eCircular

Circular No.158-2010-BC-RMD-10 Date: 30-06-2010

PERMANENT UTILITY

INTRODUCTION OF BASE RATE (BR) EFFECTIVE FROM 1ST JULY 2010
WOX

Attention of branches/offices is invited to introduction of Base Rate, effective from 1st July, 2010.

The existing BPLR system, introduced in 2003, fell short of its original objective of bringing
transparency to lending rates. This was mainly because under the BPLR system, banks could lend
below BPLR. Hence, the Base Rate concept is introduced as per the directions of RBI, in order to
have transparency in the pricing of lending products.

Reserve Bank of India, vide circular No.DBOD.No.Dir.BC.88/13.03.00/2009-10 dated 09.04.2010, has
issued detailed guidelines on Base Rate.

Base Rate has been computed based on components, such as, Cost of Deposits, Negative Carry on
CRR and SLR, Unallocatable Overhead Costs and Average Return on Networth. Based on the above
components, Bank has computed and arrived at a Base Rate of 8.25%, effective from 1st July, 2010.

Base Rate will replace the existing Benchmark Prime Lending Rate (BPLR) and will be applicable to
all new loans, including Exports, and for those old loans that come for renewal.

Existing loans linked to BPLR will run till their maturity. However, if any of the existing borrowers
want to switch over to the new system, before expiry of the existing contracts, an option will be given
to them for switch over. However, no charges will be levied for such switch over.

Since Base Rate will be the minimum rate for all loans, branches/offices are not permitted to
lend below the Base Rate. However, by extending interest subvention to Agriculture and Export
Credit and rebate provided for prompt repayment for agriculture loans, if the effective rate falls below
the Base Rate, the same shall not be construed as violative of base rate guidelines.

Exemptions: Base Rate is not applicable to the following type of loans.

• Loans to Bank’s depositors against their own Deposits.
• Loans to Bank’s own employees.
• DRI Loans.

Staff Loans under General Scheme: If any staff member, who has already availed loans, such as,
Housing Loan, Education Loan, SOD / ODC under General Public Scheme of the Bank, are entitled to
switch over to Base Rate, by giving an option letter. For all new loans availed by staff members under
General Public Scheme, on or after 1st July, 2010, interest rate will be linked to Base Rate.

Floating Rate: Floating rates are linked to Base Rate and spread. Floating rates will automatically get
revised as and when there is revision in Base Rate or spread or both.

2 Circular No.148-2010-BC-P&D-43 / 18-06-2010 Fixed Rate: “Reset Clause” may be stipulated in the case of fixed rate to the effect that the Bank reserves the right to revise the interest rate upwards on the expiry of reset period or such other intervals. determined from time to time. as mentioned in the sanction letter. .

Documentation: Consequent to switching over to Base Rate. FITL. such lending will not be construed to be violative of base rate guidelines.2011.75% on all other advances.2011. Branches shall not execute the documents / disburse loans sanctioned under interest linked to BPLR. risk premium and tenor premium. interest to be levied consequent to switch over to Base Rate system will be communicated separately by MSME & Retail Banking Department at Corporate Office. Loans to Bank’s employees. other than Retail Products.271-2009-BC.2010 and the sanction has to be retrans- mitted to the respective sanctioning authorities for modification of interest rate linked to Base Rate.Circular No. Executive Director/Chairman & Managing Director is only empowered to sanction any other finer rate. branches are advised to obtain documentation as per Annexure–9 for new borrowers and Annexure–10 for existing borrowers who want to switch over to Base Rate. .03. The premium so arrived at is added to Base Rate to arrive at the interest rate for various loan products. Special Monitoring Accounts: Guidelines for considering interest concession in respect of Special Monitoring Accounts identified during the course of a financial year linked to Base Rate.158-2010-BC-RMD-10 / 30-06-2010 3 Product Pricing: Product pricing is arrived at based on borrower specific operating costs.. but not disbursed till 30th June. Subvention of interest on Agriculture and Exports: 2% Interest subvention and 1% Additional Incentive Subvention on Short Term Crop Production Loans will continue till 31. Interest rate on Rupee Export Credit to certain category of exporters @ 2% as mentioned in circular No. 01. Tenor Premium: Tenor premium of 0. is 5. However. However. Maximum Spread: The maximum spread stipulated by the Bank over Base Rate. interest rate at Base Rate plus 6. Micro and Small Enterprises and 6. However.07. Purchase of Plots –SyndNivas: Where house is not constructed within the period of 2 years from the date of availment of loan. w.115-2010-BC will continue till 31. Debit balance in SB / Current Account: In the case of debit balances allowed in Savings Bank / Current Account. Restructured loans: In case of restructured loans if some of the WCTL. Concessions in interest rates: Field functionaries are empowered to permit concessions in interest rate as mentioned in Annexure-6. Premises Loan.25% on all Term Loans of 36 months and above. to be added to the interest rates specified for the respective sectors. Loans sanctioned up to 30th June and not disbursed: Wherever loans are sanctioned upto 30th June. Bangalore. shall be modified by the respective sanctioning authorities.03. as these type of loans are not linked to Base Rate. Non Performing Assets: Guidelines for considering interest concession in Non Performing accounts and future interest for One Time Settlement will be issued separately by Corporate Office: Recoveries Department.75% shall be charged from the date of allowing debit balance up to the stipulated period of 30 days for SB and 15 days for Current accounts and overdue interest shall be added thereafter. by incorporating rate of interest linked to Base Rate. tenor premium need not be added to DRI Loans. need to be granted below the base rate for the purpose of viability and there are recompense clauses etc. SHG. existing guidelines on extent of concessions on restructured accounts will continue.25% in respect of advances to Agriculture.e. will be issued separately by Corporate Office: Recoveries Department.f. Loans against deposits. Reverse Mortgage. as per circular No.

