12th Dec.

2022

Dear Aspirants,

Happy to share “उत्कर्ष-2023” (Helping hand for your promotion) for the forthcoming
promotion exam. “उत्कर्ष-2023” is focused on various policies, schemes, and guidelines of
IRMD vertical along with other relevant guidelines pertaining to credit.

While preparing the “उत्कर्ष-2023”, utmost care has been taken. In case of any doubt or
clarification, please refer to the relevant guidelines of the Bank as this booklet is not a
substitute for the bank’s guidelines.

Suggestions for further improvement are always welcome.

With Best Wishes

***If not necessary, please do not print it out. For easy navigation, hyperlinks have been
provided on the index and on each page of the document.

उत्कर्ष -2023
@
0|P a g e
 INDEX
S. No. PARTICULAR Page No.

A. Analysis of Last Year’s Exam Held on 16.01.2022 3

B. Bank’s Financial Results 30.09.2022 5
C. Credit Management & Risk Policy 8
D. Valuation Policy 62
E. Stock Audit Policy 66
F. Basel Guidelines 68
G. IRMD Schemes & Guidelines
G1 Future Lease Rentals (FLRs) 73
G2 PNB Sampatti 75
G3 Open Term Loan 78
G4 Corporate Loan 79
G5 Short Term Loan 80
G6 Line of Credit 81
G7 Securitisation of Future Toll Collection/ Discounting of Annuity 83
Receivables in BOT Road Projects & HAM Projects
G8 Extending Financial Assistance for Enhancement and Augmentation 85
of Ethanol Production Capacity
G9 Advance against Bank Deposits 87
G10 Financing against LIPs/NSCs/KVPs/Bonds 88
G11 Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) 89
G12 Credit Guarantee Scheme for MFIs (CGSMFI) 92
G13 Financing Second hand Assets 94
G14 Financing Association of Persons 95
G15 Credit Information Reports of the Borrowers provided by CICs 96
G16 Takeover of Borrowal Accounts 98
G17 Green Renewal 100
G18 Infrastructure Financing
G18.1 Financing Renewable Sources of Energy 102
G18.2 Financing Wind Mills 103
G18.3 Financing Solar Power Projects 105
G18.4 Financing to Infrastructure Investment Trust (InvITs) 107

उत्कर्ष -2023
@
Back to Index 1 |P a g e
 G18.5 Financing to Educational Institutions 108
G18.6 Viability Gap Funding Scheme (VGF) 110
G19 Guidelines On Transfer of Loan Exposures 111
G20 Framework for Micro Finance Loan 113
H. IRMD – One Liner 116
I. Priority Sector Guidelines 137
J. Credit Guarantee/ Interest Subsidy Schemes for Education Loan/ 144
Housing Loan
K. PMAY 146
L. IBC Guidelines 147
M. Current Benchmark Rate 150
N. Contactless Loan through Online Portal 153
O. Various Cut Off Limits 154
P. Gist of Various Campaigns 156
Q. Important Finacle Menus 157
R. Area wise Expected Questions for forthcoming Exam 163

उत्कर्ष -2023
@
Back to Index 2|P a g e
A. Analysis of last Year Paper

PNB Scale IV to V -Generalist Cadre: Exam held on 16.01.2022

Division No. of Questions Area Covered
(approx.)
Integrated Risk 25-28 ▪ Credit Management & Risk Policy
Management Division ▪ Loaning Green Renewal /NBG
(IRMD) ▪ Basel Guidelines/ Risk weights / Regulatory Retail Portfolio
▪ Scoring Model (Farm, SME Score)/ RAROC
▪ Ship Breaking / Covid-19 – Financial Ratios
▪ DSCR Calculation/ 2nd Method of Lending : Margin
▪ Transfer of Loan Exposure (Pool Purchase)
▪ ZRMC: Line of defence
Agri & FI 8-10 ▪ Policy on Business Correspondents
▪ Commission Structure for Corporate BCs & BC Agents
▪ Co-Lending etc

GBD/Operations / Retail 16-18 ▪ PM SVANIDHI, PM KUSUM Yojana, PMEGP, NRLM,NULM etc)

Liability / Govt. Schemes ▪ NPS/ PPF/ SUKANYA SAMRIDHI
▪ CEGSSC/ CGSSD/ CGTMSE
▪ KYC Policy/ DEAF/ Pradhan Mantri Suraksha Bima Yojana
(PMSBY) etc
▪ Minimum QAB in PNB TWIN/ Positive Pay System
DBTD/ITD 5-8 ▪ Debit Card Limits / Debit Card General Question/ World Travel
Card/ Credit Card Limit for Staff
▪ USSD per day transaction Limit
ITD 20 ▪ Finacle Menu

SASTRA 10-12 ▪ Recovery Policy

▪ Engagement of (i) Recovery Agencies /Detective Agencies
▪ IBC Policy /PPIRP / NCLAT
▪ OTS Schemes/ Question on NPA provision/SASTRA Portal
▪ Commission to BC agent for recovery
IAD 8-10 ▪ Whistle Blower Policy
▪ Concurrent Audit Policy/ RBIA/ Revenue Audit Policy
▪ Staff Accountability Policy
FRMD 2-3 ▪ Fraud Risk Management Policy/ Forensic Audit Policy
MSME 8-10 ▪ PNB Prime Plus / PNB Sampatti/ SATAT Scheme
▪ e-Mudra Scheme/ GECL3
▪ PNB E-Dealer Scheme (Tie up IOC/Ashok Leyland)
▪ Psbloansin59minutes portal
Retail Asset Division 5-8 ▪ Home Loan Scheme/ Education Loan Scheme
▪ PNB my Property Loan
▪ Time norms for disposal of Retail Loan
▪ Govt. Schemes (PMAY/ Padho Pradesh scheme etc)

Miscellaneous -Internal 5 Role of CISO/ Question on Bank’s Financial Result

External: 28-30 Priority Sector/ DEAF/ Notice Money/ Call Money/Five Star Export
(RBI/ Priority Sector/ House/CKYC/ Currency/ Consumer Protection Act etc
Miscellaneous Acts /
Others)

उत्कर्ष -2023
@
Back to Index 3|P a g e
 PNB Scale II to III and III to IV -Generalist Cadre: Exam held on 16.01.2022
No. of Questions
Division Area Covered
(Approx)
Integrated Risk 20-25 ▪ Credit Management & Risk Policy
Management Division ▪ CIC/RLLR exempted cases
(IRMD) ▪ Basel Guidelines/ Scoring Model (Farm, SME Score)
▪ 2nd Method of Lending: Margin
▪ ZRMC: Line of defence/ Numerical on DSCR/LC/ Current ratio

Agri & FI 8-10 ▪ Policy on Business Correspondents

▪ Commission Structure for Corporate BCs & BC Agents
▪ Co-Lending

GBD/ Operations / Retail 28-30 ▪ PM SVANIDHI, PMEGP, NRLM, NULM, MUDRA TARUN etc
Liability / Govt. Schemes ▪ NPS/ PPF/ SUKANYA SAMRIDHI
▪ CEGSSC/ CGSSD/ CGTMSE/ CSIS/ Stand-Up India
▪ Ambedkar Central Sector Scheme of Int. Subsidy on
Educational Loans
▪ KYC Policy/ DEAF/ PMSBY/PMJJBY/PMFBY etc
▪ PM-USP/3S Programme/ GECL 3.0/ Positive Pay System
▪ PNB Select/PNB Uttam/ Rakshak Plus scheme
▪ Locker Break Open Charges

DBTD 8 ▪ Debit Card General Question/ World Travel Card /Uphar card
▪ USSD per day transaction Limit

ITD 20 ▪ Finacle Menu

SASTRA 10-12 ▪ Recovery Policy

▪ Engagement of (i) Recovery Agencies/ Resolution Agents (ii)
Supporting Agencies (iii) Detective Agencies
▪ OTS Schemes / PNB Pride App/ E-Auction
▪ Commission to BC agent for recovery

IAD 10-12 ▪ Concurrent Audit Policy/ RBIA/ Revenue Audit Policy

▪ Staff Accountability Policy/Whistle Blower Policy
▪ OSS/DMS Report/TMSAC

FRMD 3 ▪ Fraud Risk Management Policy/ Forensic Audit Policy

MSME 10-12 ▪ PNB Prime Plus / Collateral security in PNB Contractor

▪ PNB GST Express / PNB Transport Scheme
▪ SATAT Scheme/ PNB Jeevan Rakshak Scheme/ PNB Shikhar Scheme
▪ PNB E-Dealer Scheme (Tie up IOC/Ashok Leyland)
▪ GECL3/Psbloansin59minutes portal

Retail Asset Division 6-8 ▪ Home Loan Scheme/ CRE Home Loan rate
▪ Green Car Loan/Car Loan Scheme/Personal Loan Scheme
▪ PAPL/ PNB my Property Loan
▪ PMAY/ Padho Pradesh scheme etc
Forex/IBD 4-5 NTP/TT Buying Selling Rate/ Record maintenance under SWIFT/ROI
under FCNR (B)
Miscellaneous -Internal 5 Role of CISO/ Question on Bank’s Financial Result
External: 35-40 Lok Adalat/SARFAESI / NPA Provisions/ Willful Deafult/Current
(RBI/ Priority Sector/
MSF rate/Priority Sector/ DEAF/ KYC-AML/CKYC/Consumer
Miscellaneous Acts /
Protection Act etc/ Schedule of the Balance Sheet
Others )

उत्कर्ष -2023
@
Back to Index 4|P a g e
B. Bank’s Financial Result as on 30.09.2022- Key Highlights (₹ in Crore)
1. Global Gross Business increased by 12.84% on YoY basis to ______ ₹ 20,23,713
2. Global Deposits grew by 7.00% on YoY basis to _____ ₹ 11,93,501
3. Global Advances grew by 12.84% on YoY basis to _____ ₹ 8,30,212
4. Domestic Gross Business increased by 8.31% on YoY basis to _______ ₹ 19,64,711
5. Domestic Deposits grew by 6.35% on YoY basis to _____ ₹ 11,67,872
6. Domestic Advances increased to _________ with growth of 11.32%. ₹ 7,96,839
7. CASA at ₹ 5,24,448 Crore 44.91%
8. Savings Deposit grew by 5.84% on Y-o-Y basis to ______ ₹ 4,51,707
9. Total Recovery including Cash and Up-gradation improved sequentially to ____Crore ₹ 8,565
10. GNPA ratio improved by 315 bps (Y-o-Y) to _____from 11.27% in June’22, NNPA
ratio improved by 169 bps (Y-o-Y) to 3.80% from 4.28% in June’22 10.48%

11. Gross Non-Performing Assets (GNPA) stood at ______Crore as against ₹ 90,167 Crore
₹ 87,035
in June’22.
12. Net Non-Performing Assets (NNPA) stood at _____Crore ₹ 29,348
13. Provision Coverage Ratio (PCR) excluding TWO stood at ____(Including TWO it is
66.28%
83.96%)
14. Credit Cost improved to ____as against 2.46% June’22 1.76%
15. CRAR as at September’22_____.
Out of which Tier-I is 12.20% (CET-1 was at 10.88%, AT1 was at 1.32%) and Tier-II 14.74%
CRAR is 2.54%
16. Q2-Operating Profit (Y-o-Y growth 5%) ₹5,567
17. Q2-Net Profit (Y-o-Y variation -62.8%) ₹411
18. Retail, Agriculture & MSME (RAM) Share to Domestic Advances 53.5%
19. Retail, Agriculture & MSME (RAM) Credit grew by 8.85% on YoY basis to _____Crore ₹ 4,25,930
as at the end of September’22.
• In Retail Segment: (i) Home loan increased by 7.8% on YoY basis to ₹ 76,877 Crore.
(ii) Vehicle loan increased by 35.3% on YoY basis to ₹ 14,038 Crore. (iii) Personal
loan increased by 36.4% on YoY basis to ₹ 14,294 Crore.
• Agriculture advances grew by 4.81% on YoY basis to ₹ 1,40,303 Crore.
• MSME advances grew by 4.57% on YoY basis to ₹ 1,30,218 Crore.
Priority Sector
20. Priority Sector Advances stood at ₹ 2,82,256 Crore, exceeding the National Goal of
43.54%
40% and was at _____of ANBC
21. Agriculture advances stood at ₹ 1,23,312 Crore, exceeding the National Goal of 18%
19.03%
and was at _____of ANBC
22. Credit to Small and Marginal farmers stood at ₹ 65,865 Crore in September’22.
10.16%
National Goal achievement is _____of ANBC, exceeding the target of 9.5%
23. Credit to Weaker Sections stood at ₹ 91,294 Crore in September’22. National Goal
14.08%
achievement is ______of ANBC, exceeding the target of 11.5%.
24. Credit to Micro Enterprises stood at ₹ 54,142 Crore as on September’22. The Bank has 8.35%
achieved National Goal at ______of ANBC as against the target of 7.5%.

उत्कर्ष -2023
@
Back to Index 5|P a g e
 Other
25. Internet Banking Services (IBS) users increased to _____as at September’22 from 284
370 Lakh
Lakhs in September’21 with YoY growth of 31%
26. PNB One Mobile Banking Services (MBS) users increased 37% YoY to ____as at
373 Lakh
September’22 from 272 Lakhs in September’21.
27. _____% of Bank’s Transactions are now digital
83%
(ADC 92%, Branch 8%)
28. Accounts opened under PMJDY (No. in Lakh) 441
29. Deposit mobilized by BCs ₹18729
30. The Bank has _____number of domestic branches. Rural: 3863, Semi-Urban: 2445,
Urban: 1998 & Metro: 1732, 2 International Branches, 12966 number of ATMs and 10,038
20447 BCs.
31. International Branches: 1.Dubai 2. ________ Gift City,
Ahmedabad
32. PNB’s share in PNB MetLife India Insurance Co. Ltd 30.00%
33. PNB’s share in Canara HSBC OBC Life Insurance Co. Ltd 23.00%
34. Govt. of India shareholding 73.15%
35. Digital Initiatives:
▪ UPI Lite- customers can make small payments of up to Rs 200 using on device "wallet"
▪ Onboarding in UPI Using Aadhaar OTP Authentication In lieu of Debit Card for Customer On-
boarding on UPI.
▪ Launch of Banking Services through Whatsapp
▪ PNB One new features Added: Scan & Pay and UPI payment using IFSC & A/c No
▪ Pre-Qualified Credit Card facility for salaried account customers
▪ Revamped PNB ONE App Launched
▪ Self Onboarding Platform for Online Application of Credit Card on 24*7 basis
▪ Online Overdraft Facility (e-OD) against offline Fixed Deposit (FD) in PNB One app
36. Total RWAs ₹ 623392 cr.
37. Credit RWA ₹ 509766 cr.
38. Market RWAs ₹ 43406 cr.
39. Operational RWAs ₹ 70220 cr.
40. Exposure to NCLT accounts, PCR against this exposure 99.3% Breakup:
Parameters Accounts Balance
RBI List 1 4 3802
RBI List 2 10 4591
Filed by PNB 133 8674
Filed by Others 420 49787
Total 567 66854

41. Business per Employee ₹ 2001 Lakh

42. Business per Branch ₹ 19719
Lakh
43. Operating Profit per Employee ₹ 22.3 Lakh
44. Operating Profit per Branch ₹ 220 Lakh
45. Cost of Deposits (Global, Domestic) (Decline trend) -HY G 3.85%
D 3.89%

उत्कर्ष -2023
@
Back to Index 6|P a g e
46. Cost of Funds (Global, Domestic) (Decline trend) -HY G 3.40%
D 3.41%
47. NIM (Global, Domestic) (Growth trend) -HY G 2.91%
D 3.00%
48. Yield on Advances (Global, Domestic) G 6.70%
(Growth trend in Domestic, Global remain same) HY D 6.88%
49. Yield on Funds (Global, Domestic) (Growth trend) -HY G 5.72%
D 5.77%
50. Yield on Investment (Global, Domestic) (Growth trend) -HY G 6.44%
D 6.50%
51. Return on Assets HY23 0.11%
52. Return on Equity HY23 2.30%
53. Earnings per share 0.65
54. Book Value per Share 81.32
55. Book Value per Share-Tangible 58.39
56. Operating Profit HY23 (YoY Growth 5%) 10946
57. Net Profit HY 23 (YoY Decline -66.2%) 720
58. Total no. of RRBs sponsored by PNB 9
59. Govt. of India Share Holding in PNB as on 30.09.2021 73.15%
60. Awards & Accolades
1. Winner of Rajbhasha Kirti Award (2nd Prize) for the year 2021-22
2. PNB becomes one of the first banks to Launch UPI on RuPay Credit Card
3. Under EASE 4.0 : 1st Runner up under “Tech Enabled Banking” Theme, 1st Runner up under
“Governance and HR” Theme
4.Under APY, Bank qualified in “Winning Wednesday Campaign” by PFRDA as Warriors of Winning
Wednesday July 2022

उत्कर्ष -2023
@
Back to Index 7|P a g e
 C. CREDIT MANAGEMENT & RISK POLICY

1. OBJECTIVE, STRUCTURE AND PROCESSES OF CREDIT RISK MANAGEMENT

The policy lays down the basic credit policy and culture, broad framework of lending norms, regulatory and prudential
guidelines and broad approach to lending rationale and practices.
The cases /matter not dealt in this policy shall continue to be guided by the extant circulars /guidelines issued by
Bank /RBI from time to time.
Upon receipt of any regulatory directions regarding modifications in statutory or regulatory restrictions, the same may
be approved by CRMC and be informed to Board subsequently.

STRUCTURE & PROCESSES OF CREDIT RISK MANAGEMENT

Definition of “Credit Risk”
“CREDIT RISK” is the possibility of loss associated with changes in the credit quality of the borrowers or counter
parties. The counter parties may include an individual, small & medium enterprise, corporate, bank, financial
institution, or a sovereign. In a bank’s portfolio, losses stem from outright default due to inability or unwillingness of
a borrower or counter party to honor commitments in relation to lending, settlement and other financial transactions.
Credit Risk Management –Framework

The overall framework of credit risk management in the bank would comprise of following building blocks:
• Credit Risk Management Structure
• Credit Risk Policy
• Credit Risk Strategy
• Processes and Systems

CREDIT RISK MANAGEMENT STRUCTURE

AT HEAD OFFICE LEVEL
• Risk Management Committee (RMC):Sub-Committee of Board with overall responsibility of formulating
policies/procedures and managing all the risks. It adopts integrated approach in managing all the risks.
• Credit Risk Management Committee (CRMC)
CRMC was originally constituted by ALCO on 23.09.1999 and the first meeting of CRMC was held on 11.01.2000.
Constitution of CRMC:
SN Member Invitee
1 Managing Director & CEO – (Chairman)
2 All Executive Directors
3 Group Chief Risk Officer – IRMD
4 Group Chief Compliance Officer – Compliance
5 CGM - Corporate Credit Div.
6 CGM – Other Credit Div. (RAD /MSME /PSFID)
7 CGM – IBD General Manager (Alternate to GCRO)
8 CGM – CRMD CGM – IAD
9 CGM – ITD CGM – MISD
10 CGM – Treasury CGM – Mission Parivartan
11 CGM -SMEAD CGM – Finance (CFO)
12 Chief Economist officer
Convener: Vertical Head - Credit Risk

उत्कर्ष -2023
@
Back to Index 8|P a g e
 Mandatory Members of CRMC
✓ Chairperson of CRMC i.e. MD&CEO. In the absence of MD&CEO, Domain Executive Director (looking after
IRMD) shall be the chairperson of the committee.
✓ Anyone of the Executive Directors
✓ CGM of the concerned division having any item in the committee meeting. In the absence of the concerned
CGM, Senior Most GM / Alternate CGM if any shall attend the meeting.
Quorum of CRMC: Quorum shall be completed when at least 6 members are present including Chairperson
of the committee.
Specific responsibilities of CRMC :
✓ Implementation of credit risk policy/ strategy approved by the Board/ RMC.
✓ Monitor credit risk on a bank-wise basis and ensure compliance of limits approved by the Board/ RMC.
✓ Recommend to the Board for its approval, policies on standards for presentation of credit proposal, financial
covenants, rating standards and benchmarks.
✓ Devise delegation of credit approving powers, prudential limits on large credit exposures, asset concentration,
standards for loan collaterals, portfolio management, loan review mechanism, risk concentration, risk
monitoring and evaluation, pricing of loans, provisioning, regulatory/ legal compliance etc.

• INTEGRATED RISK MANAGEMENT DIVISION (IRMD)

The Division is headed by Group Chief Risk Officer with distinct functions related to credit risk, namely:
✓ Framing of policies, inter alia, related to credit risk, development of systems & models for identifying,
measuring and managing credit risks and their implementation;
✓ Monitoring and managing the industry risk;
✓ Integrated risk management functions;
✓ Credit Intelligence and Support Department (CISD)
• CREDIT AUDIT &REVIEW DIVISION (CARD)
Bank has also set up a Loan Review/Audit Mechanism to be looked after independently by CARD.
AT FIELD LEVEL
Zonal Risk Management Cell (ZRMC)
➢ In order to perform various risk functions in a more structured way, Zonal Risk Management Cell (ZRMC) has

been created at Zonal level. There shall be a two tier Risk Management structure of which one part will be
Zonal Risk Management Cell (ZRMC) & other shall be HO: IRMD. ZRMC will work as an extended arm of HO:
IRMD which will help in percolating Risk Culture in bank down the line.

➢ The Internal Risk Ratings for loans above ₹1 Crore & up to ₹30 Crore shall be vetted and approved at

ZRMC. For loans above ₹30 Crore, ratings shall be initiated & vetted at ZRMC and approved at IRMD HO.
➢ For Loans (irrespective of amount) falling under vested powers of HO committees (including MC) vetting

and approval will be done at HO: IRMD.

➢ ZRMC will act as 2nd line of defense after ZO (1st line of defense) & ZAO (3rd line of defense).

Roles and Responsibility of Zonal Risk Management Cell (ZRMC)

1. Risk Rating 2. Credit Portfolio monitoring 3. Risk Side Review (GO-NOGO) 4. Operational Risk 5. Single Point of
Contact (SPOC) for all risk related matter

उत्कर्ष -2023
@
Back to Index 9|P a g e
2. CREDIT DELIVERY STRUCTURE
The Credit delivery structure focuses on delivery of credit through 4 types of structures equipped with skilled staff
having separate verticals for pre & post sanction by retaining operational work at Branches. The model focuses on
delivery of Credit through specialized verticals wherein duties assigned are outlined as under:
➢ LCB: The structure deals with Pre sanction appraisal, post sanction monitoring and operational work with the
clear segregation of pre & post sanction activities. LCB handles loan accounts above ₹50 Crore, whereas ELCB
handles loan account above ₹500 crores.
➢ CBB: To cater to the business at Centres not having LCBs or where existing LCBs are having limited business
potential. The structure shall broadly be in line with structure of LCBs/MCCs, it will handle corporate accounts
above ₹10 Crore
➢ MCC: MCC deals with Pre sanction appraisal and post sanction monitoring of Loans having exposure above ₹1 Cr
to ₹50 Cr. For accounts above ₹1 Crore, only operations to be handled by Branch and all Pre & Post Sanction
responsibilities to be handled by MCC.
➢ PLP: PLP deals with Pre sanction appraisal and sanction of loan accounts above ₹10 Lac and upto ₹1 Crore
(above ₹1.00 crore where MCC is not located). Post sanction monitoring and operations to be handled by Branch.
There are two type of PNB Loan Point Centres:
PLP-RAM: Such centres cover all the branches of a defined Circle irrespective of distance.

PLP- Hybrid RAM: At certain centres, MCCs have been converted to PLP or rationalized with shifting of business to PLPs and
setting up of credit monitoring cell for post sanction responsibilities of Non-Retail Accounts having exposure above ₹1 Crore

CREDIT APPROVAL COMMITTEES (CACs)

CAC at PLP/ MCC/

Headed by Credit Proposals
ZO/HO level
CM Above ₹1 Crore & up to ₹4 Crore
PLP-CAC
AGM Above ₹1 Crore & up to ₹10 Crore
MCC-CAC AGM Above ₹1 Crore & up to ₹10 Crore
CHCAC AGM Above ₹10 Crore & up to ₹15 Crore
CHCAC DGM Above ₹10 Crore & up to ₹30 Crore
ZOCAC GM Above ₹30 Crore & up to ₹50 Crore
ZOCAC CGM Above ₹30 Crore & up to ₹75 Crore
HOCAC Level-I CGM-Credit Above ₹50 Crore & up to ₹100Crore

HOCAC Level-II ED-Corporate Credit Above ₹100 Crore & up to ₹300 Crore
HOCAC Level-III MD & CEO Above ₹300 Crore & up to ₹800 Crore
Management
MD & CEO Above ₹800 Crore
Committee
Note: It should be ensured that the committee structure at field shall not have the appraising officer as part of the committ ee

उत्कर्ष -2023
@
Back to Index 10 | P a g e
NEW BUSINESS GROUP (NBG)

➢ The system of NBG is in place at HO level to examine the large credit proposals in respect of new borrowers
and take a view whether the same is support worthy or not. The purpose of setting up of NBG is to cut down
the time period involved in making the credit decision and to consider the credit proposal in a structured format,
so as to reach a consensus about the proposal.
➢ All fresh credit proposals envisaging total exposure (both FB and NFB) of above ₹50 crore shall be placed
before NBG in a structured format known as Preliminary Information Memorandum (PIM).
➢ NBG-I (Headed by ED-Corporate Credit): Total exposure of above ₹50 crore and upto ₹200 crores
➢ NBG-II (Headed by MD & CEO): Total exposure of above ₹200.00 crores
➢ In case, complete proposal is available beforehand placing of Preliminary Information Memorandum (PIM)
before NBG is not mandatory i.e. the branches/sanctioning authorities are free to submit/consider the proposal
even without approval of NBG. The purpose of NBG is only to take quick decision based on PIM because
preparation of complete proposal normally takes more time and not to prohibit submission of proposal without
NBG’s approval.
➢ Validity of NBG: shall be valid for 6 months for considering the regular proposal.

SCREENING COMMITTEE FOR RISK BASED REVIEW OF CREDIT PROPOSALS

Risk Side Review
➢ Applicability: Credit Proposal for loans (fresh/enhancement proposal) falling within the power of ZOCAC &
above (i.e. above ₹30.00 Cr) shall be placed before Screening Committee (SC)
➢ Constitution of Screening Committee: At ZO Level: Headed by Second Person of ZRMC, AT HO Level:
GM-IRMD

➢ The Committee shall give its observations and recommendations relating to consideration or non-consideration
on all fresh/enhancement proposals, which shall be advisory in nature. The SC shall give its observations and
recommendations relating to consideration or non-consideration on all fresh/enhancement proposals, which
shall be advisory in nature.
➢ Decision of the sanctioning authority regarding consideration/non-consideration of the proposal shall prevail.

3. STATUTORY, REGULATORY AND OTHER RESTRICTIONS

➢ Statutory Restrictions
✓ Advances against Bank's own shares
✓ Advances to the Bank's Directors
✓ Restrictions on Holding Shares in Companies
✓ Restrictions on Credit to Companies for Buy-back of their Securities
➢ Regulatory Restrictions
✓ Granting loans and advances to relatives of Directors
✓ Lending to directors and their relatives on reciprocal basis
✓ Restrictions on Grant of Loan & Advances to Officers and Relatives of Senior Officers (Scale IV & above) of
the Bank
✓ Restrictions on Grant of Financial Assistance to Industries Producing/ Consuming Ozone Depleting
Substances (ODS)
✓ Restrictions on Advances against Sensitive Commodities under Selective Credit Control (SCC)

उत्कर्ष -2023
@
Back to Index 11 | P a g e
✓ Restrictions on other Loan and Advances:

i. Loans and Advances against Shares, Debentures and Bonds

ii. Advances against Fixed Deposit Receipts (FDRs) issued by other banks
iii. Advances to Agents/Intermediaries based on Deposit Mobilization
iv. Loans against Certificate of Deposits (CDs)
v. Finance against Indian Depository Receipts (IDRs)
vi. Advances for purchase of Bullion/Primary Gold
vii. Loans & advances to Real Estate Sector
viii. Grant of Loans for acquisition of Kisan Vikas Patra (KVPs)
ix. Bridge Loans against receivables from Government
x. Shell Companies/ Strike Off Companies
xi. Opening of Current Accounts by Banks

उत्कर्ष -2023
@
Back to Index 12 | P a g e
4. EXPOSURE NORMS

4.1 PRUDENTIAL EXPOSURE NORMS

➢ Prudential Exposure Limit under Large Exposures (LE) Framework :

Counterparty Exposure Ceiling as percentage of Tier I Capital
For NBFC
Single 20* 20
Group 25 25
*In exceptional cases, Board of banks may allow an additional 5% exposure of the bank’s available eligible capital
base.
➢ Framework on Enhancing Credit Supply for Large Borrowers through Market Mechanism:
Objective: To address the issue of concentration risk of the banking system to a single large corporate and
help them to augment alternative sources of credit by gradually tapping the market mechanism for their
funding needs, RBI has advised guidelines on ‘enhancing credit supply to large borrowers’ through market
mechanism.

The Bank has to keep future incremental exposure to large “specified borrowers” within a “Normally Permitted
Lending Limit) (NPLL).

The norms, which was come into effect from financial year 2017-18, define a large borrower as Specified
Borrower who are having Aggregate Sanctioned Credit Limit (ASCL fund-based credit limits sanctioned or
outstanding, whichever is higher by the banking system) of more than:

a) ₹25,000 Cr at any time during FY 2017-18

b) ₹15,000 Cr at any time during FY 2018-19
c) ₹10,000 Cr at any time from April 1, 2019 onwards
NPLL : means 50% or 60% as the case may be of the incremental funds raised by the specified borrower over and
above its ASCL as on the reference date in the financial years succeeding the FY in which the reference date falls .

Breach in NPLL: If the banking system crosses the lending limit prescribed for a specified borrower, the provisioning
requirement on the excess amount would be 3 % higher than normal. Additionally, the banking system would have
to assign a risk weight of 75 % over and above the applicable weight for the incremental exposure to the large
borrower.

Once the borrower becomes a specified borrower, the disincentive mechanism will be applicable from next financial
year.

The computation of NPLL is linked to incremental funds raised over and above the ASCL as on the reference date
in the financial years (FYs) succeeding the FY in which the reference date falls For this purpose any fresh loans
extended will be subjected to the prudential guidelines in the FY succeeding the FY in which the reference date falls
irrespective of whether the existing loans of a borrower are repaid or not.

उत्कर्ष -2023
@
Back to Index 13 | P a g e
4.2 INTERNAL EXPOSURE CEILING

A. Single Borrower (other than NBFC)

Ceilings (% of Tier-1
Internal/External Credit Risk Rating
Capital)
Internal Rating‘A1’/‘A2’,External rating ‘AAA/AA’ and PSUs 20%
Internal Rating‘A3’and External Rating ‘A’ 17%
Internal Rating‘A4/B1/B2’and External Rating ‘BBB/BB’ 15%
Internal Rating‘B3/C1’and External Rating ‘B’ 12%
Internal Rating‘C2/C3’and External Rating ‘C’ 9%
Notes:
• Bank may in exceptional circumstances consider enhancement of the exposure ceiling for single counter
party classified under Large Exposure up to a further 5% over & above the ceiling of 20% in case of:
✓ PSU borrowers based on their cash flows
✓ Non-PSU borrowers having external risk rating ‘AA’ & above and/or internal risk rating‘A2’&above
“Exceptional Circumstances” for above purpose may be envisaged such as:
✓ Exposure on account of PSU disinvestment Program,
✓ Exposure on account of Liquidity support to Industry/Sector in view of Govt./Regulatory
initiatives/instructions,
✓ Exposure exceeding due to decrease in Bank’s eligible capital base.
• Advances, where external Risk rating, if applicable is not available or has expired be treated as unrated
category and exposure ceiling, as applicable to ‘BB’ category be treated for the purpose of exposure
ceiling.
• In case of variance in both the ratings, external or internal, lower of the two will be reckoned for exposure
norms.

B. Single Borrower: NBFC

Ceilings (% of Tier-1
Internal/External Credit Risk Rating
Capital)
Internal Rating‘A1’/‘A2’, External Rating‘ AAA/AA’ and PSUs 15%
Internal Rating‘A3’and External Rating ‘A’ 12%

Internal Rating‘A4/B1’and External Rating ‘BBB’ 9%

Internal Rating‘B2’&Below*/and External Rating ‘BB’ & Below*/Unrated 5%
*In terms of extant guidelines, fresh exposure should be taken in A & Above externally rated accounts on
merits only.

➢ Bank finance to Residuary Non-Bank Companies (RNBCs) registered with RBI will be restricted to the extent of
their NOF.

➢ Ceiling for single NBFC which is predominantly engaged in lending against collateral of gold jewellery i.e. gold
loan company is fixed to 7.5% of bank’s capital fund i.e. Tier I + Tier II. However, the above exposure ceiling
may go up by 5% i.e. upto 12.5% of capital funds if the additional exposure is on account of funds on-lent by
NBFC to the infrastructure sector.
Note: Advances, where external Risk rating, if applicable is not available or has expired be treated as unrated
category. In case of variance in both the ratings, external or internal, lower of the two will be reckoned for exposure

उत्कर्ष -2023
@
Back to Index 14 | P a g e
norms.
➢ Group of Connected Counterparties: Ceiling for group borrowers have been kept at the level of RBI
prescription i.e. 25% of Tier 1 capital. In the existing cases, where the exposure exceeds on account of
proposed revision under Large Exposure Framework, bank shall bring down the exposure progressively.

C. Exposure based on CONSTITUTION

Constitution Exposure Ceiling
Proprietorship Concern/ AOP ₹50.00 Crore
Partnership Concern/ Limited Liability Partnerships ₹100.00 Crore
Single entity with constitution as Society, Trust & HUF ₹200.00 Crore

D. Limit for SUBSTANTIAL EXPOSURE

Substantial Exposure : is defined as sum total of exposures assumed in respect of such “Large Borrowers”
“Large borrower” is defined as the sum of all exposure values of the bank to a counterparty or a group of connected
counterparties is equal to or above 10% of the Bank’s Tier- I Capital. The aggregate exposure to all “Large
Borrowers” should not exceed 800% of Bank’s Tier I Capital.
In order to reduce concentration risk in a few accounts, substantial exposure limit has been fixed as under: -
Particulars % of Tier I Capital
Single Group
Private Sector Borrowers 100% 200%
Public Sector Borrowers 300% 400%
Aggregate of Substantial Exposures 400% 600%
@Tier-I capital as per published accounts as on 31st March of previous year
E. MAXIMUM INDUSTRY EXPOSURE LIMIT
➢ Bank is having a model for fixing industry wise internal credit exposure limits. The model takes into account
Industry Outlook Assessment, Asset Impairment Assessment, Portfolio Risk Assessment, Bank’s
Outstanding vis-à-vis Outstanding from Banking Industry and Govt Thrust and Initiative.
➢ Report on Asset Quality (RAQ) submitted to RBI has been the base document for fixing and monitoring
industry wise Internal Exposure Ceiling. The RAQ report divides non-food credit into 5 Segments, viz. i)
Agriculture and Allied Activities, ii) Industry, iii) Services, iv) Retail Loans and v) Other Non-food Credit.
Out of these five segments, “Industry” is further divided into various line items, which has all been considered
for internal ceiling fixation. “Services” is also further divided into various sectors, out of which only NBFC has
been considered for industry internal exposure ceiling fixation.
➢ The Industry wise ceiling are fixed as a percentage to Gross Bank’s Exposure of last annual financial result.
Industry /sector with exposure of 1% and more of Bank’s gross exposure shall be considered for fixing
industry /sector exposure ceiling
➢ As the ceilings proposed are internal ceilings to achieve diversified growth of portfolio and reduce portfolio
concentration, it is provided that the monitoring against such limits would be based on the higher of
Outstanding or Exposure (Credit plus Investment) to the particular industry.
➢ The industry-wise exposures shall also be monitored by Credit Review & Monitoring Division, HO especially
those industries, which have reached trigger level of 85% of exposure limit, so that instances of breach of
ceiling could be averted.

उत्कर्ष -2023
@
Back to Index 15 | P a g e
➢ The Industry wise ceiling are fixed as a percentage to Gross Bank’s Exposure of last annual financial result
which are as under:
S.N. INDUSTRY Internal Exposure Ceiling
(For FY 22-23 or till review of
ceiling)
1. All Engineering (Electronics) 1.53%
2. All Engineering (Others) 1.97%
3. Beverage (excluding Tea and Coffee) and Tobacco – Others 0.57%
4. Beverage (excluding Tea and Coffee) and Tobacco - Tobacco 0.50%
and tobacco products
5. Cement and Cement Products 0.71%
6. Chemical and chemical products - Drugs and Pharmaceuticals 0.72%
7. Chemical and chemical products - Fertilizers 0.94%
8. Chemical and chemical products – Others 0.89%
9. Chemical and chemical products - Petrochemicals 0.91%
(excluding under Infrastructure)
10. Construction 1.79%
11. Food Processing – Coffee 0.50%
12. Food Processing - Edible Oils and Vanaspati 0.73%
13. Food Processing - Others 5.00%
14. Food Processing - Sugar 1.67%
15. Food Processing - Tea 0.59%
16. Gems & Jewellery 1.50%^
17. Glass & Glassware 0.59%
18. Infrastructure - Communication 3.50%
19. Infrastructure – Energy* 9.00%
20. Infrastructure – Other 1.97%
21. Infrastructure - Social and Commercial Infrastructure 0.81%
22. Infrastructure - Transport 8.00%
23. Infrastructure - Water and Sanitation 0.80%
24. Iron and Steel 6.00%
25. Leather and Leather products 0.67%
26. Mining and Quarrying - Coal 0.73%
27. Mining and Quarrying - Others 0.59%
28. NBFC** 16.00%
29. Other Metal and Metal Products 0.95%
30. Paper and Paper Products 0.77%
31. Petroleum 4.00%
32. Rubber, Plastic and their Products 1.60%
33. Textiles - Cotton 0.94%
34. Textiles - Jute 0.51%

उत्कर्ष -2023
@
Back to Index 16 | P a g e
 35. Textiles - Man-made 0.70%
36. Textiles – Others 1.96%
37. Vehicles, Vehicle Parts and Transport Equipment 0.74%
38. Wood and Wood Products 0.62%
*Exposure Ceiling for Renewal Energy is 3 % of Bank’s Exposure within overall ceiling for ‘Energy’ sector.
**Incremental exposure (exceeding 11% ceiling meant for NBFC sector) shall be taken only in those accounts
where long term external rating is AAA or AA and internal rating is PNB A1 to PNB A3. Management Committee
(MC) of Board is authorized to take exposure on a case to case basis in accounts having External Rating ‘A’ and
below. Further, incremental exposure (exceeding 15%) in NBFC shall be taken only in PSU NBFCs.
^
Since “Gems & Jewellery” Industry falls under “Stressed” category, the revised ceiling for this industry is : 1.35%

Internal Exposure Ceiling for Stressed Industry/ Sector

➢ Once an industry/ sector is classified as “Stressed” or “Highly Stressed” category in a quarter, a downward
revision of the available headroom for incremental exposure by ____and ____ respectively in that industry shall
be done: 10% and 20%
➢ The Industry/Sector classified under “Stressed Category” and “Highly Stressed category” for quarter ended
September ’2022 is as under:
▪ “Highly Stressed” Category- Nil
▪ “Stressed” Category- Gems & Jewellery
➢ The revised Internal Exposure ceiling for “Gems & Jewellery” Industry after making a downward revision on
account of the Industry being “Stressed” is: 1.35%

F. LENDING TO STATE GOVT. UNDERTAKINGS/ PSUs- EXPOSURE LIMITS

➢ An overall ceiling on total State Government exposure (in respect of accounts where facilities are granted as direct
advance to State Govt. /State PSUs /Undertakings and other exposure guaranteed by State Govt.) is fixed at _____
of Bank’s exposure as of previous quarter: 15%

➢ Investment in State’s SLR securities shall not be considered as a part of exposure. Further advances against bank
deposit are also excluded from the above ceiling.

➢ All fresh /enhancement /renewal proposals of loss making State Govt. Undertakings /PSUs shall be placed to:
Management Committee for consideration.

➢ The State-wise exposures shall be closely monitored by the Credit Review & Monitoring Division, HO. Exposure
especially in States which reach trigger Level of 85% of exposure ceiling limit on quarterly basis along with
other industry exposure ceilings. Any breach in exposure ceiling during the quarter shall be placed to the ensuing
meeting of the Board for the ratification.

G. NBFC EXPOSURE CEILING

➢ NBFC Exposure ceiling: 16%

➢ Ceilings for NBFC Comprises Maximum sub limit of 1% to Micro Finance Segment & 1.5% for gold loan companies,
having gold loans to the extent of 50% or more of their total financial assets.

उत्कर्ष -2023
@
Back to Index 17 | P a g e
➢ Incremental exposure (exceeding 11%) in NBFC shall be taken only in those accounts where long term
external rating is AAA or AA and internal rating is PNB A1 to PNB A3. Management Committee (MC) of Board is
authorised to take exposure on a case to case basis in accounts having External Rating ‘A’ and below. Further,
incremental exposure (exceeding 15%) in NBFC shall be taken only in PSU-NBFCs.

➢ For monitoring the exposure ceilings, the higher of Outstanding or Exposure to be considered.

H. UNSECURED EXPOSURE CEILING

➢ The exposure including all funded and non-funded facilities, where the realizable value of tangible security is not
more than 10%, ab-initio of the outstanding exposure shall be treated as ‘Unsecured Exposure’, which should
not exceed ____ of gross outstanding advances (FB+NFB) as on close of previous quarter: 25%
➢ Within the above ceiling, a sub ceiling of _____of gross outstanding advances (FB+NFB) as on close of previous
quarter has been fixed for unsecured advances to Govt. and PSUs borrowers: 15%

I. EXPOSURE TO REAL ESTATE

➢ It being a sensitive sector, the overall exposure ceiling for real estate sector has been fixed at 15% of the total
advances of the bank as at close of last quarter. Within this ceiling, segment-wise sub-ceilings is as under:
S.N. Segment Ceiling (in %)
(i) Exposure on NHB & HFCs 7.00%
(ii) Commercial Real Estate- Total 10.00%
of which:
a) Land & Building Developers- other than Residential Housing 2.00%
b) Other Commercial Real Estate i.e IPs (commercial) , Hotels etc.
1.00%
but excluding Future Lease Rentals(FLRs)
(iii) Residential Mortgages Excluded for Ceiling Purpose
Total 15%
Note:
✓ With the fixation of the above sub ceilings, there will be no sub ceiling for CRE-RH and FLRs, but the overall
ceiling for CRE including CRE-RH and FLRs shall continue to be 10% as hitherto fore.
✓ Credit Review & Monitoring Division, HO to monitor the internal ceilings of real estate sector as per extant
guidelines on quarterly basis, by putting up quarterly review to Board, to ensure that the same is well within the
prescribed ceilings.
✓ Further, in case of breach in the above noted ceilings, present guidelines of placing the same to the Board, in its
next meeting for ratification, shall also continue to be followed by Credit Review & Monitoring Division, HO.

J. EXPOSURE TO CAPITAL MARKET

SN Particulars Exposure Ceiling

REGULATORY CEILINGS
40% of Bank’s net worth on a
1. Overall ceiling for both fund based and non-fund based exposure
Solo and on consolidated basis
Advances to individuals against security of Equity Shares/
2. ₹20 lakh
Debentures/Bonds in Dematerialized Form from entire banking system
INTERNAL CEILINGS
20% of net worth of the bank as on
3. Aggregate advances forming part of exposure to Capital Market
31s t March of the previous year

उत्कर्ष -2023
@
Back to Index 18 | P a g e
 10% of net worth of the bank as on
3.1 Out of which, aggregate advances to All Stock Brokers
31st March of the previous year
Aggregate advance to any single stock broking entity including its
3.2 ₹100 Crore
associate /inter connected Companies
Financing individuals for acquiring shares under IPO /FPO/
3.3 ₹10 Lakh
ESOP (Minimum per Individual ₹1 Lakh )
Advances to individuals against security of Equity Shares/
3.4 Debentures/Bonds in Dematerialized Form from entire banking ₹20 Lakh
system (Minimum per Individual ₹1 Lakh )
Equity Oriented Mutual Funds which are held in the form of
3.5 ₹20 Lakh
Statement of Accounts (Minimum per Individual ₹1 Lakh )
3.6 Debt Oriented Mutual Fund (Minimum per Individual ₹1 Lakh) ₹100 Lakh

K. OTHER EXPOSURE CEILING

SN PARTICULAR Ceiling (₹ in Crore)

1. Lending to State Govt./ State PSUs/ Undertakings and other
15% of bank’s exposure
exposure guaranteed by State Govt
as of previous quarter
(Maximum ceiling as per Appendix –II of CMRP)
All fresh/enhancement/renewal proposals of loss making State Govt. Undertakings/PSUs shall be placed
to : Management Committee for consideration
2. ₹200.00 (in FY)
Film Industry
₹25.00 (Per Borrower)
3. Non Fund Based facility (ies) not to exceed ___ Bank’s total Fund 100%
Based exposure
4. Financing to Infrastructure Investment Trust (InvITs) 1%
(___of Gross outstanding/exposure (whichever is higher) of the respective
industry/sector within the overall ceiling prescribed for Infrastructure Sector
5. Asset Reconstruction Companies (ARCs) NIL
(Bank will not take any further exposure on ARCs)
6. Short Term Loan 18%
(_____ of total advance of the bank as at close of previous quarter)
7. Renewable Energy (within the overall limit of 10% fixed for Energy sector as
on close of previous quarter) 1% of Gross Advance
8. Indian Joint Ventures/Wholly Owned Subsidiaries Abroad and
Overseas Step-Down Subsidiaries of Indian Corporates (of banks’ 20%
unimpaired capital funds i.e. Tier-I & Tier-II capital )

L. INTRA GROUP EXPOSURE

Entity Limit for Financial Limit for Non-Financial
Entity** Entity**
Subsidiaries 8% 5%
Joint Venture and Associates 8% 4%
All Group Entities (financial & Non-
15%
financial) taken together
**of Paid-up Capital and Reserves (excluding amalgamation reserves) of PNB as at the end of March of Previous FY.
For the purpose of Intra-Group Exposure Ceilings, the following entities will be treated as group entity:
• Subsidiary - Parent
• Associate
• Joint Venture
• Related party
• Direct or Indirect ownership of 20% or more in the voting power of the enterprise.
• Common Brand Name
• Promoters of the Bank
• Non operative financial Holding companies
• An entity which has any of the first six relations, as above, with the promoters/NOFHC and their step-down entities.

उत्कर्ष -2023
@
Back to Index 19 | P a g e
4.3 Monitoring of Exposure

➢ In order to ensure compliance of Prudential Exposure ceilings as well as Internal Exposure ceilings, Credit Review
& Monitoring Division (CRMD) to monitor various exposure ceilings on an ongoing basis and to place the annual
review of the implementation of exposure management measures as on 31st March to the Board before the end
of June positively.
➢ Computation of exposure ceilings will be based on: Bank’s exposure (credit plus investment) to the
industry/sector of the previous quarter.
➢ It is also advised that for monitoring the exposure ceilings, the higher of Outstanding or Exposure to
be considered.
➢ Adherence to Exposure Norms is to be placed to : CRMC on monthly basis and any breach shall be reported
to the Board, as and when breach occurs.

4.4 Regulatory / Internal Ceiling

Ceiling Nature of Limit

Regulatory Ceiling Exposure limits stipulated by RBI, DFS, SEBI or any other regulators (Regulatory)
Internal Ceiling Exposure limits set by Bank internally (Non-Regulatory)

The exposure taken by the Bank beyond the Regulatory Ceiling shall be termed as breach of Regulatory Ceiling.
Similarly, the exposure taken by the Bank beyond the Internal Ceiling shall be termed as exceeding the Internal
Ceiling

4.5 IMPORTANT DEFINITION

A. EXPOSURE
➢ Exposure shall include Credit exposure (Funded and Non-Funded Credit Limits) and investment exposure
(including underwriting and similar commitments). The sanctioned limits or outstanding, whichever are higher,
shall be reckoned for arriving at the exposure limit. Further, non-fund based exposure should also be reckoned
at 100 percent of the limits or outstanding, whichever are higher.
➢ In case of fully drawn term loans, where there is no scope for re-drawal of any portion of the sanctioned limits,
the outstanding shall be reckoned as exposure. However, in the case of other term loans, the exposure shall be
computed as usual i.e. “sanctioned limits or outstanding, whichever are higher”.
➢ Credit Exposure: Credit exposure comprises of the following elements:
i. All types of funded and non-funded credit limits.
ii. Credit Exposure on account of derivative products.
iii. Facilities extended by way of equipment leasing, hire-purchase finance and factoring services.
➢ Investment Exposure: Investment exposure (including underwriting and similar commitments) comprises of
the following elements:
i. Investments in shares & debentures of companies.
ii. Investment in PSU bonds.
iii. Investments in Commercial Papers (CPs).
iv. Banks’ / FIs’ investments in debentures/ bonds / security receipts / pass-through certificates (PTCs) issued
by a Securitisation Company (SC)/ Reconstruction Company(RC) as compensation consequent upon sale of
financial assets will constitute exposure on the SC / RC.
The investment made by the banks in bonds and debentures of corporates which are guaranteed by a Public
Financial Institution (PFI) will be treated as an exposure by the bank on the PFI and not on the corporate.

उत्कर्ष -2023
@
Back to Index 20 | P a g e
B. UNSECURED EXPOSURE
➢ Defined as an exposure where the realisable value of the security, as assessed by the bank/approved valuers /
Reserve Bank’s inspecting officers, is not more than 10 %, ab-initio, of the outstanding exposure. ‘Security’ will
mean tangible security properly charged to the bank and will not include intangible securities like guarantees,
letter of comfort, etc.

➢ The rights, licenses, authorizations, etc., charged to the banks as collateral in respect of projects (including
infrastructure projects) financed by them, should not be reckoned as tangible security. Ba nks, may however, treat
annuities under build-operate –transfer (BOT) model in respect of road/highway projects and toll collection rights
where there are provisions to compensate the project sponsor if a certain level of traffic is not achieved, as
tangible securities, subject to the condition that banks’ right to receive annuities and toll collection rights is legally
enforceable and irrevocable.
C. EXPOSURE UNDER PPP MODEL
In case of PPP projects, the debts due to the lenders may be considered as secured to the extent assured by the
project authority in terms of the Concession Agreement, subject to the following conditions:

a. User charges/toll/tariff payments are kept in an escrow account where senior lenders have priority over
withdrawals by the concessionaire;

b. There is sufficient risk mitigation, such as pre-determined increase in user charges or increase in concession
period, in case project revenues are lower than anticipated;

c. The lenders have a right of substitution in case of concessionaire default;

d. The lenders have a right to trigger termination in case of default in debt service; and

e. Upon termination, the Project Authority has an obligation of (i) compulsory buy -out and (ii) repayment of
debt due in a pre-determined manner.
However, in all such cases, bank must be satisfied about the legal enforceability of the provisions of the tripartite
agreement and should factor in the past experience with such contracts.
D. CAPITAL FUND AND CAPITAL BASE
a. Capital Fund comprise of Tier I and Tier II and capital base comprise of Tier I capital, as defined in the RBI
Master Circular on Basel III – Capital Regulation dated July 1, 2015 (as amended from time to time) as per
the last audited balance sheet.

b. However, the infusion of capital after the published balance sheet date may also be taken into account for
the purpose of exposure ceiling.

c. In the light of above, it is prudent to deduct the capital which was redeemed after the published balance
sheet and any other deduction.
d. Hence, Capital Fund and Capital Base for determining the exposure ceilings shall be reckoned as per audited
capital adequacy ratio under Base III of the previous quarter.

उत्कर्ष -2023
@
Back to Index 21 | P a g e
E. INFRASTRUTURE
➢ Harmonized Master List of Infrastructure and its Sub-sectors as per Department of Economic Affairs, MoF, GoI
Harmonized Master List of Infrastructure Sub-sectors
SN Category Infrastructure sub-sectors
1. Transport and i. Roads and bridges
Logistics ii. Ports1
iii. Shipyards2
iv. Inland Waterways
v. Airport
vi. Railway track including electrical & signaling system, tunnels, viaducts, bridges
vii. Railway rolling stock along with workshop and associated maintenance facilities
viii. Railway terminal infrastructure including stations and adjoining commercial
infrastructure
ix. Urban Public Transport (except rolling stock in case of urban road transport)
x. Logistics Infrastructure3
xi. Bulk Material Transportation Pipelines 4
2. Energy i. Electricity Generation
ii. Electricity Transmission
iii. Electricity Distribution
iv. Oil/Gas/Liquefied Natural Gas (LNG) storage facility5
3. Water & Sanitation i. Solid Waste Management
ii. Water treatment plants
iii. Sewage collection, treatment and disposal system
iv. Irrigation (dams, channels, embankments etc)
v. Storm Water Drainage System
4. Communication i. Telecommunication (Fixed network) 6
ii. Telecommunication Towers
iii. Telecommunication & Telecom Services
5. Social and i. Education Institutions (capital stock)
Commercial ii. Sports Infrastructure 7
Infrastructure iii. Hospitals (capital stock)8
iv. Tourism infrastructure viz. (i) three-star or higher category classified hotels
located outside cities with population of more than 1 million, (ii) ropeways and
cable cars
v. Common infrastructure for industrial parks and other parks with industrial
activity such as food parks, textile parks, Special Economic Zones, tourism
facilities and agriculture markets
vi. Post-harvest storage infrastructure for agriculture and horticultural produce
including cold storage
vii. Terminal markets
viii. Soil-testing laboratories
ix. Cold Chain9
x. Affordable Housing10
xi. Affordable Rental Housing Complex11
1 Includes Capital Dredging
2
“Shipyard” is defined as a floating or land -based facility with the essential features of waterfront, turning basin, berthing and
docking facility, slipways and/or ship lifts, and which is self-sufficient for carrying on shipbuilding/repair/breaking activities.
3
"Logistics Infrastructure” means and includes Multimodal Logistics Park comprising Inland Container Depot (ICD) with
minimum investment of ₹50 crore and minimum area of 10 acre, Cold Chain Facility with minimum investment of ₹15 crore and
minimum area of 20,000 sft, and/or Warehousing Facility with investment of minimum ₹25 crore and minimum area of 1 lakh sq

उत्कर्ष -2023
@
Back to Index 22 | P a g e
ft.
4
Includes Oil, Gas, Slurry, Water supply and Iron Ore Pipelines
5
Includes strategic storage of crude oil.
6
Includes optic fibre/wire/cable networks which provide broadband / Internet.
7
Includes the provision of Sports Stadia and Infrastructure for Academies for Training/Research in Sports and Sports -related
activities.
8
Includes Medical Colleges, Para Medical Training Institutes and Diagnosti cs Centres. 9 Includes cold room facility for farm level
pre-cooling, for preservation or storage of agriculture and allied produce, marine products and meat.
10
“Affordable Housing” is defined as a housing project using at least 50% of the Floor Area Rati o (FAR)/Floor Space Index (FSI)
for dwelling units with carpet area@ of not more than 60 square meters.
11
“Affordable Rental Housing Complex” means a project to be used for rental purpose only for urban migrant/poor (EWS/LIG
categories) for a minimum perio d of 25 years with basic civic infrastructure facilities such as water, sanitation, sewerage/septage,
road, electricity along with necessary social/commercial infrastructure and the initial rent fixed by Local Authority/ Entiti es based
on local survey of s urrounding area wherein the project is situated.
Project means a listed project having at least 40 Dwelling Units of double room or single room or equivalent Dormitory Units or a
mix of all three in any ratio but not more than one third of total built up area under double bedrooms units.
Dwelling Units (DUs) means a unit comprising of double bed room with living area, kitchen, toilet and bathroom of up to 60 sq uare
meters carpet area @ or single bed room with living area, kitchen, toilet and bathroom of up to 30 square meters carpet area @ .
Dormitory Units means a set of 3 Dormitory Bed with common kitchen, toilet and bathroom in 30 square meters carpet area @
meaning 10 square meters carpet area @ per Dormitory Bed.
@
“Carpet Area” shall have the same meaning as assigned to it in clause (k) of section 2 of the Real Estate (Regulation and
Development) Act, 2016

F. Exposure Treatment of Bills discounted under Letter of Credit (LC)

➢ Bills purchased/discounted/negotiated under LC (where the payment to the beneficiary is not made
'under reserve') will be treated as an exposure on the LC issuing bank and not on the borrower. However,
in cases where the bills discounting/ purchasing/negotiating bank and LC issuing bank are part of the
same bank, i.e. where LC is issued by the Head Office or branch of the same bank, then the exposure
should be taken on third party/borrower and not on the LC issuing bank. In the case of negotiations
‘under reserve’, the exposure should be treated as on the borrower.

