Amended vide Circular no. HO: Retail:10:2014-15:127 dated 23.05.2014 & HO:Retail:48:2014-15:980 dt: 17.03.15)

After relaxation by RLCC-RH, the net take home income shall be minimum 45%,35% & 25% respectively for above three slabs of Gross Annual Income.

In case of joint borrowers, the Gross Annual Income of the individuals can beclubbed to arrive at the slab for Net take home criteria. (Amended vide Circular No.HO:Retail:44:2013-14:1126 dated: 06.03.2014)e.g.

(`

In Lacs)

S.No. Particulars Mr. A Mr. B Mr. C Mr. D

a. Gross Annual Income 6.00 4.80 10.80 16.00

b. Net Take Home (%age) on

individual basis40% 50% 30% 30%

c. Applicable Net take Home

on joint basis (%age)

30%

Note:

The maximum permissible loan amount shall be the amount out of above twoalternatives, whichever is less.

THE INCOME

1. For salaried persons:

Gross income shall include salary and other regular income i.e., dividends,interests, rent, etc., as declared in salary certificate, form 16 and/or income taxreturns / assessment.

Since the salaried income are having increasing trends in future, as such onmerits the latest income may be considered for computation of MPBF.

Net Income = Gross IncomeAll deductions including instalment of proposed loan andincome tax.

Gross Annual Income Net Take Home Maximum extent ofrelaxation by RLCC-RH

Upto`

5 lacs 50% 5%

Above` 5 Lacs to` 10 Lacs 40% 5%

Above` 10 Lacs 30% 5%

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2. For Non salaried person: where income tax return are being filed

Gross income consists of income as declared in the income tax returns/assessmentsand/or supported with financial statements and/or certificate from a qualified CA.wherever required a copy of tax paid challan / receipt shall also be obtained to supportthe income of the person.

Net Income = Gross Income All deductions including instalment of proposed loan andincome tax.

Clarification:The MPBF be arrived at by taking into consideration average income of past 2 years.However, it must be ensured that two IT returns not to be filed together. (Amended videcircular letter no. HO: Retail:11:2014-15 dated: 29.12.2014)

Note: Depreciation if any, claimed in the income tax return may be considered as a partof gross income for computation of eligible loan amount. Existing rental income as perincome tax return may be taken into consideration. However,if the applicant intends

to let out the proposed property to be purchased and requests for inclusion ofexpected rental income in the gross income of the party, it can not be consideredfor MPBF calculation, as the same will be treated as income producing realestate.

3. For Non salaried (Self-employed/Small Business/Traders) where income taxreturns are not filed:

Subject to complete satisfaction of the sanctioning authority as regard to theearning/income vis--vis repayment capacity of the borrower in this category bysubjective/objective means available at his command. Housing Loan to this category ofborrower with a maximum limit of `2.00 Lacsis permitted.

In such cases, branches may accept income as declared by prospective borrower in aduly notarized affidavit as the gross income.

4. For Farmers/Rural Artisans:

In rural and semi-urban areas where income of the applicant cannot be ascertained onthe basis of documents, it may be worked out as follows:

A. GROSS INCOME

Income from Agriculture: The below mentioned income per annum per acre ofland may be taken as base for ascertaining the total amount of income. However,these rates are notional which may be updated with available authenticatedincome per acre of land provided by NABARD or approved rates of District LevelConsultative Committee (DLCC).

Further, the income from other horticulture/medicinal crops may be considered inall areas, wherever such crops are grown. In case of sugarcane, income shall beworked out on the basis of average yield per acre and minimum/special supportprice (MSP/SAP) declared by the concerned State Government.

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Further, these rates may vary from place to place. The loan sanctioning authorityshould take prudent decision on the monthly income and repaying capacity of theindividual farmers.

Type of land/Crop Income per acre per annum

For irrigated land `20000/- to`25000/-

For un-irrigated land `5000/- to`7500/-

For Horticultural cropsGrapes `95000/-Litchi `29000/-

Coconut `27000/-

Citrus `32000/-

Tea `46000/-

For Medicinal crops - Mulethi `84000/-

Mentha `69000/-

Computation of MPBF for Agriculturists:

a) Income from Agriculture : _________________b) Income from Allied activities : _________________

c) Income from Services/Business/other sources : _________________

Gross Income: a) +b) +c):-_________________

B. Deductions

a) On account of Crop Loan :_________________b) On account of Tractors/Tube-well/Thresher loan etc. :_________________c) On account of any other loan : _________________d) Income Tax, if applicable : _________________

Total Deductions: a) +b) +c):-_________________

C. NET INCOME OR SURPLUS = A. B. [Gross Income All Deductions

including installment of proposed loan]

NOTE:

1. It is reiterated that the acceptance of Gross Income in the above manner should

be to the entire satisfaction of the sanctioning authority, to ensure continuance of

adequate future income for repayment of loan installment.

2. However, future rent from the proposed property (the house that is going to be

financed) shall not be included for calculation of loan eligibility as per income

criteria in all of the above cases.3. In process note invariably the computation of eligible loan amount be given on

tabulated sheet.

4. Repayment of loan by the agriculturist may be by way of monthly/quarterly/half

yearly installments so as to commensurate with generation of income cycle.

However, preference be given for monthly installment in case the agriculturalist is

having repayment capacity/other source of income.

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BORROWER / CO-BORROWER

1) In case of Individual/co-borrower, the income of spouse, son/sons anddaughters-in-lawmay also be considered for arriving at the maximum amount ofthe loan provided they have a steady income.