Standard Table for determining Overdue / Penal rate of interest 8. Interest rates: The rate of interest to be charged on monthly compounding basis. Standard Table showing floating interest rates on (monthly compounding) on advances other than Export Credit linked to Base Rate.158-2010-BC-RMD-10 / 30-06-2010 Branches are advised to utilise the above formats for all types of loans. Separate guidelines will be issued by DIT. general instructions/guidelines on application of interest rates. are furnished in the following Annexures. may be sought from RISK MANAGEMENT DEPARTMENT . if any.4 Circular No. existing formats may be used for DRI advances. Display in the Notice Board: Branches shall display in the Notice Board the interest rates on advances. Standard Table showing interest rates on loans / overdrafts against FCNR and Third Party Deposits. Clarifications required. branches shall open borrowal accounts only as per new codes to be provided by CO: Department of Information Technology.. Annexure Description 1. Standard Table showing floating interest rates (monthly compounding) on Imports and Purchase of Foreign Currency instruments linked to Base Rate. Standard Table showing floating interest rates on Export Credit 3. 10. including general housing loan.07. through respective ROs as per extant guidelines. It is reiterated that branches shall disburse loans only after executing additional documents as per Annexure–9 and Annexure-10. MURALIDHARAN) Check Word GENERAL MANAGER . KUIUK : YRTZI : YRUGN (T. till the existing printed formats are exhausted. LDs / ODDs and all types of staff loans other than loans availed under General Scheme for public. 9.e. 01. Annexure to be taken in respect of new loans/borrowers till existing formats are exhausted. 4. as the case may be. 2.Credit Policy and Procedures Division at Corporate Office. in this regard. Bangalore. 2010. Branches shall also display in the notice board the option available for existing borrowers to switch over to Base Rate system. about this circular. Table showing concessional interest rate on various loan products 7. Annexure to be taken in respect of existing borrowers who opt for Base Rate. General Instructions / guidelines on application of interest rates. formats for documentation. IT related matters: Effective from 1st July. etc. Interest rates on advances carrying fixed rate of interest (monthly compounding) 5. applicable to all sector of advances. 6. applicable w.2010. However.f.

