recollect April 2009 to March 2010 - aiiboa 2009 TO MARCH 2010 Cir No. Date Subject DEP. 01 08.04.09...

APRIL 2009 TO MARCH 2010

Cir No. Date Subject DEP.

01 08.04.09 Inoperative Accounts

03 13.04.09 Restriction in Usage of Withdrawal Slips for Third Party payment

04 13.04.09 Foreclosure of Domestic Term Deposits 05 15.04.09 Renewal of Overdue Domestic Term

Deposits 20 20.06.09 Processing of AML alerts – New link

provided in the Help Desk for submission of replies

23 03.08.09 Special Domestic Term Deposit Scheme for Senior Citizens

26 28.08.09 Adherence to KYC / AML Guidelines while Opening and Conduct of the account of Multi Level Marketing Firms (MLMS)

36 12/10/09 Movement `Banyan Vriksh 2010’ – Staff Incentive Scheme

38 22/10/09 Combating Financing of Terrorism (CFT) – Unlawful Activities (Prevention) Act (UAPA), 1967 – Obligation of Banks.

39 12/11/09 Inoperative Accounts 42 25/11/09 BCSBI - Code of Bank's Commitment to

customers-August 2009. 48 01.03.10 Quoting of PAN in the Account Opening

Forms 50 19.03.10 Procedure for dealing with dishonoured

cheques ADV.

05 13.04.09 Implementation of PMEGP Scheme-

Addition to Negative list and Addendum 06 15.04.09

Entry level scoring of borrowal accounts

09 25.04.09 Recovery policy 2009-10 17 28.05.09 Methodology of assessment of working

capital requirements 20 12.06.09 Methodology for assessment of working

capital requirements 23 17.06.09 Verification of genuineness of Salary

Certificates 26 18.06.09 Intoduction of web based status view

facility to applicants of credit limits 31 20.06.09 Revised scoring model for educational

loans 35 27.06.09 Provision of copy of credit report to

customers 40 02.07.09 IBA Model Educational Loan Scheme -

Life Insurance Coverage to Student Borrowers

44 04.07.09 Tata Motors Tie Up Car Loan Scheme 45 08.07.09 Lending to Micro Enterprises - Board

Direction 49 09.07.09 One Time Settlement Scheme for MSE

NPAs 51 17.07.09 Credit Facilities for Micro, Small and

Medium Enterprises- Collateral free Loans for Prime Minister's Employment Generation Programme (PMEGP)

52 20.07.09 Financing Handicrafts Artisans and covering them under CGTMSE Scheme

54 22.07.09 Hedging of Foreign Exchange Exposure of Clients

57 27.07.09 Lending to Priority Sector Advances - Revised Guidelines - Additions /

Cir No. Date Subject Amendments

59 27.07.09 Rating of SME Customers by ICRA- Rating Scale & Rating Fee Structure

61 01.08.09 IB Swarna Mudra -"Income On Sale Of Gold Coins

73 17.08.09 Renaming of IB-SHANTINIKETAN as IB-HOSTEL PLUS

79 31.08.09 Entry Level Scoring for Credit Card 84 05.09.09 SGSY Scheme - Increase in Exemption

Limit of Collateral Security in Respect of Individual and Group Loans

87 09.09.09 Operational Guidelines for Issue of Letter Of Comfort (LOC) / Letter of Undertaking (LOU)

92 14.09.09 ‘I-Cube - A Comprehensive Database of CMIE

96 18.09.09 Implementation of National Agricultural Insurance Scheme (NAIS) Administrative Approval for Rabi 2009-10

100 22.09.09 Categorisation of Retail Trade under Small (Service) Enterprises

101 22.09.09 Financing Agri Term Loan against Gold Ornaments and New Product Code for J L for Traders Scheme

104 29.09.09 Accounting procedures for Devolved Letter of Credit (DA)

107 06/10/09 Loan against Deposits -- Purpose of the Loan

111 21/10/09 Service Charges and Target Group for IB Pension Loan Scheme

118 13/11/09 Enhancement of advance rate per gram of jewels and ceiling on appraisal fee

124 26/11/09 Approval of tractor models for Retail Financing.

126 27/11/09 Swarna Jayanti Shahari Rozgar Yojana (SJSRY) - Revised guidelines

127 27/11/09 Extension Of Policy On One Time Settlement For NPAs with Book Balance up to Rs. Two Lakhs

129 09/12/09 Housing Loan – Interest Subsidy Scheme for Housing the Urban Poor [ISHUP]

130 10/12/09 TRADEWELL Scheme – Clarifications 135 17/12/09 Implementation of Interest Subsidy

Scheme for Housing the Urban Poor [ISHUP] – Modification of guidelines

137 29/12/09 Continuation Of 2% Interest Subvention Scheme and Introduction of 1% Additional Incentive Subvention for Short-Term Crop Loans disbursed during 2009-10

141 31/12/09 New Product Codes in CBS for the PMEGP Scheme

143 06.01.10 Certificates issued by Chartered Accountants - IBA Communication dt 22.12.09

145 07.01.10 Bank’s MOU with Hyundai Motors India Limited (HMIL)

146 12.01.10 Comprehensive guidelines on Payment of Advocate fee and revision of Delegation of Powers

150 29.01.10 Revision in Delegation of Credit and Credit Related Administrative Powers

152 04.02.10 Revised Guidelines for "Entrepreneurship Development

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Cir No. Date Subject Programme" (EDP) under "PMEGP" Scheme

154 18.02.10 Modifications in "IB-STAR Rice Mill" Scheme

158 18.02.10 Introduction of DPN for advances with both fixed and floating rates of interest

159 20.02.10 Launching of " IB- BEML- EQUIP - FINANCE" (SLPs)

160 23.02.10 Capital Investment Subsidy Scheme (CISS) for Rural Godowns – Farmers Category and Multi-storey Godowns Clarifications

163 10.03.10 Launching of VISA Business Credit Card for SME and Corporate Customers

164 11.03.10 Interest Rates on Export Credit in Foreign Currency

CRA 03

17.04.09 Return of cheques by bank branches citing ‘link failure’ as a reason

04 20.04.09 Government Transactions –Need for prompt Remittance / Reporting – Levy of penal interest for delayed remittance of Government revenue

11 01.06.09 Revision of locker rent in metropolitan and urban branches

CRA 23

15.07.09 Electronic Payment of Direct Taxes by Corporates and Assessees (Coming Under Section 44AB of IT Act) – E-Payment of TDS by our Branches/Offices Made Mandatory

34 30.09.09 Co Branded Mediclaim Policy `Arogya Raksha‘ – Renewal of MOU for 2009-10 with improved Features.

36 06/10/09 Use of RTGS / NEFT / NECS / ECS for Credit to NRE Accounts - Compliance with FEMA Regulations and Wire Transfer Guidelines.

42 23/10/09 Provision Of Group Life Cover To Home Loan Borrowers - (1) Introduction of New Scheme from M/s Kotak Mahindra Old Mutual Life Insurance Ltd - “IB HOME SURAKSHA” (2) Modifications to the existing IB Griha Jeevan Scheme

44 26/10/09 (i) Discontinuance of MT Code on DDs issued for Rs.1 lakh and above (ii) Revised guidelines on the cancellation of BPOs in the system

46 02/11/09 Subscription to Tamilnadu Government Pension Health Fund & Family Security Fund Scheme

47 02/11/09 Collection of Home / Vehicle Loan Instalments through Electronic Clearing Service (ECS)

49 01/12/09 Online Payment (of Utility Bills, LIC Premia, Mobile Bills, Fees, Charities / Donations etc) by Net Banking Customers having Transaction PW.

52 03/12/09 Provision of Group Life Cover to Home Loan Borrowers – ‘IB Home Suraksha’– SHL A/cs. Now included

53 08/12/09 Scheme of Incentives for Officers becoming licensed Specified Persons for sale of HDFC Life Policies

56 21/12/09 TDS on Pension Payment - Income Tax for the financial year ending 31.03.10 Assessment year 2010-11

Cir No. Date Subject 61 09.02.10 Mandatory electronic payment of tax by

certain categories of taxpayers w.e.f from 01.04.2008

62 09.02.10 Launching of new Travel Group Insurance Product – “IB YATRA SURAKSHA” Policy.

63 12.02.10 Obtention / Updation of Debit Mandates from our Customers for Electronic Clearing Services and Other purposes

66 26.02.10 NEFT System - Refinement of Process-flow

FX 03

11.04.09 Increase in percentage of cover under Export Credit Insurance for Banks - (ECIB WT-PC and ECIB WT-PS) by (ECGC).

07 05.06.09 Bank’s Policy on collection of US Dollar denominated cheques.

10 04.07.09 Rupee Draft Drawing Arrangements with Exchange Houses.

20 01/10/09 Relaxation of norms for Gold Card Scheme for Exporters

22 12/10/09 National Export Insurance Account (NEIA) - operated by ECGC.

27 27/11/09 Implementation of UNSCR 1718 (2006) and UNSCR 1874 (2009) pertaining to Democratic People’s Republic of Korea (DPRK)

30 23/12/09 KYC / AML / CFT / Obligations of Authorised Persons under PMLA– Money changing activities / Xpress Money / Money Gram / DD Drawing Arrangement

35 28.01.10 Request from branches to handle China Gold Unit Bond.

37 31.01.10 Introduction of new product - offer on opening of “Student Account“ by our US Dollar correspondent bank

GENL. 01

15.04.09 Recovery of commission on Letters of Comfort

02 20.04.09 Joint custody of Security Stationery-Numbered items. Guidelines on custody of Numbered Stationery items

03 22.04.09 RTGS Transactions 04 28.04.09 RTGS/NEFT Timings - Authorisation in

Time 05 12.05.09 Usage of Inter-bank window for

customer transactions – RTGS 06 22.05.09 Launching of IndMobile – Enabling

Funds Transfer facility through Mobile Phone

08 04.06.09 Service Charges on ATM services 10 19.06.09 Withdrawal of Express Way Clearing

(EWC) facility at Service branches 13 24.07.09 Settlement of Failed ATM Transactions

– Payment of Compensation 25 15/10/09 RBI directions regarding Free

Withdrawal of Cash from Other Bank ATMs.

29 10/11/09 Waiver of charges on Intra City Transactions

30 14/11/09 Cash Handling Charges–Revised Rates .w.e.f 15 December 2009.

35 03/12/09 Payment Of Old Demand Drafts Issued Upto 31.03.2008.

36 08/12/09 Supply of Statement of Loan Account

APRIL 2009–MARCH 2010

3

Cir No. Date Subject to Borrowers

41 21/12/09 Resolving complaints forwarded by RBI & the Banking Ombudsman.

44 30/12/09 IB Connect – A ‘Fast Communication’ portal for our Bank

45 30/12/09 Display of information for lodging of ATM related complaints

48 09.01.10 ATM-Customer care and complaint 49 09.01.10 Service Charges for Outstation Cheque

Collection 50 19.01.10 Electronic Voucher Verification 51 23.01.10 Enhancement of Limit for Funds

Transfer through Mobile Banking 54 29.01.10 Acceptance of ‘Postal Identity Card’ as

‘Proof of Address’ for opening of accounts

55 03.02.10 PMLA Rules, 2009 - Obligation of Banks / Financial Institutions

73 15.03.10 Updation of Customer Records - RBI Observation

75 31.03.10 Adherence of KYC Norms - opening of Accounts of Properietary Concerns

HRM 22

14.05.09 Staff Welfare Measures - further improvements

48 04.07.09 Issue of "Retired Employee Card" to Retired Employees

49 06.07.09 Bonus to Staff for the Year 2008-09 56 10.07.09 Leave Fare Concession – Visits

Abroad. 60 15.07.09 Nodal Officer for Customer

Service/Principal Code Compliance Officer (BCSBI) and Public Information Officer under Right To Information Act 2005.

61 16.07.09 NISM–Series-I – Certification In Currency Derivatives Exam. – Fee Reimbursement and Cash Incentive to Officers

88 12.09.09 Categorisation of Branches as on 31.03.2009

101 10.10.09 Staff Welfare Measure - Presentation Of Memento On Superannuation - Modification In Procedure

132 30.11.09 Scheme for extending Legal and Financial Support to Officers of Banks against whom motivated false complaints have been made by people/agencies outside Bank

152 05.02.10 New Holiday Homes At Tirumala and Puri

175 15.02.10 Modification In Nomination Of Disciplinary Authority / Appellate Authority / Reviewing Authority For Officers

181 03.03.10 Canteen Subsidy To Staff Members 187 08.03.10 Improvements In Staff Welfare

Schemes 204 31.03.10 Categorisation of branches as on

31.03.2010 MD/ED

8 07/12/09 Joining of Shri V. Rama Gopal as

Executive Director of our Bank 14 01.03.10 Launching of VISA Business Credit

Card for SME and Corporate Customers

ADMN. 01

06.04.09 Policy on Business Continuity Planning 2009-10.

Cir No. Date Subject 02 06.04.09 Whistle Blower Policy 2009-10 10 25.04.09 ATM Security 14 11.05.09 Banker’s Indemnity Policy for the

Financial Year 2009- 16 25.05.09 Information Systems (I S) Audit Policy -

2009-10 17 25.05.09 Inspection and Audit Policy - 2009-10 24 17.06.09 Security of Cash in Transit 28 26.06.09 Comprehensive Centralised Insurance

Policy for SFVM of Bank’s Assets of all branches/Offices all over India

36 17.08.09 Deduction And Remittance of Tax Deducted at Source (TDS) - Amendments made in the Finance Act 2009 to the TDS Provisions under Section 194a to 195 of the Incometax Act, 1961.

44 24.09.09 Whistle Blower Policy 45 25.09.09 Capturing of Operational Loss Data 49 09/11/09 Discontinuance of re-issue of

banknotes of Rs.500/- denomination of Mahatma Gandhi Series 2000

59 30/12/09 Deduction and Remittance of TDS – Amendments under Section 194A and 195 of the Incometax Act, 1961

61 30.01.10 Tax Deducted at Source (TDS) –Quoting of PAN made mandatory – Deduction of TDS at a higher rate of 20%, if the PAN is not provided by the customers from 01.04.2010.

69 20.03.10 Discontinuance Of Printing Circulars From 1st April 2010

71 26.03.10 Document for credit of Tax Deducted at Source (TDS) in our PAN with National Security Depository Ltd (NSDL)

DEPOSITS

Inoperative Accounts According to Reserve Bank of India, banks

should play a more pro-active role in finding the whereabouts of the account holders whose accounts have remained inoperative. 1. Branches should make an annual review of

accounts in which there are no operations for more than one year. Branches should approach the customers and inform them in writing as per the letter enclosed to the circular that there has been no operation in their accounts and ascertain the reasons for the same. In case the non operation in the account is due to shifting of the customers from the locality, they may be asked to revive their connection.

2. If the letters are returned undelivered, branch may immediately be put on enquiry to find out the whereabouts of customers or their legal heirs in case they are deceased.

3. In case the whereabouts of the customers are not traceable, branches should consider contacting

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the persons who had introduced the account holder. They could also consider contacting the employer / or any other person whose details are available with them.

4. A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years.

5. In case any reply is given by the account holder giving the reasons for not operating the account, branches should continue classifying the same as an operative account for one more year within which period the account holder may be requested to operate the account. However, in case the account holder still does not operate the same during the extended period, branches should classify the same as inoperative account after the expiry of the extended period.

6. For the purpose of classifying an account as ‘inoperative’ both the type of transactions i.e. debit as well as credit transactions induced at the instance of customers as well as third party should be considered.

7. The customer should not be inconvenienced in any way, just because his account has been rendered inoperative. The transaction may be monitored at a higher level both from the point of view of preventing fraud and making a Suspicious Transactions Report.

8. Operation in such accounts may be allowed after due diligence as per risk category of the customer.

9. There should not be any charge for activation of inoperative account.

10. Branches are also advised to ensure that the amounts lying in inoperative accounts are properly audited by the internal auditors / statutory auditors of the bank.

11. Interest on savings bank accounts should be credited on regular basis whether the account is operative or not.

12. Branches may also note to apply the service charges in force for Inoperative accounts.

(DEP.01/2009-10 dt. 08.04.09 )

Restriction in usage of Withdrawal Slips for third party payments

The following modifications are introduced in using of withdrawal slips in our Bank (under

manual/physical control only) in order to improve the security in the system/procedure.

The third party payment on withdrawal slip is restricted up to Rs.1000/-, subject to production of pass book on withdrawal,

Third party payment beyond Rs.1000/- on withdrawal slip is not permitted.

Branch Managers are authorized, to allow third party payment above Rs.1000/- only to close relatives (as defined in page C-8 and Para 2.2.4 of “Booklet on credit and credit related administrative powers) under exceptional circumstances based on merits of the individual case.

All other guidelines about issue and maintenance of withdrawal slips are as mentioned in Manual of Instructions – “Deposits -2006” pages 5.6 and 5.7 – para 5.4 and 5.5, and Circular Admin.100/07-08 dated 29 03 2008.

(DEP.03 /2009-10 dt. 13.04.09)

Foreclosure of Domestic Term Deposits The revised charges for foreclosure of

Domestic Term Deposits are as follows with immediate effect.

Period run

Deposits of less than Rs.15 lakhs

Deposits of Rs.15 lakhs to Rs. 5 Crore

Deposits of above Rs.5 Crore

7 days to 14 days

No interest will be paid on foreclosure of deposit



15 days and above

Eligible rate will be the applicable card rate for the actual period run prevailing on the date of deposit less 0.75% p.a as foreclosure charges

Eligible rate will be the applicable card rate for the actual period run prevailing on the date of deposit less 1% p.a as foreclosure charges

Eligible rate of interest will be the applicable rate of interest prevailing at the time of deposit for above Rs.5 crore or Rs.15 lakhs to Rs. 1 crore, which ever is less minus 1% as foreclosure charges

For foreclosure of Term Deposits of Senior Citizens, the existing norms remain unchanged.

The authority for waiver of foreclosure charges is vested with Executive Director on the basis of the recommendation of the Committee of General Managers to be approved by Chairman and


5

Managing Director. The waiver is restricted to the Corporates for deposits of Rs.25 Crore and above.

(DEP. 04 / 2009-10 dt. 13.04.2009)

Renewal of Overdue Domestic Term Deposits The following procedure has to be observed

for payment of interest on overdue term deposits with immediate effect.

1. The present guidelines on payment of interest on overdue term deposit for the overdue period, when it is renewed is to be continued

2. When the request is made by the customer for payment of overdue deposit without renewal, the unclaimed amount will attract savings bank rate of interest from the date of original maturity to the date of payment (simple interest).

(DEP. 05 / 2009-10 dt. 15.04.2009)

Processing of AML Alerts – New Link provided in the Help Desk for submission of replies.

AML Cells at Head Office and Circle Offices, require confirmation from the branches, whether the account has complied with KYC norms and whether the transaction referred is genuine and is in conformity with the declared customer profile before taking a decision on the closure of the AML alert.

To ensure authenticity for such information from the branches a secured gateway has been created with a link provided in the Help Desk.

BMs / ABMs alone are empowered to give reply for the above queries, by clicking on the box “YES / NO”. The BMs/ABMs have to login to this utility on a daily basis and submit their replies within 48 hours.

Based on the replies received from the branches, AML cell at Head Office or Circle office will take a decision on the closure of the alert.

(DEP. 20/ 2009-10 dt.. 20.06.2009)

Special Domestic Term Deposit Scheme For Senior Citizens

With effect from 01.01.2009, additional rate of interest of 0.50% has been extended to Recurring Deposits for Senior Citizens.

DEP. 23/2009-10 dt. 03.08.2009

Adherence to KYC / AML guidelines while opening and conduct of the account of Multi Level Marketing Firms (MLMs)

Branches shall undertake quick review, in cases where accounts have already been opened in the names of the marketing agencies, retail traders, investment firms, following RBI guidelines.

Wherever large number of cheque books has been issued to such firms, the relative decision may be reviewed in the light of the following: i. Whether the cheque books have been issued

to customers on the basis of their express request and after following the internal processes laid down in the matter.

ii. Whether the number of cheque books is consistent with / matching the profile of the customers as also their nature of business operations.

Unusual operations noticed during the above review may be immediately reported to HO: AML Cell and other appropriate authorities such as Financial Intelligence Unit (FIU-IND), Department of Revenue, Ministry of Finance, Government of India, Hotel Samrat (6th Floor), Chanakyapuri, New Delhi – 110 021.

DEP.26/2009-10 dt. 28.08.2009

Movement `Banyan Vriksh 2010’ – Staff Incentive Scheme

The incentive scheme for the “BANYAN VRIKSH – VISION 2010” movement has been modified this year. Avowed objective should be to garner as much CASA deposits as possible during the campaign. The guidelines for the scheme are detailed hereunder: i. Vision 20 lakh CASA accounts for CASA deposits of Rs.6000 crore. ii. Period The movement BANYAN VRIKSH – VISION 2010 shall come to close on 31.03.2010. The Bank reserves the right to draw the curtains if the vision of the movement is achieved at any time during the movement. iii. Eligibility to participate Open to all staff members including staff of administrative units/offices and Designated Marketing Personnel entrusted with field level marketing activities.

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iv. Eligible Accounts Current account and Savings Bank account opened during the movement period. As we aim at bringing in new clientele, New CIF/account opened during the campaign period will only be considered for award of reward points. v. Reward Point: There will be Basic Reward Points for each CASA product as given below:

CASA product Basic Reward Points

Regular Savings Bank A/c (with or without cheque book) (other than no frill accounts and smart kid accounts)

1

SB Silver and Power account 5 NRE, NRO SB A/c and SB Platinum account 10 Regular Current Account 10 Premium Current Account 25 CMS Plus Account 250

A reward point is equivalent to Re.1/-. However, the maximum cash incentive per staff shall not exceed 20% of his annual gross salary. Regarding Additional Reward Point, Minimum Performance Level (MPL) and Operational guidelines are given in the circular.

