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पंजाब एंड स धं बैंक Punjab & Sind Bank

प्रधान कार्ाालर् ऋण ननगरानी एवं नननि H.O Credit Monitoring & Policy Deptt
ववभाग़़, 7व ं िल बैंक हाउ , राजेन्‍दर प्ले 7th floor, Bank House
नई दिल्ली - 110008 Rajendra Place
New Delhi-110008
ईमेल:ho.cm@psb.co.in
Email: ho.cm@psb.co.in

HO Credit Monitoring Deptt. Cir. No. :1710 /2017-18 Date:31.05.2017


Deptt. Code No. : H-9002
Number of pages of circular : 53
TO: ALL BRANCHES & CONTROLLING OFFICES

REG: FRAMEWORK FOR DUE DILIGENCE FROM EXTERNAL AGENCIES EMPANELLED WITH
THE BANK

In view to further strengthen the system, as well as, to supplement the efforts of the Branches, Board of
Directors have approved framework for engaging external Due Diligence Agencies (DDA) for Retail
Proposals above Rs. 2.00 lac and Micro, Small & Medium Enterprise (MSME) borrowers for exposure of
Rs. 5.00 lac and above but upto Rs. 5.00 cr. vide BR No 22810 in their meeting dated 16.05.2017.

The objective of conducting due diligence inter-alia include:

Physical Due Diligence:

 To properly establish the identity of the persons who have approached for bank finance.
 To weed out all unscrupulous, not trust worthy persons from availing bank finance
 To form an independent opinion on the integrity, standing of the persons, who have approached for
Bank Finance.
 To ensure that persons are genuine and committed for the cause of the business they are dealing in.
 To ensure that they are residing in the place mentioned for long.
 The properties / securities offered are genuine and they are the real owners of those properties.
 The unit / business set up by them are existing for long.
Financial Due Diligence

 To get an independent opinion about the financial position of the units sought to be financed.
 To read beyond the Balance Sheet, and to know the true financial position of the unit and its
implications on the future borrowing programme, sought to be financed
 To know the liquidity and solvency position of the units.
 To know their banking operations – track record of their dealings.
 To ensure that the payment track records of these units to its suppliers/ from its customers are
reasonably good and money can be lent to them- whether payments are made promptly and
receivables are realized in time. The quality of its debtors and creditors would be known to a large
extent.

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
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 For double checking the facts and figures furnished by these units and an independent opinion is
formed before committing bank’s funds.
 To ensure the unit is statutory compliant with regard to payment of Sales Tax/ VAT, Service Tax,
Excise , PF, ESI etc.
 Unit is approved by the Pollution Control Board, if required
The detailed guidelines on Framework for empanelment of external Due Diligence Agencies (DDA) is
attached as per Appendix 1 and the same will have to be invariably followed in all eligible cases w.e.f.
01.07.2017.

All Zonal Managers shall ensure that all DDA applications along with necessary documents are
submitted to H.O. Retail Department for empanelment, within the preview of this framework, well in
time, so as to enable the empanelment of requisite number of DDA agencies for all Branches.

All the branches and controlling offices are advised to note the above for strict compliance.

(Jagmohan Sharma)
Asst. General Manager (Cr.M)

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
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APPENDIX 1

POLICY FOR DUE DILIGENCE FROM EXTERNAL AGENCIES EMPANELLED WITH THE BANK

A. Cut off for due diligence from external Due Diligence agencies empanelled with the Bank

In case of:

- Retail Loan proposals for exposure above Rs. 2.00 lac


- MSME loan proposals having exposure of Rs. 5.00 lac and above but upto Rs. 5.00 cr.
; a report from external Due Diligence Agency in the format prescribed by the Bank, shall be mandatorily
obtained and considered for taking decision on the proposal..

B. Exemptions: Following type of loans may be kept outside the purview of this policy:
 Retail Loans upto Rs. 2.00 lac.
 MSME loans upto Rs. 5.00 lac.
 Agriculture Loans
 Staff Loans
 Loan against Govt. Securities like NSCs IVPs, KVPs & Life Insurance Policies approved by IRDA
 Loan against Bank’s own Term Deposits
 Public sector Undertakings/ establishments (Govt. Undertakings)

However it shall be ensured that in such cases, the necessary due diligence is being carried out by Branches
as per extant guidelines.

C. Waiver of Due Diligence by External DDA - In case of loan proposals received from reputed new customers
who have proven track record for integrity & credit discipline and where the concerned Branch feels that the
due diligence need not be outsourced, in such cases, the Branch may seek permission from the Zonal Office
for waiver of due diligence by external DDA.

However waiver of due diligence from external DDA may also be sought in case of existing non borrower
customers who have satisfactory dealings with the branch at least for two year.

Zonal Heads are empowered to permit the same based on the merits of the case, due diligence report
submitted by branch along with specific recommendations of the Branch concerned on select basis. It may be
noted that the due diligence conducted by Branches in such cases is in addition to due diligence specified
elsewhere in any other scheme/ appraisal note format.

Permission for waiver of due diligence by external due diligence given by Zonal Office shall be applicable to
the specific proposal only.

Where the case falls under the powers of ZM (ZLCC), the waiver may be permitted by Head office after
considering ZM recommendations/ comments, which may be further based on specific recommendations of
the Branch, as well as, due diligence report submitted by the Branch.

However, for the cases falling under the Head Office, the respective sanctioning authority may permit such
waiver, after considering ZMs recommendations which may be further based on specific recommendations of
the Branch, as well as, due diligence report submitted by the Branch.

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
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It may be noted that in all such cases mentioned above, Due Diligence has to be conducted and signed by the
branch as per extant guidelines and the report should be submitted in the approved format (Annexure V - A for
MSME and V – C for Retail Loans).

D. Supplementary and not Substitute - The due diligence report as per this policy will not be an alternative/
substitute to the due diligence carried out by the Field functionaries and as such, the field functionaries are
also required to carry out their own KYC/ due diligence as per the guidelines issued by the Bank from time to
time. The report received from such agencies will only act as the second level of due diligence and the first
level of due diligence will continue to be done by the branches themselves i.e. compliance of the laid down
systems and procedures by the Bank.

