Dos & Donts

96
¤s`gÀwˆAiÀ˜ ‚ÉÖˆmï ¤`åAPï C¢üP`jUÀ…À ‚ÀAWÀ (PÀ£`ðlPÀ) STATE BANK OF INDIA OFFICERS' ASSOCIATION ( KARNATAKA) Dos & Donts in Day to Day Banking A STUDY CIRCLE PUBLICATION OF SBIOA(K) # 65, State Bank Buildings, St. Mark’s Road Bangalore - 560 001 2009

Transcript of Dos & Donts

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¨sÁgÀwÃAiÀÄ ¸ÉÖÃmï ¨ÁåAPï C¢üPÁjUÀ¼À ¸ÀAWÀ(PÀ£ÁðlPÀ)

STATE BANK OF INDIA OFFICERS'ASSOCIATION

( KARNATAKA)

Do�s & Don�tsin Day to Day Banking

A STUDY CIRCLE PUBLICATION OF SBIOA(K)# 65, State Bank Buildings, St. Mark's Road

Bangalore - 560 0012009

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FOREWORD

In one of the General Body meetings member had suggested thatAssociation should bring out a book on �Do's and Don�ts� coveringall aspects of banking.

Though a commitment was given in the General Body Meetingthat efforts would be made to bring out the book at the earliest, inspite of our best efforts we could not do so. However, now, I amhappy to inform that we are able to bring out the book as promised.

We have endeavoured our best to collect and produce as manydo's and don'ts covering all facets of banking which would enableour members to follow the laid down systems and procedures andalso follow the bank's instructions.

Though we have been advising our members in every ZonalConference and also in every interaction with the members to followthe laid down Systems and Procedures, many of our members arestill falling in the net of Disciplinary Proceedings unwittingly in theireagerness to achieve the budgets and targets fixed by thecontrollers, and also due to heavy pressure of work.

The book on �Do's and Don'ts� is brought out in a very simplemanner and through bullet points. I am sure, if our members followthese meticulously, they would not only be able to protectthemselves, they would also be protecting the interests of the bank.

I would request all our members to kindly go through the bookat least once, and preserve the book for regular usage.

I place on record the efforts of all the office bearers and alsomany members including faculty of SBLC Bangalore who hadcontributed to bring out this book.

My compliments are due to Com. Y. Sudarshan the Dy. GeneralSecretary for having co-ordinated the compilation.

G. MUTHUSWAMYGeneral Secretary

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INDEX

Chapter Subject Page

1 Customer Identification 5

2 Advances 11

3 SME Advances 25

4 �Per� Segment Advances IncludingStaff And Home / Vehicle Loans 36

5 Agricultural Advances 51

6 NPA Accounts 61

7 Foreign Exchange 69

8 Cash Department 74

9 Government Business 77

10 General Banking 83

11 System, Technology & ATM 88

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CHAPTER - 1

CUSTOMER IDENTIFICATION

ACCOUNTS OF INDIVIDUALS

The customer identification will be on the basis of documents

provided by the customer as (a) Proof of identity and (b)

proof of address. Prescribed application form along with

Photographs of the customer is to be invariably obtained in

all cases.

(a) Proof of identity (any of the following with authenticated

photographs thereon):

l Passport

l Voter ID card

l PAN Card

l Govt./Defence ID card

l ID cards of reputed employers

l Driving License

l Pension Payment Orders issued to the retired

employees by Central/State Government Departments,

Public Sector Undertakings

l Photo ID card issued by Post Offices.

l Photo identity card issued to bonafide students by a

University, approved by University Grant Commission

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(UGC) and/or an Institute approved by All India Council

for Technical Education (AICTE).

(b) Proof of current address (any of the following)

l Credit Card Statement

l Salary slip

l Income/Wealth Tax Assessment Order

l Electricity Bill

l Telephone Bill

l Bank account statement

l Letter from reputed employer

l Letter from any recognized public authority

l Ration Card

l Voter ID Card (only if it contains the current address)

l Pension Payment Orders issued to the retiredemployees by Central / State GovernmentDepartments, Public Sector Undertakings, if it containscurrent address.

l Copies of Registered leave & License Agreement/SaleDeed/Lease Agreement may be accepted as proof ofaddress.

l Certificate issued by hostel and also, proof of residenceincorporating local address, as well as permanentaddress issued by respective hostel warden ofaforesaid University / institute where the studentresides, duly countersigned by the Registrar/Principal/Dean of Student Welfare. Such accounts should beclosed on completion of education/ leaving theUniversity/ Institute.

l For students residing with relatives, address proof of

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relatives along with their identity proof, can also be

accepted provided declaration is given by the relative

that the student is related to him and is staying with

him.

While the above set of documents should normally

suffice to establish both the identity and the correct

address of the applicant, wherever this is not so (e.g.

PAN Card and Salary Slip together may not provide

proof of address) applicants to be asked to give

additional documents e.g. a letter from the employer

giving the correct address, credit card statement etc.

In case of joint accounts, applicants who are not closely

related to each other would be required to establish

their identity and address independently.

KNOW YOUR CUSTOMER (KYC) GUIDELINESGUIDANCE NOTE & INDICATIVE CHECKLIST

FOR BRANCHES

(OTHER THAN INDIVIDUALS)

Obtain brief details of Proprietor / Partner / Promoters/ Directors, viz.,

l Full name and their identity check with photo-identity proof

issued by Government (Passport / Driving Licence / PAN

Card, etc.)

l Address (Office & Residence) with telephone / fax / e-

mail / mobile

l Other concerns of the same Promoters / Group.

l Details of educational qualifications, experience, etc. of

the Promoters.

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l Make a visit to the factory / site, Registered Office /

Corporate Office.

l Make market enquiries through our own customers /

Chamber of Commerce / Industry Associations / Panel

Auditors or other sources.

l Obtain Audited Financials for the last 3 years to ascertain

Unit�s performance and other financial details (in case of

existing Units).

l Scrutinise necessary Registration Certificates, Partnership

Deed, Trust Deed, Registration Certificate from the

Registrar of Societies / Partnership Firms, Certificate of

Incorporation / MA / AA, as the case may be. Peruse

Certificate of Commencement of Business in the case of

Public Limited Companies and Private Limited Companies

being a subsidiary of a Public Limited Company.

l Whether licence / permission / approval by regulatory

authority obtained, if necessary.

l Details of Associate Concerns with their borrowing

arrangements.

If it is a running Unit, obtain details of

l Existing borrowing arrangements

l Major shareholders

l Associate Concerns

What are the guidelines in Customer IdentificationProcedures in respect of accounts of Companies?

Besides prescribed application forms and photographs of

persons who will be operating the account, the following

documents are also to be obtained:

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COMPANIES

l Certificate of Incorporation.l Memorandum of Association.l Articles of Association.l Certificate of Commencement of Business.l A copy of the Resolution of the Board of Directors for

opening of the account.l Identification of those who have authority to operate the

account.

What are the guidelines in Customer IdentificationProcedures in respect of accounts of Hindu UndividedFamily (HUF)?

HUF comes into being because of a particular concept underHindu Law, whereby all the members of the family residetogether jointly, carry on a business activity jointly and holdthe property jointly and, therefore, it is termed as HinduUndivided Family.

Besides prescribed application forms and photograph ofperson who will be operating the account, the followingdocuments are also to be obtained:

HINDU UNDIVIDED FAMILY (HUF)

l Declaration from the Karta.l Proof of identification of Karta.l Prescribed Joint Hindu Family Letter signed by

all the adult co-parceners.

What are the guidelines in Customer IdentificationProcedures in respect of accounts of Trusts?

Besides prescribed application forms and photographs of

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persons who will be operating the account, the followingdocuments are also to be obtained:

TRUSTS

l A copy of the resolution.l Trust Deed.l A copy of the Registration Certificate.l Power of Attorney granted to transact business on

its behalf (wherever applicable).l Any officially valid document to identify the Trustees,

Settlors, Beneficiaries and those holding Power ofAttorney.

What are the guidelines in Customer IdentificationProcedures in respect of accounts of Partnership Firms?

Besides prescribed application forms and photographs ofpersons who will be operating the account, the followingdocuments are also to be obtained:

PARTNERSHIP FIRMS

l Partnership Deed.l Partnership Letter.l Introduction from a person known to the Bank.l Registration Certificate (in case of Registered Firm).l Any officially valid document identifying the partners and

the persons having Power of Attorney and their addresses.l Telephone bill in the name of the Firm / Partners.

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CHAPTER - 2

ADVANCESPROCESSING

Do�s

l Keep a check list of required forms/documents /particulars

to be obtained from the prospective borrowers and givethem a copy of the same to enable them to produce allthe required data at the time of submission of the loan

application.

l On receipt of the same, acknowledge and enter in theloan applications received & disposed register.

l Give them a definite date and time when they shouldapproach you again to enquire about the fate of the

application.

l Scrutinize the papers along with the application and incase you need any clarifications/further documents, note

down all of them and inform the applicant to submit themin one lot.

Don�ts

l Don�t make the applicant run around number of times.

l Don�t depend on the consultants to furnish the requireddata. Instead, keep in touch with the applicants to elicit

the required information.

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VERIFICATION OF DOCUMENTS

Do�s

l Ensure that the KYC formalities are completed.

l If the applicant is a Company, obtain a copy of certificateof incorporation, the Memorandum and Articles ofAssociation, Copy of Resolution passed by the Board ofDirectors, Certificate of Commencement of Business (incase of public limited companies) and verify themthoroughly to know about the objectives of the company,place of Registered office, borrowing powers of thecompany, authorized persons to sign the documents,affixation of common seal of the company, etc.

l Conduct a thorough search in the office of the Registrarof Companies to know about the previous borrowings ofthe company, and subsisting charges.

l If the applicant is a partnership firm obtain a copy of thePartnership Deed and Partnership letter. Partnership Deedto be registered with the registrar of firms.

l If the applicant is a trust, obtain a copy of the Trust Deedand also a copy of the Resolution passed by the Trustees,and bye-laws of the trust.

l If the applicant is a Society, obtain a copy of the Bye-laws of the Society and a copy of the Resolution passedby the Board of Directors.

l Do follow the KYC (Know Your Customer) norms in respectof all the above cases.

l If any property is offered as security, obtain all the originaldocuments and submit the same to the Bank�s approvedlegal advisor for Title investigation Report (TIR), to knowabout the genuineness of the documents, ownership,

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transferability and marketability of the properties inquestion. TIR to be obtained on standard format only.

l Obtain Valuation Report from the Bank�s approved

Engineer/Valuer and critically examine the same.

l Obtain Search Reports from Bank�s approved Company

Secretaries and carefully verify them for existing charges

if any.

Don�ts

l Do not proceed with processing of the loan application

unless you have verified the above documents and are

satisfied about the genuineness of the applicant,

guarantors, and the securities offered.

l Do not read only the last para of the Title Investigation

Report and create the equitable mortgage. Instead read

thoroughly the entire legal opinion and if there are any

flaws/conditions mentioned in the opinion, arrange for

obtention and rectification of the flaws and then only

accept the property as security and create mortgage.

PRE SANCTION INSPECTION

Do�s

l Visit the Business Premises of the company/ firm,Registered Office if situated elsewhere other than thefactory premises, the Promoters�/Directors� residences,

guarantors� residences and also the properties offered assecurity and make enquiries about the genuineness ofthe ownership and prepare a rough sketch indicating the

close by landmarks and file the same along with the

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application for future reference. Measurement of the

property is a must.

l Make a note in the Original Application, the date, timeand your observations if any, of the pre-sanctioninspection. This is very very important.

l Prepare a report and submit the same to your immediatesenior and after his verification file the same along withthe original application.

l Carefully verify the properties, along with the legal opinion

and valuer�s report.

l Enquire in the neighborhood about the applicant,guarantors etc.

l Verify whether all the licenses required for doing the

business are obtained by the applicant. (Viz. SSICertificate, Sales Tax/VAT Certificates, Power sanction,Water and Sewage board approvals, NOC from pollution

control authorities, etc.)

l If existing unit, verify all the records to know about theperformance of the unit, orders on hand, suppliers/buyersparticulars, discretely enquire with the employees about

the performance of the unit, existing borrowings if anywith other banks, salary/wage dues if any etc.

l If term loan is involved, opinion report about the suppliers

to be obtained from their bankers.

l Pre sanction inspection is a must. Don�t avoid it. It is alsonecessary to to note down the date of pre-sanctioninspection, observations if any, on the file.