➢ All clean negotiations as indicated in para (i) above, will be assigned the risk weight as normally applicable
to inter-bank exposures, for capital adequacy purpose.

➢ In the case of negotiations under reserve' the exposure should be treated as, on the borrower.

*************

उत्कर्ष -2023
@
Back to Index 23 | P a g e
5. CREDIT DELIVERY - PRE-SANCTION APPRAISAL
5.1 DUE DILIGENCE
➢ Due diligence and market intelligence on borrowers/borrowing firms are important ingredients of Credit
Management. All credit proposals are subjected to due diligence processes in regard to the credentials of the
borrower, scrutiny of past credit history of all Borrowers/Promoters/Directors/Guarantors, purpose of the loan,
financial position of the borrower, need based requirement of credit facilities for working capital and capital
expenditure, capability to service the loans and security offered. Before sanction and disbursement of loan, visit of
the unit, market report on borrowers and guarantors, besides other pre-sanction/pre-disbursement guidelines
issued from time to time, should be a part of corporate culture.
➢ Genuineness/credentials of the supplier/dealer must be ascertained before disbursing the loan amount by visiting
the supplier/dealer’s place/by reference to the website of supplier/dealer or by adopting other means such as
search the internet, making telephone call etc. besides ensuring correctness of cost/price of asset being financed
by the bank.
5.2 CENTRAL ECONOMIC INTELLIGENCE BUREAU (CEIB)
➢ For proposals of ₹50 Cr and above, the report shall be sought from CEIB on the prospective borrower , to be
properly analysed and if any adverse/significant feature in the report is noted with regard to the prospective
borrower/entity etc., the same be taken cognizance of and be mentioned in the proposal
➢ It is mandatory to seek the report from CEIB prior to placing the proposal before the sanctioning authority for
taking credit decision.
➢ Sanction may be accorded if CEIB report does not come within reasonable time.
However, it shall be mandatory to obtain report from CEIB prior to disbursement if the report is not received
at the time of sanction. The disbursement shall take place after ensuring that the report does not contain any
adverse remark. In case of any adverse remark, the matter shall be referred to Sanctioning Authority for their
consideration.
➢ Corporate Credit Division at Head office shall designate a Nodal Officer as a point of contact for seeking CEIB
report. All request seeking CEIB report in prescribed format shall be sent by bank’s Nodal Officer to designated
e-mail id [email protected]. No physical copies of the requests shall be sent to CEIB.
➢ Corporate Credit Division has designated a nodal point of contact for seeking CEIB report and a dedicated e-mail
id [email protected] has been created for the purpose for seeking report from CEIB for prospective
Borrowers and for NPA Accounts.
➢ CEIB would try to adhere to a timeline of 15 working days for disbursing the report after receipt of a complete
request.
➢ The report received from CEIB is only for the exclusive use of the Bank and under no circumstances it should be
shared with the applicant or any other entity by the Bank.
5.3 LEGAL ENTITY IDENTIFIER (LEI) REGISTRATION
➢ Legal Entity Identifier (LEI) is a 20 digit unique code that identifies every legal entity (across the globe) or structure
that is party to a financial transaction, in any jurisdiction.
➢ RBI has made it mandatory for non-individual borrowers enjoying aggregate exposure of ₹5 crore and above
from banks and financial institutions (FIs) to obtain LEI codes as per the timeline.

उत्कर्ष -2023
@
Back to Index 24 | P a g e
➢ Borrowers who fail to obtain LEI codes from an authorized Local Operating Unit (LOU) shall not be sanctioned any
new exposure nor shall they be granted renewal/ enhancement of any existing exposure. However, Departments/
Agencies of Central and State Governments (not Public Sector Undertakings registered under Companies Act or
established as Corporation under the relevant statute) shall be exempted from this provision.
➢ Definition of exposure: “Exposure” for this purpose shall include all fund based and non-fund based (credit as
well as investment) exposure of banks/FIs to the borrower. Aggregate sanctioned limit or outstandi ng balance,
whichever is higher, shall be reckoned for the purpose. Lenders may ascertain the position of aggregate exposure
based on information available either with them, or CRILC database or declaration obtained from the borrower.
➢ Timelines for obtainment of LEI nonindividual borrowers having total exposure from ₹5 crore to ₹50 crore:
Total exposure to Banking System LEI to be obtained on or before

Above ₹ 25 crores 30.04.2023

Above ₹ 10 crores to ₹ 25 crore 30.04.2024
₹ 5 crores to ₹ 10 crores 30.04.2025
5.4 GROUP APPROACH
➢ For identification of a group, the guiding principle is : “Commonality of Management and Effective Control”
➢ Under LEF, counterparties with specific relationships or dependencies such that, were one of the counterparties
to fail, all of the counterparties would very likely fail are defined as Group of Connected Counterparties

➢ Two or more natural or legal persons shall be deemed to be a group of connected counterparties if at least one
of the following criteria is satisfied:

i. Control relationship: one of the counterparties, directly or indirectly, has control over the other(s) or the
counterparties are, directly or indirectly, controlled by a third party (bank may or may not have exposure towards
this third party). The control relationship criterion is satisfied if one entity owns more than 50 % of the voting
rights of the other entity.

ii. Economic interdependence: if one of the counterparties were to experience financial problems, in particular
funding or repayment difficulties, the other(s), as a result, would also be likely to encounter funding or repayment
difficulties.

5.5 BANKING ARRANGEMENT

➢ CONSORTIUM ARRANGEMENT:
▪ Minimum 10% share of the aggregate exposure should be taken by our Bank under consortium arrangement.

▪ In case where our Bank’s share is less than 10% of the aggregate exposure, for sanction falling under the loaning
power upto the ZOCAC level, administrative clearance shall be sought from HOCAC-I to enter such consortium.
However, administrative clearance may not be required for proposals where the sanctioning authority is HOCAC-
I & above.
➢ MULTIPLE BANKING ARRANGEMENT:
▪ Under MBA, each Bank is free to negotiate terms and conditions, including margin, rate of interest etc. Based
on the communication received from IBA, the common code for financing under Multiple Banking Arrangement,
particularly in respect of sharing of information as well as common securities has been adopted by the bank.

उत्कर्ष -2023
@
Back to Index 25 | P a g e
 ▪ In existing Multiple Banking Arrangements where our borrowers have total exposure upto₹50 Cr, efforts to
be made convert such accounts into sole banking arrangement.
➢ SYNDICATION:
In view of thrust of Government on infrastructure projects, there is a business opportunity for the banks towards
part financing such projects by way of project appraisal and syndication, to augment bank’s fee based income. This
activity is being looked after by Corporate Credit Division, HO.
➢ JOINT LENDING ARRANGEMENT (JLA):
All lending arrangements, involving more than one public sector bank, with a single borrower with aggregate credit
limits of ₹150 Crore and above and all non-investment grade borrowers (External Commercial Rating below
BBB or equivalent), enjoying credit limits from more than one public sector bank, irrespective of the amount of
exposure shall be under JLA.
5.6 SHARING OF INFORMATION

Sanction of fresh /ad-hoc /renewal of loans to new/existing borrowers should be done only after obtaining/sharing
necessary information on the prescribed format in case of lending under consortium/multiple Banking
Arrangements/Joint Lending Arrangement.

5.6 VALIDITY OF CREDIT LIMIT SANCTIONED

➢ Sanctions in respect of Working Capital and Term Loan facilities shall be valid for____from the date of sanction:
6 months,
➢ Facilities not availed within 6 months should be treated as lapsed and borrower be advised accordingly. Unless a
lapsed sanction is revalidated by the competent authority within a maximum period of _____from the date of
sanction, no facility should be released: 12 months
➢ However, where documents have been executed within a period of 6 months fr om the date of sanction, the
sanctions shall be valid for ____from the date of documentation: Next 6 Months

➢ Following powers will be applicable for re-validation of the sanctions:

S.N. Sanctions made by Competent authority to Time period upto which revalidation
consider re-validation can be considered from the date of
sanction
1. Sanctions up to HOCAC- III Sanctioning Authority 12 months
2. Sanctions made by MC HOCAC-III 12 months
However, to safeguard the bank’s interest, while permitting revalidation, the competent authority shall obtain and
study the latest financials of the borrowers/units and also ensure that the projections submitted at the time of
original sanction continue to hold good.

5.7 SECURITY
Advances can be granted to the borrowers either on secured basis or unsecured. 'Secured Advance' call for a
security in shape of tangible asset whereas 'Unsecured Advance' are granted only considering the creditworthiness
of borrowers without insisting upon any tangible security like land, building, plant or stocks. Security can be
classified in two categories as under:

➢ Primary security is an asset created out of the credit facility extended to the borrower and / or which are
directly associated with the business / project of the borrower for which the credit facility has been extended.
For example: hypothecation of stocks & books debts for cash credit facility. Hypothecation is the established

उत्कर्ष -2023
@
Back to Index 26 | P a g e
 practice whereby a borrower offers to the lender charge on an asset as security for a loan, while retaining
ownership of the asset and enjoying the benefits therefrom. With hypothecation, the lende r has the right to
seize the asset if the borrower cannot service the loan as stipulated by the terms in the loan agreement.

➢ Collateral security is any security, other than Primary Security, offered to additionally secure the credit
facilities sanctioned by the Bank. Collateral security is normally obtained as a risk mitigating measure and to
sustain the promoters’ interest in the venture & fall back on its liquidation in case of need.

5.8 CREDIT RISK RATING

➢ Hurdle Rate for considering the proposals :

External Credit Risk rating
Investment Grade Non-Investment Grade
BBB & above BB & Below
Internal Credit Risk rating
Investment Grades Rating grades B2 and above (With score of more than 46.00)
Borderline Risk Grade B3 (Having score more than 40.00 and upto 46.00)
High Risk Grades C1, C2 and C3 (Having score up to 40.00)

➢ The bank shall undertake new relationships in externally rated BBB & above accounts, & on conduct of their
Internal Rating should achieve B1 or B2. In such cases where the account is Internally Rated B2, it shall be
sanctioned at an appropriate level as per vested loaning powers in terms of extant guidelines.

5.9 Pricing

5.9.1 Linking of pricing with Credit Risk Rating

➢ In respect of borrowal accounts availing limits over ₹20 lakhs, interest rates have been linked with the credit
risk rating with certain exceptions.

➢ Situations may arise, where the borrowers would like to know about the rationale of their rating. Borrowers may
be informed about their weak areas such as Financial, Business/Industry, Management or Conduct of Account. The
rating report/individual parameters in detail are not to be disclosed to them.

5.9.2 Risk Adjusted Return on Capital (RAROC) Framework

➢ RAROC analysis is used for all corporate loan (FB and NFB) aggregating above ₹5 crore, where ROI/ commission
is linked to risk rating of the borrower and borrower is requesting concessions on card rate of the bank.

5.9.3 Reference Lending Rate

MCLR RLLR

➢ All rupee loans (other than linked with RLLR) are ➢ RBI has advised that floating rate Personal or Retail
priced with reference to the MCLR, which comprise loans (housing, auto, etc.) and floating rate loans to
of Marginal cost of funds, Negative carry on Micro, Small & Medium Enterprises extended by banks
account of CRR, Operating costs and Tenor shall be benchmarked to one of the following:
premium. ▪ Reserve Bank of India policy Repo Rate
▪ Government of India 3-Months Treasury Bill yield
➢ MCLR is reviewed on monthly basis and in the published by the Financial Benchmarks India
last week of every month reviewed rates are Private Ltd (FBIL)

उत्कर्ष -2023
@
Back to Index 27 | P a g e
 published/ circulated, which are applicable to all ▪ Government of India 6-Months Treasury Bill yield
new loans and credit facilities sanctioned/renewed published by the FBIL
from the 1st of the following month. ▪ Any other benchmark market interest rate
published by the FBIL.
➢ All floating rate Retail Loans, MSME loans including Food
& Agro processing segment are linked with external
benchmark i.e. Repo Linked Lending Rate (RLLR). Final
interest rate shall be arrived at by adding the applicable
spread to RLLR.

PNB RLLR ELITE TBLR

Under PNB RLLR ELITE wherein interest rates are Under the scheme “PNB PRIME PLUS”, interest rates are
linked with Repo rate under the purview of “Policy linked with T-Bill Rates under the purview of “Policy for
for Interest rate on Advances” for the Target Interest rate on Advances” for the Target segment
segment borrowers which are given as under:- borrowers, which are given as under:
▪ AAA rated corporate borrowers including NBFC (except
▪ PSUs, Central & State Govt. Undertakings including
Banks).
their NBFCs (irrespective of ERR) guaranteed ▪ AA rated corporate borrowers (except Banks & NBFC).
by Central Govt. /State Govt. ▪ PSU’s, Central & State Govt. Undertakings including
their NBFCs.
▪ All India Financial Institutions (NABARD, EXIM,
▪ All India Financial Institutions (NABARD, EXIM, SIDBI
SIDBI & NHB). & NHB etc.).
▪ Entities (Corporates including NBFCs, PSUs, ▪ A rated corporate borrowers* (For a maximum period
of 180 days)
Central & State Govt. Undertakings (including their
*Additional cost of Capital of 40 bps be recovered on
NBFCs)) not guaranteed by Central Govt. /State
account of increase in Risk Weight.
Govt. having ERR AAA & AA except Banks.

MCLR= Marginal Cost of Funds Based Lending Rate , RLLR= REPO linked Lending Rate , RLPLR = REPO linked Prime
Lending Rate , TBLR= T-Bill Linked Lending Rate
Note: With the introduction of PNB RLLR ELITE scheme, PNB PRIME CORP PLUS scheme is discontinued. However,
existing loans and advances under PNB PRIME CORP PLUS shall continue till repayment/switchover to PNB RLLR -
ELITE. As such, interest rates under PNB PRIME CORP PLUE are going to be published only for existing loans and
advances under this scheme

***************************

उत्कर्ष -2023
@
Back to Index 28 | P a g e
6. CREDIT DELIVERY – POST SANCTION FOLLOW UP, SUPERVISION & MONITORING

6.1 Documentation – Execution & Vetting of Loan Documents

➢ A uniform set of Standard Covenants circulated by IBA with the instructions that the Standard Covenants will be
stipulated at the time of sanction and shall form part of documentation for all credit facilities sanctioned by the
bank has been advised to the field as part of Model Terms & Conditions. These Standard Covenants are the
minimum and the sanctioning authority may consider the existing set of Model Terms & conditions or additional
stipulations on case to case basis, if necessary.
➢ Bank has in place a system of Vetting of Loan Documents from the approved advocate in case of borrowal
accounts, with sanctioned limits of ₹2 crore & above (both FB + NFB).

6.2 Pre-Disbursement Compliance (PDC)

➢ For effective implementation of compliance of Pre-Disbursement Terms & Conditions of Sanction, Bank has put
in place a system of PDC.
➢ The disbursing officer shall submit a certificate as per the prescribed format to the Compliance Officer who shall
verify and satisfy himself that all pre disbursement formalities are completed as per sanctioned proposal.
6.3 Limit Sanctioned Statement (LSS)
➢ Sanctioning Authorities are required to submit all limit sanctioned whether Fresh/Renewal/Reduction/
Enhancement/ Adhoc/Refund of excess charges /any other issue to be reported etc. in the prescribed format of
Limits Sanctioned Statement as on the _______of the month to the next higher authority: Last day
➢ The statement is to be submitted by the sanctioning authority to the next higher authority, properly filled up in all
respects, within _______of the close of the month to which it relates: 7 days
➢ LSS received should be scrutinized and observations, if any to be communicated to the concerned branches/offices
within _______of receipt of the LSS.: 10 days

➢ It shall be ensured that all the LSS are monitored till its logical end and shall be closed within : 3 months

6.4 Ensuring end-use of funds

➢ As a matter of prudence, Bank needs to ensure end-use of funds, it has lent. It is necessary to ensure that the
Bank does not depend entirely on the end-use certificates issued by the Chartered Accountants, but strengthens
its internal controls and the Credit Management System to ensure end-use of funds, which would enhance the
quality of the loan portfolio. Some of the illustrative measures that could be taken by the field functionarie s to
ensure end-use of funds are:
i. Meaningful scrutiny of quarterly progress reports/operating statements, balance sheets of the borrowers;
ii. Regular inspection of borrowers’ assets charged to the Bank as security;
iii. Periodical scrutiny of borrowers’ books of accounts;
iv. Periodical visits to the assisted units;
v. System of periodical stock audit, in case of working capital finance
➢ The appraising office i.e. Branch Office/RAM/MCC/LCB, as the case may be, should conduct pre-sanction visit of
borrower’s factory/business premises/IP offered as security in the loan account/borrower’s place of work/residence
as part of appraisal and annex the copy of visit report with the proposal.
➢ Based on RBI’s indicative list for ensuring end-use of funds following points may also be kept in view especially in
case of large borrowal accounts:
i. In working capital facility stock statement submitted by the borrower may also be got verified by Chartered
accountant/ Statutory auditor of the borrower initially at the time of its first submission and periodically
thereafter as prescribed in the sanction. Sanctioning authority may waive the same on merits of the case.
ii. In order to verify the debtors and creditors their GSTIN as mentioned on the invoice may be cross checked
from GST website (https://services.gst.gov.in/services/searchtp) at regular intervals.

उत्कर्ष -2023
@
Back to Index 29 | P a g e
 iii. In case sufficient information is not available about the supplier of machinery/equipment, credit report/external
rating report of supplier of machinery & equipment may be obtained to verify the credentials of the supplier
e.g.: its activity, address, turnover, etc.
iv. In cases where loan is being sanctioned for purchase of land/property/machinery or for construction and
Lender’s engineers have not been appointed, certificate from valuer/technical experts (approved by Bank)
may be obtained for verification of end use of funds.
6.5 Agencies for Specialised Monitoring (ASMs)

➢ The services of ASMs are to be utilized for large value loan/ (may or may not be of) specialized nature by bank
under Sole/multiple/consortium banking arrangement for monitoring. In case borrowal account is having large
exposure i.e. more than ₹250 Crore from the Banking system under Sole /Multiple /Consortium banking, ASMs
are to be appointed.
➢ Borrowers having loan accounts of above ₹50 cr and up to ₹250 cr:
Committee consisting of 2 General Managers (1 from CCD, HO and 1 from CRMD, HO) without inte rvention of ZO
/ ELCB / LCB shall decide whether ASM to be appointed or not for following cases:
· In accounts with PMS rank 5 continuously for 2 months. AND
· The internal risk rating of the account is B3 or below.
➢ Waiver of ASM in accounts having overall exposure of above ₹ 250 cr,
In case of borrowers having valid External Risk Rating of for the Bank facilities, Sanctioning Authority is
empowered for considering waiver of appointment of ASMs on merits of the case: AAA or AA. In other cases,
waiver of ASM in any account may be considered in exceptional circumstances by MC in case of MC power
accounts and by HOCAC – III in all other accounts.
6.6 PNB-SAJAG

➢ PNB-SAJAG is a EWS+PMS system to capture the signals of early warning applicable to all borrowal accounts having
exposure: Above ₹1 Crore.
➢ The system captures 127 Early Warning Signals including ___ signals prescribed by RBI :42
➢ In compliance of RAR observations and EASE agenda, Bank has subscribed to the services of ________for
implementation of Early Warning Signal System for Retail portfolio and MSME (exposure up to ₹1 Crore).:
M/s Transunion CIBIL Ltd.
These borrowers have been kept on watch list and on invocation of any trigger in a particular account and change
in credit profile of the borrower with our Bank and /or other banks, CIBIL sends auto generated triggers on daily
basis. The alerts are being disseminated real time on daily basis through Web Portal to the Branches /PLP /CO
/ZO /HO Divisions. Controlling offices at different levels (CO /ZO /HO) can also access the portal and view the
remarks submitted by branch. The alerts are also being placed daily in common folder of Morning Checking report
under name, “Daily_Retail_EWS_Report”
6.7 Review/Renewal of Working Capital Limits/Term Loans

➢ All limits are to be renewed/ reviewed at least once in 12 months from the last date of sanction/renewal.
➢ In order to have constant monitoring of the portfolio of the bank in the lower rating categories of “C1 to C3”,
review of borrowal accounts (where IRR is C1 to C3), having limits above ₹10.00 crore should be done on: Half
Yearly basis.
In cases where regular renewal is due in less than 6 months period, then instead of aforesaid review, regular
renewal be done as per the due date.

➢ All standalone Term Loans, except retail loans, with sanctioned limit of___need to be reviewed annually: ₹2
Crore & above. The Annual review of standalone term loan shall continue till such time the balance
outstanding of the Term Loan account is ₹2.00 Cr and above
➢ The review of Term Loans will have no bearing on asset classification and income recognition of the accounts.

उत्कर्ष -2023
@
Back to Index 30 | P a g e
➢ The OD facility to housing loan borrowers for personal needs should be reviewed once in : 3 Years

➢ Loans extended in shape of Overdraft facility on monthly reducing DP basis under “PNB myProperty Loan scheme”
shall be renewed : Once in 3 years
➢ All Kisan Credit Cards/Kisan Gold Cards are sanctioned for 5 years and are reviewed annually. The CC
limit shall be reviewed annually to ensure that crop and other sales proceeds are routed through limit account.
➢ It may not be always possible to have each and every account reviewed /renewed before the due dates. In case
of constraints such as non-availability of financial statements and other data from the borrowers, the branch should
furnish evidence to show that renewal/ review of credit limits is already on and would be completed soon. If the
reasons for delay are genuine and beyond the control of the borrower, on request of the borrower, validity of
sanction may be extended maximum upto ____from the due date of renewal of limits.: 6 months

➢ In case of CC / OD limits under Schematic Lending (Eg: PNB myProperty Loan, OD-HL, etc.,) having validity
of sanction more than ______as prescribed in such schemes, the same shall remain in vogue: 12 months
However, the extension of validity in accounts (other than KCC/KGS) shall be permitted as per guidelines i.e. for
a period not exceeding ____from the regular due date of such limits: 180 days

➢ Adoption of Green Renewal:

In order to increase efficiency of appraisal process, reduce TAT and screen good accounts at the time of renewal,
simplified Procedure for Renewal of Credit Facilities i.e. Green renewal is implemented in the Bank, which is
applicable for limits upto : ₹25 Crore

➢ E-Renewal and digital lending:

Bank has taken following initiatives towards digital lending;
▪ PNB e- Mudra (Shishu) Scheme- The module has rule based processing & sanctioning, which is completely
system driven for loan: upto ₹50,000/-

▪ e-RENEWAL Scheme- Automatic /Straight Through Process (STL) for renewal of credit facilities is
implemented for working capital credit facilities having exposure upto ₹ 10 Lakh. The process is based on pre
defined business rules and there is no need to prepare process note /other documents. Renewal of credit facility
under STP /Digital modes shall be treated at par with the regular renewal of credit facilities .

▪ End to end fully digital Pre-approved Personal loan (PAPL) for Government /PSU employees/Pvt.
Employee/Pensioners/existing Car loan, Home loan and Personal loan borrowers/PNB customers having deposit
relationship with us on the basis of QAB & TRV

▪ Pre-approved analytics-based loan offers at HO level on the basis of available database under various retail loan
schemes. The eligible customers are informed through usage of digital channels such as SMS, email and
outbound calls from Call Centre.

उत्कर्ष -2023
@
Back to Index 31 | P a g e
6.8 Obtention of Financials

The requirement of Audited Financial Statement

Category Financial Paper Requirement Exposure Criteria

Borrowers governed by Companies Act Audited Financial Statement Irrespective of Exposure
Borrowers not falling under exempted category Audited Financial Statement Irrespective of Exposure
for Tax Audit as per Income Tax Act
Borrowers falling under exempted category for Audited Financial Statement Above ₹1.00 Crore
Tax Audit as per Income Tax Act Unaudited Self-Certified Financial Up to ₹1.00 Crore
Statement

Obtention of Financials in case of Fresh Sanction, Enhancement, Additional (except Adhoc) and
Takeover

TIMELINE Financials to be Obtained Calculation of Benchmark Ratio

(for financial year T)
A. FOR EXISTING FIRMS
i.Proposal is 1. Annual Audited financials for immediately Annual Audited financials/
appraised up to preceding last FY (i.e. T-2), Provisional financials for last FY (i.e.
30 st September 2. Annual Audited financials for last FY (i.e. T-1) T-1)
OR provisional1 financial statement for last FY Benchmark ratios shall be calculated on
i.e. (T-1), and provisional financials only where
3. Provisional financials up to last quarter (As per borrower comes under the purview of
prescribed format). GST regime & is liable to file GST
returns. Otherwise, the calculation of
Example: benchmark ratios shall be done on the
15 th July 2022 basis of last available audited financials.
1. ABS as at 31.03.2021 (T-2) Example
2. ABS as at 31.03.2022 OR provisional 15th July 2022
financials as on 31.03.2022 (T-1), and ABS as at 31.03.2022/ provisional
3. Provisional financials as on 30.06.2022. financials as on 31.03.2022
ii.Proposal is 1. Annual Audited financials for last FY (i.e. T-1), Annual Audited financials for last FY
appraised on or and (i.e. T-1)
after 1 st October 2. Provisional financial statements up to last
quarter (As per prescribed format)
Example: Example:
20 th November 2022 20th November 2022
1. ABS as at 31.03.2022, and ABS as at 31.03.2022
2. Provisional financials as on 30.09.2022
B. FOR NEWLY INCORPORATED FIRMS
iii. Newly incorporated firms Financials to be Calculation of Benchmark
In case of newly incorporated business entity where Obtained Ratio
no audited financials are available In case of newly incorporated
Or, For businesses: business entity where no
❖ under implementation, or audited financials are available
Projected financials Or,
❖ where the project is completed but shall be used For businesses:
audited financials are available for a
▪ under implementation, or
period of less than 6 months
▪ where the project is
In other cases, the guidelines as placed at para i. completed but audited
and ii shall be followed. financials are available for a
period of less than 6 months
Projected financials shall be
used.
In other cases, the guidelines
as placed at para i. and ii. shall
be followed.

उत्कर्ष -2023
@
Back to Index 32 | P a g e
Obtention of Financials in case of Renewal/ Review

TIMELINE Financials to be Obtained Calculation of Benchmark

(for financial year T) Ratio
(a) (b) (c)
1. Annual Audited financials for immediately
preceding last FY (i.e. T-2)
2. Annual Audited financials for last FY (i.e. T-1)
or Provisional financials for last FY (i.e. T-1),
Irrespective of time and Calculation of benchmark ratios
of the financial year 3. Provisional financials up to the last quarter (As shall be done as per the
(i.e. April to March) per prescribed format) financials mentioned at para (b).
Example:
15th February 2023
1. ABS as at 31.03.2021 (T-2)
2. ABS as at 31.03.2022 or provisional
financials as on 31.03.2022 (T-1), and
3. Provisional financials as on 31.12.2022

Prescribed format for Provisional Financials up to the last quarter

Period ended Accepted for the current year % age achievement Remarks
up to latest quarter
Sales
Other Income
PBT
PAT
NWC
Current Ratio

Other Guidelines

i. In case of Listed companies, no proposals of renewal, enhancement, new connection & takeover in WC/TL
limits shall be permitted based on Annual Audited Financial statements which are older than 15 months.
ii. In respect of exposures to unlisted PSUs/ Government undertakings assessment/ calculation may be
carried out based on the provisional financial statements certified by Internal Auditors even after 30 th September.
There is no need to wait for the completion of Comptroller & Auditor G eneral Audit, wherever applicable.
However, non obtention of Audited financials should be discussed as a part of the assessment with proper
justification along with the timeline for its obtention. No specific approval from Competent Authority is required
to be obtained.
iii. In respect of Companies/LLPs, before accepting the Audited Financial Statements for further
processing/records, it is mandatory to compare the Balance Sheet, P&L account submitted by the Company/LLP
with Balance Sheet, P&L account filed in MCA portal and confirm the authenticity of the documents submitted.
iv. All financial statements should be duly authenticated to be true copies by the borrower /authorized
representative.
v. Wherever Audited Financials are required to be submitted as per extant guidelines, the documents shall
invariably bear UDIN so that essential figures can be cross verified

vi. In case where provisional financial statements are submitted, the following shall be ensured:
1. The sales figures are comparable with GST returns (i.e. variations, if any, may be within the range of
upto 10%).

1 Provisional financials shall be duly signed by the proprietor / partner (s) / authorized signatory

उत्कर्ष -2023
@
Back to Index 33 | P a g e
 2. In case adverse variance exceeds 10% as mentioned above, the respective sanctioning authority may
prescribe appropriate measures as deemed fit.
3. Further, an undertaking shall be obtained from the borrower regarding the following:
a) To submit the Audited Balance Sheet within one month of the due date for submission of audited
financial statements as prescribed by the MCA/SEBI/Income Tax Department etc.,
b) That the adverse variance between provisional financials and Audited figures shall not be more than
5% in respect of Sales, Adjusted Net worth, Current ratio, and TOL/Adj. TNW.
vii. Wherever the statutory body extends the timeline for filing the Annual financial statements, the sanctioning
authority shall have the discretion to permit the use of provisional financials, as deemed fit.

viii. For operational convenience, the sanctioning authority may permit 1 month cooling period for obtention of
provisional financials i.e. if the loan is appraised in the month of April, then provisional financials up to February
may be accepted by the sanctioning authority for all purposes.

6.9 Change of Promoter in Standard Assets

Change in promoter shall be a situation where there is no change in entity’s name & activity however new promoter
steps in and gain financial/operational control over the firm/company.
Following indicative points shall be looked and commented in the proposal whenever there is change of promoter in
borrowal accounts:
➢ Applicability: Partnership Firms/Limited Liability Partnerships/ Private Ltd Companies/ Public Ltd Companies
➢ Risk Posed vis-à-vis Risk Mitigants
SN Risk Posed Indicative Mitigants

i. New promoter neither possessing required Qualification nor experience Sanctioning authority may explore the
in the related field. possibility of following mitigants:
ii. Operation of the firm/company is highly dependent on
➢ reduction in limits
skills/qualifications/experience of existing promoter.
➢ increasing the collateral coverage
iii. New promoter (already highly leveraged) stepping in or the group is ➢ increasing margins
highly leveraged. ➢ Obtention of Personal Guarantee of
Leverage position includes corporate guarantees/capital commitment existing promoter and/or new
given to its other subsidiaries. promoter.

iv. Change in promoter will adversely affect the business.

v. Change in promoter is primarily due to inadequacies of the existing ➢ Continue with the exposure while
promoters and subsequent change in ownership will be beneficial for treating the exposure as fresh
business.
exposure and conducting due diligence
vi. Change in promoter is due to government regulations/Law etc as a fresh exposure.
➢ Obtention of Personal Guarantee of
vii. Where operational control is in hands of previous promoter and only
existing promoter and/or new
equity stake is sold out to new promoter. For example in Road projects , promoter.
to free up the capital generally Promoter sells its equity however the
Operation and maintenance activity lies with original experienced
promoter and cash flows are not hampered by such change.
General conditions:
a) Compliance of guidelines contained in Companies Act and SEBI (in case of listed entity)
b) Assessment of key promoter risk (irrespective of loan amount).
c) Rating: - Internal Risk Rating shall be again conducted to analyse the risk posed by change i n management.
d) Legal Aspect: - Legal opinion shall be sought from empanelled advocate whether fresh documentation shall be required or
mere executing of supplementary agreement will suffice the purpose.
e) Due Diligence: Change of promoter will be considered as a new connection with the Bank and the credibility/due diligence of
new promoters shall be carried out treating the exposure as a fresh exposure .

उत्कर्ष -2023
@
Back to Index 34 | P a g e
6.10 Loan Review Mechanism

➢ Coverage of Credit Audit

Type of Accounts eligible for LRM Cut Off Limit
(FB+NFB)
▪ All rated standard accounts
(fresh proposals and proposals for renewal /enhancement of limits within 3 months from the ₹10.00 Crore &
end of quarter, during which loan was sanctioned/first disbursed) above
▪ All Standard Restructured Accounts
Note: In case of accounts with combined group exposure of ₹10 cr. and above all the accounts
irrespective of individual limits shall be subjected to credit audit
5-10% randomly selected sanctions having exposure ______ from the rest of the rated ₹5.00 Crore &
portfolio including those Circle Offices where total Number of accounts with aggregate above
exposure of ₹10 crore & above (FB+NFB) are less than 10 in a Financial Year.
Taken over borrowal accounts: ₹1 Crore and
Note: The first such audit is to be got done within 3 months from the end of quarter, during above
which loan was sanctioned/first disbursed and the next audit is to be carried out within three
months after completion of one year of first credit audit.
Note:
▪ All eligible Accounts shall be subjected to credit audit annually.
▪ The frequency of review should vary depending on the magnitude of risk (say, for the high risk accounts - 6
months, for the Medium risk & low risk accounts- 1 year).
Frequency of Audit:
Low Risk Medium Risk High Risk
Yearly Half-Yearly Quarterly
A1 to A4 B1 to B3 C1 to C3

▪ Credit Audit of all eligible accounts will be got conducted by Credit Auditors (Scale-III & above) of CA&RD, HO
/Auditors of ZAO’s/Engaged Credit Auditor of CA&RD, HO. A pool of 45-50 officers having exposure of handling
Large Credit/Forex) for conducting Credit Audit of Eligible Accounts will be created at CA&RD, HO

Time Frame for LRM/ Credit Audit

Exposure upto ₹250.00 Cr. Exposure above ₹250.00 Cr.
2 working days for completion of Audit 3 working days for completion of Audit
Exempted category:
(a) Retail Banking segments (i) Rule Based Lending (housing, vehicles & personal loan) (ii) Advances against consumer durables,
(b) Advances against Bank Deposits, LIC policies, Govt. securities, Gold/silver Jewellery & ornaments, advance against shares ,
debentures & Mutual Fund
(c)Accounts which are exempted from Internal Rating.

▪ For detailed guidelines refer :CREDIT AUDIT AND REVIEW DIVISION (CARD) Cir No.04/2022 Dt.06.05.2022

6.11 Special Mention Accounts (SMAs)

➢ All irregular accounts other than revolving credit facilities are classified as Special Mention Assets (SMA) with sub-
categories as under:
SMA Sub-categories Basis for classification –
Principal or interest payment or any other amount wholly or partly overdue between
SMA-0 1-30 days
SMA-1 31-60 days
SMA-2 61-90 days

उत्कर्ष -2023
@
Back to Index 35 | P a g e
➢ In the case of revolving credit facilities like cash credit, the SMA sub-categories will be as follows:
SMA Sub-categories Basis for classification – Outstanding balance remains continuously in excess
of the sanctioned limit or drawing power, whichever is lower, for a period of:
SMA-1 31-60 days
SMA-2 61-90 days

➢ Credit Review & Monitoring Division, HO monitors SMAs of ______on daily basis and suggest corrective steps to
ZOs/COs/BOs: ₹5 crore and above
➢ Besides, the position of all weak accounts/ SMAs under standard category with outstanding of ₹5 crore and
above having weaknesses such as PMS Rank 4 & above, Accounts with Internal Risk Rating C1 & below and
RBI/SCAs commented accounts etc. It also monitored at corporate level. For monitoring of SMAs, the Task Force
is set up.
Level Constitution Scope (All SMA with Aggregate
Exposure (AE) of___)
HO GM (CRMD), DGM/AGM/Chief (CRMD), GM/DGM & AGM/Chief (RD), ₹5 crores and above
GM/DGM (Credit Div.)
ZO ZM, 2nd Man of ZO (AGM/DGM), AGM/CM (credit/Recovery), Desk Officer ₹1 Crore and above
(Credit/ Recovery)
CO Circle Head, AGM/CM and/or FM (Credit), Desk Officer (Credit), FM (RD) ₹ 5.00 lac and above

➢ Crop Based Advances: Asset Classification

For Crop based CC/OD
Basis for Classification (Overdue period)
Irregularities Sub-Categories
Short Term Crop Long Term crop
CBR-0 1-364 days 1-364 days
CBR-1 365-546 days 365-546 days
CBR-2 547-729 days 547-729 days

For Crop based TL/DL

Basis for Classification
Irregularities Sub-Categories (Overdue period from the date of Instalment/Interest due date )
Short Term Crop Long Term crop
CBR-0 1-364 days 1-182 days
CBR-1 365-546 days 183-364 days
CBR-2 547-729 days 365-547 days

➢ RBI has setup a Central Repository of Information on Large Credits (CRILC) to collect, store and disseminate
credit data of borrowers having Aggregate Exposure (AE) of ₹5 crore and above and the Banks are to report
classification of such borrowers to CRILC.
➢ Bank endeavors to exit from Standard accounts having total fund based and non fund based exposure of ₹10
crore & above from us, which are likely to prove difficult of recovery in future due to any type of irregularity
in account/ change in industry scenario/management/technological obsolescence and/ or market factors like
increased competition/slump in market etc.

उत्कर्ष -2023
@
Back to Index 36 | P a g e
7. DELEGATION OF LOANING POWERS

7.1 Linking Loaning Powers with Risk Rating

The Bank has in place a multi-tier credit approving system. In order to enable the field functionaries for taking
expeditious decisions and also to attract quality accounts, the CACs/officials shall exercise loaning powers linked to
risk rating of borrower/rating of the industry, as enumerated in loaning powers & guidelines for exercising such
powers at various levels.

7.2 Sanction of limits in anticipation of approval by MC

Shall be considered in case of Existing as well as Fresh Borrowers by HOCAC-III for meeting emergent needs and
ratification of such approval should be moved immediately to MC

7.3 In Principle Consent

In case of genuine and urgent cases falling under MC sanction, “for existing borrowers HOCAC -III/II may convey the
‘In Principle Consent’ and in case of fresh borrowers HOCAC-III may convey the same”. However, in all cases, the
funds shall be released only after complete appraisal and regular sanction by the Sanctioning Authority.

7.4 Certain Restrictions on Loaning Powers

➢ Sanction of limits to NBFCs:

▪ All fresh proposals enhancement/additional/temporary/adhoc facilities to NBFCs shall be considered at
HOCAC-I & above only subject to following:
Sanctioning External / Internal Risk Rating*
Authority
ERR of AAA & AA or ERR of A or IRR of A4 ERR of BBB or IRR of
IRR of A1 to A3 B1 & below
HOCAC - I Nil Nil
HOCAC - II Nil Nil
Full Power
HOCAC - II Nil
Full Power
MC Full Power
*In case of variance of external and internal rating, lower of the two will be reckoned for determining loaning power

▪ However the cases for renewal /review of existing facilities shall be considered by sanctioning authority under
whose power the exposure otherwise falls within its vested loaning powers.

➢ Rubber Industry: Further exposure should not be taken. In case, Branch Heads (LCB) & ZMs find a bankable
proposal, they may recommend it to Credit Division, HO for sanction by the MC of Board on merits.
➢ Tea Industry: Further exposure should not be taken except for the Branches in West Bengal & North East
states where sanction would be done at RAM/MCC {CM/AGM} and above only within their vested loaning powers).
In case Branch Heads (LCB & E-LCBs) & ZMs find a bankable proposal in any other region, they may recommend
it to Credit Division, HO for sanction by the MC of the Board on merits. However, competent authority may
sanction additional/adhoc/enhancement facilities in case of existing accounts in Tea Industry on merits.

➢ PSU Disinvestment announced by Govt.: Loaning powers are to be exercised by MC on merit basis.

➢ Purchase of Gold: No advances shall be granted for purchase of gold in any form, including primary gold,
gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold Mutual
Funds.
➢ Gems & Jewellery Sector: To be considered by MC on merits. In case of existing accounts any
Additional/Enhancement also to be allowed with the approval of MC. However, renewal of limits shall
continue to be considered by competent authority as per vested loaning powers.

उत्कर्ष -2023
@
Back to Index 37 | P a g e
 Further, financing to Jewelers against Mortgage of IP under PNB Sampatti scheme will continue as per
extant IRMD/MSME scheme. Credit Review & Monitoring Division, HO shall closely monitor the exposure under
the Gems & Jewellery Sector including the exposure ceilings and along with Credit Division HO shall take steps
to right-size the exposure as and when required, proactively.
➢ Infrastructure Projects: Shall be sanctioned by ZOCAC & above only. However following infrastructure
proposals can be sanctioned by PLP-CAC /MCC-CAC and above, within their vested loaning powers:

Proposals related to Sanctioning Authority (SA)

Agro-Processing and Supply of Inputs to Agriculture PLP-CAC /MCC-CAC
Setting up of Cold Storages which includes construction for MCC-CAC / PLP Headed by AGM (where MCC
preservation and storage of processed agro products, perishable is not located) and above
goods such as fruits, vegetables and flowers including testing
facilities for qualityF
Construction of Hospitals* for running the same by their promoters PLP-CAC /MCC-CAC
Water Supply Project, Irrigation Project, Water Treatment System, CHCAC & above within their vested loaning
Sanitation & Sewerage System or Solid Waste Management System powers.
Mini Hydropower Projects
*In case of construction of educational institutions and hospitals by companies/individuals engaged in construction
or development of real estate projects, the loaning powers for financing real estate projects shall be exercised

7.5 TOD / Adhoc Limits

In order to facilitate operational convenience, TOD and Adhoc Limits have been defined and will be exercised as
under:
➢ Temporary Overdrawings (TOD)
In fund-based secured advances, over drawings may be allowed for payment of statutory dues, salaries, wages
or any other justifiable debits for very short period say 2-3 days, but not exceeding 7 days (including roll over,
if any) to meet temporary mismatch of funds in unforeseen circumstances by officials within their vested loaning
powers.
➢ Adhoc Facilities
▪ Adhoc limit/facility should be granted as regular sanction for fixed period to the borrower after analyzing
the financials & requirements of the borrowers only for unexpected business and subject to the other laid
down stipulations for sanction of adhoc limits.
▪ BM in PLP/MCC/LCB/E-LCB, CHCAC and above to exercise their existing loaning powers for sanction of adhoc
facilities in an account for maximum of two occasions within a year from the date of last
sanction/renewal/review/enhancement of the regular limit as per the Criteria specified in the Loaning Power
Chart.
▪ No adhoc facilities are to be permitted where limits are due for renewal/review.
▪ No clean OD should be permitted in savings accounts except for schemes with inbuilt OD facility.
7.6 Confirmation of Action
➢ Any direction (including telephonic direction) for taking action in any case in respect of matters, on which the
senior officer or his subordinate has powers to decide, shall ordinarily be conveyed in writing.
➢ The officials shall exercise the vested loaning powers diligently and shall not exceed the vested powers. However,
in exceptional circumstances and for bonafide exigencies, wherever such powers are exceeded, reporting the
same immediately to the controlling authority for confirmation by the competent authority not later than three
days from the date of the transaction in any case shall be done on the prescribed format.

उत्कर्ष -2023
@
Back to Index 38 | P a g e
8. INTERNAL CREDIT RISK RATING/SCORING - PROCESS AND SYSTEMS
A comprehensive credit risk management process encompasses the following steps:
A. Credit Risk Identification and Measurement
B. Grading of Borrowers under the Rating System
C. Reporting and analysis of Credit Risk
D. Portfolio Management
E. Use of Securities as Risk Mitigants
F. Use of Guarantees as Risk Mitigants
A. CREDIT RISK IDENTIFICATION AND MEASUREMENT

➢ Credit risk management process involves identification, measurement, monitoring and control. The bank has put
in place strong credit risk management structure, which ensures continuous identification of possible areas, which
may adversely affect the credit quality of a borrower and/ or portfolio.
➢ The process of identification of credit risk is done by:
• Identifying potentially good and weak industries to manage risk in portfolio through industry wise exposure
ceiling model.
• Identifying potential credit risk in a new as well as existing borrower through various credit risk rating models.
• Identifying signals of weakness in an existing borrower through preventive monitoring system.
• Identifying weak accounts having incipient sickness.
INDUSTRY OUTLOOK

➢ Bank has established Industry Research Desk to carry out in-house risk assessment of Industries. The
result in the form of industry outlook is available on Knowledge Centre.
➢ Further, for better understanding of industry outlook, the output of industry risk assessment exercise carried
out has been translated into Industry Handout of each industry. The Handout presents executive summary
and brief of various industry risk parameters. Industry Handouts are used as inputs in Bank's credit risk rating
and while taking informed credit decision.
➢ Industries are classified into three categories based on outlook; Favourable, Neutral and Less Favourable.
➢ ‘Less favourable’ does not mean that proposals under these industries will not be considered for sanction.
Delegated Authorities as per loaning power may consider the sanction on case-to-case basis.
➢ The industries not rated are to be treated as neutral so far as applicability of loaning power restrictions are
concerned. Besides, other guidelines on the subject shall be adhered to.

CREDIT RISK RATING MODELS

The different online software platforms for rating/scoring of borrowers in different segments ar e as under:
Covers the risk rating models, including default risk rating and
A PNB Trac
Transaction/Facility Rating models.
B PNB Score Scoring Models for Retail Segment
C PNB Score SME Scoring Models for MSME Segment
D PNB Farm Score Scoring Models for Farm Sector

उत्कर्ष -2023
@
Back to Index 39 | P a g e
Score Based Models (For Loans up to ₹100.00 Lakh)

Particulars PNB Score PNB Score SME PNB Farm Score

• All Retail Loan applications MSME borrowers with exposure up • Agriculture loans up to ₹100
(except exempted categories) to ₹100 Lakh Lakh
up to ₹100 lakh • Agriculture loans above ₹100.00
Applicability
• Housing, Education and lakh for those Individuals only,
Vehicle (individuals) loans, who don’t prepare book of
irrespective of amount
accounts and credible financial
statements.

Rating 1. Housing Loan/ Loan against ₹10 lakh and below

Models IP to Individual 1. MSME Manufacturing and Service 1. Model I: Farm Credit -
2. Conveyance Loan (New Cases including takeover) Agriculture with limit above ₹1
2.MSME Manufacturing and Service lakh.
3. Education Loan
(Renewal / Enhancement) 2. Model II: Farm Credit- Allied
4. Personal Loan (Pensioner)
Above ₹10 lakh to ₹100 Lakh Agriculture with limit above ₹1
5. Personal Loan (Others) 3.MSME Manufacturing (New Cases lakh.
6. Doctors‟ Loan @ including takeover) 3. Model III: Farm Credit-
7. Traders‟ Loan (New)@ 4. MSME Service (New Cases Agriculture with limit above ₹1
including takeover) lakh (Renewal/ Enhancement)
8. Traders‟ loan (renewal)@
5.MSME Manufacturing and Service 4. Model IV: Farm Credit-Allied
(Renewal / Enhancement)
Agriculture with limit above ₹1
lakh (Renewal/ Enhancement)

Exemption • Advances under Retail • All accounts with sanctioned • Cash Credit /Production Credit
/other Banking Schemes, where limits of ₹2 lakh and below. loan up to ₹3.00 lakh and
scoring models are not • Advances to Transport sector investment Credit / Term Loan
available (Loan against Gold and Documentary Films (on up to ₹1.00 lakh.
& Jewellery and PNB themes like family planning, • Schemes which are being
Baghban) social forestry, energy classified in Agriculture, but to
• Loan against Sovereign Gold conservation and commercial be evaluated through other
Bonds advertising). scoring models
Risk Rating shall be done
@These credit scoring models through Credit Risk Rating
are still part of PNB Score, Model-PNB TRAC under the
though some of the schemes following cases:
covered under these scoring • For all Agriculture loans above
models are now being looked ₹100.00 lakh other than
after by MSME Division exceptions.
• Agriculture loans above ₹100.00
lakh for Individuals having
audited book of accounts and
financial statements shall be
rated through Small Loans Rating
Model.
• Agriculture loans above ₹100.00
lakh for Individuals setting up
new business having projected
balance sheet and financials shall
be rated through Entrepreneur
New Business Model.

➢ Scoring Model for Credit Card

Bank is using model for scoring of fresh applications for issue of the credit card to individuals and to assess
the credit card limit for Classic, Gold and Platinum Cards.

उत्कर्ष -2023
@
Back to Index 40 | P a g e
 ➢ Scoring Model for PNB Sampatti Scheme or Any Similar Scheme Wherein Primary Security is in
the Form of Immovable Property
This model is applicable for credit exposure above ₹10 lakh and up to ₹5 Crore. For exposures above this
level, respective rating model as per PNB TRAC are applicable.
➢ Scoring Model – PNB GST Express Loan Scheme
This model is applicable for “PNB GST Express Loan scheme or any similar scheme where financial statements
are not required for credit sanction” and has been placed in the PNB-SME Score family for the Risk Scoring.
PNB Trac (For Loans above ₹100.00 Lakh)

Credit Risk Rating Threshold Limits

Sector
Model Aggregate Bank Exposure Turnover
> ₹1 Cr
Manufacturing/
Small Loans <= ₹10 Cr <= ₹50 Cr
Service/Trading
(AND)
> ₹10 Cr
Manufacturing/ > ₹50 Cr
<= ₹50 Cr
Service <= ₹250 Cr
(OR)
Mid Corporate
> ₹ 10 Cr
> ₹ 50 Cr
Trading <= ₹ 100 Cr
<= ₹ 500 Cr
(OR)
Manufacturing/ > ₹50 Cr
> ₹250 Cr
Service (OR)
Large Corporate
> ₹ 100 Cr
Trading* > ₹ 500 Cr
(OR)
Credit Risk Rating
Sector Aggregate Bank Exposure Cost of Project
Model
New Project Rating Manufacturing/ > ₹10 Cr
> ₹30 Cr
Model Service (OR)
Borrower setting up new business
Manufacturing/ and requiring finance above ₹1
<= ₹30 Cr
Service Cr upto ₹ 10 Cr
(AND)
Trading All new trading concerns irrespective of bank limits.
New Non-Banking Financial Companies (NBFCs)/New Micro Finance Institutions (MFIs)

New borrower entities, setting up new business requiring only working capital/NFB
ENBM limits but not involving setting up of any project as such (Irrespective of bank
exposure).
Projects already completed with own finance, audited results for first year of
operations are not yet available and proposal is only for sanction of WC/NFB/TL
facilities (Irrespective of bank exposure).
Existing borrower proposing to avail credit limits above ₹1.00 Cr and up to ₹10.00 crore
undertaking a major expansion i.e. value of block assets being added are more than
50% of existing gross block assets value as per the latest audited accounts and value of
gross block assets being up to ₹30.00 Crore after expansion.
All Non-banking Financial Companies (NBFC), Financial Institutions (FIs), State
NBFC Financial Companies (SFCs), Housing finance Companies (HFCs) and Power Finance
Corporations (PFCs) irrespective of the limits or turnover except new NBFC/ and MFIs.
Counterparty Model All banks and Financial Institutions
Mandatory:
✓ For borrowers having exposure more than ₹50.00 Crore
✓ For all listed borrowers, irrespective of exposure
Dynamic Review of
rating (However, borrower already rated as PNB-C1/C2/C3 and borrower wherein all the facilities
are guaranteed by Centre/State Govt. are exempted from purview of the model).
Optional: For all other borrowers keeping in view any recent adverse
developments. Period of Review : After 5 months from date of rating.

उत्कर्ष -2023
@
Back to Index 41 | P a g e
 TRANSACTION RATING MODEL
1. Facility Rating Framework Assigning rating to facility sanctioned based on default rating and securities available
2. Future Lease Rental Model Advances to property owners against future lease rentals
NPA Marking Model
1. NPA Model For marking NPA accounts in on-line PNB Trac Credit Risk Rating System
PNB Super Scorer
PNB Super Scorer shall serve as an additional tool on top of regular rating in PNB Trac in the
account to capture fine- tuned riskiness/ change in riskiness in borrowers in the previous recent
PNB SUPER rating. (To strengthen the credit risk assessment for all fresh /enhancement /additional limit
1.
SCORER proposals in standard accounts falling within vested power of ZOCAC and above (i.e., ₹30
Crore and above) and to capture changes in risk dynamics post regular rating more than 3
months old at the time of sanction)

Exempted categories of PNB Trac

i. All accounts with sanctioned limits of ₹100 lakh and below.
ii. All loans against shares and debentures, units of mutual funds, life insurance policies.
iii. Advances to Central/State Govt. Departments. Undertaking/ Establishments, which are not running on
commercial basis (e.g. Industrial/Agricultural/Rural Development Boards of various State Govts.).
➢ Following Advances are exempt from the purview of both Credit Risk rating and Scoring models:
• All advances against security of Bank’s own deposits./ All staff Loans/ against Govt. securities

B. Grading of Borrowers under the Rating system

Rating Risk Description
Grade Significance
Excellent business credit, superior asset quality and excellent track record of debt
PNB-A1 Minimum Risk
repayment capacity and coverage.
Very good business credit, asset quality and liquidity, debt repayment capacity and
PNB-A2 Marginal Risk
coverage.
PNB-A3 Modest Risk Good business credit, asset quality, debt paying capacity and coverage.
PNB-A4 Lower Risk Satisfactory business credit, asset quality, Liquidity, good debt repayment capacity
Acceptable business credit with average risk, acceptable asset quality, modest debt
capacity. However, adverse economic conditions or changing circumstances are
PNB-B1 Average Risk
more likely to lead to a weakened capacity of the obligor to meet its financial
commitments.
Marginally An obligor is less vulnerable in the near term. However, it faces major ongoing
PNB-B2 Acceptable uncertainties and exposure to adverse business, financial, or economic conditions
Risk which could lead to the inadequate capacity to meet financial commitments.
An obligor is more vulnerable than the obligors rated 'B2', and currently the obligor
Cautiously
has the capacity to meet its financial commitments. Adverse business, financial, or
PNB-B3 Acceptable
economic conditions will likely impair the obligor's capacity or willingness to meet
Risk
its financial commitments.
Not creditworthy, generally acceptable on case to case basis, Currently vulnerable
PNB-C1 High Risk and dependent on favorable business, financial and economic conditions to meet
financial commitments.
Not creditworthy. An obligor has minimal margin of principal and interest payment
PNB-C2 Very high Risk protections, currently highly vulnerable, and is totally dependent upon favorable
business, financial and economic conditions to meet its financial commitments.
Unacceptable business credit, Currently highly vulnerable obligations, normal
Exceptionally
PNB-C3 repayment in jeopardy, inadequate projected net worth and paying capacity.
high Risk
Default of some kind appears imminent.