E. Consortium/ Multiple Banking Arrangement: In respect of Consortium Accounts where our Bank is not the
leader, the matter should be taken up with the lead Bank for obtaining the same. The decision by consortium
by consensus will be binding on all the members. In case Diligence Report is obtained by the lead Bank then
Bank’s branches which are member of the consortium shall not insist upon obtaining Diligence Report afresh,
and the report available with lead Bank shall be obtained and examined. However, in case of Multiple Banking
Arrangements where each bank does its own independent economic and financial evaluations of the borrower,
Diligence Report shall be obtained by each loan syndication member, in terms of Banks guidelines already in
place and issued vide ID Circular No. 28/2008 dt. 26.09.2008 and ID Cir. No. 31 dt. 01.01.2009.

F. Frequency: The due diligence falling within the scope of these guidelines (excluding Consortium and Multiple
Banking Arrangement which are already covered by separate guidelines mentioned above), shall be carried
out as under:

- For Retail loan proposals above Rs. 2.00 lac and MSME loan proposals above Rs. 5.00 lac but upto Rs.
5.00 cr., due diligence exercise is required at the time of entry.

- In addition, sanctioning authority may insist upon DDA report, for cases where there is substantial
enhancement in limits. However such report may be obtained only in cases where the earlier DDA report is
older than 3 years or more.

- Proposals submitted to ZLCC/ HLCC, within the limits specified in this policy, shall also be subjected to due
diligence by the DDA. Such proposals may be referred to the DDA either by Branches or Zonal Office
depending on the availability of services of the DDA in Branches.

- Due diligence conducted is case specific and hence applicable to that proposal only. Subsequently, if the
borrower approaches for another loan, fresh due diligence shall be conducted.

G. Number of DDAs: Maximum of 10 DDAs shall be empanelled in any Zone. The appointment shall be done
keeping in view the location of branches and number of branches in each Zone. This will avoid over
dependence on any one DDA.

H. Turnaround Time: The task assigned along with verification involved shall be completed within the
Turnaround time (TAT) and at the rates/ fees/ charges governing such activities specified by the Bank. The
Turnaround time for the purpose of due diligence/ verification report covered under this policy may as under:

a. Auto Loan/ Education loan Schemes: Maximum 2 days

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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b. Housing Loan/Mortgage backed loans/ ODP/ Maximum 3 days


Multipurpose business loans/ LAP/ Other Retail funding schemes
c. MSME Loans Maximum 5 days

The above TAT is subject to the fact that all relevant documents/ necessary information is provided by the
borrower.

If any time, during the process of due diligence/ verification, the empanelled agency encounters any unexpected
conditions impending timely completion of report, the same shall be promptly communicated to the Bank in
writing, with details of reasons for delay, likely duration. The Branch manager may extend TAT by reasonable
time, on need basis, after being satisfied with the justification for delay in report, as provided by the respective
agency.

I. Due Diligence report should be signed by the promoter/ director of the company/ partner of the partnership firm
/ Proprietor of the proprietorship firm/ DDA Agency.

J. The empanelment of Due Diligence Agency (DDA) criteria for under this policy may be as under :

S.N Particulars Guidelines


1. Eligibility Criteria i. DDA shall be either a Partnership Firm or a Company (which may also
include firm/ Practicing CA/ CS/ ICWA). In case of non-availability of
Partnership Firm or a Company, Proprietorship may be considered,
ii. DDA shall have well equipped office with proper infrastructure.
iii. DDA shall have sufficient number of experienced office staff as well as field
level staff to carry out the work speedily and efficiently.
iv. The DDA being appointed shall have a minimum period of three years of
experience in the field.
v. DDA should be in the panel of any of the Public Sector/Private Sector/New
Generation Banks/Reputed Financial Institutions, at least for a period of 1
year, for conducting due diligence work.
vi. DDA engaged/appointed as sub-agent by another DDA is not eligible for
appointment.
vii. Proprietor/ Partner(s)/any of the Director(s) of DDA shall not be related to
any of the Directors of the Bank.
viii. Where there are common partners/ directors in more than one firm, only one
of the such firms shall be empaneled.
ix.. In case any of the partner/ proprietor/ director in the DDA is an ex-employee
of the Bank, such DDA shall be eligible for empanelment after a cooling
period of three (3) years from the date of retirement of that employee.
ix. Appointment of DDA shall be in compliance with statutory guidelines, if any,
issued from time to time.

Any relaxation in above eligibility criteria may be considered by the GM


(Retail), on case to case basis, based on merits.

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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S.N Particulars Guidelines
2. Negative Criteria i. No complaint against such DDA or its proprietor/ partner/ directors should
have been filed with CBI/ SFIO/ police/ court of law &/ or blacklisted by any
Bank/ FI/ IBA/ SEBI/ any regulatory authority, Government Department, any
PSU or removed from the assignment by RBI.

ii. The firm or practicing professional convicted of any offence and sentenced to
imprisonment /found guilty of misconduct in professional capacity / convicted
under IT Act &/or WT Act &/or Gift Tax Act &/or Service Tax Act, shall not be
eligible.

iii. A concurrent/ statutory auditor of the Bank shall not be eligible for
empanelment for the purpose of due diligence report during the tenor as
concurrent/ Statutory Auditor.

An undertaking to this effect (points i, ii & iii) should be submitted by the firm/
practicing professional on its letter head.
3. Empanelment Procedure i. Zonal Managers to invite applications for empanelment of DDA. For this
purpose, cases may be referred by branches to Zonal Offices also.

ii. The application letters for empanelment to the respective Zonal Offices are
to be submitted as per format prescribed in Annexure I. Zonal Managers
shall peruse the DDA application including the audited financial statements
and annual report as well as other indicators to ascertain the financial
position, nature & status of borrowings, financial conditions, sufficient
number of staff etc.

iii. While submitting the applications to competent authority for empanelment,


the respective Zonal Manager must certify that eligibility criteria in terms of
guidelines/ circulars are being met by applicant and they have conducted
necessary due diligence of such DDA agency and the details/ proof
submitted are found to be correct to the best of their knowledge and belief.
In addition, Zonal Managers should invariably send their recommendations
along with other documents to GM (Retail), for empanelment of the Due
Diligence Agencies. ZMs should also ensure that :

a) Necessary documents shall be submitted along with application


b) The geographical area where the firm/ practicing professional may be
entrusted the work in view of his set up may be proposed.

iv. After scrutiny/ analysis of the documents, the same are to be put up to the
competent authority for approval.

v. The competent authority to consider empanelment/ renewal/ depanelment


of firms/ practicing professionals may be General Manager (HO. Retail
Department). However, on stabilization of the system, the powers may be
decentralized to Zonal Managers after say 2-3 years, with approval of CMD
(ED in his absence) of the Bank.

vi. In case the agency is empanelled, the same may be communicated to the
concerned agency in the prescribed format (as per Annexure II).