2) Income of parents (up to 70 years of age) residing with their only son, who

intend to borrow home loan, can be considered for assessing the maximumloan amount of the son.

3) In case the owner of property is made as co-borrower only because property isstanding in his / her name, there shall be no ceiling on age of such owner / co-borrower (Income of co-applicant cannot be considered for calculation of MPBF).

4) The income of the joint owner of the property irrespective of relationshipwith the borrower may be considered for computation for maximum permissibleHousing Loan. Thejoint owners shall essentially be the co-borrowers.

5) However, the particular person whose income has been added to arrive at

maximum loan amount will stand as co-borrower of the loan account .

EXAMPLE FOR CALCULATING MAXIMUM PERMISSIBLE BANK FINANCE(MPBF):-

Illustration-1

Following applicants have approached the bank for sanction of home loan andrequested to appraise their eligibility.

(` in Lacs)

Name ofapplicant

Relation Age Profession Gross AnnualIncome

DeductionsincludingIncome Tax

Mrs. X Mother 58 yrs Housewife No income --

Mr. Z Father 60 yrs Business man 4.80 0.96

Mr. Y Son 25 yrs Govt. employees(Pensioner)

10.80 2.40

Mrs. A Daughter-in-law

23 yrs Private employee(non-pensioner)

8.00 1.50

The proposed cost of flat is ` 150.00 Lacs. It shall be presumed as if all the fourborrowers have approached for housing loan independently and their housing loanrequirement shall be assessed independently except Net Take Home Criteria:-

1) On Margin criteria(Amt. In Lacs)

Total Cost of the Flat/House `150.00

Margin (20% for home loan up`

75.00 Lacs & 25% for home

loan above`

75.00 Lacs)*

`37.50

MPBF `112.50

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2) Net Take Home Criteria(Amt. in

`

)S.No. Particulars Mrs. X Mr. Z Mr. Y Mrs. A

a. Age Profile 58 60 25 23

b. Repayment Years 12 10 30 30

c. Gross Annual Income 0.00 4.80 10.80 8.00d. Gross Monthly Income 0.00 0.40 0.90 0.67

e. Monthly Net take Home(%age)* 30% 30% 30% 30%f. Monthly Net take Home (Amt.) 0 0.12 0.27 0.20g. Funds available before deductions (d-f) 0 0.28 0.63 0.47h. Monthly Deductions

(Without proposed Loan EMI)0

0.08 0.20 0.13

i. Fund Available for EMI (g-h) 0 0.20 0.43 0.34j. EMI per Lac 0 1335 896 896

k. MPBF [(i *1,00,000)/j] 0 14.98 47.99 37.94*

Collectively- Eligibility= 0 + 14.98 + 47.99 + 37.94 =`

100.91

Lacs

MBPF,on the basis of whichever is less criteria, of all above 2 methods, shall be `100.91 Lacs.

* In case of joint borrowers, the Gross Annual Income of the individuals can be

clubbed to arrive at the slab for Net take home criteria. Please refer circular no.

HO:Retail:44:2013-14:1126 dated 06.03.2014. In this case, gross annual income of

all borrowers is `23.60 Lacs, as such, 30% net take home criteria is taken.

If the borrowers come independently for taking home Loan, then following will be

net take home criteria

Name of the applicant Gross Annual Income Net Take home criteria

I (Mrs. X) No income Not eligible

II (Mr. Y) 4.80 50%III (Mr. Z) 10.80 30%

IV (Mrs. A) 8.00 40%

The example and EMI are illustrative only. The actual EMI per Lac shall be computed

on prevailing ROI on proposed loan and available repayment period of respective

borrowers.

Note:-

The above example is illustrative. If loan is considered in favour of single individual,

then the repayment period and installment shall be governed according to his/herindividual eligibility. However, in case loan is given jointly in favour of more than 1

borrower having different repayment period, then the installment shall be calculated on

the basis of their individual repaying capacity & subsequently clubbed to form a single

installment. Initially this clubbed installment shall be of higher amount and subsequently

it may be of lower amount. (Please refer step down option given in point no.- vii under

repayment of loan section)

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DISBURSEMENT-

a)Release of instalment in case of purchase of ready built house.

Payment be made in lump sum directly to the seller in consultation with borrower.

In case loan for insurance premium is considered the same may be released in

favour of the insurance company after ensuring compliance of margin/loan tovalue ratio.

In case the house proposed to be purchased is under construction stageand builder / Government agency issues a demand letter of payment, undersuch circumstances, the loan shall be released in accordance with theterms of said demand letter or schedule of construction limited payment.

b) Release of installment in case of construction of house /floor

The Loan for construction of house will be disbursed in stages in accordance with a

phased programme according to sanctioned plan as under:

25% when the relative plan is sanctioned.

25% for construction upto the plinth level against production of certificate from

architect certifying the amount spent on construction. The architect shall also

certify that construction has been done strictly as per sanctioned plan.

25% for construction upto the ceiling level against production of certificate from

the architect certifying the amount spent on construction. The architect shall also

certify that construction has been done strictly as per sanctioned plan.

Balance on completion of roof against production of certificate from architect.

The loan for petty expenses of construction can be released to the account of borrowerdirectly so as to facilitate him to effect petty payments. However, the Branch Incumbentshall ensure that borrower does not misutilize funds and all other necessary precautionssuch as site visit, Architect Certificate before release of loan and other terms andconditions of Housing Loan Scheme are meticulously complied with.