उत्कर्ष -2023
@
Back to Index 42 | P a g e
 ➢ Rating grades B2 and above (With score of more than 46.00): Investment Grades
➢ B3 (Having score more than 40.00 and up to 46.00): Borderline Risk Grade
➢ C1, C2 and C3 (Having score up to 40.00): High Risk Grades
C. NPA RATING CATEGORIES UNDER CREDIT RISK RATING SYSTEM
As and when a rated account becomes NPA, the NPA rating classifications need to be marked, which will be treated
as new ratings and again as and when there is change in Asset Classification of NPA account, NPA cl assification is to
be remarked accordingly. Any subsequent up-gradation of the borrowal account to standard category would require
fresh view on the rating of borrower.
The NPA rating categories are as under:
Score Obtained Rating Grade Description
Defaulted Accounts PNB-NS NPA - Sub-Standard
(Accounts that have slipped to NPA PNB-ND NPA - Doubtful (I,II and III)
category) PNB-NL NPA - Loss

D. Reporting and Analysis of Credit Risk

➢ Rating and vetting authority for credit risk rating in PNB Trac/PNB Score/SME Score/Farm Score:
There is separate credit risk management structure in the organization functioning completely independent from
credit section doing appraisal and sanction of credit proposals. Rating assignment and periodical rating reviews is
done by personnel distinct from personnel involved in loan appraisal system.
The Rating and Vetting/Confirming Authority
Loan amount Credit Risk Rating Vetting / Confirming Authority@
Authority
Up to ₹ 10 lakh Officer/Manager at An official designated by the Incumbent not connected with
GBB/CBB processing/ recommending of the concerned loan proposal at GBB
Above ₹10 Lakh and Risk Rating officer, RAM An officer independent of appraisal especially designated for all
upto₹1 Cr rating/scoring
Above ₹1 Cr and Up Risk Rating officer, RAM*/ Head ZRMC
to ₹10 Cr# MCC
Irrespective of Loan Overseas Branches GM, Industry Desk/Credit Risk/IRMD, HO
amount

Loan amount Credit Risk Rating Vetting Authority Approving Authority

Authority
Above ₹10 Cr upto ₹ 30 Cr Rater at ZRMC Scale IV & above at ZRMC1 ZRMC Head (not below the
level of AGM) 2
Above ₹30 Cr upto ₹ 50 Cr Level I : Rater at ZRMC Scale IV & above at ZRMC DGM IRMD-HO/ AGM IRMD-
Level II : Rater at HO Scale IV at HO HO 3 in absence of DGM

Above ₹50 Cr Level I: Rater at ZRMC Scale IV & above at ZRMC GM, Industry Desk/Credit
Level II: Rater at HO Scale IV at HO Risk/IRMD, HO through
DGM/AGM at HO IRMD
1
Vetting authority and Approving authority shall not be the same. 2 In the absence of AGM/DGM ZRMC, The approving authority shall be
DGM IRMD-HO or AGM IRMD-HO (as delegated by way of office order issued by GCRO). 3As delegated by way of office order issued by
GCRO

#All scoring done in PNB Score, SME score and PNB Farm score shall be vetted at PLP/MCC level only. For example
scoring applicable in housing, car loan, farm score etc. by an officer independent of appraisal especially designated for all rating
/scoring.
* For branches that are not linked with MCCs, PLPs shall exercise their loaning powers as defined in the Loaning
Powers guidelines for Agriculture and MSME for loans above ₹1.00 crore also in addition to Retail loans.

उत्कर्ष -2023
@
Back to Index 43 | P a g e
❖ For Loans (irrespective of amount) falling under vested powers of HO committees (inclu ding MC) vetting will
be done at HO: IRMD.
@The vetting authority for review ratings carried out in Dynamic Review Rating Model, in applicable cases shall be as per ext ant
bank guidelines except :
✓ For loans sanctioned by HO level committees: Vetting shall be done by vetting authority at concerned ZRMC.
✓ For Overseas Branch/Office (all ratings irrespective of sanctioning authority): Vetting shall be done by vetting
authority at concerned Branch/ Office.
➢ Process to be followed at PNB Loan Point (PLP) / Mid Corporate Center (MCC) / Zonal Risk
Management Cell (ZRMC) / HO: IRMD for Credit Risk Rating
Risk Rating for Fresh Advances shall not remain pending with the Rating Desk for more than 7 days at any
given point of time after receipt of all necessary documents.. Risk Rating for Renewal/Review of Advances shall
not be pending for more than 15 days at any point of time after receipt of all necessary documents.
➢ Roles And Responsibility at Various Levels (Maker/Checker/ Vetter):
To ensure that credit risk ratings pertaining to Fresh Proposals and Review/Renew should not remain in outstanding
category for more than 7 and 15 days respectively after receipt of all necessary documents.
➢ VALIDITY OF CREDIT RISK RATING DONE IN PNB TRAC:

• Rating Due: Rating of a borrower shall become due for updation after the expiry of 12 months from the
month of confirmation of rating or 18 months from the date of balance sheet on the basis of which
credit risk rating was assigned, whichever is earlier.
• Rating Overdue: The rating shall be treated as ‘overdue’ after the expiry of 15 months from the month
of confirmation of rating or 21 months from the date of Balance Sheet on the basis of which the credit
risk rating was assigned, whichever is earlier.
• After the expiry of the above period, the rating should be stated as ‘Due’ or ‘Overdue’ for renewal as the case
may be and word ‘Due for renewal’ or ‘Overdue for renewal’ will be suffixed along-with the rating wherever it is
quoted.
• Fresh rating should be assigned to a borrowal account, irrespective of the validity period stated above, if any
material development/information on the borrower comes to light, which may affect the rating adversely.
• The Branch/ZO should initiate efforts for renewal of ratings, as & when they become due, so that the same are
renewed well before becoming overdue. Penal interest be charged as per extant guidelines in all
accounts, where rating has become overdue.

E. PORTFOLIO MANAGEMENT
➢ Desired Distribution of Loan Portfolio under various Risk Rating Categories:
S. N. Risk Profile Credit Risk Rating Loan portfolio distribution
1. Low Risk A1, A2, A3 &A4 ≥40%
2. Average Risk B1 &B2 35% - 50%
3 Borderline Risk B3
≤10%
4. High Risk C1, C2 and C3
➢ The rated portfolio of the loan accounts should be monitored by IRMD periodically to ensure proper mix of various
risk category accounts and thereby the asset quality of the portfolio. With this aim the bank has taken the following
measures:
i. Evaluation of rating wise distribution of borrowers in various industries is done to assess/appraise the
quality of bank’s portfolio.
ii. Industry scenario analysis is being undertaken taking into consideration the changes in industrial and
external environment e.g. changes in Economic/Fiscal/Monetary policies, general slowdown/ boom in the
economy etc.
iii. The Bank has appointed “Relationship Managers” in its Large Corporate branches with the aim of proper
monitoring of bank’s exposure in high value accounts so as to ensure constant surveillance on the substantial
share of the loan portfolio of the bank which can alter its risk profile

उत्कर्ष -2023
@
Back to Index 44 | P a g e
9. IDENTIFICATION OF TARGET MARKET FOR THE BANK - THRUST AREAS
In the year 2022-23, the thrust areas for the bank shall be as under:
9.1 RETAIL SEGMENT
Bank will continue to use retail as a growth trigger and direct its policies towards boosting advances to retail
segment, mainly through Lead Generating Branches and PLPs.
The Objective will be to grow at a reasonable pace and to increase Retail Loan shar e in the Industry. For this, the
Bank will continue to study the market requirements; evolve innovative products for meeting the requirements of
Retail customers and establish itself in a big way in the Retail Banking Arena with emphasis on improving the
Industry share.
Advances under following retail loan schemes will be encouraged to increase the priority sector portfolio / boost the
country’s economic development and meet the needs of various segments of Society, including those hitherto
deprived, students and senior citizens:
➢ Housing Loans with its variants.
➢ Popularizing PNB PRIDE – Housing loan & Car Loan to Central Govt. & State Govt employee with concession in rate
of interest.
➢ Education Loans // Vehicle Loans // PNB Green Car (e-Vehicle) Loan // Personal Loan
➢ Pre Approved Personal Loan
➢ PNB myProperty Loan Scheme
➢ Loans to Pensioners
➢ Pre Approved Personal Loan to Pensioners
➢ Loan against Gold jewellery/ Ornaments and Sovereign Gold Bond.
➢ Popularizing Housing Loans to EWS/ LIG and MIG categories under “Pradhan Mantri Awas Yojana - PNB Housing for
All”
➢ Financing Installation of Grid connected rooftop and small solar power plants at residential houses – under housing
finance scheme for public.
Following areas will be focused to build robust and quality-based retail loan portfolio:
i. Product, Research and Innovations
ii. Leveraging of Information Technology
iii. Cut- off levels for Scoring Models for Credit Decision
Cut- off levels for Scoring Models for Credit Decision
a) The cut-off level for ‘sanction’ of all the loan applications has been kept at the score of ‘above 50’ for all the
Retail Loan schemes covered under the scoring models. The cut-off level for ‘consideration by the next higher
authority’ has been kept at the score of ‘above 40 upto 50’ and the cut-off level for rejection of loan
applications has been kept at the score of ‘upto 40’.
b) However, in case of Education Loan, CHCAC and above may consider education Loan proposals even cases
with score below 40 based on cogent reasons given by the recommending authority.

c) Sanction & rejection of the Retail Loan based on PNB Score are as under:
S.N. Score Range Color Implications
Scheme
1 Upto 40 Red Zone Cannot be considered for sanction except Education Loan.
2 Above 40- up to 50 Yellow Zone Can be considered by next higher authority for sanction with proper
justification
3. Above 50- upto 75 Green Zone Can be considered for sanction at Branch level
4. Above 75 Blue Zone May be considered for price discount by competent authority
Reference: RBD (A) Circular 31/2020 for detailed guidelines

उत्कर्ष -2023
@
Back to Index 45 | P a g e
9.2 PRIORITY SECTOR CREDIT
Bank will continue to direct its policies for boosting advances to all segments of Priority Sector to remain ahead of
the national goals under priority sector, agriculture, weaker sections, women beneficiaries etc.
The thrust is to provide financial and all other assistance to the farming segment in the line with goals of Govt. of
India to double farmers’ income by promoting farmers’ welfare, reducing agrarian distress and bringing parity between
income of farmers and those working in non-agriculture professions.
Focused attention shall be paid to increasing investment credit in Agriculture under following:
• Agriculture infrastructure like cold chains, refrigerated vans etc. for transport and preserving perishable goods.
• Scheme for construction/ renovation/ modernization of cold storages.
• Financing Green Houses/Poly Houses
• KCC for working capital for Animal Fisheries and Fisheries
• Allied agricultural activities like poultry, fishery, piggery, sheep/ goat etc.
• Cluster based financing model of Agri Commodities and regions will be explored

In addition to the above, thrust shall be on lending for micro irrigation facilities like drip irrigation, sprinkler
irrigation etc., organic farming, financing to FPOs, supply chain build up, Agri. Logistics, agri
transportation network and agri export. Loans for pre and post-harvest activities will be encouraged for
increasing agriculture lending.
CLASSIFICATION OF LENDING BY BANKS TO NBFCS AND MFIS FOR ON-LENDING UNDER PS

In order to boost credit to the needy segment of borrowers, bank credit to registered NBFCs (other than MFIs) for on
lending will be eligible for classification as priority sector under respective categories subject to the following
conditions:
i. Agriculture: On-lending by NBFCs for ‘Term lending’ component under Agriculture will be allowed up to ₹10
Lakh per borrower.
ii. Micro and Small enterprises: On lending by NBFC will be allowed up to ₹20 Lakh per borrower
iii. Housing: On-lending by HFCs upto aggregate loan limit of ₹20 lakh per borrower

Cut- off levels for Scoring Models for Agriculture Credit: Farm Score
PNB Farm Score Model is applicable for Cash Credit /Production Credit loan more than ₹3 lakh and for investment
Credit /Term Loan more than ₹1 lakh. Credit linkage of SHGs /JLGs be exempted from the purview of Farm Score and
they be graded on the basis of grading system devised by NABARD.
With reference to PNB Farm Score, the cut- off levels for scoring models for credit decision are as under

Score Range Color Implication

0<40 Red Zone Applications cannot be considered for sanction

40<50 Yellow Zone Applications can be considered for sanction by next higher authority with proper
justification

50<75 Green Zone Applications can be considered for sanction by competent authority

75 & above Blue Zone Applications can be considered for sanction and may be considered for price
discount in future

For detailed guidelines on PNB Farm Score, PSFID /Priority Sector /Circular No. 22/2020 dated 26.03.2020,
No.27/2022 dated 09.05.2022 and its subsequent modifications may be referred.

उत्कर्ष -2023
@
Back to Index 46 | P a g e
Other Instruction
• Loans for social infrastructure development like schools, health care facilities, drinking water facilities and
sanitation facilities in Tier II to Tier VI centres, use of renewable energy will be encouraged.
• Apart from thrust on investment credit efforts will be made to cover all the eligible KCC/ Kisan Gold borrowers
with PNB KisanRuPay Card (KCC Debit Card) and mandatory crop insurance coverage.
• Moreover, considering the benefits extended under the Crop Insurance Scheme in terms of commission available
@ 4% of the premium collected by the Bank and potential for bringing new farmers in Bank’s fold, efforts should
be made for covering maximum number of non-loanee farmers under crop insurance coverage.
• Bank will also explore new ventures in rural areas in partnership model with Govt. agencies/ Corporates.

9.3 MICRO, SMALL & MEDIUM ENTERPRISES (MSME)

The Bank shall continue to lay emphasis on financing Micro, Small & Medium Enterprises and our existing MSME credit
portfolio shall be enlarged with special focus on lending to Micro Enterprises.
New Definition of Micro, Small and Medium Enterprises
Ministry of MSME, GoI, vide Gazette notification no. S.O.2119 (E) dated June 26, 2020 has communicated detailed
guidelines viz. Classification of Micro, Small & Medium enterprises, Registration of MSME on Udyam Registration
portal, Updation of information on Udyam Registration portal etc. The new criteria has come into effect from July 1,
2020. In terms of revised guidelines, classification is as under:

Classification Criteria
Micro Enterprise Where the investment in plant and machinery or equipment does not exceed ₹1.00
crore and turnover does not exceed ₹5.00 crore.
Small Enterprise Where the investment in plant and machinery or equipment does not exceed ₹10.00
crore and turnover does not exceed ₹ 50.00 crore
Medium Enterprise Where the investment in plant and machinery or equipment does not exceed
₹50.00 crore and turnover does not exceed ₹ 250.00 crore
Note 1: Exports of goods or services or both, shall be excluded while calculating the turnover.
Note 2: The value of Plant and Machinery or Equipment shall mean the Written Down Value (WDV) as at the end of
the Financial Year as defined in the Income Tax Act and not cost of acquisition or original price.
(Ref: MSME & Mid Corporate Division Circular No.96/2020 dated 04.09.2020 for details)
Targets for MSME Lending

In terms of the recommendations of the Prime Minister’s Task Force on MSMEs, banks are advised to achieve:
• 20% year-on-year growth in credit to MSE.
• 10%annual growth in the number of Micro Enterprise accounts and
• 60% of total lending to MSE sector as on preceding March 31st to Micro enterprises.

As per RBI stipulation the target fixed for the Micro Sector in MSE is as below:
Category Sub- Targets
Micro Enterprises 7.5% of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever is
higher.

9.3.3 Institutional Framework for MSMEs

As the MSME Sector is an unorganized sector after the enactment of MSMED Act 2006, there has been number of
institutionalized efforts, initiated to take care of the needs and problems faced by them with regulations for the
stakeholders. Some of them where the Bank has a role to play are as under:
▪ Delayed Payment to MSMEs

उत्कर्ष -2023
@
Back to Index 47 | P a g e
 ▪ Financial literacy and consultancy to the Micro and Small Enterprises Sector
▪ Financial Support to MSMEs in ZED Certification Scheme
▪ SLBC Sub-Committee on MSME
▪ Specialized MSME Branches
▪ Cluster Approach
Delayed Payment to MSMEs
In MSMED Act 2006, the provisions of the Interest on Delayed Payment Act, 1998 to Small Scale and Ancillary
Industrial Undertakings, have been strengthened as under where penal provisions have been incorporated to take
care of delayed payments to MSME units.
i. In case the buyer fails to make payment on or before the date agreed on between him and the supplier in
writing or, in case of no agreement before the appointed day, the agreement between seller and buyer shall
not exceed more than 45 days.
ii. In case the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound
interest with monthly rests to the supplier on the amount from the appointed day or, on the date agreed
on, at three times of the Bank Rate notified by Reserve Bank.
iii. For any goods supplied or services rendered by the supplier, the buyer shall be liable to pay the interest as
advised at (ii) above.
iv. In case of dispute with regard to any amount due, an MSME unit can approach the Micro and Small
Enterprises Facilitation Council, constituted by the respective State Government under the Ministry
of Micro, Small Enterprises.
Financial Support to MSMEs in ZED Certification Scheme
▪ The Ministry of MSME, Govt. of India, launched the ‘Financial Support to MSMEs in Zero Defect Zero Effect (ZED)’
Certification Scheme on 11th July 2016.
▪ The Scheme aims to enhance global competitiveness of MSMEs by providing them financial support in
assessment, rating and handholding of their manufacturing processes on quality, environment & other important
business aspects.
▪ Quality Council of India (QCI), an autonomous body setup by Ministry of Commerce & Industry, Govt. of
India has been appointed as the National Monitoring and Implementing Unit (NMIU) for facilitating,
implementation, co-ordination and monitoring of the Scheme.
▪ ZED Maturity Assessment Model consists of 50 parameters for projecting a holistic picture of MSMEs (covering
various aspects like Production, Quality, Design, Safety, Environmental, Energy, Natural Resource, Human
Resource, Intellectual Property, and Performance). Each parameter has 5 levels and the rating is on a weighted
average of marks obtained in each parameter. The rating is valid for 4 years and the surveillance audit is
carried out by QCI.
▪ Based on the assessment, the MSME will be ranked as ZED Certification Level 1 (Bronze), Level 2 (Silver) and
Level 3 (Gold).
As the ZED rated MSME units reflect better performance in terms of manufacturing processes and financial
discipline, the below mentioned concessions shall be applicable to ZED rated units:
ZED Rating achieved by the Eligible Concession
Unit
Bronze 50% Concession in Processing Charges and 10 bps (0.10%) interest
concession
Silver & Gold 50% Concession in Processing Charges and 25 bps (0.25%) interest
concession
▪ Specialized MSME Branches
RBI has advised to open at least one specialized branch in each district. Further, banks have been permitted to
categories their general banking branches having 60% or more of their advances to MSME sector as
specialized MSME branches in order to encourage them to open more specialized MSME branches for providing
better service to this sector as a whole.
Our Bank has identified 264 branches in 264 districts as specialized MSME branches for specialized services to MSMEs.

उत्कर्ष -2023
@
Back to Index 48 | P a g e
Cluster Approach
➢ All SLBC Convenor banks are advised to incorporate in their Annual Credit Plans, the credit requirement in the
clusters identified by the Ministry of Micro, Small and Medium Enterprises, Government of India. They are also
encouraged to extend banking services in such clusters / agglomerations which have come up and identified
subsequently by SLBC / DCC members.
➢ As per Ganguly Committee recommendations (September 4, 2004), banks are advised that a full-service
approach to cater to the diverse needs of the SSI sector (now MSE sector) may be achieved through extending
banking services to recognized MSE clusters by adopting a 4-C approach namely, Customer focus, Cost
control, Cross sell and Contain risk.
➢ To remain competitive in the market and to grasp good business through these clusters, there is a need of
customized offering in cluster areas. Accordingly, for effective TAT and faster disposal of cluster related issues, a
sub-committee of CGMs has been formulated to look after the issues related to clusters and delegation of powers
for various Relaxations accorded in approved clusters.
MSME Financing

Loan Application Form

a) Simplified Loan Application for Micro, Small and Medium Enterprises (Manufacturing & Service sector) has
been made available as per IBA format along with provisional acknowledgement through a perforated sheet and
check list of documents. Wherever scheme specific application form is prescribed the same should be obtained.
b) Photograph of the Borrower: For the purpose of identification of borrowers, branches themselves should
make arrangements for the photographs. Cost of photographs of borrowers falling in the category of
Weaker Sections should be borne by the bank.
c) Issue of Acknowledgement of Loan Applications: All Branch/Cluster Offices are advised to mandatorily
acknowledge all loan applications, submitted manually or online, by their MSME borrowers and ens ure that a
running serial number is recorded on the application form as well as on the acknowledgement receipt.
d) Register of Receipt/Sanction/Rejection of Applications: A register should be maintained at branch
wherein the date of receipt, sanction/rejection/disbursement with reasons thereof etc., should be recorded for all
the Applications received by the Branches for their consideration as and when received. Rejection of application
for fresh limit/enhancement of existing limits should not be done without the approval of next higher
authority. Sanction of reduced limits should be reported to the next higher authority immediately with full
details for review and confirmation. The reason for rejection should be communicated in writing to the borrower
within the period stipulated for disposal in line with stipulation mentioned in the Fair Practice Lenders Code.
e) Capturing of Leads through PNB LenS : Branches /Offices have to ensure that all the leads received
through various channel i.e., online or offline shall be entered in PNB LenS invariably. After capturing of leads,
lead reference number is generated. SMS and e-mail are sent to the applicant mentioning lead reference number
for further reference. For tracking of application by the applicant, the system will send SMS and e -mail to the
customer at following stages:
❖ At the time of generation of Lead
❖ Complete documents are received at GBB
❖ At the time of sanctioning of the proposal
❖ At the time of rejection of the proposal
❖ At the time of opening of loan account in Finacle
Further, applicant can also on-board their proposal on PSB 59 minutes portal through Bank specific URL
https://www.psbloansin59minutes.com/pnb and Lead generated through this portal is moved to PNB LenS for its
further processing.
f) PNB Pride: Bank has introduced an Application – “PNB Pride” with a view to enhance the monitoring mechanism
and Lead Management through the field functionaries. Digital Banking Division vide its Circular No. 06/2021 dated
02.02.2021 has communicated the guidelines on “PNB Pride” Application.

उत्कर्ष -2023
@
Back to Index 49 | P a g e
 Besides other modules, “Lead Management” module has been made available on this application, which
facilitates the field functionaries to record the activities /leads generated by them. The controlling authorities
are required to monitor the performance of the field functionaries based on the information entered by the field
staff on the Pride portal.
Disposal of Loan Application:
For MSE Borrowers
(time limit start from the date of submission of complete information/data by the applicant)
CREDIT LIMIT TIME SCHEDULE (Maximum )
Loans up to ₹ 5 Lakh 2 weeks
Loans above ₹ 5 Lakh and upto₹₹25 Lakh 3 weeks
Loans above ₹ 25 6 weeks
For Other than MSE Borrower: (Except Retail Lending Schemes):
CREDIT LIMIT TIME SCHEDULE (Maximum )
Loans up to ₹ 2 Lakh 2 weeks
Loans above ₹ 2 Lakh and upto ₹50 Lakh 4 weeks
Loans above ₹ 50 Lakh and upto ₹1 Crore 5-6 weeks
Loans above ₹1 Crore&upto ₹100 Crore 6-7 weeks
Above ₹100 Crore 8-9 weeks
Note: For proposals which are falling under HO power, timelines and strategies are to be followed as per the guidelines circulated
vide Credit Division circular no 4 dated 15.05.2019.

Type of Loan / Facility

The Bank provide all types of fund based and non-fund based facilities to the borrower under this sector viz. Term
Loan, Cash Credit, Overdraft facility, Bill financing, Letter of Credit, Packing credit, Bank guarantee, etc. A composite
loan with maximum limit up to ₹1.00 Cr. should be considered by bank to enable the Micro and Small Enterprises
(both for manufacturing and service sector) to avail of their working capital and Term loan requirement through Single
Window.
Credit Appraisal and Due-Diligence
New Simplified Common Appraisal Memorandum for MSME were adopted by the Bank for loans upto ₹25 crore. (Ref:
MSME Circular No. 19/2020 dated 24.03.2020). Credit Appraisal of the application shall be done in terms of Bank’s
guidelines, circulated time to time.
Credit Rating Model
a) Internal Risk Rating
Credit Risk rating of MSME advances upto ₹100 lakh are done through PNB SME Score. Use of PNB Score SME was
made mandatory in all eligible MSME advances. These Credit Scoring models have been placed on the server of the
bank and are available on Finacle home page as “PNB SCORE SME”.
Sanction & Rejection of the loan applications based on PNB SME Score:
SN Score Range Color Implications
Scheme
1 Upto 46 Red Zone Sanctioning Authorities may exercise loaning powers for Fresh
/Additional/ Enhancement /Adhoc /Renewal of facilities as per loaning
power guidelines for exercise of loaning powers in B3, C1, C2 and C3
rated accounts issued by IRMD from time to time.
2 >46 to <=52 Yellow Zone Sanctioning Authorities may exercise loaning powers for Fresh
/Additional/ Enhancement /Adhoc /Renewal of facilities as per loaning
power guidelines for exercise of loaning powers in B2 rated accounts
issued by IRMD from time to time.

उत्कर्ष -2023
@
Back to Index 50 | P a g e
 3. Above 52 Green Zone Normal Loaning Powers by officials at all levels to the extent of their
vested loaning powers. However, no fresh exposure should be taken
upto field level (branch office level) for such accounts in case of Less
Favourable industries
(IRMD L& A circular No. 28/2022 may be referred for detailed guidelines on Linking of Loaning powers with Credit
Risk Rating)
MSME loan of limit above ₹100 lakh are to be rated as per rating manuals issued by IRMD from time to time.
b) External Credit Rating:
Rating from an external accredited agency is required for all borrowers availing loan limit of above the prescribed
limit as decided by IRMD policy of the Bank.
Rate of Interest
RBI has advised that all new floating rate loans to Micro and Small Enterprises extended by banks from October 01,
2019 shall be linked to external benchmark lending rates
Further, RBI also issued directives that all new floating rate loans to Medium Enterprises (MSEs) shall also be
benchmarked with External Benchmark Lending rate (EBLR) w.e.f. 01.04.2020. Accordingly, Bank adopted Repo rate,
as External Benchmark Lending Rate to link all new floating rate to MSME loans w.e.f. 01.04.2020.
Security Norms
i) Branches are mandated not to accept collateral security in the case of loans up to ₹10 lakh extended to units
in the MSE sector. It is also advised to extend collateral free loans up to ₹10 lakh to all units financed under
the PMEGP administered by KVIC.

ii) If the credit facility is proposed to be covered under CGTMSE coverage, Respective sanctioning authority is
empowered to cover eligible loans under CGTMSE guarantee coverage, on merits of the case.

iii) In case of MSME borrowers, which are above ₹10.00 lakh and are not secured under CGTMSE cover/Credit
Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL)/ any other guarantee coverage schemes/ where
credit guarantee cover is not available, Bank should obtain the collaterals as per the Bank’s guidelines on coll ateral
security policy/ Specific product Scheme guidelines.

iv) CGTMSE has introduced a new “Hybrid Security” product allowing guarantee cover for the portion of credit
facility not covered by collateral security. In the partial collateral security model, the Bank is allowed to obtain
collateral security for a part of the credit facility, whereas the remaining part of the credit facility, up to a maximum
of ₹200 lakh, can be covered under Credit Guarantee Scheme of CGTMSE. CGTMSE will, however, have pari-
pasu charge on the primary security as well as on the collateral security provided by the borrower for
the credit facility. In such partial collateral model, the collateral coverage for the uncovered credit facility shall be
obtained.

v) In case of hybrid security model, irrespective of loan amount, respective Sanctioning Authority shall have
discretion to cover credit exposure upto ₹50 lakh under CGTMSE, on merits of the case.

Credit Guarantee Scheme for Subordinate Debt (CGSSD) for Stressed MSMEs
Ministry of MSME, Govt. of India through CGTMSE has introduced “Credit Guarantee Scheme for Subordinate Debt
(CGSSD) to provide personal loan to the promoters of Stressed MSMEs for infusion as equity/ quasi equity in
the business, eligible for restructuring as per RBI guidelines for restructuring of stressed MSME advances. The loans
would be provided with a 90% credit guarantee by the CGTMSE.
Eligible borrower under the scheme are as under:

उत्कर्ष -2023
@
Back to Index 51 | P a g e
• MSME Enterprises defined under MSMED Act. The MSMEs may be Individuals / Proprietorship, LLP, Partnership,
Private Limited Company or registered company etc.
• Promoters of MSME units which are stressed viz. SMA-2, and NPA accounts as on 30.04.2020 and are
eligible for restructuring as per RBI guidelines and can become commercially viable as per the assessment of the
Bank.
• The scheme is applicable for those MSMEs whose accounts have been standard as on 01.01.2016 and have been
in regular operations, either as standard accounts or as NPA accounts during the financial year 2016-17, 2017-
18, 2018-19 and 2019-20 even if they did not remain in regular operation in FY 2020-21 & FY 2021-22 provided
such accounts are viable as per MLI’s assessment and expected to come out of financial stress by availing this
facility.
• In cases where recovery proceedings are underway and banks assess that with the facilities provided under the
scheme the account would be viable, the banks shall kept on hold/ kept under suspension the recovery
proceedings before going ahead with restructuring etc.
• Eligible Loan Amount: Promoter(s) of the MSME unit will be given credit equal to 50% of Promoter’s
stake (equity plus debt) or ₹75.00 lakh, whichever is lower in the shape of personal loan. This personal loan
shall not exceed the original debt of the beneficiary. The Equity/ quasi equity shall be calculated on the basis of
the last available audited balance sheet of a Financial Year. The borrowers who had earlier availed 15% of the
promoters’ stake are allowed to avail additional 35% of the promoters’ stake, provided the overall maximum
benefits availed under CGSSD does not exceed ₹75 lakh

• The Scheme would be applicable to all credit facilities sanctioned under CGSSD for a maximum period of 10
years from the date the guarantee is availed or till an amount of ₹20,000 crore of guarantee amount is
approved or till the validity of the scheme.
GECL Facility
➢ This scheme is a specific response to the unprecedented situation created by COVID-19. It seeks to provide much
needed relief to the MSME sector at low cost, thereby enabling MSMEs to meet their operational liabilities and
restart their businesses. Under the scheme, NCGTC shall provide 100% Guarantee coverage on the outstanding
amount for the credit facility as on the date of NPA.
➢ GECL scheme was implemented in 4 phases (GECL 1.0, 2.0, 3.0 and 4.0) to support the various business activities
affected by Covid-19 pandemic as under:
• GECL 1.0:- All Business Enterprises /MSME borrower /individuals who have availed loan for business purposes
with total credit outstanding loans across all Banks/ FIs of up to ₹50 Crore (fund based only) as on 29.02.2020
are eligible under the Scheme. Eligible loan amount under the scheme is upto 20% of the total outstanding as
on 29.02.2020.
Under GECL 1.0 (Extension), borrowers are eligible for funding up to 30% of their total fund based credit
outstanding up to ₹50 Crore (net of support received under GECL 1.0) as on 29.02.2020 or 31.03.2021,
whichever is higher.
• GECL 2.0:- All Business Enterprises /MSMEs in the 26 stressed sectors recommended by Kamath Committee
and healthcare sector with total credit outstanding (fund based only) across all lending institutions, a bove ₹50
Crore and upto ₹500 Crore as on 29.02.2020 are eligible under the scheme. Eligible loan amount under the
scheme is up to 20% of total credit outstanding as on 29.02.2020.
Under GECL 2.0 (Extension), borrowers are eligible for funding upto 30% of their total fund based credit
outstanding up to ₹500 Crore (net of support received under GECL 2.0) as on 29.02.2020 or 31.03.2021,
whichever is higher.
• GECL 3.0:- All Business Enterprises /MSMEs borrower in the Hospitality, Travel & Tourism, Leisure & Spor ting
and Civil Aviation sectors without any ceiling on outstanding are eligible under the scheme. Loan amount is
capped at 40% of FB outstanding as on 29.02.2020 subject to a cap of ₹200 Crore as GECL loan amount.
Under GECL 3.0 (Extension), the amount of funding is based on outstanding of 29.02.2020 or 31.03.2021,
whichever is higher.

उत्कर्ष -2023
@
Back to Index 52 | P a g e
 • GECL 4.0:- Existing Hospitals /Nursing Homes /clinics /medical colleges /Units engaged in manufacturing of
liquid oxygen, oxygen Cylinders etc. are eligible for loan upto ₹2 Crore under the scheme.
➢ Scheme would be applicable during the period from the date of issue of these guidelines by NCGTC upto
31.03.2023 or till guarantees for an amount of ₹5,00,000 Crore are issued, whichever is earlier. Last date of
disbursement for fund based facility under the scheme shall be 30.06.2023.
(MSME Division Circular No. 81/2021 dated 13.10.2021,No. 53/2022 dated 10.10.2022 and other circulars issued from time
to time may be referred for guidelines regarding extension of GECL scheme.)
Contactless Loans (PSBLOANSIN59MINTUES.com)
➢ Govt. of India launched a transformative initiative in MSME credit space by launching portal
www.psbloansin59minutes.com.
➢ The portal has been developed by : M/s Online PSB Loans Ltd. (Formerly known as M/s Capitaworld Platform
Pvt. Ltd).
➢ This web portal enables in principle approval for MSME loans upto ₹5.00 Crore within 59 minutes from SIDBI
and Public Sector Banks (PSBs). Through this portal the borrowers can apply online and get in-principle
sanctions of their Mudra proposals.
➢ Subsequent to this in-principle approval, the loan is required to be sanctioned & disbursed in 7-8 working days.
➢ Efforts should be made to route all fresh / enhancement / renewal Mudra applications from ₹10,000 to ₹10 lac
under “MUDRA LOANS‟ and all other MSME fresh / enhancement / renewal applications up to ₹5 crore preferably
through this Portal.
Trade Receivables Discounting System (TReDS)
TReDS (Trade Receivable Discounting System) is an institutional mechanism set up for financing of trade receivables
of MSMEs from corporate and other buyers including Government Departments and Public Sector Undertakings (PSUs)
through multiple financiers. Eligible Participants in TReDS exchange are as under:

MSME i. Should be an MSME enterprise as per the eligibility criteria under the definition of MSMED
Sellers Act, 2006.

Buyers i. Corporates and other buyers including Government Departments and Public Sector
Undertaking and such other entities as may be permitted by the Reserve Bank of India
(“RBI”) from time to time to participate on the TReDS platform as Buyers.
ii. Should be in existing business for a minimum period as decided by business rules of
individual exchanges in line with RBI directives at the time of submission of application for
registration on the TReDS platform

Financiers i. Banks, Non-banking Financial Company – Factors and such other institutions as may be
permitted by RBI from time to time to participate on the TReDS platform as Financiers.

Centralized dedicated Cell & approved platforms:

Agreement adopted for amalgamated entity a) M1xchange: PNB2.0 (through PNB1.0)
b) RXIL: PNB 2.0 (through eOBC)
c) A. Treds Ltd: PNB 2.0 (through eOBC)
Centralized TReDS Cell ZO, Delhi
➢ Overall Exposure through TReDS.
There will be no exchange wise capping of O/s as factoring limits will be provided to registered buyers/ corporates
irrespective of the exchange(s). Bidders will utilize the opportunities in the factoring market to utilize the corporate
wise sanctioned factoring limits irrespective of any exchange.

उत्कर्ष -2023
@
Back to Index 53 | P a g e
➢ Assessment of factoring limit for PSUs/ Government Undertaking (Central/State)/ All Government
Department (Central/ State) on TReDS-
✓ State Government Departments- In terms of extant guidelines, State Governments are eligible for factoring
exposure. However, maximum exposure ceiling for factoring limit was not specified for State Governments.
Maximum exposure ceiling for factoring limit on TReDS platform to a State Government registered as buyer
can be 4% of State exposure final ceiling with lead bank buffer fixed by IRMD from time to time or ₹25 Cr.,
whichever is lower. This limit will be over and above the existing exposure to the State Government
✓ PSUs/Government Undertaking (Central/State)/All Government Departments (Central)- All profit-
making PSUs and Government Undertaking (Central/State)/ All Government Departments (Central) irrespective
of External Credit Rating shall have buyer wise maximum exposure ceiling at ₹25.00 Cr.
✓ PSUs/ Government Undertaking (Central/State)/ All Government Department (Central/ State)- All
these categories of buyers on TReDS platform will be treated at par with AAA rated (Externally Rated) Corporates
for ROI purpose.
Credit to Deposit (CD) Ratio
Endeavour would be to take up hi-value agri-projects and cluster based lending to small and medium enterprises, to
enable bank to surpass the benchmark of 60% under CD ratio of rural and semi-urban areas.
National Goals under Priority Sector and Sub- sectors
Sector National Goal (Computed against ANBC or credit equivalent of Off Balance
Sheet Exposure whichever is higher)
Priority Sector 40%
Total Agriculture 18%
Within Agriculture, Loans 13.5%
to non-corporate farmers (12.73% for FY 2021-22 )
Within Agriculture, Phase Financial Year For Small and Marginal For Weaker Section
wise targets Farmer Target Target
2020-21 8% 10%
2021-22 9% 11%
2022-23 9.5% 11.5%
2023-24 10% 12%
Micro Enterprises 7.5%

Other Strategies

➢ To improve Non Fund Based Business, To consider Short Term Loans

➢ To bring quality accounts in to our fold by take over from other bank/lending instruction.

➢ To consider buy out of loans from other institutions as a strategic decision after due diligence and ensuring that
it will be a profitable proposition for the bank. Under the buyout of loans, bank has to pay the outstanding amount
plus premium payment (difference between NPV of interest chargeable as per sanction of the selling institution
and interest rate at which loan has been purchased by our bank) and the total amount has, therefore, to be
debited to the term loan. In our books it will be a Term Loan like any other Term Loan with the only difference
that a part of amount is towards premium payments.

➢ Transfer of Loan Exposure : Loan transfers are resorted to by lending institutions for multitude of reasons
ranging from liquidity management, rebalancing their exposures or strategic sales. “Transfer” means a transfer
of economic interest in loan exposures by the transferor to the transferee(s), with or without the transfer of the
underlying loan contract, in the manner permitted in above master direction of RBI.

उत्कर्ष -2023
@
Back to Index 54 | P a g e
10. CAPITAL CHARGE FOR CREDIT RISK
➢ In terms of the RBI guidelines, bank has implemented Standardized Approach w.e.f. 31.03.2008 through CRISMAC
software of ladder system. In order to obviate possibilities of manual intervention centralized LADDER+ solution
is implemented, which sources data from CBS through STP (Straight through Process) and process the data
centrally.
➢ Under Standardized Approach, loan assets have been classified into following major categories :
i. Claims on Domestic/Foreign Sovereigns
ii. Claims on Public Sector Entities (PSEs)/ Primary Dealers
iii. Claims on Banks / Claims on Corporates/ Claims on NBFCs
iv. Claims included in the regulatory Retail Portfolio
v. Claims Secured by Residential Properties
vi. Claims under Specified Categories
vii. Other Assets
viii. NPA
PRESCRIBED RISK WEIGHTS AS PER RBI GUIDELINES

S.N Particulars Risk Weight

Claims on Central Government, Central Government guaranteed, State Government,
1 RBI, DICGC,CGTSME , Credit Risk Guarantee Fund Trust for Low Income Housing 0%
(CRGFTLIH)
Claims on State Government guaranteed, ECGC, Domestic Banks, AAA rated Corporates
2 20%
/PSE /NBFC Securitisation Exposures & Staff Loans secured by SA or mortgages
Claims on AA rated Corporates/ Domestic PSE/ NBFC/ Securitisation Exposures/
3 30%
Restructured & Corporate/ PSE/ NBFC
Claims on A rated Restructured Corporates / Domestic PSE/ NBFC, Unsecured NPA
4 50%
exposure where specific provisions is at least 50%
5 Claims on Regulatory Retail (RRP), CRE – RH, Education Loans 75%
Claims on Unrated & BBB rated Corporates/ PSE/ NBFC/ Securitisation exposure,
Unsecured NPA exposure where specific provisions is atleast 20% but less than 50% ,
6 100%
Commercial Real Estate, Personal Loans, Consumer Credit including personal loans
excluding education loan
Foreign Sovereign/ Foreign PSEs attracts risk weight as per the rating assigned by
7
international rating agencies namely Standard & Poor, Moody’s and FITCH
8 Primary Dealers attracts risk weight in a manner similar to claims on Corporate
Claims on Banks:
➢ Under Basel III, Risk Weights are based on Common Equity level (CET) & applicable Capital
9 Conservation Buffer (CCB) of the concerned Bank.
➢ Claim on foreign banks & foreign central bank attracts risk weight as per the ratings assigned
by international rating agencies
Credit card receivables attracts risk weight @ 125% or higher, if warranted by the external
rating (or, the lack of it) of the counterparty. However, as gold and gold jewellery are eligible
10 financial collaterals, the counter party exposure in respect of personal loans against gold and gold
jewellery are worked out under the comprehensive approach after netting the value of security from
outstanding and then applying risk weight of 125%.
11 Restructured
11.1 Rated Restructured As per Rating
11.2 Unrated Restructured 125%
12 Capital Market Exposures 125%
Claims on BB & below rated Corporates /Domestic PSE/NBFC/Restructured, NPA
13 Unsecured exposure, specific provisions less than 20%, Venture Capital funds & Capital 150%
Market Exposures (150%)
14 Investment in JV/ DTA due to timing difference 250%
*RWA has been calculated after considering netting of available Credit risk Mitigants available with Bank

उत्कर्ष -2023
@
Back to Index 55 | P a g e
 Note: In terms of RBI Circular dt. 16.10.2020 on Individual Housing Loans – Rationalization of
Risk Weights , As a countercyclical measure, it has been decided to rationalise the risk weights, irrespective
of the amount. The risk weights for all new housing loans to be sanctioned on or after the date of this circular
and upto March 31, 2023.
Such loans shall attract a risk weight of 35% where LTV is less than or equal to 80%, and a risk weight of
50%where LTV is more than 80% but less than or equal to 90 percent. This measure is expected to give a
fillip to bank lending to the real estate sector.

CLAIMS ON NBFCS:
• RBI vide notification dated 21/02/2019 has decided that exposures to all NBFCs, excluding Core Investment
Companies (CICs), will be risk weighted as per the ratings assigned by the rating agencies registered with
SEBI and accredited by the Reserve Bank of India, in a manner similar to that of corporate as mentioned
above.
• Exposures to CICs, rated as well as unrated, will continue to be risk-weighted at 100%.
• As regards the claims on AFCs, risk weights are governed by the external credit rating of the AFC, except
that claims that attract a risk weight of 150% under the New Capital adequacy Framework are reduced to
a level of 100% 1.
➢ Number of External Credit Rating Agencies accredited by RBI: Six (6) CRISIL, ICRA, CARE, INDIA RATINGS,
Acuite Rating & Research (formerly SMERA Ratings Limited) and INFOMERICS Valuation and Rating
Pvt. Ltd. (INFOMERICS).
➢ Depending on the contractual maturity of bank loan facility, the rating as well as the respective ris k weight are as
under:

✓ Long Term: The bank loan facilities having contractual maturity of more than one year.
✓ Short Term: The bank loan facilities having contractual maturity up to one year.

Claims on Corporate - Risk Weights

External Rating-L AAA AA A BBB BB & Below Unrated
External Rating-S A1+ A1 A2 A3 A4/D Unrated
Risk Weight 20% 30% 50% 100% 150% 100%

➢ Regulatory Retail Portfolio2

Exposures (including both Fund-based and non-fund based) shall be classified as retail claims for regulatory capital
purposes if they meet the four criteria listed below. Claims in this portfolio shall be assigned a risk-weight of 75%,
except if RBI mandates otherwise:

(i) Qualifying criterion: The exposure is to an individual person or persons or to a small business.

(ii) Product criterion: The exposure is in the form of revolving credits, lines of credit (including overdrafts), term
loans/leases/small business facilities and commitments.

(iii) Granularity criterion: Aggregate exposure to one counterpart does not exceed _____of the overall regulatory
retail portfolio. NPAs under retail loans are to be excluded from the overall regulatory retail portfolio while
assessing the granularity criterion for risk-weight purposes:0.2%

(iv) Low value of individual exposures: The maximum aggregated retail exposure to one counterpart should not
be more than the absolute threshold limit of : ₹7.50 Crore

उत्कर्ष -2023
@
Back to Index 56 | P a g e
➢ Under Regulatory Retail Portfolio, Small business is one where the total average annual turnover is less than:₹50.00
Crore.
➢ The turnover criterion will be linked to the average of the last ______in the case of existing entities; projected
turnover in the case of new entities; and both actual and projected turnover for entities which are ye t to complete
three years: 3 years

Claims secured by Residential Properties

➢ Risk Weights for all loans sanctioned on or after June 7, 2017, the following LTV ratios, risk weights and standard
asset provisioning rate:
Outstanding loan LTV ratio (%) Risk Weight (%) Standard Asset
Provision (%)
Up to ₹30 lakh ≤ 80 35
> 80 and ≤ 90 50
Above ₹30 lakh and up to ≤ 80 35 0.25%
₹75 lakh
Above ₹75 lakh ≤ 75 50
*Loan to Value Ratio (LTV) is computed as a percentage of outstanding in the account (Principal + Interest + Other
charges without any netting) in the numerator and the latest realizable value of the residential property mortgaged to the
bank, exclusive of stamp duty, registration and other documentation charges, as per bank record , in the denominator.
➢ However, for individual housing loans sanctioned on or after June 7, 2017, the following LTV ratios, risk weights
and standard asset provisioning rate:
➢ Recognizing the criticality of real estate sector in the economic recovery, given its role in employment generation
and the inter linkages with other industries, it has been decided, as a countercyclical measure, to rationalize the
risk weights by linking them only with LTV ratios for all new housing loans sanctioned w.e.f. 12.10.2020 up
to March 31, 2023 which are as under:
Outstanding loan LTV ratio (%) Risk Weight (%) Standard Asset
Provision (%)
≤ 80 35
0.25%
Irrespective of Amount > 80 and ≤ 90 50

Risk Weights for NPAs

SN Particulars Residential Other NPAs

Mortgage (Unsecured
Portion)
1 Specific provisions are less than 20% of O/s of NPA 100% 150%
2 Specific provisions are at least 20% and less than 50% of
75% 100%
outstanding amount of NPA
3 Specific provisions are at least 50% of outstanding amount of NPA 50% 50%
If NPA is fully secured by the following collateral that are not recognized for credit risk mitigation purposes, either
independently or along with other eligible collateral, a 100% risk weight may apply, net of specific provisions, when
provisions reach:15% of the outstanding amount.
✓ Land and building valued by an expert valuer and with valuation not more than 3 years old, and
✓ Plant and machinery in good working condition at a value not higher than the depreciated value as
reflected in the audited balance sheet of the borrower, which is not older than 18 months.
Off Balance Sheet Items
• Non market related off balance sheet items such as direct credit substitutes and trade & performance related
contingent items are also subject to risk weights. First credit equivalent amount in relation to these items is
determined by multiplying the contracted amount of that transaction by the relevant credit conversion factor
(CCF) followed by deduction of eligible CRMs and then the stipulated RW is applied to arrive at the RWA.

उत्कर्ष -2023
@
Back to Index 57 | P a g e
• Under the RBI guidelines, RW is also applicable where the fund based facility is undrawn or partially undrawn
and the same is not unconditionally cancellable. The amount of undrawn facility is included in the non-market
related off balance sheet item after application of relevant CCF. The undrawn portion of cash credit/ overdraft
limits sanctioned to the aforesaid large borrowers, irrespective of whether unconditionally cancellable or not, shall
attract a credit conversion factor of 20%.
Commitments other than securitisation liquidity facilities with an original maturity up to one year and
commitments with an original maturity over one year will receive a CCF of 20% and 50%, respectively.
Note:
1Claims on Corporates, AFCs, and NBFC-IFCs having aggregate exposure from banking system of more than ₹100 crore which

were rated earlier and subsequently have become unrated attracts a risk weight of 150% and a higher risk weight of 150% will
be applicable on all unrated claims on corporates having aggregate exposure of more than ₹200 crore from the banking system
with effect from FY 2019-20 onwards
2In order to reduce the cost of credit for this segment consisting of individuals and small businesses (i.e. with turnover of upto

₹50 crore), and in harmonization with the Basel guidelines, it has been decided that the above threshold limit of ₹5.00 crore for
aggregated retail exposure to a counterparty shall stand increased to ₹7.50 crore from RBI notification date 12.10.2020. The risk
weight of 75 per cent will apply to all fresh exposures and also to existing exposures where incremental exposure may be take n
by the bank upto the revised limit of ₹7.50 crore. The other exposures shall continue to attract the normal risk weights as per the
extant guidelines.

EXTERNAL RISK RATING

➢ In view of Basel III regulations (NCAF Guidelines), the borrowers of having aggregate exposure (FB+NFB) above
₹5 Crore or total average annual turnover of more than ₹50 crore, shall get their credit facilities rated
from any of the External Rating Agencies
➢ However, as per our Bank’s guidelines All borrowers of our Bank with total exposure (both FB+NFB) of up to____
from our bank., be exempted from securing External Risk Ratings:₹25 Crore
In case external rating of the borrower is available its cognizance should not be taken for reckoning loaning power
however Risk Weight & pricing shall be applied based on available valid external risk rating.
➢
In case External Rating comes below the Investment grade rating i.e. below ‘BBB’ rating grade, then the rating
outcome shall be placed before the next higher authority for continuation of granted concessional rate of
interest, if any and taking a call on additional risk mitigants. However, in case of HO sanctions, the same shall be
placed to respective sanctioning authority for taking further call accordingly.
➢ Borrowers having Exposure above ₹25 Crore, shall get their credit facilities rated from any of the External Rating
Agencies, as per: NCAF guidelines
➢ For borrowers having IRR PNB-B2 and exempted from requirement of ERR up to ₹25 Crs., ZOCAC can sanction
proposal for fresh/enhancement/additional/adhoc limits where exposure is secured by the eligible collaterals of
at least : 50% or more
➢ The eligible collateral for this purpose are as under:
Collaterals
I. Cash & Cash Equivalents like FDR, NSC, KVP etc.
II. LIC Policies (Surrender Value)
III. Immovable Properties in the form of Residential /Industrial/Commercial Properties.
Surplus value of primary securities of Land & Building, if available, can also be considered for the
purpose.
➢ In event of Non-availability of External Risk Ratings in case of new borrowers, the sanctioning authority shall
provide a suitable time of _____to the new borrowers for obtaining external risk rating in terms of sanction:3 to
6 months
➢ In case the entity is externally rated after the period as granted by sanctioning authority and the External Rating
comes below the Investment grade rating i.e. below ‘BBB’ rating grade, then the rating outcome shall be placed

उत्कर्ष -2023
@
Back to Index 58 | P a g e
 before the ________and to the appropriate sanctioning authority in case of HO sanctions, for continuation of
granted concessional rate of interest, if any and taking a call on additional risk mitigates: Next Higher Authority
However, in case of HO sanctions, the same shall be placed to respective sanctioning authority for taking further
call accordingly
➢ Penal interest @1% shall be levied in respect of those borrowers, who are otherwise eligible and have not got
themselves externally rated from any of the approved rating agencies or whose external rating has expired
➢ Cash Credit exposure though generally sanctioned for one year or less, is tend to roll over. Hence these
exposures should be reckoned as Long Term Exposures and accordingly the Long-Term Ratings accorded by the
Credit Rating Agencies will be relevant.

INTERNAL RATING BASED APPROACH

➢ The IRB approach allows banks, subject to the approval of RBI, to use their own internal estimates for some
or all of the risk components (Probability of Default (PD), Loss Given Default (LGD), Exposure at
Default (EAD) and Effective Maturity (M)) in determining the capital requirement for a given credit
exposure.
➢ Under the IRB approach, to arrive at the risk weighted assets (RWA) for exposure, internal risk ratings is used
and banking book exposures is categorized into following six asset classes broadly:
a) Corporate b) Sovereign c) Bank d) Retail e) Equity f) Others
➢ The IRB approach is again classified into Foundation IRB (FIRB) approach and Advanced IRB (AIRB) approach.
The bank has got approval from RBI to participate in the parallel run of the Foundation IRB (FIRB) approach of
credit risk.

CREDIT RISK MITIGATION TECHNIQUES

➢ RBI has prescribed list of eligible financial collaterals, method of valuation of these collaterals and haircut thereon
etc., which helps the bank in reducing the exposure amount by permitting offset of such collaterals against the
exposure.
➢ Banks use a number of techniques to mitigate the credit risk e.g. exposure may be collateralized in whole or in
part by cash or securities, deposits from the same party, guarantee of a third party etc.
➢ While the use of CRM technique reduces or transfers credit risk, it simultaneously may increase other risks such
as residual risks. The bank ensures that all these risks are also monitored and controlled.
➢ RWA Computation Engine developed in-house under ‘PNB EDW 2.0’ software takes care of CRM techniques,
as mentioned above for computation of RWA under credit risk
➢ The following securities (either primary or collateral) are eligible for treatment as credit risk mitigants:
i) Cash (as well as certificates of deposit or comparable instruments issued by the lending bank) or deposit with
the bank which is incurring the counter-party exposure.
ii) Gold: Gold would include both bullion and jewellery. However, the value of the collateralized jewellery should
be benchmarked to 99.99 purity.
iii) Securities issued by Central and State Governments.
iv) Kisan Vikas Patra and National Savings Certificates, provided no lock in period is operational and if they can be
encashed within the holding period.
v) Life insurance policies with a declared surrender value of an insurance company, which is regulated by an
insurance sector regulator.
vi) Debt securities rated by a recognized Credit Rating Agency where these are either:
(a) at least BBB- when issued by public sector entities; or
(b) at least A3 for short-term debt instruments

vii) Debt securities not rated by a recognized Credit Rating Agency where these are:
a) Issued by a bank; and

उत्कर्ष -2023
@
Back to Index 59 | P a g e
 b) Listed on a recognized exchange; and

c) Classified as senior debt; and

d) All rated issues of the same seniority by the issuing bank that are rated at le ast BBB- or A3 by a chosen
Credit Rating Agency ; and

e) The bank holding the securities as collateral has no information to suggest that the issue justifies a rating
below BBB- or A3 (as applicable) and;
f) Banks should be sufficiently confident ab out the market liquidity of the security.

viii) Units of Mutual funds regulated by the securities regulator of the jurisdiction of the bank’s operation mutual
funds where
a) a price for the units is publicly quoted daily i.e., where the daily NAV is available in public domain; and

b) Mutual fund is limited to investing in the instruments listed in this paragraph(Equities including convertible bonds
are no longer part of CRM)

The above mentioned is an indicative list of eligible financial collaterals. The detailed guidelines are available in
Credit Risk Mitigation and Collateral Management Policy 2022-23.