Credit Consultancy Service Agreement (CCSA as per Annexure-III) shall


be executed between the Bank and the DDA. The Schedule of activities and

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
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S.N Particulars Guidelines
fee structure shall be clearly mentioned in the agreement

The letter of empanelment/ renewal and execution of CCSA agreement


shall be invariably signed by the Zonal Head. The CCSA agreement shall
have the seal & signature of authorized signatory on each page followed by
name & designation also on the last page.

vii. DDA shall be clearly apprised about their role, duties, responsibilities in
conducting due diligence. The person conducting due diligence shall
personally visit the borrower /guarantor/property to ascertain/collect true &
correct facts/information.

viii. The confidential opinion from the existing Bank’s with special mention to
the performance of DDA in conducting due diligence exercise shall be
invariably obtained.

ix. The DDAs shall be selected for empanelment in such a way that their
services will be available to all the Branches in the Zone, preferably close
to industrial clusters. The DDAs having offices at different location may be
preferred since large number of our Branches can be brought under DDA
network / service area.

x. Assignment for obtention of Diligence Report be given to same


professional, for specific borrower only once and in case of enhancement
(where applicable) the work should be allocated to some other
professional to have benefit of divergent views. As far as possible, Work
should be distributed in equal proportion amongst such empanelled firms
or Individual.

xi. The work relating to certification by professionals i.e. the Diligence Report
shall not be allocated to Stock Auditors conducting stock audit of the said
borrowal account. Further, the Statutory Auditor/ Concurrent Auditors of
the branch shall also not be allocated the work of issuance of Diligence
Report.

xii.HO Retail Marketing Department to periodically review the list of such


firms/ professionals and to update and circulate the list of such reputed
firms/ practicing professionals, whose report/ certification will be
acceptable to the Bank as per this policy.
4 Validity This empanelment will be valid for a period of three years unless there is any
modification in Terms & Conditions. The consultants will be required to apply
for renewal of empanelment along with requisite documents, two months prior
to anniversary date of original empanelment/ last renewal to the concerned ZO.
5 Review of Performance - Review of the performance of the DDA shall be carried out on a yearly basis
by the Zonal Managers. Review shall cover number of proposals handled by
each DDA, number of proposals marked positive & negative respectively,
total fees paid during the half year, time taken for submission of due
diligence report, quality of due diligence, adverse remarks observed,
customer complaints received , if any, etc.

- Where more number of DDAs are empanelled, work will be entrusted among
the DDAs uniformly to avoid over dependence on any one DDA. Referring
large number of cases to a particular DDA may overload them which may
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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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S.N Particulars Guidelines
prompt them to adopt short cuts in conducting due diligence which may
result in poor quality of work.

- Zonal Head shall conduct review meeting every year, separately with each
Due Diligence Agency and record the proceedings of the meeting, duly
signed by the participants. Zonal Office should prepare yearly Review report
(Annexure VII, Part A and Part B) on Due Diligence Agency and send the
same to GM (Head Office Retail Department) before 15th April each year.

- In case of major discrepancies /shortcomings observed in the functioning of


any DDA, their service shall be temporarily suspended till the time the DDA
initiates corrective measures to improve its efficiency by issuing a caution
notice to the DDA by Zonal Office with information to Head Office Retail
Department.

- Inspite of the warning, if the DDA fails to show improved performance, in


such cases the Branch may recommend for termination of the contract to
Zonal Office.

- The Due Diligence fee is to be paid by debiting to the applicant borrower


account with prior irrevocable Letter of Authority cum Undertaking
authorization (Annexure VIII) obtained from the borrower. Branch Office
shall keep a record on the fees paid to the DDA and submit the details to
Zonal Office which shall be further submitted to Head Office along with
yearly review report (Annexure VII Part A and B). However, the fee for retail
cases upto Rs.50.00 lac is to be borne by the Bank.
6 Renewal of Agreement - The exercise for renewal of contract shall commence two months prior to the
expiry of the existing contract to maintain the continuity of contract. The due
diligence work shall not be entrusted on lapsed agreement.

- Financial statements /Annual reports shall be obtained every year.

- The agreement executed is valid for 3 years unless there is any


modifications in terms & conditions. DDAs shall be informed that the fees
agreed thereupon are valid for 3 years.

- Such of the DDAs who have shown satisfactory performance during the
earlier period of contract only shall be considered for renewal. Enhancement
of fees may be considered at the time of renewal only. Renewal of contract
shall be for a further period of 3 years only.

- On renewal, letter of empanelment (Annexure II) shall be issued, with


suitable modifications, if necessary.

- Undertaking letter (Annexure IV) to be obtained afresh from DDA.

- GM (HO retail Department) is the Competent Authority for approving renewal


of external DDA. On receipt of approval from Zonal Office, shall execute /

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
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S.N Particulars Guidelines
renew the agreement and submit copy to Head Office for records.

7 Professional Fees Retail Loans

For Mortgage Based Loans - Rs. 1200 per file + ST


For proposals other than mortgage based loans - Rs. 800 per file+ST

MSME Loans:

Rs. 5.00 lac and upto Rs. 10.00 lac – 0.05% of proposed loan amount (Min.Rs.
1000 and Max Rs. 1500 per file+ST)

Rs. 10.00 lac and above upto Rs. 200 lac - 0.05% of proposed loan amount
(Min.Rs. 1500 and Max Rs. 2500 per file+ST)

Above Rs. 200 lac upto Rs. 500 lac. - 0.05% of proposed loan amount
(Min.Rs. 2500 and Max Rs. 3500 per file+ST)

The fee mentioned above shall be the maximum amount and ZM can negotiate
for lower fee on case to case basis.

