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Oriental Bank Of Commerce Department of Information Technology Head Office, New Delhi

Manual for

Term Deposits

17. LOAN / ADVANCE AGAINST DEPOSITS

Manual for Term Deposits –Department of Information Technology, Head Office Page1 of 4


17.1.1. The Branches may consider request of the depositor/s for Demand Loan / Overdraft facility against term deposits. However, the facility be released only after getting sanction from competent authority and on execution of necessary documents as per procedure laid down by bank. The Branches may also consider loan against deposit standing in the name of minor, however, a suitable declaration stating that loan is for the benefit of the minor, is to be furnished by the guardian.

17.1.2. Loan or advance upto 95% of the balance in the account depending on the remaining maturity period of the deposit and the interest accrued upto the preceding quarter and with interest at 1% over the rate applicable on the deposits or as advised by H.O. from time to time may be allowed if the deposit stands in the name of:

i) ii) iii)

Borrower himself, Borrower jointly with another depositors; Minor under guardianship of parent who is competent to borrow (advance can be permitted only if amount raised as loan/ advance is to be utilized for benefit of minor); iv) Any partner of the partnership firm and the advance is made to the partnership firm; v) Any partner of the partnership firm jointly with another person who may or may not be related to him and the advance is made to the partnership firm; vi) Proprietor of a proprietary concern and the advance is made to the proprietor / proprietary concern; vii) Proprietor along with another person who may or may not be related to the proprietor and the advance is made to the proprietary concern; viii) Trustee (or a beneficiary) of the trust and the advance is made to trust, subject to borrowing powers of trust as per trust deed; ix) Director of a company and the advance is made to the company, subject to borrowing powers of company as per Memorandum & Article of Association; x) Advance made to a coparcener of HUF concern against the deposit standing in the name of HUF concern may be treated as advance against borrowers’ deposit, only after obtaining factual confirmation by acceptable evidence i.e. declaration by all coparceners including Karta of HUF as to how that deposit is treated for tax purposes etc. and that whether the deposit really belongs to HUF as the liability of coparceners in HUF is limited to the extent of his share in their family estate. In other cases deposits of other coparceners may be treated as deposit of third party for the purpose of allowing advance there against to HUF; 17.1.3. Loan / advances can also be granted to third parties against security of Term Deposits as per guidelines issued by Head Office from time to time. Manual for Term Deposits –Department of Information Technology, Head Office Page2 of 4


17.1.4. Guidelines regarding sanctioning/ disbursing of Demand Loans against FDRs/ CDRs/ bank deposits of own and other branches

i) ii) iii) iv)

Deposit receipt(s) must be got discharged on its reverse on revenue stamp from the depositor(s). Discharge on the back of the deposit receipt(s) and signatures of the depositors be verified jointly by the officials handling the deposit seat and the Officer/ Manager Loans. Full details of the deposit receipt (s) should be filled in the LTR-1.If space is insufficient in the LTR-1, a list be made out on plain paper and annexed to the LTR-1. Bank’s lien on the deposit receipt(s) as well as in the relative account in the Computer System should be noted and verified/ authenticated by the authorized signatories stating the date of marking the lien and the account in which the deposit is charged in the manner as under: “Under Bank Lien OD/CC/BG/LC/DL/A/C No.- XV Z & Co.”

Date

(Name & Designation)

(Name & Designation)

17.1.5. Likewise on adjustment of loan, lien be lifted under proper authority in the following manner.

“Lien Lifted”

Date:

(Name & Designation)

(Name & Designation)

17.1.6. Advance against bank deposit shall be allowed under the joint signatures of the Branch Incumbent and Manager (Loans), where no Manager (Loans) is posted at the branch, the second signatory shall be the Hall-Incharge. 17.1.7. In case of branches having no Hall-Incharge or Manager (Loans)/ second man, the advance against the bank deposits be allowed under the signatures of the Branch Incumbent, but only after complying with all the instructions as mentioned above.

Manual for Term Deposits –Department of Information Technology, Head Office Page3 of 4


17.1.8. Before the release of advance all the documents shall be filled, checked and entered in the Document Register. In no case loaning documents shall be kept blank/ partly filled. 17.1.9. After the adjustment of loan, deposit receipt be immediately returned to the depositors invariably. Confirmation to this effect shall be obtained from the depositors.

Manual for Term Deposits –Department of Information Technology, Head Office Page4 of 4


Loan advance against deposits  

Loan advance against deposits

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