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PUNJAB & SIND BANK,


HO , CREDIT MONITORING DEPTT.
BANK HOUSE 7
TH
FLOOR,
21, RAJENDRA PLACE, NEW DELHI
Ph. No. 011- 2581 4037, 2581 4039, FAX: 011-2572 6359
e-mail:ho.cm@psb.org.in
HO Credit Monitoring Deptt. Cir. Letter No. :43 /2013-14 Date: 30.12.2013
Deptt. Code No. : H-9002
Number of pages of circular : 5

TO: ALL BRANCHES & CONTROLLING OFFICES,

REG: Amendments in Delegation of Lending Powers For Advances and Guidelines & Provisions for use of
Lending Powers

The Policy of the Bank, for Delegation of Lending Powers for Advances and Guidelines & Provisions for use of
Lending Powers presently in vogue, was circulated vide CMP Circular No. 1657 dated 29.05.2012. Subsequent to
the aforesaid, certain amendments/clarifications have been issued to the field functionaries vide following
circulatory letters:

Date Cir/Cir
Letter No.
Description Key amendments
22.06.2012 Circ. letter
no.
12/2012-13
Amendments in delegation of Lending
Powers For Advances and Guidelines &
Provisions for use of Lending Powers
Change in Composition of Credit
Approval Committees, Credit
Recommendatory Committees &
amendments in Housing Loans
01.10.2012 Circ. letter
no.
30/2012-13
Clarification w.r.t. delegation of Lending
Powers For Advances and Guidelines &
Provisions for use of Lending Powers
Clarification on withdrawal of Real
Estate Powers vide HO Advances
Deptt. circulatory letter no. 7/2007
dated 24.02.2007 still in force
24.10.2013 Circ. letter
no.
33/2013-14
Delegation of Lending Powers For Advances
and Guidelines & Provisions for use of
Lending Powers
Delegation of individual powers for
sanctioning of loans & advances to the
staff posted at controlling offices and
Lending powers for Finance to NBFCs
including Micro Finance.

In the view of feedback received from field functionaries/ H.O. Advance Deptt., below amendments/additions have
been approved by the Board of Directors in the said Policy vide resolution no. 20877 dated 21.12.2013.

A. TEMPORARY FACILITY:

1. Appendix VIII and Appendix XIII

Following changes/addition have been recommended to guidelines on sanction of temporary facilities:

EXISTING GUIDELINES REVISED GUIDELINES
In terms of existing guidelines, as circulated in terms
of CMP Cir. 1657 dt. 29.05.2012 and amended vide
CMP Cir. letter no.12/2012-13 dt.22.06.2012 and Cir.
letter no.33/2013-14 dt.24.10.2013, various Field
functionaries have been delegated powers for
Respective sanctioning authority may allow, within
his delegated lending power, temporary facility
subject to maximum of 20% of sanctioned limit as
detailed in point no. 2 here below. However, it should
be strictly based on assessment of need based
requirement of the borrower.

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Punjab & Sind Bank HO Credit Monitoring & Policy Deptt; New Delhi
Reg: Amendments in Delegation of Lending Powers For Advances and Guidelines & Provisions for use of
Lending Powers

Existing Guidelines Revised Guidelines
sanction of Temporary facility in case of facilities
sanctioned by Higher Authority as per Appendix VIII
and Appendix XIII.
No lower authority is permitted to allow Temporary
facility in cases sanctioned by higher authority.
However, higher authority can allow Temporary
facilities in cases sanctioned by lower authorities
subject to max. 20% of sanctioned limit.

However, the same should be within the overall
delegated sanctioning powers of the authority.