Note:

In case of housing projects of private builders- Disbursal of housing loanssanctioned to individuals should be closely linked to the stages of construction

of the housing project / houses and upfront disbursal should not be made incases of incomplete/under-construction /green field housing projects.(Amended vide Circular no. HO:Retail:19:2013-14:540 dated: 04.09.2013

In cases of projects sponsored by Government / Statutory Authorities, loans may bedisbursed as per the payment stages prescribed by such authorities, even wherepayments sought from house buyers are not linked to the stages of construction,provided such authorities have no past history of non-completion of projects. (Amendedvide Circular no. HO:Retail: 46:2014-15:952 dt: 07.03.15).

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REIMBURSEMENT OF ADVANCE AMOUNT ALREADY PAID BY THEBORROWERS:

In case of flats allotted by Govt. agencies like DDA, HUDA, PUDA, NOIDA etc. theapplicants are required to deposit the entire/ part amount within a limited period forregistration of flats in their names. Sometimes it is not possible for them to raise homeloans despite their best efforts, within the specified time. In such cases, the applicants

are left with no option but to arrange funds from other sources including friends andrelatives. With a view to enable such applicants to avail Housing Loan it has beendecided to allow reimbursement of the advance amount already paid by them subject tocompliance of following terms and conditions:

(i) In such cases, where part/advance payments have been effected, the amountdeposited with the Government Agency may be treated as margin money and theBank may reimburse the amount in excess of margin.

(ii) The reimbursement shall be restricted only in those cases, where flats are allotted

by Government agencies and not in case of private builders.

(iii) The borrowers should be able to provide clear documentary evidence of havingpaid the amount in advance from sources, which should be clearly identifiable.

(iv) The funds raised should not be older than six months.

SECURITY

The loan shall be secured by Registered / Equitable Mortgage of the property(House/Flat) created out of bank finance. However, where Registered / EquitableMortgage cannot be created immediately-

a) The borrower may give an alternate property/ tangible securities having value more

than loan limit with clear titles for interim period.b) In case the borrower is in no position to offer any alternate security and it is expected

that the title deed/security document for creation of mortgage will be available in oneor two weeks time from registrar office then on merit of the case the sanctioningauthority in such situations may permit obtention of a letter of authority (specialpower of attorney) from the borrower authorizing the bank to collect the title-deedsfrom the office of the sub-registrar as and when the same is ready for delivery. Thereceipt/ counter foil issued by the sub registrar office shall invariably be obtainedalong with such authorization. The loan disbursing Branch shall maintain a trackrecord of such authorization and ensure to collect the title deeds from the subregistrar office on prescribed future date.

However, all relevant loaning documents for creation of registered / equitablemortgage shall be obtained at the time of release of loan.

c) In case of purchase of flat etc. at under construction stage from co-operative society/builder/developer or from public sector/ Govt. agencies like DDA, NOIDA, HUDA,PUDA etc. where the borrower is having only share certificate/allotmentletter/agreement to sell etc. (as the case may be) as document to sanctify thetransfer of property.

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In such cases loan can be secured by obtaining undertaking, as per Annexure-14and security documents like tripartite agreement Annexure-17&18, power ofattorney as per Annexure-6, letters from the borrower in order to reinforce the rightof the bank to recover its dues as a stopgap arrangement. These provisions arecomparatively for shorter duration.

All above option be exercised in consultation with Banks panel advocate. Further,

to obviate any contingent situation and eventualities which may arise in variousparts of the country because of local practices/law and also to make system fullproof, Regional Heads/branches shall obtain the opinion of their legal retainers tosuggest additional document if any, to supplement the above documents.

Since the registered mortgage of immovable property is better option for creation ofBanks charge, as such, the preference shall be given for registered mortgage over theequitable mortgage if the same is not creating operational difficulties as well as notattracting excess stamp duty as compared to duty on equitable mortgage.

Registration of Equitable Mortgage:

With a view to secure advances of banks and to avoid / detect frauds, some of the

States Tamil Nadu, Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Madhya

Pradesh etc. have set up Registry for registering equitable mortgages. In other states,

setting up of Registry is in process. It has been decided that wherever Registry for

registering equitable mortgages has been / shall be established in a State, it shall be

mandatory for the branches to get, equitable mortgages created by them registered with

the Registry established by the State Govt.

OBTENTION OF NEC FROM ADVOCATES AND VALUATION CERTIFICATE OFPROPERTY FROM APPROVED VALUERS

As per system in vogue, the branches are required to obtain NEC, Legal Opinion, Legal

Vetting and Valuation Certificate (of plot/built up house/flat). Accordingly, the job of

obtaining NEC and valuation certificate of the property shall be assigned to Advocates /

Valuers on the panel of the Bank only.

While perusing the legal opinion, the field functionaries must ensure that the

seller has bonafide title to sell the property and the prospective buyer derives

better/valid title, besides other compliance.

Branches should ensure that advocate on panel of the Bank submits his opinion as perthe standard format 29of Model Legal Opinion circulated vide Head Office Circular No.HO/RMD/17/2012-13/175 dated 18.06.2012 & amendments thereafter format enclosedas per Annexure-27 & Annexure 28.

The instructions communicated by circular number HO/MKTG./RT/39/2011-12/596dated 24.11.2011 & HO/RMD/51/2011-12/626 dated 05.12.2011 and amendmentsthereafter on obtention of valuation certificate shall be perused and comply.