➢ Eligible IRB collaterals: In addition to the eligible financial collaterals as mentioned above for standardized
approach, some other collaterals recognized under IRB approaches of credit risk are as under:-
i. Eligible Financial Receivables
ii. Commercial or Residential Real Estate (CRE/RRE)
iii. Other physical Collaterals

************************************

उत्कर्ष -2023
@
Back to Index 60 | P a g e
11. SANCTION OF PROPOSALS BEYOND THE PURVIEW OF CMRP
a) Definition of Relaxations/Waiver and Deviation:
▪ Relaxations/Waiver which are already prescribed: In respect of those issues where Delegated Authority
is def ined, the respective Delegated Authority shall exercise the approved delegated powers as prescribed
under Credit Policy/Scheme/other guidelines. The same shall not be construed as deviation.
▪ Relaxations/Waiver which are not prescribed: In respect of those issues where Delegated Authority
have not been defined, the Management Committee (MC) of Board may consider Relaxation/Waiver in the
extant Credit Policy/Scheme/ Guidelines but within the Statutory & Regulatory framework. The same shall
not be construed as deviation. However, the same shall be reported to the Board in its next meeting for
inf ormation.
▪ Deviations: Those issues which are in variance to extant Statutory and Regulatory f ramework are
considered as deviations.
b) Management Committee may permit Relaxation/Waiver beyond the purview of credit Management & Risk
Policy. While permitting Relaxation/Waiver f rom the policy guidelines, sufficient reasons f or permitting such
Relaxation/Waiver need to be clearly outlined in the note f or allowing such Relaxation/Waiver. Such
Relaxation/Waiver considered expedient in the interest of the bank in the normal course of business must be
reported by the respective Division/Department to the Board in its next meeting for information.

c) Further, HOCAC-II/HOCAC-III/MC may consider cases on merits in respect of the f ollowing matters in the
larger interest of the bank, to the extent of their vested loaning powers:

i) Waivement of stock audit in case of accounts with credit risk rating ‘B1 & below’.
ii) Relaxation in the ceiling of ₹100 crore prescribed f or single stock broking entities including their allied
concerns/inter-connected companies.
iii) Sanction of short term/corporate loan for the purpose not specified in the guidelines/policy.
iv) Sanction of proposals of proprietary concerns/partnership f irms/limited liability partnerships/HUFs,
Societies, Trusts beyond the exposure ceiling of ₹50 crore/ ₹100crore/ ₹200crore.
v) Sanctioning loans beyond the prescribed internal ceiling in respect of individual/group borrowers, but
within the ceiling prescribed by RBI.
vi) Sanctioning loans beyond the maximum ceiling prescribed from time to time under various schemes.
vii) Amendments in the Restructuring Policy by HOCAC-III based upon experience gained f or smooth
implementation thereof.
viii) HOCAC-II & III may relax the prescribed margin in respect of advances against bank’s deposits including
DRI/FCNR (B) deposits as well as in case of advances against PSU Bonds/RBI Relief Bonds/postal
securities/life insurance policies/liquid securities of similar nature on merits of each case.
d) To f acilitate operational convenience and to take care of meritorious proposals, HOCAC-II & above within
their respective vested loaning powers are empowered to approve relaxation in the scheme/guidelines
which otherwise do not fit in laid down schemes/ guidelines but is within overall statutory and
regulatory framework. Such cases where the HOCAC-II/ HOCAC-III has exercised relaxation in the
scheme/guidelines the same shall be treated as relaxation and shall be put up to MC of the Board for
Information.
e) Wherever f inancial powers have been delegated to board, it shall mean MC of Board.
*********************

उत्कर्ष -2023
@
Back to Index 61 | P a g e
D. VALUATION POLICY
1. Properties taken as primary/collateral security are valued at ____prices all the time Realizable

2. In agricultural loans up to credit limit of_______, where agricultural land is being

offered as security, valuation of such agricultural land may be assessed on the basis of
Circle Rates decided by revenue authorities. The same shall be authenticated from the ₹2.00 Crore
site/ latest data published by revenue authorities by the processing/ assessment officer
and a record of the same shall be kept in file

3. Where the realizable value of immovable property to be mortgaged/ charged is

above_____, branches shall get valuation of such IPs done from minimum two valuers ₹5 crore
of category A or B on the Bank’s approved panel

4. If the difference in valuation obtained by two valuers as mentioned above is less than___,
the average realizable value may be taken. If the difference in two valuations is more than
20%
____, 3rd valuation may be got done from a senior valuer in category A and the average
of the lower two valuation reports shall be taken.

5. In case the IPs are recently purchased then the purchase price as per sale deed and not
the realizable value shall be reckoned as value of the property. The period for recent
purchase be taken as ______from the date of sale deed. However, if the guideline value
12 months
has been revised after the date of sale deed and it is higher than the purchase value then
value of the property shall be reckoned in terms of the guideline value even if the sale
deed is recent i.e. not one year old

6. If the duration between the date of allotment and date of conveyance deed / sale deed
(executed by the development agencies/private builder) is more than_____, fresh 1 year
valuation shall be obtained

7. With respect to valuation of land in all proposals including Real Estate, if the land is
acquired / purchased beyond one year, realizable value or _____ of the market value
85%
whichever is lower assessed by the Bank’s approved valuer should be taken as value of
the land

8. For borrowal accounts having aggregate limit of ______& above, valuation of immovable
properties charged/mortgaged to the Bank is to be got done from approved valuer once
in three years. As regards borrowal accounts having aggregate limit of below _______, ₹1 crore
valuation of immovable properties charged/mortgaged to the Bank be got done from
approved valuer once in five years

9. Wherever the Branch Head feels that realizable value of IPs is significantly lower than the
one on bank’s record in accounts, he may get the property re-valued from the bank’s One year old
approved valuer provided the valuation is more than _____

10. Revaluation of immovable property under PNB Home Loan ______is not required in case
of standard accounts. However, For NPA Accounts, the revaluation is to be got done as
Irrespective
per extant guidelines. Further, if the borrower approaches for top-up facility or any other
of limits
credit facility (Other than Home Loan), Valuation/Revaluation will be obtained as per
extant guidelines.

However, if the Home Loan is sanctioned for construction of house, valuation of the
Completion
property may be done after obtaining _____from competent authority viz municipal
Certificate
corporation, development authorities etc. and in case of individual construction, Bank’s
empanelled valuer certifying that construction is as per the approved plan.

उत्कर्ष -2023
@
Back to Index 62 | P a g e
11. Valuation of IPs mortgaged in Educational Loan to be conducted as per existing
guidelines during moratorium period.
Further, revaluation may be discontinued once the_______, till the status of account is Repayment
standard. However, if the mortgage of IP is extended to other credit facility /borrower Starts
approaches for other credit facility against security of same IP, the IP should be revalued
as per existing guidelines

12. If, at the time of revaluation, negative variance of the individual property is _____ or more
from the earlier valuation, the matter shall be referred to sanctioning authority to take 20%
appropriate safeguards

13. Branches/Offices to ensure that residual age of the immovable property should be at least
5 years
______more than the tenure of loan

14. Periodicity for Valuation in NPA accounts

Apart from the procedure for valuation to be conducted for ascertaining Reserve price of
the immovable properties charged/mortgaged to the bank it is prescribed that the
periodicity for valuation shall be once in______. However the Circle/Zonal/HO SASTRA
shall be empowered to get the said valuation even at the lower interval than 3 years 3 years
depending upon the exigencies of the case . All other guidelines with regards to valuation
of assets/ properties pertaining to stressed assets account shall remain unchanged and
continue to be advised by SASTRA Division Circular No 20/2021 dated 31.03.2021 and
subsequent updations

15. In cases where new plant and machinery is to be financed, the ____indicated in the
quotation/ supplier’s bill shall be reckoned as its value, which should be verified by making Cost Price
enquiries through other vendors supplying such machinery

16. Where the value of Plant & Machinery to be charged is_______, branches shall get ₹50 crore &
valuation of such P&M done from minimum two valuers on the Bank’s approved panel above

17. Cases where the WDV of P&M is less than ₹50 Crore as per latest ABS
In cases where existing plant & machinery is to be charged to the bank by way of
hypothecation, mortgage, etc., valuation of such plant & machinery shall be reckoned by Sanctioning
the ______as per their discretion, either from the valuation report submitted by a valuer Authority
on the Bank’s approved panel OR from Written Down Value (WDV) of P&M from the latest
ABS

18. Cases where the WDV of P&M is ₹50 Crore and above as per latest ABS
In cases where existing plant & machinery is to be charged to the bank by way of
hypothecation, mortgage, etc., branches shall get valuation of such P&M done from Average of
minimum two valuers on the Bank’s approved panel. The valuation of such plant & two
machinery shall be reckoned by the sanctioning authority as ____submitted by valuers on Valuations
the Bank’s approved panel or Written Down Value (WDV) of P&M from the latest ABS,
whichever is lower.

19. In remote locations or other places where suitable valuers capable of undertaking
Valuation of the class of assets are not empanelled by the Bank, services of any other
valuer empanelled with a Public Sector Bank within their vicinity may be utilized after Zonal
necessary due diligence and approval from ________ Manager

उत्कर्ष -2023
@
Back to Index 63 | P a g e
20. The empanelment of valuers:
Category of Work in Undertaking Valuation Value of property for
Valuers assignment of Valuation Work
A More than 10 years No limit
B More than 5 years and less than 10 Upto ₹50 crore
years
C Upto 5 years* Upto ₹5 crore
* In case of Diploma holders eligible for empanelment to undertake valuations, work experience of 8
years in the field of valuation after completing the diploma is required and they can undertake valuation
of property/plant and machinery upto maximum value of ₹5.00 cr
21. ______, Head Office shall be the owner division for empanelment of valuers SASTRA
Division

22. Age is an important criteria while empanelling valuers. The minimum age for empanelment
25 years
shall be ______and there is no maximum age limit for a valuer to remain on the panel

23. The valuer shall be on the bank’s panel for a period of _____unless and until removed
5 Years
from the panel

24. In case of built up property, the construction is as per the plan approved by the competent
authority.
If construction is not as per the approved plan, the ______ shall be accepted in such Realizable
cases. Also, guidelines as applicable to valuation of land shall be followed. In any Value of
eventuality where construction is as per approved plan, but some portion or floor has been Land
identified as unauthorized, and bank approved valuer confirms that in case of demolition
of unauthorized construction, the approved portion shall remain intact, the value of the
approved construction and the land as assessed by the approved valuer can be accepted.

25. In case of misconduct by any valuer, the bank shall have the prerogative to recommend the removal of the
valuer from the panel. The steps involved in this process are given hereunder:
a) Issue of show cause notice: The valuer shall be given due opportunity to explain why action
should not be initiated against him or her.
b) Hearing: The valuer shall be given an opportunity to make his/her point of view known and heard.
c) Deliberation by the committee: The matter shall be deliberated by the concerned Conflict
Resolution Committee.
If the charges are found to be serious against the valuer he/she may be removed from the panel.

26. Valuers once removed from the panel of the bank (i.e De-paneled) may be re-
empanelled. The Re-empanelment is to be done on very selective basis in exceptional
circumstances and after a minimum cooling period of ____from the date of de-panelment.
The same process as that of empanelment is to be followed for Re-empanelment of valuers
5 Years
with specific justification for such Re-empanelment. If approved by delegated authority
for empanelment, names of such valuers removed from De-empaneled list (post re-
empanelment) may be reported to the IBBI/ IBA by SASTRA Division, HO, requesting
IBBI/ IBA to arrange for the names to be deleted from its caution list.

27. A maximum of _____time shall normally be given to the valuer to carry out the valuation.
Maximum time for valuation will be mutually decided by the Valuer and Bank depending
upon the nature of the valuation job and circumstances on a case to case basis.
10 days
In case of outstation properties or in case of large property valuations, more time shall be
given, depending on the circumstances, on a case to case basis.

उत्कर्ष -2023
@
Back to Index 64 | P a g e
28. Payment to be made within ______from the date of receipt of final valuation report or
45 days
receipt of final bill for payment whichever is later

29. In case the valuation report submitted by the valuer is not in order, the bank shall bring
the same to the notice of the valuer within ______of submission for rectification and
15 days
resubmission. In case no such communication is received, it shall be presumed that the
valuation report has been accepted.

30. In exceptional circumstances, Deputy General Managers at Zonal Offices/ Zonal SASTRA
Head (in case of NPA accounts) may permit payment of fees to valuers beyond the above
ceilings subject to a maximum of______. Further, Branch Head of LCBs/ELCBs (specialized
₹25,000/-
branches, with heavy credit portfolio requiring valuation of high value primary/collateral
securities), in exceptional circumstances, shall also exercise discretionary powers for
payment of fees to valuers beyond _____subject to a maximum of ₹50,000/-

31. The valuation of all the securities is to be updated in the CBS system by menu option
HCLM
_____and linked to respective accounts through HSCLM

32. The fee structure for valuation of properties shall range from ₹2000/- to _____ ₹25000/-

33. For the purpose of calculating the valuation fees, _____________ shall be considered Realizable
Value

*********************************************

उत्कर्ष -2023
@
Back to Index 65 | P a g e
 E. STOCK AUDIT POLICY
1. FB + NFB (NFB limits which are being used for WC Funding like LC, SBLC, BG for ₹5 Crore and
purchase of goods for sale and BGs for Mobilization Advances, but excluding Capex above from
LCs, Bid Bond Guarantees etc.) our bank
2. in respect of borrowers enjoying Fund based limits of_____, stock audit may be Less than ₹5
got done in exceptional cases and/or, wherever bank’s interest demands Crore
3. Annual Stock Audit to be compulsorily conducted in all ‘B2’ to ‘C3’ rated accounts and ₹3 Crore and
NPA accounts enjoying fund based and non- fund based working capital limits of __ above
4. In exceptional circumstances where certain adverse features are observed in the operation of account
which may be like:
▪ Abnormal increase or decrease (30% or more on a monthly basis without due justification) in Stock
receivables/Sundry debtors / sundry creditors
▪ Decline (20% or more) in credit summation in Working Capital facility continuously for 3 months
without due justification
▪ Account remains overdrawn continuously for more than 2 months.
5. In cases of Consortium/Multiple Financing, where the borrower is enjoying WC limits
(Fund based) of less than ₹ 5 Crore from our Bank and _____in aggregate from the ₹ 20 Crore and
banking system, branches should take up with lead bank/major share-holder banks in above
multiple banking arrangement forgetting the stock audit conducted.
6. There may be certain prestigious accounts which may fall under the category
______under the risk rating module signifying lower risk and where conducting stock
audit by an outside agency may hurt the sentiments of borrowers. Exemption from
‘A1’ to ‘A4’
annual stock audit, if required, in such cases based on merits and business
considerations of each case should invariably be incorporated at the time of fresh
sanction/renewal/ review of the working capital limits.
7. Frequency of conducting Stock Audit in NPA Accounts
Immediately after an account gets classified as NPA and normal cooling period of
3 months
______for up-gradation/rectification of default is over, Stock Audit be made mandatory
within next _______
8. Maximum time taken for such audit varies from ______except in case of non-
cooperation by borrowers where it may take some more time. Time frame for
completion of such audit should be clearly spelt out. It should be ensured that the 2-4 weeks
agency conducting Stock Audit submits its report on the prescribed format immediately
after completion of audit but in no case later than two weeks of completion of audit.
9. The observations/deficiencies pointed out by the Stock Auditors should be
removed/rectified maximum within_______. In order to have effective monitoring, the
reasons for non-closure of stock audit reports, if outstanding for more than 90 days,
90 days
should be reported under remarks column of ‘Stock Audit Report’ which is provided at
Appendix-II. The periodicity of submission of the same to Credit Review & Monitoring
Division, HO is quarterly.
10. Closure of stock audit reports, after rectification of the observations / deficiencies
pointed out by the Stock Auditors be put up to “Head of Credit Review and Monitoring DGM
Vertical” who is not below the rank of______ at the Zonal Office. The duty shall be
allocated by way of office order
11. Time schedule for completion of stock audit every year:
31st August
Completion of the process of appointment of stock auditors

उत्कर्ष -2023
@
Back to Index 66 | P a g e
12. Completion of stock audit and submission of the report 30th
November
13. Compliance of the observations of the stock audit report and its closure 31st
December
14. The overall time limit for closure of stock audit shall be_____. However, in cases where
stock/receivables audit is conducted more than one time in a year, the time limit for 3 months
closure of stock audit shall be 2 months

15. _______shall be the deviation authority on matters pertaining to undertaking

HOCAC
stock/receivables verification by independent chartered accountants in large value
III/HOCAC II
accounts unless otherwise permitted in the guideline.

16. ____at HO shall invite applications for empanelment from Chartered Accountants for
the purpose of stock/receivables verification from various centres where branch of the
bank is present through detailed advertisement on website of the Bank and short notice CRMD
in newspaper (one national & one vernacular language). Application shall also be
invited through ICAI web portal (till it is free of cost)

17. Application shall be called in every_____. The duration of empanelment shall be for a 3 years
period of ______. If required, Bank can call for application annually. Already
empanelled Chartered Accountants are required to apply for the empanelment again
after ______and shall be treated as fresh applicants. Application along with format of
undertaking have to be submitted by the Chartered Account firm/stock auditors for
empanelment to the respective Zonal Offices

18. Application received at Zonal Offices shall be processed by a committee headed

by_________. The committee shall make an assessment of the required numbers of
Chartered Accountants for the purpose of stock/receivables verification for all Zonal
branches, recommend and send the list of Chartered Accountants for the purpose of Manager
Stock audit to CRMD, HO which shall act as the nodal division for empanelment of
Chartered Accountants

19. Allotment of stock audit for all branches (except E-LCBs/ LCBs) shall be carried out by Branch Head
Zonal Office. Allotment of stock audit for LCB branches shall be done by ________ (E-LCB/ LCBs)

20. Panel of Stock auditors shall consist of reputed firms of Chartered Accountants/
Individual CAs/Cost Accountants/firm of Cost Accountants, who have at least_____
5 Years
standing and at least one of the partners should be a Fellow of the Institute of
Chartered Accountants of India (FCA).

21. The duration of empanelment shall be for a period of ______ 3 Years

22. Empanelled chartered accountant’s performance shall be reviewed (Appendix-X) by the

2 Years
Committee at Zonal office every _________

23. Chartered accountant firm once removed from the panel could be reempanelled again
after a period of _______from the date of depanel after giving proper justification and 3 years
completing process for empanelment

24. The entire fee inclusive of all expenses to be incurred by Auditors for stock audit of
₹2 Lakh
one borrower including travelling, boarding, lodging etc. will not exceed _____

*********************************************

उत्कर्ष -2023
@
Back to Index 67 | P a g e
F. BASEL GUIDELINES
BASEL ACCORD
The G-10 countries, Spain and Luxembourg formed a standing committee in 1974 under the auspices of the Bank
for International Settlements (BIS), called the Basel Committee on Banking Supervision, Headquartered in Basel-
Switzerland. It is a comprehensive set of reform measures, developed by the Basel Committee on Banking
Supervision to strengthen the regulation, supervision and risk management of the banking sector:
Basel-I Basel-II Basel-III
• Issued: July 1988 • Issued: June 2004 • Issued: Nov 2010* (Consultative Document
Dec 2009)
• Implemented: Dec 1992 • Implemented: Dec 2006 • Implemented: 01.04.2013 –
31.03.2020
• India adopted: 1999 • 3 pillars approach *G 20 endorsement of Basel III
• Discontinued: w.e.f. • Enhanced risk coverage: • Objective
01.07.2013 Credit Risk, Market Risk, a) To improve ability to absorb shocks
• Covers only: Credit Risk, Operation Risk from financial & economic stress
Market Risk b) To reduce risk of spillover from
financial sector to real economy.
Origin of Basel-III: Sub Prime Crises
Market Risk Amendment Advance Approaches: Dec. Implementation: started w.e.f. 01.04.2013
Issued: Dec 1996 2007 and fully implemented by 31.03.2019
Implemented: Dec. 1997
Minimum capital Minimum capital Comprehensive reform package “Basel-III” a
requirement: 8% of RWA requirement: 9% of RWA global regulatory framework for more resilient
(Part of Pillar-I, Tier 1 banks and banking systems and Basel III :
minimum 6% of RWA) International framework for liquidity risk
measurement, standard and monitoring
1. OBJECTIVES OF BASEL-III
Basel III aims to strengthen the stability of the Banking system by introducing: -
➢ New Capital Structure with more emphasis on quality of capital.
➢ Introducing New Global Liquidity standard.
➢ Introduction of a leverage ratio.
➢ Promoting capital conservation and counter cyclical buffer.
➢ A Counter Cyclical Buffer (CCCB) has been introduced to counter the effect of impact on capital during
economic downturns.
Salient point of the RBI guidelines on BASEL-III
▪ Revaluation reserves arising out of change in the carrying amount of a bank’s property consequent upon its
revaluation may, at the discretion of banks, be reckoned as CET-1 capital at a discount of 55%, instead of as
Tier -2 capital under extant regulations
▪ Banks may, at their discretion, reckon foreign currency translation reserve arising due to translation of financial
statements of their foreign operations as CET-1 capital at a discount of 25% provided the same is being shown
as an item under schedule -2, Reserves and surplus and auditors have not expressed a qualified opinion on
FCTR.
▪ DTAs which relate to timing differences (other than those related to accumulate losses) may, instead of full
deduction from CET-1 capital, be recognized in the CET-1 capital up to 10% of a bank’s CET-1 capital, at the
discretion of banks.
▪ In order to ensure the liquidity of the banking system, all banks will be tracked for their liquidity position on an
ongoing basis using the following two ratios i.e. Liquidity Coverage Ratio (LCR) & Net Stable Funding Ratio
(NSFR) for capturing short term liquidity and long term liquidity respectively.

उत्कर्ष -2023
@
Back to Index 68 | P a g e
▪ The final guidelines for NSFR have been released by RBI vide circular dated 17.05.2018. The same has come
into effect from April 1, 2021.
• The capital requirement prescribed has to be maintained on an ongoing basis.
2. BASEL-III TRANSITION PRESCRIBED BY RBI (Minimum Capital to be maintained under
Pillar-1)

SN Minimum Capital Ratio March 31, 2021

1. Minimum Common Equity Tier-1 (CET1) 5.50%
2. Maximum Additional Tier I Capital 1.50%#
3. Capital conservation buffer (CCB) 2.50%
4. Minimum CET-1+ CCB 8.00%
5. Minimum Tier-1 capital 7.00%
6. Maximum Tier 2 Capital 2.00%#
7. Minimum Total Capital / CRAR 9.00%
8. Minimum Tier-1+ CCB 9.50%
9. Minimum Total Capital 9.00%
10. Minimum Total Capital + CCB 11.50%
The above CRAR prescribed by RBI is the minimum CRAR required under Pillar 1. (For Credit Risk, Market Risk
& Operational Risk)
# However, if the Common Equity Tier I Capital is above 5.5%, then the maximum permissible AT 1 and Tier 2
capitals may be increased on a proportionate basis.
3. PRESCRIBED RISK WEIGHTS AS PER RBI GUIDELINES

Refer Chapter-D Credit Management & Risk Policy>> S.No.10 Capital Charge for Credit Risk

4. POSITION OF BANK’S CRAR AS ON 30.09.2022 UNDER BASEL-III

SN Particulars 31.03.2022 30.09.2022
1 Tier –I 11.73% 12.20%
1.a Common Equity (CET-I) 10.56% 10.88%
1.b Additional Tier -I 1.17% 1.32%
2 Tier -II 2.77% 2.54%
3 Total CRAR 14.50% 14.74%
A. Pillar -1 Minimum Capital Standards
Capital for Credit Risk: (Standardized Approach)
Shall be calculated based on external rating and applicable risk weight.

Capital for Market Risk: (Standardized Measurement Approach)

a. Specific Risk for a specific security. "Specific Risk" charge for each security, which is designed to protect
against an adverse movement in the price of an individual security owing to factors related to the
individual issuer, both for short (short position is not allowed in India except in derivatives) and long
positions( risk weight ranges from 0.28% to 56.25%)
b. General market risk, which is interest rate risk in the portfolio.
Capital for Operational Risk: (Basic Indicator Approach)
Under Basic Indicator approach used presently banks must hold capital equal to average of positive annual
gross income (AGI) for previous 3 years multiplied by alpha, which is currently 15% set by BCBS. If AGI is
negative or zero for any year, it is excluded from numerator & denominator.
• Capital charge = Average of (Gross income* alpha) for each of the last 3 financial years, excluding years of
negative or zero gross income.
• Gross income means net interest income + net non-interest income or
• Gross income = Net profit + Provisions & contingencies +operating expenses

उत्कर्ष -2023
@
Back to Index 69 | P a g e
 B. Pillar-2: Supervisory Review Process (SRP)
It has two components namely Internal Capital Adequacy Assessment Process (ICAAP) and Supervisory
Review & Evaluation Process (SREP). ICAAP comprises a bank’s procedures and measures. SREP consists of
review and evaluation process adopted by RBI, to review and evaluate ICAAP. SREP is conducted by RBI
annually along with Annual financial Inspection.
C. Pillar-3: Market Discipline or Disclosure
Purpose: To complement Pillar 1 & Pillar 2 and encourage market discipline by developing a set of disclosure
requirements which will allow market participants to assess key pieces of information about capital adequacy
and risk exposures.
Implementation: became effective from 01.07.2013.
• Scope/Frequency
1. At least on a half yearly basis.
2. For (i) Capital Adequacy; (ii) Credit risk: General Disclosures for all banks and (iii) Disclosures for Portfolios
subject to standardized approach.
3. Disclosures must either be included in a bank’s published financial results/ statements or at a minimum
must be disclosed on bank’s website.
• Capital Conservation Buffer (CCB): The Capital Conservation Buffer (CCB) has been introduced in the
form of Common Equity of 2.5% of RWAs in addition to the minimum total of 9%. CCB is designed to ensure
that banks build up capital buffers during normal times (i.e. outside periods of stress) which can be drawn
down as losses are incurred during a stressed period. The Capital conservative buffer in the form of Common
Equity will be phased-in over a period of four years in a uniform manner of 0.625% per year, commencing
from 01.01.2016.
In view of the continuing stress on account of COVID-19, it has been decided to defer the implementation of
the last tranche of 0.625 per cent of the Capital Conservation Buffer (CCB) from September 30, 2020 to April
1, 2021. The pre-specified trigger for loss absorption through conversion / write-down of Additional Tier 1
instruments (Perpetual Non-Convertible Preference Shares and Perpetual Debt Instruments), shall remain at
5.5 per cent of risk weighted assets (RWAs) and has rose to 6.125 per cent of RWAs from April 1, 2021.
• Countercyclical Capital Buffer (CCCB): The range prescribed is 0 – 2.5% of CET 1 capital. This would be
introduced as an extension of the capital conservation buffer. However, presently RBI has not prescribed any
time limit. CCCB shall have 2 thresholds (a) Lower and (b) Upper with respect to credit to GDP Gap. When
upper threshold is reached, CCCB shall remain at 2.5% of RWA.
• D-SIB Capital Buffer: Framework for dealing with Domestic Systemically Important Banks (D-SIBs) has
been issued by RBI which is ef f ective f rom April 1, 2019. The banks identified as D-SIBs would be plotted in
5 different buckets depending upon their systemic importance scores in ascending order and they would be
required to maintain additional capital (in the form of CET1 capital) in the range of 0.20% to 1.00% of their
risk weighted assets.
The list of D-SIBs is as follows:

5. INTERNAL CAPITAL GENERATION RATIO (ICGR) OF THE BANK

• The internal generation of capital is a function of retained profit (depends on return on assets) after dividend
payouts. The rate of internal generation of capital is measured through a ration namely Internal Capital
Generation ratio.
• The ICGR is calculated by dividing Bank’s retained earnings by average Net Worth as on previous year.
Retained Profit (Net profit after dividend payout)
ICGR =
Net worth as on previous year

उत्कर्ष -2023
@
Back to Index 70 | P a g e
 6. LEVERAGE RATIO UNDER BASEL-III
Particulars Remarks
Definition of Leverage Ratio Leverage Ratio is the ratio of Tier-1 Capital of the Bank to
On & Off balance sheet exposure of the Bank.
Leverage Ratio prescribed by RBI under Basel-III Tier-1 Capital
Bank’s On & Off balance sheet exposure
Minimum Leverage Ratio prescribed by RBI D-SIB 4% & Other Banks 3.50%
Bank’s Position As on 31.03.2022: 4.27 % As on 30.09.2022: 4.55%

7. LIQUIDITY RATIOS UNDER BASEL-III

• The Liquidity Coverage Ratio (LCR) is short term measurement of Bank’s liquidity position to ensure
that the cash outflow during next 30 days are adequate to covered by high liquid assets of the Bank.

The stock of high quality liquid assets comprises of :-

✓ Level 1 Liquid Assets: Excess CRR, Excess SLR, Cash
✓ Level 2 Liquid Asset: Investment in Bonds/ Shares of Non-Financial PSU or Corporate Bonds with external
rating AA- or above and Multilateral Development Banks (ADB, NABARD etc).

• LCR is to be computed with respect to the position at the end of the month for next 30 days.
Position of Liquidity Coverage Ratio (LCR):**
RBI Prescribed Position 31.03.2022 30.09.2022
100% 159.31 153.49
**Based on final LCR Guidelines issued dated 09 June 2014 which is as follow: -

➢ High quality Liquid Assets (HQLA): Earlier, RBI divided HQLA into Level 1 & Level 2 assets depending
upon the liquidity and credit quality. In the final guidelines RBI has kept Level 1 assets same as in draft
circular, but has introduced another layer of liquid assets under Level 2 assets. Hence, level 2 assets are
further divided into Level 2A & Level 2B.
➢ Definition of Level 1 assets: Level 1 asset include cash including excess CRR, excess SLR within
mandatory SLR requirement Government securities allowed up to the extent of MSF (presently 2% of NDTL
as notified by RBI) + 8% of NDTL (as notified by RBI - Facility for Availing Liquidity for LCR-FALLCR), and
marketable securities issued or guaranteed by foreign sovereigns.
➢ Definition of Level 2 assets: RBI has widened the scope of Level 2 assets. The Level 2 assets have
further been bifurcated into Level 2A & Level 2B.
At present the assets allowed as Level 1 High Quality Liquid Assets (HQLAs), inter alia, includes among others within the
mandatory SLR requirement, Government securities to the extent allowed by RBI under (i) Marginal Standing Facility
(MSF) and (ii) Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) [16 per cent of the bank's NDTL with effect
from April 1, 2020]. The total HQLA carve out from the mandatory SLR, which can be reckoned for meeting LCR
requirement will be 18 per cent of NDTL (2 per cent MSF plus 16 per cent FALLCR).

Net Stable Funding Ratio (NSFR) :

The NSFR promotes resilience over longer-term time horizon by creating additional incentives for banks to fund
their activities with more stable sources of funding on an ongoing structural basis.

Available Stable Funding (ASF):

• ASF includes Capital, Borrowings, Deposits (Retail, SBS, PSU & others) and excludes deposits from Financial
Institutions. Bank strategy should be to maximizing the ASF.
• RBI has prescribed higher conversion factors for ASF depending upon the nature and maturity i.e. Capital
and other liabilities having 1 year or more effective maturity.

उत्कर्ष -2023
@
Back to Index 71 | P a g e
 • All the Deposits having effective maturity more than 1 year, eligible Capital instruments and other liabilities
with maturity 1 year or less doesn’t contributed to the Available stable funding of the Bank.
Required Stable Funding (RSF):
• RSF includes Advances & Investments with maturity of one year or more and Bank’s strategy should be
to minimizing the RSF.
• Cash available with the Bank & CRR attract 0% conversion factor (CF) as also the SLR attracts 5%
conversion factor and Level 2 A assets also attracts 15% CF.
• Short term loans (1 year or less residual maturity) to non-financial entities/ Retail attracts 50% CF.
• Residential mortgages loans and other performing Loans with Risk Weight of 35% or less in Standardised
approach for credit risk attracts 65% Conversion factor.
• Other performing loans to non-financial entities will attract 85% CF.
• All other assets will attract 100% conversion factor for evaluating Required Stable funding.
Position of Net Stable Funding Ratio (NSFR) :
SN Ratio RBI Prescribed Bank’s Position as on
Position 30.09.2022
1 Net Stable Funding Ratio (NSFR) >=100% 138.40%

Components of Regulatory Capital (CAPITAL = Tier-I + Tier-II)

Tier-I (Going concern capital) Tier-II (Gone Concern Capital)
A. Common Equity Tier I (CET-1)
In addition, the banks will also have to build Capital
B. Additional Tier I (AT-1) Conservative Buffer (CCB), comprised of common equity.

Elements of CET-1 Elements of Tier-II capital

1. Common shares (Paid up equity capital) issued 1) General Provisions and Loss Reserves: These items
by the bank; as given below (a to f) together will be admitted as
2. Stock surplus (share premium) resulting from Tier-II capital up to a maximum of 1.25% of the
the issue of common shares; Total Credit Risk Weighted Assets under
3. Statutory Reserves; Standardized Approach.
4. Capital Reserves representing surplus arising a) Provision on standard Assets
out of sale proceeds of assets b) Floating provision
5. Other disclosed free reserves, if any; c) Provision held for country exposures
6. Balance in Profit & Loss Account at the end of d) Investment Reserve Account
the previous financial year; e) Excess Provision on account of sale of NPAs
7. Quarterly Profits (Provided the incremental f ) Countercyclical provisioning Buffer
provisions made for non- performing assets at
the end of any of the four quarters of the Under Internal Ratings Based (IRB) approach, where
previous financial year have not deviated more the total expected loss amount is less than total eligible
than 25% from the average of the four provisions, bank may recognize the difference as Tier 2
quarters), capital up to a max of 0.6 % of credit RWAs calculated
8. Revaluation reserves at a discount of 55% under IRB approach.
9. Forex translation reserves @ discount of 25%
10. Minority Interest (common shares issued by 2) Debt capital instruments issued by the banks;
consolidated subsidiaries of the bank and held 3) Preference Share Capital instruments;
by third parties). 4) Perpetual Cumulative preference Shares (PCPS);
11. Elements of Additional Tier 1 Capital: 5) Redeemable Non-Cumulative Preference Shares
• Perpetual Non-Cumulative Preference Shares (RNCPS);
(PNCPS); 6) Redeemable Cumulative Preference Shares
• Stock Surplus (share premium) resulting from (RCPS);
issue of instruments included in Additional
7) Stock surplus (share premium) resulting from the
Tier-I capital;
• Debt capital instruments eligible for inclusion issue of instruments included in Tier- II capital
in Additional Tier-I capital
***************************************

उत्कर्ष -2023
@
Back to Index 72 | P a g e
G. IRMD Schemes & Guidelines
G1: FINANCING AGAINST FUTURE LEASE RENTALS (FLRs) (L&A 21/2022)

SN Particular Guidelines

Property owners of Freehold/ Leasehold properties who have let out such
properties to PSU/Govt./Semi Govt./State Govt. & reputed corporate, Banks, FIs,
Insurance Companies, MNCs, reputed private schools/colleges (approved
1. ELIGIBILITY
by/affiliated to State Board/University/AICTE/any other Govt. body) and reputed
private hospitals/nursing homes and franchisee/ dealers/distributors of reputed
corporates

• Term loan
2. FACILITY
• Overdraft on reducing DP basis

• On the basis of lease rental receivables, applicable/proposed rate of interest

and unexpired initial & renewal period of lease.
3. EXTENT OF LOAN • An indicative list showing the quantum of loan at various interest rates (6.00%
to 15.00%) and period of lease (3 years to 15 years) is given in Appendix-B
of the circular.
Maximum 15 Years or total lease period considered for arriving at the loan
amount whichever is earlier subject to the following:
Category of lessee Maximum repayment period
1.For sanctions upto level of ZOCAC
a. Govt. departments / PSUs 15 years
b. Other cases 12 years
2. For sanctions at the level of HOCAC-I / HOCAC-II
a. Govt. departments /PSUs/ reputed corporates 15 years
4. REPAYMENT
b. Other cases 12 years
3. For sanctions at the level of HOCAC-III & above
a. Irrespective of the category of lessee 15 years

• Term Loan: shall not exceed 15 years

• Overdraft Limit : shall be adjusted within a maximum period of 180 months
(as prescribed for Term Loan option) or total lease period considered for
arriving at the loan amount, whichever is earlier, by reducing Drawing Power

• Assignment of lease rental;

• Equitable Mortgage of leased IP of which rental is assigned
PRIMARY • In case of loans having repayment period upto 5 years: the amount of loan
5.
SECURITY should not exceed the realizable value of the property mortgaged.
• In case of loans having repayment period beyond 5 years: the amount of
loan should not exceed 75% of the realizable value of the property mortgaged

• Wherever the leased property cannot be mortgaged for any reason

whatsoever, of the required value, the loan to be secured by EM of any other
COLLATERAL IP i.e. other than that of which rental is assigned, having minimum value of
6.
SECURITY 133% of loan amount
• CHCAC & above may waive obtention of Equitable Mortgage of property in case
the property is rented to our Bank
ROI for Non CRE Borrower: Spread (0.10% to 3.45 based on internal rating)
INTEREST & over applicable benchmark*
7. ROI for CRE Borrower: Spread (0.35% to 3.95 based on internal rating) over
SERVICE CHARGES
applicable benchmark*
(*Applicable Benchmark: (i) For MSME : RLLR +BSP, (ii) For other than MSME: 1 Year MCLR )

उत्कर्ष -2023
@
Back to Index 73 | P a g e
 • Upfront Fee: L&A Circular on Credit related service charges issued from time
to time
• Annual review fee is to be levied in both the cases i.e., term loan / Overdraft
on DP reducing basis sanctioned against FLR.
• Collateral linked concession shall not be applicable under the scheme

8. LOANING POWER • PLP/MCC & above within their vested loaning powers

• While considering financing under the scheme sensitivity analysis on below

mentioned factors should be carried out:
a) Change in Lease Rentals - Decreased by 10%
SENSITIVITY
9. b) Change in Occupancy Levels - Decreased by 10%
ANALYSIS
c) Change in Rate of Interest - Increased by 2%.
• After conducting sensitivity analysis adverse impact may be examined and if
needed, loan amount may be reviewed on case to case basis.

DEBT SERVICE • DSRA equivalent to the instalment plus interest of some specified period (i.e.1
10. RESERVE to 3 months) may be maintained as a cushion. Sanctioning Authority may
ACCOUNT prescribe for creation of DSRA in terms of sanction on case to case basis

• Let out property to allied concerns is not permitted even if it otherwise falls in
aforesaid permitted categories.
However, in cases where there are multiple offices / units in the same building
of which few units are leased out to their allied concerns and remaining other
units to other eligible lessees, financing under the scheme shall be permitted
for reputed corporates.
11. 5 RESTRICTIONS
Proposals shall be considered by the Sanctioning Authority as permitted in the
scheme by excluding the rentals from such allied concerns while arriving the
eligible loan amount. In exceptional cases, HOCAC-II & above may consider
such cases of property owner letting the property to allied concerns on merits.
Consideration of ‘Reputed’ shall be as per the Judgment of Recommending /
Sanctioning Authority
• The visit to the rented premises shall be undertaken once in a year at the
time of annual review or more often if deemed necessary.
• In case the account has slipped into SMA-1, inspection is to be done on half
12. INSPECTION
yearly basis and in case of SMA-2, inspection is to be done on quarterly basis.
The periodicity (half yearly / quarterly, as the case may be) shall continue till
the account is regularised

• Financials of the lessor be also obtained at the time of considering the proposal
from the borrower/public domain/published financial statements or other
13. OTHERS sources.
• At the time of annual review, the revaluation may not be insisted upon if the
account has not slipped to SMA-2 on any occasion during the last 3 years.

For detailed guidelines refer: IRMD L&A Circular No.21/22 dt. 15.02.2022, 78/22 dt.07.06.2022

उत्कर्ष -2023
@
Back to Index 74 | P a g e
G2: PNB SAMPATTI (MSME 15/2022 , L&A 132/2020, 81/2021)

SN Particular Guidelines
• All Business enterprises including Individuals (Both PS and NPS) including MSMEs/
Education Institutions*/Hospitals/Nursing Homes/ Hotels/ Traders
ELIGIBILE
1. • Builders/ Developers are permitted under the scheme provided the property
BORROWER
proposed to be offered for mortgage as security should be other than the projects
where the loan amount is proposed to be invested and are meant for sale .
BORROWER Loan to HUFs / Property Dealers / Real Estate Agents/ Real Estate/Capital Market/
2.
NOT ELIGIBLE Investment in or for giving loans to Associate/Group/Sister Concerns are not allowed
• Fund Based: Overdraft (General/Reducing),Term loan (EI/ Non EI)
3. FACILITY • Non Fund Based: BG/ LC may also be permitted in deserving cases by earmarking
OD Limits
• Residential Property : Maximum upto 65% of R.V. of the property
LOAN TO VALUE • Other than Residential Property: Maximum upto 60% of R.V. of the property
4.
RATIO Note: In case more than one property with mix of residential and other than residential are
offered then prorata value shall be computed.
• Term Loan: Maximum 180 months (inclusive of 6 months moratorium)
• Overdraft Limit (With reducing DP): Maximum 180 months subject to annual
5. REPAYMENT renewal. The drawing power will be reduced on quarterly basis with fixed amount
so as the total Principal+ Interest is liquidated at the loan tenure.
• Overdraft Limit-General: One Year, subject to annual renewal.
PRIMARY • Mortgage of immovable property(s) which are un-encumbered from other Bank / FI
6.
SECURITY and should be enforceable under SARFAESI Act
• Personal Guarantee of the Promoters /Proprietors / Partners / Trustee/ Directors
7. GUARANTEE (Other than Independent/ Professional/Nominee Director) of the Unit.
• Personal Guarantee of owner(s) of the property.
• Property already mortgaged in any existing loans, may be extended in this scheme
subject to availability of residual realizable value (after carving out 150% of the RV
EXTENSION OF of the security of the existing exposure or as per security coverage norms of the
CHARGE OVER scheme under which existing facility has been sanctioned).
8. SECURITY FOR • Property charged in this scheme may be extended to cover any other facility to the
OTHER extent of spill over available i.e. realizable value of property in excess of 160%
ACCOUNTS (incase LTV is 65%) or 175% (incase LTV is 60%), as the case may be, of the
exposure against which the property is held as primary security.
• No Second Charge or Pari-Passu charge will be extended for other Bank/FI.
Rate of Interest
Loan Amount ROI
Upto ₹5.00 cr. RLLR+BSP+1.00%
INTEREST ,
Above ₹5.00 cr As per Card rate linked to RLLR subject to capping of
9. SERVICE
RLLR+BSP+1.50%
CHARGES
Processing Fee /Upfront Fee: Overdraft: Processing Fee @ 0.25% p.a./ Term
Loan :Upfront Fee @0.50% of the limit
Review Charges for Term Loan: As per IRMD L&A guidelines.
Exposure Sanctioning Authority
SANCTIONING Minimum above ₹10.00 Lakh PLP/ /PLP-CAC/MCC-CAC/CHCAC/ZOCAC/
10. and up to ₹15.00 Cr
POWERS HOCAC-I within their vested Loaning Power
Above ₹15.00 Crore HOCAC-II and above
• Overdraft (with Reducing DP)/ Term Loan: To be renewed/ reviewed annually.
RENEWAL /
11. • Overdraft General: At the time of renewal, limit shall be reassessed by the
REVIEW
sanctioning authority and renewed at existing level if the projections accepted at the

उत्कर्ष -2023
@
Back to Index 75 | P a g e
 time of last sanction have been achieved to the tune of 75% (For FY 2020-21 &
2021-22). However if party has achieved sales which is in consonance with the
existing limit, in this case limit should not be reduced.
• After 1 year of original sanction of OD limit. In case the enhancement has to be
made before 1 year, it can be considered by authority one step higher but not less
than CHCAC
ENHANCEMENT
• Cash flow being sufficient to take care of repayment.
(Permitted only in
12. • Projections accepted at the time of last sanction achieved to the tune of 95% or
OD General
more of projected turnover (i.e on the basis of which the limit was sanctioned).
Scheme)
• Against additional security provided by the unit (within the permissible margin level)
subject to cash flow being sufficient to take care of repayment even within 3 years.
• Account should not have been classified SMA-2/ NPA since last renewal
• For Overdraft:
Upto ₹5.00 crore Maximum amount of loan shall be, prescribed LTV OR 25% of
the projected annual sales or receipts whichever is lower.
If the party is not maintaining proper financial statements such as Doctors, Lawyers,
Architecture, other professionals, self-employed etc. MPBF can be given as 4 times of their
ASSESSMENT
13. annual income (subject to cash flow/repaying capacity) or prescribed LTV, whichever is
OF LIMIT lower
Above ₹5.00 crore: 25% of the projected annual sales/ receipts or based on Cash
Budget (Cash Flow Based) method
• For Term Loan: Maximum amount of loan shall be, prescribed LTV OR 75% of
the assets to be created out of loan whichever is lower.
Property in the shape of following should not be accepted:
• Vacant Plot and Agricultural Land
• Land & Building in shape of Education Institutions/Hospitals/ Nursing Homes/
Orphanages/ Old Age homes or any other Social Sector Infrastructure, SEZ/Trust
14. RESTRICTIONS
Property, Property with Power of Attorney
• Property to be mortgaged is to be within 50 Km of the Metro Branches and within
25 Km of the Non Metro Branches where account is/ to be maintained
• Borrower already availing Cash Credit; however same can be converted
Service Charges: Loyalty Bonus To Privileged Borrower shall be applicable (As per
IRMD L&A cir 93/2020 dated 26.05.2020) and will be reviewed on renewal.
Rate of Interest: Concession of 0.25% over applicable rate in following cases:
Upto ₹5.00 Crore
a. In case borrower opts for OD Reducing Facility.
b. In case borrower offer residential property (self-occupied by Proprietor/ Partner/
15. CONCESSION
Director/ Trustee/ Promoter/Guarantor)
ZOCAC & above authority may grant concession upto 0.50% subject to minimum of
RLLR+BSP
Above ₹5.00 Crore
ZOCAC & above authority may grant concession upto 0.50% subject to minimum of
RLLR+BSP
INTERNAL RISK B1& above. In case rating is B2, sanctioning authority shall be Next Higher
16.
RATING Authority
• No TOD/Adhoc permitted under the scheme
• The Financial ratios: Average DSCR 1.25, with minimum of 1.10 during entire
17. OTHERS repayment period (for TL and OD with reducing DP). Interest Coverage Ratio as per
IRMD guidelines shall be ensured.
• Inspection of the unit and property is to be done Half Yearly

उत्कर्ष -2023
@
Back to Index 76 | P a g e
 • Transactions should be routed through the OD Account. If the credit summations in
the account are less than 65% of sales/receipts realization, Penal Interest @
0.25% will be charged till next renewal of the limit
• New units may also be eligible subject to prior permission from CHCAC
• Conditions of obtaining Completion certificate is exempted with the stipulation of
higher margin by 5%.
• The property on which construction is not as per approved map plan or map is not
available, in such cases, loan can be granted against such property by taking the
realizable value (RV) of land portion only for calculation of LTV. In this case, entire
land & building should be under one ownership or all the owners of the property
shall be made borrower/ guarantor
• Loan can be extended on Leasehold property (where lesser is Govt.
Authority) subject to: The residual lease period of the land should be at least 3
years more than the repayment period at the time of creation of mortgage and the
repayment should be proposed within this period

For detailed guidelines refer: MSME Cir. No. 15/22 dt.17.02.2022 read with IRMD L&A Circular
No.132 dated 23.07.2020, No.81 dt.01.05.2021

उत्कर्ष -2023
@
Back to Index 77 | P a g e
G3: SCHEME FOR OPEN TERM LOAN (L&A 170/2020)
SN Particular Guidelines
a. Existing borrowers enjoying fund based credit facility and the account has
not slipped to category SMA-2 and below in previous 12 months.
b. The borrower shall have internal credit risk rating of ‘B1’ & above. External
ELIGIBILE rating of the borrower should be BBB and above wherever applicable.
1.
BORROWER c. This facility may be considered at the time of Sanction of Additional Credit
Facility or at the time of Renewal /Enhancement of Existing facilities.
d. Existing borrowers enjoying credit facilities under MSME schemes are also
eligible for open term loan.
Any genuine commercial purposes in the same line of activity, with regular
business of the borrower. These would include:
a. Expansion / modernization and ongoing capex requirement.
b. Repayment of high cost debts/ high cost term debts of other banks/FIs.
c. Implementation of VRS scheme in the Company.
2. PURPOSE
d. Any other purpose, which may help in growth/ expansion /operation of
business.
e. Construction contractors who need to purchase / acquire machineries on an
ongoing basis depending on their orders to be executed and cannot estimate
their requirements at the beginning of the year.
pre-approved term loan facility with an option of multiple disbursements for
3. FACILITY multiple purposes which can be disbursed over a period of 12 months depending
upon requirement of the borrower
ASSESSMENT OF Upto 20% of the total limit sanctioned, minimum above ₹10 lakh and
4.
LOAN maximum upto ₹10 Crore
5. MARGIN Minimum 25%
6. VALIDITY 12 months from date of sanction
REPAYMENT PERIOD Maximum 3-5 years in monthly / quarterly installments. Sanctioning HOCAC-II
7. and above may consider repayment period upto 7 years wherever necessary on
case-to-case basis.
Hypothecation / mortgage of the assets proposed to be purchased out of the
8. PRIMARY SECURITY term loan. In case no tangible security is being created, extension of charge on
fixed asset/ 1st charge on fixed asset be created.
CHCAC and above. However, accounts classified as SMA-1 can be considered by
9. LOANING POWERS
HOCAC-I and above.
• Separate loan account shall be opened for each purpose as requested by the
borrower
• The borrower shall be free to avail the facility at their convenience within the
10. OTHERS validity of the sanction. Disbursement of the facility would be done on the
request of the borrower within the currency of the sanction subject to
verification / scrutiny of the basic financial information and satisfaction of
branch heads regarding purpose and end-use of funds.
For detailed guidelines refer: IRMD L&A Circular No.170/2020 dated 05.09.2020

उत्कर्ष -2023
@
Back to Index 78 | P a g e
 G4: GUIDELINES FOR CORPORATE LOAN (L&A 84/2021)

SN Particular Guidelines

a. To be allowed to public limited companies only

b. The company must have commenced business, having at least previous three
1. ELIGIBILITY
year’s audited balance sheets
c. The company shall have credit risk rating of B3 & above

a. Building up of Net Working Capital (NWC)

b. Repayment of existing high cost debts
c. Leveraging specific cash streams, that accrue into company
2. PURPOSE
d. Implementation of VRS scheme in the Company.
e. For meeting research & development expenditure.
f. Any other purpose, which may help in growth/ expansion/operation of business.

3. EXTENT OF LOAN Need based

4. RAPEYMNET Maximum 5 years by way of bullet repayment OR in instalments

These loans may be secured or unsecured depending upon the credit worthiness
5. SECURITY
and financial strength of the company

INTEREST RATE/ as advised through L&A Circulars issued from time to time or Fixed interest rates/
6.
UPFRONT FEE rates linked with market benchmark upto 1 year

HOCAC-II/III may exercise their vested loaning powers to sanction such loans.
7. LOANING POWER
However, MC shall exercise full powers in this regard.

Standard Loan documents shall be obtained. In cases where some special clauses
8. DOCUMENTATION are to be incorporated, the documents shall be got drafted from Law Manager,
ZO/HO/Legal Retainer

a. The end-use of funds shall be in accordance with the purpose permitted in the
sanction.
b. While determining the loan amount and repayment period, the cash generation
capacity and total indebtedness of the borrowing company shall be kept in view.
It must be ensured that the borrowing company is in a position to generate
9. GENERAL sufficient cash for serving its obligations.
c. The loan shall not be provided for speculative purposes or for capital
expenditure for replacement of existing plant/machinery and/or on its
upgradation/renovation.
d. HOCAC-II/III may permit deviations upto their vested loaning powers.
However, MC shall have full powers for permitting deviations

10. SCHEME CODE EI Type: TLCLE, NON EI Type: TLCLN

For detailed guidelines refer: IRMD L&A Circular No.84/2021 dated 06.05.2021

उत्कर्ष -2023
@
Back to Index 79 | P a g e
G5: GUIDELINES FOR SHORT TERM LOAN (L&A 85/2021)
SN Particular Guidelines
a. To be allowed in respect of bank’s existing customers. However, in case of
meritorious proposals of non-customers, the STLs may be considered subject to
IRR ‘A4’ & above
b. Short Term Loans of secured nature be allowed to corporate borrowers as
under:
i. For loans upto ₹500 crore with minimum internal credit risk rating of ‘B2’.
However, in case STL is to be considered in the sensitive sectors such as Capital
Market/CRE then for rating should be “A4” and above
ii. For loans above ₹500 crore with minimum risk rating of ‘A4’.
iii. PSUs of repute, showing profits in the latest period as per ABS or duly certified
ELIGIBILE by CA and/or having a positive fund flow/Escrow arrangement, without
1.
BORROWER reference to their rating.
iv. The details of STLs raised by the PSUs during last two years from our
bank/other lending institutions should be obtained to ascertain whether the
same have been repaid on time or not. The adequacy of cash flows and track
record should be the prime criteria for considering STLs to PSUs.
The amount of STLs to PSUs be decided based on the genuine needs as well as
the repaying capacity but should be restricted to 10% of average gross
revenue for the last three years. It should be within the internal exposure
ceiling fixed for advances to State Govt. Undertakings/PSUs with sub-ceiling to
State Govt. Undertakings / PSUs running in losses or where financials are not
available, as per extant guidelines.
Minimum: ₹25.00 crore, Maximum: should be considered within the overall ceiling
2. EXTENT OF LOAN
for prescribed for individual and group borrowers
3. TENOR Maximum 1 Year
INTEREST RATE Fixed interest rates / rates linked with market benchmark upto 1 year
HOCAC-II and above within their vested loaning powers.
LOANING Proposals of State Govt. Undertakings/PSUs running in losses or where
4.
POWERS financials are not available shall be placed to Management Committee for
consideration
EXPOSURE 18% of the exposure of the bank as at close of previous quarter
5.
CEILING
a. In case the aggregate limit by single borrower from more than one PSB is ₹ 150
crores & above, Joint Lending Arrangement (JLA) shall be formed.
b. In case STL is being considered under project financing for meeting the
temporary mismatch of funds, it should be ensured that the financial closure of
project is duly achieved. The STLs may also be considered for preoperative
expenses
c. STLs of secured nature may be considered where bank has first/second and
subservient charge (with adequate residual value to cover the advances) on
6. OTHER
assets (current/fixed). In case of WC limits, adhoc limits/WCDL may be preferred
over STLs facilitating generation of more interest income.
d. Fresh STLs of unsecured nature are not to be considered. However,
exceptional cases of unsecured STL may be considered by MC under information
to Board with the proviso that such sanctions are not done through circular
resolution
e. No rollover of STLs should be allowed. The repayment should be clearly defined
in the sanction with servicing of interest regularly
7. SCHEME CODE EI Type: TLSTE, NON EI Type: TLSTN
For detailed guidelines refer: IRMD L&A Circular No.85/2021 dated 10.05.2021

उत्कर्ष -2023
@
Back to Index 80 | P a g e
G6: GUIDELINES FOR LINE OF CREDIT (L&A 194/2020, 145/2021)
Line of credit is an arrangement between the bank and the borrower wherein a maximum amount of a loan
limit fixed in favour of the borrower with the option to draw the amount at any time as per the requirement of
the business in shape of Working Capital Facilities, LC/LG, Bills Financing, etc. within the overall sanctioned line
of credit. It is a solution to most of the credit needs of a business concern as it represents a commitment by
the bank to lend the firm upto a specific amount for variety of business purposes.