The fee for Retail loans upto Rs. 50.00 lac shall be borne by the Bank and is not
to be recovered from the borrower. However in case of rejection, bank shall bear
the fees.
8 Discontinuation/ i. In cases, where services of the agency/ firm are not found satisfactory and/
Removal/ Depanelment or:
of agency/ Termination - Their reports are influenced /detrimental to the Bank’s interest
of Agreement
- Deficiency/inefficiency in their service
- Instances of DDA involved in fraud/supporting fraud
- Instances of DDA seeking financial favour/gain from customers
- Submission of reports without conducting the due diligence or without
visiting borrower /guarantor/property
- Where the DDA are found to be black listed by other Bank/s or IBA/
Other Government Organizations
- Partners /Directors of DDA are subsequently found to be related to any
of the Directors of the Bank
- DDA is subsequently engaged/appointed as concurrent/ statutory
auditors of the Bank.
- Any other reasons which warrants discontinuation/termination of service
of the DDA:
ii. Branches under the control of ZO shall forward names of such firms/
professionals to their respective Zonal Offices for de- listing their names
from the approved panel with their comments.

iii. However, before termination of services, the DDA shall be given a fair
opportunity to express his views for such deficiency by giving one month

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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S.N Particulars Guidelines
notice.

iv. After due scrutiny and analysis of the case, the ZM shall submit the case to
competent authority, along with his comments, who will be empowered to
de-panel such agency viz. GM (HO Retail Department)

v. On removal from panel, the respective ZM, will complain to self regulatory
organization concerned like Institute of Chartered Accountants of India,
Institute of Cost Accountants of India. Institute of Companies Secretaries of
India, other such bodies, as per formal procedure.

H.O. Inspection Department, being nodal authority for reporting and sharing of
third parties involved in professional misconduct, will be responsible for
receiving the information from ZOs/ H.O. Retail Department and circulate the
same to all branches/ controlling offices, as well as, report such information to
IBA/ receive such information from IBA for circulation to branches/ Zonal
Offices.

However the cases in which, such agency/ firms have played a vital role in
credit sanction/ disbursement or facilitated the perpetration of frauds, HO.
Fraud Monitoring Deptt., in turn, will prepare caution lists of such third parties
for circulation among the Branches and will further report to IBA, in line with
Fraud Risk Management Policy in vogue.

K. Change in Operational guidelines: For approval of any changes in aforesaid operational guidelines/ Scope, a
note shall be put up by HO Retail Management Department to the competent authority which in this case shall
be CMD of the Bank (ED in his absence).

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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Annexure I
Format for application letter for empanelment of firms/ practicing professionals for due diligence/
Verification Reports (to be submitted through Branch Office)

To,
The Zonal Manager
Punjab & Sind Bank.
……………..Zone

Dear Sir,

We / undersigned offer to apply for empanelment with Punjab & Sind Bank for due diligence exercise/ verification
report with your Bank.

We understand that Bank reserves the right to accept /reject our offer, without assigning any explanation or reason
and decision of Bank’s management shall be final and binding on us.

1 Name of the Agency

2. Date of Establishment

3. Reg. No.

5. Service Tax Reg. No.

6. ISO Certification No., if any

4. Constitution [Firm/ company/ Others]

5. Details of changes in constitution in last three years.

6. Registered Office

7. Postal Address

8. Number of Partners/ Directors

9. Names of Partners/ Directors and date since he became a partner/ director

10. Details of Contact person (s) viz. Name, Telephone No., Mobile No., Fax No. E-mail address etc.

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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11. Details of Branch / Office (s) with address, if any.
Number
Locations
Addresses
Partner incharge
Number of Computer Units
12 Particulars of proprietor/ partners/ Directors (Particulars for each of proprietor/ partners/ Directors
are to be provided (separate pages may be used for each partner to provide information in prescribed
format)
12.1. Personal Details
Name DOB PAN
Son/daughter/wife Age Telephone, Mobile, e-
of mail

12.2. Educational / Professional qualifications


Qualification Nature* University/ Institution Date of award

* Graduate degree /diploma / Post-graduate degree/diploma/certificate / Professional certificate


12.3. Membership / affiliation details
Name of the Member Since Membership Type (fellow or Membership No.
Body associate member)

12.4. Work Experience details


Practicing as auditor since In Individual capacity
Under this firm:
Under other firm(s):
Undertaking due diligence since In Individual capacity
Under this firm:
Under other firm(s):
Due diligence reports handled in last 3 years with name of In Individual capacity
clients [Attach separate sheet if required] Under this firm:
Under other firm(s):
Whether proprietor/partner of any other firm,
If so, name and address
Duration with the applicant firm
Whether empanelled / registered with others for
Due diligence/ verification exercise, If so give details

13. Brief profile of officials (qualification-wise) working in the firm as permanent employees alongwith
details of their names, designation, qualifications [Academic / Professional]. Registration /
Membership No.__ issued by Institute of Chartered Accountants/ Cost Accountants/ Company
Secretaries/ Other professional body. Brief profile and experience in the field of conducting due
diligence/ verification of potential Bank’s customers. (relevant certificates to be enclosed).
14. Brief financial particulars of the firm for the last three years along with the volume of business
handled (The information would be kept confidential)
15. Whether the firm has ever been empanelled for any professional assignment with our Bank. If yes,
please give details.

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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16 Whether firms or partners having any account, advance and other dealings with our bank. if so,
Please furnish necessary details indicating nature of the dealings & the name of the bank’s branch
where the accounts/s is/are maintained.
17 Average Turn Around time for such services in with other clients (type of loan wise breakup)
18 Undertakings/ Declarations
18.1 I/We do hereby undertake that [strike out which is not applicable]
I/we/none of our employees are ex-employee of your Bank OR
I/… of our partners/Directors/… of our employees was/were ex-employees of your Bank (give
details, viz. Name, SPF No. and Date of retirement/resignation) but ceased to be under your
employment since last 3 years or more. And
I/We shall not induct/employ any partner/employee during the tenor of our empanelment for due
diligence exercise/ verification report(s), who is/are within the abovementioned cooling period of 3
years from the date of retirement / resignation
18.2 We do hereby declare that
 I/We am/are not Central/ statutory auditor of your Bank
 I/We undertake to disclose any change in the above status as and when takes place
during the empanelment period
18.3 I/We do hereby solemnly declare and affirm that
 I/We have not been removed/dismissed from service/employment earlier
 I/We have not been convicted of any offence and sentenced to a term of imprisonment
 I/We have not been found guilty of misconduct in professional capacity
 I/We have not been convicted of an offence connected with any proceeding under the I.T.
Act 1961 &/or W.T. Act 1957 &/or G.T. Act 1958
 I/We am/are not undischarged insolvent(s)
 There are no complaints against me/us, registered with CBI/SFIO/Police/Courts of law
 I/We have not been blacklisted/depanelled by any bank/FI/IBA/ RBI/ others in the past
 None of the partners or proprietor of the firm is Director of the Bank
 The firm or their partner/proprietor has not been subjected to inquiries in the past for
misconduct by the Institute of Chartered Accountants/ Cost Accountants/ Companies
Secretaries of India. Similarly, no such inquiries are pending initiated or contemplated by the
Institute till date.
 We will not Sub-contract the assignment to another firm/persons in any manner whatsoever.