BR + 0.00% Priority Sector and SyndSwarna Express For Hallmarked Jewels.00 lakhs where subvention is available interest @ 9% is to be levied.00% * Tenor Premium of 0.00 lakhs BR + 1. .000/.158-2010-BC-RMD-10 / 30-06-2010 5 Annexure-1 STANDARD TABLE SHOWING FLOATING INTEREST RATES ON (MONTHLY COMPOUNDING) ADVANCES other than Export Credit linked to Base Rate 1. ♦ For Short term loans upto Rs.00% 11. 0.75% 10.00% 13.25% 13.00% SYND 2 BR + 3.50% * Tenor premium of 0.75% SYND 4 BR + 4.25% on all Term Loans of 36 months and above to be added to the above rates.50% Above Rs.25% 13.000/ BR + 1.00 lakhs: Interest Rate* Rating STL/WC/TL SYND 1 BR + 2. 2.25% SYND 6 BR + 5.50% SYND 7 & BELOW BR + 5.25% 12.25% on all Term Loans of 36 months and above to be added to the above rates.25% SYND 3 BR + 3.2.50% NPA BR + 5. AGRICULTURE All Agriculture Loans Size of Credit Limit Interest rate* Upto Rs.000/.2.25% 13.and upto Rs. ♦ 1% concession in applicable rate permitted for Advances to Farmers Service Cooperative Societies. SYNDSWARNA (Irrespective of amount) Particulars Normal Jewels For Agriculturists BR + 0.75 9.50% SYND 5 BR + 5.75% 10. 3. Above Rs. subject to Minimum Base Rate.Circular No.2. Non BR + 2.75% 11.00% * Tenor premium of 0.75% 11.50.25% 8.3.25% on all Term Loans to be added to the above rates.00.50% 11.25% concession in applicable rate permitted subject to minimum of Base Rate. Micro and Small Enterprises (M S E) (including KVI Sector) Size of credit limit Interest rate* Micro and Small Enterprises (MSE)-(Manufacturing and Service Sector) Upto Rs.50.00% Priority Sector other than Agriculturists.

Farm House Loans and Golden Jubilee Rural Housing Finance) Amount and Tenor Interest Rate* Upto 20 lakhs (a) Upto 10 years BR + 0.25% 13.75% Above Rs.6 Circular No.25% 13.75% 13. Housing Loan Scheme under Floating Interest Option (SyndNivas. Note: ♦ MSE stands for Micro and Small Enterprises in Manufacturing and Service Sector.50% (b) Above 10 to 20 years BR + 0. 5. However.25% 8.25% 9.25% concessions in applicable rate to Women beneficiaries Note: These concessions are not cumulative and in case the borrower is eligible for multiple concessions the maximum concession eligible under any applicable category shall be extended.50% 10.00% SYND 3 BR + 3.00% ♦ 1% concession in applicable rate is available to Employees of Govt.50% (b) Above 10 to 20 years BR + 1. 4. RETAIL PRODUCTS (Tenor premium not applicable) Name of the Product Interest rate a) SyndSaral BR + 4.75% SYND 2 BR + 2.75% 11. where there is tie up arrangement or corporates sponsor the applications and give irrevocable undertaking letter.25% 11. 0.50% SYND 7 & Below BR + 5.25% 13. Note: Wherever LTV ratio in housing loans at the time of sanction goes above 75%.00% SYND 6 BR + 5. ♦ 0.25% less than the rates mentioned for Small Enterprises.2. Tenor premium of 0.158-2010-BC-RMD-10 / 30-06-2010 Above Rs. In case of SYND 7 and below rated accounts and NPAs same rates as applicable to Small Enterprises to be charged. subject to the condition that the rate of interest so arrived shall not be below Base Rate.25% SYND 5 BR + 4.50% concession in applicable rate available to Employees of Govt.75% 10.25% on all Term Loans of 36 months and above to be added to the above rates for both Micro and Small Enterprises.20 lakhs (a) Upto 10 years BR + 1.00 lakhs: Rating Small Enterprises (Interest Rate*) SYND 1 BR + 2.Department/Public Sector Undertakings/Corporations and Blue Chip Companies. where there is tie up arrangement or corporates sponsor the applications give irrevocable undertaking letter.50% *In respect of Micro Enterprises rated SYND 6 and above. rate of interest to be increased by 25 bps over the applicable rate of interest.Department/Public Sector Undertakings/Corporations and Blue Chip Companies. ♦ Interest rate for Transport Operators and Retail Trade as applicable to Micro and Small Enterprises.00% *Tenor Premium not applicable ♦ 0.50% NPA (Both for Small and Micro) BR + 5.75% 13.50% 8.50% SYND 4 BR + 4.00% 12. .