SN Particular Guidelines

▪ PSUs irrespective of the rating and all existing/fresh borrowers with External Risk
Rating BBB & above where the bank’s exposure by way of working capital
finance (funded and non funded) is above ₹100 crore and
(i) the limits are not overdue for review/renewal; (ii) the conduct of account is
satisfactory; (iii) there is no major IR irregularity/adverse features in the account.

▪ Unless desired specifically by the borrower, the borrower’s working capital limits
shall be the single assessment in the form of line of credit where instead of
considering/sanctioning separate limits for Cash Credit (Stocks/Book Debts) and
DA (LC) facilities, a combined limit for Cash Credit (Stocks & Book Debts)-cum-
DA (LC) limit is to be sanctioned, with a sub-limit for DA (LC) facility.
▪ To facilitate operational convenience, credit facility may be permitted by way of
ELIGIBILITY,
1. line of credit facility in shape of OD/WCDL to be availed for maximum period of
AMOUNT OF LOAN
12 months subject to the following:
✓ The outstanding balance should be made as NIL at the end of 12 months or
the period of sanction whichever is earlier. In other words, credit facility given
in the shape of line of credit should not be extended/renewed without the
adjustment of the limit.
✓ A notice of at least 48 hours is to be given before availing/ repaying the
amount under line of credit.
▪ Under line of credit the following facilities are not to be considered:
i) LC (DA/DP) for procurement of capital goods
ii) Performance guarantees and guarantees issued for fulfillment of export
obligations
iii) Loans to meet capital expenditure/long term need, which are to be met
through term loans only.
▪ Having arrived at an outer limit/cap assessed by way of second method of
lending/Cash Budget Method, the credit delivery shall be done through the
NATURE OF modes of credit facilities viz. CC (Stock/Book debts), WCDL, LC (DA), Bank
2.
FACILITY guarantee for procurement of current assets.
▪ It can also be used as OD/WCDL subject to compliance of laid down guidelines
in the matter

Margin against stocks/book debts and LC (DA) shall be prescribed by the

Sanctioning Authority on case-to-case basis. While allowing CC (Stock/book
debt) facility prescribed margin shall be deducted from the security to arrive at the
3. MARGIN
drawing power as per the extant system by obtaining stock and book debt
statements on the prescribed format. Similarly, LC (DA) shall be opened after
obtaining the stipulated cash margin.

4. LOANING POWERS Management Committee (MC)

5. NOTICE PERIOD For availing the line of credit, the borrower has to give notice of minimum 48
hours clearly specifying the period for which the availment shall be made. In case

उत्कर्ष -2023
@
Back to Index 81 | P a g e
 no availment period is specified by the borrower, it shall be presumed that the
same is for the entire validity period of the line of credit. Accordingly, in case of
adjustment of limit before the due date of the validity period, the bank may consider
levying commitment charges in such cases.

▪ Corporate Credit Division (CCD) shall convey the sanction details to CRMD,
HO for post sanction monitoring which shall make available the information to
other divisions upon request.
▪ CCD shall ensure Sanctioning Line of Credit strictly as per extant guidelines &
convey the sanction to Branch clearly mentioning that the facility is Line of
Credit for facilitation of the Branch to open the account accordingly
▪ On receiving the sanction letter, the details of Line of Credit shall be captured
MONITORING & in Limit Node by Branch. In order to capture details of Line of Credit a New
6.
REPORTING Suffix for Limit Node “LOC” (Line of Credit) has been created. Branches
should ensure creation of separate Limit ID for Line of Credit, in addition to
Fund & Non fund exposure under Party Total Exposure Limit ID.
▪ On availment of facility by borrower, the account (CC/DO) or limit (LC/LG) etc.
shall link with limit ID for created for LOC to facilitate MIS generation for
monitoring by CRMD.
▪ CRMD, HO shall provide information on the position of Line of Credit as on
close of the month to ALM, IRMD and CCD on prescribed format.

▪ The line of credit facility should not be utilized for purchase of real estate,
investment in capital market or other unrelated activities/speculations. An
undertaking to this effect should be obtained.
▪ In order to avoid levying of capital charge on the unavailed portion, an
undertaking for unconditional cancellation of the credit limit should be obtained.
▪ The line of credit should be considered in line with length of the working capital
cycle but not exceeding period of 12 months.
▪ The processing fee as applicable to fund based working capital limits should be
recovered for the entire limit sanctioned as line of credit.
▪ The sanctioning authority should prescribe minimum level of usage of limit for
levying of commitment charges on merits of the case.
▪ Disbursement:
a) Line of Credit sanctioned in form of WCDL may be disbursed in form of
7. OTHER tranches.
b) The sanctioning authority shall stipulate in the sanction, the period under
which such Tranches shall be availed i.e. the number of days in which
sanctioned line of credit shall be availed in tranches and ROI applicable at the
time of each disbursement.
c) The extant guidelines shall be amended to stipulate that Line of Credit if
availed in form of WCDL may be disbursed in tranches & should be adjusted
within the respective tenor of the tranche from the date of respective
disbursement. The maximum tenor of the tranche shall be 12 months from the
date of disbursement.
d) Where Line of Credit is disbursed in tranches and expiry of tranches is going
beyond the expiry of sanction, in such cases review of credit facilities
should be conducted immediately on completion of 9 months from
date of sanction to maintain the credit discipline.

Ref. : IRMD L&A Circular No.194/2020 dated 14.10.2020,145/2021 dated 27.09.2021

उत्कर्ष -2023
@
Back to Index 82 | P a g e
G7: FINANCING SECURITIZATION OF FUTURE TOLL COLLECTION / DISCOUNTING OF
ANNUITY RECEIVABLES (L&A 146/2021)

SN Particular Guidelines

a. Public/Private Limited Companies may be considered for financing.

b. The advance shall be made to the borrowers (under consortium or otherwise) who
have availed the credit facilities for project implementation in BOT Road
projects/HAM Models.
c. Before financing such projects, the traffic volume study conducted by the reputed
agencies should be obtained to ensure the accuracy of projections relating to
1. ELIGIBILITY increase in future toll collection. In any case, the projections should be based on
the actual figures/toll collections of at least 9-12 months in case of toll based road
projects.
d. In case of annuity based road projects, it should be ensured that the concessionaire
has completed the project as per terms of the concession agreement and is eligible
for getting the payment of the annuity and atleast payment of the first annuity has
been received in its account.

The credit facilities should be used first for adjusting the existing secured and
2. PURPOSE unsecured debts in full. Thereafter for repayment of creditors, further expansion of
business, operation & maintenance cost etc.
3. NATURE Term Loan

4. LOAN AMOUNT Need based but within the prudential ceilings prescribed by RBI/Bank for
individual/group borrowers
Project Minimum Margin
HAM Nil
5. MARGIN
Other annuity Receivable 10%
Toll Receivable 40%

▪ HAM Project: Present value (PV) of net assured future receivables in the shape of
annuities for the unexpired period of concessionaire agreement (excluding final year
of annuity period) determined on the net cash flow basis
▪ Other Annuities/Recievables: PV of net assured future receivables in the shape
of annuities for the 85% of the unexpired period of concessionaire agreement
determined on the net cash flow basis.
For the purpose, PV of cumulative Annuities shall be calculated by way of
discounting the same at proposed rate of interest plus 100 bps. While determining
the PV of Net Assured Future Receivables/Annuities, the money required for
meeting day-to-day expenses as well as TDS (wherever applicable) shall also to be
METHOD OF taken into account. For this purpose, calculation should be done on the Net Cash Flow.
6.
ASSESMENT In such proposals, the amount of loan should be calculated by way of securitisation of
project revenues consisting of annuities only. The advertisement revenues and DSRA
income, if any, should not be reckoned for computing the loan amount and repayment
schedule.
The PV formula:
Net Assured Future Receivables/Annuities
Present Value = ----------------------------------------------------------
(1+ Interest rate per month) n (No. of months)
The discounting factor should be taken at proposed interest rate plus 100 bps to cover
the future upward revision in the rate of interest, if any, as in the present scenario the
interest rates have become volatile and any abnormal increase in rate of interest may
affect the repayment obligation.

उत्कर्ष -2023
@
Back to Index 83 | P a g e
 The sensitivity analysis in respect of following three variables, as may be applicable,
be carried out:
a. Increase in interest rate by: 100 bps
SENSITIVITY b. Increase in operation & maintenance cost by: 5%;
7.
ANALYSIS c. Reduction* in revenue by: 5%
*In case the Sanctioning authority is of the opinion that the key variable factors are
highly volatile for some particular case/period, the Sensitivity analysis may be carried
out at 10% instead of 5%.
HAM Projects: ROI shall be in the range of 3-month MCLR to 3-month
MCLR+40% based on external rating. However, ROI for All PSUs shall be 3-month
8. ROI MCLR irrespective of rating.
Other Projects: As applicable to other category of borrowers in terms of interest rate
guidelines issued from time to time

The repayment should be worked out in such a manner that the periodic instalment of
principal & interest are aligned with the future cash flows.
Further, TL shall be repayable within the period for which the future toll collection is
9. RAPEYMNET reckoned for computing the loan amount i.e. within the concession period as envisaged
in the concessionaire agreement.
The instalments may be equated or by way of ballooning depending upon the future
cash flows

The possibility should be explored to obtain charge on moveable/immovable assets of

COLLATERAL the company/equitable mortgage of other IPs. Corporate Guarantee of other promoter
10.
SECURITY companies/personal guarantee of promoters may be accepted. Particulars of charge
be filed with the Registrar of Companies within the stipulated period

LOANING HOCAC Level-II and above within their vested loaning powers
11.
POWER

▪ Debt Service Reserve Account (DSRA)

In order to ensure regular payment of interest plus instalment, DSRA equivalent to the
instalment plus interest of minimum two quarters may be maintained as a cushion. In
case of unequated instalments, the average instalment plus interest may be reckoned
for maintenance of amount in DSRA
12. OTHER ▪ Escrow account

To be maintained with the Lead bank/our bank and the funds for the project are to be
routed through this account. After the commencement of commercial operation,
annuities/other income by way of advertising etc. are to be deposited in this account
and withdrawals are permitted for operation & maintenance as per the terms of
agreement after earmarking the amount required for the servicing of debt.
Project Scheme Code MIS Code
SCHEME CODE/
EI Type Non EI Purpose of Advance – 41 -
13. MIS CODE Type “Financing Future Receivables –
HAM THAEI TBOEI BOT/ HAM/ Toll Projects”
Other Road Project THANE TBONE
For detailed guidelines refer: IRMD L&A Circular No.146/2021 dated 27.09.2021

उत्कर्ष -2023
@
Back to Index 84 | P a g e
G8: GUIDELINES FOR EXTENDING FINANCIAL ASSISTANCE FOR ENHANCEMENT AND
AUGMENTATION OF ETHANOL PRODUCTION CAPACITY (L&A 92/2021)

SN Particular Guidelines

i. Existing distilleries attached with the sugar mills

ii. All the Sugar mills are eligible for assistance to set up new distilleries including
expansion of capacity of existing distilleries attached with sugar mills,
1 ELIGIBILITY iii. As the assistance is credit linked, the concerned sugar mill should be eligible to
receive bank loan for installing the project at (i) and (ii).
iv. Assistance shall not be available to sugar mills which have availed benefits
under any other scheme of Central Government for the same project.

▪ Augmentation of ethanol production capacity by setting up of new distilleries

2. OBJECTIVE attached with sugar mills
▪ Expansion of the capacity of the existing distilleries attached with sugar mills

i. Interest subvention @ 6% per annum or 50% of rate of interest charged

ASSISTENCE by banks, whichever is lower, which shall be borne by the Central Government
UNDER THE for 5 years (including one-year moratorium)
SCHEME ii. Interest subvention under the scheme shall be provided on loan amount
3. sanctioned and disbursed in respect of each project based on the proposed
(as per GoI capacity, limited to the in principle approval by Department of Food and Public
guidelines Interest Distribution (DFPD)
Subvention) iii. Assistance shall not be available to sugar mills and distilleries which have availed
benefits under any other scheme of Central Government for the same project.

i. The applicant should get the loan disbursed from the bank within 2 years or
as stipulated by the nodal agency from the date of in principle approval by
DFPD.
MODALITIES OF
4. ii. The project should be completed within 2 years from the date of
THE SCHEME
disbursement of 1st instalment of loan from bank.
iii. Disbursement of loan under the scheme shall be in a separate loan account so
that the utilization of the money for the said purpose is easily monitored.

5. FACILITY Term Loan

Door to Door Tenor shall not exceed 8 Years. HOCAC-I & above may permit door
to door tenor upto 10 years on case to case basis. However, payment of interest
6. TENOR
subvention on loan amount under the scheme will be limited to only 5 years
including one year moratorium period

5% of the loan amount wherever tripartite agreement amongst the manufacturer,

7. MARGIN
the bank and the OMC for purchase of ethanol is executed

Primary Security First exclusive charge / first pari passu charge on its Fixed
Assets, as primary security purchased out of bank finance.
Collateral Security:
8. SECURITY
▪ 5% of the loan amount
▪ Extension of 1st / 2nd (pari passu) charge
▪ Personal guarantees of Promoters / Directors (excluding Nominee/ Professional/
Independent Director). Waiver may be permitted by the Sanctioning Authority

उत्कर्ष -2023
@
Back to Index 85 | P a g e
 As per guidelines on benchmark ratios i.e. Average >=1.50:1 however it should
9. DSCR
not be below 1.10:1 in any year.

10. LOANING POWERS CHCAC and above as per their vested Loaning Powers

The tripartite agreement shall ensure that the payment from the Oil Marketing
Companies (OMC) is routed through a dedicated escrow mechanism whereby it is
ESCROW to be ensured to deduct the amount of instalment for repayment of loan and the
11.
MECHANISM interest (after deducting the interest subvention amount to be paid by the
Government) after which the balance is to be released to the concerned sugar mill’s
account for its other uses. The exercise will be carried out every month

DSRA to the extent of three months repayment (of Principal + Interest) is to be

12. DSRA
built up within one year of commencement of commercial production

13. TAT Within 30 days of receipt of all documents / papers

14. SCHEME CODE Non EI (Equated Installment) : TLISM , EI (Equated Installment) : TLESM

▪ A tri-partite agreement (TPA) among the producers of ethanol sugar mills, OMCs
and the lending bank is to be signed before disbursement
▪ NABARD has been appointed as the “Nodal Agency” for interacting with the
Department of Food and Public Distribution (DFPD) and managing the subsidy
15. OTHER
funded for onward reimbursement to respective Bank
▪ Corporate Credit Division (Technical Cell), HO shall act as a Nodal Office
and shall collect the claims from all the branches and lodge the same with Nodal
Agency

For detailed guidelines refer: IRMD L&A Circular No.92/2021 dated 28.05.2021

उत्कर्ष -2023
@
Back to Index 86 | P a g e
G9: CONSOLIDATED CIRCULAR -ADVANCE AGAINST BANK DEPOSITS (L&A 39/2021, 192/2020)

SN Particular Guidelines
• Term Deposit/ Recurring Deposit, NRE/ FCNR Deposits
Type of
1. • Balance lying in Current/Savings Account
Deposit
• Balances held in Exchange Earners Foreign Currency (EEFC) accounts
ADVANCE AGAINST SELF DEPOSITS
Maturity period remaining at the time of granting Margin % (minimum)
advances
Upto 2 years 5.00
Above 2 years and upto 3 years 7.50
Above 3 years and upto 4 years 10.00
Above 4 years and upto 5 years 12.00
2. Margin Above 5 years 20.00
ADVANCE AGAINST THIRD PARTY DEPOSITS 25.00
ADVANCES AGAINST BALANCE LYING IN CURRENT/SAVINGS 25.00
ACCOUNT/ NRO TERM DEPOSIT
ADVANCE TO MEMBERS OF STAFF/ HONOURABLY RETIRED/ VOLUNTARILY
RETIRED/ WIDOW OF STAFF
Advance upto ₹10 lakh 5.00%
Advance above ₹10 lakh As applicable for public
As advised vide L&A Circulars issued from time to time. Presently as under
Self 1.00%*
Rate of Third Party Deposit 2.00%* subject to Min. RLLR / MCLR
3. *Over the applicable rates of interest on deposits
Interest
Note: In case there is more than one deposit in the name of the depositor(s) with varied rate of
interest, 1% or 2% higher on the weighted average of rate of interest paid on deposits should be
taken for calculating interest rate on loan.
(₹ In Lakh)
GBBs/CBB Headed by Heads/Incumbents of
Loaning scale
4.
Powers II III IV V PLP Head IV PLP/MCC Head- V LCB ELCB
50 160 800 800 800 2000 5000 10000
• Form PNB-308 be used for fresh advances
• Third party advance under automated scheme (DLDEP/ODDEP) shall be permitted at
base branch only
• Advance (i.e. Demand Loan/Overdraft) against fixed deposits shall not be allowed on
the same day of deposit. In case of unavoidable exigencies of customers, permission
will be granted by Zonal Office
• Demand Loan/Overdraft sanctioned against self FDRs should be credited only to the
account with same Customer Id duly verifying that the account is in same name.
Proceeds after adjustment of DL/OD should be credited in the account with the same
5. Others Cust-Id with same name from which proceeds have been originated.
• Advances at other than base branch to individual against his/her own deposit shall
be permitted where deposit value is up to ₹2.00 crore only.
• To avoid instances of fraud, sudden spurt in business mix of any branch in a single
day or in a quarter shall be monitored. Monitoring of change in deposit or advance figure
of any branch shall be done based on below threshold levels:
✓ 5% of total deposit or advance of the branch or ₹ 50.00 Cr, whichever is lower in a
single day.
✓ 10% of the total deposit or advance of the branch or ₹ 100.00 cr, whichever is lower
in the last quarter.
CBS Menu: For Demand Loan: HOAACLA, For OD: HOAACOD
6. SCHEME CODE
Scheme Code: For Demand Loan :DLDEP, For OD: ODDEP
For detailed guidelines refer: IRMD L&A Circular No.39/2021 dt. 19.02.2021, 192/2020 dt. 14.10.2020

उत्कर्ष -2023
@
Back to Index 87 | P a g e
G10: FINANCING AGAINST –LIPs / NSCs/KVPs/PLIs/GOVERNMENT & RBI BONDS (L&A 83/2020)
S.N. Particular Guidelines
LIPs:
▪ All Policies issued by LIC, approved Private Sector Insurance Companies, other than
Money Back Policies/ULIPs
▪ Satisfactory account with our bank at least for the last 6 months
▪ All Indian Nationals of 18 years and above
ELIGIBLE ▪ LIC of India/Private Sector Insurance Cos. allow the Surrender Value after
1. completion of 3 years period of policy and the Bonus is accrued only when the
SECURITIES
policy has run for complete 5 years from the date of commencement
Govt. Securities and Bonds: Issued by the Central & State Govt or Other Public
Bodies duly guaranteed by Central or State Govt. except PSU Bonds.
NSCs: VIII Issue and IX issue (discontinued with effect from 20.12 2015)
KVPs: issued on or before 30.11.2011 and on or after 23.09.2014
2. FACILITY Demand Loan/ Overdraft
LIP (of Surrender Value) 20%
Bonds having the residual period :
▪ upto 48 months 25%
▪ exceeding 48 months 35%
RBI Relief Bonds:(Based on expiry period from the date of issue ) 10% to 20%
Saving Bonds (Taxable & Non Taxable) 10% to 45%
MARGIN (Based on expiry period from the date of issue of bond)
3. (FOR PUBLIC Post Office Time Deposits (based on remaining maturity period) 15% to 25%
& STAFF) NSCs: Period for which NSCs have run at the time of Advance:
▪ Less than 3 years from the date of NSCs 25%*
▪ 3 years & above but less than 5 years from the date of NSCs 20%*
▪ 5 years & above from the date of NSCs N.A.
*NSC VIII issued on or After 1st April 2020, On or before 31.03.2020 it is 20% and
15% respectively.
KVPs: Issued on or before 31.03.2020 25% to 35%
Issued on or after 01.04.2020 25% to 40%
(Advance against KVPs issued on or before 30.11.2011 is discontinued)
Demand Loan: 60 months or the period till maturity of the security whichever is earlier.
4. REPAYMENT
Overdraft: The facility shall be renewed every year
5. ROI Public & Staff: RLLR+BSP+1.50% / 1 Year MCLR + 1.25%
(₹ in Lakh)
LOANING GBBs headed by scale Head/Incumbent of
6.
POWERS II III IV PLP/MCC (IV) PLP/MCC (V) LCBs ELCBs
6.25 20.00 100.00 100.00 250.00 500.00 625.00
Postal Life Insurance (PLIs): following PLI Schemes are in vogue:
✓ Whole Life Assurance (Suraksha)
✓ Endowment Assurance (Santosh)
✓ Convertible Whole Life Assurance (Suvidha)
7. OTHERS ✓ Anticipated Endowment Assurance (Sumangal)
✓ Joint Life Assurance (Yugal Suraksha)
Extent of Loan/Limit, Margin, Rate of Interest, Documentation and General
Instructions applicable for advance against Life Policies shall also be applicable for
such advances.
8. SCHEME CODE ODGOV/ DLGOV
For detailed guidelines refer: IRMD L&A Circular No.83/20 dt. 06.05.2020 and subsequent modifications

उत्कर्ष -2023
@
Back to Index 88 | P a g e
G11: LOAN GUARANTEE SCHEME FOR COVID AFFECTED SECTORS (LGSCAS) – HEALTH
CARE SECTOR (L&A 126/2021, MSME 47/2022)

SN Particular Guidelines

a) Proprietor / Partnership / Limited Liability Partnership (LLP) / Pvt. Ltd. Co. /

Public Ltd. Co. / Trust / Societies. (registered and incorporated under applicable
law) b) Unit should have required regulatory approvals for manufacturing the
healthcare products. c) Owners / Promoters need not be necessarily registered
qualified medical practitioners. However, professional qualified doctors should be
hired by the Hospitals/Nursing Homes / Pathology Labs / Diagnostic Centre etc.
1. ELIGIBILITY
Documentary proof in this regard should be obtained from the promoters. d) In
case of MSMEs, it must be registered in Udyam portal and should possess valid
Udyam Registration Certificate. e) ITR is mandatory in case of all existing units
operating for more than one Financial Year. f) In case of existing Borrower, the
account should be Standard (including SMA 0 /SMA-1 only) as on the date of
sanction.

Extending Credit Support to Health Care Sector for setting up of or modernizing

/expanding : a) Hospitals / Dispensaries / Clinics / Medical Colleges / Pathology
2. PURPOSE
Labs / Diagnostic Centers; b) Facilities for manufacturing of Vaccines / Oxygen /
Ventilators / Priority medical devices; c) Public Healthcare Facilities

a) The Scheme shall be applicable to all eligible loans sanctioned during the period
from May 07, 2021 till March 31, 2023, or till guarantees for an amount of ₹50,000
DATE OF Crore are issued under the scheme, whichever is earlier.
COMMENCEMENT b) Disbursement shall be made in stages as per the requirements of the project as
3.
AND DURATION decided by the Branch/ Office.
OF THE SCHEME
Last date of first disbursement shall be within 3 months of the sanction of facility. However,
loans which were sanctioned prior to issuance of revised guidelines shall be allowed
additional time upto 3 months from the date of issue of the guidelines for first disbursement.
a) Loans provided in individual capacity will not be covered under the Scheme.
4. RESTRICTIONS b) Traders are not allowed under the scheme.
c) Only new machinery / vehicle / other asset shall be financed.

Units located at areas other than 8 metropolitan Tier 1 cities. The 8 metropolitan
AREA OF cities are municipal area of Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad,
5.
OPERATION Kolkata, Mumbai, Pune cities. Projects coming up in the suburbs of these cities
would be eligible for coverage.

Following facilities shall be granted subject to maximum ceiling of ₹100.00 Crore:

6. FACILITY Term Loan: Need Based ,Working Capital Facility (FB & NFB) : Need Based
Capex LC, if granted shall be debited from term loan.

QUANTUM OF Maximum loan per project shall be limited to ₹100 Crore (both fund based and
7.
LOAN non-fund based included).

Term Loan:
Social Infrastructure: upto 10 years (ZOCAC and above may consider tenure
upto 15 years on case to case basis)
8. TENOR
Others : upto 5 years (ZOCAC and above may consider tenure upto 10 years on
case to case basis )
Tenure includes of moratorium period of:

उत्कर्ष -2023
@
Back to Index 89 | P a g e
  For Green Field Project Maximum up to 24 months:
§ For Brown Field Project: Up to 12 months, However, Interest to be serviced
as and when levied.
Cash Credit: To be renewed / reviewed annually.
 ZOCAC and above may permit moratorium upto 36 Months for Green Field Project
and 24 months for Brown Field Project on case to case basis.
 Tenure of loan shall be decided on the basis of DSCR.

For Term Loan:

▪ 25% for acquisition of premises and / or expansion / renovation / modernization
of existing premises.
▪ 15% for purchase of equipment / machinery / cost of on road vehicles / for
Ambulance / Other Vehicle.
9. MARGIN
▪ In case of purchase of land, margin should be minimum of 50% of the cost of
land (including cost of registration). However, loan amount for the purchase of
the land shall not be more than 50% of the total term loan amount sanctioned.
For Working Capital: Stock / Book Debts: 25% ,BG / LC: 10% by way of Cash
margin

▪ Hypothecation of the assets financed by the Bank (Current assets, fixed assets,
consumables, debtors).
▪ In case of Multiple Banking / Consortium, Loan facility shall rank pari-passu with
PRIMARY the existing credit facilities, in respect of underlying security as well as cash flows
10. for repayment.
SECURITY
▪ Mortgage of Project Land with existing / future construction thereon.
Note: Bank shall have first charge and NCGTC shall have second charge on the
assets financed under the Scheme (under both Greenfield and Brownfield
projects).
a) Minimum 25% collateral security shall be obtained in the form of immovable
property / liquid security.
b) No collateral is required if realizable value of the primary security in the shape
of Land & Building mortgaged is more than 100% of the total exposure.
COLLATERAL c) For Financing Medical Equipment: Collateral Security need not be insisted upon.
11.
SECURITY Note: ZOCAC and above may waive the collateral security requirement
on case to case basis.
In all cases (other than proprietary concerns), personal guarantee of the Promoters
/ Partners / Promoter Directors of the firm / company will be mandatorily obtained.
Corporate guarantee of holding company wherever applicable to be obtained.

GUARANTEE For Brownfield Projects: 50%, For Greenfield Projects: 75%

12. COVERAGE BY For Aspirational Districts (as identified by Niti Aayog): 75% (for both brownfield
NCGTC expansion and Greenfield projects).

For Brownfield Projects- The guarantee shall be available upto 2 years from the
DCCO, subject to a maximum guarantee period of 5 years from the date of first
disbursement. If the commercial operations start say at the end of 2 years,
TENOR OF guarantee shall be available upto 2 more years.
13. GUARANTEE
COVERAGE For Greenfield Projects- The guarantee shall be available upto 5 years from the
date of first disbursement. In such cases, guarantee shall continue to be available
upto 5 years from the date of first disbursement, even if commercial operations
commences earlier

उत्कर्ष -2023
@
Back to Index 90 | P a g e
14. GUARANTEE FEES NIL
Internal Risk Rating – Minimum B2 and above / Score above 46 (in case of
scoring model).
CREDIT RISK External Risk Rating – Minimum BB and above (for loan above ₹25.00 Crore).
15.
RATING In event of Non-availability of External Risk Ratings in case of new borrowers, the sanctioning
authority shall provide a suitable time of 3 to 6 months to the new borrowers for obtaining
external risk rating in terms of sanction as outlined in IRMD Circular No. 26/2020 dated
13.08.2020
Exposure up to ₹50 Lakh:
MSME Other
RLLR + 0.50% 1 Year MCLR
Exposure above ₹50 Lakh:
Internal Risk Rating MSME Other
A1 to A3 RLLR+ 0.5% 1 Yr MCLR
16. Rate of Interest
A4 to B1 RLLR+ 0.75% 1 Yr MCLR + 0.25%
B2 & below RLLR+ 1.15% 1 Yr MCLR+0.65
The above ROI shall be capped at 7.95% till the availability of Guarantee , even
if RLLR / MCLR including spread goes beyond the ceiling rate of 7.95%. On expiry
of Guarantee cover by NCGTC, rate of interest shall be reviewed as per applicable
guidelines in force.
Processing fee shall be Nil for the first year of finance.
PROCESSING FEE/ Normal charges shall be applicable subsequently.
UPFRONT FEE / In case of Term Loan / Bank Guarantee / Letter of Credit, concession upto 50% on
17.
BG / LC applicable charges shall be available. Further concession in service charges may be
COMMISSION permitted by competent authorities as per extant guidelines. 50% Concession in
Inspection Charges.

Half yearly inspection for regular accounts and monthly for accounts in SMA-1 /
18. INSPECTION
SMA-2 category till account turns regular.
19. LOANING POWERS As per vested Loaning Powers
Capital expenditure incurred Authority for permitting
during last 12 months reimbursement
20. REIMBURSEMENT
Upto 6 months CHCAC & above
Above 6 months and upto 12 months ZOCAC & above
Branch / Office is required to inform the date on which the account was classified
as NPA within 90 days of the account being classified as NPA

INVOCATION OF NCGTC shall pay 75% of the guaranteed amount within 30 days of preferring of
21. eligible interim claim by the Bank. The balance 25% of the guaranteed amount will
GUARANTEE
be paid on conclusion of recovery proceedings or till the decree gets time barred,
whichever is earlier. Any amount recovered over and above the total dues, including
legal costs, shall be remitted to NCGTC by the Bank
SCHEME & Scheme Code: Term Loan (EI):- TLECS ,For Term Loan (Non-EI):- TLNCS,
22. GUARANTEE
For CC:CCNCS ,Guarantee Coverage Code:- CGCAS
COVERAGE CODE
23. OWNER DIVISION MSME, HO

For detailed guidelines refer: IRMD L&A Cir. No.126/2021 dt. 09.08.2021, MSME Cir. No.47/22 dt.02.09.2022

उत्कर्ष -2023
@
Back to Index 91 | P a g e
G12: CREDIT GUARANTEE SCHEME FOR MFIs (CGSMFI) (L&A 127/2021)
SN Particular Guidelines
All NBFC-MFIs / MFIs registered with one of the Self Regulatory Organisations
1. ELIGIBILITY recognized by RBI (presently MFIN & Sa-Dhan) are eligible for support under the
scheme

The Scheme is a specific response to provide funding to the NBFC-MFIs / MFIs at

2. OBJECTIVE competitive rates to enable them to extend need based financial assistance to their
existing micro enterprises and to support new micro enterprises at reasonable rates

DATE OF The Scheme came into force from the date of issue of these guidelines by NCGTC
COMMENCEMENT (i.e., 15.07.2021) and shall cover funding provided by the Bank to MFIs / NBFC-
3.
AND DURATION MFIs till 31.03.2022 or till guarantees for an amount of ₹7500 Crore are issued,
OF THE SCHEME whichever is earlier
5. FACILITY Term Loan
Upto 3 years including moratorium.
Moratorium may be allowed based on repayment terms of onward lending done by
6. TENOR
the borrower subject to maximum 6 months. However, interest shall be serviced as
and when levied.
Unconditional and irrevocable Credit Guarantee from NCGTC upto 75% of amount
classified as NPA.
In cases where FD is taken as collateral security, NCGTC guarantee shall be
available only on the uncovered portion of the loan (FD margin also to be netted
off).
8. SECURITY In addition NCGTC guarantee, the facility shall be secured by following securities:
Primary Security: Hypothecation of book debts and receivables from assets
created out of loan raised from us valued atleast 110% of loan amount. However,
ZOCAC may reduce primary security coverage upto 100%.
Collateral Security: EM of any other collaterals offered if any by the MFI. Further,
personal guarantee of Promoter Director be explored
75% of amount in default for a maximum period of 3 years. The loan extended to
GUARANTEE the NBFC-MFIs / MFIs could be for longer period. However, tenor of NCGTC’s
9. COVERAGE BY guarantee would be for a maximum period of 3 years
NCGTC Upon submission of the claim as per guidelines, NCGTC shall pay the eligible
amount to the Bank within 30 days
10. GUARANTEE FEES Nil
Internal Risk Rating – Minimum B2 and above / Score above 46 (in case of
CREDIT RISK scoring model).
11.
RATING External Risk Rating – The borrower should be rated under MFI rating grade by
authorised external rating agency irrespective of exposure of the borrower.
Rate of interest as applicable to NBFC-MFI which was last circulated vide IRMD L&A
RATE OF Circular No. 42/2020 dated 26.03.2020 shall be applicable subject to maximum 1
12.
INTEREST year MCLR + 2% p.a. Concession in RoI may be permitted by competent authorities
as per extant guidelines.
CONCESSION IN 50% of applicable charges
13.
SERVICE CHARGES
For borrowers rated MFR-4 or better, the proposals shall be considered by CHCAC
14. LOANING POWERS
and above within their vested loaning powers. For borrowers rated below MFR-4 /

उत्कर्ष -2023
@
Back to Index 92 | P a g e
 Unrated, the proposal shall be considered by HOCAC- I and above within their
vested loaning powers.

Dealing branches for the scheme are as under:

Zone Branch
Delhi Greater Kailash, New Delhi (099300)
Mumbai Foreshore Road (123200)
Kolkata Old Court House Branch (038920)
Chennai Mount Road (016510)
DEALING Hyderabad MG Road, Bangalore (104610)
15.
BRANCHES i. All the LCBs/ ELCBs will be eligible to handle proposals above ₹ 50 crore. In cases where
the overall group exposure is above ₹50 crore then the proposals upto ₹50 crore will
also be handled by the respective LCBs/ ELCBs
ii. Proposals upto ₹50 crore in Delhi, Mumbai, Kolkata, Chennai and Bangalore will be
handled by the above mentioned branches.
Zonal Offices shall identify suitable branches in consultation with HO: PSFID for handling
proposals irrespective of amount in centers other than (i) and (ii) above

SCHEME & Scheme Code: For EI: TLEMF For Non-EI: TLNMF
16. GUARANTEE Guarantee Coverage Code: CGMFI
COVERAGE CODE
17. OWNER DIVISION PSFID, HO
▪ Approval From NBG waived
▪ At least 50% of the funding made and covered under the scheme should go to
NBFC-MFIs / MFIs rated / graded MFR 2 or below
▪ Lock in period for the first claim against each tranche of loan sanctioned by the
Bank shall be 1 year from the date of issue of guarantee or last date of
disbursement out of the sanctioned amount, whichever is later. The second and
third claim shall be made in subsequent years. Only 1 claim per year shall be
entertained
▪ PSFID, HO shall be the Nodal Division for submitting claims to NCGTC. Upon the
borrower getting classified as NPA in the books of the Bank, the Bank shall submit
claims on an annual basis in respect of amount in default and claim payment of
75% against the amount in default.
▪ The borrower shall ensure that 80% of the finance obtained under the
18. OTHER scheme is utilized for creation of fresh loan assets. These assets should
be created within a period of 4 months from the date of disbursement of each
tranche of loans
▪ Interest rate charged on these loans is at least 2% below the maximum rate
prescribed by RBI on such loans. To illustrate, if the maximum interest rate
that an NBFC-MFI can charge to its eligible small borrowers works out to 22%
p.a. as per the formula prescribed by RBI on such lending, then the said NBFC-
MFI shall charge 20% p.a. from its eligible small borrowers under the scheme

▪ Assistance extended to the borrowers is as per extant guidelines of RBI. Existing

or new small borrowers within the regulatory definition of micro finance as
prescribed by RBI from time to time shall be the eligible borrowers under the
scheme. Such borrowers should not be in default for more than 90 days as on
the date of sanction / disbursement by the NBFC-MFI/MFI
For detailed guidelines refer: IRMD L&A Circular No.127/2021 dated 09.08.2021

उत्कर्ष -2023
@
Back to Index 93 | P a g e
G13: GUIDELINES FOR FINANCING SECOND HAND ASSETS (L&A 157/2022)

SN Particular Guidelines

▪ The customer should be dealing with the Bank for atleast five years by way of
current account or credit facilities.
1. ELIGIBILITY ▪ HOCAC-I may consider relaxation upto 3 years in respect of all cases falling
upto their vested loaning power and proposals under ZOCAC power.
▪ HOCAC-II and above may consider cases without stipulating any minimum
dealing period with us.
2. RESIDUAL LIFE Atleast 5 years. The repayment period shall be fixed within the residual life.
Age of Assets Minimum Margin
Upto 3 Years 40%
3. MARGIN Above 3 Years 50%
▪ HOCAC-II and above may consider reduced margin subject to minimum 25%
Primary Security: Hypothecation / mortgage of the assets proposed to be
purchased out of bank finance.

4. SECURITY Collateral Security: Minimum 50% coverage shall be obtained. HOCAC-I may
relaxe collateral security upto 25% in respect of all cases falling upto their vested
loaning power and proposals under ZOCAC power.
HOCAC-II and above may consider cases with Nil collateral security.
5. ROI 1% more than the normal interest rate linked with internal / external rating

CHCAC & above within their vested loaning powers.

LOANINNG
6.
POWER However, in case of such financing to NBFCs proposals shall be exercised by
HOCAC-I and above within their vested loaning powers.

No bank finance shall be given for purchase of second hand plant & machinery
/assets of certain industries like Chemicals, IT & Computer Hardware and other
7. RESTRICTIONS
industries where incidence of depreciation is high and there are rapid technological
changes / upgradation

▪ The imported asset / plant & machinery should be valued by Bank’s approved
Valuers/ Chartered Engineers within 6 months of arrival. In cases where, the
valuation of the asset / plant & machinery shows 10% or more downward
variation from the valuation accepted at the time of sanction after arrival in
India, the matter may be referred to sanctioning authority and possibilities be
explored to obtain additional eligible collateral security to cover the variation.
Further, the borrower shall make good the shortfall in margin due to downward
variation in valuation.
8. GENERAL ▪ In general, the machinery being purchased / imported should have been
manufactured / assembled in the same country to avoid any legal issues on
account of repair / return etc. However, in cases where country of manufacture
/ assembly of the machinery is different from the country from where the
machinery is purchased / imported, the sanctioning authority may permit the
same subject to stipulations mentioned in the said circular.

▪ The guidelines shall not be applicable on composite buyout of companies through

NCLT.

For detailed guidelines refer: IRMD L&A Circular No.157/2022 dated 02.11.2022

उत्कर्ष -2023
@
Back to Index 94 | P a g e
G14: GUIDELINES FOR FINANCING ASSOCIATION OF PERSONS (L&A 154/2021)

SN Particular Guidelines

EXPOSURE SUB- Exposure to a single AOP borrower by way of Fund Based and Non Fund Based
1.
CEILING facilities shall be restricted to ₹50 Crore

2. LOANING POWER CHCAC and above within their vested loaning powers

▪ In addition to primary security, Bank’s exposure should be secured by way of

atleast 100% coverage of eligible collateral securities.
3. SECURITY
▪ HOCAC-II and above may consider proposals where collateral coverage is less
than 100%.

The following illustrative list of safeguards may be kept in mind while financing
AOPs.
▪ In absence of any specific act passed by the Parliament, the provisions of AOPs
and other regulatory guidelines in this respect are depending upon the legal
judgments passed from time to time and provisions available in the Income Tax
Act, 1961, only. As such, the care must be taken by Bank, while financing to
AOPs which may have legal ramifications also.
▪ It must be ensured that in no case, members of AOP should exceed 50.
▪ Credit facilities be sanctioned to only those AOPs which are formed in writing
and duly registered with appropriate authority. The said AOP should have good
reputation in the area / field where they are operating.
4. SAFEGUARDS ▪ All precautions as Bank takes in accepting properties as security in its favour,
be applied in case of AOPs properties.
▪ AOP should be formed in writing between the members by executing inter-se
Agreement / Memorandum of Understanding wherein the rights and liabilities
of the members are clearly defined including ratio of their profit and loss sharing
and way to run the common management.
▪ All the documents have been prescribed for each and every facility by the Bank
and the same will also apply to AOP, as well.
▪ The meticulous compliance of Bank’s guidelines w.r.t. extension of credit
facilities to different categories of borrowers issued from time to time be mutatis
mutandis apply to AOPs, as well.

For detailed guidelines refer: IRMD L&A Circular No.114/2021 dated 11.10.2021

उत्कर्ष -2023
@
Back to Index 95 | P a g e
G15: Credit Information Reports (CIRs) of the Borrowers provided by CICs (15/2021)
S.N. Particular Guidelines
For Fresh sanctions/Enhancement/Additional /Renewal/Review/Adhoc Credit
1. APPLICABILITY
Facility

A. Consumer CIRs
Loan Amount Consumer CIRs
Less than ₹10.00 Lakh One CIR with Credit Vision (CV) Score
from TU CIBIL
₹10.00 Lakh and above / In case Two CIRs as under:
of customers having credit risk i) Primary: One CIR with Credit Vision
rating of B2 and below or having (CV) score from TU CIBIL, and
Risk Score >46 to<=52 and below
ii) Secondary: One CIR with score from
Experian or CRIF Highmark or Equifax
Note:
i. In case credit score from TU CIBIL comes to -1 (Insufficient History/Data),
report (with score) from second bureau i.e. from Experian or CRIF
Highmark or Equifax to be extracted and analyzed for any default/overdue.
ii. In case of No Hit in TU CIBIL, report (with score) from other bureau(s)
i.e. Experian or CRIF Highmark or Equifax to be extracted and analyzed as
per the Score mapping matrix.
iii. Mapping Matrix of CICs Scores:
THRESHOLD CIBIL CRIF Experian Equifax
2.
LIMIT 732-900 767-900 826-900 784-900
690-731 719-767 776-825 720-783
650-689 677-719 701-775 608-719
602-649 631-677 651-700 561-607
300-601 300-631 300-650 300-560

B. Commercial CIRs
Loan Amount Commercial CIRs
One CIR from TU CIBIL
Less than ₹50.00 Lakh
Note: In case no report found from this
bureau, report from second bureau to be
extracted and analyzed for any
default/overdue
₹50.00 Lakh and above/ In
Two CIRs as under:
case of customers having
credit risk rating of B2 and 1. Primary: TU CIBIL
below or having Score >46 2. Secondary: One CIR with score from CRIF
to<=52 and below Highmark or Experian or Equifax
▪ The acceptable CV Score for Consumer CIR that can be considered safe/less
risk prone with respect to the sanction of credit facilities is as under:
TU CIBIL Score Range Acceptable CV Score
300-900 650 & above
▪ In case CV score is less than 650:
ACCEPTABLE For considering loans to individuals (including Proprietorship Accounts) whose CV
3. score is less than 650, the sanctioning authority at field level (i.e. Branch
SCORE
/PLP/MCC) may consider the credit facility (fresh/enhancement/additional)
subject to fulfilment of all the conditions mentioned below:
• The aggregate amount of default except credit card default in regard to all
the credit facilities provided by the other banks/NBFCs should be less than
₹25,000/-.

उत्कर्ष -2023
@
Back to Index 96 | P a g e
 • Default/irregularity should be atleast 1 year prior to the date of current
application for fresh credit facilities.
• Current CIBIL CV score of the borrower shall not be below 550.
However CHCAC & above may consider the proposals in their vested loaning
powers having CV score below 650 on merits of the case.
• Advance against Bank’s own Deposits, Govt. Securities/Bonds, PSU Bonds,
Postal Securities, LIC Policies, Shares and Debentures & Mutual Funds.
• Advances against 100% Cash Margin.
4. EXEMPTIONS • All Staff Loans
• Advance against gold jewellery/ornaments
Note: CIR and it’s scrutiny shall be undertaken where the credit facilities are
secured by Bank’s Deposit and Liquid Securities as collateral security/margin
For Credit Card Defaults
The sanctioning authority shall take their credit decisions within their Delegated
Loaning Powers after due diligence and on merits of the case after verifying the
reasons for default.
For Defaults other than Credit Card
i. Fresh/Additional/Enhancement
b. Facility may be considered by the respective sanctioning authorities after
ensuring that the irregularity/default (if any) is removed from CIC report or
the applicant submits the sufficient proof (i.e. No-dues certificate/Statement
of account/ Deposit receipts etc) for having removed such irregularity/
default.
c. Where ever applicant is not able to fulfil the above conditions, the facility
may be considered by the sanctioning authority not below the level of CHCAC
and above. In such cases, the reasons for default/irregularity during past 12
DEFAULT(S) IN months should be critically examined and based on justification/ mitigations
5.
CIC REPORT provided, a view may be taken on a case to case basis.
ii. Restrictions mentioned at S.N. i) above, shall not be applicable
subject to fulfilment of all the conditions mentioned below:
• Such instance of default/irregularity should be at least 5 years prior to the
date of current application for fresh credit facilities.
• The aggregate amount of default in regard to all the credit facilities provided
by the other banks/NBFCs was less than ₹1.00 lakh.
• Current CIBIL CV score of the borrower must be 700 or above (wherever
applicable)
iii. The restrictions mentioned at S.No.i) shall not be applicable in case of debt
waiver by Central Government/ State Government.
iv. Renewal/Review
Renewal / review shall be considered by the respective sanctioning authorities
based on proper Justification/ further course of action as deemed appropriate.
VALIDITY OF Should not be older than 90 days at the time of Fresh Sanction/
6.
CIR Enhancement/ Renewal/ Review/ Adhoc/Additional credit facility

CIR CHARGES Segment Charges

7. Consumer @ ₹50/- per CIC

(w.e.f. Commercial @ ₹500/- per CIC
01.04.2020)
Priority Sector Loans up to ₹25000/-: No Charges shall be recovered
For detailed guidelines refer: IRMD L&A Circular No.15/2021 dated 15.01.2021

उत्कर्ष -2023
@
Back to Index 97 | P a g e
G16: TAKEOVER OF BORROWAL ACCOUNTS (L&A 34/2022)
S.N. Particular Guidelines
• Should have a rating of ‘B1 & above’
• The accounts should be in the ₹Standard Asset' category of the existing Bank
• Should have earned net profit after tax in the immediately preceding 3 years and have
1. ELIGIBILITY sound financial position
• Credit information Report (Appendix III) as per RBI guidelines should be obtained.
• Account should be standard and should not have been classified under SMA-1/SMA-2
during last 24 months
• Borrower was availing credit facilities from another Bank/ FIs within the period of 3
months prior to submitting loan proposal shall be treated as ‘Deemed takeover’.
• In case where such credit facility has been repaid by the applicant borrower as per
DEEMED the terms & conditions of the original sanction, shall not fall under the purview of
2. Deemed Takeover. In case of Revolving Credit Facility, the date of expiry of last
TAKEOVER
sanction as availed from other bank/ FIs shall be treated as date of maturity.
• In case of crop loans/KCC, the prior approval from next higher authority is not
necessary even if the accounts have been adjusted within 3 months subject to the
compliance of other takeover norms.

SANCTIONING • Respective Sanctioning Authority except GBB.

3. • GBB may consider the proposal after obtaining prior approval from the next higher
AUTHORITY
authority.
• Small Loan accounts (aggregate exposure upto ₹5 crore) with credit risk rating
‘B2 & below’ are not to be considered for takeover.
• Enhancement above 25% in WC limit , the proposals shall be sanctioned by the next
higher authority on merits
4. RESTRICTIONS • Takeover of borrowal accounts from the banks where our present EDs and MD & CEO
have worked earlier need not to be considered. However in all loans (including retail/
agriculture) having limits upto ₹7.50 Crore, the above restriction shall not apply and
shall be considered by respective sanctioning authority. These sanctions shall continue
to be reported as per Bank’s extant guidelines and shall not be reported to the Board
OBTAINMENT
5. OF As per Policy on Obtention of Financials (IRMD L&A Cir. No.172/2022 dt.19.11.2022)
FINANCIALS
• Data capturing in the System, a separate menu option ‘TOACM’ has been
customized for capturing additional data related to previous bank.
• Credit Audit: To be conducted for accounts with exposure of ₹1 cr. and above
• Stock Audit: Audit is to be conducted prior to disbursement of any credit facilities
₹5.00 Crore and above. However, the same may be exempted for units:
a. Having external rating of “A” and better (wherever applicable) or
b. Accounts with collateral coverage of 75% or more.
6. OTHERS • Monitoring: System generated MIS report (Appendix III), submission of cumulative
position having exposure above ₹10.00 crore and upto ₹50.00 crore shall be placed to
ACE and above ₹50.00 crore shall be place to Board on Half Yearly basis.
• The formalities, such as, fresh documentation, transfer of securities should be created
and perfected preferably within 90 days of disbursement. Specific timeline in this
regard is to be incorporated as part of the proposal. However in case of enhancement/
additional credit facility to be considered (if any), shall be released after ensuring
security perfection.

उत्कर्ष -2023
@
Back to Index 98 | P a g e
 • The term loan should always be taken over at existing level and with residual tenor as
per original sanction terms i.e. the remaining repayment period shall not be extended
beyond the original repayment period permitted by transferor Bank/FI.
• However in case of schematic lending such as Financing Against Future Lease Rental,
Discounting of Cash Flows, Financing securitisation of future toll collection/discounting
of annuity receivables in BOT road projects & HAM projects, PNB Sampatti, PNB My
Property, PNB Home Loan etc, the loan may be sanctioned for longer period as well,
provided the total repayment period including the period for which the loan has already
been availed from previous Bank/FI is within the total repayment period permitted in
the scheme. While assessing such term loan, it is to be ensured that the repayment
period extended does not fall in the ambit of restructuring of existing exposure
• Fresh term loan for expansion of projects/for purchase of P&M etc, shall not fall under
the purview of enhancement ceiling.
• Borrowers should have a rating of “B1 & above”
TAKE OVER OF • Account statement of minimum 12 months so as to ensure that account have not been
7. RETAIL LOANS classified under SMA-1/SMA-2 with the transferor Bank/FI and are standard regular at
the time of takeover. A certificate with the content that account is running regular
with no default and asset classification is standard may be called from existing banks.
Relaxations in takeover guidelines (Except directives from RBI {i.e. for obtaining Credit
Information}, Department of Financial Services, MOF {i.e. Restriction for taking over
RELAXATION proposal form the bank where any of its ED or MD & CEO have worked earlier} shall
8. be considered by HOCAC-II and above within their vested loaning powers.
AUTHORITY
In cases where the HOCAC-II / HOCAC-III has exercised relaxation in extant
guidelines, the same shall be put up to MC of the Board for Information
Reference: IRMD L&A Cir. No.34/22 dated 11.03.2022, 67/22 dt.09.05.2022,105/22 dt.15.07.2022
*RSA= Respective Sanctioning Authority

उत्कर्ष -2023
@
Back to Index 99 | P a g e
G17: GREEN RENEWAL: SIMPLIFIED PROCEDURE FOR RENEWAL/ REVIEW (L&A 174/2022)
S.N. Particular Guidelines
Faster renewal of accounts through simplified procedure and at the same time to ensure
that all crucial tenets of credit appraisal such as security creation / non-dilution of
1. OBJECTIVE
security, insurance / guarantee cover, conduct of account, position of inspection
irregularities pertaining to the account are assessed at the time of Renewal.
i. No dilution in security/margin
ii. No security creation is pending
iii. No change in management.
2. APPLICABILITY iv. No IR observation identified as ZTL / FSI item pertaining to the account is pending
for rectification
v. As per latest valid credit risk rating / credit score, the IRR is B2 and above (or
equivalent to PNB Score).
Credit Facilities up to ₹25.00 Cr subject to the following:
LIMITS CONDITION
All the loans which could not be renewed under E-
Upto ₹10.00 Lakh
Renewal 1 scheme or all other business loans up to ₹10
lakh, shall be renewed under green renewal
Subject to applicability conditions mentioned at S. No.
Above ₹10 Lakh upto ₹ 1 Cr.
(2) above
3. LIMITS Subject to applicability conditions mentioned at S.No. (2)
Above ₹ 1 Cr. and upto ₹25 Cr.
above along with 11 triggers (prescribed at S.No.4)
1“For Working Capital limits up to ₹2 lakh & for limits above ₹ 2 lakh and up to ₹ 10 lakhs, PNB E-
Renewal scheme is in place based on pre-defined business rules and the same is governed by
MSME (communicated vide MSME & Mid Corporate Credit Division Circular No. 25/2021 dated
12.03.2021 and No 96/2021 dated 14.12.2021 respectively). Further, the scheme of E-Renewal of
KCC Accounts up to ₹1.60 Lakhs is also in place and the same is governed by Agriculture Division
Circular No. 07/2022 dated 10.02.2022 ”
For Limits above ₹1.00 cr. and upto ₹25.00 cr
To become eligible under Green Renewal, the borrower has to qualify following triggers:
i. All the terms and conditions of last sanction have been complied with.
ii. Timely submission of renewal paper like Audited Balance Sheet, ITR / GST
returns/Stock Statements etc as per bank policy.
iii. LSS observation of last sanction/ renewal has been closed (as applicable).
iv. CIRs (Consumer/Commercial) are acceptable as per bank's policy and there are no
adverse remarks in the report.
v. Unit/Business is running satisfactory as per latest visit not older than 3 months

4. TRIGGER from date of green renewal and is held on record.

vi. Latest audited financials of the company is downloaded from MCA website is
checked with financials submitted by the company and no variation observed (if
applicable)
vii. Sales/Receipts reported in the Audited/Provisional financials are tallied with credit
summation in account for last 12 Months or in a last financial year. Sales &
purchase figures shall be compared with GST returns wherever applicable. (Minor
variation i.e. upto 15% with justifiable reasons may be considered).
viii. Projected and/or Estimated Last year's turnover has been achieved (Maximum
Variation allowed up to 20%) Turnover should be compared with latest

उत्कर्ष -2023
@
Back to Index 100 | P a g e
 Audited/Actual balance sheet. Limit assessed should be in line with last
sanction/renewal.
ix. PMS rank is not 4 / 5 during any of the last 6 months.
x. Accounts should be Standard/ SMA-0/ SMA-1 during last 12 months
xi.
COD / Completion of Project should have been achieved on stipulated time (in case
of Term Loan facility)
TREATMENT OF Concessions (if any) granted to the borrower shall continue as per existing terms and
5.
CONCESSIONS conditions of sanction
i. Green Renewal can be done for a maximum of two times in continuation, however,
the third renewal should be a regular renewal.
ii. Status cum Net worth (SNW) report need not be compiled again at the time of green
OTHER renewal. However, at the time of regular renewal, SNW report shall be compiled as
6. per extant guidelines (wherever applicable).
CONDITIONS
iii. Visit report as per visit guidelines shall be prepared and held on record.
iv. In cases where the prescribed applicability conditions are not fulfilled, such accounts
shall be renewed under normal renewal process.
Reference: IRMD L&A Cir. No.174 dated 22.11.2022

उत्कर्ष -2023
@
Back to Index 101 | P a g e
G18: GUIDELINES ON INFRASTRUCTURE FINANCING (L&A 77/2021)

G18.1: FINANCING RENEWABLE SOURCE OF ENERGY

▪ in view the advisory of Ministry of New & Renewable Energy (MNRE) and the renewed focus of the government
on the renewable sources of energy, an exposure limit of 1.5% for lending to renewable energy was carved
by our Bank within the overall limit of 10% fixed for Infra-Power.
▪ Permanent and imperishable sources of energy like wind power, solar power, Bio mass, small hydropower
projects etc. are called renewable sources of energy. Bank has already in place guidelines for financing
windmills/solar projects circulated to the field from time to time, which take care of all the prescribed norms
and requisite safeguards.