We confirm that that particulars given above are true in all respects and we undertake to furnish
necessary proof thereof if and when required by the Bank. We also confirm that all the terms and
conditions given in the proposal documents are acceptable us.

Signature of Authorised signatory


Place:_______________ Name:________________________
Date:________________ Membership No.: ______________

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List of enclosures
a…………….. b………………. c………………….. d……………….
e…………….. f……………….. g…………………. h……………….

Self-attested documents to be provided along with the application


 Photographs of the applicant/ proprietor/all partners
 Identity and address proofs of the applicant /proprietor/all partners
 Copy of Trade License
 Copy of registered partnership deed (in case of partnership firms)
 Copies of PAN Card of the applicant /proprietor/all partners
 Audited financial statements, Annual reports and IT returns of last 3 years
 Copies of Registration Certificate of the applicant /proprietor/all partners with Institute of
Chartered Accountants of India/ Institute of Companies Secretaries of India/ Institutes of Cost
Accountants of India/ other such body
 Evidences of professional qualifications and experience of the applicant /proprietor/all partners
 Evidences of existing empanelment, if any, with PSBs, FIs, Supreme Court, High Courts, Govt
authorities/departments, etc.
 Bank account statement of last 6 months

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Annexure II
FIRM NAME
ADDRESS

Dear Sir/ Madam,

Reg.: Empanelment as external agency for Due Diligence exercise for Retail proposals above Rs. 2.00
lac and MSME Loan proposals of Rs. 5.00 lac. and above but upto Rs. 5.00 cr.

We are pleased to inform that based on the request made by you, the Bank has decided to include you in the
list of agencies empanelled with the Bank for due diligence exercise of the proposals above Rs. 2.00 lac and
MSME Loan proposals of Rs. 5.00 lac. and above but upto Rs. 5.00 cr.

The terms and conditions of your appointment are as under:


i. The empanelment is for conducting Due Diligence exercise as prescribed by the bank. However, the
Bank has the right to accept or not, the report at its own discretion.

ii. The empanelment would not amount to any commitment on the part of the bank to provide any
professional assignment and bank reserves the right to cancel the empanelment at any time without
assigning any reason for the same.

iii. The empanelment shall be valid for a period of three years unless otherwise revoked.

iv. If information and details furnished in the application submitted for empanelment are found to be false
at any time in future or any information withheld, which comes to the notice of the Bank at a later date,
the empanelment of such applicant will be cancelled immediately.

v. You are requested to execute Credit Consultancy Service Agreement [CCSA] in prescribed format with
Schedule A – Objectives of Due Diligence and activities to be covered by DDA, Schedule B – DDA fee
structure and Schedule C – Status Report regarding due diligence work undertaken.

You are also requested to submit a monthly feedback report as per prescribed format within the 5th of
every succeeding month to this office.

vi. Bank reserves its right to remove/ delist you from the panel without assigning any reason at any time.
The approval as empanelled firm/ professional will cease if any adverse feature is noticed or reported
by our bank branches/ controllers without assigning any reasons, whatsoever.

vii. You or Partner(s)/ Proprietor/ Director(s) of your firm/ agency shall neither engage in negative
canvassing nor in any sort of financial transactions with the borrower in connection with loan
proposal/processing/sanction nor any other such activity which is detrimental to the interest/reputation
of the Bank.

viii. You or Partner(s)/ Proprietor/ Director(s) of your firm/ agency should not be convicted for any offence
and sentenced to a term of imprisonment by any court.

ix. You are requested to inform the Bank beforehand in case due diligence/ verification exercise is
entrusted to you for the prospective borrower who has already engaged you as Auditor/ other
professional capacity. You or Partner(s)/ Proprietor/ Director(s) of your firm/ agency should not have
been de-panelled by any bank/ PSU/ Other Government agency on account of his services/ report
being found influenced/ detrimental.

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x. Further, bank shall also be informed beforehand of any relation of with Partner(s)/ Proprietor/ Director(s) of
your firm/ agency with Director(s) or Officer/ Employee(s) of the Bank.

xi. The scope of work will be as specified, but not limited to, that defined in Bank’s Guidelines issued from time
to time. Bank reserves the right to ask for any additional information where necessary.

xii. Please note that your opinion/ reports/ certifications are being used by the Bank as an input for decision
making from time to time. Therefore, in case, any report submitted is found to be false or distorted and/ or
your firm/ agency is found to be adopting unfair practices and indulge in irregularity/ fraud, the Bank can
exercise right to inform/ notify bodies like Institute of Chartered Accountants/ Cost Accountants/ Company
Secretaries/ IBA/ other statutory or professional bodies for such act/ professional misconduct and request
for suitable action.

xiii. The report prescribed by the Bank shall be submitted to the concerned Branch Manager within the Turn
around Time (TAT) specified for the activity by the Bank from time to time. Please note that Punjab and
Sind Bank (PSB) may rely on your report and its finding before arriving on the decision for sanction/ non-
sanction of loans to a particular applicant. Your firm shall therefore ensure to submit true and correct
particulars on the field (s) verified. Please note that the format of report and TAT can be changed by PSB at
any time your agency shall comply with the same.
xiv. You should please ensure that all the persons, employees, workers and other individuals engaged in
rendering due diligence/ verification service to Punjab & Sind Bank have undergone proper background
check and other necessary due diligence checks to examine their antecedence and ensure their suitability
for such engagement. No person shall be engaged for this purpose unless found suitable for verification/
due diligence exercise. The firm/ practicing professional shall retain the records of such verification and
shall produce the same to the Bank when requested.

xv. If any time, during the process of due diligence/ verification, your firm/ agency encounters any unexpected
conditions impending timely completion of report, the same shall be promptly communicated to the bank in
writing, with details of reasons for delay and likely duration.

xvi. The following is the fee/charges payable per proposal for conducting due diligence exercise:

xiii. You shall submit the bill along with the list of proposals for which due diligence has been conducted during
the month (Schedule C) to Zonal Office for approval and advising the branches to make payment. You shall
not collect the fees directly from the borrowers.
You are requested to return the duplicate copy of this letter duly acknowledged as a token of your consent for
having agreed to provide your service for conducting due diligence on the above terms and conditions, by the
authorised signatory along with signed CCSA agreement within 15 days of date of appointment letter as token of
acceptance of above conditions. The empanelment for due diligence/ verification report shall be effective only on
receipt of acceptance from the firm/ practicing professional.