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APPRAISAL

Do�s

l Analyse the Balance Sheet thoroughly and read theDirectors� Report and Auditor�s Report to find out if thereare any qualifying remarks.

l Avoid highly ambitious projections, arrive at meaningfuland achievable targets and accordingly arrive at thesanctionable limits after due discussions with theborrowers.

l Stipulate covenants which are possible to implement.

l Obtain the necessary opinion reports from all concenedand compile opinion reports on the guarantors and theborrowers and keep them in the file before sanctioningthe limits.

l If any querries are raised by the sanctioning authority,obtain satisfactory replies from the applicants and advisethe same at the earliest to the sanctioning authority.

l Prepare the control forms and submit the same to therespective authorities as soon as the loans are sanctioned.

l Ensure that the approved control forms are received atthe branch and file the same along with the securitydocuments. Reply to the queries raised in the controlform without fail.

Don�ts

l Don�t stipulate conditions which are impossible to fulfil bythe borrowers.

l Don�t conceal any negative information which you cometo know while appraising. Bring it along with mitigatingfactors to the notice of the sanctioning authority for theirconsideration.

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l Don�t disburse the loan without completing all theformalities.

DOCUMENTATION

Do�s

l Keep ready all the documents that are required to beobtained from the borrowers/guarantors.

l Ensure that the documents are stamped as per the LatestState Stamp Act as applicable to the place of execution.

l Prepare the sanction letter in two perfectly identical originalsets and advise the borrower to return one of them signedby the borrowers guarantors and third party mortgagors,if any in acceptance of the terms and conditions.

l In respect of companies obtain the necessary boardresolution for execution of the documents and the commonseal of the company may need to be affixed if called forin the Articles of Association.

l Ensure that the documents are properly filled in and arecomplete in all respects before they are executed by theborrowers, guarantors & third party guarantor if any.

l Ensure that the signatures of the borrowers and theguarantors are obtained at all the places that arenecessary. Rubber stamps of the unit and common sealof the company have to be affixed in your presence andproperly witnessed.

l Ensure that the authorized official on behalf of the banksigns the security documents wherever necessary andsignatures of witnesses are obtained at stipulated places.

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l Ensure that the documents are executed in our ownpremises and the documents are dated and the place ofexecution is marked on all the documents.

l In case if the documents are to be executed elsewherethan the branch, ensure that the documents are stampedas applicable to the place of execution and the fact thatthe documents are executed elsewhere has to be notedin the Cash Credit Register/Term Loan Register.

l In case of Partnership firms obtain Partnership letter inthe prescribed format duly signed by all the partners. Alldocuments to be signed by all the Partners.

l In respect of Hindu Undivided family, HUF letter to beobtained.

l Enter the documents in the Documents Execution Register.

l If any property is offered as security, Equitable mortgageor Registered Mortgage as per the terms of sanction hasto be obtained. In case of equitable mortgage prepareform A and obtain the signatures of the borrowers orguarantors as the case may be and enter the details ofexecution in the EM Register chronologically. Hand overForm A to the mortgagors and ask them to post the sameto the bank�s address.

l In case of extension of Equitable mortgage, enter thesame in the EM Register and obtain form B duly signedby the borrower/guarantor as the case may be.

l Please note EM can be created only at notified centres.So, before execution of EM ensure that the Centre isnotified for that purpose. If not, create the EM only at thenearest Notified Centre and obtain a copy of the recitaland file the same along with the documents.

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l Obtain all the documents mentioned in the TIR in original

and number the same serially and retain the samealongwith other security documents safely.

l Serially number all the security documents and ensure

that they are properly secured and stored in a safe place.(Either in the Strong Room or in a fire proof safe).

Don�ts

l Do not release the limits without completion of all theformalities

All the formalities means :a) Security Documentationb) Mortgage Creation

c) Charge filing in ROC, in case of Borrower Companies,and execution of proper documents as stipulated bythe sanctioning authority.

l Do not obtain blank documents for eventual completion.

l Do not encourage piece meal execution of documents.All the borrowers and guarantors should be present atthe time of execution of the documents.

l Do not hand over the documents to the borrowers for

execution elsewhere. As far as possible the documentsshould be executed in your presence.

l Do not obtain Photocopy of the documents.

l Do not understamp the documents or use invalid stamps.

l Do not obtain unnecessary documents.

l Do not create EM on the basis of Certified copies/photocopies of the title deeds. Do not accept conditional legal

opinion.

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DISBURSEMENT

Do�s

l Ensure that all the terms and conditions stipulated in thesanction note are complied with by the borrower/guarantor.

l Recover all the charges stipulated viz. processing fee,EM charges, upfront fee etc.

l In case of term loans issue BCs/Inter office instrumentsin favour of the suppliers and send the same direct to thevendors along with a covering letter by registered post.

l Ensure that the entire margins stipulated by the bank arebrought in upfront by the borrowers and a certificate tothis effect is obtained from the auditors wherevernecessary.

l In respect of companies ensure that the charges areregistered with the Registrar of Companies within thestipulated time and proof by means of a search report ofsuch registration is obtained and retained along with thedocuments.

l Ensure end use of funds.

Don�ts

l Do not release the funds without completion of all theformalities and compliance of all the stipulated terms andconditions and covenants by the borrower as per thesanction letter.

l Do not send the DDs for supply of machines through theborrower. Send them by registered post alongwith acovering letter.

l Do not deviate from the laid down instructions/stipulations.In case any deviation is required then bring it to thenotice of the sanctioning authority in writing and onlyafter obtention of their approval proceed ahead.

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l Do not allow excess drawings without prior approval fromthe sanctioning authority.

INSPECTION & FOLLOW-UP

Do�s

l Maintain DAILY LIST. This is most importantl Ensure that the borrower submits the Stock Statements

every month and scrutinize the same thoroughly andcritically analyse. Do not write anything on the StockStatements.

l Compare the stock statement with the previous month�sstatement to ascertain if there are non-moving stocks,sundry debtors beyond the cover period, long pendingsundry creditors etc.

l Verify whether any machines are idling, if so the reasonstherefor.

l Verify the electricity meter reading to understand the levelof activity.

l Discretely verify from the employees whether the salariesand wages are paid in time.

l Verify the purchase and sale invoices and also the sundrydebtors and sundry creditors registers.

l Verify whether the Bank�s name plate is displayed atproper place and any other bank�s Boards are on display.

l In respect of large advances it is always better to informthe borrower in advance about the date and time ofinspection so that he can keep ready certain records andinformation for the purpose of inspection.

l Sometimes it may be necessary to make surprise visitsalso.

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l Verify whether all the assets financed by the Bank areavailable in the unit.

l Ensure that the stocks and the machinery are insured forthe correct value and our charge is noted on the insurancecertificate/policy.

l A copy of the insurance certificate/policy should be sentto the borrower and his acknowledgement should beobtained.

l In case the borrower insists for covering specific risks thesame thing should be done invariably.

l Verify whether the address of the unit is properly indicatedin the policy.

l Whenever there is a change in the address the sameshould be informed to the Insurance company andnecessary endorsements are made in the insurance policy.

l In case the stocks are sent for further process to otherplaces, such addresses should also be informed to theinsurance company and a suitable note is made in thepolicy to cover such stocks for the risks mentioned in thepolicy.

l Diarise the date of execution of the documents and ensurethat the documents are revived before the completion of21/4 years.

l Diarise the date of insurance and promptly renew thesame with necessary changes if any before the due date.

l If vehicles are financed ensure that our charge is notedin the RC Book and a copy of the RC Book is kept alongwith the documents. Ensure that the vehicles are insuredproperly and a copy of the insurance policy is kept alongwith the documents. Ensure that our hypothecation clauseis noted in Insurance policy as well.

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l Ensure that the Financial Statements are obtainedquarterly, half yearly and yearly and the same are criticallyanalysed and put up to the controllers with yourobservations for their consideration and file the same inthe unit�s file.

l Obtain standing instructions for recovery of the Term Loaninstallments and Interest and ensure that the same arerecovered without fail. If any SI could not be put throughdue to inadequate balance in the account, recover thesame at the earliest and inform the borrower to arrangefor funds.

l Depending on the size of the unit, decide a thresholdamount up to which cheques can be passed withoutreference to you, and ensure that any cheque beyond thethreshold amount should be referred to you before theyare paid. This is to ensure the end use of funds.

l Scrutinise the Vouchers of your units without fail on a dayto day basis, to ensure that the cheques are issued bythe units for the right purposes.

l In case there is a need to allow excess drawings to theunits, advise the units to submit their request in advanceand after verifying about the genuineness of the requestput up a note to the sanctioning authority for permissionto allow the excess drawings.

l Submit excess drawings reports monthly before 10th ofthe next month to the authority concerned and get theirapproval.

l Ensure that such excess drawings are ratified by thecompanies in their respective boards, and obtain a copyof the resolution passed by the Boards ratifying the excessdrawings, and retain the same along with documents.

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l As and when the limits are due for renewal/review, obtainall the necessary financial documents in advance andarrange for renewing the limits before due date withoutfail.

l In respect of units financed by the Bank whenever youobserve any negative features, or come across anyinformation which is detrimental to the interests of thebank, bring it to the notice of the sanctioning authority.

l In case inspection is not possible due to the vastness ofthe unit�s operations, multifarious products, spread overof manufacturing units at various places, stocks aremaintained at various distribution points and meaningfulinspection can not be conducted for any other reason,then obtain permission from the sanctioning authority forwaiver of inspection.

l Obtain Audited Balance Sheet and critically analyse thesame along with the projections made at the time ofsanction of limits and submit a note to the sanctioningauthority with your observations for their consideration. Incase any corrective measures are to be initiated to rectifycertain aberrations, initiate the same immediately withoutany loss of time.

l In case of multiple financing, put in place a mechanismto obtain and share the informations with regard to theunit at regular intervals.

l If any irregularities are pointed out by the StatutoryAuditors, Credit Auditors, Risk Focussed Internal Audit,RBI Audit, Income leakage Audit and Concurrent Auditor,do rectify the same immediately. In case it is not possibleto rectify, do bring it to the notice of the Sanctioningauthority and obtain their approval for continuing theirregularity.

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l Do maintain the correspondence systematically andensure that the same is properly filed and secured andthe files are readily available at any point of time.

l Do understand that there is no room for complacency inadvances.

l Keep your ears and eyes open to the happenings in theunits.

Don�ts

l Do not allow excess drawings casually.

l Do not allow excess drawings as a routine.

l Do not be overawed by the size of the unit and allowdrawings without taking proper care and ensuring enduse of funds.

l Do not forget to insure the assets financed by the Bankfor necessary risks and at regular intervals.

l Do not suppress certain information which is detrimentalto the interests of the Bank. Do inform the same to thesanctioning authority without fail and obtain theirpermission for future course of action to rectify the position.

l Do not violate any of the laid down instructions.

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CHAPTER - 3

SME ADVANCESAPPLICATIONS

Do�s

l Have preliminary discussion with the prospective Borrower.

l Enquire about his family background.

l Know what his qualifications are.

l Know what his experience in the activity / proposed activityis.

l Check the originals of Identity Proof, Address Proof,Qualification Proof, and experience Proof. (as per KYCnorms)

l Attest the Xerox copies of the above.

l If applicant is a Company, obtain copies of certificate ofIncorporation, Memorandum & Articles of Associationand scrutinize carefully. Look out for power to borrow inthe memorandum of Association.

l If the applicant is a Partnership firm obtain copy of thepartnership deed duly verifying with the original. Ensurethat the Power to Borrow is incorporated in the deed.

l If the applicant is a Trust, obtain copy of the Trust Deedduly verifying with the original.

l Know the requirement of the prospective borrower.

l Give him the suitable application form.