▪ Retail Assets Division has also issued guidelines for installation of solar water heating and Solar Lighting
Equipments in Homes. Similarly, PS&FID has also issued guidelines pertaining to solar based power generators,
Biomass based power generators, Wind mills, Micro Hydel plants etc. in Priority Sector, in terms of RBI
guidelines. Further, guidelines for financing of Grid Connected Rooftop Photovoltaic (PV) Solar Power Projects
for Commercial, Industrial, MSME, and Profit Making Institutions have also been issued by Corporate Credit
Division.

▪ It is pertinent to mention that wind power is the cheapest source of energy w ith low operation and maintenance
costs. It is a real fast track power project with the shortest gestation period and the fastest payback period.
Wind Energy conversion is now a proven technology and the system can be operated in an economically/
technically viable manner. Further, the incentives for development of wind power are highly attractive to the
wind farm developers/investors and a favourable policy from Central Govt. as well as from state governments
exists in India
▪ Solar power, a renewable source of energy, is considered an alternate and clean source for generation of
power just like wind energy and its use for generation of power is becoming increasingly popular. Since in
India significant amount of land areas get good sunshine during the major part of the year, financing to solar
power projects has immense scope for financing. It may be added that Govt. is providing support by way of
subsidy etc. to give boost to power generation through solar energy.

▪ Further, small hydropower projects, which are normally economically viable can play a critical role in improving
the overall energy scenario of the country and in particular for remote and inaccessible areas. The MNRE is
encouraging development of small hydro projects both in the public as well as private sector.

For detailed guidelines refer: IRMD L&A Circular No.77/2021 dated 26.04.2021

उत्कर्ष -2023
@
Back to Index 102 | P a g e
G18.2: GUIDELIENS FOR FINANCING WIND MILLS

SN Particular Guidelines

For setting up wind mills at high wind potential sites by the industry and other
1. PURPOSE sectors either for their captive use or on standalone basis for power needs, income
generation and tax savings

2. FACILITY Term Loan

Need based but within the prudential ceilings prescribed by RBI/Bank for
3. LOAN AMOUNT
individual/group borrowers

Captive Units - Min 25% Standalone units/ As allied activity – Min. 30%*

*Sanctioning authorities may consider sanction of Term Loan at a lower margin of

25%, in case of borrowers with credit risk rating of ‘A4 & above’ or external rating
4. MARGIN
grade of ‘A & above’ within their vested loaning powers on case to case basis.
However, MC/HOCAC-III is empowered to consider sanction of Term Loan at a
lower margin of 25% irrespective of rating, within their vested loaning powers on
merits of the case.
The sensitivity analysis in respect of following three variables, may be carried out:

a. Increase in interest rate by: 100 bps

b. Increase in plant load factor (PLF) by: 5%;
SENSITIVITY
5. c. Reduction in in tariff collection by: 5%
ANALYSIS
In case the Sanctioning authority is of the opinion that the key variable factors are
highly volatile for some particular case/period, the Sensitivity analysis may be
carried out at 10% instead of 5%.

▪ 10 to 15 years including moratorium of 6 to 9 months, depending upon the cash

generation capacity and the obsolescence of technology.
▪ Sanctioning authorities may consider sanction of Term Loan beyond 15 years, in
6. REPAYMENT case of borrowers with credit risk rating of ‘A4 & above’ or external rating grade
of ‘A & above’ within their vested loaning powers on case to case basis.
▪ However, MC/HOCAC-III is empowered to consider sanction of Term Loan
beyond 15 years irrespective of rating, within their vested loaning powers on
merits of the case
▪ The possibility should be explored to obtain charge on moveable/immovable
assets of the company/equitable mortgage of immovable properties belonging to
promoters/family members and guarantors etc. Similarly, Pledge of fixed deposits
receipts, third-party deposits and/or assignment of LIC policy of the
COLLATERAL individual/promoters, pledge of promoters’ share etc. may be considered.
7.
SECURITY Corporate guarantee of other promoter companies/personal guarantee of
promoters may be accepted. Particulars of charge be filed with the Registrar of
Companies within the stipulated period.
▪ Escrowing of money lying to the credit of TRA
▪ Assignment of the Alternate Risk Transfer Policy

▪ The PLF studies for windmills are not as elaborate as hydro projects. In most of
PLANT LOAD the cases studies are carried out for 1 or 2 seasons only before the sites are
8.
FACTOR (PLF) offered for investment.

उत्कर्ष -2023
@
Back to Index 103 | P a g e
 ▪ EPC (Engineering, Procurement and Construction) contractors, at times, quote a
higher PLF at offered sites without any absolute guarantee of project
performance. The existing operational sites are showcased which is not a true
reflection.
▪ In comparison the State Electricity Regulatory Commissions (SERC’s) while
fixing/revising tariffs generally take up elaborate performance review of
operational projects in their jurisdiction and thus have a holistic approach while
fixation of tariff. The SERC PLF analysis as such be taken as benchmark PLF while
considering projected cash flows / revenue. However, the PLF over 25% may
only be accepted under exceptional circumstances and after detailed evaluation
as to the reasonability.
▪ Plant Load Factor (system efficiency) of the existing wind power plants is typically
about 18% to 20% depending upon the location (availability of high wind
potential sites). Plant load factor (PLF) may be carefully assessed and SERC PLF
analysis normally be accepted as benchmark for PLF consideration and accepted
for projected cash flows / revenue. However, PLF above 25% may only be
accepted after thorough appraisal and placing on record the reasons for
acceptance.

9. LOANING POWERS As per Loaning Power guidelines

Indicative list of risks and risk mitigants are given below:

a) Equipment / Plant Under performance risk/ lower wind availability -
The borrower/ original manufacturer supplier may be persuaded to give an
unconditional guarantee for a fixed number of units per machine.
b) Off-take Risk/ Tariff risk/ Regulatory risk - Power off-take to be committed
under Power Purchase Agreement (PPA) and the tariff for the project would be
predetermined in the PPA as per the respective policies duly issued by gov ernment/
regulator. Also a standby PPA can be had so that in case of default for
RISKS & IT’S payment/evacuation of power, the power can be sold alternately.
10.
MITIGANTS
c) Payment risk from Power Purchaser - Payment track record of the Power
Purchaser be satisfactory and the terms of PPA including tariff be approved by the
state governments. The party be persuaded to obtain Alternate Risk Transfer (ART)
policy for the repayment period. ART partly mitigates the risk of default by the State
Utilities by reducing the exposure of the lenders to the extent of insured amount.
d) Repayment risk – All the money received from sale of power / other sources
be deposited in TRA (Trust & Retention Account). Borrower may additionally
maintain a minimum Debt Service Reserve Account (DSRA) wherein one/two
quarter principal plus interest shall be maintained as a DSRA.

The National Institute of Wind Energy (NWE) is established by the Ministry of New
and Renewable Energy (MNRE) to act as Technical Consultants to establish the
11. OTHERS Certification expertise in India for Wind Energy Turbine (WET). While financing
windmills, bank may accept Wind Turbine Generators (WTG) to be installed
/purchased from the MNRE approved Manufacturers as circulated by NWE

For detailed guidelines refer: IRMD L&A Circular No.77/2021 dated 26.04.2021

उत्कर्ष -2023
@
Back to Index 104 | P a g e
G18.3: GUIDELIENS FOR FINANCING SOLAR POWER PROJECTS
SN Particular Guidelines
▪ The plants installed/to be installed in India having adequate sunlight may be
considered for financing by way of Term Loan, Working Capital and non-fund
based requirement for generation of electricity using solar energy by using either
of following:
i) Photovoltaic Technology (PV)
ii) Concentrated Solar Power (CSP)
iii) Thin Film technology

▪ A detailed project report clearly indicating the entire cost estimates and the
means of financing the same be obtained from the promoters clearly describing
1. ELIGIBILITY the strategies and technologies to be adopted. Strategies must clearly spell out
the terms and conditions of power purchase agreement (PPA) and available
subsidies.
▪ Subsidy plays a major role in growth of production of solar power. At present,
these projects are not viable without subsidy. Hence, till the time cost of
producing solar energy matches with that the cost of conventional energy
sources, subsidies available shall be major source of revenue in pre sanction
appraisal. Cash flow statement must clearly specify the amount and timing of
subsidies.
▪ Bank may finance such projects if unconditional Power Purchase Agreement
(PPA) has been executed for the period the bank exposure is likely to run.

▪ Need based facility for setting up of solar power plant/procuring necessary

gadgets which are the main cost involved may be considered. However,
preference shall be given to the hybrid plants or plants having PPA.
PURPOSE &
2. EXTENT OF ▪ The amount of loan should be within the prudential/internal ceiling prescribed
FINANCE by RBI/bank for individual and group exposure.
▪ Nature of finance shall mainly be by way of term loan. However, working capital
facility and non fund based facility may be considered depending upon the
genuine credit requirement of the borrower
Captive Units : Min 25%,
Standalone units/allied activity: Min. 30%*.
*Sanctioning authorities may consider sanction of Term Loan at a lower margin
of 25%, in case of borrowers with credit risk rating of ‘A4 & above’ or External
3. MARGIN Rating Grade of ‘A & above’ within their vested loaning powers on case to case
basis.
However, MC/HOCAC-III is empowered to consider sanction of Term Loan at a
lower margin of 25% irrespective of rating, within their vested loaning powers on
merits of the case

The sensitivity analysis in respect of following three variables, may be carried out:
a. Increase in interest rate by: 100 bps
SENSITIVITY b. Increase in plant load factor (PLF) by: 5%;
4. c. Reduction in tariff collection by: 5%
ANALYSIS
However, if the sanctioning authority feels that the variable factors are highly
volatile in some cases, the sensitivity analysis may be carried out at 10% instead
of 5%

5. PERIOD OF LOAN ▪ Solar projects, once installed, provide a secure, reliable return on investment.
This is due to the fact that the life of implements typically lasts for 25 to 40

उत्कर्ष -2023
@
Back to Index 105 | P a g e
 years whereas payback ranges between 8 to 12 years. Moreover, once the
plant is set up, direct cost of production comes down as there is no raw
material (fuel) related cost and the major cost component is managing the
mirrors.
▪ Repayment period of 10 to 15 years including moratorium of 6 to 9 months,
depending upon the cash generation capacity and the obsolescence of
technology.
▪ Sanctioning authorities may consider sanction of Term Loan beyond 15
years, in case of borrowers with credit risk rating of ‘A4 & above’ or External
Rating Grade of ‘A & above’ within their vested loaning powers on case to
case basis. However, MC/HOCAC-III is empowered to consider sanction of
Term Loan beyond 15 years irrespective of rating, within their vested loaning
powers on merits of the case.
▪ While considering the repaying capacity/cash flows/revenue generation, the
Plant Load Factor (PLF) analysis undertaken by State Electricity Regulatory
Commission (SERC) be taken as bench mark PLF. Deviation beyond 25%
may be accepted under exceptional circumstances and after detailed
evaluation.
Primary:
▪ Hypothecation of assets including book debts.
▪ Unconditional power purchase agreement should be in place.
▪ An undertaking may be obtained from the agency which releases subsidies, to
the effect that the amount of subsidy shall be directly sent to Bank.
Collateral:
▪ The possibility should be explored to obtain charge on moveable/immovable
assets of the company/equitable mortgage of IP belonging to promoters/family
6. SECURITY members and guarantors etc. Similarly, Pledge of fixed deposits receipts, third-
party deposits and/or assignment of LIC policy of the individual/promoters,
pledge of promoters’ share etc. may be considered.
▪ Corporate guarantee of other promoter companies/personal guarantee of
promoters may be accepted.
▪ In order to mitigate off-take risk/tariff risk/regulatory risk the power off-take
and tariff for the project should be committed and pre-determined in the PPA
respectively. Obtention of a standby PPA can also be prescribed by the
sanctioning authority as an additional measure.
7. LOANING POWERS As per Loaning Power guidelines issued from time to time.
Tariff received from sale of power/other sources be deposited in TRA (Trust &
Retention Account). Borrower may be advised to additionally maintain a minimum
8. TRA/DSRA
Debt Service Reserve Account (DSRA) wherein one/two quarter principal plus
interest shall be maintained as a DSRA
For detailed guidelines refer: IRMD L&A Circular No.77/2021 dated 26.04.2021

उत्कर्ष -2023
@
Back to Index 106 | P a g e
G18.4: FINANCING TO INFRASTRUCTURE INVESTMENT TRUST (InvITs)
SN Particular Guidelines
▪ An InvIT must be registered with SEBI.
▪ 100% of the infrastructure projects undertaken/proposed to be undertaken
by InvITs should be “Completed and revenue generating projects”.
▪ For power projects, PPA (Power Purchase Agreement)/FSA (Fuel Supply
Agreement) should be in place.
▪ Valid External Risk Rating of AAA
1. ELIGIBILITY ▪ Internal risk rating of A2 & above
▪ Banks shall lend to only those InvITs where none of the underlying SPVs, which
have existing bank loans, and is facing ‘financial difficulty’ as defined in Para 2
of Annexure I to the circular DBR.No.BP.BC.45/21.04.048/2018-19 dated 07.06.2019.
▪ The aggregate net consolidated borrowings and deferred payments of the InvIT,
Holding Company and SPV(s) net of cash and cash equivalents not to exceed
49% of the value of InvIT assets
▪ For acquisition of new infrastructure projects /SPVs.
▪ For refinancing of standard Debt in InvIT or for repayment of standard debt in
2. PURPOSE
underlying SPV. Further, top up loan can also be considered in standard InvIT
accounts
3. FACILITY Term Loan
Tenor of the loan to be aligned with the projected cash flow/life of the Projects of
4. TENOR
the InvIT considered from the day of first drawdown
5. MARGIN HAM – Nil, Toll Receivable – 30%, Other annuity Receivable – 10%
▪ Receivables of the underlying SPVs, Charge on INvIT bank accounts
▪ Rights/Interest/benefits/claims etc. in project contract agreement, insurance
6. SECURITY
contracts, policies etc.
▪ Guarantee / Corporate guarantee of beneficial owner of InvIT may be explored
AUTHORIZED All ELCB’s and LCBs
7.
BRANCHES
8. LOANING POWERS HOCAC-III & above within their vested loaning powers
Lending to InvITs of a particular Infra segment will be considered as lending to that
EXPOSURE
9. particular industry and ceiling of respective industry/sector will also be applicable
CEILING
to InvITs. However, in case of exposure to single InvIT shall be ₹5000.00 Cr
▪ Cash Inflow of SPVs after meeting O&M, taxes, statutory payments and debt
servicing (at SPV level) would be transferred from SPV escrow account to InvIT
Master Escrow account.
WATERFALL
10. ▪ Payment from InvIT Master Escrow Account would be made in following order:
MECHANISM ✓ Debt Servicing
✓ DSRA maintenance
✓ Major Maintenance/SPV shortfall
✓ Surplus for unit holders
Cash trap mechanism will be invoked when the actual Gross DSCR (as per annual
audited figures) falls below the minimum DSCR stipulated at the time of sanction.
CASH TRAP
11. In case of invocation, the surplus in the escrow account after meeting all statutory
MECHANISM
expenses and debt servicing will be retained and not released to the borrower till
achievement of the minimum stipulated DSCR.
Debt service reserve account (DSRA) in the form of TDRs / BG equivalent to interest
12. DSRA and instalment obligation of one quarter or one installment whichever is
higher
For detailed guidelines refer: IRMD L&A Circular No.169/2022 dated 17.11.2022

उत्कर्ष -2023
@
Back to Index 107 | P a g e
G18.5: FINANCING TO EDUCATIONAL INSTITUTIONS
SN Particular Guidelines
• For the purpose of Financing under this Scheme, Educational Institutions shall
mean places of imparting qualification like schools, colleges and other alike
1. ELIGIBILITY institutes and shall not include viable small MSME units which include
Coaching Centres and other similar entities.
• New as well as existing customers of the Bank shall be eligible for Overdraft
facility subject to satisfactory operation of the institute for past two years
• Fund Based: Term loan, Working Capital in the form of Overdraft
2. FACILITY • Non Fund Based: After proper analysis & TEV study quantified Non Fund
Based facility (Where ever applicable)
• Term Loan & Overdraft: 25%
• Wherever land is also financed as part of cost of project then minimum
prescribed margin against cost of the land shall be 50% of the cost of the
3. MARGIN
land.
• The quantum of finance against cost of the land shall be restricted to 50% of
the sanctioned loan amount
• Term Loan: Maximum 120 months (including maximum moratorium up to
36 months) subject to annual review
4. REPAYMENT
• Overdraft Limit : Upto 1 year & interest to be serviced as & when due
subject to Review on Annual basis
Term Loan:
• Hypothecation of all movable assets.
• Equitable/ Registered mortgage of Land & Building of the Educational
Institution.
• Wherever EM is not possible, alternate collateral security in the name of the
PRIMARY institution or promoters of the institution equivalent to a minimum of 30%
5.
SECURITY (in terms of RV) of the Loan Amount shall be obtained as collateral security.
Overdraft:
• All the cash flows shall be routed through Trust and Retention account opened
with the Bank.
• Hypothecation of all movable assets.
• Equitable/ Registered mortgage of Land & Building other than agricultural
land.
• In case of partial constructed property, the realizable value of land is to be
considered for collateral coverage only.
• In case of OD, Asset Coverage Ratio of at least 2 times to be maintained
including Term loan outstanding, if any.
• Personal Guarantee: In cases of all fresh/enhancement/additional
exposure obtaining of personal guarantees of all trustees should be insisted
COLLATERAL upon.
6. • The collateral security other than Land & Building of the same or any other
SECURITY
Educational Institutions shall be obtained as under:
Sanctioning Authority Minimum collateral
(for Fresh /Enhancement/ prescribed
additional exposure)
CHCAC 100% of Total exposure
ZOCAC 75% of Total exposure
HOCAC-I 50% of Total exposure
HOCAC-II & above NIL

उत्कर्ष -2023
@
Back to Index 108 | P a g e
 • No fresh exposure should be taken up to field level for financing to
Educational Institutions.
• CHCAC & above may consider fresh exposure up to their vested loaning power
subject to obtainment of minimum collateral as prescribed at para (6) above.
• Additional/enhanced facility shall be sanctioned by the next higher authority
not below the level of ZOCAC subject to obtaining of minimum prescribed
7. LOANING POWERS
collateral security for additional/ enhanced facility.
• However, in existing accounts having satisfactory conduct and enjoying credit
facilities with our bank for a minimum period of four years,
additional/enhanced facility may be considered on merits by CHCAC & above
within their vested loaning powers subject to obtainment of minimum
collateral prescribed at para (6) above
Half Yearly visits in the account shall be done by the branch officials. Undertaking
END USE
8. of stock verification by independent chartered accountant should not be insisted
VERIFICATION
upon
• Overdraft facility not to exceed 50% of the realizable value of the
property taken as collateral security.
• In case OD limit to Educational institutions already availing Term loan from
our Bank, the primary security (land & building only) and collateral security,
already mortgaged with our Bank against Term Loan can be treated as
collateral security for OD limit.
CEILING/ • In such cases, the residual realizable value of the immovable property (primary
9.
RESTRICTIONS and collateral) after netting of 100% term loan exposure should be reckoned
for computing collateral coverage for OD limit.
• Finance for purchase of land alone is not permissible. However, the land
proposed to be purchased forming part of project shall be considered for
finance (subject to minimum margin as stipulated in the policy). In case where
purchase of land forms part of project cost, margin for purchase of land shall
be brought upfront by the borrower.
• TEV study shall be carried out in all cases involving Project cost of over ₹20
Cr.
• The Financial ratios shall be as per IRMD L&A Circular No 10/2021 and
10. OTHERS subsequent modifications therein
• Audited Balance Sheet and Profit & Loss or income - expenditure statement
for the last 3 years shall be obtained in case of an existing Institution.
Project report shall be obtained in case of a new Project.
For detailed guidelines refer: IRMD L&A Circular No.77/2021 dated 26.04.2021

उत्कर्ष -2023
@
Back to Index 109 | P a g e
G18.6: VIABILITY GAP FUNDING (VGF) SCHEME

▪ Infrastructure is an input to a wide range of industries and as such, an important driver of long-term
growth. However, due to long gestation periods and limited financial returns, these projects usually fall
short of financial viability.
▪ As such, Government of India, has notified scheme for Viability Gap Funding (VGF) to
infrastructure projects, under which grant support one-time or deferred is made available for certain
Public Private Partnerships (PPPs) Projects by Govt. of India, with the objective of making the project
commercially viable.
▪ The Scheme is mainly related to introduction of following two sub-schemes for mainstreaming private
participation in social infrastructure:

Sub scheme -1 :

This would cater to Social Sectors such as Waste Water Treatment, Water Supply, Solid Waste
Management, Health and Education sectors etc. These projects face bankability issues and poor revenue
streams to cater fully to capital costs. The projects eligible under this category should have at least 100%
Operational Cost recovery. The Central Government will provide maximum of 30% of Total Project Cost
(TPC) of the project as VGF and State Government/Sponsoring Central Ministry/Statutory Entity may
provide additional support up to 30% of TPC.

Sub scheme -2 :

This Sub scheme will support demonstration/pilot social sectors projects. The projects may be from Health
and Education sectors where there is at least 50% Operational Cost recovery. In such projects, the Central
Government and the State Governments together will provide up to 80% of capital expenditure and upto
50% of Operation & Maintenance (O&M) costs for the first five years. The Central Government will provide
a maximum of 40% of the TPC of the Project. In addition, it may provide a maximum of 25% of
Operational Costs of the project in first five years of commercial operations.

▪ Benefits: The aim of the scheme is to promote PPPs in social and Economic Infrastructure leading to
efficient creation of assets and ensuring their proper Operation and Maintenance and make the
economically/socially essential projects commercially viable. The scheme would be beneficial to public at
large as it would help in creation of the Infrastructure for the country.

▪ Impact: Revamping of the proposed VGF Scheme will attract more PPP projects and facilitate the private
investment in the social sectors (Health, Education, Waste Water, Solid Waste Management, Water Supply
etc.). Creation of new hospitals, schools will create many opportunities to boost employment generation.
▪ The detailed scheme for financial support to PPPs in infrastructure and operational guide lines for
implementing the scheme has been issued by Department of Economic Affairs, Ministry of Finance, Govt.
of India vide notification dated 07.12.2020 and the same is available on https://www.dea.gov.in/guideline.

For detailed guidelines refer: IRMD L&A Circular No.77/2021 dated 26.04.2021

उत्कर्ष -2023
@
Back to Index 110 | P a g e
G19 : GUIDELINES ON TRANSFER OF LOAN EXPOSURES (L&A 97/2022)
SN Particular Guidelines
For the transferee:
a) To manage excess liquidity available with the bank and for deployment of
such excess liquidity in more profitable sources.
b) To meet Priority Sectors targets.
c) To diversify existing portfolio to reduce the concentration risk.
d) To churn the existing portfolio to reduce asset liability mismatch.
1. Objective For the transferor:
a) To manage short liquidity position in bank.
b) To reduce concentration to a particular segment.
c) To free up capital from low-yield portfolio to high-yield portfolio and to
liquidate loans which do not meet targeted IRR or RAROC.
d) Accounts identified for exit as per the Exit policy of the bank.
e) To churn the existing portfolio to reduce asset liability mismatch.
• The extant instructions on outsourcing and the applicable provisions of the
Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016 (as
amended from time to time) should be complied with in all cases
Due Diligence – • Internal risk rating is waived for underlying individual accounts in the pool.
2.
Borrowers • The Transferor shall have a minimum operating history of 5 years
• Loss Estimation Report shall not indicate loss rate of more than 3%.
However, in exceptional circumstances or for pools consisting of used
vehicle loans it can go maximum up to 4%.
The valid rating of transferor
Transferor External Rating Internal Rating
Due Diligence - NBFC/FI AA A2
3.
Transferor Private/ Foreign Bank A A3

• Minimum CRAR for public sector banks should be at least 9%, for private
sector banks should be at least 10.85% & for NBFC should be at least 15%.
Minimum Holding • In case of loans with tenor of up to 2 years: 3 Months
4.
Period (MHP) • In case of loans with tenor of more than 2 years: 6 Months
In case of loans acquired as a portfolio, in case a transferee is unable to
perform due diligence at the individual loan level for the entire portfolio but
Minimum Retention can perform due diligence at the individual loan level for not less than one-
5. Requirement (MRR) third of the portfolio by value and number of loans in the portfolio,
the due diligence may be performed at the portfolio level for the remaining, in
which case, the transferor has to retain at least 10% of economic
interest in the transferred loans
External rating of Exposure ceiling as %age of Capital Fund
Transferor
NBFC HFC Others
Private/ Foreign Bank 15% 7%
AAA 10% 6%
6. Ceilings AA 8% 5%
A 2% 2%
BBB 15% 7%
Unrated/BB & Below Nil
MFI (Irrespective of Nil
External Rating)
7. Loaning Powers HOCAC III & above

उत्कर्ष -2023
@
Back to Index 111 | P a g e
 Category Value* (Max. loan quantum of single asset)
Housing Loan ₹5.00 Cr
Loans Against Property ₹5.00 Cr
Other Retail Loans ₹5.00 Cr
Maximum Value of MSME Loans As per RBI guideline classification should be MSME
Single Asset under with no maximum value.
Pool Transfer, with Agriculture Loans As per RBI guideline classification should be
9. the bank as Agriculture Loans with no maximum value.
transferee **Value shall mean outstanding amount in the books of transferor on due-diligence date
(Loans in the name of as mutually agreed between transferee and transferor .
individual borrower) ▪ Further, aggregate exposure as transferee from all transferor excluding
portfolio purchased under Partial Credit Guarantee scheme of GOI, shall not
be more than 3.50% of gross advances as on previous quarter or ₹35,000
crores, whichever is lower.
▪ However, MC can permit purchase of portfolio beyond the aforesaid limit in
exceptional circumstances.

Asset Class Maximum Door to Door Maturity

Housing Loan (Priority/ Non Priority) 300 months
Door to Door
10. Mortgaged backed assets 180 months
Maturity
(Other than HL)
Any other Assets 84 Months
LCBs & LCBs, other than LCBs & E-LCBs identified branches as under:
1. Mount Road, Chennai
Authorized 2. Bhikaji Cama Place, Delhi
11.
Branches 3. Rajendra Place, Delhi
4. Foreshore Road, Mumbai
5. BKC, Mumbai
For detailed guidelines refer: IRMD L&A Circular No.97/22 dt. 01.07.2022, 154/22 dt. 21.10.2022

उत्कर्ष -2023
@
Back to Index 112 | P a g e
G20: FRAMEWORK FOR MICROFINANCE LOANS (L&A 134/2022)
SN Particular Guidelines
▪ A microfinance loan is defined as a collateral-free loan given to a household having annual
household income (actual as well as projected) up to ₹3,00,000. For this purpose, the
household shall mean an individual family unit, i.e., husband, wife and their unmarried
children.
▪ All collateral-free loans, irrespective of end use and mode of application/ processing/
disbursal (either through physical or digital channels), provided to low-income households,
1. Definition i.e., households having annual income (actual as well as projected) up to ₹3,00,000, shall
be considered as microfinance loans.
▪ To ensure collateral-free nature of the microfinance loan, the loan shall not be linked with
a lien on the deposit account of the borrower.
▪ Repayment period of credit facilities provided to Microfinance borrowers shall be as per
bank’s extant guidelines.

▪ Household income shall be assessed based on actual income earned over a period of
Assessment minimum one year
of ▪ Bank’s guidelines on generation of Credit Information Reports (CIRs) are applicable on
2.
Household Microfinance Loans. Acceptable CIBIL score shall be 680 and above (or equivalent) or-1
Income ▪ Reasons for any divergence between the already reported household income as per CIR
and assessed household income shall be specifically ascertained from the borrower/s.

▪ Deductions on account of repayment of monthly loan obligations of a household as a

percentage of the net monthly household income shall be subject to a limit of maximum
50% of the net monthly household income.
▪ The computation of loan repayment obligations shall take into account all outstanding
loans (collateral-free microfinance loans as well as any other type of collateralized loans)
Limit on of the household. The outflows capped at 50% of the monthly household income shall
Loan include repayments (including both principal as well as interest component) towards all
Repayment existing loans as well as the loan under consideration.
3.
Obligations
of a ▪ Existing loans, for which outflows on account of repayment of monthly loan obligations
Household of a household as a percentage of the monthly household income exceed the limit of
50%, shall be allowed to mature. However, in such cases, no new loans shall be provided
to these households till the prescribed limit of 50% is complied with.
▪ Branch shall use the data available with CICs to ensure compliance with the level of
indebtedness. Besides, Branch shall also ascertain the same from other sources such as
declaration from the borrowers, their bank account statements and local enquiries.
▪ Bank shall mandatorily submit information regarding household income to the Credit
Submission Information Companies (CICs) for all Microfinance borrowers.
of
4. ▪ Necessary system configurations for capturing and reporting household income to CICs
information
to CICs shall be provided by MISD/ Agriculture Division to ensure accuracy and timeliness of the
information submitted to the CICs

उत्कर्ष -2023
@
Back to Index 113 | P a g e
 • Loans classified under retail and MSME shall be benchmarked to RLLR
• Loans classified under Agriculture shall be benchmarked to MCLR.
• However, advance to MSME food & agro processing units shall be benchmarked to RLLR
• Rate of interest of dedicated schemes /products framed for microfinance borrowers by
RAD, MSME Division and Agriculture Division shall be capped at maximum spreads as
under:
Nature of Loan Maximum Spread
Pricing of
5. Loans Retail (Personal loan) RLLR+ BSP+ 5.00%
Retail (Others) RLLR+ BSP+ 3.25%
Agriculture (Loan to MSME food & agro processing units) RLLR+ BSP+ 1.20% 1
Agriculture (Others) MCLR+ 2.70% 2

MSME RLLR+ BSP+ 1.40% 3

1 Spread applicable for advance upto ₹20 lakh to MSME Food & Agro processing units
2 Spread applicable for NRLM/ SRLM Scheme repayable in more than 3 years.
3 Spread applicable for Advances above ₹50000/- to ₹20 Lakh to MSMEs

Nature of Loan Maximum Fee

Retail (Personal loan) Unified fee- 1.00% of loan amount
Retail (Others) Unified fee- 0.35% of loan amount*
* NEC & Valuation charges and out of pocket expenses should be recovered as actual.
Agriculture (upto ₹3 lakh) Nil
Agriculture (Others) • Processing fee- 0.30%
• Upfront fee- 0.625%
• Documentation charges - ₹2500/-
Inspection / Supervision charges - 0.10%; (min. ₹1000/-)
Service MSME • Processing fee (For working capital advances)
Charges NIL.
6. from Expenses other than Processing Fees
Microfinance Up to ₹5/- Lakh
(i.e. CIC /CERSAI etc.) shall be borne by
Borrowers the borrower
Above ₹5/-Lakh Unified Processing Fee @0.50%*
*Unified Processing Fee includes all type of charges (i.e. CERSAI
/Inspection/ Documentation/ NEC/ Valuation etc.). However,
CGTMSE/ Insurance /State specific Stamp Duty charges on
actual basis shall be borne by the borrower.
• Upfront fee (for fresh term loans / review of term loans)
Up to ₹5/- Lakh NIL *
Above ₹5/-Lakh 1.25%
*Expenses other than Upfront fee (i.e. CERSAI/ Insurance etc.) shall
be borne by the borrower.

▪ Branches shall engage with the borrowers facing repayment related difficulties i.e.,
borrowers classified as SMA, and provide them necessary guidance about the recourse
available.
▪ Recovery shall be made at a designated/ central designated place decided mutually by the
Guidelines
borrower and the Bank. However, Branch Officials shall make recovery by visiting the place
related to
6. of residence or work of the borrower if the borrower fails to appear at the designated/
Recovery of
central designated place on two or more successive occasions. The mutually decided place
Loans
of recovery should be mentioned in terms and conditions of sanction.
▪ Bank or its agent shall not engage in any harsh methods towards recovery. Without
limiting the general application of the foregoing, following practices shall be deemed as
harsh: a) Use of threatening or abusive language b) Persistently calling the borrower and/

उत्कर्ष -2023
@
Back to Index 114 | P a g e
 or calling the borrower before 9:00 a.m. and after 6:00 p.m c) Harassing relatives, friends,
or co-workers of the borrower d) Publishing the name of borrowers e) Use or threat of
use of violence or other similar means to harm the borrower or borrower’s family/ assets/
reputation f) Misleading the borrower about the extent of the debt or the consequences
of non-repayment.
Owner Agriculture Division
7.
Division

▪ Owner Division for issuance of guidelines for NBFC-MFIs is IRMD and implementation of
the same shall be ensured by respective business Divisions
▪ CRMC is authorised to approve operational matters of the policy.
9. Other ▪ RAD, MSME Division and Agriculture Division may provide credit facilities to Microfinance
borrowers under existing schemes or frame dedicated schemes under the ambit of these
guidelines for Microfinance borrowers.
▪ Competent authority for approving new schemes is CRMC.

For detailed guidelines refer: IRMD L&A Circular No.134/2022 dated 19.09.2022

*******************

उत्कर्ष -2023
@
Back to Index 115 | P a g e
H. IRMD ONE LINERS
1. Under Financing against Future Lease Rental, maximum tenor of the loan is remaining
180 Months
period of Lease deed or ______whichever is earlier.
2. Valuation Report to be submitted by the valuers invariably contains the Purchase
price, the Market Value, the Book Value, the Realizable value, the Distress Value of Value as per Circle
the property being valued and Guideline Value, if applicable, in the area where Rates
immovable property is situated. The term Guidelines Value means____
3. As per takeover guidelines, the small loan accounts i.e. aggregate exposure upto with
₹5 crore
credit risk rating ‘B2 & below’ are not to be considered for takeover
4. To capture data of takeover accounts from the System, a separate menu option
TOACM
_____has been customized for capturing additional data related to previous bank
5. For considering advances for takeover of sick units by healthy corporates/promoters,
cases involving a project/rehabilitation outlay (capital cost of rehabilitation) of ₹5 crore & above
______may only be considered
6. Guidelines on Benchmark Ratios shall be applicable where facilities availed from our
₹20.00 Lakh
Bank is more than _____
7. Credit Information Report (i.e. TU CIBIL/ CRIF/Experian) should not be older than
_____at the time of Fresh Sanction/ Enhancement/ Renewal/ Review/ 90 days
Adhoc/Additional credit facility
8. Financing of Book Debts arising out of the sales to allied and associate concerns
beyond 25% may be considered on merits by the sanctioning authority subject to
25%
that the facility should be allowed to EPC Contractors and be restricted to _____ of
Book Debt limits
9. Financing of Book Debts arising out of the sales to allied and associate SPVs may be
allowed to EPC Contractors beyond 25% of book debts by ZOCAC, upto____. 50%
However HOCAC-I & above have full power.
10. To avoid instances of fraud, sudden spurt in business mix of any branch in a single
day or in a quarter shall be monitored by Circle office, Zonal Office and HO-IAD.
5%
Threshold for the purpose of sudden spurt in business mix in a single day shall be
___ of total deposit or advance of the branch or ₹ 50.00 Cr, whichever is lower
11. The line of credit facility may be considered for PSUs irrespective of the rating and
all existing/fresh borrowers with External Risk Rating BBB & above where the bank’s
exposure by way of working capital finance (funded and non funded) is above -
₹100 crore
_______ and (i) the limits are not overdue for review/renewal; (ii) the conduct of
account is satisfactory; (iii) there is no major IR irregularity/adverse features in the
account.
12. Relaxation in service charges permitted by the competent authority and / or partly
recovered amount from the customer in case of fresh limits should be captured LOANCHRG
through menu option _______(in case of customer level relaxation)
13. Relaxation in service charges permitted by the competent authority and / or partly
recovered amount from the customer in case of fresh limits should be captured RELAXSC
through menu option _______ (for account level relaxation)
14. The timelines for clearance of Pre Disbursement Compliance (PDC) for Credit Facilities
1 Working day
upto ₹10.00 Crore
15. The timelines for clearance of Pre Disbursement Compliance (PDC) for Credit Facilities
2 Working days
above ₹10.00 Crore
16. To clear PDC, Branch Visit for all cases upto ________(For retail loans irrespective of
₹100.00 Lakh
limit sanctioned) is not required. The clearance of PDC shall be given by the

उत्कर्ष -2023
@
Back to Index 116 | P a g e
 Authorized Official (PDCO) on the basis of compliance certificate submitted.
17. In case of exceptional circumstances/ due to non-availability of PDCO at PLP/MCC,
______ may assign an officer in the rank of scale IV but not below the rank of scale- Zonal Head
III, preferably from nearby branch(s)/office to conduct PDC
18. In cases where BG is issued for longer period and the borrower requests for recovery
of commission on Annual/Qtly basis as against the stipulated policy for recovery of
0.25%
commission for the entire tenure of the bank guarantee + the claim period, an
additional charge of _____shall be applicable
19. Under PNB Sampatti Scheme, in case borrower offers self-occupied residential
0.25%
property, a concession of _______shall be allowed
20. Under PNB Sampatti Scheme ,Property to be mortgaged is to be within _____of the 50 Km
Metro Branches and within _______of the Non Metro Branches where account is/ to and
be maintained 25 Km
21. Under PNB Sampatti Scheme, If the party is not maintaining proper financial
statements such as Doctors, Lawyers, Architecture, other professionals, self-
4 Times
employed etc. MPBF can be given as ______of their annual income (subject to cash
flow/repaying capacity) or prescribed LTV, whichever is lower.
22. Under PNB Sampatti Scheme, Loan can be extended on Leasehold property (where
lesser is Govt. Authority) subject to the residual lease period of the land should be at
3 Years More
least _____than the repayment period at the time of creation of mortgage and the
repayment should be proposed within this period.
23. Aggregate exposure under portfolio purchase (Pool Purchase) from all originator
excluding portfolio purchased under Partial Credit Guarantee scheme of GOI, shall
not be more than 3.50% of gross advances as on previous quarter or______, ₹35000 Crore
whichever is lower. However, MC can permit purchase of portfolio beyond the
aforesaid limit in exceptional circumstances.
24. Scheme for OPEN TERM LOAN which is a pre-approved term loan facility with an
option of multiple disbursements for multiple purposes which can be disbursed over Upto 20% of the
a period of 12 months depending upon requirement of the borrower is provided. total limit
Quantum of loan under this scheme is _______ subject to minimum above ₹10 lakh sanctioned
and maximum upto ₹10 Crore
25. Under Scheme for OPEN TERM LOAN, Validity of Sanction is______ 12 months from
date of sanction
26. Charges for conducting TEV by bank officials is ______ of project loan amount subject
0.15%
to minimum ₹50,000/- (where TEV report is shared with customer)
27. Charges for conducting TEV by bank officials is ______ of project loan amount subject
0.10%
to minimum ₹50,000/- (where TEV report is not shared with customer)
28. Charges for vetting of TEV study shall be _____ of applicable TEV appraisal charges
50%
as mentioned above.
29. CERSAI Charges for Creation or modification of Security Interest in favour of secured ₹50/- &
creditor: Upto ₹5.00 Lakh_____ & Above ₹5.00 lakh ₹100/-
30. CERSAI Charges for Satisfaction or Correction of any existing security interest NIL
31. CERSAI Charges for search ₹10/-
32. Prepayment charges where the closure of loan is on the instance of the Bank on
account of size of irregularity, possibility of default in future or any other technical or NIL
other specific reasons.
33. Charges for issuance of Solvency Certificate is 0.10% of certificate amount with a
minimum of ₹1000/- and maximum ₹25000/-. Further any additional certificate issued
3 months
within a period of _______of issuance of 1st solvency certificate, only 50% of the
applicable charges shall be levied.

उत्कर्ष -2023
@
Back to Index 117 | P a g e
34. No Documentation Charges (except Retail and Agriculture Advance) is levied on Loan
₹10.00 Lakh
amount up to__________
35. Charges for extension of validity of sanction for 2nd time (i.e further upto three 150% of Normal
months) (to be levied for loan above ₹10.00 Lakh) charges
36. Additional rate of interest to be charged in case of Adhoc Sanction 2%
37. Ministry of MSME has issued the MSME Sustainable (ZED) Certification Scheme on
28.04.2022, wherein ratings Bronze, Silver, Gold, Diamond and Platinum have
changed to ZED Certification level 1(Bronze), 2(Silver) and 3(Gold) 50% and 25 bps
For Certification Level 1 (Bronze), Concession in (i) Processing Charges is 50% (ii) respectively
ROI 10 bps, whereas For Certification Level 2 and 3 (Silver and Gold), Concession in
Processing Charges and ROI is ____
38. In case internal risk rating is A1 & A2, CMs, AGMs of PLPs (in individual powers or
committee structure as applicable) and MCC, CHCAC and above (in committee 125%
structure) shall exercise _____ of their normal loaning powers
39. No fresh exposure is to be taken in _____& below rated accounts. However,
MC/HOCAC-III is empowered to consider fresh exposure in these accounts. B3

For Additional/ Enhancement/ Adhoc, HOCAC-I is empowered to considered cases.

ZOCAC and above may consider these proposals where exposure is at least ___ 50%
secured by eligible collaterals.
40. The NBG approval is in-principle in nature for evincing interest in the credit proposal
based on broad parameters. Unless there is significant change in project parameters
6 months
or other factors affecting credit decision, such approval shall be valid for ______for
considering the regular proposal
41. Sanctions in respect of working capital and Term Loan facilities shall be valid
for_____, from the date of sanction. Facilities not availed within the above period 6 months
should be treated as lapsed and borrower be advised accordingly.
42. Where documents have been executed within a period of 6 months from the date of
sanction, the sanctions shall be valid for next _____ from the date of documentation.
However, it should be ensured that there are no adverse developments/ material 6 months
change in the financials during the intervening period impacting the proposal
adversely
43. Sanctioning authority may reschedule Term Loan upto ___subject to total repayment
1 year
period not exceeding 7 years
44. Authority one step higher may reschedule Term Loan upto total period of____. 7 years
45. _________have full powers to reschedule repayment of Term Loans in their own
sanctions as well as sanctions by lower authorities. In case of sanctions by higher CHCAC & above
authorities, matter is to be referred to sanctioning authority for consideration
46. Investment Grade for considering External Credit Risk rating BBB & above
47. Under Internal Credit Risk rating, Borderline Risk Grade is ___ B3
48. Under Internal Credit Risk rating, Investment Grade is___ B2 & above
49. In case internal risk rating is B1, _____ shall be exercised by officials at all levels to Normal Loaning
the extent of their vested loaning powers. Powers
50. In case internal risk rating is B2, additional /Adhoc/ Enhancment to be considered
ZOCAC
by next higher authority not below the level of ______
51. Under Internal Credit Risk rating, C1, C2 and C3 (Having score up to 40.00) is
High Risk
considered as ________ grades
52. Exposure under Film Industry per borrower in the sector shall not be more
₹25.00 crore
than_______.

उत्कर्ष -2023
@
Back to Index 118 | P a g e
53. In emergent circumstances, CHCAC & above may permit reimbursement, on merits,
within _______of acquisition of fixed assets to the extent of loan sanctioned to MSME Six months
borrowers within their vested loaning powers and after ensuring end use of funds
54. In exceptional and deserving cases, part disbursement of term loan may be allowed
through current/cash credit account by the sanctioning authority not below the level 25%
of CM subject to maximum of ______of the sanctioned limit
55. The Temporary Over drawings (TOD) may be allowed in fund based secured
advances for payment of statutory dues, salaries, wages or any other justifiable 7 days
debits for very short period say 2-3 days but not exceeding ______
56. Maximum loan limit for constructing/acquiring a house for personal use to CEO/Whole
₹1.50 crore
time directors of the bank
57. Maximum loan limit for purchase of Car to CEO/Whole time directors of the bank ₹20.00 Lakh
58. In cases where prepayment penalty is to be charged in account, authority to permit HOCAC-I and
waiver of such prepayment penalty, if required, shall be at the level of ______ above
59. No prepayment charges are to be levied where the borrower shifts to other bank
within 30 days from the date of issuance of circular for upward revision in the _____to Spread
be charged in borrowal account or change in other terms of sanction
60. No prepayment charges are to be levied in case of upward revision in the interest
rate due to reset of benchmark rates and the borrower informs the Bank within 30
90 Days
days from the date of reset & shifts its account to other Bank within ____from the
date of reset.
61. For allowing advance against uncleared effects Premium Clients shall be identified
on the basis of two criteria. One of the criteria is for borrowal account where Internal
Credit Risk Rating should be B1 and better. Second criteria is for Non borrowal
₹1.00 Lakh
account i.e. Current account holders who have maintained a minimum average
balance of ______during the previous 12 months and in whose case cheque returning
during the previous 12 months are less than 10%
62. RAROC software is applicable only on those corporate whose exposure is above ₹5.00 Crore
________ and where rate of interest / commission is linked to risk rating of the
borrower and borrower is requesting concessions on card rate of the bank
63. The exposures where the RAROC is not applicable or exempted are to be indicated White Zone
as____
64. For the purpose of RAROC analysis for each facility as well as for borrower as a whole, Four
RAROC is categorized in _____Zone (Green/Amber/Red/White)
65. Under LEF, the sum of all exposure values of the Bank to a counterparty or a group 10%
of connected counterparties is defined as Large Exposure, if it is equal to _____or
above of the Bank’s Tier-I capital fund
66. The Bank will release all securities / documents / title deeds of mortgaged property 15 working days
within _______of the repayment of all dues agreed to or contracted and report to
CERSAI about satisfaction of our charge
67. In case of takeover by other bank, branch will process a request for transfer of
borrowal account, either from the borrower or from a bank / financial institution, 21 Days
along with borrower’s explicit consent in the normal course and convey its
concurrence or otherwise within _____of receipt of request.
68. Cash payment not exceeding _____by non base branch may be allowed to the drawer
for self drawn cheques of Cash Credit account. The drawer should be asked to write ₹1.00 Lakh
the reasons/purpose on the reverse side of the cheque at the time of permitting cash
withdrawal.
69. In borrowal accounts, where one or more defaults/ Irregularities persist, maximum
3%

उत्कर्ष -2023
@
Back to Index 119 | P a g e
 penal interest @_____ above the normal rate of interest applicable to the respective
borrower shall be charged
70. Balance Confirmation (BC) Letters confirming balances be obtained once in ____ Two
years in all Standard Term Loan accounts (including Retail Loans) from the borrowers
and guarantors
71. In other accounts i.e. NPA accounts, standard credit facilities other than Term Loan Once
not reviewed/renewed annually etc BC Letters confirming balance be obtained from
the borrowers and guarantors ___in a year
72. Along-with the stock/book debt statement, borrowers to submit complete addresses
including email address and contact details of top 20 book debts OR covering ____ 50%
of total book debts (amount wise), whichever is higher, in all advances against book
debts
73. Minimum cut off limit under Green Renewal is_____ > ₹10 Lakh
74. To become eligible under Green Renewal, Unit/Business is running satisfactory as per 3 Months
latest visit not older than _____from date of green renewal and is held on record
75. To become eligible under Green Renewal, the borrower has to qualify _____ 11 triggers
76. All Term Loans, other than retail loans, with sanctioned limit of ______ needs to be ₹2.00 Crore
reviewed annually
77. _______is an entity that has no active business and usually exists only in name as a
vehicle for another company's business operation (Black's Law Dictionary). In Shell Company
essence, these are Corporations that exist mainly on paper, have no physical
presence, employ no one and produce nothing
78. ______refers to that layer of financing between a company's senior debt and equity, Sub-Ordinate /
filling the gap between the two. Structurally, it is subordinate in priority of payment Mezzanine Debt
to senior debt, but senior in rank to common stock or equity
79. Vetting of the loan documents for sanctioned limits of _____shall be done by the ₹2.00 crore
local approved advocate/solicitor, first before their execution and again after & above
execution but before disbursement of the loans
80. For the purpose of availing Loyalty Bonus in service charges , Privileged Borrower
is the existing borrower of our bank availing business loan under sole / Multiple / Since Inception
Consortium banking with satisfactory conduct of account. The criteria of
Satisfactory Conduct comprises:
a. Internal rating of the borrower is not below A4 since last 3 years
b. Borrower does not fall under SMA-1/SMA-2 category since last 3 years
c. Borrower was not in NPA category since _______
81. In order to incentivize our existing good customer who are having business
relationship with our bank for last____, Loyalty Bonus (i.e. 25% concession in 10 years
service charges) is to be provided by respective sanctioning authority
82. Loan Processing Fee (except Retail and Agriculture Advance) is exempted for Loan ₹5.00 Lakh
amount up to ₹__________
83. No Inspection/Supervision Charges (except Retail and Agriculture Advance) is levied ₹10.00 Lakh
on Loan amount up to__________
84. Unified Process Fees (Excluding Schematic / Retail Credit / Agriculture Credit) is 0.50%
introduced where instead of taking multiple charges, only one charge for loan amount
Above ₹5.00 Lac to ₹ 10.00 Lac shall be levied. Rate of Unified Service Fee is______
of Loan Amount
85. For providing loyalty bonus to Privileged Borrower, Internal Credit Risk Rating of the 3 years
borrower should not be below A-4 since last ____
86. Charges, which is collected while processing the Term loan is called Upfront Fee

उत्कर्ष -2023
@
Back to Index 120 | P a g e
87. Charges, which is collected while processing Cash Credit loan is called Processing Fee

88. Bank is using External Benchmark for Pricing its ________accounts by linking it to Retail and MSE
Repo Linked Lending Rate (RLLR) w.e.f. 01st Oct 2019.
89. The ALCO (Asset Liability Management Committee) is headed by _______ MD & CEO
90. Concession to Privileged Borrower shall not be applicable in case of : Retail Loans
a. Concession already given under any schematic/customized loan scheme
b. Any concession already given by respective/higher sanctioning authority
c. ______________
91. ______Concession in Processing/ Upfront fee will be given in case of applications 20%
received through PSB online portal in respect of MSME category of borrowers to
promote the digital platform (i.e. psbloansin59minutes.com which promotes the
automation and digitization of various processes of Business Loan)
92. _____are short-term papers issued by scheduled commercial banks to raise funds IBPC
from other banks against big loan portfolios
93. Under IBPC with risk sharing :The minimum period of participation will be 91 days 180 days
while the maximum period will be
94. Under IBPC without risk sharing :The maximum period will be 90 Days
95. Under IBPC with risk sharing :The aggregate amount of such participation in any 40%
account should not exceed ______of the outstanding in the account at the time of
issue (within prudential exposure ceiling to individual borrower/ group)
96. Exposure in IBPC portfolio (excluding exposure to bank’s sponsored RRBs) of the 3%
bank shall be capped to ______ of total advances of previous quarter on an ongoing
basis
97. Under IBPC (With risk sharing/without risk sharing), minimum threshold limit of ₹500 Cr
transaction shall be_____. However RRB’s sponsored by the bank shall remain
exempted from the minimum threshold limit in transaction.
98. _____collects and stores credit information from all the financial creditors NeSL
(Banks/NBFCs etc) on digital platform and provide access of stored information to all
registered users of the concerned debt
99. Periodicity of stock statement for advances up to ______on quarterly basis and for ₹50.00 Lakh
advances above ₹50.00 Lac, on Monthly basis in all cases without any exception
100. Submission of QMS forms is applicable If the aggregate WC limits (FB & NFB) exceed ₹30.00 Crore
______ form our bank
101. ▪ The QMS-I, is to be submitted by the borrower on quarterly basis within 6
___weeks from the close of the quarter to which it relates.