00% SyndNivas Plus SyndRent SyndVyapar Improved Scheme f) SyndLaghuUdyami Credit Card/SyndUdyog/SyndVyapar As applicable to Micro and Small Enterprises depending on investment.00% ♦ 1% concession in applicable rate is available to children of Employees of Government Department / Public Sector Undertakings/Corporations and Blue Chip Companies.75% 12. h) SyndMortgage Interest rate Residential & Non residential BR + 6. Note: These concessions are not cumulative and in case the borrower is eligible for multiple concessions the maximum concession eligible under any applicable category shall be extended. e) SyndSenior / SyndPigmy / SyndSmallCredit / SyndNivasPlus / SyndRent/SyndVyapar improved scheme Product Interest rate SyndSenior SyndPigmy SyndSmall Credit BR + 3.00% LIC Policy. where there is tie up arrangement or corporates sponsor the application and give irrevocable undertaking letter.25% 14.75% 11.50% . of amount 4 Wheelers Department/Public Sector Under- BR + 3. IVP. RBI Relief Bonds Name of the Product Interest rate Concession c) SYNDVAHAN 2 Wheelers 1% concession in applicable rate 2 & 4 Wheelers irrespective BR + 3.75% for girl students of SC/ST category. d) For Pigmy Agents – Interest rate as applicable to General Public for SyndSaral and SyndVahan Loans. where there is tie up arrangement or corporates who give irrevocable undertaking letter. The overall concession extended to these categories shall not exceed 1%. KVP.00 lakhs BR + 2. 0.4.158-2010-BC-RMD-10 / 30-06-2010 7 Name of the Product Interest rate b) Loans against NSC.50% Above Rs.4. ♦ 0. g) SyndVidya (Education Loans) Interest rate Upto Rs.25% 11. 0.50% to SC/ST Boy students.00% is available to Employees of Govt.75% 10.75% 12.25% 10.50% for Girl students of other than SC/ST category. SV of BR + 1.00 lakhs BR + 2.50% takings/Corporations & Blue Chip Companies.Circular No.

75% 15. Large Industry. Inland Bills backed by LCs of Scheduled Commercial Banks IRRESPECTIVE OF AMOUNT Interest Rate Upto 90 days BR + 0.25% 10.25% 13.00% SYND 7 & Below BR + 6.75% 15.00% SYND 3 BR + 4.00% NPA BR + 6.75% 15. WOX .75% 15.75% SYND 4 BR + 5.25% on all Term Loans of 36 months and above to be added to the above rates. Finance granted to Housing and other intermediary agencies for on-lending to ultimate beneficiaries and others not covered under any other category.50% 14.50% 181 to 365 days BR + 2.158-2010-BC-RMD-10 / 30-06-2010 6.50% 91 to 180 days BR + 1.8 Circular No.25% on all Term Loans of 36 months and above to be added to the above rates.75% 12.25% 9. 8.75% 15.00% * Tenor premium of 0.00% SYND 7 & Below BR + 6.00% * Tenor premium of 0. Rating Interest Rate* SYND 1 BR + 3.25% 12.75% 15. Medium Enterprises.25% 11.75% 12.25% SYND 5 BR + 6.50% SYND 2 BR + 3.25% 14.00% NPA BR + 6.50% LC Paid/BG Paid/DPG instalment paid BR + 6.00% 14. NBFC (NDSI) / CRE Rating Interest Rate* SYND 1 BR + 3. Other Non Priority Sector Loans / Advances Interest Rate BR + 6.00% SYND 2 BR + 4.75% 15.75% SYND 6 BR + 6.50% SYND 4 BR + 6. 9.75% 15.25% on all Term Loans of 36 months and above to be added to the above rates.50% SYND 3 BR + 5.75% SYND 5 BR + 6.50% SYND 6 BR + 6.00% discounting Scheme (including overdue interest of 2%) 7.50% 12.00% (including overdue interest of 2%) For delayed period of remittance received in respect of bills under IDBI/SIDBI Bill Re- BR + 6.00% * Tenor premium of 0.25% 8.50% 13.75% 15.