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l Obtain the fully filled up application form along with otherdocuments.

l Obtain copies of Title Deeds and other documents incase there is a Mortgage of Immovable Properties.

l Obtain Quotations, if the applicant is seeking Term Loan.

l Obtain previous two years Financials and next two yearsprojections in the appropriate format - if necessary obtainFinancials under CMA format. If Term Loan is requiredprojections of next five to seven years(as the case maybe) to be obtained.

l Enter the application in Loan Applications Received &Disposal Register.

Don�ts

l Do not involve middle men for sourcing the application.

l Do not promise anything.

l Do not accept applications under any outside pressures.

PRE SANCTlON INSPECTlON

Do�s

l Inform the customer well in advance about your visit.

l Take the application along with all other documents.

l Have a casual enquiry about the applicant in theneighborhood.

l If it is an existing unit, have casual interactions with theemployees.

l Look for Name boards and other Certificates.

l Look for any other signs of Borrowing arrangement withother Banks like Hypothecation Board etc.,

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l Scrutinize the necessary Licenses issued by the LocalAuthorities.

l If it is an SSI, scrutinize SSI Certificate, and the expirydate if any.

l Verify Original Sales tax and VAT Certificates, NOC fromPollution Control Board (if necessary).

l If existing unit, go through the Sales Invoices, SalesRegisters. Purchase Bills. Purchase Registers. StockRegister etc.,

l Have thorough discussion with the prospective borrower.

l Ask as many meaningful questions as possible and getanswers.

l Offer the prospective Borrower suitable product to suithis requirement.

l Verify the availability and Quantum of Power required.

l Check the availability and source of water.

l Verify the source of raw materials and how the same willbe procured.

l Verify the records pertaining building/shed where theactivity will be conducted. (Whether leased or owned). Ifleased, the validity period of the lease agreement.

l Verify the Addresses Given in Various Certificates likeSSI, VAT, IMPEX etc., and confirm their correctness withactual location of the unit.

l Give details of all our charges to the prospective borrower.(Processing/upfront charges, EM charges, Stamp duty,Legal Opinion charges, Valuation Charges etc.,)

l Carryout inspection of Collateral Security if any.

l Identify the property with the documents available.

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l Enquire in the neighborhood about disputes, if any,regarding the property.

l Guarantors, if any to be interviewed and identified.

l Give the customer probable date by which the decisionwill be conveyed.

l Obtain Assets and Liabilities Statements of Borrower andGuarantor.

l If a Term Loan is to be considered verify the Quotations.Discreet Enquiries about the Vendor should be done, ifnecessary make a visit to the Vendor.

Don�ts

l Do not Commit anything.

LEGAL OPINION

Do�s

l Send the copies of Title Deeds and Other documentsdirectly to the Bank�s Panel advocate along with contactnumbers of the prospective borrowers.

l Inform the applicant to submit all original papers.

l Obtain the legal opinion from the Advocate directly within a reasonable period.

l Read the Legal opinion in full.

l Look for conditions if any.

l Ensure that the Search Report is enclosed along with theopinion.

l Ensure that the Legal Opinion is in the Bank�s PrescribedFormat.

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Don�ts

l Do not send the documents through the applicant.

l Do not use the services of the same advocate for allproposals.

VALUATION

Do�s

l Ensure that the valuator is on the Bank�s Panel.

l Inform the name of the valuer to the applicant.

l Receive the valuation report directly from the Valuer.

l Scrutinize the Valuation Report Carefully.

l Ensure that the Address and other Descriptions given inthe Legal Opinion match with that of the Valuation Report.

l Ensure that the Photograph of the Property is scanned inthe Report.

l Ensure that the Valuation Report contains the Sketch Mapof the property.

l Compare the Valuation of property with market valueprevailing in the area.

Don�ts

l Do not entrust the valuation to Valuers other than thebank�s approved Valuers.

l Do not use the services of same valuer for all valuations.

PROPOSALS

Do�s

l Keep all the documents ready.

l Analyze the financials in the appropriate formats.

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l Discuss with the sanctioning authority about the proposalwith the analysis of financials.

l Finalize the Quantum of Advance and inform the applicantabout his eligibility.

l Prepare the proposals in the appropriate format.

l Incorporate in the proposal all the information which areavailable, furnished and you know during the interactionwith the applicant.

l Comment on the other accounts held by the applicant/guarantor like Housing Loan, Car Loan etc. Compileopinion report on the Borrower/Guarantor.

l Obtain opinion report from other banks in the IBA�sstandard Format.

l Put up the proposal for sanction to the appropriateauthority.

l Ensure that all queries raised by the sanctioning authoritiesare answered and clarified.

l After the proposal is sanctioned look out for conditions ofsanction and ensure their compliance.

l Put up the control report to the appropriate authority.

l Look out for the conditions, if any, imposed by thecontrolling authority.

l Comply with all pre disbursement conditions of thesanctioning authority and controlling authority.

l Intimate the applicant about the sanction of loan.

l Obtain convenient date for documentation.

Don�ts

l Do not hide any information you know.

l Do not disburse the loan before sanction.

l Do not misguide the sanctioning authority.

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DOCUMENTATION

Do�s

l Use appropriate documents.

l Fill up the documents in full at the appropriate columns.

l Obtain appropriate stamp paper or get the documentsstamped according to the State Stamp act. (Embossed.)

l Call the Borrowers/Guarantors on the appointed day.

l Get the signatures of the Borrowers/Guarantors on eachand every page and wherever additions and deletionsare made. Affix necessary rubber stamp, wherever theyhave signed. (except wherein they have signed in theirindividual capacity)

l If it is a company get the Resolution passed by the Boardof Director in the appropriate format.

l Affix Company�s Common Seal at the appropriate placesand get the authorized signatures of the Directors.

l If partnership entity, get the Partnership Letter in theprescribed format of the Bank signed by all the partners.

l If HUF, HUF letter to be obtained.

l Verify once again whether the Borrower�s / Guarantor�shave signed wherever required and that the documentsare fully filled up.

l Enter the documents in the document execution Register.

l Secure the documents with tag and keep them safely asper bank instructions.

l Diarize the date for obtaining the revival letter.

Don�ts

l Do not under stamp the documents.

l Do not use Xerox copies of documents.

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l Do not keep stamp papers blank.

l Do not use invalid stamp papers.

l Do not take the signature of the borrower�s / guarantor�s

on the blank document.

EQUITABLE MORTGAGE

Do�s

l Read the legal opinion carefully. Look out for any

conditions - like obtension of Upto date EC etc.,

l Obtain all original Title Deeds and other documents as

required in the Legal Opinion and copies of other

documents.

l Number the same as per the legal opinion.

l Identify the person depositing the Title Deeds and ensure

the genuineness of the person.

l Obtain all the documents mentioned in the legal opinion.

l Record the recital in the appropriate Form/Register.

l Obtain the signature of the Borrower/Guarantor (as the

case may be) in the acknowledgments (Form A/B- SME-

6/8) and ensure the same is sent by Registered Post to

the Bank Address.

l Ensure that the place you are creating an Equitable

Mortgage is a Notified Centre as per State Government

Gazzette.

l Secure all the Documents with tag and keep it in a Folder/

Cover.

l Keep the documents in Fire Proof Safe/ Strong Room.

l Ensure that the documents are not laminated.

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Don�ts

l Do not obtain certified copies of title deeds unless specifiedin the legal opinion.

l Do not accept conditional legal opinion.

ACCOUNT MAINTENANCE

Do�s

l Read the sanction note carefully.

l Look out for any pre disbursement conditions.

l Recover all charges, like Processing, Upfront Fee, EMcharges, etc. if not already done.

l Comply with all pre-disbursement conditions imposed bythe Sanctioning Authority and the Controlling Authority.

l Open the accounts giving all the details as required byCBS.

l Give correct product code for each facility.

l Connect collateral security if any, to the accounts opened.

l Obtain Stock Statement if it is an existing unit.

l Verify the Stock Statement. If necessary conduct/arrangefor an inspection.

l If satisfied, enter the Stock Statement and arrive at theappropriate Drawing Power.

l If a Term Loan Disbursement is involved, issue DD / BkCheque / IOI direct to the Vendor with a covering letterby Registered Post.

l Conduct/arrange for inspection of the Assets purchasedout of Bank Funds and get yourself satisfied.

l If new Cash Credit Account is sanctioned, call for the

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quotations from the Suppliers of Stock and issue DD/IOIBanker�s Cheque directly to the suppliers.

l Conduct/Arrange for Inspection after the Goods havearrived.

l Obtain stock statement from the borrower and arrive atthe Drawing Power based on the Stock Statement.

l Diarise the Date of Document for obtaining the RevivalLetter after 21/4 years.

l Ensure that the borrowers submit Stock Statementregularly as per the scheme. Monthly, Quarterly, Yearlyetc.,

l Enter the same in DP Register or CBS and arrive at theDP.

l Compare the Stock Statement with previous StockStatements Look out for obsolete stocks which are lyingfor a long time.

l Verify the Sundry Debtors Statement carefully. Removethe Debtors which are outstanding for more than thestipulated Period from the list.

l If necessary call for the copies of invoices from theborrower.

l Verify the Sundry Creditors level from the Stock Statement.Look for the warning signals.

l Monitor the accounts carefully.

l Verify the cheques issued by the borrower. Look out forlarge withdrawals.

l Obtain financial statements at regular intervals and putup for review/renewal.

l Give Standing Instructions for credit to Term Loan account.

l Monitor the Standing Instructions which are not carriedout.

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l Ensure that the interest instalment on Term Loans is paidregularly.

l Follow up with the customer if the Term Loan Installmentsand Interest are not being serviced properly.

Don�tsl Do not release Term Loan Payment direct to the Customer.l Do not send the DD/Banker�s cheque through the

customer.

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CHAPTER - 4

�PER� SEGMENT ADVANCES ANDSTAFF ADVANCE ACCOUNT

HOME LOANS

Interview

l Interview the borrower: Enquire about his job, since whenhe is working in the existing post/ place, names of some ofhis colleagues, his native place, name of landlord, hisfamily members, other working members of his family (fora minimum period of 5 years).

l The prospective borrower should be given a list ofdocuments required to be furnished to the bank forconsidering his proposal.

l After initial interview and after deciding to give him loan,then only he should be asked to provide the necessarypapers related to property to be Mortgaged / property forconsidering Housing Loan, Approved plan, Legal Opinionon the property etc.

KYC

l Obtain address proof, photo identity etc., (Copy of RCbook, PAN Card, Passport, Election ID card, ID card issuedby reputed companies, Telephone bill etc) as per KYCnorms.

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Application

l Help the applicant in filling up the relevant data /information in the Loan Application.

l Obtain necessary Signatures of the Borrower / Guarantoron the Loan Application.

l The loan Application so received should be entered intoApplication Received and Disposed Off Register.

Salary

l Obtain latest salary slip and ensure that the net salaryshown is the amount he has received as credit to his SBaccount maintained at the branch. This is to ensure that thenecessary deductions are being made in the salary areshown in the salary slip.

l His Bank account statement may be perused to ascertainany outside / other borrowings.

l For arriving at the total income of the applicant you can addthe salary/income, of the spouse, expected monthly rentfrom the house to be constructed or any other regularincome.

l Obtain copies of Income Tax Returns filed by the applicantand verify the same with the Originals held by the applicant.

l Wherever Xerox copies of the documents are obtainedplease verify the same with the originals and evidence thesame before acting upon it.

Inspections - Pre Sanction / Post Sanction

l Before the loan is sanctioned Visit / Inspect the spot / siteand satisfy that it is as per the chakbandi / as described inthe Sale Deed.

l Pre-sanction inspections a) office/work place of theapplicant, b) Residence c) IT. verification and estimateverification.

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l Ensure that all the necessary civic amenities such as Light/ Water / Drainage facilities are available/ provided to thesite. This is required to ensure / arrive at the expected rent.

l Record your observations in the Loan appraisal/InspectionRegister.

l Irregularities, if any observed during your inspectionshould be reported to the Controllers for their guidance.

l Inspections should be conducted at required intervalsregularly.