DEP.36/2009-10 dt.12.10.2009

Combating Financing of Terrorism (CFT) – Unlawful Activities (Prevention) Act (UAPA), 1967 – Obligation of Banks

According to the amended Unlawful Activities (Prevention) Act (UAPA), RBI advised all the Banks to strictly follow the procedure laid down in the UAPA Order dated August 27, 2009 issued by Government of India and ensure meticulous compliance to the Order issued by the Government.

1. Banks to maintain updated designated lists in electronic form and run a check on the given parameters on a regular basis to verify whether individuals or entities listed in the schedule to the Order (referred to as designated individuals / entities) are holding any funds, financial assets or economic resources or related services held in the form of Bank accounts with them.

2. In case, the particulars of any of their customers match with the particulars of designated individuals / entities, the Banks shall immediately not later than 24 hours from the time of finding out such customer, inform full particulars of the funds, financial assets or economic resources or related

services held in the form of Bank accounts, held by such customer on their books to the Joint Secretary, Ministry of Home Affairs.

3. Banks shall also send a copy of the communication mentioned in (2) above to the UAPA Nodal Officer of RBI, Chief General Manager, Department of Banking Operations and Development, RBI, Mumbai.

4. Banks shall also send a copy of the communication mentioned in (2) above to the UAPA Nodal Officer of the State / UT where the account is held as the case may be and FIU-India.

5. In case, the match of any of the customers with the particulars of designated individuals / entities is beyond doubt, the Banks would prevent designated persons from conducting financial transactions, under intimation to Joint Secretary, Ministry of Home Affairs.

6. Banks shall also file a Suspicious Transaction Report (STR) with FIU – IND covering all the transactions in the accounts covered by paragraph (2) above carried through or attempted as per the prescribed format.

To facilitate reporting as in (2) above, one more table has been ported in the secured gateway (in the Help Desk – in Other web sites – AML alerts for BM/ABM) now being used by branches for replying to HO: AML Cell queries.

Branches should report to HO: AML Cell immediately after detection, so that HO:AML Cell in turn can send its reports to all authorities within 24 hours of such detection by the branches.

DEP.38/2009-10 dt.22.10.2009

Inoperative Accounts

RBI had clarified regarding transactions that are to be taken into account, while deciding the status of an account, as inoperative, is as follows:

“Since the interest on Fixed Deposit account is credited to the Savings Bank accounts as per the mandate of the customer, the same should be treated as a customer induced transaction. As such, the account should be treated as operative account as long as the interest on Fixed Deposit account is credited to the Savings Bank account. The Savings Bank account can be treated as inoperative account only after two years from the date of the last credit entry of the interest on Fixed Deposit account.”

DEP.39/ 2009-10 dt.12.11.2009


7

BCSBI - Code of Bank's Commitment to customers-August 2009.

Board has approved for adoption of the revised Banking Codes and Standards Board of India (BCSBI).

Objectives of the Code:

a. To promote good and fair banking practices by setting minimum standards in dealing with customers.

b. To increase transparency so that customer can have a better understanding of what customer can reasonably expect of the services.

c. To encourage market forces, through competition, to achieve higher operating standards.

d. To promote a fair and cordial relationship between customer and their Bank.

e. To foster confidence in the banking system.

Application of the Code:

This Code applies to all the products and services listed below, whether they are provided by branches or subsidiaries, agents acting on our behalf, across the counter, over phone, by post, through interactive electronic devices, on the internet or by any other method.

a. Current accounts, Savings Bank accounts, Term deposits, Recurring deposit, PPF accounts and all other deposit accounts.

b. Payment services such as pension, payment orders, remittances by way of Demand Drafts, wire transfers and all electronic transactions e.g. RTGS, EFT, NEFT.

c. Banking Services related to Government transactions

d. Demat accounts, equity, Government bonds

e. Indian currency notes exchange facility

f. Collection of cheques, safe custody services, safe deposit locker facility.

g. Loans, overdrafts and guarantees.

h. Foreign exchange services including money changing.

i. Third party insurance and investment products marketed through our branches.

j. Card products including credit cards, debit cards, ATM cards, Smart Cards and services

(including credit cards offered by our subsidiaries/ companies promoted by us).

The revised Code has already been ported in our website, www.indianbank.in and also in our Intranet under the head “Customer Centric Services”.

DEP.42/2009-10 dt.25.11.2009

Quoting of PAN in the Account Opening Forms As quoting of Permanent Account Number

(PAN) is made mandatory from 01.04.2010 on all transactions attracting TDS and also in the declaration in “Form 15G / Form 15H” submitted by the customers, Branch should ensure that the 10 digit column in all the Account Opening Forms meant for PAN is filled in by the customers.

Further, in all the Account Opening forms, after due verification, the following is to be added in the column for Bank’s use

“PAN validated and entered “

and the officer has to sign below this.

HO: Stationery Dept. is making arrangements for printing the PAN column on all the opening forms and until such forms are made available, Branches are advised to get the PAN entered on the presently available opening forms.

DEP.48/2009-10 dt.01.03.2010

Procedure for dealing with dishonoured cheques The procedure in dealing with frequently

dishonoured cheques including those of the value of Rs. One crore and above was explained, in para 25 in Chapter 4 of Manual of Instructions – Deposits 2006. RBI vide their circ. No.DBOD.No.Leg. BC.59/09.07.005/2009-10, dt.09.11.2009 advised all the Banks to have a Board approved policy for dealing with frequent dishonour of cheques of value of less than Rs.1 crore also.

RBI further advised that the policy should deal with frequent dishonour of ECS mandates too.Considering the fact that the existing procedure in para 25 referred to above, takes care of this advice of RBI, the Board of Directors of our Bank reiterated its meticulous implementation.

The Board of Directors adopted the same procedure in respect of dishonour of ECS mandates also.

DEP. 50/2009-10 dt.19.03.2010

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Payment of Interest on Savings Bank Account on Daily Product Basis

RBI vide their notification has informed that payment of interest on Savings Bank account may be made by Banks on a daily product basis with effect from April 01, 2010. Accordingly the payment of interest on Savings Bank account is revised as under with effect from 01.04.2010.

EXISTING REVISED

Interest is calculated as on every 31st January and 31st July and credited on any day before 10 the February and 10th August respectively. The six months products eligible for interest should be added up and the total products should be arrived at. Interest is calculated on monthly products on the minimum balance in the account between 10th and the last day of the month. The interest so arrived should be rounded off to the nearest rupee. An account is not entitled to interest, unless it earns a minimum of Re.1 as interest per half year.

Interest is calculated on a daily product basis for the period from 1st February to 31st July and credited on any day before 10th August and for the period from 1st August to 31st January, on any day before 10th February. The daily products for the six months period (Ending 31st July and 31st January) should be added up and the total products should be arrived at. Interest is calculated on the daily product for the six months period. The interest so arrived should be rounded off to the nearest rupee. An account is not entitled to interest, unless it earns a minimum of Re.1 as interest per half year.

DEP.51/2009-10 dt.30.03.2010

ADVANCES

Implementation of PMEGP Scheme- Addition to Negative list and Addendum

KVIC, Mumbai has informed that the following additions have been made to the “Negative List” of activities of the PMEGP scheme guidelines-

i) Business activities like opening of grocery and stationary shops etc., involving no manufacturing process and value addition.

ii) Farm related activities like Goatery, Piggery, Poultry etc.,

iii) All Urban/rural transport activities-

a. Except Auto Rickshaw, Tourist boat and House boat in A & N Islands.

b. Except the House Boat, Shikara and Tourist boat in J & K.

c. Except Cycle Rickshaw.

Other terms already mentioned in the Negative list will remain unchanged.

The above negative list will be applicable to all the cases sanctioned during 2008-09 and onwards under PMEGP Scheme.

KVIC Mumbai has also informed the following “Addendum” in respect of implementation of PMEGP Scheme-

• Sanction Of Application

Sanctioning order will be issued by the Financing Branch of the Bank in favour of beneficiary under intimation to District Offices of KVIC/KVIB /DIC with a copy to their respective headquarters of KVIC, KVIB & DIC as the case may be i.e, from whom the Government subsidy will be availed.

• Release Of Margin Money

(vi) The financing branch of the Bank while forwarding the Margin Money claim to the respective Nodal Branch, a copy of the same should invariably be sent to District Head quarter of KVIC, KVIB and DIC.

(vii) The Nodal branch of the Bank while forwarding the original Margin Money claim to respective Head Offices of KVIC, KVIB and DIC, a copy of the claim should also be sent to District Headquarter of KVIC, KVIB and DIC.

(ADV. 05/2009-10 dt. 13.04.2009)

Entry level scoring of borrowal accounts The following categories of accounts are

exempted from “individual rating” as well as entry level “Scoring”.

S No. Exempted Segments – from Individual Rating or Scoring

1 Loan Against Deposits 2 All Jewel Loans 3 Staff Loans 4 All Loans < Rs.25000/- other than those under Rural

Banking Segment and Personal Banking Segment 5 All Loans < Rs.200000/- under Rural Banking

Segment


9

The existing scoring models applicable for various loan products have been reviewed in consultation with the credit departments concerned and the revised models, are now rolled out replacing the existing scoring models.

The scoring models are revised and ported in “CBS Help Desk”. Branches shall use only these models for the respective loan products w.e.f 20/04/2009.

The scoring models are proposed as a two-tier approval system with an initiator / assignor for assigning the score and an approver for score confirmation, as stated below: (Refer page no: 11 of Credit Risk Management Policy 2009-10 - Circular No: Adv:211 / 2008-09 dt 30/03/2009).

Sanctioning Authority Scoring Initiator Scoring Approver

Branch Branch (Loan Officer) Branch (Second-in-command)

R B S Branch (Loan Officer) Officers nominated by the Official-in-charge of RBS

Circle Office Branch (Loan Officer)

Officer in charge of Circle Office, Risk Management Cell

The entry barrier for all these scoring models are fixed as “BBB” and proposals below the entry grade can be considered only by the respective functional Credit General Managers at HO.

Illustrative screen shots relating to scoring process are given as Annexure to this Circular.

(ADV.06 / 2009-10 dt. 15 04 2009)

Recovery policy 2009-10 Modifications are carried out in the

guidelines stipulated in the Recovery Policy taking into consideration the developments to make our approach realistic and efficient. Major improvements approved by the Board are detailed in the Appendix – I of this circular.

The intention is to equip the field level functionaries for efficient handling of the NPA portfolio & maximizing recovery. A well planned strategy coupled with an action plan on the ground for each account targeted would enable Branches / Circle Offices to reduce NPA substantially.

OTS Policy for NPAs with book balance up to Rs.2 Lakhs: The scheme was valid up to 31.03.2009 which has been extended upto 30.09.2009. All other terms and conditions stipulated should be followed without any deviation.

(ADV. 09 / 2009-10 dt. 25.04.2009)

Methodology of assessment of working capital requirements

In the Consortium and Multiple Banking Arrangement accounts, we are adopting the appraisal method of the Leader Bank.

STBC method was relied on empirical study conducted during the period 1996-97. Hence the study became outdated on account of reform measures taken by the Govt. and the changing industrial scenario.

As per Loan appraisal guidelines (para 5.6.2. of Credit Risk Management Policy for 2009-10), limits more than Rs.5 crores shall be assessed as per MPBF method of lending.

The MPBF method is based on the two fundamental principles:

The industrial borrower should carry a reasonable level of Current Assets that is neither excessive nor short of their genuine requirements.

Such borrowers must ensure that their Net Working Capital (excess of long term liabilities including equity over fixed assets and non-current assets) is reasonably adequate in relation to the level of Current Assets held.

Guidelines for classification of Current Assets and Current Liabilities are given as per annexure to this Circular.

Export Receivables: Export receivables are to be excluded from current assets for computation of margin, the reason being that, as a measure of export promotion, Corporates need not maintain any margin for export receivables. (as per existing method).

Margin on Letter of Credit and Guarantee relating to Working Capital shall be considered as Current Assets for the purpose of calculation of Eligible Bank Finance.

LC/DA for raw materials shall be over and above the fund based Working Capital limit (if the requested limit is in line with the Trade creditor’s level projected in the current liabilities).

The revised methodology of assessment of Working Capital comes into effect immediately.

(ADV.17/2009-10 dt. 28/05/2009)

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Methodology of assessment of Working Capital requirements

Refer Cir. ADV.17/2009-10 dated 28.05.09 and the corrected working is reproduced hereunder for MPBF II Method:

Projected Gross Current Assets (to be in line with past actuals or any variation should be justified)

A

Less Current Liabilities Other Than Bank Borrowing

B

Working Capital Gap (A-B) C

Less 25% Margin On Gross Current Assets (A) *D

Actual/Projected Net Working Capital *E C-D Working Capital Gap-Margin F C-E Working Capital Gap-NWC G Maximum Permissible Bank Finance F or G which

ever Is lower * Margins should be available at the time of sanction itself or proposed limits shall be permitted on prorata basis.

Annual Maturing Term Liabilities need not be included under other Current Liabilities (B) and Net Working Capital (E) for the purpose of calculation of MPBF. All other things remain the same.

(ADV. 20/2009-10 dt. 12/06/2009)

Verification of genuineness of Salary certificates

There are various Personal Loans raised by individuals in which the Bank bases its appraisal on the ‘Salary Certificate’ of the customer. Such loans are Home Loans, Salary Loans, Vehicle Loans etc.

If the Salary Certificate produced by a customer is fake or inflated in amount or forged in signatures or forged in competent authority signing the Salary Certificate, the quality of such Home Loan/ Salary Loan/ Vehicle Loan will run the risk of getting defrauded.

The genuineness of Employee, genuineness of Salary Certificate and genuineness of issuing authority of Salary Certificate are very very important Risk Mitigating factors for the Bank which should never be compromised.

Various precautionary measures to be adopted while financing /appraising proposals with the Salary Certificates produced by the applicant is given in the circular.

Recording of verification by an official of the Bank is made mandatory in the Loan appraisal note with immediate effect.

(ADV. 23 / 2009-10 dt. 17.06.2009)

Introduction of web based status view facility to applicants of credit Limits

Web based status view facility to applicants of credit limits has been introduced by our Bank. Applicants seeking credit facilities from our bank can view the status of their loan application through our web site www.indianbank.in .

As the compliance level is low the Branch Manager/ designated officer are responsible for entry of all eligible applications and updating the status on daily basis.

Loan proposals without the application ID No. shall not be taken up for consideration by the Circle offices/Head office.

As the facility is created as per CVC directions for the benefit of the customer, appropriate staff accountability will be fixed for any omission.

(ADV. 26/2009-10 dt. 18/06/2009)

Revised Scoring Model for Educational Loans Based on feedback / representations

received, the scoring model for Educational Loans has been revised and ported in CBS – Helpdesk.

Branches / RBS Centres shall go through the operational instructions mentioned in the first screen.

Branches, Circle Offices and Retail Banking Segments should score all the educational loan applicants through the revised scoring model only.

(ADV. 31 / 2009-10 dt. 20 06 2009)

Provision of copy of Credit Report to customers

Customers are entitled to get copy of the Credit Report obtained by us from CIBIL (Credit Information Bureau of India Limited). In our Bank, for all retail loans, sanctioning authorities are referring CIBIL Consumer Credit Information Reports. If a customer requests for a copy of the credit report, we have to provide the same after collecting service charges of Rs.50/- (maximum fees).

Branches shall ensure strict compliance with the provisions of the Credit Information Companies


11

(Regulation) Act, 2005 as well as the rules and regulations framed thereunder.

(ADV.35 / 2009 - 10 dt.. 27.06.2009) IBA Model Educational Loan Scheme - Life Insurance coverage to Student borrowers Under IBA Model Educational loans scheme, loans upto a limit of Rs.7.50 lakhs do not require any tangible collateral security. In the event of any unforeseen happenings resulting in the untimely death of the student borrower, the Bank has no fall back in such accounts to recover the dues of the deceased student. In such cases, life insurance coverage to the student borrowers will be of immense help to the Bank.

Branches should bring to the knowledge of the student applicants, at the time of applying for educational loan itself, that life insurance coverage for the student applicant will be a part of the educational loan scheme and the insurance premium payable will be included as an eligible expense under the loan that will be sanctioned.

The insurance clause should be incorporated in the Sanction Ticket and consent should be obtained from the student borrower/co-borrower/Guarantor.

However, the student applicant will have the choice of selecting the insurance company for the purpose.

For all the existing educational loan accounts which are regular and which do not have insurance coverage, the student borrowers concerned shall be advised to get insurance coverage and the premium for which can be sanctioned as additional loan in respect of all regular educational loan accounts.

ADV.40/2009-10 dt.02.07.2009

Tata Motors Tie Up Car Loan Scheme

Car Loans to purchasers of new passenger cars of Tata Motors viz. Indica, Indigo etc. and Fiat range of cars, a scheme, “TATA MOTORS TIE UP CAR LOAN” (PRODUCT CODE: 4002 0018) has been formulated:

The highlights of the Scheme are:

Interest Rate 11.00% (Fixed, with reset clause of 2 years)

Repayment Period Maximum 84 EMIs.

Margin 15%

All other norms are as applicable for IB Vehicle Loan Scheme.

The salient features of the Scheme are given in Annexure I of the Circular.

ADV.44/2009-10 dt. 04.07.2009

Lending to Micro Enterprises - Board Direction

In order to encourage lending to Micro Enterprises, our Bank is bearing a portion of one-time guarantee fee under CGTMSE scheme according to the interest rate stipulated in the account.

Target fixed by Circle Heads should be achieved by the branches. The performance under Micro, Small & Medium Enterprises (MSME) and the exercise of discretionary powers for advances by Branch Managers will be part of annual appraisal.

ADV.45/2009-10 dt.08.07.2009

One Time Settlement Scheme for MSE NPAs

1. Policy on One Time Settlement of NPAs exclusively for the Micro and Small Enterprises (MSE) sector: Compromise proposals covering Medium Enterprises shall be dealt as per guidelines stipulated in the general Recovery Policy guidelines 2009-10. The salient features of the Policy are given in the Circular.

2. Coverage: The scheme will cover,

All NPAs falling under the MSE (Micro and Small Enterprises) sector as on 31.03.2008.

The scheme will also cover cases where OTS have been sanctioned but not paid fully and lapsed, written off accounts and BOT-NRR accounts, Cases where action under SARFAESI has been initiated and cases pending before Courts / DRTs, subject to consent decree being obtained from Courts / DRTs.

Decreed / DRC obtained cases / Awarded cases in Lok Adalat sittings / NPAs where consent decrees were obtained earlier are also eligible under the scheme.

The following categories of accounts are excluded from the policy coverage:

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Cases of willful default, fraud and malfeasance and Staff related and staff guaranteed accounts.

3. The scheme will be in force up to 31.03.2010.

4. Minimum Recoverable Amount (MRA): Branch / Circle have the liberty to negotiate with the borrowers for higher amount as this would help to improve the bottom line of the Bank. The field level functionaries shall maximize the compromise amount taking into account the paying capacity of the borrower / guarantor and the realisability of the securities held, keeping the MRA worked out as per guidelines, as the minimum.

Sub-Sector

Sub-standard as on 31.03.08

Doubtful / Loss as on 31.03.08

MICRO Enterprises

Book balance from the date of NPA plus simple interest at BPLR / applicable card rate, minus 3%.


Small Enterprises



Branches shall refer the circular for other guidelines and salient features of the policy.

Reporting of Sanctions: Branch Managers should report all the sanctions made and amounts recovered in the prescribed formats on a monthly basis to Circle Offices. Circle Heads shall closely monitor the sanctions made and recovery effected by branches.

ADV.49/2009-10 dt. 09.07.2009

Credit facilities for Micro, Small and Medium Enterprises- Collateral free Loans for Prime Minister's Employment Generation Programme (PMEGP)

As per guidelines of RBI and MSE Code, branch should extend credit facilities up to Rs. 5.00 lakh to new MSEs without any collateral security and such accounts should be covered under Credit Guarantee Scheme of CGTMSE, including those units financed under PMEGP scheme.

ADV.51/2009-10 dt. 17.07.2009

Financing Handicrafts Artisans and covering them under CGTMSE scheme

Government of India enlarged the scope of the Artisan Credit Card scheme and extended it to cover artisans, weavers, fishermen, self-employed persons etc. and it was subsumed by Swarojgar Credit Card Scheme (SCC).

Due to the unorganised nature of the Handicraft Artisans, this sector is plagued with myriad problems but most crippling of them is non availability of the credit in the absence of collateral security. To address this problem, the Office of the Development Commissioner (Handicrafts) had launched “Credit Guarantee Scheme” which provides Guarantee to the credit extended by the Financial Institutions. The scheme has a provision to pay Guarantee Fee and Annual Service Fee (GF & ASF) on behalf of the borrower which is charged by M/s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) in lieu of guarantee extended against the loan sanctioned to them by Member Lending Institutions (MLI).

Branch shall refer this circular for further guidelines.

ADV.52/2009-10 dt. 20.7.2009

Hedging of Foreign Exchange Exposure of Clients

RBI advised Banks to have a policy which explicitly recognizes and takes into account risk arising on account of unhedged foreign exchange exposures of their clients and to monitor the un-hedged foreign exchange exposure of their clients, by putting in place a suitable policy in this regard.

Policy of our Bank

As a policy for hedging, Credit Risk Management Policy 2009-10 stipulates the following:

Where there is no natural hedge, forward cover is suggested to customers in respect of import/export transactions. The forward cover will act as risk mitigation on exchange risk.