50% b) Against incentives receivable from Govt.75% shipment (inclusive of overdue interest of 2%) After due date till the 16.50% e) Against retention money (for supplies portion only) payable within one year from the date of BR+1. covered BR+1.50% FEDAI) b) Usance Bills (for total period comprising usance period of export bills. as specified by FEDAI.50% shipment (upto 90 days) WHERE NDD IS BEYOND 180 DAYS AND UPTO 12 MONTHS a) From the date of advance upto 180 days BR+1.25% 9. and grace period.25% 9.50% b) From 181st day from the date of advance upto NDD or 12 months from the date of shipment.25% 9.25% 9.25% 9.25% 9. 14.50% by ECGC Guarantee up to 90 days POST SHIPMENT CREDIT a) On demand bills for transit period (as specified by BR+1.50% the date of shipment 181st date to due date.50% (a) Upto 180 days (b) Upto 365 days for exporters under gold card scheme c) Against incentives receivable from Govt.75% (inclusive of overdue interest) WOX . transit period.25% 9.25% 9.25% 9. whichever is earlier BR+5.00% BILLS NOT REALIZED WITHIN THE NTP/NDD a) For the period NTP/NDD and upto 180 days from BR+1. wherever applicable) BR+1.75% 14.50% by ECGC Guarantee) upto 90days d) Against undrawn balances (upto 90 days) BR+ 1.Circular No.00% date of realization BR+7.158-2010-BC-RMD-10 / 30-06-2010 9 Annexure-2 STANDARD TABLE SHOWING FLOATING INTEREST RATES ON EXPORT CREDIT PARTICULARS Interest rate PRE SHIPMENT CREDIT a) Upto 270 days BR+ 1. (covered BR+1.00% b) For the period beyond 180 days from the date of BR+5.

10 Circular No.00% b) For Others As given in standard table furnished depending on the size of advance.75% 15. category of borrower.158-2010-BC-RMD-10 / 30-06-2010 Annexure-3 STANDARD TABLE SHOWING FLOATING INTEREST RATES (monthly compounding) on Imports and Purchase of Foreign Currency instruments linked to Base Rate 1. Import Finance Interest Rate A) In respect of foreign currency bills drawn under Import LCs i) From the date of debit to the Nostro account till the date of retirement of the demand bill or date of crystallization. Notes: Foreign Currency amount should be crystallized into Rupee liability on 90th day from the date of purchase. B) On Rupee Bill from the date of remittance made i) Upto 10 days a) Working Capital As applicable for cash credit b) Others BR + 6.75% 15.00% 2. etc) a) For Personal purpose BR + 6. 3. if instrument remains unpaid. Purchase of foreign currency instruments/clean instruments in foreign currency purchased for transit period up to 15 days (Foreign Cheques and Drafts. Devolved liability under Foreign BG BR + 6.00% ii) Beyond 10 days a) Working Capital As applicable for cash credit b) Others BR + 6.75% 15.00% ii) From the date of crystallization in case of Demand Bills and from the due date in case of Usance Bills Working Capital As applicable for Cash credit Others BR + 6. purpose of advance and credit rating of the borrower. whichever is earlier.00% th Note: Bills shall be crystallized into Rupee liability on the 10 day from the date of receipt of documents in case of Demand Bills and on the due date in the case of Usance Bills.00% (inclusive of overdue interest of 2%) WOX . a) Working Capital As applicable for Cash credit b) Others BR + 6.75% 15.75% 15.75% 15.