Check-off

l Ensure that the applicant is a permanent employee of thecompany / Govt. establishment by cross checking with thecompany, if possible.

l For check-off facility - obtain irrevocable Letter of Authorityfrom the employer for making payment out of any amountpayable to the employee eg. Terminal benefits in case ofretirement, resignation discontinuance of service or death.

l Obtain undertaking from the employer to obtain a NOCfrom the bank before settling the dues of the borrower ontransfer, resignation, retirement etc.,

Equitable Mortgage

l Equitable Mortgage can be created only by deposit of TitleDeed or such other documents which convey the title to theproperty such as Sale Deed / Partition Deed / Deed ofAssignment / Gift Deed Lease Deed etc.

l Evidence the Equitable Mortgage by recording the recital,obtaining letter of Confirmation.

l While creating EM - Give acknowledgement of Title Deedsheld clearly stating the particulars of the property and thedocuments.

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- Verify that all the pages of the Title Deed are presented.

- Obtain signature of all the owners of the said propertyon the acknowledgement form.

- Details in Form - A/B to be filled in same ink as that usedfor signing by property owners.

l Certified copies of the Title Deeds should not be acceptedfor creation of Equitable Mortgage.

Sanction

l After completing all formalities you should put uprecommendations to the Competent Authority for sanctionof loan.

l Obtain post dated cheques for eventual presentation.

l After the loan is sanctioned the same should be put up forcontrol to the next higher OfficiaI.

l Disbursement to be made only in phases, co-relating to theactual progress made in respect of construction of house/flat.

l In case of purchase of house/flat, the sanctioned amountto be paid by DD/Bankers Cheque in favour of the seller, atthe time of Registration of the property at Sub-RegistrarsOffice. The Field officer to be present at the time ofRegistration and hand over the sale proceeds DD/BCs. Atno point of time, proceeds to be handed over to theborrower before registration.

Insurance

l The property so financed should be properly insured.

l Try to cover the life of the borrower through SBI LifeInsurance.

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Do�s

l The builder should be in the line of activity for a minimumperiod of 10 years and should be approved by Bank (AGM(Region)/ AGM Branch has powers to approve individualprojects promoted by Builder).

l Due Diligence on Builder/KYC Norms of seller to be done.

l Legal Opinion/TIR to be gone through and followedmeticulously.

l In case of take-over of accounts, prescribed norms to befollowed.

l The running bill should be in tune with the estimate and tobe certified by approved empanelled engineer after visit tothe site. It is desirable to get a photograph of the buildingwith date of visit duly attested by the borrower/engineerand kept along with the loan documents.

Don�ts

l Do not give false promise of sanctioning loan.

l CERTIFIED Copies of the Title Deeds should not beaccepted for creation of Equitable Mortgage.

l Do not sanction loan / consider the property for securitywhere the legally transferred ownership cannot beestablished.

l The applicant should not be asked to provide informationdocuments piece meal. Instead, all the necessarydocuments should be sought in first visit only.

l Don�t accept the Valuation of the property as it is - Youshould make your own valuation by discreet enquiries andtaking into account the prevailing rates in the vicinity.

l Conditional Legal Opinion should not be accepted /considered.

l No spaces in the Security Documents should be left blank

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i.e. all relevant columns should be filled in properly.Security documents should be written in one colour ink andby one person only.

l Do not release the housing loan instalment without actuallyinspecting the progress of construction.

l Do not release / disburse the loan in cash.

l Do not forget to include the name of the customer for�Personal Accident Scheme�.

VEHICLE LOANS (CAR / JEEP)

l Ascertain the credit worthiness of the applicant (verify theconduct of other accounts maintained at the branch). Findout the eligibility of the applicant.

l Obtain post dated cheques wherever Check Off facility isnot available.

l Obtain a quotation from the applicant. Verify the ratesquoted by the vendor - includes Insurance, Road Tax etc.,whether rates are inflated to get more loan amount.

l Only on completing the formalities release the loan.

l Loan can be given for purchase of vehicle on road cost i.e.including Registration, Insurance, Road Tax etc.

l If spouse income is considered for arriving at eligibility he/ she should be taken as Guarantor for the loan.

l Demand draft comprising of Bank Loan and the CustomersContribution should be drawn in favour of the AuthorisedDealer of the vehicle.

l The DD should be sent directly to the Dealer with a coveringletter stating that the DD should be appropriated towardspurchase of the vehicle as described in the letter and not forsettling any other dues of the borrower.

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l Ensure that the vehicle is released only after it is dulyinsured with New India Assurance Co - as we are theCorporate Agents of New India Assurance Company.Insurance should be Comprehensive with Banks interestas Hypothecatee.

l The vehicle should be Comprehensively Insured formarket value or 10% above the loan amount, whichever ishigher.

l Obtain & keep on record the copy of the Vehicle Insurancepolicy.

l Advise the borrower to register the vehicle with concernedRoad Transport Authority within a stipulated time.

l Obtain the photo copy of the R.C. Book (RegistrationCertificate) and verify the same with the Original.

l Ensure that the remarks �Hypothecated to State Bank ofIndia� indicating Bank�s Charge is entered in the RC book.

l Obtain Invoice / Receipts / Bills issued by the Dealer of theVehicle for having delivered the vehicle and hold the samein borrowers� file.

l Inspect the vehicle - verify the specifications.

l Obtain blank RTO Forms No. 29/30 and No. 34/35 dulysigned by the borrower at the time of documentation.

l Hologram to be affixed on Form No. 35 and on letter issuedto RTO for cancellation of Lien / Hypothecation against thevehicle financed by the bank.

l Maintain a register for recording the business sourced bythe Dealers for making payment of Service Charges.

l Help the customer to get the necessary Cash Discounts /Rebates / Free Gifts, Accessories / Corporate Discountsetc. from the Dealer being announced from time to time.

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USED VEHICLES / TAKE-OVER

l In case of loan for purchase of used cars (Second Hand)ensure that the vehicle is not more than 5 years old and noInsurance claim is availed.

l For second hand vehicles Valuation of the Vehicle from areputed / Govt. recognized Valuer to be obtained.

l Repayment for Old vehicles (Second hand) should not bemore than 7 years for salaried class and 5 years for othersfrom the date of original sale.

l Ensure to obtain No Dues Certificate from the previousBanker (if any).

l Verify the Original RC Book for any charge of previousBanker. If loan is to be liquidated with the previous banker,obtain a letter from the banker stating that they will issue nodue certificate and also cancel/lift the charge marked onthe vehicle, on receiving the amount from us. In such casethe DD should be sent directly to the Bank.

l In case of taking over of loan from other Bank ensure thatthe repayment has started and the account is not a NPA.

l If the vehicle (Second hand) is purchased from Maruti TrueValue the payment should be made to the Maruti True ValueDealer and not to the original Owner. However, you shouldobtain an Indemnity on the letter head of the company(Refer Circular No. 290 dated 13.02.2006 issued by LHOBangalore).

Do�s

l Any deviation from the existing scheme should beapproved by the controllers.

l Obtain Form No. 29 and Form No.30 signed by theapplicant.

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l Margin money to be deposited in the SB A/c of theapplicant.

l Advise the dealer in writing to get the HypothecationCharge noted in the RC Book and vehicle Insurance Policy.

l In case repayment period exceeds the retirement age ofthe salaried applicant, proof of income such as pension,rental income, income on deposits etc. to be obtained.

l In case of financing for second hand vehicles, Certificate ofFitness, Valuation of the vehicle from reputed mechanics tobe obtained and kept along with loan documents.

l Do not issue any letter stating that �loan will be sanctioned�before completing the formalities.

l Only Second Hand vehicle can be financed and not furtheri.e. third hand and forth on.

Don�ts

l Do not disburse loan by crediting the proceeds to thecustomer�s a/c or by disbursing cash.

PERSONAL LOANS - XPRESS CREDIT

l Employees of PSU/Govt. establishment who are drawingtheir salary through the accounts maintained with us andwhere check off facility is available, are eligible.

l Employment certificate / salary slip to be obtained. Checkthe salary credited with, that shown in the salary slip.

l Ensure that the applicant is on permanent role of thecompany / govt. establishment.

l The loan should be sanctioned strictly as per the minimum /maximum amount prescribed by the Bank.

l Necessary processing fees to be recovered.

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l Verify the failed standing instructions for necessary followup.

l Keep in touch with the salary Disbursement Authorities incase salary of any employee is not being credited to theaccount.

GOLD LOANS

l Gold loan can be sanctioned to individuals who are over 21years of age with a steady source of income against thecollateral security of Gold Ornaments.

l Proper introduction of the borrower is important andminimum capacity to service the interest is necessary.

l Refer to the LHO circulated gold rates for the advancevalue of gold.

l Cash Officer should ensure the purity of gold ornaments byboth touch stone and specific gravity method. If necessarythe cash officer should utilize the services of a reputedjeweler in town to verify the genuineness of the goldornaments at the cost of the borrower and a certificate ofpurity to be obtained from him.

l The repayment period for Gold loan should not be morethan 30 months.

l Current Account Over draft can also be sanctioned but tothe customers of good standing only.

l The necessary Processing fees should be recovered forthe sanction of loan.

l If the loan is not closed within the stipulated period, noticeshould be sent to the borrower to repay the loan withinterest and the matter should be advised to the Controllers

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and their approval to be obtained for auctioning theornaments to recover the bank�s dues.

l If the borrower fails to repay the loan outstanding theornaments should be auctioned in public by fixing floorprice depending on the market value of the ornaments.

Don�ts

l Ornaments with alphabetic initials/ names should not beaccepted.

l Do not allow / permit the customer for misutilising the GoldLoan facility to keep their valuables safely with the Bank. Toobviate such possibility a service charge of 1% of theoriginal limit sanctioned should be charged in addition tothe regular interest.

GUIDELINES FOR THE BRANCHES WHERERASMECC / RACPC IS ESTABLISHED

l Branches should interview the applicant for ascertaininghis requirement / eligibility.

l On ascertaining his requirement / eligibility he should beasked to submit necessary papers i.e. proof satisfying KYCnorms, duly filled in Loan application, Salary Slip,Employment Certificate, IT. Returns for 3 years, relevantpapers of the property with legal opinion, valuationcertificate, approved house plan, estimated cost ofconstruction etc., Obtain particulars of employer company.

l Pre sanction inspection to be conducted and the findingsshould be properly recorded.

l The applicant should not be asked to follow up with theCPC for sanction of loan instead the branch should followup with the CPC.

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PERSONAL LOAN SCHEMES

Do�s

l KYC Norms to be completed before taking up the appraisalof loan.

l Statements of bank accounts for the last six months to beobtained evidencing salary credits or businesstransactions.

l Proof of business address, in case of non salariedborrowers.

l Brief write up of securities charged in respect of other loansavailed from our Bank/other Banks, Housing & Autofinance Companies / other sources.

l Latest Salary Certificate in original or proof of income incase of self employed / professionals.

l Last three years Income Tax returns duly acknowledged byIT. Department. TDS Certificate - Form 16 (Photocopies tobe kept after verifying with the originals).

l Copy of identity card issued by the employer.

l Proof of residence (Driving Licence /utility bills, Voters IDCard etc.)

l Due Diligence of the employer, i.e. its constitution, activity,employee base, sales/net profit etc., for the past 3 years.

l Visit to place of residence and Company where borrower isworking and discrete enquiry about his salary, designationetc.

l Letter from the employer about his experience andproviding check off from salary if requested.

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GENERAL

l You should know your advance products as well as that ofyour competitors. While informing the customer thebenefits of our products you should also tell about thedisadvantages / demerits of availing loan with yourcompetitors. This will enable you to market / sell yourproducts.

l Ascertain the credit worthiness of the applicant (verify theconduct of other accounts maintained at the branch). Findout the eligibility of the applicant.

l Obtain post dated cheques wherever Check Off facility isnot available.

l Do not issue any letter stating that �loan will be sanctioned�before completing the formalities.