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EXTENSION OF CHARGE ON HOUSE PROPERTY TO OTHER CREDIT FACILITIES:

Sanctioning authority can permit extension of charge of the house property to coverother credit facilities of the borrower subject to the condition that Value to Loan Ratio(VTL) should be kept at 150% minimum (or Loan to Value Ratio be kept at 66.67%minimum) of present outstanding of home loan and residual present realizablevalue (as per latest valuation of property)will be available for collateral security inother loan accounts. (Amended vide circular no. HO:Retail:32:2014-15:610 dated: 27.10.2014)

It should invariably be ensured that the terms and condition of credit policy, guidelinesregarding frequency of valuation of property as guided by RMD Deptt. and housingscheme of the Bank are complied with.

CONSIDERATION OF HOUSING LOAN ON A HOUSING PROPERTY HELD ASCOLLATERAL SECURITY IN THE BUSINESS ACCOUNT

RLCC-RH may consider/sanction housing loan on properties already mortgaged withthe bank in business account within their existing discretionary powers on housing loan.

However, it shall be ensured that:

i) Business account has been running satisfactorily during the last one year and isa standard asset.

ii) Sufficient collateral security is available to cover over-all exposure in thebusiness as well as in housing loan account in terms of the credit policy of thebank issued from time to time.

iii) However, in all circumstances, the housing loan account shall remain 150%ofpresent outstanding of home loan and residual present realizable value (asper latest valuation of property)will be available for collateral security in otherloan accounts..

iv) The Branch incumbents are not authorized to consider such specificproposals even though the proposal falls within their discretionary powers.

Minimum margin/contribution of the borrower in such cases shall be 33.33%instead of existing 15%,20% and 25% as the case may be.

CENTRAL REGISTRY

Banks charge of mortgage shall be noted in the Central Registry System within 30 daysof creation of such charge. The increase in limits or modification of charge shall also begot registered within 30 days. The procedural aspects communicated from time to time

by Risk Management Deptt. (RMD) be meticulously complied with.

RATE OF INTEREST (FLOATING)

a) Upto 2 houses

Particulars Rate of interest Interest Table Code Free code 10 Scheme Code

Irrespective of Loan Limit Base Rate BT633 HL01 TL601

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b) Home Loan (CRE)

If the applicant intends to avail home loan for 3rdhouse onward, the said exposure for

third unit house onward be treated as CRE exposure. The rate of interest in this case

shall be as under:

Particular Rate of interest Interest Table Code Free code 10 Scheme Code

Under CRE Base Rate + 0.50% BL050 HL01 TL601

The respective sanctioning authorities as per the powers delegated under OrientalHome Loan Scheme can consider Home Loan proposal under CRE.

(Amended vide Circular no. HO:Retail:18:2014-15:425 dated: 27.08.2014 & HO:Retail:39:2014-15:764 dated: 19.12.2014)

b) Home Loan (Repair & Renovation)

Particulars Rate of interest InterestTable Code

Free code10

SchemeCode

Irrespective of Loan Limit Base Rate BT633 HL05 TL605

Note:

These rates of interest shall be applicable only on fresh Home loans.

b) Calculation of interest:-

1. Interest on amount of loan will be applied at the prevailing rate per annum on

daily reducing balance with monthly rests.2. In case any fresh additional/supplementary loan (excluding home furnishing loan)

is considered in favour of existing borrower and during the currency of existingloan, the rate of interest in such accounts shall be determined as per theslab falling in respective categories after clubbing the outstanding ofexisting accounts plus proposed loan limit.If the derived Rate of Interest ishigher, then the existing rate, the new rate will be applicable on both theaccounts or if the new rate is lesser than the existing rate, then two different rateon existing account (prevailing rate) and new account (fresh rate) shall beapplicable.

3. The rate of interest shall be on floating rate basis as well as on monthly rest.

4. Interest during moratorium period shall be paid as & when it becomes due. OR In case borrower exercises the option of not paying interest duringmoratorium period, interest component charged in the account for themoratorium period will be added to the loan amount and would be spreadover EMIs for the entire repayment period.

5. Rate of interest is subject to change as per RBI/Banks guidelines circulated fromtime to time.

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6. With a view to facilitate the branches calculation of equated monthly instalmentsinstantaneously, a comprehensive chart showing EMIs on applicable interestrates for loan of`100000/- is enclosed as per Annexure-1.

c) Intimation of change in Interest Rate:-

The borrower shall be deemed to have notice of changes in the rate of interest

whenever there are changes in Base Rate (either increase or decrease) by displayof Base Rate on the website of Bank/Notice Board of the Branch or published innews papers or made through entries of the interest rate charged in thepassbook/statement of account furnished to the borrower and the borrower is liableto pay such revised rate of interest.

In addition, Bank shall have a right to change the spread (above Base Rate) onreset date.

A condition clause to this effect be also incorporated in sanction letter(Annexure-31).

However, the field functionaries shall also comply the instructions in this regard as

are mentioned in particular circular communicating changes in Base Rate.

d) Penal Interest: The application of penal interest clause shall be governed inaccordance with Banks loan policy. Presently the penal interest shall be charged atthe rate of 2% over and above the normal rate of interest on irregular amount of loanand for the period of irregularity.

e) Pre-payment penalty

NIL - The prepayment penalty clause is completely waived. None of the occasionthe pre payment penalty will be applied in the account, even the borrower opts to

switch his home loan account to other bank/financial institution.