While sanctioning the facilities, it should be ensured that all exposures (fund based and non fund based including letter of comfort and letter of undertaking) in foreign currencies are covered by forward cover. Request for considering waiver of forward cover can be considered only by the functional credit General Managers at Head Office. While reviewing the borrowal accounts, hedged and


13

unhedged exposures are to be captured and incorporated in the proposal.

Salient Features of the Board approved Policy for Monitoring of Unhedged Exposure is given in the circular.

Authorised Branches shall not book forward cover unless the non authorized branches confirm availability of limit for the customer.

ADV.54/2009-10 dt. 22.07.2009

Lending to Priority Sector Advances - Revised Guidelines - Additions / Amendments

Revised Priority Sector Guidelines as given by RBI along with certain additional instructions relating to Classification under Indirect Agriculture and Housing are given hereunder.

Guidelines relating to classification of segments of Priority Sector and various activities covered under each segment remain unchanged except the following amendments.

In addition to earlier guidelines, following are eligible to be classified under:

a. Indirect Agriculture:

• Entire Credit outstanding under loans for general purposes under General Credit Cards (GCC)

• Loans granted to RRBs for on-lending to agriculture and allied activities

• Overdrafts, up to Rs.25000 (per account), granted against “no-frills” accounts in rural and semi-urban areas

b. Housing • Loans granted to Housing Finance Companies

(HFCs) approved by National Housing Bank for the purpose of refinance, for on-lending to individuals for purchase / construction of dwelling units, provided the housing loans granted by HFCs do not exceed Rs.20 lakh per dwelling unit per family. The above dispensation shall apply to loans granted to HFCs up to 31.03.2010. Such loans granted till 31.03.2010 will continue to be classified under Priority Sector till they are repaid.

ADV.57/2009-10 dt. 27.07.2009

Rating of SME Customers by ICRA- Rating Scale & Rating Fee Structure

Our Bank has renewed the MoU with ICRA towards rating of SME clients of our Bank and is valid till 31.03.2011.

According to ICRA, minimum rating fee after the subsidy by Govt. of India works out to a sum of Rs.5000/- (including taxes) for the smaller SMEs ie. for entities having turnover of up to Rs 50 lakhs. The Rating Fee structure and the Rating Scale of ICRA are given in Annexure to this circular.

ADV.59/2009-10 dt. 27.07.2009

IB SWARNA MUDRA -"Income On Sale Of Gold Coins".

Branches should credit the branch income on sale of gold coins/bars to BGL No.96539 "Income on sale of Gold coins" only and not to any other head.

ADV.61/2009-10 dt. 01.08.2009

Renaming of IB-Shantiniketan as IB-HOSTEL PLUS To enhance better reach of the product, the existing IB-Shantiniketan has been renamed as IB – HOSTEL PLUS.

Guidelines and all other terms & conditions of the scheme remain unchanged and shall continue similar to the erstwhile product.

ADV.73/2009-10 dt. 17.08.2009

Entry Level Scoring for Credit Card

1. The scoring model for Credit Card is rolled out for scoring by Branches and the same is available in the Help Desk of the Bank alongwith other Scoring Models.

2. The scoring model is proposed as a two-tier approval system with an initiator / assignor for assigning the score and an approver for score confirmation, as stated below:

Sanctioning Authority : H O, Credit Card Centre

Scoring Initiator : Branch (Loan Officer)

Scoring Approver : H O, Credit Card Centre

3. The entry barrier for the scoring model is fixed as “BBB” and proposals below the entry grade can be considered by the respective functional Credit General Manager at Head Office.

ADV.79/2009-10 dt. 31.08.2009

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SGSY Scheme - Increase in exemption limit of collateral security in respect of individual and group loans

Reserve Bank of India raised the exemption limit of secondary collateral security (earlier referred to as primary security) under SGSY as follows :

For individual loans up to Rs.1 lakh and group loans up to Rs.10 lakh, the movable assets created out of bank loan would be hypothecated to the bank as primary collateral (earlier referred to as primary security).

In case where movable assets are not created as in land based activities such as dug well, minor irrigation, etc., Mortgage of land may be obtained.

Where mortgage of land is not possible, branches should get prior permission from Circle Head to consider loans under SGSY with suitable third party guarantee whose networth is atleast equal to loan amount.

For all individual loans exceeding Rs.1 lakh and group loans exceeding Rs.10 lakh, in addition to primary security such as hypothecation / mortgage of land or third party guarantee as the case may be, suitable margin money/other collateral security in the form of insurance policy, marketable security / deeds of other property etc, equivalent to amount of loan sanctioned shall be obtained by the branches. Any reduction in value of securities may be permitted by Circle Head on case to case basis based on the requirement.

The upper ceiling of Rs.10 lakh in respect of group loans is irrespective of the size of the group or prorata per capita loan to the group.

ADV.84/2009-10 dt. 05.09.2009

Operational guidelines for issue of Letter of Comfort (LOC) / Letter of Undertaking (LOU)

AD Banks can issue Guarantees/ Letter of Undertaking (LoU)/ Letter of Comfort (LoC) in favour of the overseas supplier, Bank and financial institution up to USD 20 million per import transaction for a period up to one year for import of

all non-capital goods permissible, under the Foreign Trade Policy (except gold) and up to three years for import of capital goods subject to prudential norms issued by the Reserve Bank from time to time. The period of such Guarantees/LoUs/LoCs has to be co-terminus with the period of credit, reckoned from the date of shipment. Loan Policy on Letter of Comfort (LOC) and Letter of Undertaking (LOU) The General / Operational guidelines, Settlement of Claims, Accounting procedure and Devolvement in LOC/LOU are given in this circular. Service Charges “0.20% per month for the specified period of liability, with a minimum of 0.35% (subject to a minimum of Rs.575/- per LOC / LOU). Refund of commission for early redemption shall be as per the foreign guarantee service charges norms from time to time. ” Besides the commission, the Branch shall collect processing fee as per norms in force, provided the facility is considered as a Standalone facility. If considered as sub limit under Import LC, the processing fee need not be collected. Commitment charges as specified in Service Charges circular have to be levied on the unavailed portion in the all the cases unless specifically waived in sanction.

ADV.87/2009-10 dt. 09.09.2009

‘i-cube - a Comprehensive Database of CMIE

Bank has subscribed to a new product of Centre for Monitoring Indian Economy Pvt. Ltd. (CMIE), named i-cube, for a period of one year (from Sep 09) which supports with information for better decision making / credit marketing. A pamphlet briefly detailing the features of these services is enclosed as Annexure to this circular..

The high light of the product is that an information specialist is provided by CMIE to assist the Bank in accessing and using the data. The information analyst will be stationed at Head Office, Risk Management Department. Circle Offices / Branches can avail i-cube services through any of the communication channels detailed under. The responses shall generally be provided to the Circle / Branch though e-mail only.

Customized reports shall be generated at periodic intervals (eg. projects coming up in the


15

area) and the same would be sent to the concerned Circles. Branch Managers / Credit Relationship Officers can also request for details like major companies (including financial details / peer level comparison) / projects coming up in any particular location, which may be used for marketing apart from making use of such information in credit appraisal.

ADV.92/2009-10 dt. 14.09.2009

Implementation of National Agricultural Insurance Scheme (NAIS) Administrative approval for Rabi 2009-2010

According to Reserve Bank of India the National Agricultural Insurance Scheme (NAIS) continue during Rabi 2009-10 as approved by the Government of India, on the following terms and conditions:

Risk of implementing agency in meeting claims would be restricted to 100% of the premium in case of food and oilseeds crops and 150% for annual commercial / horticultural crops.

The existing premium rates i.e. flat rates for food and oilseeds crops and actuarial premium for annual commercial and horticultural crops will be continued.

As provided in the scheme, indemnity claims will be settled only on basis of yield data furnished by State Government based on requisite number of Crop Cutting Experiments (CCEs) conducted under General Crop Estimation Survey (GCES) and not on any other basis like Annavari/Paisawari etc.

Element of sharing risk, nature of coverage, seasonality discipline, submission of declarations by lending agencies etc. will remain same i.e as per provisions of the scheme.

Government of India is attaching importance to the implementation of the scheme as it mitigates the risks of the farmer. Hence, branches should cover 100% of all eligible farmers under NAIS.

ADV.96/2009-10 dt. 18.09.2009

Categorisation of Retail Trade under Small (Service) Enterprises

RBI has conveyed the decision to include loans granted by banks in respect of following activities under Micro and Small (Service) Enterprises within the priority sector, provided such Enterprises satisfy the definition of Micro and Small (Service) Enterprises in respect of investment in equipment (original cost excluding land and building, fittings and other items not directly related to service rendered or as may be notified under MSMED Act 2006) (i.e., not exceeding Rs.10 lakh and Rs.2 crore respectively):

i) Consultancy Services including Management Services

ii) Composite Broker Services in Risk and Insurance Management

iii) Third Party administration (TPA) Services for Medical Insurance Claims of Policy Holders

iv) Seed Grading Services v) Training –cum-incubator Centre vi) Educational Institutions vii) Training Institutes viii) Retail Trade ix) Practice of Law i.e. Legal services x) Trading in medical instruments (brand new) xi) Placement and Management Consultancy

Services xii) Advertising agency and Training Centres

Accordingly, there will be no separate category for “Retail Trade” under priority sector.

In CBS environment, sub sector code 52 is assigned to Retail Trade activity and branches shall continue to allot this sub sector code. However, while reporting Quick Data / any other relevant statement, branches / Circle Offices shall ensure that amount outstanding for Retail Trade activity (under Sub Sector code 52) is reported under Small (Service) Enterprises only as per extant RBI guidelines.

ADV.100/2009-10 dt.22.09.2009

Financing Agri Term Loan against Gold Ornaments and New Product Code for Jewel loan for Traders scheme.

In respect of the earlier allotted product

1616

code 4011-0003 stands withdrawn and a new product code 4011-0005 has been introduced for financing Jewel loan for Traders scheme.

Branches should select the product code correctly and for sub-sector code of the products (Agri Term loan against Gold Ornaments and Jewel loan for Traders), manually enter ‘5’, till modified in the system.

ADV.101/2009-10 dt. 22.09.2009

Accounting procedures for devolved letter of credit (DA)

The following modifications came into operation, in the accounting procedures of LC DA (both inland and import), where the customer is not arranging funds for meeting the LC commitment on due date:

The dues under LC / DA will be debited to “Devolved Liability under LC / DA account” and amount remitted to negotiating Bank / Branch. LC contra to be reversed. Branches should immediately reverse the devolved letter of credit liability by following up with the party.

Drawing limit in Cash Credit shall be reduced to the extent of devolved LC liability after 15 days (from the date of debit) till adjustment. On adjustment of the devolved letter of credit liability, regular drawing limit in Cash Credit account shall be restored. Drawing limit reduction is suggested to have effective monitoring of the account. Accounting entries (existing and proposed) for devolved Letter of Credit are given in annexure.

ADV.104/2009-10 dt. 29.09.2009

Loan against Deposits -- Purpose of the Loan

According to Loan Policy of the Bank, branches should take a declaration mentioning the purpose to ensure the end use of funds for Loan against Deposits of above Rs.1 crore to commercial firms and corporate entities. Branches should add the “Purpose of the loan” as column No 9, in the Application/Pledge Letter (F 29) with due authentication by the borrower/s, since end use of funds is to be ensured in respect of LODs also. In CBS, the relevant IB Code may be given in the CISLA details.

ADV.107/2009-10 dt. 06.10.2009

Service Charges and Target Group for IB Pension Loan Scheme The following are the revised terms with respect to IB Pension Loan Scheme:

Target Group: Central & State Pensioners, Family Pensioners, Re-employed Pensioners, IB Retirees both under VRS and superannuation whose Pension accounts are maintained by our Branches.

Service Charges: Rs.250/-, if loan amount is more than Rs.25000/-.

All other terms and conditions are applicable as detailed in our Circular No.ADV 99/2009-10 dated 19.09.2009.

ADV.111/2009-10 dt.21.10.2009

Enhancement of advance rate per gram of jewels and ceiling on appraisal fee.

The advance rate per gram of jewels has been revised as follows:

Rs.1000/- per gram or 70% of the market rate whichever is lower for 22 carat fineness.

Rs.1015/- per gram or 70% of the market value whichever is lower for Hall Mark Jewels of 22 carat fineness / gold coins of 24 carat fineness.

All branches shall conduct recovery campaign exclusively for Jewel loans and arrange to auction the jewels in chronic cases to bring down the overdues below tolerance level of 2% as and when required.

Ceiling on Appraiser fee:

At present jewel appraisers in our bank are collecting appraisal fee @ Rs.3/- per Rs.1000/- of loan sanctioned under jewel loans without any upper ceiling. An upper ceiling on appraisal fee has been fixed as below:

Existing Revised

Appraisal Fee: Rs.3/- per Rs.1000/- of loan amount sanctioned.

No Change

Maximum ceiling: No maximum ceiling.

Maximum ceiling of Rs.300/- per borrower.

ADV.118/2009-10 dt.13.11.2009

Approval of tractor models for Retail Financing

Ministry of Agriculture, Government of India has approved the following tractor model of


17

M/S Mahindra Gujarat Tractors, Vadodara, Gujarat for Retail financing:

Tractor Make and Model

HP Specifications

Mahindra Gujarat Shaktimaan-45

45 Suitable for dry land cultivation only and not for wet land

The above tractor model is also eligible for subsidy under the Farm Mechanisation Programme of Centrally sponsored ‘Revised Macro Management of Agriculture (MMA) Scheme’.

Branches shall consider finance to the above model of tractor only for dry land cultivation whenever approached by any borrower as per eligibility and norms applicable.

ADV.124/2009-10 dt.26.11.2009

Swarna Jayanti Shahari Rozgar Yojana (SJSRY) - Revised guidelines

The Ministry of Housing & Urban Poverty Alleviation has comprehensively revised the SJSRY Scheme to overcome the difficulties faced by the States/UTs and address certain drawbacks in the implementation of SJSRY. A Under Urban Self Employment Programme (USEP),

Maximum allowable unit project cost is enhanced from Rs.50000/- to Rs.2,00,000/-

Maximum allowable subsidy is enhanced from 15% of the project cost subject to a limit of Rs.7,500 to 25% of the project cost subject to a limit of Rs.50,000/-

B Develpment of women and Children in Urban areas has been renamed as Urban women Self-Help Programme (UWSP).

There is no maximum allowable unit project cost

Maximum allowable subsidy is revised from Rs.1,25,000 or 50% of the project cost whichever is less to Rs.3,00,000 or 35% of the project cost or Rs.60,000 per member of the group, whichever is less.

C In view of the Prime Minister’s New 15-Point Programme for the Welfare of Minorities, 15% of the physical and financial targets under the Urban Self Employment Programme at the national level shall be earmarked for the minority communities. The revised guidelines are with effect from 01.04.2009. The revised guidelines will assist in the effective implementation of SJSRY and make a dent on the urban poverty scenario in the country.

Salient features of the revamped SJSRY Scheme is enclosed to this circular.

ADV.126/2009-10 dt.27.11.2009

Extension Of Policy On One Time Settlement For NPAs with Book Balance up to Rs. Two Lakhs

The validity of the Scheme “One time settlement for NPAs with Bank Balance upto Rs.Two lacs has been extended up to 31.03.2010 in its present form but covering NPAs outstanding up to 31.03.2009 instead of 31.03.2008.

In view of extension of coverage of the scheme and inclusion of NPAs outstanding up to 31.03.2009 under the scheme, the settlement formula (Paragraph ‘d’ of Cir. No. ADV.108 / 2008-09 dated 05.11.2008) will be as follows:

a. Eligible NPAs upto Rs.2 lakhs outstanding as on 31.03.2008: Settlement formulae will be based on asset status of the respective accounts as on 31.03.2008.

b. Eligible NPAs upto Rs.2 lakhs that slipped during 2008-09 and outstanding as on 31.03.2009: Settlement formulae will be based on asset status of the respective accounts as on 31.03.2009.

Settlement formula (Minimum Recoverable Amount) and other guidelines are given in this circular.

ADV.127/2009-10 dt.27.11.2009

Housing Loan – Interest Subsidy Scheme for Housing the Urban Poor [ISHUP]

Government of India, Ministry of Housing & Poverty Alleviation has launched a scheme under the name ‘Interest Subsidy Scheme for Housing the Urban Poor [ISHUP]’ which has been approved by the Union Government for implementation by public sector banks and other housing finance institutions.

The Scheme aims at enabling the Economically Weaker Section (EWS) and Low Income Group (LIG) segments in the urban areas to construct or purchase houses by providing an interest subsidy of 5% on loans upto Rs.1 lakh. The National Housing Bank (NHB) and Housing and Urban Development Corporation (HUDCO) have been designated as the Nodal Agencies for administration and release of subsidy under the scheme to the lending institutions. The bank-wise progress of the scheme will be monitored by NHB.

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Some of the salient features of the scheme are given below:

Target Group: Beneficiaries belonging to Economically Weaker Section and Lower Income Group segments in any urban area.

Specification of dwelling units: The area of each dwelling unit will be at least 25 Sq.mts. for EWS and at least 40 Sq.mts for LIG.

Maximum Loan amount: Rs.1.00 lakh for EWS & Rs.1.60 lakhs for LIG. However, subsidy will be given for loan amount upto Rs.1.00 lakh only.

Quantum of Subsidy: 5% p.a. on the admissible loan amount over the full period of loan for construction/acquisition of a new house.

Repayment: Ranging from 15 to 20 years depending on the repaying capacity of the borrower.

Security: Mortgage of the dwelling unit as Primary Security. There would be no collateral security/third party guarantee for loans upto and inclusive of Rs.1 lakh excluding group guarantee.

Selection of Beneficiary: Identification of beneficiary will be by State Governments / Urban Local Bodies (ULBs), as far as possible in the ratio of 70% EWS & 30% LIG. Preference will be given to SC, ST, Minorities, Persons with disabilities and Women beneficiaries in accordance with their proportion in the total population of City / Urban Agglomerate during the 2001 census.

The scheme guidelines and procedure for claiming subsidy are given in detail in this circular as Annexure.

ADV.129/2009-10 dt.09.12.2009

TRADEWELL Scheme – Clarifications

Secured OD limit towards TRADEWELL Scheme of 0.20 crore to Rs1.00 crore may be considered subject to specific conditions on security as detailed below: Primary: Immovable property: with margin of 50% on market value or Other tangible security: as per existing Bank norms. i.e. IVP/KVP/NSC with margin of 25% and Govt Securities with margin of 20%. Collateral: Stocks & Book debts equal to the limit sanctioned.

All rural branches are having powers to consider trade finance upto 0.20 crores.

ADV.130/2009-10 dt.10.12.2009

Implementation of Interest Subsidy Scheme for Housing the Urban Poor [ISHUP] – Modification of guidelines

According to the Government of India, Interest Subsidy Scheme for Housing the Urban Poor [ISHUP] and Jawaharlal Nehru National Urban Renewal Mission [JNNURM] Scheme are mutually exclusive schemes i.e. a single beneficiary cannot get benefit under both the schemes. In other words, beneficiaries who are availing capital subsidy under JNNURM Scheme are not eligible for finance under ISHUP Scheme.

The brief details about Jawaharlal Nehru National Urban Renewal Mission [JNNURM]’ Scheme is as given below:

Jawaharlal Nehru National Urban Renewal Mission [JNNURM] is a centrally shared Government of India programme with the following two sub missions

to provide ‘Basic Services to Urban Poor’ (BSUP) to meet the massive housing requirements of the urban poor and

to provide ‘Urban Infrastructure and Governance’(UIG).

The programme under BSUP includes Integrated Housing & Slum Development (IHSDP), rehabilitation and resettlement with grant assistance from Central Government, State Government / Urban Local Body and beneficiary’s contribution. Commercial banks can finance the beneficiary’s contribution of the total project cost.

ADV.135/2009-10 dt.17.12.2009

Continuation of 2% Interest Subvention Scheme and Introduction of 1% Additional Incentive Subvention for Short-Term Crop Loans disbursed during 2009-10

Salient features of the notification issued by Reserve Bank of India are:

Government will provide interest subvention of 2% p.a and 1% additional subvention as incentive (to farmers who repay their short term crop loan on schedule) during 2009-2010 to Banks in


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respect of short-term production credit up to Rs. 3.00 lakhs provided per farmer.

This amount of subvention will be calculated on the crop loan amount from the date of disbursement/drawal up to the date of repayment or up to the date beyond which the outstanding loan becomes overdue i.e March 31, 2010 for Kharif and June 30, 2010 for Rabi respectively, whichever is earlier, subject to maximum period of one year.

This subvention will be available to Banks on the condition that they make available short-term credit at ground level at 7% p.a.

Other guidelines, calculation of interest subvention and incentive subvention, submission of claim etc., are given in this circular.

ADV.137/2009-10 dt.29.12.2009 New Product Codes in CBS for the PMEGP Scheme

The following new product codes for the PMEGP scheme in CBS have been introduced:

Product Code Product Name

4205-0001 PMEGP - TERM LOAN 2511-1251 PMEGP-WC-CASH CREDIT

The above product codes have been created with subsidy enabled provision to account for the subsidy to be received under the PMEGP scheme. Hence, Branches are advised to ensure that if the loan under the above scheme has already been opened in any other product codes, the same should be changed with the new product code as above as applicable to PMEGP scheme and the subsidy details are entered properly in such loan accounts.