Documents Required

l If considered for sanctioning Housing loan: Record ofRights, Khata Utara, Mutation entries showing the flow oftitle and other rights, Chakbandi (sketch) which shows theexact location of the said property, Property tax paid receiptfor 3 years, Encumbrance Certificate for the past 13 yearsshould be obtained. Documents showing title to theproperty i.e. Sale Deed / Partition Deed / Gift Deed /Relinquishment Deed, Lease Deed etc., to be obtained inOriginal Only.

l Valuation of the land / building from the Bank approved /empanelled Valuer. As regards Leased property- valuationto be obtained at the original value only, as the leasedproperty cannot be sold / alienated so easily for realizingour debt.

l Obtain Legal Opinion on the property to be mortgaged from

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the Bank approved / empanelled Advocates. Read theLegal Opinion so obtained and evidence the same.

l Obtain no due certificate from other Banks / or from theBank where he is maintaining account / drawing salary etc.

l Verify the Estimated cost of construction taking intoaccount the prevailing rate of construction. The Estimatedcost of construction should be verified & attested by theBank Empanelled Engineer. This is to prevent the borroweravailing more loan by inflating the cost of construction.

l Verify whether necessary permission to construct thehouse is obtained from the concerned MunicipalAuthorities and its validity.

l If the applicant is our existing customer, furnish the detailsof his connection i.e. details of other accounts and theirconduct.

l Compile Opinion report on the Borrower and Guarantorevery year.

l While releasing the housing loan instalment obtain latestphotograph of the house at every stage and hold the sameon record.

l Obtain the Completion Certificate issued by the MunicipalAuthorities for releasing the last installment.

l In case of apartments - verify the total number ofapartments exists on the premises. Make discreteenquiries in this regard.

l In case of take over finance - accompany the borrower tothe Bank

- Obtain the documents immediately. Verify that thedocuments are complete (no page is missing) in thepresence of the borrower and the previous banker.

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- Only standard loan where property is registered in thename of borrower to be considered for take over.

l While creating EM - Give acknowledgement of Title Deedsheld clearly stating the particulars of the property and thedocuments.

- Verify that all the pages of the Title Deed are presented.

- Obtain signature of all the owners of the said propertyon the acknowledgement form. - Form - A/B to be filledin same ink as that signed by property owners.

- When Extension of EM is done, obtain balanceconfirmation of other existing loans and Revival letter.

l On closure of housing loans - Verify in presence of propertyowners that all pages of Sale Deed(s) are in tact.

- All related documents of the property to be returnedback.

- Acknowledgement on COS-49 to be taken from partieswho created EM.

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CHAPTER - 5

AGRICULTURAL ADVANCESAPPLICATIONS

Do�s

l Interview the borrower thoroughly, know his experience inthe field. Know his requirements, family background etc.

l Fill the application properly without leaving anything blankand obtain the signatures of the borrower/ guarantors..

l As per KYC norms obtain address proof, and photo identityetc.

l Enter the application in the Application Received andDisposed register.

l Give the borrower a letter detailing the documents requiredfor sanction of loan.

l Give him the date on which you are going to conduct presanction survey to enable him to be present in the villageto assist you in your work.

l Gather full information about the applicant from otherborrowers of the village.

Don�ts

l Do not entertain middleman for identifying the applicantand also during pre sanction survey.

l Do not take application under pressure.

l Do not conduct pre sanction before taking application.

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DOCUMENTS TO BE OBTAINED

Do�s

l Record of Rights.

l Khata Utar showing the entire land holdings of theapplicant.

l No Due certificate from the society, co-operative banks andother commercial banks operating in the area.

l Mutation entries showing the flow of title and other rights.

l Chakbandi showing the exact location of the lands.

l Nil Encumbrance Certificate for the past 13 years.

l Original Title deeds, partition deeds.

l Valuation of the lands/ property to be mortgaged.

l 3 pass port size photographs.

l Quotations in case of ATL advances.

l Technical report from the competent persons in case of LiftIrrigation schemes, poultry advances, Drip irrigationschemes etc.

Don�ts

l Do not accept certified copies of title deeds, laminatedcopies of the title deeds.

l Do not accept quotations from firms which are not dealingin items which borrower wants to purchase.

l Do not accept the documents from other than applicant.

LEGAL OPINION

Do�s

l Read the legal opinion fully once you receive the same andevidence the same.

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l Ensure that translation memo is attached to it if the titledeed is in vernacular language.

l Ensure that search report is enclosed along with feereceipt.

l Ensure that legal opinion is unconditional.

l Ensure that legal opinion is on Banks specified format.

l Ensure that legal opinion is taken from the advocate whois on the Bank�s panel.

Don�ts

l Do not send the documents to the lawyer throughapplicant.

PRE SANCTION / POST SANCTION INSPECTIONS

l Inspect the village, applicant�s lands, house and ascertaincorrectness of information given by the applicant.

l Take the opportunity to talk with other people in the villageand ascertain the correctness of the information given bythe applicant.

l Visit the Rural Bank, society, village panchayat to ascertainthe correctness of information provided by the applicant.

l Record all your observations in your pre sanction / postsanction report.

l Ensure that regularity is maintained in conductinginspections.

l Report all irregularities observed during inspections toyour controllers and seek their guidance.

l Carry Inspection registers during your inspections andrecord your observations then and there only.

l If the advance is for vehicles, ensure that vehicle is

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registered with RTO and copy of RC book is obtained withBanks charge.

l Visit the villages in the early morning or late evening whenfarmers are free from their routine.

Don�ts

l Do not take the assistance of a middleman duringinspections.

l Do not avoid going for inspections, which gives you usefulinformation.

l Do not take sides with any particular group in the village. Beimpartial and friendly with everybody.

l Do not be misled by anybody�s opinion.

PROPOSAL

Do�s

l Prepare the proposal carefully, incorporating all theinformation gathered during your pre sanction survey.

l Work out all necessary financial data, analysis, DSCR,income generation, pre implementation/ postimplementation of the project.

l If the borrower is already enjoying other limits like vehicleloan, HTL, etc record the status and comment the conductof these accounts.

l Compile opinion report on the borrower/ guarantor.

l Your recommendations should be precise, andunambiguous and convey clear message to thesanctioning authority. If, in your opinion the proposal is notworth sanctioning, recommend for rejection without anyFEAR.

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Don�ts

l Do not hide any information known to you.

l Do not keep any thing blank in your proposal.

SANCTION

Do�s

l Obtain sanction from the competent authority beforedisbursement.

l Record sanction in the Application Received and DisposedRegister.

l Submit control form to the next higher authority for control.

l Prepare appropriate security documents and call theborrower on a mutually agreed date for execution ofdocuments.

Don�ts

l Do not disburse the loan before sanction.

l Do not misguide the sanctioning authority on any points.

DOCUMENTATION

Do�s

l Use appropriate documents. Fill all the documentsproperly.

l Obtain necessary stamp papers for the documents.

l Obtain signatures of the borrowers/ guarantors on eachand every page of the agreement.

l Ensure that none of the borrower/ guarantor is a minor.

l If a borrower is a minor, signature to be obtained from thenatural guardian. For this permission from the competentauthority is necessary.

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l Mention date and place of execution on each document.

l Obtain witness letter if the borrower affixes his left handthumb Impression.

l Ensure that Letter of Arrangement is signed by all theborrowers/guarantors and the Branch Manager.

l Record the execution of documents in the DocumentsExecution Register as well as in the Daily list for revival ofthe documents.

Don�ts

l Do not use photo copy documents.

l Do not keep stamp papers blank.

l Do not take signatures of the borrower/ guarantor on theblank documents.

EQUITABLE MORTGAGE

Do�s

l Obtain legal opinion from the Bank�s empanelled advocatebefore creation of the EM. If the title deed is in thevernacular language, obtain Translation Memo for thesame. Also ensure that search report and fee receipt isenclosed to it.

l Read the legal opinion carefully as to the title of theborrower and inspect the property before creation of theEM.

l Obtain ROR , EC, Original sale deed, Mutation entries,valuation of the property for creation of the EM.

l Obtain necessary Stamp duty before creation of EM.

l If the property belongs to a person other than the borrower,the owner of the property should be made as guarantor.Other wise EM has no legal validity.

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l Ensure that the date of the EM be same as of date of otherdocuments. If the date of the EM is prior to the date of thedocuments, EM becomes invalid.

l Write the recital in the Title Deed Register ( EM Register)and obtain the witness of other two officers / employees.

l Give Form A/B to the borrowers to enable them to post byRegistered post.

l Obtain vardi from the borrowers to create charge on themortgaged property.

l Create the Banks charge on the mortgaged property andobtain ROR afresh to ensure that Bank�s charge is noted.

l Obtain EC for the broken period to ensure that no othercharge has been created by the borrower during theintervening period.

l Insure the property after creation of the EM.

Don�ts

l Do not accept laminated title deeds.

l Do not accept conditional legal opinion.

DISBURSEMENTS FOR ACC ACCOUNTS

Do�s

l Disburse in cash / kind in case of ACC

l Obtain receipts/ bills for the amount disbursed to ensureend use of the finance.

l Disburse in stages that too after visiting the fields.

l Obtain approval of the controllers for any deviation.

Don�ts

l Do not disburse in full in cash.

l Do not ignore scale of finance while disbursing the loans.

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FOR ATL ACCOUNTS

Do�s

l Obtain quotations for the assets to be purchased.

l Ensure that the supplier who is giving quotation is anauthorized dealer in that particular product which borrowerintends to purchase.

l Disburse the amount through Bank�s DD favouring supplierand forward the same direct to the supplier alongwith aletter by registered post.

l Obtain receipts/ bills / invoices from the supplier for havingdelivered the goods.

l Inspect the assets immediately after the delivery.

l Obtain insurance for the assets created.

Don�ts

l Do not credit the loan amount to his SB account or do notdisburse in cash.

TRACTOR LOANS

l Follow only Scoring Model Method (All Plus SchemesWithdrawn).

l Ensure the Tractor/ trailor is registered with RTOimmediately and obtain a copy of the RC book and confirmthat bank�s charge is duly noted.

l Obtain blank RTO forms No. 29/30 and 34/35 in two sets.

l In case of joint borrowers, obtain consent letter from all theborrowers to register the vehicle in the name of one persononly.

l Ensure that Bank�s Hypothecation is painted on theTractor/trailor.

l Obtain supplementary hypothecation letter recording

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details of the Model No, Engine No, Chasis No, RTORegistration No. etc.

l Branches can finance only for those models of tractorswhich have completed the commercial test fromorganisation, viz., Central Farm Machinery Training andTesting Institute (CFMTTI), Budni (Madhya Pradesh) orFarm Machinery Training and Testing Institute (FMTTI),Hissar. The list of such tractors is being circulated from timeto time.

Don�ts

l Do not keep duplicate set of keys of tractor in case receivedfrom the dealer directly along with documents.

FOR LIFT IRRIGATION SCHEME ADVANCES

Do�s

l Obtain Technical Report from the competent authority.

l Obtain Water permission from the Irrigation Dept.

l Obtain power sanction letter from the Electricity Board.

l Ensure that technical report is calculated correctly as to HPof the pumpset and pressure of the pipes.

l Obtain consent / agreement from the farmers in whoselands the pipes are laid.

l Obtain insurance for pumpset and accessoriesimmediately.

BAD LOAN MANAGEMENT

Do�s

l Identify all the NPA accounts as per the IRAC norms.

l Submit your recommendations to transfer these accountsto Recalled Assets accounts.

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l If, legal action is to be initiated, initiate the sameimmediately.

l File the suit, FDP, EPs in time.

l Obtain advocate�s acknowledgement when you hand oversecurity documents for filing suit.

l Obtain status of suits filed cases from the respectiveadvocates every quarter.

l Update suit Filed Register on receipt of status report fromthe advocates.

H Review the suit filed cases quarterly and submit yourrecommendations to your controller as to continuance oflegal action.

l Maintain Written Off Accounts register and record theparticulars of written off accounts.

l Make sincere efforts for compromise proposals.

l Attend the court evidences with all preparations.

Don�ts

l Do not keep NPA accounts in live ledger.

l Do not apply interest to NPA accounts.

l Do not show NPA account as Standard Account as itattracts accountability.

l Do not renew, sanction another loan when one account ofthe borrower is NPA.