Yours Faithfully,

Zonal Manager
Punjab and Sind bank
………..Zone

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Annexure III.

CREDIT CONSULTANCY SERVICE AGREEMENT [CCSA]


THIS AGREEMENT made at …………………………………..on …………………day of…………………….
in the year………………………between M/s…………………………………………………………………
having its registered office at …………………………………………………………………………….
hereinafter referred to as ‘The firm’ (which term shall so far as context admits be deemed to mean and
include its permitted successors and assigns) of the ONE PART: and Punjab & Sind Bank, a body
corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act,
1980, having its Corporate office at21, Rajendra Place, New Delhi, hereinafter referred to as the ‘Bank’
(which term shall so far as the context admits be deemed to mean and include its divisions, subsidiaries
affiliated and their successors and assigns) of the OTHER PART :
WHEREAS:
a. M/s……………………………………………………………………………………………………………
……………………….is engaged in the business of management consultancy including business
of conducting verification of identity and address of persons by visiting to their places of
residence/office etc., verifying original identity proof, income proof, conducting reference check
etc., in connection with possession of immovable properties, visiting place of business, etc., and
has represented to the Bank that it has the necessary expertise, staff, infrastructure, business
premises and facilities for performing the services in the most efficient and effective manner.
b. Relying upon the representation made by the Firm, the Bank agrees to appoint the Firm to
perform services more details described in Schedule-A of this agreement according to the terms
and conditions hereinafter appearing.
c. Subject to the terms and conditions contained in the Agreement, the Bank hereby appoints the
Firm for providing verification services, on non-exclusive basis and in its capacity as an
independent contractor/service provider in the Territory for performing the functions, services,
operations mentioned herein and the Firm accepts the said appointment and shall during the term
of this Agreement and in accordance with the operating procedures and activities set forth in
Schedule-A, Schedule-B and Schedule-C of this Agreement.
d. Notwithstanding anything contained herein nothing shall restrict the right of the Bank to appoint
any other service provider/company/Firm for the same Territory on similar or on any terms and
conditions as the Bank may deem fit, which terms and conditions may be at variance with the
terms and conditions contained herein.
e. The Firm shall endeavor to confine the scope of its operations in the Territory agreed in terms of
this Agreement. However, it may enlarge the scope of its operations if required by the Bank.

NOW THIS AGREEMENT WITNESSTH AS FOLLOWS:


1.0 SERVICES:
1.1 The services to be provided hereunder by the firm is further described in ‘Schedule A’ of this
agreement.
2.0 EFFECTIVE DATE:
2.1 This agreement shall be effective from……………. and shall be in force till ………………[thirty
six months]
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3.0 TERM:
3.1 This Agreement shall remain in force for an initial period of 36 months from ……………., unless
terminated earlier under clause-14 herein.
3.2 The parties to this Agreement shall have a right to cancel this Agreement for convenience with
or without assigning any reasons thereto, on giving not less than 30 days prior written notice of
the intention to do so, to the other party.
3.3 Notwithstanding what is stated hereinabove, this Agreement shall, unless earlier terminated
continue to be operative in full force and effect, even after the expiry of 36 months, on a month
to month basis until renewed or terminated by written notice. During such continuation of the
Agreement the terms and conditions herein recorded shall be valid subsisting and remain
binding on both parties.
3.4 On the expiry or termination of this Agreement, The firm and any individual assigned for the
performance of the services under this Agreement, shall handover or cause to be handed over
all the Confidential Information and all other related materials in its possession to an authorized
official of the Bank.

4.0 COMPENSATION AND BILLING:


4.1 The firm will bill the bank for the services rendered as set forth in Schedule ‘B’ attached hereto
and made a part of this agreement.
4.2 All bills should be received by the Bank within 10 days after the end of the month for services
rendered during the month. The Bank will not entertain bills submitted beyond the due date.
4.3 The fee stated above (DDA Charges) is subject to change during the term of this Agreement by
mutual consent only. The fees for any new or additional service will be discussed and mutually
agreed. Such fees agreement will be by exchange of letters and will form a part of this
agreement.
4.4 Any amounts outstanding from the Bank against bills submitted in relation to services provided
for more than ninety (90) days, must be advised in writing to the bank for resolution.
5.0 WORK POLICY:
5.1 The firm agrees to employ its best efforts to meet the Bank’s deadlines and standards as
applicable.
5.2 The firm shall not, knowingly engage any person with criminal record/conviction and any such
person shall be barred from participating directly or indirectly in providing the services under this
Agreement.
5.3 The firm and any individual assigned for the performance of the services under this Agreement
agree to comply with all of the Bank’s standard/special physical security procedures in place at
the locations where the firm is performing work.
5.4 The firm shall compensate the Bank for any loss and/or damage caused to the Bank as a
consequence of non-compliance of all or any of the terms of this agreement or for the
misconduct or negligence of all or any of its employees, representatives or any individual
assigned for the performance of the services under this agreement. The Firm shall also
compensate the Bank for any claims made by third parties against the Bank arising out of any
act of omission or commission by the Firm. In the event of such a claim for loss or damages