(i. for minimum period. 3. whichever is higher.Bank to NGOs 9. held in respective NRO accounts Advances against Third Party Deposits BR + 1.00% Advances against FCNR (B) Term Deposits prematurely withdrawn BR + 1. SyndNivas Fixed Upto 10 years 11. 4. as far as loans against other Term Deposits and Pigmy Deposits.50% Advances against term deposits are exempt from charging interest at monthly rests.e.75% 10.50.Within group.00%* • In respect of advances against third party deposits. 10.2002.75% 10. deposit rate.00% .000/. 2. Financing of Self Help Groups & NGOs .00% .158-2010-BC-RMD-10 / 30-06-2010 11 Annexure-4 INTEREST RATES ON ADVANCES CARRYING FIXED RATE OF INTEREST (monthly compounding) (Tenor Premium not applicable ) 1. 2% above Advance against Domestic/NRE/NRNR* Term Deposits.50. Base Rate is not applicable.000/. per member loan exceeding Rs. which are cleared out of 2% above local rupee resources. Part II. 9. Reverse Mortgage 11.04. 5.Within Group.000/.NGOs to SHGs .00% Note: Reset period for review of rate of interest is 3 years. per member loan NOT exceeding Rs.e.Fixed Rates 1. WOX .00% 3.00% 4.Circular No.00% WOX Annexure – 5 STANDARD TABLE SHOWING INTEREST RATES ON LOANS / OVERDRAFTS against FCNR and Third Party Deposits linked to Base Rate. Premises Loan 12. interest at commercial rate shall be charged on the advances granted against such term deposits from the date of advance.00% before completion of stipulated minimum period Advances against FCNR (B) Term Deposits which are cleared out of BR + 1.01. per member loan exceeding Rs. Part I – Floating Rates Interest Rate Advances against FCNR (B) Term Deposits BR + 1.00% .50. held in respective NRO accounts. deposit rate.f.00% ii) Within Group. When a term deposit / NRE Term deposit is withdrawn before completion of a minimum term period.50. Base Rate + 6.Bank to SHGs i) Within Group. 2. Advances against Domestic/NRE Term Deposits prematurely 2% above deposit rate withdrawn. Advances against deposits of Staff members retired staff 1% above members/widows of deceased staff members the deposit rate.75% 10. per member loan NOT exceeding Rs. However.00% local rupee resources. * NRNR deposit scheme is discontinued w. Advances against NRE Term Deposits.75% 10. 11. 10.75%). Advances against Pigmy Deposits 8.75%.000/. Deposit rate + 2% or Base Rate + 1.

where there is tie up arrangement or corporates sponsor the applications and give irrevocable undertaking letter. 06. where there is tie up arrangement or corporates sponsor the applications and give irrevocable undertaking letter. SE-1B.50% for Girl Students of other than SC / ST Category. 03. Rated SME SE-1A. 0. SME 3:0. SE-3B. Pledge loans under 0.75% to Traders and Manufacturers under Priority Sector. Note: These concessions are not cumulative and in case the borrower is eligible for multiple concessions the maximum concession eligible under any applicable category shall be extended. tie up with National 0. SyndNivas 0. subject to the condition that the rate of interest so arrived shall not be below Base Rate. 02. in applicable rate is available to Employees of Govt.Department/Public Sector Undertakings/Corporations and Blue Chip Companies.50% concession.Department/Public Sector Undertakings/Corporations and Blue Chip Companies.25% p. where there is tie up arrangement or corporates sponsor the applications and give irrevocable undertaking letter. SyndVahan 1% concession in applicable rate is available to Employees of Govt.Department/Public Sector Undertakings/Corporations and Blue Chip Companies. and should not be offered in a routine manner. SE-2A. Bulk Handling In addition to the above concessions.12 Circular No. Name of the Concessions in applicable interest rate Product 01. SyndSaral 0. SME 1 and 2 :0. 0.158-2010-BC-RMD-10 / 30-06-2010 Annexure-6 TABLE SHOWING CONCESSIONAL INTEREST RATE ON VARIOUS LOAN PRODUCTS Sl. SE-2B-0.25% to Farmers under Priority Sector. for proposals of Rs.00 crore and above based on merits of each proposal. SE-3A.No.25% to women borrowers (earlier SyndMahila) 1% concession in applicable rate is available to Employees of Govt.75% to Girl Students of SC / ST Category. Note: These concessions are not cumulative and only concession as applicable to the category of borrowers is to be reckoned for extending concession.50% to SC / ST Boy Students.50% accounts concession in applicable rate. SyndVidya 1% concession in applicable rate is available to children of Employees of Government Department / Public Sector Undertakings/Corporations and Blue Chip Companies. 0.25% concession in applicable rate. 05. 04. WOX . (NBHC) Ltd.50%. Regional Heads are Corporation empowered to consider an interest concession up to 0. where there is tie up arrangement or corporates sponsor the applications and give irrevocable undertaking letter. Note: The above concessions will be in vogue till its validity as stipulated by the concerned functional departments at CO/HO.1. This provision is applicable only to Pledge Loans under tie up with NBHC Ltd.a.