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CHAPTER - 6

NON PERFORMING ASSETSLIST OF REGISTERS TO BE MAINTAINED BY FO�s

l Loan application received and Disposal Register -Segment wise

l Document Execution Register for CC/TLIDL

l Control Forms sent register

l Inspection Register - Field Officer wise Segment wisevillage wise

l Insurance Register

l DP Stock Statement Register

l EM Register Extn of EM Register

l Title Deed Register

l Daily list for Revival Letters

l Field Officer�s Tour Dairy

l Back up register for Movement of NPAs

l Recalled Asset Register

l INCA Register

l Written off Account Register

l AUCA Register

l Suit Filed Account Register

l Under CBS there is a provision for creating due dates forrevival/inspection.

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OTHER IMPORTANT ASPECTS

l Technical write-offs against 100% provisions alreadyavailable.

l Policing of assets (Regular supervision and follow up)

l Enforce legal system available to banks for enforcementand recovery.

l Unit visit- physical inspection verification of security is amust.

l Scrutinise loan document /security documents and ensurethey are enforceable.

l Interaction with borrowers and other lenders forinformation about the borrower�s assets legal heirs notknown to the bank.

l Have control over recovery process through AdvocateEnforcement agency/DRT functionaries.

l Review of reports put up by the inspection functionariesresponsible for follow-up and supervision.

l Arrange for sale of the moveable assets of the unit at theearliest to avoid security charges/insurance/removable bythe owner or others.

l Investigation by the outside agency to be arrangedwherever required.

l Gather all relevant information on the borrower from theneighbors/ other lenders.

l Arrange for Regular Advocate Meet at branch for review ofthe status of the cases.

l Prepare History Sheet for each account /case.

l Prepare ABC analysis for amount wise and asset vise.

l Record your observations in the inspection register / suitfiled register.

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l Furnish the Asset details of the borrower not mortgaged tothe Bank to the dealing Advocate for filing attachmentbefore judgement.

l On obtaining the DRT order or the court decree got throughthe decree whether it is as per our prayer including the rateof interest.

l Verify the asset details before submitting Form 16 forattachment of the assets immediately after the DRT order/ file the Execution petition on obtaining the Decree.

l Make periodical visit to the borrowers residence / sendcorrespondences through post to keep track of theborrowers change of residence.

l Try to communicate with the borrowers over residentialtelephone.

l Gather information about the borrower�s wife/ childreneducation and age which may be useful at the time of filingthe L R details to the court to avoid future investigationcharges.

l Location of the assets mortgaged to the bank with properpostal address and landmarks be prepared and kept onrecord.

l Agri Field Officers to prepare route map of the area ofoperation under his control with name of the village anddistance.

l Repayment period for restructured debts should notexceed seven years from the date of implementation.

REASONS FOR SPURT IN TECHNICALNPAS IN CBS BRANCHES

l Stock statement to be input in the system through securitycreation menu at laid down periodicity say once in a month.

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l DP to be renewed in the system at laid down periodicity.

l Checking of reports generated during pre-migration.

l Ensure migration of all fields from Bankmaster to CBS

- Keyin correct details of repayment schedule in case ofloan accounts.

- Define periodicity of interest application in case ofagricultural advances.

- Define interest compounding frequency in case ofeducational loans.

- Recovery of processing / other charges.

- Repayments to term loans should be posted byselecting repayment menu in the system and notthrough general posting.

- Furnishing notional limit expiry date in case of CC/ODat the time of migration and prevent/do not allow CC/ODaccounts limit to get expired.

- Please furnish Limit expiry date at the time of renewal.

- Renew DP in the system at laid down periodicity.

- security created in the system should be authorized byanother user at branch.

FAILURE OF STANDING INSTRUCTIONS/ORDER

Reasons

l Posting Restriction on primary account.

l Non-availability of balance / funds in the account.

l Standing order date is subsequent to credit of salarypension resulting in withdrawal of credit by account holderthrough ATM.

l Accounts having STOP status on account of non-compliance of KYC in CBS.

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Do�s & Don�ts

l Branches should exercise constant vigil by scrutinizingreport on probable NPAs, which is stamped by CDC atregular interval.

l As and when standing order is input in the system torecover loan instalment, user has to remove postingrestrictions in respect of �debit other transactions� so thatSI will not fail for the reason �Restrictions�.

l Standing instruction date should coincide with date ofcredit of salary or pension to SB/CA. In respect of salariedemployee / pensioners, branches to use �Hold required� asYes so that system would hold the SI amount the momentsalary/ pension is credited to the account and SI will not failfor want of balance. However, branches should getconsent of the customer in the SI requisition letter beforeusing this option.

l Whenever SI fails for want of balance in respect of othertype of customers, immediate steps to be taken to putthrough manual transaction. Branches should scrutinizemeticulously �Failed Standing Instruction� report everyday.

l In case of 00 account, if the customer has SB account alsowhich is being operated regularly, in the CC/OD limit inputscreen, branches should use �Dr interest� field as transferand furnish SB account number, so that on the next day ofinterest application system will recover interest amount bydebit to SB account and credits to 00 account.

l In case the customer does not intend to operate the 00account regularly, then branches should sanction onlydemand loan and under repayment schedule they shouldselect frequency as �End or term� for both principal andinterest column.

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l Wherever branches have resorted to rephasement of termloans / demand loans, effort should be made to contact theborrower and obtain their consent to recovery higherinstalment.

l Wherever incorrect loan term has been given, the sameshould be immediately amended.

l Wherever incorrect account type / sub-category is given, itshould be amended immediately.

l Repayment schedule is generated for the first time in caseof term loans at the time of creating repayment schedule.Once the loan is fully disbursed branches have toregenerate repayment schedule again. Further, if there isany change in terms and conditions viz. interest rate, loanterm, again repayment schedule has to be regeneratedand this is necessary in CBS.

EMI

l In respect of loan accounts, while creating repaymentschedule in CBS, EM-1 option should be exercised, only inrespect of �P� segment advances (other than staffadvances.)

l The other two options that is �Principal equally distributed�and �Navigated repayment� should be used when theinstalments are equal or varying.

Whenever negotiated option is excercised, �Projectedinterest� option should invariably be created in therepayment schedule.

AGRICULTURAL ADVANCES

Cash Credit Accounts:

l Non creation of security in the system, Limit gettingexpired, DP becoming NIL after expiry date and Non-

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recovery of interest are reasons for emergence ofTechnical NPA�s.

l Create security in the system.

l Get the limit renewed and enter the particulars in thesystem.

l Agricultural crop loans (direct advance) interest to berecovered along with principal on due date.

Term Loans

l Reasons for accounts becoming NPAs could be:

l Non creation of security

l Not inputting interest application start date

l Non selection of loan term correctly including moratoriumperiod Incorrect repayment schedule creation

l Non recovery of loan instalment and interest

HANDLING OF DRT CASES

l Before going for sale of the property mortgaged to the Bankinsist for declaration of the Assets belonging to thedefendants.

l Valuation of both the property mortgaged and the identifiedproperty to be made and submitted to DRT for fixing theFlore price.

l Any work like serving of summons Affixture Attachment ofproperty, delegated by the Presenting Officer, DRT to thebank official to be carried with the assistance of outsidesecurity agency Advocate.

l All legal enforcement has to be carried out between sunrise and sunset in presence of at least two independentwitnesses of repute and known to the bank.

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l Any resistance by the borrower(s) should be recordedindicating the conduct and the manner and extent ofresistance and the same to be recorded in presence of thewitnesses and keep the controller court informed.

l At the time of taking possession, inventory of the assetsshould be taken in the presence of the witnesses and theborrower if he is present and their signature should beobtained. A Mahazar should also be drawn in detail andduly witnessed.

l Mahazar should specify the following: The date and time ofseizure, the location where the seizure was done, Namesand address(es) of the persons present at the time ofseizure, Presence or the absence of the borrower or theguarantor, the time taken for effecting the seizure, detailsabout the method and manner in which the seizure waseffected, description of the assets seized, Existingcondition of the assets seized, Approximate value of theitems seized, Signature of the persons effecting theseizure, Signature of the independent witness, andSignature of the borrower or the guarantor if present andwilling to sign or the reason for their refusal to append theirsignature.

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CHAPTER - 7

FOREIGN EXCHANGE

LETTERS OF CREDIT & IMPORT BILLS

Do�s

l Open LC for import transactions only for customers andopen the LC only if the party has got sanction limit.

l Allow import of restricted items as per procedure laiddown in the Exim Policy.

l Handover import documents only to drawee or his P Aholder against property acknowledgement.

l Allow payment for import by debit to customer�s account.

l Verify the imported items under the LC.

l Issue amendments to LC only on the basis of writtenrequest and beneficiary�s consent to be obtained.

l Verify whether the payment method in Letter of Credit isdone as per FEMA guidelines or not.

l In case of default payment, crystallise the bill on 10th dayfrom the date of receipt.

l Insist for insurance cover at the time of opening the LC.

l Allow opening of LC on DA basis provided the Usancedoes not exceed more than 180 days.

l Allow opening of Transferable LCs provided transfer isrestricted to specified second beneficiaries whose creditreport is satisfactory.

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l Verify the Letter of Credit application form to ensurewhether they are properly filled and stamped.

l Report to the RBI (Reserve Bank of India) if the Bill ofEntry is not received.

l Opinion reports to be obtained on overseas suppliers.

l Legal compliance certificate to be furnished by officialswho authorize LCs > 1 cr.

l Consent of beneficiary to be obtained while amendingLCs.

l Accepted bills of exchange to be held with importdocuments.

l Acceptance of bill of exchange should be made within 48hrs of presentation.

l Import collections not paid on due date even afteracceptance - to be advised to remitting bank for disposalinstructions.

l LC�s should not normally be issued for customers who donot enjoy credit facilities with the Bank.

l Ensure separate sanctioned limits for purchase of billsunder LC for export bills and inland bills.

l All LC�s should be issued bearing the legend �withrecourse�.

Don�ts

l Do not issue the Letter of Credit if the customer doesn�thave IEC number.

l Do not open LC without proper transport documents.

l Do not allow advance payment without properdocumentation.

l Do not forward the documents to third party withoutpermission from the importer.

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l Do not import prohibited or restricted items without importlicense.

l Do not allow direct remittance of import bills beyond thelimit and without EC copy of bill of entry.

l Do not open revolving LC without safety clause.

l Do not amend the Letter of Credit for import of thoseitems which is either restricted or prohibited.

l Do not allow import documents received under collectionpaid without verifying importers line of business andfinancial standing.

EXPORT BILLS

l All negotiations are to be authorized by appropriateauthority.

l Copies of LCs under which export bills are negotiated tobe held with documents after original LC has been dulyendorsed.

l In case of discrepant export documents, discrepanciesshould be listed in the covering letter sent to the LCopening bank.

l Discrepancies in export documents should also be advisedin writing to the exporter for rectification.

l Opinion reports to be obtained on overseas buyers.

l Export bills for which PCFC was availed should bediscounted under EBR and not sent on collection.

l ECGC for pre shipment credit and post shipment credit tobe obtained.

BANK GUARANTEES

l Legal compliance certificate to be furnished by officialssigning the guarantees for BG and LC�s above 1 crore.

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l Liability limitation clause and notwithstanding clause tobe invariably included in all guarantees.

l Individual / omnibus counter guarantees to be obtainedfor all customers.

l Branches should not issue BG for more than 18 monthswithout obtaining prior administrative clearance of theappropriate authority.

l No bank guarantee should normally have a maturity ofmore than 10 years.

l Don�t amend the BG�s unlike in the case of LC. Insteadissue fresh guarantees canceling the earlier ones.

l BG can be cancelled prior to expiry of the period onlywith the consent of both the parties to the contract i.e.the beneficiary and the applicant.

l The beneficiary of the bank guarantee can invoke in writingor by authenticated swift message.