ADV.141/2009-10 dt.31.12.2009

ADVANCES Certificates Issued By Chartered Accountants - IBA Communication No C&I/Icai/2009-10/2410 Dt 22/12/09

Branches are obtaining Certificates from the Chartered Accountants in the normal course of business. The Certificates are to be issued only by the Chartered Accountants who are members of the Institute of Chartered Accountants of India (ICAI).

With a view to strengthening the process, the Institute has hosted a link http://220.227.161.82/locm.asp on ICAI Website. By logging on to this website, it can be ensured that the certificate being received by the Branch has been issued by a member of the Institute holding

full time Certificate of Practice (i.e. a member authorised to issue a Certificate).

ADV.143/2009-10 dt.06.01.2010

Bank’s MOU with Hyundai Motors India Limited (HMIL)

Our Bank has entered into a Memorandum of Understanding (MOU) with M/s. Hyundai Motors India Limited (HMIL) on January 4th 2010 and has become a ‘Preferred Financier’ for financing all models of Hyundai Cars, which is expected to be helpful in increasing the volume under Car Loans.

The Preferred Financier status provides ample scope for contacting the prospective Car Loan borrowers right at the Point of Sales of Hyundai Cars viz. at the Showroom concerned. Also, the purchasers of Hyundai Cars enjoy the benefit of simultaneously choosing our Bank as their Car Loan financiers.

For the sake of generating MIS on Hyundai Cars financed by our Bank, a separate product code in CBS (Product Code: 4002 0019) has been allotted for the Hyundai Car Loans.

Car Dealers play an active role in helping the prospective buyers to identify their financiers. Officers-in-charge of Retail Banking Segments may therefore coordinate with HMIL Dealers operating in their jurisdiction and strategize to popularize our Car Loans. Corporate Clients may be contacted, i.e., Car Loans to employees of Corporates and reputed institutions under tie-up arrangement for recovery. Speed of sanction is extremely critical for success in Car Loans.

Branches / RBS/ Circles should utilize this opportunity for increasing our Car Loans substantially and achieve the targets set. They are to be careful enough to ensure that only quality loans are financed and that there is no dilution in our appraisal and adherence to systems and procedures.

ADV.145/2009-10 dt.07.01.2010

Comprehensive guidelines on Payment of Advocate fee and revision of Delegation of Powers - Reg.

The detailed structure of the fee schedule and the revised delegation of powers are outlined in the Annexure A to this circular. An abstract / quick reference of the fee and delegation of powers are detailed in Annexure B to this circular.

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The field level functionaries are advised to exercise the powers judiciously and appropriately so as to expedite the process of recovery of NPA blocked in suit filed accounts, as recovery in suit filed accounts is less due to lack of ownership and inadequate follow up with the Advocates. Concrete steps to be taken to expand the panel of advocates and let us have for every Civil Court, a minimum of two to three leading advocates of the area in our approved list, besides a battery of junior Advocates exclusively to attend to filing of EPs. We should not depend on any one Advocate and entrusting the cases to Advocates must henceforth be done purely based on their performance in recovery of money.

ADV.146/09-10 dt.12.01.2010

Revision in Delegation of Credit and Credit Related Administrative Powers

The Delegated Power Booklet was last brought out in 10th August 2005 and subsequent amendments / modifications have been intimated from time to time. In the light of corporate objective of consistent and qualitative credit growth and delegating powers to field levels based on the credit-rating of borrowers, the review of the existing Discretionary Power Structure is done. Board at the meeting held on 23.01.2010 approved the revision in delegated powers for sanction of credit facilities. The revised powers will come into force with effect from 01.02.2010. The exercise of powers is subject to the specific guidelines given herein.

Salient features of the Revised Delegation of Powers include the following:

Powers based on credit-rating of borrowers: No change in the existing guidelines for exercise of powers in Chart I. However, the Credit Functionals upto the level of General Manager can exercise the varied percentage of powers as per credit rating of the borrowal accounts: Rating is applicable for Accounts with exposure of Rs.25 lakh and above.

a) For high rated accounts with ‘AAA’&’AA’ (obligor) all sanctioning authorities are delegated with full powers.

b) For ‘A‘& ’BBB’ rated accounts (obligor) all sanctioning authorities are delegated with only 90% of powers.

c) For ‘B’ &’BB’ rated accounts (obligor) all sanctioning authorities are delegated with only 70% of powers.

d) For ‘C’ &’CC’ rated accounts (obligor) all sanctioning authorities are delegated with only 50% of powers.

1) More powers for Agricultural Sector: Branch Managers upto Scale-III have been vested with more powers for exercise of certain categories of agricultural loans, as detailed in the relevant chart.

2) Review / Renewal of accounts: With effect from 01.04.2010 only the respective sanctioning authorities shall be the competent authority to renew/ review the accounts.

3) Credit Administrative Powers are modified based on latest guidelines and requirements

4) Reporting of granting of excess: Exercise of powers delegated for granting excess shall be reported immediately on the same day and shall not in any event, await adjustment of excess granted for reporting the excess sanctioned. In respect of accounts sanctioned by MC, the reporting of excess allowed immediately and its adjustment thereof shall be monitored and where the excess granted is not so adjusted within the time frame, it shall be reported to MC immediately thereafter.

The power booklet to be supplied shall be kept under the custody of Credit Functional / Credit Desk Official and the contents should not be parted with outsiders except Inspecting Officials without the written approval from HO: Credit Division.

ADV.150/2009-10 dt.29.01.2010

Revised Guidelines for "Entrepreneurship Development Programme" (EDP) under "PMEGP" Scheme

M/s. Khadi and Village Industries Commission, Mumbai (vide their Addendum to Office order No: 2027 dated 24.12.09) has informed the revised guidelines for conducting the EDP Training programme under “Prime Ministers’ Employment Generation Programme” (PMEGP) as under-

To reduce the time lag for release of Margin Money from Nodal Branches the following decision has been taken by KVIC-

1. Sanctioning authority need not wait for the completion of EDP for disbursement of the loan to beneficiaries, claiming as well as settlement of subsidy by Nodal Branches. However, if such Bank authorities feel that EDP is necessary before disbursal in some specific projects, the same can be insisted upon by them.


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Final adjustment of subsidy kept in Term Deposit Receipt (TDR), after physical verification of the project should not be made till EDP is completed.

2. However, looking to the importance of EDP training as well as to ensure profitability of the project, the said training should be invariably completed by the respective implementing agencies within 12 months of release of first instalment

3. Further, KVIC, Chennai (vide their letter dated 05.01.10) has informed that the period of EDP training is reduced from 2 weeks (14 days) to 3 days for the projects up to Rs 2.00 lakhs for Service activities under PMEGP.

ADV.152/2009-10 dt.04.02.2010

Modifications in "IB-STAR Rice Mill" Scheme Rice mill advances (hitherto classified under

SSI/ OPS) are now being classified under “Direct / Indirect Agriculture” as the case may be as per the revised guidelines of RBI, the captioned loan product is permitted for transfer to HO: RBD for further handling in respect of policy and other related matters relating to this segment.

In order to make our scheme more attractive to cope up with the competition posed by other Banks in garnering the rice mill business certain Modifications in “IB-STAR Rice Mill Scheme” have been approved as detailed in the Annexure to this circular.

ADV.154/2009-10 dt.11.02.2010

Introduction of DPN for advances with both fixed and floating rates of interest

On special occasions, like festival period offers, bank is offering Home Loans and Vehicle Loans with fixed rate of interest for initial period of loan and later floating rate of interest.

For such advances, there is a need to introduce a DPN with both fixed and floating rates of interest. The following DPN is introduced to take care of such situations:

D 1G – Single / Joint DPN (for advances with fixed and floating rates of interest)

A proforma of the D 1G is enclosed to this circular.

ADV.158/2009-10 dt.18.02.2010

Launching of " IB- BEML- EQUIP - FINANCE " (Structured Loan Products)

Our Bank has entered into an MoU with M/s BEML Limited the Company on 04.02.2010 for financing to contractors for purchase of the Company’s products. This enables us to become a “preferred financer” for financing all models of their commercial construction equipments to the prospective buyers from the company throughout the country.

Salient features of the scheme are as follows:

1. A Structured Loan Product (SLP) named “IB-BEML -EQUIP FINANCE” is launched.

2. The product details are furnished in the enclosed annexure. 3. The product can be under priority (with original investment in

equipment up to Rs.2 crores) or non priority (with original investment in equipment above Rs.2 crores but below Rs.5 crores).

4. The Minimum credit rating of the borrower should be “BBB” 5 The scheme is made operational through out the country. 6 Under the scheme, the Branch Manager shall exercise only

upto his/her normal delegated powers and the proposals beyond the MDL powers should be referred to Circle Office/ Head Office as the case may be.

7 All extant guidelines of the Loan Policy/Credit Risk Management Policy/ Discretionary Power Booklet should be adhered to except DSCR as stipulated in the scheme.

8 Eligibility criteria and all KYC norms are to be adhered to by the sanctioning authority to ensure the compliance in this respect.

9 Any deviation in the scheme has to be referred to HO by Circle Head and the functional General Manager at HO in charge of SME is vested with powers to consider such deviations on merits.

10 Product Code allotted for the Scheme is 5017-0001 11 BEML has 10 Regional Offices, 16 District Offices, 11

Activity Centres and 4 Zonal Offices spread all over the country. As per MoU with the company:

They provide support in identifying the prospective borrower, give sufficient publicity to our Bank in their advertisement campaigns

They will also help in finding alternate buyers/ resale of equipments in case of default by any borrower.

They also offer maintenance solutions, repair & rehabilitation services and customer training.

12 The price range of Company’s products is between Rs.17.00 lakhs to Rs.85.00 lakhs.

13 The loan component would be between Rs.15 lakhs to Rs.300 lakhs per borrower.

Branches / RBS / Circles are requested to make use of the scheme for financing to contractor customers for purchase of the array of equipments manufactured by BEML Ltd.

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ADV.159/2009-10 dt.20.02.2010

Capital Investment Subsidy Scheme (CISS) for Rural Godowns – Farmers Category and Multi-storey Godowns Clarifications

NABARD Mumbai vide letter NB.ICD/1794/RG-4/2009-10 Circular No.23/ICD09/2009 dated 28.01.2010 have communicated certain clarifications on Farmers category and Multistorey godowns.

The Monitoring Committee Meeting convened by GOI has reviewed on documentary evidence to be taken in respect of farmer and non farmer category promoters of Rural Godowns and revised the same as furnished below:

♣ The criteria for a person to be categorized as a farmer, would continue to be a person, who earns a major share of his income from Agriculture, as indicated in paragraph no.5 (i) of operational guidelines issued vide GOI letter no.19011/2/2007-MII (Vol.II) dated 28.07.2008.For categorizing a borrower, who was filing income tax returns, copies of the IT returns of the last three years would be scrutinized for deciding his / her major source of income.

♣ However, in case of a borrower who was not filing IT returns, an affidavit indicating / affirming / declaring the following would be obtained. i. Details of Agriculture land holding

owned by the borrower ii. Main source of income is from

Agriculture iii. Not an Income Tax assessee and does

not file IT returns iv. Declaration to the effect that in case

information furnished is found to be incorrect at any stage- the entrepreneur shall be liable to repay the subsidy amount together with interest applicable as per prevailing norms and shall also be liable for prosecution.

In addition to this, Banks have also to exercise normal due diligence process while recommending the category in which the entrepreneur falls for subsidy purpose under the scheme.

It is further clarified that -

Cases that have been settled (i.e where advance and final subsidy have been released) would not be reopened.

These clarifications would be applicable for fresh cases only. The final subsidy would be applicable for fresh cases only.

The final subsidy claims would be processed as per the category under which advance subsidy was earlier released or in certain cases as the Joint Monitory Committee finds and recommends otherwise.

It is also advised that multi-storey godowns built under the scheme should be structurally sound on engineering considerations and functionally suitable to store the agricultural produce in accordance with operational guidelines of the scheme for availing subsidy.

ADV.160/2009-10 dt.23.02.2010

Launching of VISA Business Credit Card for SME and Corporate Customers

To address the credit card and payment requirements of our Corporate and SME Clientele, our Bank will be launching VISA Business Credit Card, which would offer several additional advantages and features to facilitate regular use by these clientele segment for business needs.

Eligibility:

Corporate & SMEs (Limited Companies, Partnerships & Sole Proprietary Concerns) having credit facilities with limits of Rs 10.00 lakhs & above and classified as Standard Assets

Corporate current accounts with satisfactory track record of operations

Compliance with KYC Norms

The value of securities available to be at least

125% of the aggregate of credit facilities sanctioned to the unit plus card limit recommended

Cards will be issued as per the request of the above clientele segments – viz. Corporate & SMEs Loan Accounts & Corporate current accounts - in the name of its executives and / or employees and the name of the Business undertaking will be printed on the card.

Credit Limit


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Card Limit will be in the range of Rs 75001 – Rs.300000/-.

Card Limits shall be recommended by the Branch Manager to HO Credit Card Centre taking into account the eligibility criteria as prescribed above for Corporate & SMEs having credit facilities with limits of Rs 10.00 lakhs & above and classified as Standard Assets.

In case of corporate current accounts with satisfactory track record of operations Branches should submit the application through Circle Office, for onward submission to HO CCC with Circle Head’s recommendation.

Up - to a maximum of 5 cards can be issued to the executives and / or employees of an undertaking and the overall limit of Rs 3.00 lakhs will be apportioned to individuals as desired by the company.

For further details regarding Revolving Credit, Cash Advance Facility, Documentation etc., Please refer circular.

ADV.163/2009-10 dt.10.03.2010

Interest Rates on Export Credit in Foreign Currency Based on RBI circular the ceiling rate on

export credit in Foreign Currency will be at LIBOR plus 200bps (2.00%) w.e.f 19.02.2010 subject to no other recovery like Service Charges, Management Charges etc. Out of Packet expenses if, any, incurred may be recovered.

Branches are advised that similar changes may be effected in interest rates in cases where EURO LIBOR / EURIBOR have been used as the benchmark for Export Credit in Foreign Currency. The revision in interest rates would be applicable for FRESH ADVANCES WITH EFFECT FROM 19.02.2010.

Schedule of interest rates on Export Credit in Foreign Currency

No Category of Advance Interest Rates (percent p.a.)

1 a

Pre-shipment Credit Upto 180 days

Not exceeding 200 bps over LIBOR/EURO LIBOR / EURIBOR

b Beyond 180 days and upto 360 days

Rate for initial period of 180 days prevailing at the time of extension plus 200 bps

2 a

Post-shipment Credit On demand Bills for transit period (as specified by FEDAI)


No Category of Advance Interest Rates (percent p.a.)

b Usance bills (for total period comprising usance period of export bills, transit period as specified by FEDAI and grace period wherever applicable) upto 6 months from the date of shipment.


c Export bills (demand or usance) realised after due date but upto date of crystalisation

Rate for 2 (b) above plus 200 bps

3 a b

Export Credit Not Otherwise Specified (ECNOS) Pre-shipment credit Post-shipment credit

Repayment of crystallised liability in Rupee shall be at the rate specified for ECNOS under Rupee Export Credit – i.e at BPLR + 4% + 2% from the date of crystallisation

ADV.164/2009-10 dt.11.03.2010

CRA

Return of cheques by branches citing ‘link failure’ as a reason According to RBI, returning of cheques by Drawee Banks/Branches drawn on them in Clearing quoting “Link Failure “ as reason is are frequently cited.

In such situations branches shall proceed as given under:

Banks should explore other alternatives before returning the cheques viz., processing at the service / drawee/nearby branch.

After exhausting all avenues if it is necessary to return the cheque due to link failure, it may be returned under Reason Code 84 ( Other reasons – Connectivity Failure), with no charges to be debited to the payee’s account.

No charges shall be recovered from the payee for return of the cheque in such cases.

Such cheques should be re-presented in the next clearing without waiting for a request from the payee.

All branches/offices should comply with the above.

(CRA. 03 / 2009-10 dt. 17.04.2009)

Government Transactions – Need for prompt Remittance / Reporting – Levy of penal interest for delayed remittance of Government revenue

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We undertake Government business only to earn non-interest income and to cross-sell our other products. If branches show laxity to remit the Government funds expeditiously and error free, it will result only in financial loss to the bank due to penal interest payment. The salient features of earlier circular on the subject to highlight the importance of avoiding levy of penal interest payment is furnished in this circular.

(CRA. 04 / 2009-10 dt. 20.04.2009)

Revision of locker rent in metropolitan and urban branches The rental rates of safe deposit lockers has been increased with effect from 01.07.2009 for metropolitan and urban branches.

1. Different rates of locker rents have been prescribed for branches situated in Metro, Urban, Semi Urban and Rural areas. Depending upon the branch classification, branches should recover the appropriate locker rents.

2. Revised Rental Rates on the Safe Deposit Lockers are furnished in the Annexure I to the Circular. The revised rent is exclusive of service tax. Service tax at the appropriate rate have to be collected as per rules prevailing from time to time. Presently the rate of service tax including education cess is 10.30%.

3. HO: O&M Division has issued a circular CRA02/2005-06 dated 07.04.2005 on revised procedure for collection of locker rent. The cut off date for recovery of annual locker rent has been uniformly fixed as 1st JULY. The difference in rent has to be collected for the subsequent periods, if the locker rent has already been paid for more than one year.

4. In case of termination of locker, advance rent paid by the hirer on annual basis, shall not be refunded on any case.

5. All other terms and conditions as communicated in the earlier circulars remain unchanged.

(CRA.11/ 2009-10 dt. 01.06.2009)

Electronic payment of Direct Taxes by Corporates and Assessees (coming under section 44AB of IT Act) – e-Payment of TDS by our branches / Offices made Mandatory

According to Central Board of Direct Taxes electronic payment of taxes made mandatory for the following categories of taxpayers w.e.f 01.04.2008:

A Company

A person (other than a company) to whom provisions of Section 44AB are applicable.

Also, as per the recent Govt. guidelines, all TDS on Salary, TDS on Deposits, TDS on Expenditure payments such as Rent, Professional fees, contracts, services etc., are to be remitted mandatorily through e-payment from 01.04.2008.

Payment of Direct taxes is made available to our customers through Net banking facilitating them to make e-payment.

Branches / offices need to open a designated current account, in order to remit through e-payment mode, the taxes deducted. Obtain Net Banking login and transaction password for this designated current account, credit the taxes to be paid to this account and pay through e-payment.

For other guidelines, branch shall refer this circular.

CRA.23/2009-10 dt. 15.07.2009

Co branded Mediclaim Policy ‘Arogya Raksha’ – Renewal of MOU for 2009-10 with improved features to make it more attractive.

The MOU with the United India Insurance Company governing the issue of Arogya Raksha Policies has been renewed for a further period of one year from 01.10.2009 up to 30.09.2010 incorporating major improvements as given below:

Improved Features: 1. Premiums: Premiums have been reduced by

around 8% across all age Groups (Plan A, Plan B & Plan C). Please refer Premium Chart (Annexure 1) of this circular.

2. Increased coverage : Sum Insured under Plan A & B raised to Rs. 10 lakhs from the existing level of Rs. 5.00 lacs subject to the following conditions: • Fresh Applicants can choose any amount

from Rs. 50,000/ to Rs. 10 Lacs • Existing Policyholders can increase the Sum

Insured to the next slab only. 3. Maximum Sum Insured for Plan C continues to

remain at Rs.5.00 lakhs subject to the existing Terms and Conditions as below: • For existing Policyholders in Plan C,

enhancement on renewal is allowed as in the


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case of other Plans (to the next higher slab- e.g. . from Rs.3.00 lacs to 3.50 lacs and so on)

• Policyholders migrating from Plan B to Plan C on completion of 65 years will continue to have the same amount of Sum Insured, even in Plan C subject to the maximum cover not exceeding Rs.5.00 lakhs.

4. Benefit Increased For Major Surgery: Hospitalisation benefit in respect of ALL MAJOR SURGERY was allowed with a ceiling of 70% of Sum Insured subject to a maximum of Rs. 2.00 lacs. This has now been improved as 80% of Sum Insured subject to a maximum of Rs.4.00 lacs.

5. Pre-Existing Diseases: So far, Pre–existing Diseases were covered from the 4th year provided the policy has been in force continuously for a period of consecutive three years and no claim has been reported. As a result of this, even if there was a small claim for other members covered under the Policy, coverage for the Pre existing Disease was lost/postponed. Under the new MOU, this has been modified as “However, this exclusion will be deleted after 3 consecutive continuous claim free policy years, provided there was no claim for hospitalisation of the pre-existing ailment during these 3 years of Insurance (Para No. 4.1)”. This means that any claim made in respect of other members of the family and for other diseases (other than Pre existing diseases) will not affect Pre existing Disease to be eligible under the Policy from the fourth year.

6. Restriction on Room rent: A ceiling has been introduced on daily Room Rent @ 1.5% of Sum Insured and daily rent for ICU @3% of Sum Insured.

7. For customers of 65 years and above, the existing Co-Pay at 20% for major illness has been modified as “10% deductibles applied on all admissible claims”.

8. However, this deductibles clause will not be applicable to policyholders migrating from Plan B to Plan C on completion of 65 years.

9. Personal Accident Death (PA) cover: It continues to be available for all Policies as follows: @100% of Sum Insured for Policyholder; @ 50% of Sum Insured for Spouse and @ 25% of Sum Insured for each

child, subject to total payment not exceeding the Sum Insured. PA cover is not available for Parents. The Premium rates given in the Annexure are inclusive of PA premiums.

CRA.34/2009-10 dt. 30.09.2009

Use of RTGS / NEFT / NECS / ECS for Credit to NRE Accounts - Compliance with FEMA Regulations and Wire Transfer Guidelines.