in the case of priority sector advances Note: The cut off point of Rs.75% over the applicable of the renewal proposal: normal rate.25% over the applicable rate. b) 2. charged on the entire balance outstanding in fund based working capital limits for the entire quarter.000/. 25. penal interest as per ‘B’ above shall not be charged. diversion of funds.25. under Quarterly Information System (QIS) to be rate. II. iii) Other category of advances including SSI advances 2% over the applicable normal rate B. Additional interest (penal interest) for non-creation of 1.referred to in (ii) above relates to original advance/limit and not balance outstanding. Overdue Interest: Loans and Advances including Bills i) Advances under DRI Scheme Nil ii) Aggregate credit limits not exceeding Rs. For credit limits not exceeding Rs.75% over the applicable proposal normal rate.Circular No. renewal proposal Note: The item No. 3) For diversion of funds. Penal Interest: 1) For non-submission/delayed submission of monthly 1% over the applicable normal stock statement – to be charged for delayed period rate.and Rs. No. ii) For the delayed period beyond three months from the date of expiry of credit limits till date of receipt a) 1.000/.00% over the applicable b) Without provisional extension.25.in the case of general advances and not exceeding Rs. iii) For delayed period beyond 30 days from the date of 2.40-2003-BC and No. (As per circulars No.in case of priority sector advances.000/. 4) For non-submission of renewal proposal/additional information/requirement on the renewal proposal i) For the period upto three months from the date of expiry of limits till date of receipt of renewal a) 0. 1%over the applicable normal rate. normal rate. Ceiling on Overdue/Penal Interest: Total penal and overdue interest to be charged on account of loan/OD becoming overdue/overdrawn.00% over the applicable b) Without provisional extension normal rate. a) With provisional extension. D.55-2004-BC) WOX . Bills finance and non-fund based limits are exempt from the above rule.000/.) A.5. non/delayed submission of CCR forms/stock statement /renewal proposal.129/96/BC.a.5000/. 4 above is applicable for overdraft/cash credit/packing credit limits only. a) With provisional extension b) 1. C. 5000/.00% over the applicable normal calling for addl information/requirement on the rate. mortgage.158-2010-BC-RMD-10 / 30-06-2010 13 Annexure-7 STANDARD TABLE FOR DETERMINING OVERDUE / PENAL RATE OF INTEREST Description Rate of Interest (% p. should not exceed 2% over the applicable normal rate at any point of time.in Nil the case of general advances and Rs. 2) For non-submission/delayed submission of CCR Form 1% over the applicable normal I.

decrease or increase in the balance outstanding in the loans or closure of some of the credit facilities. 4) Interest on adhoc limits: On adhoc limits (other than export finance) additional interest at 1% over the rate applicable for the respective category shall be charged.00 lakhs.000/-. The same should not be revised subsequently merely on account of revision in rates of interest.2. b) Existing credit limits. Overdue interest as indicated in Annexure-7 shall be charged over the applicable rates from the date of purchase of the instrument.00. e) Export Finance. c) Debit balance in SB and Current Accounts. except Housing Loans.50% on all restructured accounts. b) Drawing against clearing effects. c) Amount of fresh loan/s sanctioned. the credit facilities granted by the Bank alone shall be taken into account. Loans to Micro Enterprises and Government Sponsored Schemes.14 Circular No.10. (d) Housing loans (e) Combined Harvester/two/three/four wheeler/Tractor loans under agriculture iii) The size of the credit limits should be determined/ revised only at the time of sanction of Fresh/renewed/enhanced loans/credit limits. 6) Interest on Unrated Borrowers: Levy additional interest @ 2% on all Unrated borrowers with exposures of Rs. d) BG/DPG/LC paid accounts. ii) Wherever any loans and advances are sanctioned the size of the limit shall be determined at the time of sanction by aggregating the following: a) Sanctioned amount (original advance) of all the existing short term loans as well as term loans including term loans refinanced by IDBI/SIDBI. this rule is not applicable in the case of following transactions: a) LD/ODD. d) Amount of fresh/renewed/enhanced credit limits sanctioned. not sought to be renewed/enhanced. Loans upto Rs. if any.15. when the instrument is returned unpaid. all Agriculture Loans. 3) Procedure for collection of interest on local cheques/drafts purchased: In the case of purchase of local cheques/drafts.10. This rule is not applicable for immediate credit of local cheques upto Rs. However the following types of advances may be excluded for the purpose of aggregation: (a) LD/ODD (f) Non-fund based credit limits (b) Jewel Loans (Priority/Non priority sector) (g) PBS Loans (c) Premises loans (h) Credit card dues/outstandings. remain outstanding shall be collected. normal interest/discount at the applicable rates for number of days funds advanced.158-2010-BC-RMD-10 / 30-06-2010 Annexure-8 General instructions/guidelines on application of interest rates 1) Minimum Interest: Interest shall be collected for a minimum period of 7 days if the loan/OD is closed within 7 days subject to a minimum of Rs. 5) Interest on Restructured Accounts: Levy additional interest @ 0.00 crore and above . 2) Size of the limit: i) For determining the size of the limit. However.