▪ In case the account has slipped to _____category during any month in the half
year period i.e. April – September / October - March, as the case may be, QMS-II ‘SMA-1’
is to be submitted by the borrower within two months from the close of the half
year to which it relates.
102. In case of standalone NFB/Term loan limits above_____, PERT chart is also to be ₹50.00 Crore
submitted on a quarterly basis alngwith prescribed QMS form.
103. Where the value of immovable property to be mortgaged/ charged is______, ₹1 crore & above
branches shall take NEC from 2 different advocates on panel, one before sanction
and the 2nd after sanction, but before disbursement to safeguard the interest of the

उत्कर्ष -2023
@
Back to Index 121 | P a g e
 bank
104. For financing ship-breaking , Period required for dismantling the ship normally not 12 months
exceeding ______or as stipulated by Sanctioning Authority on ship to ship basis
105.
Relaxation in processing fees and upfront fees backed by liquid security as
collateral security:
▪ Relaxation in processing/upfront fees by sanctioning authority where advance is 50%
backed by 100% liquid security as collateral security
▪ Relaxation in processing/upfront fees by sanctioning authority where advance is 25%
backed by 75% liquid security as collateral security
▪ The above relaxations shall be subject to the fulfilment of the following conditions:
a. The FDR proposed to be kept as collateral security shall not be withdrawn till
the currency of bank loan which is collaterally secured by it. To ensure the same,
for renewal of FDR, a mandate for renewal on maturity of FDR shall be obtained
from the borrower and is to be renewed in CBS as and when falling due for
renewal, till the currency of bank loan.
b. In case of NSC/KVPs/Insurance Policies, on maturity, its proceeds in the form
of FDR with our bank shall be kept as collateral security till the currency of loan.
(Though balance lying in saving and current is eligible to be treated as
liquid security, however the same shall not be considered for
computation of collateral coverage for proposed relaxations )
c. The said relaxations shall be applicable to advances secured by 75% to 100%
liquid security as collateral security.
106. In respect of Green Renewal where limits upto ______, the applicability conditions ₹1 Crore
are to be complied with and trigger parameters need not be considered
107. As per section 77(1) of the Companies Act, 2013, every company creating a charge 30 days
within or outside India, on its property or assets or any of its undertakings, whether
tangible or otherwise, and situated in or outside India, to register the particulars of
the charge on payment of prescribed fees with the Registrar within _____of its
creation
108. As per Section 77 of the Companies Act, 2013 the duty to register the charge rest 14 days
with the Company which creates such charge. In case of company fails to register
the charge within 30 days then the person in whose favour the charge along with the
instrument is created may apply to the Registrar for registration of the charge in the
form CHG-1 or CHG-9 as the case may be within a period of ______after giving notice
to the company
109. Closure of stock audit reports, after rectification of the observations / deficiencies Credit Review &
pointed out by the Stock Auditors be put up to “Head of________” who is not below Monitoring
the rank of DGM at the Zonal Office. Vertical
110. The KYC Documents are to be obtained for all directors of the company as per Bank Central / State /
guidelines. However, in case of Loan accounts of______, where the Nominee UT Public Sector
directors are appointed by Regulatory bodies and / or Central / State / UT enterprises
Government as exofficio members, obtention of KYC documents is exempted.
111. Income Tax Returns of Promoter director(s) of the company to be obtained and for Nominee
director(s),
other types of company directors such as ______wherein Bank finance is not
Independent
computed on the basis of Income of the Borrower, Income Tax Returns are not director(s)
required to be obtained

उत्कर्ष -2023
@
Back to Index 122 | P a g e
112. Consortium arrangement shall be considered only in cases where our bank’s minimum
aggregate exposure is of ₹50 crore and above (fund-based limits) or minimum 10% HOCAC-I
share of the exposure whichever is higher to ensure meaningful participation.
However wherever our exposure is less than ₹50 crore or less than 10% share of the
exposure, administrative clearance shall be sought from ____to enter into such
consortium.
113. The authority to allow relaxations i.e. modification / waiver in Standard
Covenants :
Relaxations in Mandatory Covenants:
▪ In accounts having valid External credit risk rating of ‘A’ and above, waiver / ZOCAC
modification in any of the mandatory covenants M6, M11, M14 and M15 listed in
Appendix-A is permitted by_____ within their vested powers.
(However HOCAC-I within their vested powers ,may consider waiver/modification
irrespective of External Risk Rating)
▪ For Advances to Central & State Government and PSUs, waiver / modification of HOCAC-II & above
any of the mandatory covenants except those prescribed for regulatory
compliance listed in relevant Annexure is permitted by_________ within their
vested powers.
ZOCAC
Relaxations in Mandatory Negative Covenant:
▪ In accounts having valid external credit risk rating of ‘A’ and above, waiver /
modification of all negative covenants except those prescribed for regulatory
compliances to be done by________ within their vested powers. HOCAC-I

▪ Waiver / modification of all negative covenants, except those prescribed for

regulatory compliances is permitted irrespective of any external credit risk rating
by_____ within their vested powers.
114. Financing of book debts arising out of sales to allied and associate concerns
should be allowed only to corporate borrowers engaged in manufacturing activities 25%
and EPC Contractors and be restricted to ____ of Book Debt limits.
However, the facility may be allowed to EPC Contractors beyond 25% of book debts HOCAC I & above
of its allied and associate SPVs by ZOCAC upto 50%, whereas ________have full
powers.
115. Chairman of HEAD OFFICE CREDIT APPROVAL COMMITTEE-II (HOCAC-II) Executive Director
– Corporate Credit
All executive Directors are member
Invitees: 1. CGM – CRMD 2. CGM as per Agenda
116. Sanctioning Authority in B2 rated accounts for Fresh / Additional/ Enhancement/ Adhoc in
existing facilities
▪ Where exposure is at least 100% secured by eligible collaterals PLP, MCC, CHCAC
& above
▪ Where exposure is at least 50% secured by eligible collaterals ZOCAC & above
▪ Other Cases HOCAC-I & above
117. Sanctioning Authority in B3,C1,C2 and C3 rated accounts in Fresh Accounts HOCAC-III &
above
118. Borrowers falling under exempted category for Tax Audit may submit Self-Certified Upto ₹100.00 Lakh
Financial Statement instead of Audited Financial Statement in case exposure of the
borrower is _____

उत्कर्ष -2023
@
Back to Index 123 | P a g e
119. DUE DILIGENCE REPORT BY PROFESSIONALS

The due diligence report shall be obtained on half yearly basis i.e., half year ended
for September and March.
▪ A time period of ____should be allotted to CA/CS for submission of the report 45 days
▪ Due diligence report shall be obtained for all corporate borrowers (private and
public limited companies) under consortium / multiple banking arrangements Irrespective of
having limits of ₹______ limits

▪ For accounts under sole banking, Due diligence report shall be obtained for the
corporate borrowers with aggregate (fund & non-fund based) limits of _____ & ₹20 Crores
above
▪ However, in case of borrower is internally rated as “____& Above” sanctioning
PNB B2
authority may waive obtention of due diligence report by professionals in case of
sole banking on merits of the case. In case of PNB B3 & below rated borrowers
ZOCAC & above is empowered to waive the same for accounts within their
vested loaning power
(Ref. Cir IRMD L&A 151/2021 Dt. 30.09.2021)
120. In order to generate Solvency Certificate for all borrowers and non-borrower SOLV
customers, ____menu has been developed in Finacle
121. There is no restriction on opening of current accounts or on provision of CC/OD facility ₹5 crore
by banks in case borrower’s exposure from the banking system is less than____.
122. Timelines f or obtainment of LEI nonindividual borrowers having total exposure from ₹5 crore to ₹50 crore:
Total exposure to Banking System LEI to be obtained on or before

Above ₹ 25 crores 30.04.2023

Above ₹ 10 crores to ₹ 25 crore 30.04.2024
₹ 5 crores to ₹ 10 crores 30.04.2025
123. As per Industry Outlook (90/2022), presently there are eight industries whose outlook
is Less favourable.
These industries are Business Schools, Engineering Colleges, Gems and Jewellery Textile Jute
Domestic, Gems and Jewellery Export, Media and Entertainment - Content Production
– Film, Media and Entertainment – Newspapers, Oilfield Services and ________
124. No fresh exposure should be taken upto field level (i.e GBB/PLP/MCC) in case of Less Favourable
_______industries
125. Minimum and maximum Lead Bank Charges where our Bank is the Leader Bank Under Min ₹5 Lakh
Consortium Max No Limit
126. Inspection Charges upto Up to ₹ 10 Lakh Nil
127. Recovery of Processing Fee/ Upfront fee Documentation
▪ For Loan upto ₹1 Crore , 100% to be recovered at the time of _________ Acceptance of
▪ For Loan above ₹1 Crore, 50% to be recovered at the time of __________by the Sanction
borrower and remaining 50% at the time of documentation
128. Wherever internal rating is not applicable, commission on Inland Bank Guarantee for B2
accounts above ₹1.00 crore shall be charged, as applicable to ____rated accounts
129. Charges for Interchangeability Between Limits: 0.10%
_____of interchangeable amount subject to minimum ₹2,000/- and maximum
₹5,00,000/-

उत्कर्ष -2023
@
Back to Index 124 | P a g e
130. Charges for Substitution/Release of Personal Guarantee / IP/ Collateral Security

0.10% of the total loan amount* subject to minimum ₹5,000/- and maximum. ₹10.00 Lakh
_______
*The loan amount shall mean the total outstanding amount/sanctioned limit whichever is
higher. However, in case of fully disbursed term loans where there is no scope for re -drawal,
the loan amount shall mean the total outstanding amount
131. Transaction Monitoring Mechanism for Large Borrowal Accounts

▪ In accounts where exposure from our Bank is more than ______and customer is ₹50 Cr.
availing Fund Based Working Capital Limits
▪ ASM (Where ASM is appointed)/Concurrent Auditor will check the transaction and Monthly
furnish ________report
▪ ASM (Where ASM is appointed)/Concurrent Auditor will check the transaction and
20 %
furnish report on quarterly basis specifying that whether transactions where
more than _____ of the sanctioned limit is routed to a party outside the list of
debtors & creditors provided by the borrower
▪ Timeline of ______from the date of report of ASM/ Concurrent Auditor, shall be 3 months
given to Borrower to rectify the irregularity so reported by ASM/ Concurrent
Auditor
132. Internal Risk Rating: Covid Impact

In order to neutralize the pandemic effect in Internal Rating Models for FY 2021-22 10%
in view of the effects of Covid-19 on the business parameters, boost up of _____in
aggregate scores of IRR in case of highly impacted industries is provided.

The above revision in COVID-19 boost up benefit on ABS for FY 2021-22 is not
applicable retrospectively.
Borrower shall not be eligible for boost up benefit if pre COVID IRR is ______better 2 or more notches
than last approved rating
Post COVID rating i.e. after applying boost-up shall be restricted to maximum 2 notches
_____upgrade from last approved rating
In case of existing borrowers, the aggregate score after giving boostup shall not Three
exceed the best of scores in approved ratings on the last ___ Audited Balance Sheet.
However, if the current rating score before applying boostup is more than the
previous three approved rating scores, this hurdle shall not be applied i.e,
boostup shall be available

In case of new borrowers being first time rated at TRAC and externally rated, the Mappable ERR
rating grade after scaling up score should not exceed the _____

In case of already approved ratings; the same will be reopened in cases Highly

where the Industry is _____upon specific recommendations of ZRMC-Head based Highly Impacted
on customer request submitted by PLP/IRAM/MCC/LCB/E-LCB
COVID boost-up benefit under NPRM- Upto Implementation Model (Standalone or 30.06.2021
Single Point Score) is provided to borrowers operating under industries identified as
highly impacted and wherein the project has been initiated on or before ____.
133. Group Risk Management Philosophy & Policy FY 2022-23

▪ PNB as a group has no risk appetite for regulatory noncompliance and wants to
protect itself from regulatory breaches in capital at all times. As such risk appetite
has been linked to both ICAAP and Stress testing frameworks. PNB Group

उत्कर्ष -2023
@
Back to Index 125 | P a g e
 endeavours to hold a buffer over & above minimum capital requirement. Risk 1.50%
appetite in terms of sufficiency of capital in normal business scenario is set at
_____above the regulatory minimum. As such, group’s targeted CRAR for 13.00%
for the financial year 2022-23 3.75%
▪ For the FY 2022-23, PNB group shall maintain Leverage Ratio above floor level of
____
105%
▪ PNB Group has no appetite for failing to deliver on its payment obligations and
holds a sufficient buffer at group levels to survive liquidity crisis. PNB shall
maintain LCR and NSFR of at-least ____ at consolidated level (PNB and its
subsidiaries). The entities on individual basis may have LCR and NSFR less than
105% if there are no such requirements of host regulator but shall meet regulatory
requirements by host regulator, if any MD & CEO

▪ GRMC is a functional level sub-committee of Risk Management Committee (RMC),

Quarterly
headed by ____
▪ The meetings of the committee shall be conducted atleast on _____ basis or more
Four
frequently, as and when required.
▪ Quorum of the GRMC shall be completed when at-least ____members are present
including MD& CEO or Domain ED ED level

▪ Business performance of subsidiaries & associates (including RRBs) shall be placed

in _____Business Review Committee (BRC) on quarterly basis
134. Bank has subscribed to the ______portal of M/s Synergy Fintech Pvt. Ltd which
provides detailed information about a company extracted from the MCA portal along
with other services such as pending legal cases, external rating, overview of the
SaveRisk
company, media news etc. The details provided are to be used by the field
functionaries for due diligence and analyzing status of the company while preparing
the process note, conducting pre sanction appraisal, credit risk rating and preparation
of PMS etc. which in turn helps in taking informed credit decision and also ensures
proactive credit monitoring of the borrowal accounts
135. For the purpose of internal risk rating and credit processing, our bank is using services Capitaline-Neo
of_______which provides data related to corporate borrowers for the purpose of
Internal Risk Rating and appraisal of loans
136. Policy for Risk & Compliance Culture of the Bank for FY 2022-23

▪ “Risk culture” means bank’s norms, attitudes, behaviour of employees towards risk awareness, risk -taking,
risk management and controls that shape decisions on risks. Risk culture influences the decisions of
management/employees during the day-to-day activities and has an impact on the risks they assume.
▪ A strong Compliance Culture shall ensure adherence to fair practice codes, bank’s laid internal guidelines,
risk appetite framework, manage conflicts of interests, and treat customers fairly, with the larger objective
of delivering efficient customer service. Thus, compliance shall go beyond what is legally binding and
embrace broader standards of integrity and ethical conduct.
▪ Compliance Culture Requirements:
a. Inventory of Regulatory guidelines-
A repository of regulatory/ statutory guidelines has been outsourced by Bank, wherein all the
prescriptions issued till date by various regulatory/statutory authorities are updated. The repository
“Knowledge Management Tool” is accessible to all the employees.
b. Policy/operating guidelines/job cards to be in place {clarity about what to do, how to do &
who will do}-
Head Office Divisions disseminates regulatory/statutory directions & Job Cards pertaining to various
banking activities through internal circulars, policies, Documented SOPs, brief details of extant Guidelines

उत्कर्ष -2023
@
Back to Index 126 | P a g e
 (PNB Saransh), Topic wise consolidation of Guidelines (PNB Knowledge Park), Graphic Based information
on various Banking Activities (Chapters in PNB UNIV) etc.
c. Efficient Control Systems-
In order to mitigate Compliance Infractions in initial stages, the obligations are identified & possibility of
Non- Compliances is eliminated through system level controls and after that whatever remained left out
comes in purview of Control Functions to monitor. • Documentation of due-diligence and easy retrieval
{record keeping}- Bank has a record keeping policy and Documentation of due-diligence is done as per
Bank’s established guidelines.
d. Knowledge updation, training etc.
A planned training framework is required to make employees aware of Bank’s practices, rules &
standards. LKMC, HO is a separate vertical in Bank, which handles all the trainings & knowledge updation
activities in Bank
▪ The sound risk culture is exhibited by certain foundational elements defined as under:
“Effective Risk Governance, Risk Appetite Framework, Compensation Practices”
▪ Governance Structure for Risk Appetite: The governance structure adopted by bank for Risk Appetite
relies on three lines of defence –
(i) Business Line Management: This would include all the owners for different ratios defined under risk
appetite framework;
(ii) Independent Risk Monitoring: This would include Integrated Risk Management Division, RMC and
Board;
(iii) Independent Verification and Validation: This would include Management Audit and Review
Division.
▪ The first line of defence for Risk Appetite is the implementation division (owner division) and monitoring
divisions. These divisions shall be foremost responsible for adhering to the limits and putting up action plan
in case of any breach. They shall maintain sanctity of the risk appetite framework of the Bank. Detailed roles
and responsibility have been defined in the section below.
▪ Second line of defence is Integrated Risk Management Division, RMC and Board which are collectively
responsible for approving & reviewing the framework, developing tool for monitoring the adherence and
fixing accountability. Detailed roles and responsibility have been defined in the section below.
▪ Third line of defence is MARD which shall be responsible for carrying out independent review and
validation of the Risk Appetite Framework.
Indicators of Sound Risk and Compliance Culture:
In order to build a sound risk and compliance culture, Bank focuses on four key indicators which are to be
considered collectively and as mutually reinforcing.
• Tone from the Top
• Accountability
• Effective Communication and Challenge
• Incentive / Disincentive Structure
137. _____is the risk of legal or regulatory sanctions, material financial loss, or loss to Compliance Risk
reputation a bank may suffer as a result of its failure to comply with laws, regulations,
rules, related self-regulatory organisation standards, and codes of conduct applicable
to its banking activities
138. PNB-SAJAG” (EWS+PMS) system has been implemented since Oct 2019, in respect ₹1.00 Cr
of all corporate borrowal accounts having exposure above ______

उत्कर्ष -2023
@
Back to Index 127 | P a g e
139. Disclosure Policy FY2022-23

▪ As per the Basel III capital regulations, Pillar 3 disclosures shall be made at least Half Yearly Basis
on a __________with the exception of following disclosures (which shall be made
at least on a quarterly basis: i. Capital Adequacy ii. Credit Risk: General
Disclosures; and iii. Credit Risk: Disclosures for Portfolio Subject to Standardised
Approach.
▪ Bank is required to make the ____Pillar3 disclosures under Basel-III norms out of
17
which 3 to be made on a quarterly basis and rest at least on a half yearly basis,
both qualitative and quantitative.
▪ A Disclosure Committee (DC) shall be constituted at the apex level and its Finance Division
members will be appointed by the Board of Directors to look after the entire
disclosure issues of the bank. Convener to this Committee shall be from ______.
The committee may be chaired either by MD & CEO or any of the EDs.
▪ The Disclosure Committee shall meet at least on ______or before, if the Quarterly Basis
circumstances require so, preferably after close of each financial year.
140. REPUTATIONAL RISK MANAGEMENT POLICY AND ASSESSMENT FRAMEWORK 2022-23

▪ Identification of _____(Risks other than Credit, Market & Operational Risk are
referred as Pillar II risks) comes under the purview of Internal Capital Adequacy Pillar II risks
Assessment Process (ICAAP). Bank, among other Pillar II risks, has identified
Reputational Risk as one of the significant Pillar II risks in its latest ICAAP.
▪ Reputational risk is a key consideration in assessing any business
relationship/transaction/activity. _______shall conduct reputational risk Business Divisions
assessments for all business arrangements with material reputational risk and the
same shall be reassessed throughout the life of the relationship/ transaction so
that adequate focus is maintained on the preventive measures that need to be
taken for the risks involved. Quarterly
Intervals
▪ Integrated Risk Management Division (IRMD) shall assess the level of reputational
risk on ________for PNB solo and half-yearly basis for PNB Group, based on
scorecard approach
▪ In the normal course of events, the authority to determine whether the level of MD & CEO
risk as indicated by reputational risk scorecard of PNB Solo / PNB Group is
symptomatic of a crisis situation and warrants immediate action shall be ORMC /
GRMC, as the case maybe, which shall place the matter to Board. In case of
adverse reputational events affecting PNB solo and necessitating immediate
response, the appropriate authority shall be______.
▪ Indicative Triggers for initiation of crisis management for containing risk to
reputation of PNB are:
❖ Changes in PNB’s Stock prices;
❖ Decrease in stock price by more than 5% (daily) for more than 2 trading
days;
❖ Decrease in stock price by 10% or more on any given trading day;
❖ Decrease in stock price for 5 consecutive trading days.
❖ Downgrade in long term counterparty rating of the Bank by one notch.
❖ Major regulatory penalty imposed on the Bank.
❖ IT security system breaches.
❖ Adverse action against the Bank’s Top Management.
❖ Any other incident / event adversely affecting Bank’s reputation.
▪ Under Reputational Risk Assessment Framework, Peer group for the Bank has
been defined based on Business and Balance sheet size.

उत्कर्ष -2023
@
Back to Index 128 | P a g e
 Peer banks considered for PNB are:
i) State Bank of India ii) Bank of Baroda iii) Canara Bank iv) Union Bank of India
v) Bank of India vi) HDFC Bank vii) ICICI Bank viii) Axis Bank
141. In order to ensure completeness and correctness of loss data and also to inculcate
risk culture deep down the ladder in the Bank, a joint committee of ZO and ZAO
officials named as ________________ has been formed to identify and evaluate the
Joint Action Group
internal and external factors that could adversely affect the achievement of Bank’s
on Op-risk Control
performance, corporate goals, information system, and compliance objective in the
(JAGROC)
HO guidelines.
This committee shall have members from Risk Management cell, Inspection & Audit
Department, General Services Administration Department, Security Department,
Recovery Department, HR Department of ZO and at least 1 senior official from
concerned ZAO (not below the rank of Scale IV) as its members
142. Role of Group Chief Risk Officer

▪ GCRO shall have minimum ______of experience in risk functions 5 Years

▪ The appointment of the GCRO shall be made with the approval of ____ Board
▪ The appointment of GCRO shall be for a minimum period of ___ Year 2 Year
▪ The GCRO may be transferred / removed from his post before completion of the DBS, Reserve Bank
tenure only with the approval of the Board and such premature transfer/removal of India, Mumbai
shall be reported to the _____
143. ECL under Ind AS:

ECL under Ind AS will be implemented as and when notified by RBI. ECL under Ind AS is computed quarterly
as product of PD, LGD & EAD for various asset classes.
Under Ind AS, each portfolio needs to be segregated into three stages:
a) Stage 1 represents regular portfolio for which 12-month ECL is computed.
b) Stage 2 represents portfolio where credit risk has increased significantly and lifetime ECL is computed.
c) Stage 3 represents NPA and restructured accounts including SDR & S4A cases.
144. POLICY FOR APPROVAL OF NEW PRODUCT FOR F.Y. 2022-23

▪ Policy for approval of New Product’ was first approved by the Board in its meeting Annually
dated 30 & 31.01.2013 and thereafter the same is being reviewed _____by the
Board.
▪ As per policy, All the new products shall be approved by Operational Risk
SPACE
Management Committee (ORMC) / Credit Risk Management Committee (CRMC)
through ____and modifications in the existing products,
activities/processes/systems shall be approved by SPACE ‘System & Product
Approval Committee of Executives’
GCRO
▪ SPACE committee is headed by _____

▪ Invitee Members in SPACE committee are CGM (and in his absence, General
FRMD
Manager) of the owner divisions proposing the products) and General Manager
(and in his absence, Divisional Head) of _____.

▪ Quorum will be minimum ____permanent members. Five

145. While Business Continuity involves planning for keeping all aspects of a business
functioning in the midst of disruptive events, disaster recovery focuses on the IT or
technology systems that support business functions. As IT systems are critical to the
60 minutes
smooth operations of the bank, it is imperative to ensure continued operation of those

उत्कर्ष -2023
@
Back to Index 129 | P a g e
 systems, or the rapid recovery of the systems. This involves a significant investment
of time and money with the aim of ensuring minimal losses in the event of a disruptive
event. Any incidents of major failure should be reported to top management (ED
overseeing ITD) within _______of event occurrence.
146. Bank has sourced ____ for measurement and management of operational risk and SAS
this point solution is an integral part of EDW framework Op-Risk Solution
147. Fraud Risk
Management
Events related to Fraud / attempted fraud are captured in _____ Information
System (FRMIS)
148. In order to ensure completeness and correctness of loss data and also to inculcate Checks on Threats
risk culture deep down the ladder in the Bank, a committee named as ________shall to Reduce Op-risk
be formed at Circle level to identify and evaluate the internal and external factors Losses (CONTROL)
that could adversely affect the achievement of Bank’s performance, corporate goals,
information system, and compliance objective
149. As such there is no threshold limit for capturing Operational Risk loss data and all ₹10000/-
losses booked to our revenue in CBS system are required to be captured. However
Bank has chosen threshold as _____ for Op Risk VaR computation
150. A loss data collection threshold means that loss incidents below the threshold will not ₹10,000/-
be included in the operational loss incident database. The objective of introducing
loss data collection threshold is to record only the material actual operational loss
incidents which are useful for operational risk measurement and management. Our
Bank has set the loss data collection threshold________.
151. _______is an operational risk incident, which could have resulted in a loss, had it not Near Miss Event
been discovered and corrected in time. As such, a near miss event can be defined as
one, where the maker & checker of a transaction have made a mistake, but
subsequently detected and rectified without loss. Undercharges created out of
conscious commercial decision taken by field functionaries and ultimately waived by
the competent authority, will not be treated as Operational Risk. However, such
undercharges, which have arisen not out of commercial decision but due to
operational lapses/mistakes and could not be recovered and ultimately waived, shall
be treated as Near miss events and would form the part of Centralized Op-Risk Loss
Data Repository. Apart from these the amounts lost and recovered before the close
of business the same day may not be included in the operational loss data base; they
may be treated as near misses
152. Bank is currently using the Basic Indicator Approach (BIA) for calculation of
Operational Risk Regulatory Capital. RBI on 15.12.2021 has released “Draft Master
Direction on Minimum Capital Requirements for Operational Risk”. As per the circular, 01.04.2023
the new Standardised Approach (SA) will replace existing approach and will be
applicable from _____
153. ________ is the amount and type of risk that an organization is prepared to seek, Risk Appetite
accept or tolerate. BCBS Document describes Risk appetite as ‘a high level
determination of how much risk a firm is willing to accept taking into account the
risk/return attributes; it is often taken as a forward looking view of risk acceptance
154. _________ is a more specific determination of the level of variation a bank is willing Risk Tolerance
to accept around business objectives that is often considered to be the amount of
risk a bank is prepared to accept.
155. ________ of the Bank is defined as the amount and type of risk that the bank is able Risk Capacity
to support keeping in view the capital base, liquidity, borrowing constrains and
regulatory constraints

उत्कर्ष -2023
@
Back to Index 130 | P a g e
156. ______is shifting of risk to third parties. Bank is already having a system of _____ Risk Transfer
by way of insurance and other hedging instruments like outsourcing etc
157. IBA has floated the company ________ with the objective to collect data on PSB Alliance Pvt.
operational loss events and credit risk loss events of member banks for the purpose Limited
of consolidation and analysis. (Formerly known as CORDex India Pvt. Ltd.)
158. The first line of defence for Operational Risk is the _______and Operational Risk Business Line
Management Specialist at various HO Divisions Operational Risk
Managers
159. Second Line of defence is______, Group Chief Risk Officer and Operational Risk RMC, ORMC
Management Department (ORMD) which are collectively responsible for framing the
Operational Risk Framework/Policy and ensuring implementation thereof
160. The Third line of defence is ______which are responsible for independent review IAD
and validation of Operational Risk Management Framework (ORMF) and Operational and
Risk Management System (ORMS) at bank wide level. MARD
161. As per the new standardised approach of Operational Risk (Basel III Standardised Business Indicator
Approach) which is to be implemented in India w.e.f. 01.04.2023, ________ shall Component (BIC)
be calculated by multiplying the BI with the marginal coefficients (αi), which increase
with the size of the BI as shown in Table below:
Bucket BI Range (in ₹ Crore) BI Marginal Coefficients (αi)
1 ≤8000 12%
2 8000<BI≤240000 15%
3 >240000 18%
162. As per the new standardised approach of Operational Risk:
▪ (i) For banks in bucket 1, and (ii) For banks in buckets 2 & 3 that do not have 5 BIC
years of high-quality operational risk annual loss data, The ORC
requirement shall be equal to _______
▪ For banks in buckets 2 & 3 having 5 years and above of high-quality BIC*ILM
operational risk annual loss data, The ORC requirement shall be ________
ILM=Internal Loss Multiplier
163. The risk-weighted assets (RWA) for operational risk shall be calculated by multiplying 12.5
the ORC by ____
164. There are four approaches to managing a given risk i.e. 1. Risk Transfer,2. Risk Risk Acceptance
Avoidance, 3. Risk Mitigation, the fourth one is______
165. Concept of Business Continuity Plan was floated by ________ in its report of the G.
Working Group on information security, electronic banking, technology risk Gopalakrishna
management, and tackling cyber frauds
166. Risk which is excluded from the Basel Committee’s definition of operational risk Reputation Risk &
Strategic Risk
167. What term is normally used to describe the possibility that people behave differently Moral hazard
when protected from the effects of the risks they take
168. Principle of Sound Practice for management & supervision of operational risk, Banks Products,
should identify and assess the operational risk inherent in all material Activities,
Processes and
system
169. _______is defined as the forecast of operational losses and events that cause them, Scenario Analysis
based on the knowledge of business experts. Scenario enables one to assess the
impact of very rare and possibly large events without having to actually experience
those events.

उत्कर्ष -2023
@
Back to Index 131 | P a g e
170. Bank uses scenario analysis for three different purposes: Stress testing the
a. Supplementing insufficient loss data b.Providing a forward-looking element in the Capital
capital assessment, third one is_______ Assessment
171. Risk Assessment
For management of operational risks at HO division level, each business line/division Committee (RAC)
shall constitute a _______
172. The loss data along with causal factor analysis and corrective/preventive action taken Half Yearly Basis
shall also be placed to RMC on_______
173. Bank has sourced _________. for measurement and management of operational risk “SAS Op-Risk
and this point solution is an integral part of EDW framework. Solution”
174. For capturing other Op-Risk losses, expenditure revenue sub-codes have been 24 and 33
created in CBS system for all HO Divisions & ZAOs and …. Revenue sub-codes for
branches & all other offices to enable them to book the losses which automatically
flows into ‘SAS Op-Risk Solution’.
175. ______gives an insight into operational Risk, the industry and peer banks are External Loss Data
exposed to, the analysis of which may help prevent/mitigate such risks in our Bank.
176. The Governance structure adopted by bank for management of operational risk relies
on three lines of defence: Independent
i. Business line management verification and
ii. Independent corporate operational risk function, and validation
iii.________________
177. ‘Op-Risk Aware’ e-magazine is also being issued ………..on basis to create awareness Quarterly
about the Operational Risk Management, bank wide basis.
178. RBI in its final AMA guidelines stipulates that “A bank should establish one or more
appropriate de minimis gross loss thresholds which may vary in the bank across
business lines or loss event types, for the collection of internal loss data. However, ₹50,000/-
no bank will fix a threshold above ₹……. for any of the business classes.
However our Bank has chosen threshold as ₹………… for Op Risk VaR computation. ₹10,000/-
179. (RCSA) is one of the important tools to identify and assess the Operational Risk in Risk Control &
various activities & products. Self-Assessment
180. KRI(s) are one of the important tools for monitoring controls, risk drivers, and Key Risk
exposures as they can provide insights into potential risk events. Indicators
181. BL-8
The number of Business line and Loss event type is the ________
LE-7
182. There will be two tier Risk Management structure of which one part will be……….. & Zonal Risk
other will be HO:IRMD Management Cell
(ZRMC)
183. First Line of Defence… ZO
Second Line of Defence _________ ZRMC
Third Line of Defence ZAO
184. The first line of defence for Operational Risk is the Business Line Operational Risk Business Line
Managers and Operational Risk Management Specialist at various HO Divisions Management
185. Second Line of defence is RMC, ORMC, Group Chief Risk Officer and Operational Risk Independent
Management Department (ORMD) which are collectively responsible for framing the corporate
Operational Risk Framework/Policy and ensuring implementation thereof operational risk
function,

उत्कर्ष -2023
@
Back to Index 132 | P a g e
186. The Third line of defence is IAD and MARD which are responsible for independent Independent
review and validation of Operational Risk Management Framework (ORMF) and verification and
Operational Risk Management System (ORMS) at bank wide level. validation
187. Interest rates on Deposits and Advances are reviewed and approved by ______ ALCO
188. The service charges are reviewed and approved by ED-BRC
(ED Level-Business
Review Committee)
189. PNB-SAJAG (EWS+PMS) system has been implemented since Oct 2019, in respect of ₹1.00 crore
all corporate borrowal accounts having exposure above ____
190. Minimum share of the aggregate exposure should be taken by our Bank onder
Consortium arrangement 10%
191. In case where our Bank share is less than 10% of the aggregate exposure, for HOCAC-I
sanctions falling under the loaing power up to ZOCAC level, administrative clearance
shall be sought from
192. In case of Consortium Advances , Lead bank should convey to borrower its final sanction within a maximum
time period prescribed for formal disposal of loan proposals provided application/ Proposals are received
together with required details/information supported by requisite financial and operating statements:
Proposal for Export Proposals Other Proposals
Sanction of Fresh/ Enhancement 45 Days 45 Days
Renewal of existing credit limits 30 Days 45 Days
Sanction of Adhoc facilities 15 Days 30 Days
193. ▪ In case of Consortium Advances, the request for credit facility either for project
funding (new /expansion/ additional facility) and/or working capital
(new/enhancement/renewal) received from the existing borrower by the Lead
Bank should be sent to all participating/willing lenders for their
Within a week
observations/queries within a specified timeframe (say 7 days) with directions to
them to send in their comments______. Request for additional term funding
should be accompanied by Project Report indicating the need/purpose of
additional funding.
▪ The queries received from other lenders should be consolidated along with the Within a week
queries of Lead Bank and sent to the borrower _____
194. In case of Consortium Advances ,Confirmation from high value debtors would 80%
be obtained annually preferably through Auditors covering at least ____ of value of
debtors
195. In case of Term Loan facility, where project is proposed at lease hold land, lease
period of land should be synchronized with the loan tenor/repayment period, ensuring
timely implementation of project to safeguard Bank’s interest. In other words, in any 6 Month
case the Repayment Period should not go beyond the remaining lease period of land.
The Repayment Period should preferably be end at least _______before the end of
lease period of land, so that sufficient time period is available to initiate action for
enforcement of IP, if so required
196. In small accounts upto _____the capturing of passport details may not be insisted ₹ 50 Lakh
upon in routine manner and the sanctioning authority may decide the same on merits
of the case
197. Upon verification, if a new borrower seeking fresh credit exposure from our Bank
is identified as Shell Company. OR Where the major shareholding or controlling No Finance
stake or beneficial ownership of the New Borrower is held by a Shell company,
______shall be extended to such borrower.

उत्कर्ष -2023
@
Back to Index 133 | P a g e
198. Upon identification of an existing borrower or its major shareholder / controlling
stake holder / beneficial owner as Shell Company, the operation in the account be Sanctioning
immediately stopped and borrower be advised for immediate adjustment of the Authority
account. Simultaneously, the matter be referred to respective _____for initiating
suitable action (including recalling the advance) for recovery of Bank’s dues
199. Officers in _____at RAM/MCC/LCB/ELCB and above may waive insurance of collateral SMG Scale IV
security in deserving cases in their own sanctions only
200. On receipt of the Audited Balance Sheet & P&L account in all existing as well as in
fresh accounts, the officer concerned should certify that copy of Balance Sheet and
P&L of the Company/LLP have been downloaded from_____, checked with the MCA website
documents received from the Company/LLP and found to be in order. The copy of
the financials downloaded from _____ shall also be held on record.
201. In case of corporate customers of good standing having credit risk rating of_____, A3 & above
the obtainment of Confidential Reports on group concerns from their respective
bankers may not be insisted upon
202. Borrowers having exposure more than _______and all listed borrowers, irrespective ₹50.00 crores
of limits, Dynamic Rating shall mandatorily be reviewed on expiry of 5 months from
date of last rating except Borrower already rated as______, All facilities to the C1/C2/C3
borrower entity are guaranteed by Centre/State Govt.
203. ______& above may consider cases of large corporate borrowers (i.e. above ₹5.00 CHCAC
crore) beyond the purview of command area guidelines for the proposals falling
within their vested loaning powers
204. All renewal cases should be diarized at least _____in advance and followed up by 4 Months
Branch/Controlling Offices as the case may be so that all the sanctions are renewed
in time. Remind the borrowers four months ahead of the due date and collect all
relevant data and information
205. The proposals, after scrutiny at the branches, should be sent to Controlling Offices 2 Months
so as to reach them at least ____ahead of due dates
206. The proposal should be scrutinized speedily at Controlling Offices and must be sent 1 Month
to Head Office, wherever necessary so as to reach Head Office _____prior to the
expiry of the sanction date
207. At the time of disbursement in Term Loan, in case of high value purchases
above______, Accuracy/correctness of price of any asset being financed shall be ₹1 crore
ensured by reference to the website of manufacturers, wherever price is available on
website. If the payments are not being released to manufacturers, reasons thereof
are to be ascertained and recorded. If there is any price variation from the price
displayed in website, it should be subjected to scrutiny and explanation to our
satisfaction to be obtained.
208. Branches will return to the borrower all the securities / documents / title deeds to be
mortgaged property within ____ working days of the repayment of all dues agreed 15
to or contracted and report to Central Registry for Securitization, Asset
Reconstruction and Security Interest (CERSAI) about satisfaction of bank ’s charge
209. Packing credit advance is to be granted upto a maximum period of 180 days at a
concessive rate of interest. In case the exporter is not in a position to ship the goods 270 days
within the maximum period of 180 days, extension of packing credit may be permitted
upto _____by PLPs/MCCs, LCBs and ELCBs

उत्कर्ष -2023
@
Back to Index 134 | P a g e
210. Extension in packing credit beyond 270 days and upto ____ may be permitted upto 360 days
_____by HOCAC-I (for LCBs and ELCBs) and CHCAC (for other)
211. ________ (for LCB and ELCB cases) and CHCAC (for cases other than LCB/ELCB) HOCAC- I
have the power to waive the submission of export orders or LCs in all Packing Credit
Advances including Running Packing Credit accounts on very selective basis to
established exporters (not less than 3 years old) with proven excellent track record
212. ‘Running Account’ facility may be allowed to exporters having Credit Risk Rating B1 & better
of _____with good past track record (3 years track record in case of B1 rated
borrowers) and where the requirement of trade justifies the same. Further, this
facility may also be allowed to Export Oriented Units (EOUs) / Units in Free Trade
Zones / Export Processing Zones (EPZs) and Special Economic Zones (SEZs).
213. In all cases, where Pre-shipment Credit ‘Running Account’ facility has been extended, 10th
letters of credit / firm orders should be produced within a reasonable period of time
i.e. within a period of one month from the date of sanction but not later than _____of
the succeeding calendar month
214. Minimum margin of ______ is prescribed for financing to NBFC sector. However,
minimum prescribed margin for various specific sectors shall be adhered to like 10%
second hand vehicle financing -40% to 50% and 25% for leasing/ hire purchase
companies.
215. Viability Criteria for Restructuring (Resolution of Stressed Assets)
Parameter Criteria
Return on capital employed Should be at least equivalent to 5 year Government security yield plus 2 per
cent
DSCR Should be greater than 1.25 within the 5 years period in which the unit should
become viable and on year to year basis the ratio should be above 1.

The normal DSCR for 10 years Should be around 1.33

repayment period
The benchmark gap between Should be at least 1per cent
IRR and cost of capital
Operating and cash break even Should be worked out and they should be comparable with the industry norms
points
Trends of the company based should be comparable with the industry. Thus behaviour of past and future
on historical data and future EBIDTA should be studied and compared with industry average
projections
Loan life ratio (LLR) should be 1.4, which would give a cushion of 40% to the amount of loan to
be serviced
Minimum Promoters’ At least 50% must come upfront should be 20% of the long term requirement
Contribution of funds plus the monetary value of sacrifices made by the lenders

216. RELIEF MEASURES BY THE BANK IN AREAS AFFECTED BY NATURAL CALAMITY

▪ Declaration of natural calamities is in the domain of the Sovereign (Central / State
33%
Governments). The common thread to extend relief measures including
reschedulement of loans by banks, is that the crop loss assessed should be ____ or
more.
▪ The repayment period of restructured Agriculture Loans may vary depending on the 2 Years
severity of calamity and its recurrence, the extent of loss of economic assets and
distress caused. A maximum period of re payment of up to ______(including the
moratorium period of 1 year) is to be allowed if the loss is between 33% and 50%.
5 Years
▪ If the crop loss is 50% or more, the restructured period for repayment may be
extended to a maximum of _____(including the moratorium p eriod of one year).
▪ In all cases of restructuring, moratorium period of at least ____should be considered.
Further, the banks should not insist on additional collateral security for such 1 Year
restructured loans.

उत्कर्ष -2023
@
Back to Index 135 | P a g e
 ▪ As per RBI guidelines, the ______of scheduled commercial banks may be vested with Divisional/
certain discretionary powers to avoid the need to seek fresh approval from their Head
Zonal Managers
Office/Controlling Office regarding the line of action decided by the District Consultative
Committee/State Level Bankers’ Committee
▪ Branches shall also grant consumption loans up to ______ to existing borrowers ₹10,000/-
without any collateral. All the branches shall be authorized to sanction consumption
loans up to ₹10,000/- and all relaxation / waiver related to Guarantee, Security and
Margin shall be applicable as mentioned above
217. Natural Calamities where the productive assets are partially or totally
damaged and borrowers are in need of a new loan:
While the total repayment period for the restructured/fresh term loan will differ on
5 Years
case-to-case basis, generally it should not exceed a period of______.
218. In order to make footprints in this digital arena and to remain competitive in market,
as a business strategy, our bank has approved 25bps i.e. 0.25% concession in card ₹7.50 Crores
rates on advances upto ______sourced through Digital Channel : i. Internet Banking,
ii. PNB One and iii. PNB WeblenS (available through official website www.pnbindia.in)
219. Recently SEBI has cancelled the Certificate of Registration (CoR) granted to
_______as a Credit Rating Agency (CRA). Brickwork Ratings
(RBI vide its press release date 12.10.2022 has advised that in respect of ratings/credit
India Private
evaluations required in terms of any guidelines issued by the Reserve Bank, no such fresh
Limited
ratings/evaluations shall be obtained from the abovementioned rating agency with
immediate effect)
(Ref. Cir. IRMD34/2022 dt.10.11.2022)
220. In terms of the revised guidelines, all large trading concerns having exposure above ₹500 Cr
₹100 Cr OR turnover above _____are to be rated under LCRM Only. Under the
erstwhile guidelines, all such trading concerns were to be rated under Mid Corporate
Rating Model only
221. The Mark-up component linked with RLLR for all floating rate personal or Retail loans Opening of the
(housing, auto etc.) and floating rate loans to Micro Small and Medium Enterprise Account
shall be reset every 3 years from the date of ______
(Present Markup Component: 2.50% + 0.25% BSP w.e.f. 08.112021 )
222.
Where the proposal/project falls under the ambit of both Real Estate and Real Estate
Infrastructure, the loaning powers for financing ____projects shall be exercised
223.
Eligible exposure limit for Retail/Wholesale Trade under Credit Guarantee Scheme ₹ 200 lakh
has been increased from ₹1.00 crore to_______ w.e.f. 01.12.2022
224.
Guarantee cover under the CGTMSE for ZED certified MSMEs, MSEs situated unit 85%
under Aspirational Districts, Women & SC/ST Entrepreneur (w.e.f. 01.12.2022)
225.
The identification of need for restructuring should be done within _____of the first
30 ays
signs of default and restructuring package should be worked out and implemented
by the bank within the following indicative time frame.
The maximum time frame for various steps in the restructuring process shall be as
under:
SN STEPS TO BE TAKEN TIME FRAME
1 Joint meeting with other lenders in multiple/consortium accounts
and Joint Inspection of Security etc. and deciding the RP
Up to 90
2 TEV study
Days
3 Forwarding of the proposal to the sanctioning authority along with
branch views/ recommendations
4 Sanction of the restructuring package/Resolution Plan 30 Days
5 Implementation of the restructuring package 30 Days

उत्कर्ष -2023
@
Back to Index 136 | P a g e
I. PRIORITY SECTOR GUIDELINES
1. ➢ For the purpose of priority sector lending, Computation of Adjusted Net Bank Credit (ANBC)

Bank Credit in India I

Bills Rediscounted with RBI and other approved Financial Institutions II
Net Bank Credit (NBC)* III (I-II)
Outstanding Deposits under RIDF and other eligible funds with NABARD, NHB, SIDBI and MUDRA Ltd
IV
in lieu of non-achievement of priority sector lending targets/sub -targets + outstanding PSLCs
Eligible amount for exemptions on issuance of long-term bonds for infrastructure and affordable housing V
Advances extended in India against the incremental FCNR (B)/NRE deposits, qualifying for exemption
VI
from CRR/SLR requirements
Investments made by public sector banks in the Recapitalization Bonds floated by Government of India VII
Other investments eligible to be treated as priority sector (e.g. investments in securitised notes ) VIII
Face Value of securities acquired and kept under HTM category under the TLTRO 2.0 IX
Bonds/debentures in Non-SLR categories under HTM category X
For UCBs: investments made after August 30, 2007 in permitted non SLR bonds held under ‘Held to
XI
Maturity’ (HTM) category
ANBC (Other than UCBs) III + IV- (V+VI+VII) +VIII - IX + X
ANBC for UCBs III + IV - VI - IX + XI
* For the purpose of priority sector computation only. Banks should not deduct / net any amount like provisions, accrued
interest, etc. from NBC
➢ Target & Sub -Target for lending to Priority Sector for Domestic commercial banks (excl. RRBs &
SFBs) & foreign banks with 20 branches and above
Sector Targets Component of Sector
Total Priority Sector 40% of ANBC or CEOBE, whichever is higher
Total Agricultural 18 per cent of ANBC or CEOBE, whichever is higher; • Farm Credit
out of which a target of 10%# is prescribed for Small • Agriculture
and Marginal Farmers (SMFs) Inf rastructure
• Ancillary Activities
Micro Enterprise 7.5% of ANBC or CEOBE, whichever is higher
Weaker Sections 12%# of ANBC or CEOBE, whichever is higher
# Revised targets for Agriculture and SMFs will be implemented in a phased manner :
The targets for lending to SMFs and for Weaker Sections shall be revised upwards from FY 2021-22 onwards
as f ollows:
Financial Year Small and Marginal Farmers target Weaker Sections target
2020-21 8% 10%
2021-22 9% 11%
2022-23 9.5% 11.5%
2023-24 10% 12%
2. Total Priority Sector target for Urban Co-Operative Bank increased in total priority sector target from 40
% to ____ of ANBC or CEOBE whichever is higher in a phased manner i.e. as under:
Existing Target 31.03.2023 31.03.2024
50% 60% 75%
3. Inclusion of Weights in PSL Achievement
From the UK Sinha committee recommendations, in order to address regional disparities in flow
of credit to district levels. Adjusted Priority Sector Lending mechanism has been implemented 2021-2022
under the new regime, to incentivise flow of credit to underserved districts. There will be no
change in the underlying sectors eligible for PSL, however an additional weightage has been

उत्कर्ष -2023
@
Back to Index 137 | P a g e
 given to lending to the more underserved districts. From financial year ______onwards weights
would be assigned to incremental priority sector credit as follows:
• Higher weight (125%) would be assigned to the districts where credit flow is comparatively
lower, that is per capita PSL less than ₹ 6,000.
• Lower weight (90%) would be assigned to the districts where credit flow is comparatively
higher, that is per capita PSL is greater than ₹ 25,000.
▪ These additional weightages will be valid for a period up to ________and will be reviewed 2023-24
thereafter.
RRBs, Urban Co-operative Banks and Local Area Banks and Foreign Banks have been kept out
for the purpose of calculation of PSL weights, due to their limited presence.
4. Inclusions in Eligible Categories under “Agriculture Lending Including Farm Credit (Allied
Activities), lending for Agriculture Infrastructure and Ancillary Activities”:
• Inclusion of loans to farmers for installation of stand-alone Solar Agriculture Pumps and for solarisation
of grid connected Agriculture Pumps.
• Inclusion of loans to farmers for installation of solar power plants on barren/fallow land or in stilt fashion
on agriculture land owned by farmer
• Inclusion of loans up to ₹50 crore to Start-ups, as per definition of Ministry of Commerce and
Industry, Govt. of India that are engaged in agriculture and allied services.
• Inclusion of loans up to ₹2 lakh to individuals solely engaged in Allied activities without any
accompanying land holding criteria. This change is in line with recommendation by M.K. Jain
Committee.
• Inclusion of loans for construction of oil extraction/ processing units for production of bio-fuels, their
storage and distribution infrastructure along with loans to entrepreneurs for setting up Compressed Bio
Gas (CBG) plants.
• Laying of Indicative list conveying permissible activities under Food Processing Sector as recommended
by Ministry of Food Processing Industries.
A credit limit of ₹5 crore per borrowing entity has been specified for Farmers Producers Organisations
(FPOs)/Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce
at a pre-determined price. This inclusion is as per the M.K Jain Committee Recommendations.
5. In line with the series of benefits being extended to MSMEs, loans up to ____to Start-ups, as
per definition of Ministry of Commerce and Industry, Govt. of India that confirm to the definition ₹50 crore
of MSME has been included under the PSL category. (On the basis of recommendations by UK
Sinha Committee, to financially incentivise the startups in India)
6. Housing Loans
• Increase in Loans up to ____(earlier ₹ 5 lakh) in metropolitan centres and up to ₹6 lakh
(earlier 2 ₹ Lakh) in other centres for repairs to damaged dwelling units. ₹ 10 lakh
• Bank loans to governmental agency for construction of dwelling units or for slum clearance
60 Sq Mtr
and rehabilitation of slum dwellers subject to dwelling units with carpet area of not more
than ___ square meters. Under the earlier regime, it was based on cost of dwelling unit
which was ₹ 10 lakh per unit.
• Inclusion of bank loans upto ₹____for affordable housing projects using at least 50% of
No Limit
FAR/FSI (Floor Area Ratio/ Floor Space Index) for dwelling units with carpet area of not
more than 60 sq.m.
7. Social Infrastructure
Inclusion of loans up to a limit of _____per borrower for building health care facilities including
under ‘Ayushman Bharat’ in Tier II to Tier VI centres. This is in addition to the existing limit of ₹ 10 crore
₹5 crore per borrower for setting up schools, drinking water facilities and sanitation facilities
including construction/ refurbishment of household toilets and water improvements at

उत्कर्ष -2023
@
Back to Index 138 | P a g e
 household level, etc.
8. Renewable Energy
Bank loans up to a limit of _________ to borrowers for purposes like solar based power ₹30 Crore
generators, biomass-based power generators, wind mills, micro-hydel plants and for non-
conventional energy based public utilities, viz., street lighting systems and remote village
electrification etc., will be eligible for Priority Sector classification. For individual households,
the loan limit will be ₹10 lakh per borrower.
9. Inclusion of loans for meeting local needs such as construction or repair of house, construction
of toilets not exceeding ______provided directly by banks to SHG/JLG for activities other than ₹2 lakh
agriculture or MSME.
10. Investments by Banks in Securitised Assets & Direct Assignment
Investments by banks in ‘securitised assets’, representing loans to various categories of priority sector,
except 'others' category, are eligible f or classification under respective categories of priority sector
depending on the underlying assets provided:
i. The assets are originated by banks and f inancial institutions and are eligible to be classified as priority
sector advances prior to securitisation and fulfil the Reserve Bank of India guidelines on securitisation.
ii. The all-inclusive interest charged to the ultimate borrower by the originating entity should not exceed the
investing bank’s MCLR + 10% or EBLR + 14%.
iii. Purchase/ assignment/investment transactions undertaken by banks with NBFCs, where the underlying
assets are loans against gold jewellery, are not eligible for priority sector status.
11. Loans to f armers up to _____against pledge/hypothecation of agricultural produce (including
warehouse receipts) f or a period not exceeding 12 months subject to a limit up to ______ ₹75 lakh
against NWRs/eNWRs and up to ₹50 lakh against warehouse receipts other than
NWRs/eNWRs.
12. Loans to corporate farmers, farmers' producer organizations/companies of individual farmers, ₹2 Cr per
partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied borrower
Activities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture up to an
aggregate limit o (Part of Priority sector-Agriculture-Farm Credit)
13. Loans up to _____per borrowing entity to FPOs/FPCs undertaking farming with assured ₹5 crore
marketing of their produce at a pre-determined price
14. Agriculture infrastructure:
✓ Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold
storage units/ cold storage chains designed to store agriculture produce/products, irrespective of their
location.
✓ Soil conservation and watershed development.
✓ Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer,
and vermi composting.

For the above loan, aggregate sanctioned limit of _______ per borrower from the banking ₹100
system shall be part of Priority sector-Agriculture-Ancillary activities Crore
15. Loans for Food and Agro-processing up to an aggregate sanctioned limit of _______from the ₹100
banking system shall be part of Priority sector-Agriculture-Ancillary activities Crore
16. Loans up to ₹ ___ to co-operative societies of farmers for disposing of the produce of ₹5 Crore
members comes under shall be part of Priority sector-Agriculture-Ancillary activities
17. For the purpose of classification of priority sector:
✓ Farmers with landholding of up to 1 hectare are considered as________farmers. Marginal

✓ Farmers with a landholding of more than 1 hectare and up to 2 hectares are considered Small
as __________farmers.

उत्कर्ष -2023
@
Back to Index 139 | P a g e
18. MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs)
Composite Criteria: Investment in Plant & Machinery/equipment & Annual Turnover
w.e.f.01.07.2021
Category Investment Turnover
Micro Enterprises Not exceeding ₹1.00 crore
5 times of Investment in respective
Small Enterprises Not exceeding ₹10.00 crore
category
Medium Enterprises Not exceeding ₹50.00 crore
19. Manufacturing Enterprises: The Micro, Small and Medium Enterprises engaged in the First
manufacture or production of goods to any industry specified in _____________ to the schedule
Industries (Development & Regulation) Act, 1951
20. Service Enterprises engaged in providing or rendering of services and defined in terms of MSMED
investment in equipment under Act, 2006
21. To ensure that MSMEs do not remain small and medium units merely to remain eligible for 3 Years
priority sector status, the MSME units will continue to enjoy the priority sector lending status
Up to after they grow out of the MSME category concerned
Priority Sector Limit to different sectors
22. Export Credit ₹40 Crore
Incremental export credit over corresponding date of the preceding year, up to 2% of ANBC per borrower
or CEOBE, whichever is higher, subject to a sanctioned limit up to ______.
# Export credit includes pre-shipment and post shipment export credit (excluding off-
balance sheet items)
23. Education
Loans to individuals for educational purposes including vocational courses_____ irrespective Up to ₹20
of the sanctioned amount will be considered as eligible for priority sector lakh
24. Housing
Loans to individuals up to ____in metropolitan centres (with population of ten lakh and ₹35 lakh
above)and loans up to ____in other centres for purchase/construction of a dwelling unit ₹25 lakh
per family provided the overall cost of the dwelling unit in the metropolitan centre and at
other centres should not exceed ₹45 lakh and ₹30 lakh respectively.
# As housing loans which are backed by long term bonds are exempted from ANBC, banks
should either include such housing loans to individuals up to ₹35 lakh in metropolitan
centres and ₹25/- lakh in other centres under priority sector or take benefit of exemption
from ANBC, but not both.
Loans for repairs to damaged dwelling units of families (with overall cost of ₹45 lakh and
₹30 lakh respectively):
▪ Up to _____in metropolitan centres ₹10 lakh

▪ Up to _____ in other centres ₹6 lakh

# The eligibility under priority sector loans to HFCs is restricted to _______of the individual 5%
bank’s total priority sector lending, on an on-going basis.

Bank loans to HFCs (approved by NHB for their refinance) for unending. ₹20 lakh

For the purpose of identifying the economically weaker sections and low income groups, ₹6 Lakh per
the family income limit is revised to ₹3 Lakh per annum for EWS and _________ for LIG, annum
in alignment with the income criteria specified under Pradhan Mantri Awas Yojana
25. Social Infrastructure
Bank loans up to a limit of ________for building social infrastructure for activities namely ₹5 Cr per
schools, health care facilities, drinking water facilities and sanitation facilities in Tier II to borrower
Tier VI centres

उत्कर्ष -2023
@
Back to Index 140 | P a g e
26. Bank Loans to Social Infrastructure i.e. For Building Healthcare Facilities ₹10 crore
27. Renewable Energy
Bank loans up to a limit of ______ (increased from ₹15.00 crore ) for purposes like solar ₹30 Cr to
based power generators, biomass based power generators, wind mills, micro-hydel plants borrowers
and for non-conventional energy based public utilities viz. street lighting systems, and
remote village electrification.
For individual households, the loan limit will be _____ ₹10 lakh per
borrower
28. Other Priority Sector
Loans not exceeding ₹_____per borrower (earlier it was ₹50,000/-) provided directly by ₹1.00 Lakh
banks to individuals and their SHG/JLG, provided the individual borrower’s household annual
income in rural areas does not exceed ₹100,000/- and for non-rural areas it does not exceed
₹1,60,000/- and loans not exceeding ₹____provided directly by banks to SHG/JLG for
₹2.00 lakh
activities other than agriculture or MSME, viz., loans for meeting social needs, construction
or repair of house, construction of toilets or any viable common activity started by the SHGs.

Loans to distressed persons [other than farmers] not exceeding ₹____ per borrower to ₹1.00 Lakh
prepay their debt to non-institutional lenders.