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being made by the Bank, the Bank shall be entitled to adjust such amounts as claimed against
the future or outstanding payments due to the firm. Any such claim for loss and/or damage
made by the Bank shall not amount to a waiver of the Bank’s right to terminate this Agreement
or any of the other rights available to the Bank either under this Agreement or otherwise
howsoever.
5.5 Unless otherwise expressed, the firm shall meet with the Bank’s officials to discuss and review
its performance on a regular basis. The Bank shall have powers for continuous monitoring and
assessment of the service provided by the firm.
5.6 The firm and any individual assigned for performance of the services under this Agreement
agree, represent and warrant that no bank officers, director, employee or immediate family
member thereof (collectively, ‘The bank’s officers’) has received or will receive anything of value
of any kind from the firm or its officers, directors, employees or agents in connection with this
Agreement, and that no Bank personnel has a business relationship of any kind with the firm or
its officers.
5.7 In the event this Agreement is terminated consequent to the non-compliance of the provisions of
this agreement, no further liabilities or obligations shall accrue to the Bank except for any
charges due and owing at the time of such termination, for the services rendered under this
Agreement prior to such termination.
5.8 The Bank shall have the right to conduct audits, on the firm whether by its internal or external
auditors, or by agents appointed to act on its behalf and to obtain copies of any audit or review
reports and findings made on the services provided by the firm in conjunction with the services
performed for the Bank.
5.9 The firm shall allow the Reserve Bank of India or persons authorized by it to access the Bank’s
documents, records of transactions and other necessary information given to, stored or
processed by the firm within a reasonable time. In the event of the firm not making accessible
the above information to Reserve Bank of India within a reasonable time, the Bank shall be
entitled to recover from the firm the supervisory fees levied on it by Reserve Bank of India,
besides taking any other appropriate action.
5.10 This agreement shall also recognize the right of the Reserve Bank of India to cause an
inspection to be made of the firm and its book and account by one or more of its officers or
employees or other persons.
5.11 The Bank shall have the right to continuously monitor and assess the service provided by the
firm so that any necessary corrective measures can be taken immediately.
5.12 The Firm understands/agrees that the opinion/certification given by it would be an input for
decision making by the Bank. Accordingly, it is stipulated that in the event of the
opinion/certification given by the Firm turning out to be untrue and factually incorrect causing
loss to the Bank, the Bank may seek such clarifications as may be required to investigate the
matter and fix the responsibility. In the event it is established that there was gross negligence on
the part of the Firm or it had colluded with the customer in causing pecuniary damage/loss to
the Bank, then the Bank reserves its right to recover such loss/compensation for damages from
the Firm apart from taking civil or criminal recourse as it deem fit against the Firm/their
employees before the Court of Law/Competent Authority for justice. Further, the Bank may
recommend for inclusion of the name of the Firm in the caution list being maintained by the
Indian Banks' Association for circulation amongst member Banks as per advice received from
Reserve Bank of India.

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6.0 INDEPENDENT FIRM:
6.1 The firm and/or its employees, agents and representatives shall perform all services hereunder
as an independent firm on a non-exclusive basis and nothing contained herein shall be deemed
to create any association, partnership, joint venture or relationship of principal and agent or ,
master and servant or, employer and employee between the parties hereto or any affiliates or
subsidiaries thereof or, to provide either party with the right power or authority, whether
expressed or implied to create any such duty or obligation on behalf of the other party. The firm
acknowledges that its rendering of services is solely within its own control subject to the terms
and conditions agreed upon and agrees not to hold itself out to be an employee, agent or
servant of the Bank or any subsidiary or affiliate thereof.
6.2 The firm’s personnel, employees, agents, sub-contractors etc, have no authority/right to bind the
Bank in any manner. It is also clarified that the personnel or employees being provided by the
firm shall be employed by the firm and governed by terms of The firm’s employment and The
firm shall be solely responsible and liable in the event of any adverse claims of whatsoever
nature made on the Bank by the employees of The firm.
7.0 SUB-CONTRACTORS:
7.1 The firm shall not enter into any agreement with any contractor or sub-contractor in connection
with the services required to be provided by The firm under this Agreement without the prior
written consent of the Bank.
7.2 The Bank reserves the right of approval of all contractors or sub-contractors who will service the
Bank on behalf of The firm in relation to services under this Agreement. Approval of contractors
or sub-contractors will not be unreasonably withheld by the Bank. Approval of any contractor or
sub-contractor by the Bank shall not constitute the superseding or waiver of any right of the
Bank to reject work, which is not in conformity with its standards or this Agreement.
7.3 The firm shall be fully responsible for all acts and omissions of its contractors and sub-
contractors. Nothing in this Agreement shall be construed to create any contractual or other
relationship between the Bank and any contractor or sub-contractor, nor any obligation on the
part of the Bank to pay or see to the payment of any money due to any contractor or sub-
contractor.
8.0 TAXES:
8.1 The firm and its partners shall be solely liable for the payment of all taxes, duties, fines,
penalties, etc., by whatever name called as may become due and payable under the local,
state and/or central laws rules and/or regulations as may be prevalent and as amended from
time to time in relation to the services rendered pursuant to this Agreement.
8.2 The Bank shall not be liable nor responsible for collection and/or payment of any such taxes,
duties, fines, penalties, etc., by whatever name called, that are due and payable by The firm
under the local, state and/or central laws, rules and/or regulations as may be prevalent and
as amended from time to time.
8.3 Nothing contained herein shall prevent the Bank from deducting taxes deductible at source as
required by any law/s or regulation/s. The firm shall be responsible to report any non-receipt
of certificate of taxes deducted at source within ninety (90) days of deduction of such taxes at
source by the Bank. The Bank will not issue any duplicate certificate for deduction of taxes at
source unless such request is made within ninety (90) days of the closure of the financial
year.

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8.4 The firm shall co-operate fully in the defense of any claims/s by any local, state or union
authorities against the Bank with respect to any taxes and/or duties due and payable by the
firm and/or individuals assigned by The firm under this Agreement. Without limiting the
generality of the foregoing The firm shall upon request by the Bank, promptly furnish to the
Bank all documents, evidences in a form satisfactory to the Bank to defend such claim/s.
8.5 The Article-8 shall survive this Agreement and remain in effect until the statute of limitations
including extensions thereof for all claims by local, state, or union government authorities
against the Bank for taxes and duties expire.
9.0 COMPLIANCE WITH LAWS:

9.1 The firm hereto agrees that it shall comply with all applicable union, state and local laws,
Reserve Bank of India guidelines issued from time to time, ordinances, regulations and codes
in performing its obligations hereunder, including the procurement of licenses, permits and
certificates and payment of taxes where required. If at any time during the term of this
Agreement, the Bank is informed or information comes to the Bank’s attention that The firm is
or may be in violation of any law, ordinance, regulation, or code (or if it is so decreed or
adjudged by any court, tribunal or other authority), the Bank shall be entitled to terminate this
Agreement with immediate effect.

9.2 The firm has represented that it holds all valid, licenses/registrations, as may be required
under the laws prevalent from time to time. The firm shall ensure that all such
registrations/licenses where required, are kept valid and subsisting throughout the term of
this Agreement.