INTEREST SWITCH OVER OPTION

The interest switch over option shall be available to existing borrowers on anyoccasion, when they feel the current prevailing card rates of Home loan interest is intheir favour as compared to interest actually applied in their account. They mayexercise the interest switch over option subject to paying onetime fee as under:

S.No. Loan limit Switch over option fee(payable one time)

a) Upto` 25.00 Lacs 0.50% of outstanding as on the date of switch overb) Above` 25.00 Lacs 0.75% of outstanding as on the date of switch over

Note:

1. The fee shall be governed in accordance with sanctioned limit and not on thebasis of outstanding in particular account.

2. This option shall be available only once during the currency of the loan.3. The respective sanctioning authority of the loan may permit the switchover

option.4. The facility will be extended only in standard regular accounts.

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5. The fee recovered shall be credited to Commission Received Miscellaneous.6. While considering switchover option the terms of original sanction shall not be

changed i.e. the repayment period, interest rate slab/ group etc. and accordinglythe new rate of interest shall be determined.

Further, there would be some borrowers (normally high value/ importantcustomers), who could still plead for a complete waiver of such charges. In such

cases the following authority can permit deviation in accordance with discretiongiven below:

Authority Deviation

HLCC-ED Authorized to permit 100% waiver in switch over fee.

RLCC-RH Authorized to permit 25% waiver in switch over fee

The field functionaries are advised to note the above provision in the scheme and notonly check any takeover of Home loan from our Bank but by extending above benefitsto valued customer explore the possibility of fetching more business from them.

PREPONEMENT OF REPAYMENT IN EXISTING ACCOUNTS AND ADJUSTMENTOF INTEREST RATES

The sanctioning authority is permitted to consider reschedulement of repayment period

taking the 1stdate of disbursement as the base and to arrive at applicable interest rate

as available in a particular time-segment. However, the newly determined interest rate

shall be applicable only from prospective effecti.e. for the remaining period of loan as

proposed by the borrower(s) after considering the satisfactory conduct of the account in

past and future source of payment.

However, this option can be exercised only once during the currency of the loan

by the borrower.

It must be ensured that after exercising this option, if any borrower(s) proposes to

shift/transfer his loan account at any stage to some other bank/financial institution, the

benefits so availed by him in the process shall be withdrawn and interest-differential

shall be recovered.

In the event of borrower(s) failing to repay the loan as per the new schedule, penalty of

2% shall be charged for the period of default on overdue amount.

An undertaking, as per the format (Annexure-9)shall be obtained from the borrower(s)

and shall be retained with the loaning documents. Intimation shall be sent to the

borrower(s) as per Annexure-10 and duly acknowledged copy of the same shall be kept

along with the loaning documents.

PROCESS FEE/ DOCUMENTATION CHARGES*

Loan limit Process fee / Documentation Charges

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Irrespectiveof any limit

Process fee - 0.50% of the loan amount, subject to maximum of `20000/- plus service tax, if anyDocumentation charges-NIL

* Does not include advocate charges, valuer fee, insurance charges and otherapplicable out of pocket expenses which shall be borne by the applicant on actualbasis.

* The process fee shall be recovered as per banks existing guidelines on the basis ofabove rates.

* The process fee shall not be recovered from staff/ex-staff members if they avail homeloan under general public scheme.

BOUNCED CHEQUE/ECS/NACH OR STANDING INSTRUCTION DISHONOURS:-

A penalty of`250/- + service tax will be charged for every bounced cheque/ECS/NACHor SI dishonors. The rate may vary from time to time.

INSPECTION CHARGES - Nil

INSPECTION CLAUSE

The property financed under Home Loan shall be inspected at yearly interval or atirregular interval in case of need after giving due notice to the borrower. This inspectionis besides pre and post sanction visit.

It is also relevant that in case of salaried employee, details of employee from employerbe obtained including employees ID/PF number, permanent address, date of joining,retirement etc. besides other details. Further, now-a-days particularly in multinationalcompanies, the employees are switching over from one company to another or the

nature of their employment is on contractual basis for a particular period. In such type ofemployment due care be taken by the sanctioning authority to ensure continuity ofadequate income of the borrower for serving the loan instalment / interest.Time to time circular/guidelines issued in this regard shall also be complied.

REPAYMENT OF LOAN

i. The entire loan shall be repaid in maximum of 360 months preferably inequated monthly instalments including the moratorium period subject to the ageof dwelling unit as under:

Age of the dwelling unit Repayment period

Less than 10 years Maximum 30 YearsOlder than 10 years Maximum 25 years

ii. Maximum Repayment Age:

For Salaried (with pension) & other individuals: Up to 70 years.

For Salaried (Non-Pensionable): upto 60 years or superannuation.


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iii. Due diligence on repaying capacity and financial soundness be exercised by thesanctioning authority while considering loans upto repayment age of 70 years ofthe borrower.

iv. Repayment of loan by the agriculturist may be by way of monthly/quarterly/half yearly instalments so as to be commensurate with generation ofincome cycle. However, preference be given to recover monthly instalment in

case the agriculturalist is having repaying capacity.

v. In case of takeover of home loan from other financial institution / Bank, the

original repayment period shall not be rescheduled. The takeover amount shall

be recovered in remaining period of repayment as mentioned in terms of sanction

of other Banks, subject to the maximum of 360 months.

vi. The Equated Monthly Installment (EMI) are/shall comprise of principal and

interest.

vii. Step Down Option- In case of joint borrowers, with different age profile,

where one or more borrower will attain maximum permissible age during

currency of loan, the step down option shall apply. EMIs will be fixed

according to number of years, each co-borrower shall pay within maximum

permissible age limit/repayment period. The EMI of each co-borrower shall

be clubbed to form a single installment. The clubbed installment shall be

higher during the available repayment period of elder borrower and may

reduce thereafter.

viii. All the borrowers shall be jointly and severally liable to repay the loan irrespective

of the fact whether they are joint owners of the property or not.

