Discretionary Lending Powers

Purpose
Speedy Credit Decision Delegate powers to executives/ officers apart from Branch Managers

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Circulars-DLP
Circular No. BCC: RM: 102/80 Date Subject 28.12.10 DLP GM & Above

BCC: BR: 102:357 28.12.10 DLP JMGS I TMGS-VI BCC:BR:102:350 22.12.10 DLP Retail BCC: BR:103: 90 11.04.11 DLP-Clarification BCC:BR:104:244 06.07.12 Domestic Loan Policy-2012

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Discretionary Lending Powers

Rs. In crores

CMD Single Borrower Central PSU Domestic Borrower Group Borrower Unsecured Advances Adhoc/Excess Limits TOD with a maximum period of 15 days/DAUE in current accounts
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ED

GM

GM Zone

100.00 100.00 50.00 25.00 __

75.00 75.00 37.50 18.75 __

37.50 37.50 75.00 18.75 7.50 __

30.00 30.00 60.00 15.00 6.00 2.50

200.00 150.00

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Discretionary Lending Powers

(Rs. in Lacs)
Particulars DGM SMGSVI 3000 AGM SMGSV 1800 900 150 CM SM- SM IV MM-III 600 300 50 200 100 5 MGR MM-II 70 35 2 OFF JMGS-I 25 12.50 1

Group Limit

Per Party Limit 1500 Unsecured adv. 300 (incl. unsecured portion adhoc/ excess/TOD)
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Discretionary Lending Powers

(Rs. in Lacs) Particulars DGM SMGS-VI AGM CM SM-IV SMGSV SM MM- MGR MMIII II 12.50 6.25 6.25 2.50 OFF JMGS-I

Agst. Shares & Debn. Adhoc/ Excess /DAUEMin. BOB6 rating Adhoc/ Excess With B as per old rating model) Max. period for Adhoc

Max as per RBI & our banks guidelines 400 300 75

3.75 1.25

6.25

6.25

6.25

3.125

1.25

0.625

3 3 months months

2 months

2 2 months months

2 months

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Discretionary Lending Powers

(Rs. in Lacs)

Particulars

DGM SMGSVI 150

AGM CM SMGS-V SM-IV 75 20

SM MM-III 1.50

MGR MM-II 0.625

OFF JMGS-I 0.30

TOD/ DAUE in C/A LABOD, Guarantee/LC (100% Cash Margin) or fully backed by counter, Guarantee of other bank
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Full Powers

Full Powers

250

200

62.50

25.00

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Discretionary Lending Powers

Particulars DGM SMGSVI AGM CM SMGS-V SM-IV 150 50 SM MM-III 3 (Rs. in Lacs) MGR OFF MM-II JMGS-I 1.25 0.625

DAUE in 200 current account against cheques issued by Government Departments/C entral PSU or DD/Bankers Cheque issued by PSB

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Cap per Year

(Rs. in Lacs)

Particulars

DGM AGM CM SMGS- SMGS- SM-IV VI V 30 times

SM MGR MM-III MM-II

OFF JMGSI

Group Limit

25 times

20 times

Per Party Limit

30 times

25 times

20 times

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DLP-CAP
The following class of Adv shall not be reckoned for the purpose of computation of above ceiling: Staff loan under Staff schemes LABOD loan against NSCs/KVPs/ LIC policies Govt. sponsored Scheme Review without increase Review with Increase only incremental portion will be taken into account.