2. The lending powers and maximum number of days for the temporary facilities (ad-hoc) over and above the
sanctioned credit limit are as under (Both for Fund Based & Non Fund Based) (Temporary for fund based by
calculating as % of sanctioned fund based facility and that for NF based by calculating as % of sanctioned
NF based facility.):

S.
no
Sanctioning Authority Powers (Amt. In lacs) Max no. of days
1 BM-Upto Scale II Amount of Temporary
facility to be allowed
within the delegated
lending power of
respective
Sanctioning authority
subject to maximum
of 20% of Sanctioned
limit.
90
2 BM-Upto Scale III 90
3 BM-Upto Scale IV 90
4 BM/ZLCC headed by
scale V
90
5 BM/ZLCC headed by
scale VI
90
6 Committee headed by
GM (A)/
CGM/FGM/GM/Incharge
LHO/ GM(ZO)
90
7 Committee headed by
ED
120
8 CACB 120

In addition, following changes in temporary facilities have been made:

Existing Revised
1. Temporary facilities shall not be allowed for more
than five times in one financial year per client.

2. No authority is permitted to allow Temporary facility
in MC Power cases, except CACB and Credit
Committee headed by ED, CGM(A)/GM(A)/ Credit
Committee headed by GM(Zonal Manager) and Credit
Committee headed by GM(LHO)/FGM, within their
respective lending powers for Temporary Facility

3. These powers are not to be exercised in case of
Selective Credit Control Accounts/RBI directives

4. Other special instructions in CMP cir. 1657, as per
clause no.3 ,of Appendix-XIII Important
Instructions For Exercise Of Lending Powers to be
followed.

1. Temporary facilities shall not be allowed for more
than two times in one financial year per client.

2. No lower authority is permitted to allow Temporary
facility in cases sanctioned by higher authority.
However, higher authority can allow Temporary
facilities in cases sanctioned by lower authorities
subject to max. 20% of sanctioned limit.


3. These powers are not to be exercised in case of
Selective Credit Control Accounts/RBI directives.

4. Other special instructions in CMP cir. 1657, as per
clause no.3 of Appendix-XIII Important Instructions
For Exercise Of Lending Powers to be followed.


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Punjab & Sind Bank HO Credit Monitoring & Policy Deptt; New Delhi
Reg: Amendments in Delegation of Lending Powers For Advances and Guidelines & Provisions for use of
Lending Powers

Existing Revised
5. No temporary facility to be allowed in ODP limits.

6. Temporary facility to be fully secured within
available drawing power.

Special Instructions for Exercise of Lending Powers will be as follows:


i) Temporary (existing) facility should be allowed to regular clients only and that too for valid reasons.
Where a Temporary limit has been granted, no casual (temporary-new) facility be allowed.
ii) The exercise of powers should be such that the total of regular, temporary accommodation should in
any case must not exceed the powers of the sanctioning authority who has sanctioned the regular
limits.
iii) Temporary facilities shall not be allowed for more than two times in one financial year per client. In
addition to that, if the demand for Temporary facility is repetitive, then enhancement of limits be
considered on a regular basis with proper justification.
iv) Temporary credit facilities shall be granted, only then it is absolutely essential, judiciously and with due
circumspection after proper appraisal and putting sanction on record.
v) Temporary credit facilities shall not be extended as a matter of routine and in anticipation of
sanction/enhancement of credit facilities.
vi) No Temporary facility should be granted in group accounts, for accommodation purposes.
vii) Sanctioning authority is however, permitted to sanction Temporary facility for purchase/discount of
bills(only DP bills) and/or purchase of third party cheques/bank drafts/cheques issued by
Govt./reputed undertakings, over and above the existing limits sanctioned by a higher authority,
subject to however, that the same being within the lending powers of the sanctioning authority.
viii) ADVANCE TO LIMITED COMPANY:

All temporary facilities except those mentioned in S.no.11 to s.no.17 in Appendix III (Contd.) to limited
companies shall be sanctioned by next higher office. This shall, however, not apply Branch Heads of
Scale IV and above.
Next higher Authority would mean authority next to respective sanctioning authority. Respective
Sanctioning Authority would mean authority who has sanctioned the limits on regular basis.