29. Bank may extend collateral-free loans ____ to all units of the Micro and Small enterprises Up to ₹10
(both manufacturing and service enterprises) defined under MSMED act, 2006 Lakh
30. All PSLCs will be valid till 31st March and will expire on . 01st April
each year
31. Eligible categories of PSLCs: Four
1. PSLC General 2. PSLC Small and Marginal Farmer 3. PSLC Agriculture 4. PSLC Micro Enterprises
32. The PSLCs would have a standard lot size of and multiples thereof ₹ 25 lakh
33. The trade summary of PSLC market is available to the participants through the “e-Kuber”
34. With ef f ect from May 5, 2021, Small Finance Banks (SFBs) are allowed to extend fresh
credit to registered NBFC-MFIs and other MFIs (Societies, Trusts, etc.) which are members
of RBI recognised ‘Self-Regulatory Organisation’ of the sector, and which have a ‘gross loan
portfolio’ (GLP) of up to _______ as on March 31 of the previous year, f or the purpose of ₹500 crore
on-lending to individuals.
In case the GLP of the NBFC-MFIs/other MFIs exceeds the stipulated limit at a later date,
all priority sector loans created prior to exceeding the GLP limit will continue to be classified
by the SFBs as PSL till repayment/maturity, whichever is earlier. Bank credit as above will
be allowed up to an overall limit of 10% of an individual bank’s total priority sector
lending. These limits shall be computed by averaging across four quarters of the financial
year, to determine adherence to the prescribed cap.
35. _________ transactions taking place through the Trade Receivables Discounting System
Factoring
(TReDS) shall also be eligible for classification under priority sector upon operationalization
Transactions
of the platform.
36. For selection of SHGs for linkage: The group should have satisfactory internal savings and
6 Months
credit activity for atleast _________ months.
37. As per operational guidelines issued by NABARD,SHGs may be sanctioned savings linked
1:1 to 1:4
loans by banks (varying from a saving to loan ratio of . However, in case of matured
(i.e. 4 times
SHGs, loans may be given beyond the limit of four times the savings as per the discretion
of corpus)
of the bank.
38. Under PMEGP, Projects without ______ are not eligible for financing under the Scheme. Capital
Expenditure
39. For Up gradation Under PMEGP: The maximum cost of the project/unit admissible under
manufacturing sectors ₹ ______. Maximum subsidy would be ₹15 lakh (₹20 lakh for ₹1.00 crore
NER and Hill States)

उत्कर्ष -2023
@
Back to Index 141 | P a g e
40. For Up gradation under PMEGP: The maximum cost of the project/unit admissible under
₹25 Lakh
Trade/service sectors ₹_____ lakh.
41. PMEGP: Rate of Subsidy (of Project Cost) for upgradation of existing units : Normally = 15% , NER& Hill
states = 20%
42. For manufacturing units, working capital component should not be more than % of the 40%
projectcost.*
*However, for manufacturing units, the project cost may include maximum capital expenditure up to
₹25 lakhs. In such cases, the working capital over and above ₹25 lakh will not covered under subsidy.”
43. For service/trading sector, the working capital shall not be more than % of the
60%
project Cost.
44. Working Capital component should be utilized in such a way that at one point of stage it Within 3
touches 100% limit of CC within three years of lock in period of Margin Money Years
45. Minimum utilization of the sanctioned working capital limit is stipulated at ______ 75%
46. PMEGP: Loan repayment period is years excluding Moratorium period. 3 to 7 Years
47. Under “Village Industries” concept, Per-capita ceiling has been enhanced from ₹1.00 lakh
to ₹ lakhs as a special case for activities under PMEGP in respect of A&N Islands and ₹4.50 Lakh
Lakshadweep.
48. In case the Bank’s advance goes “bad” before the year period, due to reasons,
Before 3
beyond the control of the beneficiary, the Margin Money (subsidy) will be returned to the
Year period
KVIC along with the interest.
49. Beneficiary will submit ________about production, sales, employment; wages paid etc. to Quarterly
the State/Regional Director of the KVIC/KVIB/State DIC, and KVIC will in turn analyze and report & six
submit a consolidated report to the Ministry of MSME, every _______. months
50. All domestic banks (other than UCBs) and foreign banks with more than 20 branches are
directed to ensure that the overall lending to Non-Corporate Farmers (NCFs) does not fall
below the system-wide average of the last three years’ achievement which will be separately
13.78%
notified every year. The applicable target for lending to the non-corporate farmers for FY
2022-23 will be _____ of ANBC or CEOBE whichever is higher.
All efforts should be made by banks to increase the Farm Credit higher than the NCF target.
51. Loan facility extended by Micro Finance Institutions (MFIs) :
Eligibility Criteria for Priority Sector Lending:
Loan does not exceed ₹75,000/-in the first cycle and ₹____ ____in the subsequent ₹125000/-
cycles. (In other words, Total indebtedness of the borrower does not exceed ₹1,25,000/-)
The limit of the loans extended by Non-Banking Financial Company- Micro Finance
Institutions (NBFC-MFIs)
for which the tenure of the loan shall not be less than 24months, has been raised to ₹ 30,000/-
₹______/- with right to borrower of prepayment without penalty.
52. Priority Sector Lending – Lending by banks to NBFCs for On-Lending:

Agriculture: On-lending by NBFCs for ‘Term lending’ component under Agriculture will be ₹10 lakh
allowed upto per borrower.
MSE: On-lending by NBFC will be allowed up to ______ per borrower ₹ 20 lakh
The above dispensation shall be valid upto March 31, 2021 and will be reviewed
thereafter. However, loans disbursed under the on-lending model will continue to be
classified under Priority Sector till the date of repayment/maturity.
Housing: Bank loans to Housing Finance Companies (HFCs), approved by NHB for their
refinance, for on-lending for the purpose of purchase / construction / reconstruction of
₹ 20 lakh
individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject
to an aggregate loan limit of ₹_______ per borrower.

उत्कर्ष -2023
@
Back to Index 142 | P a g e
53. Credit Linked Capital Subsidy Scheme (CLSS)
Government of India, Ministry of Micro, Small and Medium Enterprises had launched Credit Linked Capital
Subsidy Scheme (CLSS) for Technology Upgradation of Micro and Small Enterprises subject to the following
terms and conditions:
(i) Ceiling on the loan under the scheme is ₹1.00 crore.
(ii) The rate of subsidy is 15% for all units of micro and small enterprises up to loan ceiling at Sr. No. (i)
above
(iii) Calculation of admissible subsidy will be done with reference to the purchase price of plant and machinery
instead of term loan disbursed to the beneficiary unit.
54.
COVID19 measures for PSL
i. TLTRO 2.0 scheme (press release 2019-2020/2237 dated April 17, 2020)

Banks were allowed to exclude the face value of such securities kept in the HTM category from
computation of adjusted net bank credit (ANBC) for the purpose of determining priority sector
targets/sub-targets. This exemption is only applicable to the funds availed under TLTRO 2.0.

ii. In terms of press release 2019-2020/2276 dated April 27, 2020, the face value of securities acquired
under the SLF-MF and kept in the HTM category will not be reckoned for computation of adjusted net
bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets.

iii. The regulatory benefits announced under the SLF-MF scheme will be extended to all banks, irrespective
of whether they avail funding from the Reserve Bank or deploy their own resources under the above-
mentioned scheme and the same can be reckoned for computation of adjusted net bank credit (ANBC)
for the purpose of determining priority sector targets/sub-targets. (press release 2019-2020/2294 dated
April 30, 2020)

iv. An on-tap liquidity window of ₹50,000 crore with tenors of up to three years at the repo rate till
March 31, 2022 has been opened to boost provision of immediate liquidity for ramping up COVID-
related healthcare infrastructure and services in the country. Banks are expected to create a COVID loan
book under the scheme. These loans will continue to be classified under priority sector till repayment or
maturity, whichever is earlier. Banks may deliver these loans to borrowers directly or through
intermediary financial entities regulated by the RBI. (press release: 2021-2022/177 dated May 7, 2021)

v. A separate liquidity window of ₹15,000 crore with tenors of up to three years at the repo rate till
March 31, 2022 has been opened for certain contact-intensive sectors i.e., hotels and restaurants;
tourism - travel agents, tour operators and adventure/heritage facilities; aviation ancillary services -
ground handling and supply chain; and other services that include private bus operators, car repair
services, rent-a-car service providers, event/conference organisers, spa clinics, and beauty
parlours/saloons. Banks are expected to create a separate COVID loan book under the scheme. Banks
desirous of deploying their own resources without availing funds from the RBI under the scheme for
lending to the specified segments mentioned above will also be eligible for this incentive. (press release:
2021-2022/323 dated June 4, 2021)

उत्कर्ष -2023
@
Back to Index 143 | P a g e
J. CREDIT GUARANTEE/ INTEREST SUBSIDY SCHEME FOR EDUCATION LOAN
Particular PADHO PRADESH Dr. Ambedkar Scheme of Interest Subsidy
(Interest Subsidy for Overseas Studies for Students of on Educational Loans for Overseas Study
Minority Community) for OBC & EBC
Effective From Loan sanctioned and disbursed from 2013-14 01.10.2017
onwards will only be eligible for interest subsidy
Eligibility The interest subsidy under the scheme shall be Secured admission in the approved courses at
available to the eligible students only once, either Masters, M.Phil or Ph.D. levels abroad for the
for Masters or Ph.D levels. (Overseas Study) courses listed. (Overseas Study)
Income Criteria Total income from all sources of the employed For OBC and EBC candidates total
candidate or his/ her parents/ guardians in case of income f rom all sources of the employed
unemployed candidate shall not exceed ₹6.00 candidate or his/her parents /guardians in
Lakh per annum.
case of unemployed candidate shall not
exceed ₹8 lakh per annum for education
*Scheme stands discontinued from 2022-23.
(The existing beneficiaries as on 31-03-2022 will continue loans sanctioned on or after 01.07.2020
to receive the interest subsidy during the moratorium to 31.03.2021
For education loan sanctioned from
period of the loan, subject to the compliance with the
extant guidelines) 01.04.2021, Parental income is revised
to ₹ 5.00 Lakh p.a. for EBC candidates.
Eligible loan component admissible for interest subsidy will be max : ₹ 20 Lakh (For both scheme)
Nodal Agency CANARA BANK , Nodal bank for Ministry of CANARA BANK , Nodal bank for Ministry of
Minority Affairs Social Justice and Empowerment
Other ▪ At least 35% seats (for subsidy) will be ▪ Minimum of 50% amount will be earmarked
earmarked for girl students. for Interest Subsidy to the girl candidates.
▪ Member banks to ensure 100 % Aadhaar ▪ Aadhar no. and Email id of Student is
seeding/authentication for the student mandatory for lodgment of claims
beneficiaries. under said scheme
Finacle menu for ▪ EDULOANM ▪ EDULOANM
capturing details ▪ Category code : “PPS” ▪ For servicing the interest during the
▪ Aadhar No. & Email ID of Student is moratorium period in Education Loans,
mandatory f or lodgment of claims under the menu option is : HLASPAY
said scheme. Hence, Aadhar Number in
CBS Menu Option “UIDNUM” and Email
ID of Student in “CRM” should be updated
Ref. Circular (RBD-A) 133/2022 Dt.08.12.2022 73/2019 Dt.01.11.2019, 93/2020 Dt.09.09.20

Particular CREDIT GUARANTEE FUND CREDIT GUARANTEE FUND CENTRAL SECTOR INTERES T
SCHEME FOR EDUCATION SCHEME FOR SKILL SUBSIDY SCHEME (CSIS), 2009
LOANS (CGFSEL) DEVELOPMENT (CGFSSD) for Economically Weaker Sections
Students
GOI Notification 16.09.2015 20.11.2015 02.07.2010 (IBA Letter)
2009-10 starting from 1 st April, 2009
Effective From 16.09.2015 15.07.2015 and subsequent years, revised
guidelines effective from 01.04.2018
Up to₹7.50 Lakh Min:₹5000/- Subsidy is available on loan up to
Loan Amount Maximum:₹150000/- ₹7.50 Lakh irrespective of loan
sanctioned (w.e.f. 01.04.2018)
Moratorium As per general Loan Course Duration
Up to 1 Year: 6 Months Course Period plus one year.
Period
Above 1 Year:12 Months
Guarantee Annual Guarantee Fee (AGF) of 0.125% per calendar quarter (i.e.
Fee 0.50% on outstanding loan 0.50% p.a.) on the quarter end N.A.
amount O/s portfolio balance (skill loans)
CANARA BANK , Nodal bank for
Nodal Agency NCGTC NCGTC
Ministry of HRD
12 months from the date of commencement of guarantee cover or end The Subsidy shall be provided for
Lock in Period
of period of moratorium of interest, whichever is later moratorium period only i.e. Course
Extent of the duration plus one year or six months
75% of the amount in default
Guarantee after getting job, whichever is earlier

उत्कर्ष -2023
@
Back to Index 144 | P a g e
 Guarantee fee shall be paid Guarantee fee shall be paid With parental income upper limit of ₹
upfront to the Fund within 30 within 16 days from the end of the 4.50 Lakh per year
Other days from the date of Credit calendar quarter
Guarantee Demand Advice Note
(CGDAN) of guarantee fee
Finacle menu EDULOANM EDULOANM EDULOANM
Ref. Circular RBD (A):19/2016 Dt.31.03.2016 RBD (A):36/2016 Dt.13.06.2016 RBD (A):72/2019 Dt.01.11.2019
Particular Credit Risk Guarantee Fund Trust for Low Income Housing in Urban Areas
(CRGFTLIH)
Loan Amount Subsidy is available on loan up to ₹8.00 Lakh w.e.f. 24.06.2012
House Hold
EWS: Upto ₹1.00 Lakh, LIG: Upto ₹2.00 Lakh
Annual Income
• Loan up to ₹2 Lakh: 90% of the Amount in Default
Guarantee Cover
• Limit above ₹2 lakh and up to₹8 lakh : 85% of the Amount in Default
Nodal Agency NHB (Ministry : MoHUPA)
Lock in Period 24 Months or Within 2 months after the completion of the house, whichever is later
Guarantee Fee One-time guarantee fee at the rate of 1.00% of the sanctioned loan amount
• The maximum Tenor of the Home Loans eligible for cover will be 25 years
• Carpet area of the Housing unit is up to 430 sqft (40 sqm) and the Bank has not obtained
Other any collateral security and/or Third Party Guarantee
• within 30 days from the date of first disbursement of housing loan or 30 days from the date
of Demand Advice of guarantee fee whichever is later or such date as specified by the Trust
Ref. Circular RAD 81/2016 dated 23.09.2016

उत्कर्ष -2023
@
Back to Index 145 | P a g e
K. PMAY : Credit Linked Subsidy Scheme for EWS/LIG Grpup
Criteria EWS LIG
Schemes 1.PM Awas Yojana Urban (PMAY-U) 2. PM Awas Yojana Gramin (PMAY-G)
Maximum Household Income per Up to ₹3.00 Lakh Above ₹3 Lakh to ₹6 Lakh
annum
Maximum carpet Area of house 30 Sq. Mtr 60 Sq. Mtr
Max- Loan Amount ₹30.00 Lakh
Max- Loan eligible for subsidy ₹6.00 Lakh
Maximum tenor of loan 20 Years (on which subsidy will be calculated)
Nodal Agency HUDCO and NHB
Maximum Subsidy Amount Payable ₹2.68 lakh
Subsidy Percentage (%) 6.50%
(NPV of the interest subsidy will be calculated at a discount rate of 9%)
Components 4 major components:
1. In-Situ Redevelopment of slums using land as a resource 2.Credit Linked
Subsidy 3. Affordable Housing in Partnership (AHP) 4. Enhancement and
construction of beneficiary led house (Assistance ₹1.50 Lakh)
Other • The scheme is also linked with other schemes like: Swachh Bharat
Abhiyan , Saubhagya Yojana , Ujjwala Yojana , Accessibility of pure
drinking water, PMJD
• Mission with all its component has become effective from the date
17.06.2015 and will be implemented upto 31.03.2022 (For
EWS/LIG)
Finacle menu for capturing details to claim subsidy: ADPMAY
Ref. Circular RBD (A) : 69/2019 Dt.01.10.2019 , 51/2020 dt.26.05.2020

उत्कर्ष -2023
@
Back to Index 146 | P a g e
L. Insolvency and Bankruptcy Board
1. Headquarters of IBBI (Insolvency & Bankruptcy Board of India) New Delhi
2. Chairman of IBBI (Insolvency & Bankruptcy Board of India) Ravi Mittal
3. The IBC brings a paradigm shift from ‘debtors’ in possession to ‘creditors in control’, ₹1.00 Crore
creates time bound processes for insolvency resolution of companies and individuals. It
moves from “Erosion of Net-Worth” to “Payment Default”. The minimum default amount
to initiate the procedure is __in case of company and ₹1000/- in case of Individual and
Partnership Firms.
4. IBC-2016: An Insolvency Professional shall make a Public Announcement of his 3 Days
appointment within ____ days of his appointment
5. Appeal against the order of The National Company Law Tribunal (NCLT) can be filed within 30 Days
__days of such order.
6. Under IBC: National Company Law Tribunal (NCLT) – to deal with Corporate Persons (including LLP). Debt
Recovery Tribunal (DRT) – to deal with Individuals and Partnership Firms.
7. TOTAL TIME FOR RESOLUTION
Insolvency and Bankruptcy Code (IBC) (Amendment) Bill, 2019 provides _______ day
330 Days
timeline (Earlier, the timeline was 270 days) for insolvency resolution process and specifies
minimum payouts to operational creditors in any resolution plan.
8. Resolution Plan (RP) will be required to be implemented where aggregate exposure of the
₹ 2000 Cr &
lenders is ₹_______ w.e.f. 07.06.2019 (reference date). Reference date is 01.01.2020 for
above
loans ₹1500 cr. and above
9. Resolution Plan (RP) shall be implemented within days from reference date
(if in default on reference date) and within days from the date first 180 Days
such default. It can be extended for another 90 days i.e. upto 270 days.
10. A plan is considered to be approved where consent of ______ of creditors by value is
66 %
obtained
11. If Resolution Plan (RP) is not implemented as per the above time line, lenders shall file
15 Days
insolvency application, singly or jointly, within days from the expiry of the said timeline.
12. Companies with assets worth at least ₹500 Crore can be taken for debt resolution NBFCs and
&liquidation proceedings under the provisions of the IBC, 2016. HFCs
13. Tribunal which has ruled that in the matter of collective investment schemes the overriding
NCLT
nature of Indian Bankruptcy Code (IBC) may prevail over the SEBI Act
14. Insolvency Regulator which has ruled that the Resolution Professionals cannot take up
IBBI
insolvency assignments once they have attained the age of 70 years
15. The Centre has taken the next step in insolvency reforms by bringing personal guarantors
December 1,
to corporate debtors within the fold of the Insolvency and Bankruptcy Code (IBC) from
2019
_______
16. The IBC, 2016 rests on four pillars, viz., Insolvency Professionals;________; Adjudicating Information
Authorities (NCLT and DRT); and IBBI Utilities
17. Resolution Plan(RP) involving restructuring in respect of accounts where the aggregate
exposure of lenders is ₹ 1 billion and above, shall require one independent credit
evaluation (ICE) of the residual debt. While accounts with aggregate exposure of ₹ 5
billion and above shall require two such ICEs, others shall require one ICE. Only such RP4 or better
RPs which receive a credit opinion of ______for the residual debt, shall be considered for
implementation.

उत्कर्ष -2023
@
Back to Index 147 | P a g e
18. As per Section 215 of IBC, 2016, “a financial creditor shall submit financial information and
information relating to assets in relation to which any security interest has been created to
Information Utility”.
19. _____ are entities, registered under IBC, which act as a repository of legal evidence Information
holding the authenticated information pertaining to any debt/claim to produce in any court Utilities (IUs)
of law
20. _____ is first such Information Utility, registered with Insolvency and Bankruptcy Board
NeSL
of India (IBBI) as the first IU under the IBBI (IUs) Regulations, 2017
21. Submission of financial information to NeSL, a registered Information utility is a statutory
obligation. There are penal provisions under the IBC Code and non compliance of the
₹200 lakh
same by Bank will attract penalty which shall not be less than ₹1 lakh, which may extend
upto ___
22. 10% of outstanding principal and capitalized interest is paid.
Standard accounts classified as NPA and NPA accounts retained in the same category on
restructuring by the lenders may be upgraded only when all the outstanding loan / facilities
in the account demonstrate ‘satisfactory performance’ during the period from the date
of implementation of RP up to the date by which at least 10 per cent of the sum of Satisfactory
outstanding principal debt as per the RP and interest capitalisation sanctioned as part of Performance
the restructuring, if any, is repaid (‘monitoring period’).
Provided that the account cannot be upgraded before one year from the commencement
of the first payment of interest or principal (whichever is later) on the credit facility with
longest period of moratorium under the terms of RP
23. Lenders shall undertake a prima facie review of the borrower account within 30 days
from such default. This Period is known as _________. Within this period, lenders may
Review Period
decide on the resolution strategy, including the nature of the RP, the approach for
implementation of the RP, etc.
24. period from the date of implementation of RP up to the date by which at least 20% of
Specified
the sum of outstanding principal debt as per the RP and interest capitalisation sanctioned
Period
as part of the restructuring, if any, is repaid
25. In case the implementation of resolution is delayed beyond 180 days, lenders must
20%
undertake an additional provisioning of _____of total outstanding
26. If implementation is delayed beyond 365 days from the end of the review period, an
additional provision of _____ is to be made of the total outstanding (i.e. total additional 15%
provisioning of 35%).
27. These additional provisions can be reversed if:
The resolution plan involves payment of overdue by the borrower. Then only if there is no additional
default for a period of six months from the date of clearing of overdue.
If the plan involves restructuring change in ownership outside IBC then upon its implementation.
If plan is pursued under IBC, then 50% when the application is filed under IBC and the balance when the
application is admitted.
28. The banks can feed default information in the IU and seek electronic evidence in the form of a Record of
Default, as issued by the IU, for pursuing petitions under any legal forum. This will eliminate the arduous
steps of providing the claim of debt by a creditor and assist in speedier resolution.
29. Waterfall Mechanism (Priority in Liquidation):
i. Liquidation Cost
ii. Dues of Secured creditors and Workman dues of 24 months
iii. wages and any unpaid dues owed to employees other than workmen for the period of twelve
months preceding the liquidation commencement date

उत्कर्ष -2023
@
Back to Index 148 | P a g e
 iv. other unsecured financial creditors
v. Central & State Govt. Dues to be received on account of the Consolidated Fund of India and the
Consolidated Fund of a State, if any, in respect of the whole or any part of the period of two years
preceding the liquidation commencement date and debts owed to a secured creditor for any
amount unpaid following the enforcement of security interest
vi. any remaining debts and dues
vii. preference shareholders
viii. equity shareholders or partners, as the case may be

Pre-Packaged Insolvency Resolution Process (PPIRP)

A sub-committee of ILC was constituted by Ministry of Corporate Affairs vide order dated 24-4-2020, under
Chairmanship of Dr. M S Sahoo, Chairperson of IBBI. Sub-committee to study pre-packaged Insolvency Resolution
Process (PPIRP) for speedier resolution of insolvency, and submit their recommendations.

1. The Insolvency and Bankruptcy Code (Amendment) Act, 2021 has notified through 12.08.2021
gazette notification on______. After commencement of the said Amendment Act, 2021,
2. The PPIRP applies only to _____which are corporates (Company or LLP or body MSME
corporate with limited liability)
3. PPIRP process commences only after (a) at least ____ of financial creditors approval
proposal for PPIRP and approve name of Resolution Professional (b) Corporate debtor 66%
passes special resolution on 75% of members approve (c) Corporate Debtor prepares a
Base Resolution Plan (d) Name of Resolution Professional has been approved by
Financial Creditors and Corporate Debtors (e) Draft information memorandum is
prepared
4. Minimum default amount ₹10.00 Lakh
5. CIRP cannot be initiated by a financial creditor or an operational creditor of a corporate Pre-Packaged
debtor which is undergoing a ____insolvency resolution process
6. ______is required to prepare base resolution plan and submit to Financial Creditors Corporate
before they agree to commence PPIRP Debtor
7. Fees of resolution professional are to be borne by resolution applicant if PPIRP not filed by corporate debtor or is
rejected by AA, for which a separate bank account is required to be opened
8. After special resolution and approval of at least 66% of creditors, application shall be
filed with Adjudicating Authority (AA) (NCLT) by corporate applicant in _____as Form-1
prescribed in PPIRP Rules, with required annexures
9. PPIRP gets priority if application filed before application for CIRP of application filed
14 Days
within ______of filing application for CIRP
10. PPIRP cannot be filed if _____already commenced against corporate debtor CIRP
11. On admission of PPIRP, AA shall declare moratorium, appoint Resolution Professional and order public
announcement
12. After order of AA, resolution plan should be submitted within 90 days (otherwise PPIRP
120 Days
terminates) and entire PPIRP process should be completed within _____
13. CoC should be constituted in _____ 7 Days
14. The resolution professional shall finalise the information memorandum with details under
14 Days
regulation 40(2) and submit to members of the committee within ______

उत्कर्ष -2023
@
Back to Index 149 | P a g e
15. CoC can resolve to vest management of corporate debtor with RP with _____voting,
66%
approval of AA is required
16. _______to be submitted to CoC –It can be revised and improved Base Resolution
Plan
17. Scoring and improvement of resolution plans will be done as per Regulation 48 of IBBI
Swiss Challenge
(PPIRP) Regulations, 2021
18. CoC will approve a resolution plan with best score with minimum 66% voting.
CoC
Termination of PPIRP if resolution plan not approved by _____
19. Approval of resolution plan by _____ AA
20. Difference between CIRP and PPIRP
Corporate Insolvency Resolution Process Pre-Packaged Insolvency Resolution Process
(CIRP) (PPIRP)
Applicable to any Corporate Debtor Applicable only to Corporate Debtor which is
MSME
Priority to CIRP only if CIRP already PPIRP gets priority if application filed before CIRP
commenced or filed within 14 days of filing of CIRP
Minimum default – ₹ 1.00 Crore Minimum default – ₹ 10.00 lakh
No preliminary work before filing application to Preliminary work before filing application to AA (NCLT
NCLT by financial creditor or operational –
creditor. a. Special Resolution
Corporate debtor has to only pass special b. Approval of at least 66% Financial Creditors
resolution. c. Name of Resolution Professional
d. Base Resolution Plan by Corporate Debtor
e. Other prescribed information
f. Report by Resolution Professional
Following persons can initiate CIRP – Only corporate applicant (normally corporate debtor
a. a financial creditor itself or its promoters/directors) can initiate PPIRP
b. an operational creditor or [section 54C(1)]
c. the corporate debtor itself or its promoters
Admission or rejection of application by AA Admission or rejection of application by AA
Time limit for completion of CIRP – 180 days Time limit for completion of PPIRP 120 days
(maximum 330 days) [section 12] [section 54D]
Management of corporate debtor vests with Management of corporate debtor continues with
IRP on insolvency commencement date Corporate Debtor unless fraud involved [section
54H] CoC can resolve to vest management with
Resolution Professional
Claims and proof of claims to be submitted to Claims and proof of claims to be submitted to RP
IRP
Constitution of Committee of Creditors within Constitution of Committee of Creditors within 7 days
30 days
Resolution Professional appointed in first Resolution Professional already appointed under
meeting of CoC section 54A before making application to AA, which is
to be only confirmed by AA under section 54E
Preparation of information memorandum by Preparation of information memorandum by
resolution professional [section 29(1)] corporate debtor and finalization by RP [section
54G]
No provision for Base Resolution Plan by Corporate debtor may improve Base Resolution Plan

उत्कर्ष -2023
@
Back to Index 150 | P a g e
 Corporate Debtor and CoC may approve the same (may be with
improvements), if it does not impair operational
creditors
No specific provision for Swiss challenge Introduction of concept of Swiss Challenge to get
though no prohibition either best possible resolution plan
Liquidation to commence if Resolution plan AA can order liquidation
rejected
Appeal can be filed before NCLAT against order of AA
21. Swiss challenge method to get best possible resolution plan
A ‘Swiss challenge’ is a method where a bid is published and third parties are invited to match or better it.
This system has been specifically provided in PPIRP regulations.
A Swiss challenge is a method of bidding, in which an interested party initiates a proposal for a contract or
the bid for a project. The details of the project are out in the public and invites proposals from others
interested in executing it. On the receipt of these bids, the original contractor gets an opportunity to match
the best bid.
For bank’s guidelines refer: SASTRA DIVISION CIRCULAR NO. 21/2022 dated 20.04.2022

M. Current Benchmark Rate

Benchmark Rate W.e.f.
RLLR* 8.65%
1 Year MCLR 8.10%
3 Year MCLR 8.40%
1 Month MCLR 7.50% 01.12.2022
3 Month MCLR 7.60%
6 Month MCLR 7.80%
Overnight MCLR 7.45%
Base Rate 8.80% 01.10.2022
BPLR 14.00% 01.05.2012

*Calculation of RLLR
Repo Rate+Markup+BSP
• Repo Rate : 5.90% w.e.f. 30.09.2022
• Mark up : 2.50% w.e.f. 08.11.2021
• Business Strategic Premium(BSP) : 0.25% w.e.f. 17.09.2021

RLLR (Repo Linked Lending Rate)

▪ Introduced in August 2019
Applicability :
▪ All new Floating Rate Personal or Retail Loans
▪ Floating Rate Loans to Micro, Small & Medium Enterprises (MSMEs) including Food & Agro processing units.
Component of RLLR :
▪ Repo Rate+ Mark up
W.e.f. 17.09.2021, one more component “Business Strategic Premium” (BSP) has been added ,to calculate RLLR
. BSP (0.25%) to be added while calculating RLLR (L&A 139/2021)
Accordingly Component of RLLR is as under :
Repo Rate + Markup + BSP
Markup :
▪ Initially mark up was set 2.65 % .

उत्कर्ष -2023
@
Back to Index 151 | P a g e
 ▪ From 1st September 2020 it was changed to 2.80%
▪ From 17th September 2021 it was changed to 2.55%+ 0.25% BSP
▪ From 8th November 2021 it was changed to 2.50% + 0.25% BSP
▪ Since then Markup has been same.
BSP : 0.25 %
Reset of RLLR :
▪ In case of change in repo rate by the RBI, the repo rate linked rate (RLLR) will be changed from the first
day of the following month. (L&A 139/2020)

▪ For all loans linked with RLLR sanctioned on or after 07.05.2022, in case of change in Repo Rate by RBI,
the RLLR will be changed from the next working day. (L&A 66/2022)

Reset of Markup component of RLLR :

▪ The Mark-up component linked with RLLR for all floating rate personal or Retail loans (housing, auto etc.)
and floating rate loans to Micro Small and Medium Enterprise shall be reset every 3 years from the date of
opening of the account.

Spread over RLLR :

▪ This component belongs to Credit Risk Premium.

▪ Actual lending rates on floating rate advances will be determined by adding the components of spread
to the RLLR.

▪ The final rate of interest charged to a customer should include RLLR and spread over it.

Example : Minimum ROI on Personal Loan is -

RLLR+BSP+2.15
Here 2.15 % is Spread.

▪ Spread percentage is based on Risk Profile

▪ Few factors which determined Risk Profile of Customer are as under :

➢ Government Employee/Private Employee

➢ Individual/Corporate/Women

➢ Salaried/Non Salaried

➢ Customer/Non Customer

➢ CIC Score

➢ Repayment mode(Check of Facility/ Standing Instruction) .

Following Credit Facilities are not covered under RLLR Benchmark :

• Loans covered by schemes specially formulated by Government of India wherein bank has to charge interest
rates as per scheme.

• Working Capital Term Loan (WCTL), Funded Interest Term Loan (FITL) etc. granted as part of the
rectification /restructuring package.

• Loans granted under various refinance schemes formulated by Government of India or any Government
Undertakings wherein bank charges interest at the rates prescribed under the schemes to the extent
refinance is available, interest rate charged on the part not covered under refinance shall adhere to RBLR
guidelines.

• Advances to banks’ depositors against their own deposits.

उत्कर्ष -2023
@
Back to Index 152 | P a g e
• Advances to staff members under staff scheme.

• Advances to Chief Executive Officer / Whole Time Directors.

• Loans linked to other market determined external benchmark.

• Loan sanctioned on Fixed rate of Interest of tenor above three years.

Marginal Cost of Funds Based Lending Rate (MCLR)

• All rupee loans (other than linked with RLLR) are priced with reference to the MCLR.

• MCLR is reviewed on monthly basis and in the last week of every month reviewed rates are
published/circulated, which are applicable to all new loans and credit facilities sanctioned/renewed from the
1st of the following month.

• The periodicity of the reset under MCLR shall correspond to the tenor/maturity of the MCLR to which the loan
is linked.

• There are 6 types of tenor based MCLR.

• Pegging frequency is to be entered for revision (Frequency) for Rate of Interest.

• Fixed rate loan can not be less than MCLR for the respective period

• Fixed rate is a loan where interest rates are fixed for entire tenure of the loan.

• Loan under fixed option at MCLR, shall be sanctioned with repayment period of above 3 years only.

• The rate of interest under fixed rate option shall be reviewed and re-set by the Bank after each block period
of 3 years.

• Spread is applicable on MCLR also.

N. Contactless Loans through online portal (www.psbloansin59minutes.com)

MUDRA Upto ₹10.00 lac in less than an hour

MSME From ₹ 10 lac to ₹ 5 crores

Retail: Home Loan Upto ₹10 crores within 15 minutes

Personal Loan Up to ₹20 lac within 15 minutes

Auto Loan Up to ₹1 crore within 15 minutes

उत्कर्ष -2023
@
Back to Index 153 | P a g e
O. Various Cut Off Limits
S. N. Particulars Amount (Exposure)
1. Agencies For Specialized Monitoring (ASMs) > ₹250.00 Crore

2. NBG-II (headed by MD & CEO) : Total exposure of above ____ >₹200.00 Crore
NBG-I (Headed by Senior Most ED): Total exposure of above ______ >₹50 crore & upto
3.
₹200 crore

4. Super Scorer

5. Dynamic Risk Review (DRR) (For Listed Companies: irrespective of limits) >₹50.00 Crore
6. PERT Chart alongwith QMS (In case of standalone NFB/Term loan)
7. Second Valuation of P&M, if WDV of P&M

8. Central Economic Intelligence Bureau (CEIB)

₹50.00 Crore & above
9. Red Flagged Account (from Banking System)

10. Forensic Audit (from Banking System)

11. Request for issuance of LOCs (Look Out Circulars) (from Banking System)
12. TEV Study for Expansion in existing activity (Cost of Project) >₹40.00 Crore
13. Quarterly Information System (QMS) Submission >₹30.00 Crore

14. External Risk Rating Exemption

Upto ₹25.00 Crore
15. Green Renewal
16. Due Diligence Report by Professionals for Corporate Borrowers under Sole Banking
₹20.00 Crore & above
(Under consortium / multiple banking arrangements: Irrespective of Limits)

17. TEV Study (Fresh Project/ Existing Account – Project involving change / diversification
>₹20.00 Crore
from existing core activity)
18. Conducting LRM/Credit Audit for Standard Account ₹10.00 Crore & above

19. Regulatory Retail Portfolio (In terms of Basel)- Small Business means:
✓ Total average annual turnover is < ₹50.00 crore
✓ The maximum aggregated retail exposure to one counterpart
Upto ₹7.50 crore
20. MPBF / 2nd Method of Lending/ Tondon Committee Method - WC limit
>₹5.00 Crore
21. Second Valuation of Property, if realizable value of immovable property is

22. Legal Audit of Title Documents in Large Value of Account

23. Quarterly Information System (QIS)- Fund Based WC Limit
24. Stock Audit (FB & NFB WC Limit)
25. Legal Entity Identifier (LEI)

26. RAROC (FB & NFB Limit) ₹5.00 Crore & above
(For those corporate where rate of interest / commission is linked to risk rating of the borrower and
borrower is requesting concessions on card rate of the bank)
27. CRILC (Exposure from the concerned bank)
28. NON CO-OPERATIVE BORROWER (FB and NFB WC Limit)
(Exposure from the concerned bank)

29. Turnover Method/Nayak Committee Method - WC limit Upto ₹5.00 Crore

30. Vetting of Loan Documents
₹2.00 Crore & above
31. Review of Standalone term Loan (Except Retail)
32. Commitment Charges

33. Rating under PNB Trac/ PNB SAJAG >₹ 1.00 Crore
34. Submission of Annual Accounts audited by Chartered Accountants

उत्कर्ष -2023
@
Back to Index 154 | P a g e
35. Conducting LRM/ Credit Audit in case of Takeover account
₹1.00 Crore & above
36. Two Legal Opinion/NEC
37. Obtaintion of Passport Detail >₹50.00 Lakh
38. Two CIR: Commercial ₹50.00 Lakh and above
39. Identification of Wilful Defaulter (Amount outstanding) >₹25.00 Lakh
40. Benchmark Ratio - Applicability >₹20.00 Lakh
41. Two CIR: Consumer i.e. Individual ₹10.00 Lakh and above
42. e-Renewal
Upto ₹10.00 Lakh
43. Mandatory Coverage under CGTMSE/CGFMU

44. Mandatory Coverage under CGFSEL Upto ₹7.50 lakh

45. Reporting under CFR (Central Fraud Registry) ₹1.00 Lakh and above
46. Accepting OTS under Special OTS (Outstanding as on 31.03.2021) Upto ₹5.00 crore
47. Accepting OTS under Special OTS for Agriculture NPA under DB -II
Upto ₹10.00 Lakh
(Outstanding as on 31.03.2021)

48. InterSol Cash txn against Self drawn cheque in SB Account /Current Account Upto ₹5.00 Lakh
rd
49. InterSol 3 Party Cash withdrawal txn in SB Account Upto ₹50,000/-
50. InterSol 3rd Party Cash withdrawal txn in Current Account
Upto ₹1.00 Lakh
51. Debit Transfer at remote SOL in SB Account

52. Debit Transfer at remote SOL in Current Account Upto ₹2.00 Lakh
53. E-way Bill for Inter-State movement of Goods >₹50,000/-
54. Submission of Stock Statement:
In case the limit is sanctioned against hypothecation of Debtors/Book Debt only, verification of Book Debts statement by
a Chartered Accountant should be obtained mandatorily as under:
❖ Limits upto ₹50.00 Lakh: Quarterly basis
❖ Limits above ₹50.00 Cr: Monthly basis
55. Submission of CA certified Book Debts:
In case the limit is sanctioned against hypothecation of Debtors/Book Debt only, verification of Book Debts statement by
a Chartered Accountant should be obtained mandatorily as under:
❖ Limits upto ₹2.00 Cr: Half–Yearly basis
❖ Limits above ₹2..00 Cr-Quarterly basis

उत्कर्ष -2023
@
Back to Index 155 | P a g e
P. NGist of Various Campaigns

S.No. Campaign Duration Subject Purpose

Name

1 PNB One for Apr 2022- MAR PNB One The primary focus of this campaign is to drive
Everyone 2023 digital awareness to far flunged areas, bring
(DBD 23/2022) new customers on the digital fold of the bank,
educate the existing customers about the
ease of transacting digitally and encourage
them to use Banks Digital Platforms for their
regular banking requirements.

2 SAMPATTI 14 Oct- 21 Dec DEMAT Accounts To garner maximum Demat & Trading
(CAD 2022 Business accounts ,
117/2022)

3 UNNATI PLUS 14 Oct – 21Dec Mutual Funds Business To increase AUM (Asset under Management)
(CAD 2022 under Mutual Fund business and also to
116/2022) increase the fee-based income of the bank

4 NRI Deposits 15 Nov-13 Jan 2023 Opening of To garner NRI deposits and build a
(IBD 72/2022) NRE/NRO/FCNR momentum to increase the NRI deposits
Accounts especially FCNR and NRE deposits.

5 WAR AGAINST 16 Nov - 31st Dec • Recovery in Housing To visit the IPs mortgaged in Housing Loan &
NPA 2022. & Mortgage NPA Mortgage Loan classified as NPA and to
(SASTRA accounts. increase the pace of recovery in the NPA
65/2022) • Agriculture NPA portfolio of Housing Loan & Mortgage Loan as
accounts upto ₹5 cr on 30.09.2022.
• NPA accounts upto
₹10 lakhs excluding
Housing, Mortgage &
Agriculture NPA
accounts

6 DUS KADAM 1 Nov - 31st of Dec 10 marks in PNB UNIV To promote “E- Learning” culture and to avoid
(LKMC 2022 late hour rush which usually occurs during
08/2022) promotion process at the end of the financial
year.

7 INSURANCE 14 Oct- 21 Dec Life Insurance , Health To achieve the budgets for the current quarter
CAMPAIGNs 2022 Insurance, General and Financial Year.
(CAD Insurance
119/2022)

8 NAYI DISHAA 10 Oct- 31 Dec PNB SWARNIM- To have a focused approach on Agriculture
(Agriculture Div 2022 Agriculture Gold Loan Gold Loan and also to simplify lending under
56/2022) Scheme the segment

9 PNB FESTIVAL 01 Oct- 31 MAR Full waiver of Upfront/ To accelerate ‘Retail Credit’ growth of Bank
BONANZA 2023 Processing Fees and and to encash the opportunities emerged in
(RAD Documentation Charges the market
116/2022) on Home Loan and Car
Loan

उत्कर्ष -2023
@
Back to Index 156 | P a g e
10 PNB Home Loan 01 Dec- 22 -JAN. Appreciation cum Acquiring long lasting new relationships.
Campaign FY 2023 Recognition Certificate Fresh home loan leads sourced, sanctioned,
2022-23 & Trophy and disbursed shall be considered for result
(131/2022) declaration during the campaign period .
Target under campaign- ₹10,000/- crore

11 Pnbone Zone 07 Nov- 16 Dec Tournament “PNB One To Boost PNB One Activation
Premier League 2022 Zone Premier League
(ZPL) (ZPL)” is for all zones
(DBTD 74/2022)

12 2x PNB One 16 Jul 2022-31 Mar Each staff member To register 5.6 crore customers on PNB ONE
(DBTD 58/2022) 2023 posted at GBB branches by March’2023
to register and activate
2 customers on PNB
One on daily basis.

उत्कर्ष -2023
@
Back to Index 157 | P a g e
Q. IMPORTANT FINACLE MENUS
Saving / Current Account
Menu used by branch for Opening of CA/SF Account through Back Office BOCUSTCO
Issuance of Personalized Cheque Book CBSCHQBK
Destroy Cheque Book CHBD
Deposit Education and Awareness Fund Claim DEAFC
New Mini Deposit Scheme -Opening of Account MDNOAAC
Transfer of Saving/ Current Account to Operative Category OPACTF
Deposit Cash PCASHDEP
Increase in Threshold Limit THRESHLD
Account Balance Inquiry HACCBAL
Interest Run for Account HACINT
Account Ledger Inquiry HACLI/ HACLINQ
Modification After Verification HACM
Account Closure HCAAC
Charges Collection HCACC
Change CIF ID of Account HCCA
Cheque Book Maintenance HCHBM
Current Accounts of Customer HCUCA
Saving Accounts of Customer HCUSB
Summary Details of a Customer HCUSUM
Issuance of non- Personalized Cheque Book HICHB
Opening of Current Account HOAACCA
Modification of Current Account before Verification HOAACMCA
Modification of Saving Account before Verification HOAACMSB
Opening of Savings Account HOAACSB
Verification of Current Account HOAACVCA
Verification of Saving Account HOAACVSB
Printing of Passbook HPBP
Passbook Print Reset HPBPR
Printing Statement of Account HPSP
Stop Payment of Cheque HSPP
Revoke Stop Payment HSPP
Verification Of Stop Payment HSPPAU
Transaction Maintenance HTM
Update Cheque Status HUCS
Demand Draft
Cancellation of DD HDDC
Issuance of Duplicate DD HDDD
DD credit account inquiry HDDIC
DD debit account inquiry HDDID
Marking of DD lost HDDLOST
Printing of all DDs HDDPALL
Printing of single DD HDDPRNT
Reprinting of DD HDDRPRNT
DD Status Maintenance HDDSM
Issuance of Draft HTM

उत्कर्ष -2023
@
Back to Index 158 | P a g e
 Inventory Management
Inventory Movement Authorization Maintenance HIMAUM
Inventory Movement Between Locations HIMC
Inquire & Split Inventory (Own Location) HISAI
Inquire & Split Inventory (All Location) HISIA
Inquire & Merge Inventory (Own Location) HIMAI
Inquire & Merge Inventory (All Location) HIMIA
Inventory Status Report (All Location) HISRA
Inventory Inquiry All HIIA
Miscellaneous
BC Cheque Collection Branch BCCHQCOL
CIF CREATION BIO-METRIC CCBM
Transfer of CIF (Menu to be executed by Transferee Branch) CIFTRF
Credit Rate Management System CRMS
Suspend CIF ID CUMMSUSP
To capture GST details of Customer CUSTGST
Customer Search CUSTSRCH
CUSTOMER ID STATUS CUSTSTAT
Finacle Menu Option Help FINHELP
Mapping of Menu from Finacle 7 to Finacle 10 MENUHELP
Forwarding Schedule for ODBC entered through HOICM OSRPT
PAN Correction PANCORR
Capturing Biometric Device details for enablement of Registered Device Services
REGRD

Reports Menu Options Inquiry REPHELP

Temporary Overdraft Maintenance HACTODM
Transfer of Scheme Code of Account HACXFRSC
Transfer of Accounts between SOLs HACXFSOL
Freezing/ Unfreezing Account HAFSM
Marking/ modifying Lien HALM
Branch Table Inquiry HBRTI
Memo Pad Look Up (Add/Delete) HMEMOPAD
Verify A Memo Pad HMPAU
Outstation Instrument Collection Maintenance HOICM
Standing Instructions Inquiry HSII
Standing Instructions Maintenance HSIM
User Profile Maintenance HUPM
Term Deposits
Handling exemptions/ rebates on TDS EXMPTDS
Closure of Flexi RD FCAAC
Opening of FD in days FDACOPN
Payment of FD to Customers not maintaining Running Account FDREPAY
Statement for Flexi FD FLEXIPSP
Opening of Flexi RD FOAAC
Backdated FD Opening MIPBD
Preferential Rate Update PRFUPD
Handling 15G/15H TAXEXM
Account Balance details HACDET
Modification of FD Account after Verification HACMTD

उत्कर्ष -2023
@
Back to Index 159 | P a g e
Modification Of Term Deposit HACMTD
Account Selection HACS
Closure Of Term Deposit HCAACTD
Customer's Term Deposit A/Cs HCUTD
Deposit Modeling HDEPMOD
Printing of FDR HDRP
Duplicate Receipt of FDR HDUDRP
General Deposits Details HGDET
Modification of FD Account before Verification HOAACMTD
Opening of FD/RD Account HOAACTD
Verification of FD/RD Account HOAACVTD
Pending Installments List HPLIST
Deposit Flow Regularization HREGFLOW
Renewal History HRENHIST
TDS Refund HRFTDS
Extension of period of Term Deposit HTDEXT
Renewal of Term Deposit HTDREN
Generation of TDS Certificate HTDSIP

Alternate Delivery Channels

Request for issuance of Internet / Mobile Banking ADCREQ
Alerts registration/modification ALERTS
ATM EOD ATMEOD
BNA EOD CAATMEOD
Debit Card Related Reports CARDREP
Credit Card Application CCAPP
Credit Card Payment CCPAY
Debit Card Issuance DCARD
Debit Card Inventory Management DCARDINS
Doorstep Banking Services DSBS
Generate Application Schedule for Credit Card GENDNLD
Duplicate PIN for PMJDY Cards PINREQ
Reloading of Pre-paid Cards PPCLTM
Issuance of Prepaid cards PPISS
Surrender of Suvidha Card PPSUR
e-statement Registration UPEMAIL
Search Account details using Debit Card Details HCDM
Bulk NEFT HNFTBLK
Bulk RTGS HNRTBLK
Hotlisting of Debit Card HOTLIST
Request for NEFT/ RTGS HPORDM
NEFT/ RTGS Transaction Inquiry HUTRI
Lockers
Locker Reports LKREPM
Maintaining waitlist of lockers in CBS WAITLIST
Locker Key Maintenance HLKKM
Locker Customer Maintenance HLKCM
Locker Transactions -History Maintenance HLKCHM
Locker Rent – Charge Collection Maintenance HLKRCM

उत्कर्ष -2023
@
Back to Index 160 | P a g e
Locker Operations HLKOPS
Income/ Expenditure
Expenditure Transaction Maintenance EXTM
To Delete EXTM Number EXTMDEL
Vendor Management System VENDORM
Menu option to recover charges MCHRG
Income/ GST reversal INCREV
Non-GST Charge Calculation for Loans PNBLACHG
GST External Charges Upload CEXCUPL
Government Business
Contribution to NPS NPSCON
Sukanya Smridhi Account - Printing of Passbook PBPSSA
Printing of PPF Passbook PBPPPF
Registration of Customer for Atal Pension Yojana APYREG
Request for PMJJBY PMJJBY
Request for PMSBY PMSBY
Issuance of FasTag FTAGISS
Reloading FasTag FTAGRLD
NPS Registration HNPSREG
Cash Credit
Opening Of CC Account HOAACCC
Modification Before Verification HOAACMCC
Verification Of Account HOAACVCC
Account Modification HACM
Force Interest Run in CC Account HACINT
Closure HCAAC
Account limit History Maintenance HACLHM
Account Drawing Power Maintenance HACDPM
Fixed Assets Management System
Fixed Assets Management System FAMS
Reports related to FAMS FAMSRPT
Collateral Maintenance
Collateral Maintenance HCLM
Linkage Of Collateral HSCLM
Collateral Look Up HCLL
Modification in collateral related to Loan against Bank Deposit HLACM
Limit Node
Limit Node Maintenance HLNM
Limit Node Details HLNDI
Limit Tree Lookup HLTL
Loans
Additional Details for PM Awas Yojana ADPMAY
Education Loan Details Maintenance EDULOANM
Subsidy Claim of Education Loan EDULOANM
Concession/Relaxation in Interest Rate – MCLR Based Accounts INTCH (by ZO User)
Concession/Relaxation in Interest Rate – Non-MCLR Based Accounts INTCM (by ZO User)
Loan Demand Effective Date Change- Simple Interest LAIDC
Customer Level Relaxation in Service Charges in Loan Accounts LOANCHRG
Issuance of System Generated No Dues Certificate NDCISSUE

उत्कर्ष -2023
@
Back to Index 161 | P a g e
Account Level Relaxation in Service Charges in Loan Accounts RELAXSC
Capturing MIS for Restructured Accounts RPCVD
Handling of Subsidy TMPS
Udyam Registration Details URDM
Loan Account Modification After Opening HACMLA
Loan Demand Generation/Force Interest Run HLADGEN
Loan Demand Satisfaction Program HLADSP
Loans General Inquiry HLAGI
Loan Lien Process HLALIEN
Loan Modelling HLAMOD
Loans Overdue Position Inquiry HLAOPI
Loan Statement Print HLAPSP
Loan Interest Transfer Liability HLARA
Loan Account Rescheduling HLARA
Loan Repayment Schedule Report HLARSH
Loan Account Scheduled Payment HLASPAY
Interest Rate Modification in Loan accounts HLINTTM
Loan Account Opening HOAACLA
Inquiry on Partitioned A/c HPARTINQ
Loan Pay Off Process HPAYOFF
Inquiry on History of Partition Accounts HPHINQ
NPA
NPA Account Write-Off & Compromise Details COWO
Loans Overdue Demand Reminder/Report HLAODR
Letter Generation For Loan Account Follow-up LETGEN
Recording Charges in NPA Accounts NPACHRG
Closure of NPA Accounts NPACLS
NPA Details NPAD
Restoration to NPA Classification NPARST
Appropriation of Recovery in NPA A/Cs HNPACR
Bank Guarantee/ Non Fund Based Facilities
Collection of Bank Guarantee charges APCHCOLL
Bank Guarantee Covering Schedule BGCOV
Non Fund Based Details NFDTL
Outward Guarantee OGM
Guarantee Inquiry HGI
Guarantees Issued/Liability Register HGILR
FOREX
Inward Documentary Credits Maintenance IDCM
Maintain Export & Outward Bill MEOB
Maintain Import and Inward Bills MIIB
Money Transfer Service MTSS
Outward Documentary Credit Maintenance ODCM
Inward Remittance Maintenance HIRM
Outward Remittance Maintenance HORM
Third Party Products
Linking / delinking Bank Account with Demat Account DEMAT
Collection of Premium for PNB Met Life and CHOICe PAYPREM
ASBA Admin ASBA

उत्कर्ष -2023
@
Back to Index 162 | P a g e
 ASBA Application in Branches ASBABR
ASBA Reports ASBARPT
Syndicate ASBA for uploading the Application File SYNASBA
Syndicate ASBA modification after uploading ASBASCSB
Day End Related Menus
DMS/ Control Reports Check CTRPTCHK
Daily security check menu SECCHK
Audit File Inquiry HAFI
Financial Transaction Inquiry HFTI
Financial Transaction Report HFTR
User login Maintenance HSAC
Actual Changing Date Of Sol HSCOD
HSCOD Process Pending Checklist HSCODCHK
Sol Closure Of Last Day HSCOLD
Closure Of Sol Operations HSOLOP
Sol Status Inquiry HSSI
Report For Checking Pendency HSVALRPT
Recently Introduced Finacle Menu
To create retail Customer ID CCBM
(Using this functionality, retail customer ID excluding NRI customer ID can be created
through CCBM using any of the six OVDs presently in use)
For refund of excess income and GST charged even in cases where invoice is not INCREV
generated was circulated
To reverse bulk entries of income/GST even in cases where invoices have not been INCREVBK
generated
Updation of PAN in corporate Cust IDs without visiting CRM module PANUPD
For mandatory capturing of operative account number/NACH/check-off facility, contact PREDISB
details and other checks.
To capture the status of compliance of conditions applicable on restructured NPAs REUPGR
To enter the information in respect of director(s) declared wilful defaulter to facilitate WILDEF
accelerated provision on exposure to companies
To capture the draw down schedule of Term Loan accounts DISBSCH
Closure of Non Performing Accounts NPACLS
Replace PAN entered as identity proof with the other valid OVD PANCD
(Passport, Voter ID, Driving License, Aadhaar etc.)
To capture required data fields for Non Fund based facilities in CBS NFDTL
To capture details of ASM eligible accounts ASMDET
To enter wait-list of Locker WAITLIST
Marking of fraud in borrowal accounts on the basis of customer id CUFRD
To know the status of products & services availed / not availed by a customer (Display of HCUSUM
Customer Profile)
To enter detail of restructured account RESDET
For inquiring various information about NPA & Standard Account NPACBAL

******************************

उत्कर्ष -2023
@
Back to Index 163 | P a g e
R. Area wise Expected Questions (Specially from Loans)
Division Important Schemes/ Guidelines Reference Circular

Agri & FI Krishak Unnatti Yojana 67/2022

Agriculture Infrastructure Fund: Guidelines on Financing for Purchase of Drone 51/2022
PNB Swarnim (AGRI GOLD LOAN SCHEME) 49/2022
PNB SAKHI 47/2022
Jan Samarth Portal 31/2022

Monitoring of Irregular Accounts – Crop Based Advances 44/2022

PM FME Scheme; Farm Mechanization Scheme 43/2022;50/2022
Co-Lending Policy 34/2022
Digital Renewal of KCC Accounts upto ₹ 1.60 Lakh 61/2022

MSME PNB PRIME PLUS 27/2022;30/2022

PNB Weaver MUDRA Scheme 59/2022
PNB Shikhar Scheme 125/2020;14/2022
PNB GST Express Loan Scheme 95/2021;10/2022

MOU with NSIC for Financing MSMEs 51/2022

PM SVANIDHI -Implementation of 3rd tranche 48/2022
Benefits to AGNIVEERS under CREDIT GUARANTEE SCHEME 55/2022
PNB COMPRESSED BIO GAS (CBG) UNDER ‘SATAT’ SCHEME 69/2021

Jeevan Rakshak Scheme 41/2021;44/2021

CGSSD-Modification in scheme 43/2022
Retail e-OD against FD 97/2022
Asset Education Loan Scheme for Higher Education under PM CARES for Children 109/2022
Division
PNB GREEN CAR (e-Vehicle) LOAN 118/2021
PNB Car Loan: In built facility to existing MSME/Corporate Borrower 106/2022
PNB Gold Loan Scheme 100/2022
PRE-APPROVED PERSONAL LOAN TO EXISTING CUSTOMER 118/2022

PNB Aabhar Rin - Personal Loan Scheme for Pensioners 84/2022

my Property Loan 87/2022
PNB Kaushal 91/2022
FRMD Policy on Fraud Risk Management & Investigation Functions (FRMIF) 48/2022

Concurrent Audit Policy 21/2022

RBIA Revenue Audit Policy 31/2022
IAD
Record Maintenance Policy 11/2022
Staff Accountability Policy 06/2022
Whistle Blower Policy 28/2022

Revenue Audit Policy 20/2022

Policy on Quick Mortality 0 4/2022
Policy on Dishonour of Cheques & NACH o n Account of Insufficient Funds 23/2022
DMS 44/2022

*******************************

उत्कर्ष -2023
@
Back to Index 164 | P a g e