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DLP-CAP
Depending upon business needs, sanctioning authority authorized to exceed the annual ceiling by the next higher authority, not below the level of AGM. The provisions of annual cap not applicable to: 1) General managers & above 2) In charge & second line officers of CPCs 3) Urban Retail loan Factory 4) SME loan Factory
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CREDIT RATING LINKED DLP Upto DGM

i Latest Credit Rating as per CRISIL Model & MSME model (Not more than 1 year old) BOB-1, BOB-2, BOB-3, & MSME BOB1 to MSMEBOB3 Latest Credit Rating as per CRISIL Model & MSME model (Not more than 1 year old) BOB-4, BOB-5, BOB-6, & MSME BOB4 to MSMEBOB6 Latest Credit Rating as per CRISIL Model & MSME model (Not more than 1 year old) BOB-7, BOB-8, BOB9,BOB10 & MSME BOB7 & Below 125% of normal lending powers 100% of normal lending powers 75% of normal lending powers
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Ii

iii

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DISCRETIONARY LENDING POWERS

Proposal from the new borrowers (i.e. borrowers approaching Bank for the first time) may be entertained with min. rating category of BOB- 6 /MSME BOB6 i.e. Moderate Safety

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DISCOUNTING/ REDISCOUNTING OF BILLS

Sr. i ii iii iv v vi Authority Branch Manager in MMG/S-III Branch/ Dy. Regional Manager in SMG/ S-IV Branch/ Dy. Regional Head / regional Head in SMG/S-V Power Upto Rs. 0.50 cr Upto Rs. 3.00 cr Upto Rs. 10.00 cr

Branch / Regional Head / Dy. Zonal Upto Rs. 15.00 cr Head / ZonalHead in TEG/S VI Zonal Heads in TEG/S-VII and Upto Rs. 25.00 cr

Functional Heads at BCC in TEG/S- Upto Rs. 35.00 cr VII

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DISCOUNTING/ REDISCOUNTING OF BILLS

Authorities up to level of Zonal Heads may Exercise additional powers for discounting /purchase of bills under L/Cs and against fully backed counter guarantees of following banks: Prime Banks All Nationalized Banks SBI, Associates of SBI ICICI Bank, IDBI Bank, HDFC Bank and Axis Bank

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DISCRETIONARY LENDING POWERS

For the purpose of exercising lending powers, the tangible security (i.e. Primary as well as Collateral) properly charged to the bank, is to be taken into account to decide secured or unsecured advances.

Intangible securities like guarantees, letter of comfort etc. will not include into security.
Extension of charge on current assets and 2nd charge on fixed assets would not be considered for exercising power under secured advance.

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DLP-Export Credit
Authorities up to General Manager are empowered to exercise their discretionary lending powers up to 125% of their normal powers

Provided limit sanctioned exclusively for export business such as PC , Post shipment credit etc. amount to at least 25% of the delegated power.

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REVIEW OF EXISTING FACILITIES WITH NO CHANGE IN TERMS&CONDITIONS

Powers of next higher authority , GM heading Zone to exercise power of Corporate GM for this case

There is no downgrading in credit rating during the review period, and Latest rating is minimum BOB 6 /MSME BOB6 as per new credit rating system.

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DLP-Ag. Hypothecation of Book Debts

Authorities below the level of Chief Manager may consider credit facility against hypothecation of book debts provided the constituents offer sufficient tangible security, the value of which being at least 75 % of the advance, by way of mortgage of immoveable property and/ or other securities. In case no collateral securities are offered/available, the proposals are to be referred to Higher Authorities.
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Other Guidelines -DLP

Officer/ Executives 2nd in line and in-charge of credit department Authorized to sanction facilities

1. LABOD, ODBOD,LIC, IVP, KVIP, Govt. Securities up to DLP 2. Report to BH For PSR

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POWERS TO ALLOW EXCESS

Excess can be granted to a borrower, on request, upto the DLP for excess over sanctioned limits For bridging temporary liquidity mismatches and should be normally for a period not exceeding 15 days, with proper justifications and ensuring the sources for adjustment of the excess Accounts where all the sanction terms and conditions have been complied with and there are no other irregularities Subject to a ceiling of -3- times in a year Not be considered in an account where there are frequent cheque returns both inward and outward and accounts rated less than BOB 6