In case of joint borrowers in different age groups and varied income, maximum

permissible loan shall be the sum total of permissible loan to each individual

borrower as if each one has applied independently for housing loan. Similarly

EMI will be fixed for each joint borrower & clubbed to arrive at total EMI.

ix. The above said Maximum age limit of borrower/ co borrowers is permissible

subject to the age by which the loan should be fully repaid, availability of

sufficient, regular and continuous source of income for servicing the loan

repayment to the satisfaction of Loan sanctioning authority.

x. The repayment of loan shall be made through Electronic Clearance System

(ECS) / NACH Debit / Standing instructions / Auto Collection Procedure from

the operative accounts of the borrowerwith us, given the mandate to collect

the EMI. The use of post dated cheque be discontinued as per government

guidelines in context to compliance of Go Green Concept.

xi. PDCs obtained in existing accounts may be retained and presented for recovery

instalment as per existing terms. However, the borrower be given option to switch

over to ECS/NACH/ Standing instructions/Auto Collection Procedure for payment

of future instalment.

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xii. In view of upward fluctuation in rate of interest, the sanctioning authority is

permitted to exercise following two options subject to expressed consent of the

borrower(s):

a) To recalculate / revise the existing EMI amount for recovery of the then

outstanding in remaining existing repayment period taking in to account the

increase in rate of interest.b) To recommend Head Office for increasing the repayment period of loan with

same / revised EMI wherever required subject to a maximum of 360

months. However, while recommending, it be ascertain that the

borrower is having repaying capacity to pay future instalment.

RBI guidelines from time to time regarding Restructuring of Home Loans shall be

applicable .

TERMS OF PAYMENT

The borrower may choose any of the under noted three options to suit his convenience:

1. EMI (Uniform Instalments for entire repayment period).

2. Payment of only interest for first five years and thereafter in EMI for next 25 years.

3. In case moratorium period is permitted, the borrower can exercise his option torepay the interest amount during moratorium period or at a subsequent date i.e.instalment commencement date.

4. In case the borrower has adequate repaying capacity and request of preponmentof repayment period the same can be permitted by the sanctioning authority after

considering the satisfactory conduct of account and ensuring future source ofrepayment. However, this option can be exercised only once during the currency ofthe loan.

An undertaking as per Annexure- 9 shall be obtained from the borrower(s) and beretained with loaning documents. An intimation shall also be sent to theborrower(s) as per Annexure 10 and its duly acknowledged copy be kept onrecord.

5. In all such cases where the borrower makes a lump sum/bullet payment inadvance and request for reducing future EMI, then the sanctioning authority mayrevise the existing EMI subject to compliance of the followings:

a) The account is standard & regular

b) After receipt of lump sum/bullet payment from borrower, the EMI berestructured in a manner that the residual outstanding balance standliquidated within the original residual repayment period.

c) The terms of original sanction (more particularly interest rate & repaymentperiod) will not be changed.

6. To universalize the repayment period, preference will be given for EMI basedrepayment of uniform instalments.

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MORATORIUM PERIOD

a) Maximum permissible moratorium period is 18 months from the date of firstdisbursement or Upto the date of possession of flat whichever is earlier subject toMaximum permissible moratorium period of 18 months from the date of first

disbursement.b) The above moratorium period shall be permitted within the overall repaymentperiod (the repayment period shall be inclusive of moratorium period).

c) In case of take over Home loan account from other Banks/FI the repayment shallcommence from the following month of disbursement/take over date of loan.

d) In case of takeover of home loan under implementation stage, as per terms ofsanction of previous bank from where loan has been taken over.

NOTE: However, in all above circumstances, the option be preferred for recovery ofaccrued interest during moratorium period, if EMI is not served since inception.

Alternatively, the accrued interest during moratorium period be capitalized as on thedate of commencement of installments.

CONSTRUCTION PERIOD

Construction period is different from moratorium period i.e. moratorium period is arepayment holiday period for EMI whereas construction period is time given inconstruction of House. Maximum moratorium period can be allowed upto 18 monthsthereafter repayment will start, however construction period can be allowed as under:

A)Construction Period for Govt. / Builder Flats: In case of purchase of flat from Govt.Agencies/Builders, the sanctioning authority shall be empowered for permittingmaximum permissible construction period as per the builder construction plan / scheduleor 48 months from the date of first disbursement, whichever is earlier.