Text received from Reserve Bank of India is furnished below:

FEMA Regulations specify the nature of credits that are permitted to NRE accounts which, inter-alia, include foreign inward remittances, transfers from other NRE accounts, funds received from a local source (representing interest / dividend / maturity proceeds of investments) that are eligible to be remitted abroad, etc. Further, the Wire Transfer Guidelines issued by DBOD, RBI, necessitates member banks to provide certain minimum information in the message formats while originating electronic payment instructions.

Changes were made in the message formats for RTGS (field tag 7495 in R-41) and NEFT (field 7002 under transaction code 40) for identifying transactions where the remittance has been received by an intermediary bank representing foreign inward remittances. Similarly, as contained in the Procedural Guidelines on NECS / ECS, the mandate form to be filled in by the user institution provides for a certification that NRE accounts of beneficiaries will be included in the input data only after ensuring compliance with rules / regulations issued by FED-RBI. This, in turn, has to be certified by the sponsor bank as well.

The onus of ensuring that credits to NRE accounts comply with the extant FEMA Regulations and the Wire Transfer Guidelines rests with the originating institution / sponsor bank. RTGS, NEFT and NECS / ECS (Credit) are credit-push systems and function efficiently if appropriate straight-through-processing interfaces are in place. Filters, if any, in the process flow would delay the clearing cycle and increase the load on the system.

All banks participating in RTGS / NEFT / NECS / ECS are, therefore, advised that when the destination of funds is to an NRE account, the originating / sponsor bank must ensure that the funds are eligible to be credited to an NRE account in India under the existing FEMA Regulations and Wire Transfer Guidelines. Beneficiary / Destination

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banks have to make requisite changes to the interface software, if not already done, so that all valid transactions indicating credit to an NRE account are not returned.

CRA.36/2009-10 dt.06.10.2009

Provision Of Group Life Cover To Home Loan Borrowers - (1) Introduction of New Scheme from M/s Kotak Mahindra Old Mutual Life Insurance Ltd - “IB HOME SURAKSHA” (2) Modifications to the existing IB Griha Jeevan Scheme.

LIC has revised the premium rates downward, towards IB Griha Jeevan Group Insurance policy covering the life of borrowers under IB Home Loan up to 10% with effect from 01.10.2009. The revised rates are applicable only to loans disbursed on or after 01.10.2009. Further, LIC has also notified certain modifications in medical requirements with immediate effect. Full details are available in Part A of this Circular.

Bank has entered into a tie up with M/s Kotak Mahindra Old Mutual Life Insurance Ltd. (Kotak Life) to provide insurance cover to our Home loan customers. The scheme is branded as “IB HOME SURAKSHA”.

This new scheme will be available to all eligible existing home loan customers and to all borrowers who avail Home Loans in future. Full details of this “IB HOME SURAKSHA” and Procedure & Operational guidelines are detailed in Part B of this Circular.

1. Eligibility: (as on last birth day)

a. Minimum Age: 18 years

b. Maximum Age at Entry: 65 years

c. Maximum Age at Exit: 75 years

2. Option to Existing Borrowers:

Option is available for the existing borrowers to join the scheme. They must join the scheme within 6 (six) months from date of implementation of this Scheme. 3. Insurance Cover:

a. Minimum: Rs.1 lakh; b. Maximum: Rs.200 lakh

4. Insurance Term: a. Minimum: 3 years b. Maximum: 20 years

Both these policies are single premium policies and premium can also be financed by the

Bank if required. The insurance cover is on diminishing basis based on the repayment schedule of loan account. Kotak Life’s “IB HOME SURAKSHA” scheme comes with many better features such as reduced Premium rates, more borrowers covered without Medical Checkup, Medical Checkup costs borne by Kotak Life, easy procedure etc. One notable important feature of the “IB HOME SURAKSHA” scheme of Kotak Life is that it provides an opportunity to cover all existing eligible accounts. (which have not been covered so far) within 6 months from date of this Circular. IB Special Home Loan Scheme Home Loans financed under “IB Special Home Loan Scheme” are NOT ELIGIBLE to be covered under these two Schemes, since Special Home Loan borrowers are covered by a separate scheme where the Premium is borne by the Bank.

CRA.42/2009-10 dt.23.10.2009

(i) Discontinuance of MT Code on DDs issued for Rs.1 lakh and above (ii) Revised guidelines on the cancellation of BPOs in the system

a. Application of MT Code on DDs :

With immediate effect, application of MT code on DDs of Rs.1 Lakh and above is discontinued, as validation of the details of the DDs is provided in the system.

b. Cancellation of BPOs in the system:

Presently, the system requires revalidation of BPO for cancellation, if BPO is beyond 24 months old. The same has been dispensed, with immediate effect. Cancellation of BPO shall be permitted at the request of the purchaser only.

CRA. 44/2009-10 dt.26.10.2009

Subscription to Tamilnadu Government Pension Health Fund & Family Security Fund Scheme

Commencing from the month of November 2009, subscription to the Tamilnadu Government Pension Health fund and Family Security fund will be recovered at CPPC by centrally debiting the pensioners account and the same will be paid as a single amount to the Health Fund and Family Security Fund.

Following are the changes in the Health Fund Scheme of the Tamilnadu State Government:


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Category of Pensioners

(A) Health Fund Scheme

1995 (B) Family

Security Fund Subscription

Amount

Maximum Eligible Amount Covered

Subscription Amount

General (Spouse) (w.e.f. 17.02.2009)

(A) Health Fund Scheme

Rs.1,00,000/- or 75% of the actual cost of treatment for the pensioner and spouse, combined together.

Increased from Rs.50/- to Rs.100/- (both pensioner and spouse will be covered with effect from 01.09.2009)

Family (including teacher family) (w.e.f. 01.09.2009)

(A) Health Fund Scheme Willing to join is one of the Conditions. The option once exercised shall be final.

Rs.1,00,000/- or 75% of the actual cost of Surgery / treatment whichever is less. Willingness should be given within 3 months period from the date of G.O, otherwise it will be construed that they are unwilling to subscribe the scheme

Rs.75/-

There is no change in Subscription amount of Rs.70/- (Maximum amount of coverage – Rs.25.000/-) in respect of Family Security Fund Scheme by General category TN State Govt Pensioners. As per the instructions in the PPO, the subscription will be deducted for all the Tamilnadu State Government Pensioners/Family Pensioners on a compulsory basis. If any pensioner desires not to make any subscription, he/she has to obtain the specific letter from the Directorate of Pension in this regard and inform the branch where the pension is drawn. Branches can modify the changes only on the death of the pensioner/family pensioner. Henceforth, any changes in the subscription will be taken care of by CPPC.

CRA.46/2009-10 dt.02.11.2009

Collection of Home Loan / Vehicle Loan Instalments through Electronic Clearing Service (ECS)

Repayment towards Home / Vehicle loan instalments from other Bank Accounts through ECS is very convenient and there are instances where borrowers prefer to issue Debit Mandates authorising our Bank Branch to raise debits in their Accounts held with other Banks. This is facilitated by Electronic Clearing Services (ECS) operated by Reserve Bank of India and Public / Private Sector Banks at various Centres.

The penal provisions applicable under Chapter XVII of N.I. Act in case of ‘Dishonour of Cheques’ and Sec. 25 of Payments and Settlement

Systems Act, 2007 in case of ‘Failed Electronic Funds Transfer’ instructions are applicable with respect to failed ECS debits also.

Hence, ECS Debit Mandates can be accepted from our borrowers who maintain salary / operative accounts with Other Banks.

While Sanctioning / Disbursing Home Loans / Vehicle Loans, branch to inform about ECS Scheme to the borrower, which provides electronic debit towards Loan Instalments. If the borrower opts to pay the instalments through ECS which is in addition to the normal / existing repayment channels like Cash / Clearing / Transfer / Post Dated Cheques (PDCs) which are in vogue, branches should follow the procedure furnished in this circular.

CRA.47/2009-10 dt.02.11.2009

Online Payment (of Utility Bills, LIC Premia, Mobile Bills, Fees, Charities / Donations etc.) by Registered Net Banking Customers having Transaction Password

Customers registered for Net Banking and have transactions password-enabled, can pay Online their bills viz. Payment of Utility bills, mobile bills, LIC Premia, fees, Charities/Donations etc.

These online payments are facilitated through a tie-up has entered into with M/s Bill Desk (Indiaideas.com) who is the Service Provider for many merchants.

List of Merchants along with their Websites to whom payments can be made by our Customers and Brief Steps to be followed for making online payments are annexed to this circular.

Provision is available on the websites of respective merchants’ for getting acknowledgement and / or printing of e-Receipt for the bills paid.

Branches may advise their customers to send email to [email protected] in case of failure of payments and any other queries in respect of their payments. Bill Desk will respond to their emails and take up the matter with the merchants for refund / adjustment and provide the necessary information by reply email within a reasonable time.

CRA.49/2009-10 dt.01.12.2009

Provision of Group Life Cover to Home Loan Borrowers – ‘IB Home Suraksha’ under tie up with Kotak Life Insurance – SHL A/cs. now included.

Staff Housing Loan borrowers can opt for either SHL/Group Mortgage Redemption Assurance (GMRA) with LIC or ‘IB Home Suraksha’. Existing

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borrowers under SHL not covered so far under SHL/ GMRA Scheme can also be covered under ‘IB Home Suraksha’ Scheme within the six months period provided. It may be noted that Staff members will be treated on par with customers under ‘IB Home Suraksha’.

Branches shall note that certain additional information/clarification in respect of ‘IB Home Suraksha’ Scheme, are also furnished in this circular.

CRA.52/2009-10 dt.03.12.2009

Scheme of Incentives for Officers becoming licensed Specified Persons for sale of HDFC Life Policies

As per the guidelines issued by Insurance Regulatory and Development Authority (IRDA), sale of Insurance Products can be undertaken by “Specified Persons” only. “Specified Person” is one who has undergone the required number of hours of training and thereafter passed the Certificate Examination in Life/General Insurance prescribed by IRDA. The Certification is valid for three years only and has to be renewed every three years. To encourage our officers to become Specified Persons, HDFC SLI has offered an Incentive Scheme. Details of the Incentive Scheme are given below: Incentives for Certification: The Incentive Scheme is valid up to 31stJanuary 2010. All the officers wishing to participate in this licensing drive will have to pass the qualifying examination latest by 31st January 2010. Branch Managers are not eligible to participate. Part 1 - for new SP's: Any officer of the Bank (other than Branch Managers) who gets trained, passes the licensing exam and is licensed on or before 31st January 2010 will be provided with a Gift voucher of Rs 2000/- towards procuring books, periodicals and other training materials related to insurance.

Part 2 - For all existing Specified Person to renew their License: Any Specified Person who renews his license (license expiring and coming up for renewal) on or before 31stJanuary 2010 will be provided with a Gift voucher of Rs 500/- towards procuring books, periodicals and other training material related to insurance. Any Officer willing to become a Specified Person can apply to HDFC SLI under intimation to the Circle Head.

HDFC Standard Life Insurance Company will sponsor these officers to undergo the prescribed training. This training can be undergone “On Line” mode through approved Institutions.

Normally 50 (fifty) hours of training is prescribed. This is reduced to 25 hours for those

a. who have passed CAIIB (both parts) or

b. for Associate/Fellow of the Institute of Chartered Accountants or

c. for Associate/Fellow of the Institute of Cost and Works Accountants or

d. for Associate/Fellow of the Institute of Company Secretaries or

e. for those who have passed MBA or f. passed any Professional qualification in

Marketing from Approved Universities / Institutions.

HDFC SLI will pay the required fees and enroll the candidates for On Line training with approved Agencies, and collect the password from the Agencies and inform the candidates. On receipt of Password, officers can start the training. On line training can be undertaken any time of the day or night. Candidates have to make their own arrangements for computers and internet connections.

On completion of the required hours of ‘On line training’ as prescribed, the candidate will be issued a Training Completion Certificate.

The Candidate has to apply through the HDFC SLI for the ‘On line’ exam enclosing the Training Completion Certificate.

HDFC SLI will pay the Exam Fees and get a time slot for online examination.

Officer has to appear for the ‘On line examination’ at the appointed date and time.

On completion of the examination, a Mark Sheet generated by the System will be issued to the Officer, duly certified by the Institute/Agency conducting the Test.

This Mark Sheet has to be submitted to HDFC SLI for arranging to issue the License; necessary fees in this regard will be paid by HDFC SLI.

Officers should apply with an attested copy of the Certificate to HO: HRM Dept for noting the above qualification.

Appearing for the examination will be treated as ‘on duty’.


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For Renewal of License Candidates have to undergo 25 hours OnLine training and on completion of the above training, Certificate of Completion of Training is issued. Based on this Certificate, License is renewed. There will be no examination for renewal of License. This process has to be complied with through HDFC SLI as informed above.

CRA.53/2009-10 dt.08.12.2009

TDS on Pension Payment - Income Tax for the financial year ending 31.03.2010 Assessment year 2010-11

Bank is under statutory obligation to deduct Income-Tax at source from Pension paid to Pensioners as per the provisions of the Finance Act 2009, (Read with Income Tax Act, 1961) HO: TMD will be pushing a report to the entire pension paying branches pensioner wise report for the pension and arrears paid during the financial year 2009-10 from April ’09 (inclusive of March ’09 pension paid on 2nd April ’09) to December ’09 and notional pension to be paid for the month of January / February 2010 including the arrears claimed through web by the branches.

Branches can verify at their end and ensure that appropriate Income Tax is deducted at source, proportionately from the month of December 2009 to February 2010 (since March 2010 pension will be paid only in April 2010). The pension paying branch has to issue such pensioners, a certificate of tax deducted (TDS) in the form prescribed in the Income Tax Rules, in April every year. Branches should note that from the ensuing Financial Year 2010-11, Pension Paying branches should deduct the proportionate Income Tax every month from the pensioners, to be remitted to Income Tax Department as per extant guidelines.

CRA.56/2009-10 dt.21.12.2009

Mandatory electronic payment of tax by certain Categories of taxpayers with effect from 01.04.2008

Central Board of Direct Taxes vide their Notification no.34/2008 dated 13.03.2008 have made electronic payment of taxes mandatory for the following categories of taxpayers w.e.f 01.04.2008:

A Company A person (other than a company) to whom provisions of Section 44AB are applicable

In this connection, please note that the status of all corporate taxpayers can be identified from the name itself. Fourth digit of the PAN of all corporate assessee would necessarily be “C”. Physical challans from such assesses shall not be accepted across the counter.

In case of taxpayers covered under Section 44AB, there should be no insistence of any proof of eligibility to pay tax through physical challans at the bank counters.

The responsibility of making e-payment rests primarily with the taxpayer. Hence, the word of taxpayers should be taken as final.

CRA.61/2009-10 dt.09.02.2010

Launching of new Travel Group Insurance Product for our customers – “IB YATRA SURAKSHA” Policy.

As a Value added service to our customers undertaking group travel, our Bank is offering a Group Travel Insurance Policy by arrangement with the United India Insurance Co (UIICo) - our Corporate Tie up Partners for Non Life Insurance business - under the brand name of “IB YATRA SURAKSHA”.

“IB YATRA SURAKSHA” offers travel insurance cover for domestic travel by road, rail and inland waterways (but not by Air) to a group of persons - minimum five persons – maximum 20 persons per group in the age group of 3 years to 70 years undertaking travel for purposes like Religious tours, Family Picnics, Holiday Package tours, Business/ Professional Tours, study/educational tours by Students etc.

Sponsor/tour operator/leader of the Group (who should be our customer) can apply for “IB YATRA SURAKSHA” travel insurance cover in advance before commencement of the journey.

“IB YATRA SURAKSHA” offers compensation subject to the limits specified in the respective plan towards

death due to accidents while on Journeys and resultant Medical expenses (Plan A) death or Permanent Total Disability due to accidents while on Journeys and resultant Medical expenses (Plan B) death or Permanent Total Disability or Permanent partial Disability and/or loss of limbs etc due to accidents while on Journeys and resultant Medical expenses (Plan C)

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Extension of cover for (i) loss of baggage and (ii) Detour expenses are available on payment of additional premium. Customers can choose Capital Sum Insured of Rs.1.00 lakh or Rs.1.50 lakh or Rs.2.00 lakhs. Rates of Premium are given in the Annexure. To give an example, Premium payable for a Capital Sum Insured (CSI) of Rs. 1.00 lakh under PLAN C policy (covering all the above risks) will be Rs.24/-per person including applicable Service Tax – presently @ 10.30%). Branches are eligible to get Commission @ 10% of the Premium collected (net of Taxes) and the same will be periodically credited by HO: BASC to the Branch Income A/c – “Commission on Non Life Insurance business” through direct credit.

For further details regarding operational guidelines, Terms and conditions etc please refer to the circular.

CRA.62/2009-10 dt.09.02.2010

Obtention / Updation of Debit Mandates from our Customers for Electronic Clearing Services and Other purposes

In view of the 100% Core Banking Solution completed in our bank ECS Debits / Direct Debits processing is / proposed to be centralised at some centres. Also with the proposed introduction of RECS in some states and proposed NECS (Debit) centralised processing will become essential.

Further recent guidelines of RBI requires Destination Bank Branches (Where debits are to be posted or centrally from a single location) to hold debit mandates based on which the debits are to be posted. Mandates wherever were taken with Old Account Numbers (before migration to CBS) shall obtain fresh mandates with New Account Numbers.

To facilitate centralised processing and smoother migration to RECS (Debit) and NECS (Debit), a mandate management system providing for entry / updation / deletion of mandates is put in place by HO: TMD. The mandates for ECS transactions can be entered / updated / deleted through Service Branch Help Desk link available in Help Desk. Mandates for other transactions are available at HO: TMD server.

The Mandate Handling Policy laying down the instructions for handling the mandates approved

by our Board is placed in the Annexure to this circular.

CRA.63/2009-10 dt.12.02.2010

National Electronic Funds Transfer (NEFT) System - Refinement of Process-flow

Necessary changes in the CBS/system interfaces to handle the enhancements of features with regard to NEFT, is carried out by our Project Office according to the communication from RBI.

The NEFT operating hours have been extended from 9 am to 7 pm on week days and from 9 am to 1 pm on Saturdays.

Branches shall to compulsorily collect the mobile number and / e-mail address of the remitters while receiving applications for NEFT with effect from March 01,2010 for the purpose of sending acknowledgements after credit of NEFT remittances. These details collected from existing customers are to be entered in the CBS customer details before creation of NEFT message. In the absence of customer contact details, originating branch should give its email address in the relevant field while creating the outgoing NEFT message.

CRA.66/2009-10 dt.26.02.2010

FX

Increase in percentage of cover under Export Credit Insurance for Banks - Whole Turnover Packing Credit and Whole Turnover Post Shipment (ECIB WT-PC and ECIB WT-PS) by Export Credit Guarantee Corporation of India Ltd. (ECGC).

Attention of Branches is drawn to HO:ID Circular FX.20/2008-09 dated 17.09.2008 wherein the salient features / terms and conditions of the renewed Export Credit Insurance for Banks ECIB (WT-PC) and ECIB (WT-PS) are detailed.

ECGC has now informed that under the stimulus package announced by Government of India additional benefits by way of increased percentage of cover is available as per details given vide Annexure to this circular. Branches should take note of the above and act accordingly.

(FX.03 /2009-10 dt. 11 .04.2009)

Bank’s Policy on collection of US Dollar denominated cheques.

In line with the RBI’s suggestions, our Bank’s Board approved policy guidelines on collection of US Dollar denominated cheques,


31

contents of which are detailed in the annexure to this circular.

The important features of the policy are detailed below.

1. Branches shall reduce transit time for despatching the cheques from branches to Correspondent Banks by handling the same on the date of receipt of cheque from the customer.

2. Payment of interest at SB rate calculated on the amount of proceeds credited from the date of sighting credit in the nostro account and until such time the customer’s account is credited.

3. Payment of compensation on “step up basis” by way of additional interest at 2% over and above SB interest rate for the period of delay beyond 30 days till the date of credit to customer’s account.

(FX.07/2009-10 dt. 05.06.2009)

Relaxation of norms for Gold Card Scheme for Exporters

One of the conditions for eligibility for Gold Card Scheme (GCS) for exporters is “Exporters should not have overdue export bills in excess of 10 percent of the previous financial year’s export turnover.”

In view of the difficulties faced by the exporters on account of weakening of external demand and in realising the dues within the stipulated time, in partial modification of guidelines for extending Gold Card Scheme to Exporters, RBI decided to dispense with the requirement of overdue export bills not exceeding 10% of the previous year’s export turnover, for one year i.e. from April 1, 2009 to March 31, 2010.

All other terms and conditions remains the same.

FX.20/2009-10 dt.01.10.2009

National Export Insurance Account (NEIA) - operated by Export Credit Guarantee Corporation of India Ltd (ECGC)

Attention of Branches is drawn to HO:ID Circulars regarding additional benefits by way of increase in percentage of cover in Export Credit Insurance for Banks – Whole turnover Packing Credit and Whole turnover Post shipment Credit under stimulus package announced by Government of India and the salient features / terms and conditions of the renewed Export Credit Insurance

for Banks ECIB (WT-PC) and ECIB (WT-PS) for 2009-10 are detailed. ECGC has informed regarding the set up of National Export Insurance Account (NEIA) by the Government of India. The salient features of the above scheme are given below. National Export Insurance Account (NEIA): Government of India, Ministry of Commerce and Industry with a view to facilitate medium and long term exports and considering the limitation of the Export Credit Guarantee Corporation in providing adequate insurance cover on its own and non -availability of re-insurance cover to such exporters have established the National Export Insurance Account scheme (NEIA). NEIA is public trust set up jointly by the Department of Commerce and ECGC and is monitored by a Committee of Direction (COD) constituted under Ministry of Commerce and Industry.