FC NOTES / FCTC

l Retention limit for foreign currency notes / FC traveller�scheques to be reviewed at annual intervals.

l Verification of stock of FCN / FCTC along with cash andsecurity forms to be done at half-yearly / quarterly intervals.

l Both joint custodians� acknowledgement to be obtainedfor foreign currency notes purchased from variouscustomers during the day.

l FCN supplied to other branches should have beenacknowledged by both joint custodians.

l FCTC balance stock needs to be aligned with AmericanExpress at quarterly intervals.

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INWARD REMITTANCES

l The inward remittance are to be credited to the customersaccount within 10 days from the date of receipt ofremittance advice from abroad for remittance uptoequivalent US $ 5000 and an intimation to be sent to thebeneficiary within 3 working days (reckoning Saturday asa working day) from the date of receipt of advice in respectof remittances exceeding equivalent of US $ 5000.

l Contributions received from foreign sources for credit tothe account of association/organisation which should becredited to the account, if the association/organisationregistered under Ministry of Home Affairs, Govt of India.

l Ascertain the purpose of remittance in case of inwardremittance equivalent of Rs. 1,00,000/- and more.

BUYER�S CREDIT / FORWARD CONTRACTS

l Buyer�s Credit arranged for trading transactions requiresspecific approval of sanctioning authority.

l Board resolution to be obtained from all companies forobtention of buyer�s credit.

l Forward contracts - undertaking from company to beobtained to produce documentary evidence before maturityof the contract.

l Certificate to be obtained from customers that no otherforward contract has been booked with other ADs for thesame underlying exposure.

l Forward contract limits / margin matrix to be approved /reviewed on annual basis.

l Buyers credit to be extended for a maximum period of365 days from the date of Bill of lading in case of rawmaterials and for 3 years in case of capital assets.

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CHAPTER - 8

CASH DEPARTMENTDo�s

l Collapsible grills gates at the Branch Entrance.

l Burglar alarms with foot pedal operating switches &

connected to Auto Dialer.

l Fire Alarms with separate Auto - dialer numbers.

l Time Locks to be operational.

l Auto Locks for single window doors.

l Snap locks for cash drawers.

l CCTV systems with master & slave monitors to cover all

cash. handling Areas. 90 days video recordings to be

available at any point of time.

l Fully operational and tested Hotline telephones.

l Vendors/Services providers of all security systems to

check and Certify periodically.

l Sandbag/Pillbox arrangements to be made within available

space in the premises.

l Defective/faulty fire arms to be repaired/replaced

immediately.

l Round the Clock armed protection for strong Room &

Premises in case of Currency Chest.

l Liaison with local Police for patrolling.

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l Non-Currency Chest - Minimum Cash Balance. Currencychest - Excess cash to be diverted for other needy Chest.

l Cash Remittance to be sent invariable under ArmedGuard/Police Escort as per policy.

l Communications with regard to Cash remittance shouldbe strictly Confidential. Remittance vans should vary theirroutes randomly.

l Currency operations to be made by locking the strongroom grill door.

l Frisking to be made by the security guard on the personentering the chest.

l Vault Control Register to be maintained & entered on adaily. basis with timings.

l Fortnightly verification of currency chest.

l Bi-monthly verification by the official other than jointcustodian.

l Regular soiled note remittances to be sent to RBI.

l T E 1. Register to be maintained.

l Cash Receipt delivery books to be maintained by all SWO& Cash Officers & entered & acknowledged on daily basis.

l Cash Officer Cash jotting book to be maintained & enteredon daily basis.

l Pest control measures have to be ensured quarterly.

l Police patrolling-check point or Police point book to bemade available to police on petrol duty and to be verifiedby BM on weekly basis.

l It is to be insured that all receptacles are operated atregular intervals and no portion of it lies dormant for along time.

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l SWO Cash Box Receipt/Delivery Register has to bemaintained.

l Fire extinguishers to be renewed on due dates.

Don�ts

l Do not allow any person unconnected with strong roominside.

l Do not forget to lock the boxes containing cash whiledelivering it to cash counters or for the purpose of cashRemittance.

l Do not operate the strong room frequently without anyvalid reason.

l Do not allow Sweeper /Cleaner alone inside the Strongroom.

l Do not forget to check the waste bins held by Sweeper/Cleaner who was inside the Strong room

l Do not allow Messengers to operate the Cash bins evenunder direct supervision.

l Don�t allow Messengers to stalk/remove the cash bundlesfrom cash bins even under direct supervision.

l Do not allow packing of Notes for the purpose ofRemittance without direct supervision.

l Do not operate in the strong room without the presenceof other joint custodian.

l Do not allow anybody to enter cash cabins who areunconcerned for the same.

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CHAPTER - 9

GOVERNMENT BUSINESSDo�s

l Strings has to be fixed correctly so as to reach figures onday today basis to CDC.

l Verify whether WEB VOLTAS on SBI TIMES on day todaybasis reaches branches.

l Wherever branch name figures in defaulting list they haveto go to VOLT AS error report, regenerate the report andrectify.

l Please note that funds are settled based on stringsgenerated. Strings are not generated properly and accountnot settled by GAD within precribed time, loss at the rateof 8% to be borne by bank. Which will harm the imageof the bank and individual officials will be held accountablefor such an income leakage.

l DMS to be verified and despatched properly to link office.

l Currency Transfer has to be reported immediatelyotherwise heavy penalty to be paid to RBI - Penalty @Bank Rate + 2%.

Don�ts

l Do not report the wrong entries.

l Do not delayed the reporting as delayed reporting attractsinterest at 8% to be paid to RBI.

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FOCAL POINT BRANCHES

Do�s

l All Focal Point branches to ensure that main scroll andchallans are submitted to respective Zonal Acounts Officewithin prescribed time of 7 days from the date oftransaction.

l All the branches which are authorised to collect direct taxrevenue are to be impressed and operating staff to besenstised for feeding PAN / TAN and other entriescorrectly.

l All the receving branches have to exchage GAD2 GAD 3and reconcile the transaction.

GOVERNMENT SPONSORED SCHEMES

Do�s

l Pre-sanction inspection is a must.

l See the viability of the project.

l Timely submission of subsidy claims to link office.

l Claim coverage under CGTMSC.

l Maintain perodicity of inspection / Maintain StandardInspection Register.

l Follow up of advances and Obtention of revival letters intime/ Diarising for the same.

l Enlist the support of licence department officials inrecovery/ Be in constant touch with them.

l Involve in Identification of beneficiaries - Service Area isapplicable for Govt. Sponsored Schemes.

l Physical verification of units/ Ensure end use of funds.

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Don�ts

l Do not entertain middlemen or agents.

l Do not issue Bankers cheque demand draft favouringparties directly.

l Do not deviate norms and procedure set by department.

l Do not finance for units which are in negative list ofactivities.

GOVERNMENT BUSINESS INSTRUCTIONS FORDEALING AND RECEIVING BRANCHES

Do�s

l State Government transactions should only be routedthrough STATE GOVT GENERAL ACCOUNT.

l Transfer the closing balance of SGL01 dated 30TH JUNEto state Government transactions to respective FSLO on5th July through schedule no. 03/07 as the case may be.

l Transfer the closing balance of GAD 5 statement as onJune to respective Focal Point branches through scheduleno.03/07 as the case may be.

l Arrange to send the TR dated July along with copy ofSGLO 1 of June to the FSLO for State Govt transactions.

l Arrange to send TR of July GAD2 for the period from Octto June along with GAD5 Statement of june to respectiveFocal Point branches for Central Government transactions.

l In case branch is linked to more than one Focal Point/Link/Nodal branch, segregate the balance to be transferedto each one of them as per relative GAD2 statementsand tranasfer the balances accordingly.

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Don�ts

l State government transactions should not be routedthrough Focal point link branch Government GeneralAccount.

l No dealing branch will originate the entry on GAD(9595).

FOR FOCAL POINT/LINK/NODAL BRANCHES

Do�s

l On receipts of TR advices dated July respond the entriesthrough schudule No.04/08 latest by July end.

l In case of difference between the amount transferred andbalance held at Focal point branth hold the difference inIBIT account.

l Take up the matter urgently with the dealing branchconcerned and ensure adjustment of IBIT entries at theearliest.

l Please ensure that all GAD 4 statement upto June havebeen sent to Govt. operations department LHO for onwardsubmission to GAD Mumbai.

l Arrange to fax the GAD 4 statements of June and Julyand TR advice dated july to GAD immediately.

FOR TAX COLLECTING BRANCH

Do�s

l Accept single copy challan only instead of 4 copies.

l Type 281 for deposit of TDS/ TCS.

l Type 280 for deposit of Advance tax / self assessmenttax / Tax on regular assessment / tax on distributed profitsof Domestic companies / tax on distributed income to unitholders.

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l Type 282 for Hotel receipts/Interest tax/state duty/Expenditure tax / Gift tax / Wealth tax / SecuritiesTransaction tax.

l Type 283 for Fringe benefit tax.

l Ensure correct 10 digit Tax deduction account number(TAN) for TDS/TCS payment/permanent accountnumber(PAN) for other direct tax and name and addressof the tax payer on each challan used for depositing tax.

l Put stamp of the branch on the counterfoil of the challanin a legible manner mentioning challan identificationnumber(CIN).

l CIN should comprise BSR code of seven digits, challanserial number upto 5 digits and challan tender date/CINis useful for verifying - the amount of tax paid, tax payer,IT Authorities and Bankers.

l Ensure CIN given on the counterfoil is the same as theone digitized and uploaded in OLTAS.

l Advice taxpayers to check status of challan through challanstatus inquiry.

l Monitor whatever you have uploaded through the speciallink provided to every collecting branch.

l Make sure that the challan details quoted in your taxreturns (Both TDS and income tax) is the same as whatis provided in the counterfoil of the challan provided bythe bank.

l In case of PPF, ensure correct rate of interest appliedand interest calculated is correct and fed correctly intothe system.

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Don�ts

l Do not accept challan having invalid PAN/TAN.

l Do not accept challan of TDS/TCS payments having PAN.in place of TAN and challan of on TDS/TCS paymentshaving TAN in place of PAN.

l Do not give challan serial number of more than 5 digits.

l Do not digitize cheque realisation date in place of challantender date.

l Do not use same challan for depositing various types oftax like advance tax, self assessment tax etc.

l Do not make mistake in Financial year and AssessmentYear.

TRANSACTIONS

l Branches has to send figures before 11 AM of next dayto RBI, otherwise.

l Penal interest will be levied.

l Individual officers will be held accountable.

CONCLUSION

l State Bank of India is premier govt bank dealing with allgovt business. It earns crores of rupees as revenue andserves the state and central government who are ourmajor customers. We are the custodian of major currencychests.

l We should strive hard to retain and gain much more govtbusiness.

l Hence we should be double carefull in settlingtransacations correctly. On day today basis.

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CHAPTER-10

GENERAL BANKINGl Crossing stamp - All cheques, drafts and other instruments,

whether drawn on the branch or on other offices of the bankmust be branded with the Bank�s crossing stampimmediately.

l Outstanding entries - Branch Managers should make timelyand proper follow up of outstanding entries in Branchsuspense account.

l All the officials must ordinarily obey the instructions of theirBranch Manager. It is the duty of officers to report to thecontrolling authority any deviation from the rules andregulations of the Bank which they consider detrimental tothe Bank�s security.

l The safe deposit receipt relating to the box containing theduplicate keys of the Branch should be entered in theappropriate section of Branch document register and keptin the BM�s safe.

l Inward Mail - Enter all the letters/documents in respectiveregisters before sending to respective desks/depts.

l Fax/e-mail messages to be cross checked and verifiedbefore being acted upon.

l Opening of accounts - Ensure compliance with KYC norms.Independent verification of adress of applicants byreference to prescribed documents to be done meti colour.Letter of thanks to be sent to the account holder, and

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acknowledgements to be monitored. The applicant shouldattend the Bank personally. Proper care to be taken in issueof cheque books to representatives of account holders.

l Proper noting of stop payment (Stopped cheques)instructions should be done in the system as well asrelevant registers.

l Close watch to be kept on dispropotionate transactionsespecially in new accounts, inoperative accounts and nonhome transactions.

l Staff accounts - An employee should not maintain morethan one account (SB/CA). All transactions by way ofdeposits, advances, collection, remittances etc. should besubject to strict scrutiny at prescribed intervals. Periodicalrotation of staff is an important exercise, both with a view toproviding job satisfaction, enhancement of all roundknowledge of employees and to ensure compliance ofpreventive vigilance mechanism.

l Remittances and collections - Large credits through bankdrafts/clearing, immediately after opening of an accountand withdrawals in a short span of time to be viewed withcaution. Please ensure Check signal and double signaturesystem for SC�s of Rs. 50,000/- and above.

l Ensure intelligent scrutiny while passing / negotiating highvalue instruments received for payment in inward clearing,especially dividend warrants/refund orders.

l Special care to be taken in the area of discounting ofcheques, like follow up of despatch of cheques discounted,not discounting local cheques, prevention of any attempt of�Kite flying�, attending caution memos/IOR memospromptly etc. Drawals against cheques collection shouldnot be allowed as a matter of routine and if allowed shouldbe recorded and reported promptly on the same day forconfirmation.