B) Construction Period for other than Govt. / builder flats (self construction)

a) In case of already owned plot /purchase of plot & construction thereon, thepermissible construction period is 24 months from the date of first disbursement.

b) In case of plot/ land being allotted by Govt. authorities e.g. HUDA, PUDA, GDA,GAMADA etc., the permissible construction period shall be 24 months from thedate of possession or period allowed by Govt. authority, whichever is earlier.(Amended vide Circular no. HO:Retail:48:2014-15:980 dt: 17.03.15)

C) Other Terms

a) In case of purchase of ready to move flat/house the construction period betreated as nil.

b) Commercial Rate of Interest: In case construction of the house is notcompleted as per sanction terms from the date of possession of the plot/land orthe plot/land is alienated, commercial rate of interest @ Base Rate+3% shall becharged from the date of disbursement of the loan and loan shall be recalled asper the normal procedure of the bank. (Amended vide Circular no. HO:Retail:48:2014-15:980 dt: 17.03.15)

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TREATMENT OF RESCHEDULING OF REPAYMENT PERIOD

Where the borrower has initially opted for a shorter repayment period but later onintends to extend the same because of shrinkage of income/repayment capacity due tounforeseen circumstances, sanctioning authority may extend repayment period upto amaximum of 30 years inclusive of lapsed period on case to case basis on merits.

Interest rate as well as EMI shall be re-worked on balance outstanding for the proposedremaining extended repayment period on the current applicable interest rates or on therates applicable as on base date (the date on which the loan was originally sanctioned)whichever is higher.INSURANCE

Insurance of House:An insurance cover under the agreed Banks clause as persystem in vogue of house / flat (structure) financed under home loan scheme of theBank, be obtained.

Life insurance cover of the borrower: Group Secure Scheme (GSS) for HousingLoan Customers launched by our Marketing Department vide Circular No. HO/Mktg./JV/ 09 /2013-14/423 dated 31.07.2013, shall be perused and its benefit beinformed to the prospective home loan customers for cross selling of this product.

Insurance premium amount in both cases shall be borne by the borrower.However, life insurance premium can be financed by the bank as a component of homeloan, if LTV ratio is maintained OR Personal loan can be raised under personal loanscheme for home loan borrowers. (HO:Retail:21:2014-15:441 dt: 29.08.2014 &amended vide circular no. HO:Retail:32:2014-15:610 dt: 27.10.2014).

TIME FRAME FOR DISPOSAL OF LOAN PROPOSAL

The maximum time frame for disposal of applications has been prescribed as under:

For Loans under Branch Manager Discretionary Powers:

3 to 7 days after submission of full set of documents by the borrower.

For Loans under Regional Office / Head Office Powers:Maximum upto 15 days after submission of full set of documents by the borrower.

DISCRETIONARY POWERS

A. For General Public: (including CRE)(`

in Lacs)

(Amended vide Circular no. HO:Retail:48:2014-15:980 dt: 17.03.15)

The field functionaries are also eligible to sanction home loan to directors/partners (intheir individual capacities) of a company/firm, whose original limits are sanctioned byhigher authorities.

HLCC-ED RLCC-RH Branch Incumbent- (Scale)

FULL GM DGM AGM VI V IV III II I

500 300 150 300 150 100 50 20 10

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B. For Staff under General Public Scheme

Place of posting of the employee availing the Loan Sanctioning

AuthorityAll Branches/RO (other than RH)/Service Branch/STC (other than STC,

Noida) / Currency Chest / COPEC / Data Centre/ Stationary Godown

(Except stationary Godown at Faridabad) / Regional Inspectorates

(other than RI Heads)

RLCC-RH

All Staff posted at Head Office/Stationary Godown at Faridabad/STC,

Noida/ Regional Heads and Regional Inspectorate Heads

HLCC-ED

DEVIATION / CONCESSION AUTHORITY

S.No. Authority Deviations / Concessions

1. HLCC-ED 1. Concession in ROI, subject to minimum of Base Rate2. All Scheme related deviations

2. Authority as perDiscretionary powerchart

Process Fee (Authority as per discretionary powersvested with them as defined in Discretionary power chart)

Note: The respective Authority shall permit deviations in the Scheme/interestrate/process fee on merits within the overall objective and prescribed guidelines ofRBI/Bank issued from time to time.

LOAN FOR ADDITIONAL CONSTRUCTION/TOP-UP LOAN ON THE EXISTINGHOUSE

Whereas we have stipulated requirements for fresh loans, position in respect of loansfor additions to house owner requires separate classification as under

1. Fresh loanees i.e. who have not availed any housing loan earlier or have repaidtheir existing loans.

2. Persons who have availed housing loan from us or from any other financialinstitutions and seek additional loans.

In case of borrowers falling in the first category, their loan entitlement, repayment, etc.

shall be considered in accordance with the terms of fresh Housing Loans.In case of additional loans to existing loanees, their overall entitlement guidelines shallbe the same. However, for computing their entitlements for additional loan, thedifference between the amount of existing home loan and the fresh assessment ofMPBF based on Margin & Net take home criteria (at the time considering additionalloan) shall be worked out to arrive at the maximum entitlement for the additional loan.

In case of those borrowers whose first housing loan is outstanding with us and theadditional loan is for additions in the same house, the repayment of the additional loanshall be so fixed that both the loans are repaid within the repayment period fixed for thefirst loan.

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Further, in case of applicants who are availing housing loan from our bank, the securityshall be existing properties mortgaged with us and charge will be extended for theadditional limit and all other formalities be completed as in fresh sanctions.

SUPPLEMENTARY LOAN AND CREATION OF SECOND CHARGEPresent scheme permits supplementary housing loan to salaried persons who haveavailed housing loan for construction / acquisition / renovation from their own Employer /Department but need supplement sources to meet their additional cost ofconstruction/renovation etc. The security in such cases remains to be the secondcharge over the property mortgaged in favour of the first lender.