Objective of NEIA The main objective of NEIA is to ensure the availability of credit risk insurance cover (both political risk and commercial risk) for medium and long term high value projects which are commercially viable and desirable from the point of view of national interest where re-insurance cover is not available or its cost is very high. Eligibility Criteria:

• The project should be commercially viable.

• The project should be strategically important for India, with regard to the economic and political relationship of India with the project country.

• The exporter should be capable of executing the contract, as shall be evident from his previous track record.

• ECGC is not able to cover the project on its own, due to its underwriting constraints.

Operational guidelines of NEIA are given in this circular.

FX.22/2009-10 dt.12.10.2009

Implementation of UNSCR 1718 (2006) and UNSCR 1874 (2009) pertaining to Democratic People’s Republic of Korea (DPRK)

1. All branches should comply with the Notification dated February 7, 2007 and September 15, 2009 in regard to DPRK, issued by the Ministry of External Affairs.

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2. In regard to the persons or entities designated by the Committee or by the Security Council, as listed in Schedule II of the Ministry of External Affairs Order dated September 15, 2009 referred to above, all branches are advised to scan all existing accounts to ensure that no account is held by or linked to any of the entities or individuals included in the Schedule. 3. In case any such account is found, details of the account should immediately be reported to Head Office, through the respective Circle Offices for onward reporting to Financial Intelligence Unit-India for necessary action under advice to Reserve Bank of India.

FX.27/2009-10 dt.27.11.2009

KYC / AML / CFT / Obligations of Authorised Persons under PMLA 2002 as amended by PMLA 2009 – Money changing activities / Xpress Money / Money Gram / DD Drawing Arrangement

According to Reserve Bank of India, all Authorized Persons come within the definition of ‘Financial Institutions’ w.e.f. 01.06.2009, are advised to furnish Suspicious Transaction Report (STR) to FIU-IND, in respect of their money changing activities within 7 days of arriving at a conclusion that a transaction, including attempted transaction, whether or not made in cash, or a series of transactions integrally connected are of suspicious nature.

Branches that have entered into Franchisee agreements with Restricted Money Changers may inform the above to the franchisees and ensure that the franchisees also adhere to the RBI guidelines on KYC / AML / CFT. It is the sole responsibility of the Franchiser branch to ensure that their franchisees adhere to the KYC / AML / CFT guidelines.

As per the extant guidelines by HO: O & M Division, branches should refer, through the respective Circle Offices, any such specific instances to the “Principal Officer/General Manager (IED)” who is the authority to file STR with the FIU-IND, New Delhi. For reporting such suspicious transactions, Circulars issued from time to time by HO: O&M Division, on the subject, has to be strictly adhered to.

RBI circular issued in this regard and some of the major points on which branches have to ensure compliance are annexed to this circular. As per RBI, a certificate from Statutory Auditor on compliance with KYC / AML guidelines

should be obtained at the time of preparation of the Annual Reports and kept on record.

FX.30/2009-10 dt.23.12.2009

Request from branches to handle China Gold Unit Bond.

We have been receiving requests from branches for encashment of China Gold Unit Bond purportedly issued by the Central Bank of China.

We are also informed by branches that the customers holding such paper bonds assure the branches of huge deposits in crores if the bonds are handled by them for encashment. Also in certain instances the customers have directly approached Reserve Bank of India with various documents for facilitating encashment and such requests are re-directed to our AD Branches/HO:ID. In this regard, we have taken up the matter with some of the correspondent Banks having presence in China and received the feedback as follows:

• They are not aware/ familiar with and also have not come across such bonds.

• These bonds might have been issued 60 – 70 years ago and some prior to 1949.

• At present, no Bank in China may be able to handle the encashment of such Bond.

• The holders of such bonds are advised to approach the People’s Bank of China directly and are unable to comment on the reaction of the above bank on presentation.

• And the correspondent Banks are not in a position to handle such bonds for collection.

Under the above circumstance, we advise the branches as follows:

1. Branches SHOULD NOT entertain any request for either collection or encashment of such China Gold Unit Bond until any of our Correspondent Banks agree for taking such instruments for collection.

2. Due to uncertainity of collection and payment by the Central Bank of China, branches are advised not to make any payment nor advance nor re-imburse any amount based on such bonds. Any violations in this regard will put the Bank in to loss and hence, branches are cautioned to be utmost vigilant in this matter.

Branches shall bring to notice of HO, any such request for encashment of either China Gold Unit Bond or any such instrument for suitable


33

guidance. At the same time, Payment should not be made towards such bonds.

FX.35/2009-10 dt.28.01.2010

Introduction of new product - offer on opening of “Student Account “by our US Dollar correspondent bank

Branches are aware that M/s Wachovia Bank, one of our US Dollar correspondent banks is in the process of merger with M/s Wells Fargo Bank, Newyork. Now, they have offered a new initiative viz “Students Account” under which Wells Fargo Bank is willing to open foreign currency account in US for Indian students going to US for higher studies even before they leave the Indian shores. Taking into consideration the advantages in the new initiative, our bank has entered into an agreement with M/s Wells Fargo Bank.

The salient features of the product are detailed below:

Wells Fargo Bank is willing to open a foreign currency account in US for Indian students going to US for higher studies even before they leave the Indian shores

Our Bank shall refer to them on a non-exclusive basis, only the customers who are individuals and who maintain a formal banking relationship with our bank

Our Bank will not refer such customers having bad track record involving money laundering etc, meaning proper KYC norms to be undertaken by our bank before such reference is made to them.

Similarly Wells Fargo Bank will carry out such due diligence according to their account opening standards and procedures. Further details regarding Standard account

opening process, List of documents to be collected from student, Formalities to be completed at branch level, A/c opening / tracking procedure at IPB etc are provided in the circular.

The handling of the transaction is restricted to Authorized branches only. Non-authorized branches may route the transactions through the authorized branches for handling the transactions.

The specimen account opening form enclosed is only for reference. Branches are advised to download application form from the website at “www.wellsfargo.com/ipb” as the bank insists on submission of latest version of form.

Branches are required to indicate on the reference letter, the details of the account holder who are banking with us for five years or over. In the event of the applicant is a student, please provide the reference letter for the parent who has been banking with our bank for at least five years

In the event of existing relationship is less than 5 years, two monthly statements from two separate banks will suffice.

To expedite account opening time, branches can scan the completed application and required documents to their IPB Hong Kong office.

FX.37/2009-10 dt.31.01.2010

HRM

Staff Welfare Measures - further improvements The improvements introduced in some of

our welfare schemes implemented by our Bank for the benefit of our staff members/retired staff members, approved by the Bank are as follows:

1. Scheme for presentation of Memento to staff members Retiring on Superannuation:

The amount for Staff members Retiring on Superannuation stands increased to Rs.5,000/- from April 2009. Branches may continue to pay the cost of Article to the debit of “Sundries Receivable” Account and claim the amount from HO: HRM Department.

2. The limit under the scheme for Staff members retired under Superannuation on declaration basis for reimbursement of Medical Expenses is increased to Rs.3,000/- per annum. Branches may continue to forward the Applications from such of those Retired Staff members to HO: HRM Department for reimbursement.

3. Treatments / surgeries for certain ailments had already been approved for reimbursement from Staff Welfare Fund and it has been decided to include the treatment of LIVER transplantation for reimbursement upto a maximum of Rs.3.00 Lakhs over and above the eligibility under OSR/BPS.

4. The scheme for grant of Scholarship to dependents of Staff Members is available to all the Award Staff and Officers up to Scale IV. The other existing guidelines and format of application remain unchanged. The last date for receipt of the applications is 15th September of every year.

5. The grant for Educational Books and Uniforms is available to any one child of the Staff

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Member, in each of the 3 stages viz I to V Std, VI to XII Std and College level Courses. To be eligible for the grant, the Dependant child of Sub-staff Members should have secured aggregate minimum marks of 50% and 60% for others, in the preceding final examination. Those who have secured highest marks in each of the three stages alone will be eligible for the grant.

HRM.22/2009-10 dt.14.05.2009

Issue of "Retired Employee Card" to Retired Employees The following are the guidelines for the issue of Retired Employee Cards:

1. All staff members who retire on superannuation alone are eligible.

2. The Retired Employee Card will be issued to retiring staff only on surrendering of Bank’s Identity Card.

3. The Officers / Staff retiring from the Branches / Offices have to submit the requisite details as per Annexure, along with the Pension Papers to HO: HRM Department.

4. Two copies of the recent passport size color photographs are to be enclosed, along with the format duly filled and signed by retired employee and countersigned by the Branch Manager or Head of the Office.

5. For those Officers / Staff already retired and drawing pension, the concerned pension disbursing branch may arrange to obtain the requisite proof / details from the pensioner.

6. For those Officers / Staff who are PF optees, branches where the retired member maintains / operates SB / Term Deposit may arrange to collect the requisite details to forward to HO:HRM Department duly certified.

7. HO:HRM Department will issue the cards and send it to the same Branch / Office from where the application is received.

8. In case employees/officers retiring on or after 01.07.2009, the format for issue of the card duly filled in and signed /counter signed may be sent to Settlement section of Head Office, HRM Department along with

papers meant for sanction of terminal benefits.

9. In case of loss of the card by the retired employees, duplicate card will not be issued under any circumstances.

10. The Bank does not undertake any responsibility for any action of the card holder. Any misuse of the card will be at the sole responsibility of the card holder.

11. In case the card is not in use, it should be surrendered to the Issuing Authority.

HRM.48/2009-10 dt.04.07.2009

Bonus To Staff For The Year 01.04.08 To 31.03.09

Board has approved payment of Bonus for 2008-2009 to all eligible Employees of the Bank in India at 8.33% of eligible Emoluments paid from 01.04.2008 to 31.03.2009 subject to a maximum of Rs.3,500/- per Employee. For ascertaining the eligibility of the Employees and for calculation of Bonus amount, etc., Branches / Offices are advised to follow the guidelines given in the Annexure to this circular without any deviation.

Please refer to the guidelines in the Annexure enclosed to this circular, regarding the maintenance of register in “Form C” showing details of Bonus paid and for submission of Annual Return in “Form D” to the Assistant Labour Commissioner (Central) of the respective Circle.

HRM 49/2009-10 dt. 06.07.2009

Leave Fare Concession – Visits Abroad.

Our Top Management has agreed to consider the request of staff members to avail LFC to visit abroad while visiting the declared destination in India, subject to the following conditions:

1. So long as the designated place is anywhere in India and the employee actually visits the place so designated, the employee can also travel to a foreign land enroute to his designated place. The cardinal principle is that the employee must visit the designated place which has to be in India.

2. As long as the officer’s place of domicile or designated place is anywhere in India and he/she actually visits the place so designated, he/she may be reimbursed actual charges for his/her entire journey


35

within and without India or the cost of fare to his/her hometown/designated place, by the shortest route, by his/her entitled class, whichever is lower.

3. For award staff the reimbursement would be restricted to the maximum eligible amount for the entitled distance according to 2 year / 4 year block or the actual cost which ever is lower.

4. Indian travel agencies who organize the travel are also issuing certificates stating that foreign/inland travel has been undertaken and the amount of fare charged is also stated by them. In such cases the statements made by the travel agencies should be confirmed by the employee concerned. The processing of the bill will be done on the basis of relevant tickets and certification of the employee concerned and he shall be solely accountable for the same.

While applying for LFC, the staff members who are desirous of availing LFC to visit abroad also should specifically mention in their leave application that they intend to visit abroad and they would comply with the instructions stipulated therefor.

Staff members are advised to take specific permission / NOC, while applying for visa / visiting abroad from the Competent Authority.

No reimbursement will be allowed against the claim until the sanctioning authority is fully satisfied as to the genuineness and correctness of the claim. Such authority shall make, if necessary, all reasonable endeavour to ascertain the correct position with regard to travel abroad and the charges claimed to have been incurred.

HRM 56/2009-10 dt. 10.07.2009

Nodal Officer for Customer Service/Principal Code Compliance Officer (BCSBI) and Public Information Officer under Right to Information Act 2005.

The General Manager at Head Office, Sri.R.Venkataramanan, General Manager (MSME) has assumed charge as Nodal Officer for redressal of complaints / grievances, Principal Code Compliance Officer for implementation of Code of Bank’s Commitment to Customers and Public Information Officer under Right to Information Act

2005. Branches have to modify in their notice board and display as under:

Sri R.Venkataramanan Nodal Officer for Customer service, General Manager (MSME), Indian Bank, Head office, 66, Rajaji Salai, CHENNAI – 600001. Telephone No.044-25231279 Email: [email protected]

Sri R.Venkataramanan Principal Code Compliance Officer, General Manager (MSME), Indian Bank, Head Office, 66, Rajaji Salai, CHENNAI – 600001. Telephone No.044-25231279 Email: [email protected]

Sri R.Venkataramanan

Public Information Officer under RTI Act, General Manager (MSME), Indian Bank, Head office,

66, Rajaji Salai, CHENNAI – 600001.

Telephone No.044-25231279 Email: [email protected]

HRM.60/2009-10 dt.15.07.2009

NISM–Series-I – Certification in Currency Derivatives Examination – Fee reimbursement and Cash Incentive to Officers

Bank has taken trading membership for currency future trading from NSE and MCX-SE.

As per SEBI requirement, all approved users and sales personnel of trading members of currency derivatives segments of recognized stock exchanges are required to obtain the necessary certification.

At present Currency Derivative Certification Examination is being conducted by National Institute of Securities Markets.

Name of Module NISM-Series-I: Currency Derivatives Certification

Examination Fees (Rs.) 1000 Test Duration (in minutes) 120 No. of Questions 60 Maximum Marks 100 Pass Marks * (%) 60 Certificate Validity (in years) 3

* Negative marking – 25% of the marks assigned to the question.

Officers are advised to qualify for the NISM-Series-I: Currency Derivatives Certification Examination, which is being conducted online at NSE, MCX-SX and BSE on payment of Rs.1000/- per attempt by pursuing the course offered by NISM. As an incentive to those officers who qualify in the examination conducted by NISM, a sum of Rs.1000/- will be granted besides reimbursing the course fee of Rs. 1000/- on production of the marks sheet/certificate. Course

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material is available free of cost on the website of National Stock Exchange of India and other websites.

HRM.61/2009-10 dt 16.07.2009

Categorisation of Branches as on 31.03.2009 The norms of business criteria for categorisation of branches and classification of Specialised branches (Annexed to this circular) were approved by the Board and is given below:

CATEGORY OF BRANCH

BUSINESS CRITERIA (Average aggregate deposits and advances during the last two years)

INCUM-BENCY Scale

Small Below Rs.5 crore I Medium Rs.5 crore and above but below

Rs.25 crore II

Large Rs.25 crore and above but below Rs.75 crore

III

Very Large Rs.75 crore and above but below Rs.250 crore

IV

Exceptionally Large Rs.250 crore and above V

HRM.88/2009-10 dt. 12.09.2009

Staff Welfare Measure - Presentation of Memento on Superannuation - Modification in Procedure

Staff members retiring on Superannuation are being presented with a ‘Memento’ in the form of an article worth Rs.5000/- on the day of their retirement.

HO: HRM Department will remit the amount towards Memento to the concerned branches through C2C during the last week of each month enabling the branches to purchase an article as per the choice of the retiree and present the same to the retiring staff member. The memento should not be presented in the form of cash.

HRM.101/2009-10 dt.10.10.2009

Scheme for extending Legal and Financial Support to Officers of Banks against whom motivated false complaints have been made by people/agencies outside Bank.

On the scheme for extending Legal and Financial Support to Executives of Banks against whom motivated false complaints in matters arising out of bonafide execution of Bank’s work made by people/agencies outside Banks, IBA had recommended the following:

1. The Scheme be extended to all officers of the Bank against whom motivated false complaints are made by outsiders/private parties with malafide intentions on matters arising out of bonafide execution of Bank’s

work to defend themselves and also to initiate legal action against those who initiated such false and motivated complaints.

2. The Retired Officers of the Bank also be covered under the scheme to defend themselves when such complaints are made, provided such false complaints by outsiders/private parties with malafide intention on matters arising out of bonafide execution of banks work while in service.

3. The Scheme will not cover instances where the complaints/prosecutions are launched by police/CBI and other Government agencies.

The revised scheme approved by our Board is enclosed as Annexure to this circular.

HRM.132/2009-10 dt.30.11.2009

New Holiday Homes at Tirumala And Puri Under staff welfare scheme our Bank has

extended the facility of Holiday Homes at Darjeeling, Guruvayur, Kodaikanal, Mahabaleshwar, Shimla and Udhagamandalam besides one guest house at Tirumala.

Our Bank has established Holiday Homes in yet another two places for the benefit of our staff members. Staff members may avail the facility of the new Holiday Homes established at PURI and TIRUMALA, the details of which are given below:-

No Details PURI TIRUMALA 1 Location Hotel Suv Palace

New Marine Drive Road, Near Swargwar, Puri – 752 001

Sri Kanchi Kamakoti Mutt, (New Building) Ring Road, TIRUMALA – 517 504

2 Phone No. 06752-254 341 06752-694 386

0877- 2277 370

3 Number of Rooms 3 3 4 Controlling office CO:Bhubaneswa

r Tirumala Branch

5 Check in time 10.00 AM 09.00 AM 6 Max no of days 2 days only 2 days only 7 Rent Rs.10/- per day

per room Rs.10/- per day per room. Not available for 15 days during the Brahmotsavam festival in a yr

8 Date of commencement

01.01.2010 10.01.2010

To avail the facility of the Holiday Homes at Puri and Tirumala, staff members have to apply to Circle office, Bhubaneswar and to Tirumala Branch respectively with the remittance of Rs.10/- per day and the respective controlling office shall allot the


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rooms ‘on first come first served’ basis as in the case of other Holiday Homes, based on availability.

It may also be noted that the allotment of Rooms in the Holiday Home at Guruvayur, another pilgrimage centre, shall also be restricted to 2 days only in view of the continuous demand through out the year, enabling the benefits of the Holiday Homes to be utilized by maximum number of staff members.

HRM.152/2009-10 dt.05.02.2010

Modification In Nomination Of Disciplinary Authority / Appellate Authority / Reviewing Authority For Officers Our Chairman and Managing Director, in exercise of the powers conferred under Regulation 5(1) of the Indian Bank Officer Employees’ (Discipline & Appeal) Regulations, 1976 has effected the following nominations of the Disciplinary Authority/ Appellate Authority/ Reviewing Authority for officers:

To function as Name of the Official > Concurrent Appellate Authority for Officers in Scale I, II & III, for HO cases > Concurrent Appellate Authority for Officers in Scale I, II & III, for Circle cases (where the Disciplinary Authority is AGM at Circle Office)

Shri DD.Deshpande DGM., Head Office Marketing Department

> Appellate Authority for Officer in Scale I, II & III, for HO cases > Appellate Authority for Officers in Scale I,II & III, for Circle cases (where Disciplinary Authority is AGM at Circle Office)

Shri K.Manoharan DGM., Head Office Premises & Expenditure Department

These modifications are w.e.f 12.02.2010.

HRM.175/2009-10 dt.15.02.2010

Canteen Subsidy to Staff Members Keeping in view of the cost escalation, our

Chairman & Managing Director has kindly approved the enhancement of the Canteen subsidy from Rs 6/- to Rs 10/- (Rupees ten only) per employee per working day to be administered as per the prescribed norms. This enhancement in Canteen Subsidy comes into effect from 03.03.2010.

As is being done, the subsidy would be made available to the Subsidy Administration Committee on submission of proper accounts for the administration of funds every month. Branches/ Staff Training Centres should submit the details of the subsidy every month to the respective Circle Offices. Circle Administration, after satisfying itself about the functioning of the subsidy Administration

Committee, will authorize payment of subsidy to branches/offices under its control.

Officer-in-Charge of the Inspection Centres and IMAGE can release subsidy to the staff members working under their control.

Circle Offices, Inspection Centres and IMAGE should submit the details of the subsidy released pertaining to their office to HO: HRM Department on a monthly basis.

All other guidelines stipulated in the earlier circulars in the matter of grant of subsidy should be followed meticulously.

HRM.181/2009-10 dt.03.03.2010

Improvements In Staff Welfare Schemes 1. High Risk Medical Check Up for Officers from Scale IV and above with their Spouse

The reimbursement under the scheme to Officers in Scale IV / Executives towards the health check-up undertaken in any of approved Hospitals stands increased to Rs.5,000/- (Staff – Rs.3,000/- and Spouse Rs.2,000/-) from 01.04.2010. Circle offices may please approve more number of Diagnostic Centres / Hospitals in their centres to have smooth functioning of the scheme. All other terms of the scheme remain unaltered. 2. Medical Check-Up for all Award Staff Members and Officers from Scale I To Scale III

The charges for the Health Check Up stands increased to Rs.3,500/- (Staff – Rs.2,000/- and Spouse Rs.1,500/-) from 01.04.2010. Circle offices are advised to approve adequate number of Diagnostic Centres / Hospitals in their centre enabling the staff members to have the fruits of the welfare facility. Circle Heads, where the arrangement is working successfully on the existing rates, may judiciously use their discretion whenever a request is received from the Diagnostic Centres / Hospitals to increase the rates within the stipulated ceiling. All other terms of the scheme remain unaltered.

3. Provision for Eye Check Up and Purchase of Spectacles for Employees above 40 Years of Age

The amount towards reimbursement for the consultations and Purchase of Spectacles stands increased to Rs.3,000/- from 01.04.2010. All other eligibility conditions remain unaltered.

