Series TEN Day Two

Q1 As Per recent credit policy of the bank, the benchmark for CD ratio has been fixed as 60%.

Q2. The following national goals (Computed against ANBC or credit equivalent of Off Balance Sheet Exposure whichever is higher) has been fixed to achieve by the bank

Priority Sector Total Agriculture Weaker Sections Women beneficiaries DRI Advances

40% 18% 10% 5% 1% of total advances as of previous year

Q3. As per recent credit policy of the bank, In case of AAA & AA rated borrowers, CM and above can exercise 125% of their loaning powers. In A rated accounts, 110% of the normal loaning powers can be exercised. No person other than MC is empowered to sanction loan in C and D rated accounts

Q4. In the recent credit policy Power- state electricity boards and Telecom Industry has been classified as Unfavorable Industry. Further, exposure should not be taken in Rubber and Tea Industries. However, Adhoc/additional limit can be sanctioned on merits by the competent authority.

Q5. All real estate proposals above 500 lac including hotel industry, finance against Lease rentals shall require administrative clearance from ED/CMD. Administrative clearance from FGM in respect of proposals up to 500 lac is required. However in case of show-room/shop, no administrative clearance is required. Finance to retailers under SME for purchase of shop/show-room is also exempted from administrative clearance.

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Q6. Fresh advances to stand alone Sponge Iron Units, Cement Industry and Civil Aviation sector are to be considered at HO level only. No fresh advances should be made to Tea and Rubber industry.

Q7. Targets for indirect agriculture under priority sector are 25% of agriculture credit or 4.5% of ANBC/credit equivalent amount of off balance sheet exposure, which ever is higher.

Q8. 30% of the project cost Max Rs. 7500/- are the subsidy norms under SGSY scheme to individual borrower.

Q9. Repayment period in Krishak Saathi scheme is 5-7 years with 12 months moratorium.

Q10. Under credit guarantee fund scheme for MSE, lock in period is 18 months from the date of last disbursement or date of payment of guarantee fee, whichever is later.

Q11. In Farmers club, bank can sanction Rs.5000/- per year in 1st, 2nd and 3rd year and Rs. 10000/- per year in 4th and 5th year.

Q12. 40 % of DRI advances should go to SC/STs and 2/3rd of DRI advances should be in Rural/semi urban areas.

Q13. RFC- resident foreign currency accounts can be maintained in the form of savings, current and term deposits. However, only individuals can open savings account. There is no minimum balance to maintain in current and savings. However, for TERM deposits minimum amount is USD 5000/- or equivalent.

Q14. NRI returning to india must make request for conversion of his NRE account to RFC account within 3 months of his return to india else no interest will be paid if NRE deposit has not completed minimum period of one year. However, no penalty for such conversion is to be levied.

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Q15 RFC (domestic) account can be opened in the form of current account and No interest will be payable. This account can be opened in 5 currencies. (GBP, USD, EURO, CAD and AUD). Canadian dollar and Australian dollar have been added recently.

Q16. RFC (D) account can be opened in the form of current account subject to maintenance of minimum balance of USD 1000. However, there is no maximum ceiling. A term deposit can be opened for minimum period of one month

Q17. FCNR PREMIUM LINKED DEPOSIT SCHEME is the new scheme launched. Only term deposit account can be opened for one year tenor. The initial remittance should be made in any of the five currencies namely sterling, US dollars, Euro, Canadian and Australian dollars. Existing NRE maintaining their balances in NRE accounts shall have option to convert their balance into foreign currency. No premature payment is allowed. No automatic renewal request will be entertained.

Q18. Resident Indian foreign currency deposit scheme is launched by PNBIL and pnb hongkong under the liberalized remittance scheme of RBI. In this scheme foreign currency term deposit can be made in the currency of GBP, EURO and USD with minimum USD 500 (single remittance) and Max 200000/- USD.

Q19. NPA under the direct agriculture advances with balance outstanding up to Rs. 10 lacs (including KCC but excluding tractor advances) recoverable due shall be calculated with interest @ 6% simple irrespective of the age of NPA.

Q20. Cases where the OTS amount is to be paid beyond a period of three months from the date of conveying approval, and or payment in installments, future interest on the settlement amount shall be charged @ 6-10 % on simple basis on reducing balance from the date of conveying approval in writing to the borrower by the branch

Q21. The application/offers received at the branches proposing a specific OTS offer should be examined by the incumbent in charge, expeditiously and depending upon the merit of the case, the proposal for acceptance or rejection, as the case may be, shall be submitted to the controlling office maximum within 15 days.

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Q22. In NPA accounts banks cannot debit interest for credit of interest income to their P&L account unless recovery thereof takes place.( Banks to follow cash system of accounting instead of accrual system of accounting in the NPA accounts.)

Q23. An account is considered as weak if irregularity persists for more than 60 days or PMS rank is 6 and above. This is based on RBI guidelines on Special Mention Accounts.

Q24. Valuation of Property from valuer is required if limit is Rs. 10.00 lacs and above or Value of Property is Rs. 20.00 lacs and above.

Valuation will be done from 2 valuers if Value of property is Rs. 5.00 crore and above. (In case of Plant and Machinery to be charged is 50 crore and above, Valuation from minimum 2 valuers is required.) In borrowal accounts with aggregate exposure of Rs. 1.00 crore and above, valuation to be got done once in 3 years.

Q25. Simplified Turnover Method will continue to be applicable in WC limits up to Rs. 2.00 crore (5 crore for SME units) and MPBF system for units requiring WC exceeding above limit. Cash Budget System will be followed in Sugar, Tea, Service Sectors, Construction activity, Film production etc.

Q26. Credit Audit by Concurrent Auditor will be done in all Standard Accounts with exposure from 10.00 crore to 20.00 crore in AAA, AA, A BB & B rated accounts , but In weak (C& D rated ) accounts, this will be done in accounts with O/S between 3.00 to 8.00 crore. Standard Accounts with exposure exceeding 20.00 crore in AAA, AA, A BB & B rated accounts and weak (C& D rated) accounts exceeding Rs.8.00 cr card audit will be done by CARD AUDITOR

Q27. Maximum ceiling in Advances against Security of Shares and Debentures is Rs.10 lacs for non-DMAT account and Rs. 20 lacs for Demat.There will be a ceiling of Rs. 10 lakh and Rs. 20 lakh for financing individuals for acquiring shares under IPO/FPO and ESOP respectively.

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Q28. The rating becomes due for updating after expiry of 12 months from the month of confirmation of rating or 18 months from the date of balance sheet whichever is earlier.

The rating is treated as overdue after expiry of 15 months from the month of confirmation of rating or 21 months from the date of Balance sheet whichever is earlier.

Q29. A system of Annual Review of Term Loan has been introduced recently. Accordingly, all the Term Loans with sanctioned limit of Rs. 1 crore & above needs to be reviewed annually. This review is to be carried out during implementation as per the prescribed format. After implementation, TL be reviewed with regard to repayment, production, sales vis-a vis projections. However, this review will have no bearing on Asset Classification and Income recognition of the accounts.

Q30. Consortium Arrangement may preferably be considered in case of borrowers enjoying fund based limits of Rs. 50 crore and above from more than one bank. Multiple Banking Arrangement and syndication are other alternatives of group approach.

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