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l Duplicate pass book should be issued, only after thoroughenquiries, under proper authority.

l Account payee cheques endorsed to third parties shouldnot be collected.

l In the case of foreign nationals, copies of residentialpermits issued by the police departments have to beobtained before opening of the account.

l While making payments, signature to be verified and anoting to that effect made where found necessary.

l In case of issuance of cheque book to a bearer, accountholder�s acknowledgement should invariably be obtained.

l Customers may be advised that they should place acarbon, face upward, in between cheque leaves whilewriting cheques to avoid forgery.

l Proper custody and control over issue/use of security formsand holograms should be strictly ensured.

l All entries put through in Branch clearing on sechdule No.s09 and 10 should be passed only by the branch Manger. Acopy of the orginal schedule reported earlier should also beenclosed.

l All IOA memos should be attended to promptly. More thanordinary attention should be paid to high value entries.

l All care to be taken while paying cheques, drafts etc. andone should ensure that they are not from the �lost� list.Ultraviolet Lamp may be used to detect fake instruments.

l Proper record should be kept of the receipt/delivery of theclearing instruments.

l Under no circumstances should a copy of Power ofattorney, other than the copy certified by a court be actedupon.

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l While opening an account in the name of a partnership firm,along with copy of partnership deed, Bank�s prescribedform of partnership letter (COS 37) should be taken.

l No partner is authorized to delegate his authority to anagent, the authority should be signed by all the partners.

l SB a/c can be opened in the sole name of a minor if he/sheis 10 years of age or above, provided he/she can signuniformly.

l If 2 minor depositors approach the Bank for opening anaccount in the style �E or S� their request cannot beacceded to. But 2 minors can open a joint account to beoperated upon by both of them jointly.

l No cheque book should be issued to an illiterate. Thewithdrawal forms relating to illiterate should be filled in bythe counter clerk. Thereafter the passing officer shouldascertain from the depositor, the correct amount of thewithdrawal.

l All portions of the trust deed detailing the powers and dutiesof trustees which affect the trust account must be enteredin power of attorney register. The activities of trust shouldbe in accordance with object/purpose of the trust.

l Nomination can be made in favour of only one individual. Allthe nominations, cancellation of nominations and alterationof nominations are required to be witnessed. Where thenominee is a minor, the depositor may while making thenomination, appoint another individual, not being a minor,to receive the amount of the deposit on behalf of thenominee (minor) in the event of the death of the depositorduring the minority of the nominee. All the depositors shouldbe requested to nominate and if the depositor does not wishto make nomination, the same should be recorded on theaccount opening form, under his full signature.

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l If the amount of the term deposit and matured deposit isRs.20,000/- or more it must be paid to the depositor by anaccount payee Banker�s cheque/draft or by credit todepositor�s account.

l VVR / day book checking not to be given a go bye under anycircumstance. Allotment of the same to be donemeticulously and intelligent scrutiny of vouchers andrelevant books to be done by Branch Managers at specifiedperiodical intervals.

l Proper followup of missing vouchers and their entry inmissing vouchers registers is a must.

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CHAPTER-11

SYSTEM, TECHNOLOGY & ATMDESKTOP

Do�s

l Desktop includes personal computers, laptops and serversprovided by bank for individual use.

l Protect your password.

l Install anti-virus and personal firewall in your system

l Always take backup of the system data or critical files andstore it securely.

l Always store your critical files in the hard disk with apassword.

l Take adequate measures for physical protection & logicalprotection.

Don�ts

l Do not leave your system unlocked.

l Do not disable the security settings / BIOS settings in yoursystem.

l Do not install any software or application which is notessential or not authorised by the Bank.

l Do not connect modems to these machines unlessotherwise approved by the appropriate authority.

l Do not change any hardware configuration, settings inoperating system or any applications installed on theirdesktops.

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PASSWORD

Do�s

l Keep the minimum length of the password as 8 characters.

l Use a mixture of numbers, special characters and symbolsand different cases.

l Keep changing your password at periodic intervals. In theextreme circumstances, if the password has to be shared,then change it immediately.

l Take precautions to protect your password and the Bank�ssensitive information and responsibility for the usage of yourpassword.

Don�ts

l Do not use birthdays, names of the family members, petnames etc.

l Do not use the word �password� for password and or anyother dictionary word.

l Do not share your password with anyone.

l Do not write your password anywhere on your desk / board.

l Do not use the same password for all your accounts.

E-MAIL

Do�s

l Ensure that your emails are encrypted when it travels overthe net.

l Users should protect their email account on the serverthrough strong password.

l Users should exercise caution in providing their emailaccount or other information to websites or any other Internetforum.

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l Users should promptly report all suspected securityvulnerabilities or incidents that they notice with the Emailsystem to IT Networking Department.

l Sensitive information may get revealed unintentionally dueto unsafe practices. Care should be exercised in thefollowing scenarios to protect sensitive information-a. Reading confidential documents in public places.b. Discussing confidential information in public places.c. Working on laptops in public places.d. Answering to queries over phone to unverified persons.

Don�ts

l Do not provide official email address in response to awebsite or newsgroup

l Do not respond or forward a spam mail (chain mails / junkmail). Just delete it.

l Do not open an attachment received from unknown source,like discussion board! mailing list.

l Do not open email that is meant for other person, if it hascome to you wrongly.

l Do not indulge in sending or forwarding following categoriesof emails within or outside the bank­

- Emails with any libelous, defamatory, offensive, racistor obscene remarks.

- Emails containing messages that may damage thereputation of the bank.

- Unsolicited emails to large number of which can beconsidered as mail spamming.

- Emails containing any document, other informationprotected by copyright, privacy or disclosure regulation.

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INTERNET

Do�s

l Limit use of web browser for business purposes only.

l While visiting web sites for banking transactions /confidential information etc ensure that sites use SSLtechnology.

l Look for the lock symbol on web pages seeking criticalinformation - like username / password, credit card numberetc.

l Always type the address on the browser to access a site donot use the links provided by spam mails.

l Ensure that downloads, if any, are scanned for virus beforeopening them.

l Maintain different passwords for Login and for Transactions.

l Please log off from www.onlinesbi.com and Instant SBI andclose the browser window after you have fmished yoursession.

l Avoid writing down your Username and password in yourdiary or such place, which can be accessed by others.

l It is advisable to change your password if you believe thatanyone has managed to get access to it.

l Enter your user-id and password only in the space providedfor- that you are normally used to.

l Change passwords at least once every 90 (ninety) days.

l Make the password difficult for others to guess or crack buteasy for you to memorise and remember. An acceptablepassword must have characters from at least three (3)different character types � upper case, lower case, digits,Special Characters, etc.

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l A password that includes a sample from a rich characterset is difficult to crack.

l Latest version of browsers should be used to connect tothe Internet as they afford higher level of security.

l Continuous updation of antivirus softwares will offer moreresistance to newer viruses.

l When not in use disconnect your computer system fromthe Internet to avoid unwanted access to the informationon your system.

l Give your user id and password only at the authenticatedlogin page.

Don�ts

l Do not use Internet facilities to Download or distributemalicious software or tools or to deliberately propagate anyvirus.

l Do not violate any copyright or license agreement bydownloading or distributing protected material.

l Do not upload files, software or data belonging to bank toany Internet site without authorization of the owner of thefile / software / data.

l Do not share any confidential or sensitive information ofthe bank with any Internet site unless authorized by superior/ controller.

l Do not post views or opinion on behalf of the bank unlessauthorized by top management.

l Do not post remarks that are defamatory, obscene or not inline with bank�s policy on the subject.

l Do not conduct illegal or unethical activities includinggambling, accessing obscene material or misrepresentingthe bank.

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l Do not in case such misuse of the Internet access isdetected, bank can terminate. the user Internet account andtake other disciplinary action.

GENERAL

l The LAN Access, Data Security, User Access and Backupare achieved through a combination of sign-on / sign-offprocedures, passwords, together with user and transactioncapability levels to protect financial and customerinformation For all user-input transactions financial and nonfinancial, including reversals and correction entries andthose in intermediate accounts, vouchers should beprepared.

l The vouchers, after they are entered in the system, will beretained by the maker where transactions do not requireany further checking. Where transactions involve checkingby an official/two officials, as the case may be, the voucherswill be retained by the last checker.

l The Day Books should be checked by official other thanthe person to whom it relates and a day book allotmentregister is to be maintained at the branch and should beinitialed by the officials concerned for being received andchecked the same. The register should be scrutinized bythe Branch Manager/Divisional Manager.

ATM

l Maintain �ATM Cash Back up Register�.

l Carry on Periodical verification of cash in ATMs on the linesof cash verification in Currency Chest or Cash in Hand atbranches, in addition to the verification by the ATM JointCustodians on a daily basis is necessary.

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l Maintain a Register for changing the Password. Mentionthe date on which the password is changed and record thesame. Password should be entered in Branch DocumentRegister.

l Branches are required to refer to the reports daily forreconciliation of all disputes in respect ATM Transaction;.

l Admin Function has to be performed on the basis of the�Corrections to be Made� report to make a Rectification.

OPERATIONS FOR NCR ATMS

Do�s

l Mode of operation of ATM has to be changed to Supervisormode IT Normal mode for the purpose of loading cash bychanging the switch provided.

l In order that ATM branches have uniformity in maintenanceof books and records, the �ATM Cash Back up Register�(Annexure VI) has been introduced. It is imperative that the�Inc Bal� figures in the register should match with the �INC�figures shown in the Admin Slip. The �Inc Bal� is cumulativefigure of all cash loaded in the ATM and the cash replenishedshould be added to the opening �Inc Bal�. The End Balancein Admin Slip represents the real physical cash in the ATM.Similar entry should be made for �Dec� i.e. decrease inAdmin Slip in a separate register or a separate folio in thesame register. �DEC� represents cash decreased from theATM. The cumulative figure of �Dec� should match with thesimilar figure in the Admin Slip.

l Periodical verification of cash in ATMs on the lines of cashverification in Currency Chest or Cash in Hand at branches,in addition to the verification by the ATM Joint Custodianson a daily basis is necessary.

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l Maintain a Register for changing the Password. Mentionthe date on which the password is changed and record thesame.

l Branches are required to refer to the reports daily forreconciliation of all disputes in respect ATM Transactions.

l Admin Function has to be performed on the basis of the�Corrections to Be Made� report to make a Rectification.

Don�ts

l Do not leave the ATM Hood open un-attended.

l Do not leave the ATM room shabby and un-cleaned

l Do not keep the hood key or battery room key inside theATM room.

l Do not leave the ATM Room leaving the ATM safe open.

l Do not open the ATM Hood keeping the ATM roomCollapsible shutters open so as to be seen by the publicwhile operating the ATM for cash replenishment.

l Do not count the cash in ATM room keeping open thecollapsible shutters of the ATM Room, so as to be visible tothe public.

l Do not share your part of password to other joint custodian.

l Do not discuss the issues or steps of ADMIN operation ofATM in public or loudly.

l Do not delegate the duties to be performed by you to others,especially in cash replenishment.

l Do not keep the password unchanged for a long period.

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NOTES