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POWERS TO ALLOW EXCESS

Should not be allowed in new accounts where the facility is sanctioned within a period of -12- months from the first date of sanction. All authorities upto SMG -Scale IV can allow an excess in any account upto a maximum of 25% of the fund based working capital limits, subject to the maximum of their DLP for allowing excess. Excess as above, can be allowed in all accounts, inclusive of that sanctioned by the higher authorities. Wherever such excess allowed are not adjusted within -15days the same is to be reported in Monthly Statement of Excess submitted to the Controlling Office. No separate processing charges applicable Penal interest of 2% for excess allowed over the Limit / Drawing power is to be charged.

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POWERS TO ALLOW ADHOC

Adhoc can be granted to a borrower upto powers stipulated for adhoc & Maximum Period of Adhoc sanctions Should be for bridging short term liquidity mismatches for a period not exceeding 2/3 months No adhoc to be considered in any new account for a period of -12- months from the first date of sanction. However, prior to this period if genuine need arises, the matter may be referred to the next higher authority for the decision. No adhoc facility / limit is to be granted where regular credit proposal is under consideration within own DLP or within DLP of higher authority In any account, adhoc facility should NOT be considered more than TWO times in a financial year, by an authority upto the level of DGM, under his powers. In case of further request for adhoc facility, reference should be made to next higher authority.
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POWERS TO ALLOW ADHOC

No further adhoc shall be considered by any authority, including the authority who sanctioned the adhoc facilities, unless the existing adhoc is adjusted. Adhoc can be allowed only in accounts where all the sanction terms and conditions have been complied with and there are no other irregularities Adhoc should not be considered in an account where there are frequent cheque returns both inward and outward and accounts rated less than BOB 6 All adhoc sanctions are to be made with proper assessment and preparation of proposals and to be disbursed with due execution of documents, charging of securities, registration of charges, recovery of processing charges etc. and they are to be submitted for PSR to the next higher authority. Maximum amount of the ad-hoc limits in an account with credit rating of BOB 6 & above (BOB1 to BOB6) by an authority upto SMGS-IV shall be 25% of the fund based Working Capital limits (excluding DA LC limit) or DLP for adhoc, whichever is lower. The authorities in the cadre of SMGS-V and above may allow adhoc up to their full respective DLPs.
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POWERS TO ALLOW ADHOC

Powers for granting Adhoc over limits may be exercised in all accounts including those sanctioned by MCB only at the DGM level. Others to restrict their adhoc powers only to the extent of their DLP i.e. both the existing limits plus adhoc SHOULD NOT EXCEED their DLP for aggregate per party limit or aggregate group limit. Only functionaries in the rank of DGMs and above can exercise their powers for Adhoc sanctions in accounts sanctioned by them / the higher authorities, even though the regular limits plus adhoc amount exceeds their DLP for per party limit / group limit, subject to the maximum of their Adhoc powers. Penal interest of 2% is applicable for the drawings over the limit / Drawing Power for the period and amount of adhoc

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Granting TODs
No TOD in first year No TOD if cheque returned for financial reasons No TOD if cheque returned frequently No TOD by rural branches Other branches 25% of average credit bal. (last 6 months) or upto discretionary lending powers (whichever is lower) Max once in a month and 5 times in a year Only in C/A

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Drawings Against Uncleared Effect (DAUE)

Strictly as per Book of Instructions. Not in first 6 months of opening of a/c except a) C/A Upto 25% of amount of cheques lodged or discretionary lending powers, whichever is lower b) CC/OD 25% of fund based limit or 25% of amount of cheques lodged or discretionary lending powers, whichever is lower c) When agnt. Cheque issued by Govt. Deptt., PSUs or highly reputed corporate or DD/BC issued by PSB, reputed Private Sector/ Foreign Banks amt of instrument or discretionary lending power (whichever is lower). NOT to DD/BC issued by Co-operative Banks/ non reputed Private banks

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Academy of Excellence

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