9) Definition of Term loan: Term loan means a loan repayable within a period of not less than 36 months as clarified by Reserve Bank of India.01/94-95 dated 22. the rates of interest furnished in the standard interest rate tables are applicable for consortium advances also. interest rate at BR + 6. ii) Agricultural advances.IECD. rate of interest stipulated at the time of implementing the package will continue subject to annual review in terms of RBI guidelines. number of days shall be taken as 365 and not 366. rates of interest may be stipulated as per parameters laid down by RBI. FDBP.Circular No. following categories of loans and advances are exempt from being charged at monthly rests – i) Advances against term deposits.No. For agreeing in consortium meeting for charging uniform rate of interest which is less than the rate furnished in the standard interest rate tables prior approval of the Corporate Office shall be obtained before falling in line with the consortium decision. However such rate of interest shall not be below the base rate. such higher rate shall be charged subject to a ceiling of BR + 6. WOX . DBD. However. In the case of viable sick industrial units to be placed under nursing programme in future.00% p. CBD. which have been communicated from time to time.a). FCBP.75% (presently 15.28/08.e CDD. Hence. 8) Consortium advances: RBI has vide Cir.12. shall be charged from the date of allowing debit balance up to the stipulated period (30/15 days) and overdue interest thereafter. 11) Charging interest at monthly rests: Interest on all loans and advances shall be charged at monthly rests. FUBP. FIBP. iii) Bills Discounting (i.11.158-2010-BC-RMD-10 / 30-06-2010 15 7) In the case of sick industrial units which are already placed under approved nursing programme. 12) Calculation of interest on advances in leap year: For the purpose of calculation of interest on loans and advances in a leap year. 10) Debit balance in SB/Current Account: In the case of debit balances allowed in SB/Current Account. etc).1994 advised that in the case of consortium advances each member bank is free to decide the rate of interest to be charged on the portion of the credit limits extended by it to the borrower. On the other hand if the leader/consortium decides to charge the rate higher than the rates furnished in the standard interest rate tables.75%. DATBD.

WOX . I am aware that RBI has permitted the Bank to introduce interest linked to Base Rate system from 01-07-2010. instead of old BPLR system. I prefer and agree to pay the interest linked to new Base Rate structure. which is at present _______% p.___________ (Rupees _______________________________________________only).a. I confirm that this undertaking can be read in addition to the documents executed by me as if this is forming part and parcel of the loan documents. subject to changes from time to time. which is at present ________ . In the loan documents/agreements. WOX Annexure -10 (For existing borrowers who opt for Base Rate) I have availed the following facilities on __________________ which is repayable with interest structure linked to Prime Lending Rate / Prime Term Lending Rate of the Bank. I am aware that RBI has permitted the Bank to introduce Base Rate system from 01-07-2010 and it has given an option to the existing borrowers to select Base Rate system.16 Circular No. I further confirm that this undertaking can be read in addition to the documents executed by me as if this is forming part and parcel of the loan documents. subject to changes from time to time. I confirm that other terms and conditions of the loan documents remain unchanged. Borrower/Surety * Any reference to singular includes plural and vice versa. This option is irrevocable. Exercising the option given to me by RBI / Bank.a.% p.158-2010-BC-RMD-10 / 30-06-2010 Annexure-9 (For all new loans / borrowers till the existing formats are exhausted) I have executed today the loan documents for __________________ facility totaling to Rs. The loan documents / agreement executed by me also refer to PLR / PTLR only. which is applicable to and binding on the Bank as well as the general public/borrowers. I hereby agree/consent and undertake that I will repay the above mentioned credit facility with interest linked to Base Rate of the Bank. Borrower/Surety *Any reference to singular includes plural and vice versa. the rate of interest is specified with reference to Bank’s Prime Lending Rate/ Prime Term Lending Rate. I am agreeable for the said Base Rate system as communicated to me.