3. Health Insurance Premium to Retired Employees

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The reimbursement of Health Insurance premium to Staff Members retired on superannuation for Mediclaim policy value increased to Rs.2 lakhs from the existing Policy value of Rs.1 lakh from 01.04.2010. Accordingly the premium reimbursement stands enhanced (as per the rate applicable to our Arogya Raksha policy) to Rs.4,000 (from Rs.2,516) to the Retirees up to the age of 65 years and Rs.9,373 (from Rs.5,336) to retirees above the age of 65, without any change in the eligibility norms. It may be reiterated that the reimbursement will be only for renewal of existing policies or fresh policies taken on after 01.04.2010

HRM.187/2009-10 dt.08.03.2010

Categorisation of Branches as on 31.03.2010

Categorisation of branches including Specialised branches has been reviewed as on 31.03.2010 as per norms approved by the Board. The details of the branches falling under different Categories/ Scales accordingly are furnished in Annexure I and Specialised branches in Annexure II of this circular.

Category Of Branch

Business Criteria (Average Aggregate Deposits

And Advances During The Last Two Years)

Incumbency Scale

a) Small Below Rs.5 crore I

b) Medium Rs.5 crore and above but below Rs.25 crore

II

c) Large Rs.25 crore and above but below Rs.75 crore

III

d) Very Large Rs.75 crore and above but below Rs.250 crore

IV

e) Exceptionally Large

Rs.250 crore and above V

HRM.204/2009-10 dt.31.03.2009

GENERAL

Recovery of commission on Letters of Comfort

According to our Loan Policy for 2009-10, Letter of Comfort is equal to issue of money guarantee as per the guidelines of RBI. Letter of Comfort is equivalent to Foreign Guarantees and commission applicable to foreign guarantees has to be charged for issuing of Letter of Comfort.

The commission chargeable on issue of letter of comfort shall be 0.20% per month with a minimum of 0.35% (subject to minimum of

Rs.575/- per guarantee) for the specified period of liability in months or part thereof and in case of early redemption of the guarantee, commission may be refunded.

(GENL. 01/2009-10 dt. 15.04.2009)

Joint custody of Security Stationery- Numbered items stocks

The system and procedure for joint custody of security/numbered items, custody of ATM/Debit Cards and Pin Mailers and guidelines for verification of custody of security/numbered stationery items are reiterated in this circular.

(GENL.02/2009-10 dt. 20.04.2009)

RTGS Transactions According to Reserve Bank of India all the

Banks to have maker-checker concept at Data entry of RTGS transactions and these transactions are to be signed and encrypted digitally.

Our CBS interface for RTGS and NEFT is enabled with maker-checker concept and all the transactions routed through our RTGS and NEFT payment gateways are digitally signed and encrypted.

As no digital signature will be used for RTGS transactions in branches, all the staff shall be more cautious while originating and authorising the messages, as once the message is authorised the same will be settled and transmitted to the destination bank’s branch.

(GENL. 03/2009-10 dt. 22.04.2009)

RTGS / NEFT Timings - Authorisation in Time Timings for RTGS and NEFT are as

follows: Days RTGS NEFT

Customer Transactions

Inter-Bank Transactions

Customer Transactions

Monday – Friday

9.00 AM to

4.30 PM

9.00 AM to

6.00 PM

9.00 AM, 11.00 AM, 12.00 Noon, 1.00 PM, 3.00 PM, 5.00 PM

Saturday 9.00 AM to 12.30 PM

9.00 AM to

2.30 PM

9.00 AM, 11.00 AM, 12.00 Noon,

The RTGS messages authorized by the branches should reach RBI on time, for settlement. Hence branches are informed to authorize the messages at least 15 minutes before the cut of time


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specified by RBI to avoid cancellation of messages. After authorizing the RTGS messages, branches should ensure that the Status of the message changes to SETTLED, which indicates that the message has gone to the receiving Bank. If the status of the message is not changing to SETTLED even after a long time, the branches may contact RTGS Cell to know the reason.

Branches should immediately reverse the amounts pending in their CGL/BGL of RTGS payable and NEFT. For the benefit of the branches FAQs are given in the circular.

(GENL. 04/2009-10 dt. 28.04.2009)

Usage of Inter-bank window for customer transactions – RTGS

RBI has informed that many RTGS participants are routing RTGS Customer payments in the inter-bank session i.e after the customer window is closed.(i.e after 4.30 PM during Monday- Friday and after 12.30 PM during Saturday), probably to accommodate late transactions of high net worth customers. This is against the procedural guidelines of RTGS.

All our branches should not route any type of customer transactions in inter-bank mode and observe the time norms for both customer and inter-bank transactions in toto. There should not be any deviation in this regard.

(GENL.5/2009-10 dt. 12.05.2009 )

Launching of IndMobile – Enabling Funds Transfer facility through Mobile Phone

Presently our mobile banking customers have been offered with SMS based enquiry services like Balance enquiry, Last 3 transaction enquiry, issued cheque status enquiry and Deposited cheque status enquiry, etc.

Menu Based Mobile Banking with Enquiry and Funds Transfer Facility:

With advancement in technology, Bank has introduced a new module ‘IndMobile’ for our mobile banking customers. This facility works on secured, menu based and user friendly interface provided through J2ME technology. Customers need not memorise the text based OP codes (operation codes) for different services. Some of the salient features and guidelines are given in the Circular.

An IndMobile customer does not necessarily need to have Internet Banking a/c.

‘IndMobile’ facility of Mobile Banking is presently extended to the a/cs of Individuals / Sole Proprietary concerns, and Joint accounts with E or S facility only.

The transactions effected through mobile banking will appear in “Other_Branch_GL_VVR_For_Home_Branch_cfpd0613.txt.gz” with teller–id 9902001 of branch code 09999. From the above report. branches can verify the transactions done through ‘IndMobile’ in case of any clarification by the customer.

List of compatible Mobile handsets, detailed procedure for downloading, installation of Mobile application software and its features are placed in internet banking site, intranet and helpdesk for information of customers/Branches /administrative offices.

Branches shall use the RM Module for obtaining the M-Pin from Project Office and deliver to the customer. All staff members may be advised to avail all self-service channels so that they may be in a position to market these products and enlighten the customers wherever required.

(GENL. 06 /2009-10 dt. 22.05.2009)

Services Charges on ATM Services The revised charges for ATM Debit Card related services w.e.f 06.07.2009 are as follows:

Nature of Services Existing charges Rs.

Revised Service charges (inclusive of ST) plus applicable postages Rs.

ATM Debit Card – Duplicate Pin Mailer Generation charges

Nil 15/-

Issue of Duplicate ATM Debit Card

100/- 150/-

(GENL. 08 /2009-10 dt. 04.06.2009)

Withdrawal of Express Way Clearing (EWC) facility at Service Branches

With the introduction of Core to Core (C2C) facility in CBS, the concept of Express Way Clearing has lost its utility now. C2C has enhanced the customer service, while reducing the expenditure on postages for the bank.

Henceforth, branches are advised to send cheques drawn on upcountry centres where we have Service Branch directly for collection.

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GENL.10/2009-10 dt. 19 06 2009

Settlement of Failed ATM Transactions – Payment of Compensation Reserve Bank of India has made it mandatory for banks to reimburse the customers the amount wrongfully debited on account of failed ATM transactions within a maximum period of 12 working days from the date of receipt of the customer complaint. For any failure to re-credit the customer’s account within 12 working days from the date of receipt of the complaint, the bank shall pay compensation of Rs.100/- per day, to the aggrieved customer. This compensation shall be credited to the customer’s account automatically without any claim from the customer on the same day when the bank affords the credit for the failed ATM transaction. The compensation will be paid by the ATM Service Centre only. The issuer bank is entitled to claim such compensation paid to the customer from the acquirer bank, if the delay is attributed to the latter. By the same logic, the ATM network operators shall compensate the banks for any delay on their part. Customer Complaint should be entered in the ATM webpage by the branches as per the procedure given in the circular. The ATM Service Centre will register ATM complaints made through web page for failed transactions reported by our customers as per the existing procedure. Our customers can lodge their complaints at any of our branches, not necessarily at the Home Branch. The delay in settlement of claims attracts penalty and accountability will be fixed on the official responsible for the delay in registering the customer complaint. Hence the branches should follow the instructions meticulously as given in this circular.

GENL.13/2009-10 dt.24.07.2009 RBI directions regarding Free Withdrawal of Cash from Other Bank ATMs.

RBI gave their consent for the following restrictions regarding Free Withdrawal of Cash from Other Bank ATMs with effect from 15.10.2009

A ceiling of Rs.10000/- per transaction on cash withdrawals by customer of other banks.

Only 5 transactions per month on Cash Withdrawals by customers of Other Banks.

The said facility of free cash withdrawals up to 5 transactions on Other Bank ATMs is extended to only Savings Bank account holders.

Cash withdrawals from ATMs of other Banks by our customers more than 5 times from Savings Bank account in a calendar month will attract a charge of Rs.20/- per withdrawal.

In respect of our Current account customers, all withdrawals through other bank ATMs will be charged at Rs.20/- per withdrawal.

GENL.25/2009-10 dt.15.10.2009

Waiver of charges on Intra city Transactions

On a consideration of the requests from the customers, it has been decided to waive charges on all Intracity transactions with immediate effect.

GENL.29/2009-10 dt.10.11.2009 Cash Handling Charges at Branches – Revised (Enhanced) Rates .w.e.f 15th December 2009.

Enhanced Cash handling charges for bulk receipts are as under.

Amount of charges on cash remittance Type of account Existing Revised / Enhanced

(w.e.f 15th December 2009)

Current account / OD / OCC account

For First 10 sections in a day in any denomination – Free

From 11th section onwards in a day in any denomination – Rs.10/- per section (inclusive Service Tax).

For First 10 sections in a day in any denomination – Free From 11th section onwards in a day in any denomination – Rs.25/- per section (inclusive of service tax) without any ceiling.

The above revised / enhanced cash handling charges are inclusive of service tax and will be effective from 15th December 2009.

These charges should be uniformly followed in respect of all customers falling in the above category irrespective of any previous arrangements with the bank. No exemption is permitted from levy of charges. However, under extraordinary circumstances when exception is warranted, Circle Head should take up with HO / Banking Operations Department with cost benefit analysis.

Branches should verify the batch file created, at the end of the day, based on the receipt of the number of notes pertaining to the customer’s account and then transmit the batch for posting in


41

the respective account. Branches should ensure daily (before the day end) that the cash handling charges are debited to the respective accounts without giving any scope for leakage of income.

GENL.30/2009-10 dt.14.11.2009

Payment Of Old Demand Drafts Issued Upto 31.03.2008.

All Demand Drafts issued with effect from 01.04.98 and pending unpaid upto 31.03.08 have been transferred to “Unclaimed Demand Drafts Account” to be maintained at HO: Reconciliation Department. Accordingly, with effect from 30.11.2009 onwards, the CBS system will not allow (i) payment, (ii) revalidation, (iii) issuing duplicate and (iv) cancellation of DDs issued upto 31.03.2008 (Both core DDs as well as non-core DDs).

Branches should submit the claims to the respective Circle Offices for making payment of such DDs. Circle Offices will make such payments under C2C to the branches after scrutiny and verification. Circle Offices in turn will claim reimbursement from HO: Reconciliation Department.

The procedure to be followed by the branches is given in this circular.

GENL.35/2009-10 dt.03.12.2009

Supply of Statement of Loan Account to Borrowers

According to RBI guidelines branches to:

1. provide term loan statements to customers on annual basis.

2. provide statement of accounts to all categories of borrowers including those who have availed of Home Loans, Vehicle loans, Educational loans and other Retail loans.

3. clearly indicate the balance outstanding at the commencement of the year, full particulars of Principal/ Interest repaid on monthly/ quarterly / half yearly/ yearly basis and the balance outstanding at the end of the year.

4. indicate the rate of interest and also the changes made, if any, in the rate of interest and dates from which such changes if any, were made effective during the year.

HO: Technology Management Department will arrange through their Project Office to push

statement of all categories of borrowal accounts to Branches.

Branches shall download the statements pushed by Project Office and take steps for providing with statements of account on annual basis as detailed above and ensure compliance of the above directions.

GENL.36/2009-10 dt.08.12.2009

Resolving complaints forwarded by RBI & the Banking Ombudsman Office.

RBI has informed that all first resort complaints (the complaints which should have been handled at Bank’s level itself) received by Customer Service Department of RBI and the Banking Ombudsman Offices are forwarded to the concerned banks. RBI observed a considerable time lag in resolving / redressing of such complaints by the Banks. With a view to streamline the entire process and to compress the response time for attending to such complaints, RBI has laid down the procedure which is furnished in the circular. After the dispatch of such first resort complaints to the Banks, the Officer in Customer Service Department at RBI will contact the Nodal Officer of the Bank concerned, responsible for redressal action in the concerned region/ Circle over telephone/ by Email and after getting the requisite feedback, would direct the complainant to approach the designated officer of the Bank for settling the issue or providing necessary information within a specific time frame. With regard to all first resort complaints forwarded by the Banking Ombudsman Offices, the banks are expected to redress the grievance in the shortest possible time but in any case within thirty days.

GENL.41/2009-10 dt.21.12.2009

IB Connect – A 'Fast Communication' portal for our Bank

IB Connect is a new communication facility, made available in the CBS Helpdesk to enable the registered users (staff members) to communicate and also interact with each other using our bank’s computer network. This platform facilitates the process of participative and collective communication for resolution of common issues faced at branches, customer grievances etc. thus improving the efficiency and overall productivity.

This facility can be utilized for cost effective instant messaging of generic information between users and CBS branches/offices.

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Communication through IB Connect is authenticated as login is through username and password. The data communicated is stored in the central server.

Through IB Connect one can interact in real time, leave a message and also use the messenger option to send messages to one or more persons.

GENL.44/2009-10 dt.30.12.2009

Display of information for lodging of ATM related complaints

According to Reserve Bank of India the following information should be displayed prominently at the ATM locations.

1. Complaint regarding money not received but account got debited has to be lodged in writing giving details like Name of the Bank which owns the ATM, location of ATM, date & time of transaction, Account number and Amount -

a. Indian Bank customer - At the branch where the account is maintained OR at any nearby Indian Bank branch.

b. Other bank customer – At the Bank branch which has issued the ATM card

2. The amount will be re-credited to the account within 12 working days of receipt of the complaint. 3. The status of the complaint if not credited within 12 working days, can be ascertained from:

a. Indian Bank customer – At the branch where the account is maintained or from Indian Bank, ATM Service Centre at Chennai through contact numbers 044 – 28220297 / 28220305 / 28220310 or Email ID: [email protected]

b. Other bank customer – At the Bank branch which has issued the ATM card.

4. For any other difficulty the branch to which the ATM is attached can be contacted at the following numbers.

a. Branch Manager : (Mention direct phone No. of BM).

b. General : (Mention the mobile No. of ATM officer of the Branch).

GENL.45/2009-10 dt.30.12.2009

ATM - Customer Care and Complaints

Given below are some of the repeated errors for major number of customer complaints and

dissatisfaction, with regard to ATM and its products:

• Omission of user code changes from ‘0’ to ‘1’ in CBS menu immediately after the issue of card to the customer.

• Not informing the customer that only after he does a transaction first in ATM at least once, his card will be processed at POS centres.

• Complaints regarding ATM operations – Non-adherence of procedures in exhibiting important notices in ATM cabin as well as in Bank premises referred in Circulars No: Genl.45/09-10 dated 30.12.09, Genl.39/09-10 dated 11.12.09, Genl.27/09-10 dated.16.10.2009 and Genl.07/09-10 dt.02.06.2009.

• Suspect transactions – Account debited cash not received - non-acceptance of complaints by branches other than host and registering online complaint to ATMSC.

• Customer is not informed of the mandatory 12 days time required for reversal of amount if the transaction is done in other bank ATMs. Not highlighting the facility of immediate credit in the case of transaction in our ATMs, prompting to use our customers to use our ATMs predominantly.

• Non-receipt of Card and Pin Mailers - Non-submission of full data, application for minor accounts, Partnership accounts, sole trader accounts with name of the concern, request for dehotlisting of the card by e-mails, /IP messages, request for duplicate card through CBS menu, etc., are some of the reasons for delay in service to the customers.

• Not using the modification menu in the ATM website for requests for changes in ATM card data.

• Non-delivery of the cards to the customers and not informing them and keeping the cards undelivered for more than two months.

• Destoying of cards at the time of home branch account change and seeking new cards results in delay in customer service. The same card can be used after home branch change.


43

• Not taking up the disputed transactions immediately with ATM switch and settle the issue with ATM Service Centre.

• Not passing on the information to customers regarding ATM card facility extended to Minors under IB Smart Kid Account.

• Not attending all the requests on the same day and not registering complaints online to avoid delay in settlement of complaints.

• Not keeping the ATM in order 24 X 7 resulting declining of transactions due to errors such as not loading of journal paper, cash replenishment before ATM getting dry, etc.,

ATM officers at branches are requested to be conversant with all regulations and be well informed with all circulars issued by HO from time to time.

It should be our endeavour to keep up the ATM functioning 24 hours and provide all the facilities extended through ATM to the delight of our customers. In order to make ATM viable, card holders of other Banks are to be attracted and service rendered.

GENL.48/2009-10 dt.09.01.2010

Service Charges for Outstation Cheque Collection The service charges for outstation cheque collection are revised as under with immediate effect, according to RBI clarification:

1 Rs.1 to less than Rs.10,000 Rs.55 per instrument

2 Rs.10,000 to Rs.1,00,000 Rs.110 per instrument

3 Above Rs.1,00,000 Rs.164 per instrument

The above charges will be all inclusive. No additional charges such as courier charges, out of pocket expenses, service tax etc., should be levied from the customers.

All other terms and conditions as communicated vide our circular Genl.38 / 2008–09 dt.15.10.2008 regarding outstation cheque collection remain unchanged.

GENL.49/2009-10 dt.09.01.2010

Electronic Voucher Verification (EVR)

In order to ensure daily Voucher Verification at branches, HO: TMD has introduced an “in-house” developed software for the Electronic

Voucher Verification (E-VVR Version 1.2.1 on 18 12 2009). Branches have to log-in with the following URL http://10.100.7.199/cnet/vvr/ vvrlogin.aspx. Branches can refer to the user manual already made available in the e-vvr web page.

Some of the special advantages of e-vvr are as follows:

• Tampering of soft copies of the e-vvr is not possible

• Centralised Monitoring of the checking of e-vvr by branches on daily basis by Circle Offices is facilitated.

• Status of voucher verification can be monitored branch-wise and date wise.

• Status of voucher verification can be monitored officer-wise (including Special Assistant, if any in the branch).

It should be noted that e-vvr checking should be completed by the next day.

In this context it is to be noted that Cash Reports of SWOs /Tellers should be generated and printed on the same day, tallied with their physical cash balance and the report should be duly signed by respective SWOs/Tellers and checked by the designated cash officer without fail, before they leave the branch for the day. Cash related reports are front-end reports and so should be generated and saved by branches daily before EOD and print out should be taken without fail and filed serially for future reference.

GENL.50/2009-10 dt.19.01.2010

Enhancement of Limit for Funds Transfer through Mobile Banking (INDMobile)

The enhanced Mobile banking facility (INDMobile) has been introduced in our Bank using J2ME (Java 2Micro Edition) application which works on a secured, menu based and user friendly J2ME technology. It is compatible to all GPRS(General Packet Radio Service)/Java enabled mobile phones using both SMS & GPRS modes.

In tune with the above RBI directions, the funds transfer limit through Mobile Banking (INDMobile) is increased to Rs.50,000/- per day for both funds transfer and transactions involving purchases of goods and services.

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This funds transfer limit of Rs.50,000/- through Mobile Banking is independent of the per day funds transfer limit of Rs.50,000/- permitted under the Net Banking facility. All other extant guidelines remain unaltered.

GENL.51/2009-10 dt.23.01.2010

Acceptance of ‘Postal Identity Card’ as ‘Proof of Address’ for opening of accounts

The Department of Posts has launched a new scheme for issue of Postal Identity Card with latest technological means. This was introduced in Chennai City from 15.10.2008. The Postal Identity Card is issued to the public after due verification by the field officers of the Department. The cards are prepared in ultra silk finish touch containing the particulars of the holder, issued under the signature of Head Postmaster. The name and address of the holder is available in the main portion and in the back side, the details like Card number, date of issue, date of birth, telephone number of the holder (both landline & mobile number) and Blood group. The cards can be renewed after the validity of three years.

Branches shall accept the Postal Identity Card, as a document for address proof in addition to the list mentioned in our account opening form.

GENL.54/2009-10 dt.29.01.2010

Prevention of Money Laundering Amendment Rules, 2009 - Obligation of Banks/ Financial Institutions

The Amendment to the Prevention of Money Laundering Rules 2005, as notified by the Government of India

i. to maintain proper record of all transactions involving receipts by non-profit organizations of value more than rupees ten lakh or its equivalent in foreign currency and to forward a report to FIU-IND of all such transactions in the prescribed format every month by the 15th of the succeeding month.

ii. to verify the customers Identity and Address in case of transactions carried out by a non-account based customer, that is a walk- in customer, where the amount of transaction is equal to or exceeds rupees fifty thousand, whether conducted as a single transaction or several transactions that appear to be connected. Further, if a bank has reason to believe that customer is intentionally structuring a

transaction into series of transactions below the threshold of Rs 50,000/- the bank should verify identity and address of the customer and also consider filing a Suspicious Transaction Report (STR) to FIU-IND.

The Amendment explains a ‘Non profit Organization’ as any entity or organization that is registered as a Trust or a Society under the Societies Registration Act, 1860 (21 of 1860) or any similar State legislation or a company registered under section 25 of the Companies Act, 1956 (1 of 1956).