RESTRICTIONS:

Temporary credit facilities shall not be granted under any of the following circumstances:

a) The track record/dealings of the client are not satisfactory.
b) There are persistent financial irregularities in the loan/limits accounts of the borrower and/or associate
concern.
c) The loan account is classified as NPA. However, if the account is classified as NPA on account of
circumstances beyond the control of the borrower and presently account is running regular, ZO/HO
may be approached for Temporary facility.
d) The credit limit is overdue for renewal.
e) The Temporary facility allowed earlier is not regularised within the stipulated time frame
f) Temporary facility shall not be accommodative in nature e.g. for discounting of bills/ cheques drawn
on associate concerns for payment of LC/BG margin or commission etc.

Procedure for proper appraisal after obtaining all requisite financial/other papers and sanction of temporary-
existing facility as per extant guidelines.

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Punjab & Sind Bank HO Credit Monitoring & Policy Deptt; New Delhi
Reg: Amendments in Delegation of Lending Powers For Advances and Guidelines & Provisions for use of
Lending Powers

Sanctioning authority can sanction Temporary credit facility in limits sanctioned by him so far the total limits
including temporary limit remain within the maximum lending power of that authority for sanction of regular
limit for that category of advance subject to max of 20% of sanctioned limit.

3. Exceeding in existing credit limits (including sanctions by higher authority) may be allowed for a maximum
number of 60 days in a Financial Year within the following:

S.
no
Authority Powers (Amt. In lacs) Max no. of days in a
year
1 BM-Upto Scale II 5 These powers are
subject to
maximum of 10%
of sanctioned
limit.
60
2 BM-Upto Scale III 10 60
3 BM-Upto Scale IV 25 60
4 BM/ZLCC headed by scale V 75 60
5 BM/ZLCC headed by scale VI 150 60
6 Committee headed by GM (A)/
CGM/FGM/ GM/Incharge LHO/ GM(ZO)
300 60

Exceeding in existing credit limits (including sanctions by higher authority) may be allowed for a maximum
number of 60 days in a financial year. However, the exceeding in the credit limit not to be allowed for more
than 15 days at a stretch.

Special Instructions for Temporary and exceeding in existing credit limits:

a) The temporary facility and exceeding in existing credit limit not to be allowed/ availed simultaneously at any
given point of time.

B. PRESCRIBED MARGINS (H.O. CMP Circular no. 1657 dt. 29.05.2012, Appendix-X, clause A-Page 34):

Following relaxation have been allowed in the existing guidelines in respect of Hypothecation/Pledge of stock,
Hypothecation of Book Debts and Term loans:

PSU: May be accepted with Nil margin

Infra (Power/Roads): Minimum 20%

NBFC: May be accepted upto 1:1 in Systematically Important NBFCs having external rating of A and above
from accredited Rating agency.

For all other NBFCs: Existing Policy to continue

In consortium cases, margin should be in line with other lenders.

C. COVERAGE OF COLLATERAL (H.O. CMP Circular no. 1657 dt. 29.05.2012, Appendix-XII, Page 37)

Following relaxation in collateral requirement is allowed in the exiting guidelines:

PSU: Not to be insisted upon

Infra (Power/Roads): May be accepted without collateral.

NBFC: May be accepted without collateral for Systematically Important NBFCs with external rating of A and
above from accredited rating agencies.
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Punjab & Sind Bank HO Credit Monitoring & Policy Deptt; New Delhi
Reg: Amendments in Delegation of Lending Powers For Advances and Guidelines & Provisions for use of
Lending Powers

For all other NBFCs: Existing Policy to continue

In consortium cases, Security collateral coverage should be in line with other lenders.

The aforesaid amendments/additions are to be read in conjunction with CMP Circular No. 1657 dated
29.05.2012 and its related amendments/clarifications circulated thereafter (as mentioned above).

All the field functionaries are advised to note the above for strict compliance.




(G.S. Puri)
Asstt. General Manager (Cr. M)