As per the system in-place, the document required to create second charge, necessitatephysical delivery of the title documents by the first lender to the bank. It has beenexperienced by the branches that while the Central govt. Ministries readily agree to partwith the title-documents to Bank but other departments/PSU do not generally agree to itand hence good business potential is lost in this process.

To overcome this difficulty, document for creation of second charge without insistenceof physical delivery of title documents from 1st lender have been devised and copy ofthe documents to be obtained in such cases is enclosed with this circular as Annexure 20 to 25.

However, this option shall be exercised only where it is not feasible to obtain delivery oftitle document from the first lender.

HOUSING LOAN LINKED TO VARIOUS GOVERNMENT SPONSORED SCHEME/CUSTOMIZED SCHEME OF LOCAL/STATE GOVERNMENT

The Branches shall continue to extend financial assistance under above said existingspecific scheme by complying the norms, terms & conditions defined in particularscheme, within the broad parameters of BanksHome Loan Scheme.

In case of any new scheme, launched/formulated by any Government/ DevelopmentAuthorities or NHB, the same shall be referred to Head Office for approval and itsimplementation.

SECOND HOME LOAN

Loan to existing home loan borrowers for purchase/construction/repair/renovation of a

second house can be considered provided net take home income/salary afterinstalments of both the loans and other deductions is in accordance with minimum nettake home income stipulation. It shall, however, be ensured that existing account isrunning regular and the facility is not misused for speculative purposes.

TAKE OVER OF HOME LOAN ACCOUNT

In view of our cost effective scheme topped with many other attractions, persons whohave already availed home loans from other FIs/Banks, may express willingness toswitch their home loan accounts to our bank.

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For sanctioning such loans, all other terms and conditions as are defined herewith shallbe complied with.

i) The account to be taken over should be classified as Standard Regular by theprevious banks / FIs and a certificate to this effect be taken from the existingbank. There should not be any rephasement / reschedulement in the account inthe last 3 years. (Amended vide circular no. HO:Retail:39:2014-15:764 dated: 19.12.2014)

ii) Before considering such requests, it shall also be ensured that the houseproperty can be validly charged to the bank. However, mechanism of charging ofproperty may be devised by the Regional Office in consultation with the legalretainer in case of any localized problem.

iii) To safeguard against the falling/stagnant property prices, it shall be ensured thatthe value of the property vis--vis balance in the existing loan account issufficient to cover margin requirement as per our home loan scheme.

The amount taken over must fulfill the criteria of our stipulated marginirrespective of the margin imposed / not imposed by other financing institutions.

iv) The original repayment period shall not be extended.

v) It shall also be ensured that such proposals confirm to all the parameters of ourhome loan scheme/guidelines circulated from time to time.

vi) The collateral securities charge to the existing Banker should not be dilutedhowever, the sanctioning authority, in its best judicious wisdom, may considerwaiving of third party guarantee only in select cases where risk-profile of theaccount is anticipated to be negligible.

Discretionary powers:The discretionary powers for considering takeover of home loanproposals are defined as under:

Authority Discretionary Powers

Branch Incumbents The branch incumbent is empowered fortakeover of home Loan where working capitallimit is availed by borrowers from our bank &housing loan from other banks subject tocondition that working capital limit must bestandard for last 3 years.

For cases falling under thepowers of Branch (other thanabove) & Regional Office

RLCC-RH

For cases of Head Office power HLCC-ED

DEVIATION AUTHORITY FOR TAKEOVER OF HOME LOAN PROPOSALS: HLCC-ED

RLCC-RH is empowered for permitting following deviations in takeover of HomeLoan Cases.

1. Takeover of home loan under Implementation Stage (construction based houses/ flats) and additional Loan for the same house.

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2. Takeover of home loan sanctioned for purchase of plot (subject to condition thatthe loan is sanctioned under home loan scheme in other Bank) and additionalLoan for construction of house, on account of increase in the cost of project dueto cost escalation of construction/ Builder and any additional construction,thereon.

3. Sanction of additional Loan (at the time of takeover or after the takeover) by wayof OBLS, OMLS, Education Loan etc. by extension of charge on the sameproperty. However, it shall be ensured that all other terms of the respective retailschemes viz. Margin, LTV etc. shall be complied with.

(Amended vide circular no. HO:Retail:40:2013-14:994 dated: 23.01.2014)

HOUSING LOAN TO STAFF UNDER GENERAL PUBLIC SCHEME

Vide HO Circular No. HO/HRD/ 72/17 /2014-15/132 dated 21.05.2014 & Circular no.

HO/HRD/72/71/2014-15/805 dated 01.01.2015, housing loan to staff can be sanctioned

as to general public with the following additional conditions:

1. Net Take Home: The minimum take-home salary shall not be less than thestipulated norms for different income slabs. However, the minimum take homeincome shall be taken 40% for all slab of income in case the staff is availingoverdraft limit under staff scheme as against the stipulated norms to generalpublic.

2. Loan can be availed for purchase/construction/renovation for own residentialpurpose and not for commercial/speculative purpose.

3. The terms& conditions i.e. rate of interest Compounding factor and Repaymentperiod shall be same as to general public.

4. In view of legitimate self occupancy purpose, a second loan to general public isintroduced. On similar lines, the staff members may avail second housing loanunder general public scheme for acquiring house/ flat for their need base selfoccupancy purpose. However, the second loan shall be subject to their eligibilityand