In our Bank, generation of reports as mentioned in (i) is centrally done by the Project Office and so the Branches need not send any CTR to HO: AML Cell in this regard.

The Branches should be very discreet in handling transactions as mentioned in (ii) above by due verification of customer identity and address and they should send STRs to HO: AML Cell through their Circle Offices, in cases considered by them as suspicious within 7 days of the transaction.

GENL.55/2009-10 dt.03.02.2010.

Updation of Customer Records- RBI Observation In Core Banking Solutions environment

updating data is easy and delays are unwarranted. All branches are therefore advised to ensure that current information is duly collected and customer records are updated immediately on receipt of intimation of change of address, Mobile Number, e-mail id and other details by the customers in order to avoid customer complaints, so that quality customer service is rendered.

GENL.73/2009-10 dt.15.03.2010

Adherence of KYC Norms - opening of Accounts of Properietary Concerns.

It has been decided by Reserve Bank of India to lay down criteria for the customer identification procedure for account opening by proprietary concerns. Accordingly, apart from following the extant guidelines on customer identification as applicable to the proprietor, branches should call for and verify the following documents before opening of accounts in the name of a proprietary concern.

i) Proof of the name, address and activity of the concern like,

Registration Certificate (in the case of a registered concern)


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Certificate / licence issued by Municipal Authorities under Shop & Establishment Act.

Sales / Income tax returns.

CST/VAT certificate.

Certificate / registration document issued by Sales Tax / service Tax / Professional Tax authorities.

Licence issued by the Registering authority like Certificate of Practice by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.

ii) Any two the above documents, which are in the name of the proprietary concern, would be sufficient.

These guidelines will apply to all new customers with immediate effect. For the existing customers, the above formalities should be completed before 31.12.2010.

GENL.75/2009-10 dt.31.03.2010

MD/ED

Joining of Shri V. Rama Gopal as Executive Director of our Bank

In terms of the Government of India, Ministry of Finance Notification, Sri V.Rama Gopal has been appointed as a whole-time Director (designated as Executive Director) of our Bank and assumed charge on 07.12.2009 as Executive Director.

MD/ED.08/2009-10 dt.07.12.2009

Launching of VISA Business Credit Card for SME and Corporate Customers

A brief overview of the salient features of IB Business Card includes the following:

The cards will be issued in association with VISA providing a highly sophisticated state-of-art global payment system round the clock.

Cards will carry the name of the Business undertaking besides its nominated executives / employees and up-to five cards can be issued per Business entity.

Consolidated monthly Billing statements facilitates effective cost control and better management of finances for the company and minimize paperwork.

No joining or annual fees and competitively priced.

Convenience of revolving credit..

Transparent Reward Points Administration and Insurance Benefits and cover to Card Members – absolutely free.

The launching of Business Cards in our Bank offers significant business opportunities for our Bank to improve its credit card base. Our Bank has a good number of SMEs and Corporates having credit facilities with our Bank who could be the target group for cross selling the Business Cards.

Business Cards apart from improving the quality of our assets, and, in view of the relatively more assured prospects of healthy conduct of the account, could also offer significant business opportunities for improving the non interest income. Higher interchange at 1.85% of transaction levels plus finance charges on the revolving credit could result in substantial increase in income levels of the Bank.

MD/ED.14/2009-10 dt.01.03.2010

ADMIN

Policy on Business Continuity Planning 2009-10 The Policy on Business Continuity Planning

was reviewed and adopted for 2009-10 by the Risk Management Committee of the Board on 26.03.2009. A copy of the revised and updated policy is enclosed to this circular for meticulous implementation.

(ADMN.01/2009-10 dt. 06.04.2009)

Whistle Blower Policy 2009-10 Whistle Blower Policy was reviewed and

approved for 2009 -10 by the Risk Management Committee of the Board on 26.03.2009.

All the staff members are advised to go through the Policy document meticulously for its effective implementation.

(ADMIN.02/2009-10 dt. 06.04.2009)

ATM Security All the Branches, having ATMs under their

control are instructed to ensure the following:

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Proper maintenance of access door to avert free entry. This must be ensured on day to day basis.

Stand alone Burglar Alarm System must be provided to ATM by connecting the cash loading door and server area with a magnetic sensor.

A CCTV must be installed in all the ATMS irrespective of whether it is Onsite or Offsite.

When the ATM is not functioning due to any technical problem, a board must be displayed indicating the status of the ATM.

It must be ensured that the glass doors are transparent and should not obstruct the view from outside.

The names and contact details of officials responsible for the ATM should be displayed prominently in the ATM room

Surprise checks should be carried out by the branch staff during day and night to monitor the working of ATM.

Security Officers of the Circle should make surprise visit to the ATM sites to check the serviceability of the security systems installed for ATM cabins.

The above guidelines should be followed in all the ATMs so that the safety and security of the ATMs can be ensured.

(ADMIN-10/2009-10 dt. 25 04 2009)

Banker’s Indemnity Policy for the Financial Year 2009-10

The Banker’s Indemnity Policy for the financial year 2009-10 commencing from 01-04-2009 has been renewed with The New India Assurance Company Limited and the policy number is 710800/46/09/62/00000003.

This policy covers losses for the period 01.04.2009 to 31.03.2010 and also for losses occurred on or after 01.04.2008 and discovered subsequently. The policy covers losses at our Banking Service Centres also with effect from 06.05.2008 as detailed in the circular. However losses upto 31-03-2008 (i.e. date of actual loss is prior to 01.04.2008 but discovered during the current year) are not eligible for any cover. Basic Sum Insured:

In respect of the following clauses viz.(A) to (H) of the circular the basic cover available is Rs.10.00 crore (Rupees Ten crore only), for the Bank as a whole. Additional Sum Insured:

Additional cover available in respect of Clause A (loss on premises) is Rs.25.00 crore and in respect of Clause B (loss in-transit) is Rs.10.00 crore.

Detailed information is given in the circular regarding the Risks covered, the important features of the policy, Exceptions, Claim procedures to be followed/ Maintenance of records, clarifications/ special instructions etc.,

A separate Insurance Policy to cover properties of our Bank against Burglary risk is taken by Head Office. The current policy number is 010503/46/08/04 /00000198, with United India Insurance Company Ltd., 64, Armenian Street Branch, Chennai–1, valid upto 15.02.2010. Similarly there is a separate insurance Policy to cover Standard Fire and Special Perils plus Earthquake and Terrorism risks for owned premises of the bank in various locations taken by HO: Premises, Expenditure & Estate Department. The current policy number is 010503/11/09/11/ 00000006 and is valid upto 31.03.2010.

(ADMIN.14 /2009-10 dt. 11 05 2009)

Information Systems (I S) Audit Policy - 2009-10 The Information Systems Audit Policy-

2009-10 approved by the Board on 19 05 2009 will be valid up to 31 03 2010.

A copy of the policy document alongwith Internal Guidelines indicating the authorities responsible to conduct the audit, review of the reports, issuance of closure certificate etc as is placed in the intranet of our Bank.

(ADMIN. 16/2009-10 dt. 25-05-2009)

Inspection and Audit Policy - 2009-10 The revised Inspection and Audit Policy

approved by the Board on 19 05 2009 comes into force with immediate effect and will be valid up to 31 03 2010.

The policy document alongwith “Internal Guidelines” and the flow chart mentioning the periodicity follow up and closure of various inspection reports, is placed in the intranet.

(ADMIN. 17/2009-10 dt. 25-05-2009)


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Security Of Cash In Transit Branches should take caution and ensure security of the cash-in-transit. Remittances from Branch to Currency Chest and vice-a versa are exposed to threat of being waylaid and robbed unless security guidelines are followed.

The guidelines to be observed during cash remittances are reiterated in the circular for compliance.

(ADMIN.24/2009-10 dt. 17 06 2009)

Comprehensive Centralised Insurance Policy for 'Safe, Furniture & Machinery (SFM), Books Forms Stationery & Electronic Equipments' of Bank's Assets of all Branches / Offices all over India

In order to have uniformity, reduce the work load in Branches / Offices and to have better control, Head Office has taken Centralised Comprehensive Insurance Policy for ‘SFM, Books Forms Stationery & Electronic Equipments’ of Bank’s assets all over India at Head Office.

The Centralised Comprehensive Insurance Policy has been taken with M/s. The New India Assurance Company Ltd., with effect from 01.07.2009.

The address of the Insurance company and the Policy numbers are given in the Circular. Coverage

The Policy covers all the existing ‘SFM, Book Forms Stationery and Electronic Equipments’ (including Computer related items and all ATMs) and accessories as well as all purchases made after 01.04.09. Hence all the Branches/ Offices must ensure that all purchases/deletions made by them every quarter is duly reported to HO: TMD (from time to time) to reach not later than 5th July, Oct., Jan., Apr.

As the Centralised Comprehensive Policy comes in to effect from 01.07.09, Branches/Offices need not renew their existing insurance policies which are due for renewal.

The existing policies may be surrendered for the residual/unexpired period of insurance by claiming the prorata premium thereunder from the respective insurance companies (including M/s. New India Assurance Co Ltd) with immediate effect.

Risks covered

The risk covered are as per Standard Fire & Special Perils Policy for SFM & Books Forms Stationery and Electronic Equipment Policy for Electronic items. Details are given in Annexure 1 of the Circular.

(ADMIN. 28/2009-10 dt. 26.06.2009)

Deduction and Remittance of Tax Deducted at Source (TDS) - Amendments made in the Finance Act 2009 to the TDS Provisions under Section 194A to 195 of the Income Tax Act, 1961. 1. Abolition of Surcharge & Educational Cess for the purpose of deduction of TDS: No Surcharge and Educational Cess need to be added to TDS amount with effect from 01.04.2009. It is enough only TDS at the prescribed rates needs to be deducted as per the provisions of Section 194A to 195 and remitted into Government Account. 2. Amendments in rate of TDS on Contract Payments u/s 194 C of the Income Tax Act. With effect from 01.10.2009 the TDS rate on contract payments has been revised as under:

Payment to Contractors and Sub-contractors u/s 194C

Existing TDS Rate (From 01.04.2009

to 30.09.2009)

Revised TDS Rate with

effect from 01.10.2009.

To Individual /HUF Contractors on advertisement contracts 1% 1%

To Individual / HUF Contractors on other contracts 2% 1%

To Individual / HUF Sub-contractors on advertisement contracts

1% 1%

To Individual / HUF Sub-contractor on other contracts 1% 1%

To Contractors other than Individuals & HUF on advertisement contracts

1% 2%

To Contractors other than Individuals & HUF on other contracts

2% 2%

To Sub-contractors other than Individuals / HUF on advertisement contracts

1% 2%

To Sub-contractors other than Individuals / HUF on other contracts

1% 2%

Further, TDS need not be deducted on payments made to Contractor for plying, hiring or leasing goods carriages provided that the contractor provides his Permanent Account Number (PAN) to the Deductor. 3. Amendments in rate of TDS on Rent Payments u/s 194 I of the Income Tax Act.

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With effect from 01.10.2009 the TDS rate on contract payments has been revised as under:

Payment of Rent u/s 194 I

Existing TDS Rate (From 01.04.2009 to 30.09.2009)

Revised TDS Rate with effect from 01.10.2009

On Plant or Equipment or Machinery 10% 2%

On Building / Land and Furniture to Individual / HUF 15% 10%

On Building / Land and Furniture to any other person such as Firm / Company etc.

20% 10%

4. Deduction to be made at higher TDS rate, if valid PAN is not furnished with effect from 01.04.2010:

A new Section 206AA has been introduced in the Income Tax Act, to make PAN mandatory for deduction of TDS which states that if the valid PAN is not furnished by the deductees to the Deductor then TDS shall be deducted at a higher of the following rates with effect from 01.04.2010.

i. At the rate specified in the relevant provisions of the Act.

ii. At the rate or rates in force iii. At the rate of 20%

Hitherto TDS exemption on interest paid on deposits u/s 194A based on Form 15G / 15H was given without insisting for PAN of the customers. As per the amendments made to Section 206A, with effect from 01.04.2010 TDS exemption u/s 194A, based on Form 15G / 15H submitted by the customers, can be allowed only if the customer provides his / her PAN to the Bank. Otherwise, TDS has to be deducted at a higher of 20%, as against the stipulated TDS rates.

The above requirement of PAN under Section 206A / 206AA needs to be informed to all the Customers, Contractors, Landlords, Professionals etc., and they are to be advised to submit their PAN in order to avoid deduction of TDS at a higher rate of 20% from 01.04.2010.

However, during the current year 2009-10, branches can accept declaration in Form 15G from our Deposit Customers (not being a Company & Senior Citizen), if the total Interest paid on deposits to them per branch during the current financial year does not exceed the following amount, being the minimum income level not subject to tax.

a. Rs.1,60,000/- in the case of individual customers not being Senior Citizen and

Women b. Rs.1,90,000/- in the case of Women customer

not being Senior Citizen In other words, if the total interest paid exceeds the above amounts, TDS need to be deducted at the stipulated rates on the total interest paid during the year. With regard to submission of Declaration in Form 15H by Senior Citizens, no change has been made on the applicability of TDS, except that the minimum income subject to tax of Senior Citizens has been increased from Rs.2.25 lakhs to Rs.2.40 lakhs. Other earlier instructions continue to apply except the above amendments.

ADMIN.36/2009-10 dt. 17.08.2009

Whistle Blower Policy

IMAGE has sent a Power Point presentation through an IP message and intranet which highlights illustrative examples or improper practices; sensitive areas and essential controls in CBS.

Branch Managers are advised to discuss the item in their branch meetings and make all the staff members aware of their responsibilities under the policy.

Circle Heads may make use of the power point presentation in their Branch Managers meeting or other staff meetings to create awareness.

ADMIN.44/2009-10 dt.24.09.2009

Capturing of Operational Loss Data Though the system of collecting the loss

data from the functional departments on a consolidated basis is in vogue branches/ circles/ HO functional Departments should submit all operational losses in their area of operations through HO: MIS online. This data collection process will continue parallely for a period of one year along with the existing mechanism of reporting the loss data to functional departments.

HO: MIS has ported a template in the BBMIS site – ISG ID 507- with the operational guidelines to fill up the template. A ready reckoner for classifying the operational loss data is annexed to this circular.

ADMIN.45/2009-10 dt. 25.09.2009

Discontinuance of re-issue of banknotes of Rs.500 denomination of Mahatma Gandhi Series 2000


49

According to the instructions of RBI all banks should stop re-issue of banknotes of the denominational value of Rs.500/- in MG series 2000 to the customer / public. Such notes tendered over the counters may be accepted for exchange at the branches and be sorted immediately and deposited in the currency chest using the Linkage Scheme or forward / tender (with prior intimation) to the nearest Issue office of Reserve Bank of India. Any stock of such notes held by Currency chest / non - Currency chest branches in their balance be similarly sent to Reserve Bank of India (after due sorting) using linkage scheme / directly.

Meanwhile, the banknotes of Rs.500/- in MG series 2000 shall continue to be legal tender and, therefore, acceptable for all transactions and no member of the public be denied exchange facility.

ADMIN.49/2009-10 dt.09.11.2009

Deduction and Remittance of Tax Deducted at Source (TDS) – Amendments made in the Finance Act (No.2) 2009 to the TDS Provisions under Section 194Aand 195 of the Incometax Act, 1961

The following amendments have been made to Section 194A & 195 of the Incometax Act, 1961, with regard to the Rate of TDS. Amendments made to Section 194 A & 195 with regard to Rate of TDS to be applied on Interest Paid on Deposits. As per the Part II of the First Schedule to Finance Act (No 2), 2009, the TDS Rates to be applied on Interest Paid on Deposits under Section 194 A & 195 for the Financial Year 2009-10 has been amended as follows:

Type of Depositor TDS rates for the

previous Financial Year 2008-09

Revised TDS Rates to be applied for the

Financial Year 2009-10

Sec. 194A Resident - Individual / HUF /Firms, Resident Foreign Currency (RFC) Deposits etc. (All depositors other than Companies)

10% 10%

Domestic Companies 20% 10% Sec. 195 Foreign Companies having Permanent Establishment in India keeping the deposit in Foreign currency

20%

“NIL” in case of FCNR (B) deposits

20%


Foreign Companies keeping the deposit in Indian Rupees in India

40% 40%

NRO Deposits kept by Individuals

The rates prescribed in S.No.1 to 4 in Circular No.101/2008-09 dated 19.03.2009 has been revised uniformly as under: For S.No.1 & 2 : No Change For S.No.3 : @ 20.60% For S.No.4 : @ 30.90%

Type of Depositor TDS rates for the

previous Financial Year 2008-09

Revised TDS Rates to be applied for the

Financial Year 2009-10

To apply the TDS rates prescribed in the “Annexure” to the Circular No. 101/2008- 09 dated 19.03.2009 for those countries where Double Taxation Avoidance Agreement (DTAA) Provisions apply (or) 20% whichever is lower, on obtention of a Certificate from the Company stating that it has no permanent establishment (Branch) in India. For other countries not covered by DTAA, TDS to be deducted at 20%.

Foreign Companies operating outside India keeping the deposit in Foreign currency in India


Further, Surcharge and Educational Cess need not be deducted with effect from 01.04.2009 in respect of Resident Deposits & Domestic Company deposits. In the case of Foreign Company the following rates of Surcharge & Education Cess are to be applied:

1. If the total interest paid to a foreign company is upto Rs.1.00 Crore during the financial year then only Education & Higher Education Cess at the rate of 3% on TDS amounts to be deducted.

2. If the total interest paid to a foreign company during the financial year exceeds Rs.1.00 Crore then, surcharge at the rate of 2.5% on TDS amount and Education & Higher Education cess at rate of 3% on TDS plus Surcharge amount is also to be deducted.

ADMIN.59/2009-10 dt.30.12.2009

Tax Deducted at Source (TDS) – Quoting of PAN made mandatory – Deduction of TDS at a higher rate of 20%, if the PAN is not provided by the customers from 01.04.2010.

The gist of the provisions of Section 206AA, which comes into force from 01.04.2010, is reiterated below:

1 Quoting of Permanent Account Number (PAN) has been made mandatory on all transactions attracting TDS including the declaration in “Form 15G / Form 15H” submitted by the customers for availing exemption from the purview of TDS u/s 194A on interest paid on deposits.

2 If “PAN” is not provided / quoted by the customers / clients to the Bank, then TDS at a higher rate of 20% shall be deducted by us from 01.04.2010.

3 The law is applicable to all Resident & Non-resident payments / remittances liable to TDS for existing and new customers.

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In order to comply with the above provisions which will come into force from 01.04.2010, branches / offices are advised to:

1. Inform all the Customers /Senior Citizens / Professionals / NRIs etc. by way of letters / mobile alerts /e-mail etc. (as per specimen letter / Alert Message enclosed) to furnish their PAN alongwith with a copy of PAN Card / PAN Allotment letter, by quoting the above provisions of the Section 206AA.

2. Place the above information in the Notice Board to keep the customers apprised of the above revised guidelines.

ADMN.61/2009-10 dt.30 01 2010

Document for credit of Tax Deducted at Source (TDS) in our Permanent Account Number (PAN) with National Security Depository Ltd (NSDL)

Branches are advised to ensure the following immediately.

1. In respect of income earned such as commission received from Insurance /telecom company, ECGC, processing charges, evaluation fees other fees, rent, etc the total amount (including TDS) should be accounted as income, TDS certificate should be received and properly claimed from HO:Accounts Department. If TDS Certificate is not received and not accounted as part of total income for past transactions, branch / office has to take up with the deductor for receiving the TDS certificate and claim reimbursement from HO: Accounts Dept.

2. To ensure that the deductor is filing corrected e-TDS return, wherever they have filed e-TDS return with incorrect data.

3. To verify the e-TDS filed by our branch / office themselves, to ensure that customer’s PAN is correctly furnished in the e-TDS return. In case of any discrepancy, to file revised e-TDS return by providing the correct PAN number of our customer / beneficiary to whom the payment was made. Further, branches should take care of the

following:

1. Wherever, TDS is deducted on the income received, Branches to ensure that the gross income (including TDS) has to be accounted on the same day of transaction (by debiting TDS portion to the debit of SR II Government transactions). Before accounting for TDS,

branches have to ensure that our Bank’s PAN is correctly mentioned in the TDS certificate, and, if not, it should be taken up with the deductor concerned for inclusion/ correction as the case may be.

2. In respect of cases where the TDS has been deducted from our bank’s income by the deductor, branches have to verify with the deductor as to whether they have filed their e-TDS return correctly furnishing our PAN (AAACI1607G)

3. Branches shall utilise the facility “tax credit “(Form 26AS) provided at NSDL web site (www.tin-nsdl.com) to verify whether tax deducted by the deductor is credited to our Bank’s tax credit account by entering the user id : AAACI1607 and password IND 190769.

4. In respect of TDS deducted by branches, while filing e-TDS returns, branch/offices should ensure that correct PAN of the customer is furnished in the related column concerned.

ADMIN.69/2009-10 dt.20.03.2010

Discontinuance Of Printing Circulars From 1st April 2010

Hitherto printed copies of Circulars issued by various Departments were sent to our Branches/Offices.

As our Bank has achieved 100% CBS, the existing practice of printing and sending hard copy of circulars to all our branches is discontinued from 1st April 2010.

HO:TMD will port the circulars in the respective `Main’ heads in Intranet as and when the circulars are issued by various Head Office Departments. All staff members are advised to use Intranet to go through the circulars issued so as to have upto date knowledge on the developments/guidelines etc.

ADMIN.71/2009-10 dt.26.03.2010

recollect April 2009 to March 2010 - aiiboa 2009 TO MARCH 2010 Cir No. Date Subject DEP. 01 08.04.09...

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