9.3 The Bank on becoming aware of any contravention/non-compliance of any laws by The firm
shall, notwithstanding its right to terminate the agreement as contained hereinafter, call upon
The firm to rectify the violation and to comply with the laws and The firm shall immediately
take all necessary steps to do so and comply with the law/s, regulation/s ordinance/s, code/s
in all respects.

10.0 CONFIDENTIALITY AND SECRECY:

10.1 The firm acknowledges and agrees that all tangible and intangible information obtained,
developed or disclosed including all documents, data, papers, statements, any
business/customer information, trade secrets and process of the Bank relating to its
business practices in connection with the performance of services under this Agreement or
otherwise, is deemed by the Bank and shall be considered to be confidential and proprietary
information (‘Confidential Information’).

10.2 The firm shall ensure that the same is not used or permitted to be used in any manner
incompatible or inconsistent with that authorized by the Bank. The confidential Information
will be safeguarded and the firm will take all necessary action to protect it against misuse,
loss, destruction, alterations or deletions thereof.

10.3 The firm shall ensure that all individuals assigned by the firm to provide services under this
Agreement, shall be made aware of the confidential nature of all such confidential
information. The firm shall not be absolved from any liability that may arise as a
consequence of breach of confidentiality either by the firm or any of its/his/their employee/s,
individual/s, agent/s or representative/s. The confidentiality has to be maintained even after
the Agreement expires or gets terminated.
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11.0 REQUIRED DISCLOSURE OF CONFIDENTIAL INFORMATION:

11.1 If the firm is directed by court order, subpoena or other legal or regulatory request or similar
process to disclose information recorded on any documents or any of the Bank confidential
Information, the firm shall immediately notify the Bank in writing, in sufficient detail
immediately upon receipt of such court order, subpoena, legal or regulatory request or
similar process, in order to permit the Bank to make an application for an appropriate
protection order (which the Bank may pursue at its own expenses). Such notice shall be
accompanied by a copy of the court order, subpoena, legal or regulatory request or similar
process.

12.0 INSURANCE:

12.1 The firm shall maintain at its sole expense, throughout the tenure of this agreement and the
extensions thereto, insurance coverage, including but not restricted to, comprehensive
General Liability Insurance covering bodily harm, injury, death of all individuals
employed/assigned by The firm to perform the services required under this Agreement
Fidelity Insurance protection against employees dishonesty, theft, robbery, forgery, altered
documents, and/or any other dishonest acts on the part of its employees or representatives,
Workmen Compensation Insurance of all individuals employed/assigned by The firm to
perform the services required under this Agreement and/or such other insurance for loss or
damage to property howsoever caused.

12.2 The firm further undertakes at its sole expense to provide for insurance of all property used,
individuals, employees, agents or persons assigned to perform the services under this
agreement, as may be required by the Bank up to such limits as may be specified by the
Bank.

12.3 The Bank shall have no liability whatsoever for any loss or injury to any property or any
individual assigned to perform the services under this Agreement or otherwise, while on
bank premises or anywhere else, including any liability that may arise as a result of
malfunction of any equipment or otherwise howsoever.

13.0 INDEMNITY:

13.1 The firm warrants to the Bank that, during the terms of this Agreements, the materials and
services to be delivered or rendered hereunder, will be of the kind and quality designated
and shall meet specifications as determined in the Bank’s sole and exclusive discretion and
communicated to The firm from time to time.

13.2 Notwithstanding any other provisions of this Agreement, in no event shall the Bank be liable
to the firm for lost profits or revenues, consequential or similar damages arising out of or in
connection with the services, materials or assistance provided under this Agreement, or for
any claims made by the Bank on The firm.

13.3 The firm agrees to indemnify the Bank and undertakes to fully compensate the Bank in case
of any prejudice, claim or any loss arising or accruing to the Bank on account of any act,
commission or omission attributable to the improper handling of the Bank’s documents or to
the negligence of any person of The firm, which has resulted whether on account of breach
of any of the conditions of this Agreement by The firm and/or its employees, or on account
of any disclosure of the confidential information or otherwise howsoever.
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13.4 The Firm further undertakes that if any employee/s of the firm is involved/alleged to be
involved in any illegal, criminal/unfair activity of any such activity which warrants criminal
action, and by which the Bank incurs any loss /damage, the firm shall take criminal action
and shall file FIR/Police Complaint at firm's cost. The firm indemnifies the Bank against any
loss caused or likely to be caused to the Bank or its employees by virtue of such acts of the
employee/s of the firm.

13.5 This shall be without prejudice to any other rights available to the Bank.

14.0 DEFAULT AND TERMINATION:

Notwithstanding anything herein contained, the Bank may by giving thirty days notice in writing to
the firm, terminate this Agreement under any one or more of the following conditions:

14.1 If the Bank is informed or information comes to the Bank’s attention that the firm is or may be
in violation of any law/s, ordinance/s, regulation/s, code/s or court order/s.

14.2 In the event of any default by the firm, if in the reasonable opinion of the Bank, performance
of any of the services under this Agreement by the firm is not acceptable as being in
contravention of any laws as may be applicable from time to time or industry practice, under
the circumstances which would amount to objectionable service.

14.3 If the firm fails to perform the services under this Agreement or to observe any of its
obligations or breaches all or any of the terms of this Agreement.

14.4 If the firm discontinues its business.

14.5 If a petition for insolvency is filed against the firm and such petition is not dismissed within
Ninety (90) days after filing and/or if the firm makes an arrangement for the benefit of its
creditors or, if the Court Receiver is appointed as receiver of all/any of the firm’s properties.

14.6 If in the opinion of the Bank the interest of the Bank are jeopardized in any manner
whatsoever. The Bank may terminate this agreement at any time without assigning any
reasons.

14.7 It is hereby agreed and understood by the parties that the provisions of this Clause shall not
limit or restrict nor shall they preclude the Bank from pursuing such further and other legal
actions, against the firm for any breach or non-compliance of the terms of this Agreement.

14.8 In the event that this Agreement is terminated for any reasons, the firm shall forthwith hand
over to the Bank all documents, material and any other property belonging to the Bank that
may be in the possession of the firm or any of its employees, agents or individuals assigned
to perform the services under this Agreement.

15.0 PUBLICITY:

15.1 The firm or its employees and representatives shall not use the name and/or trademark/logo
of the bank in any sales or marketing publication or advertisement, or in any other manner
without prior written consent of the Bank.

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16.0 SUCCESSORS:

16.1 This Agreement binds the heirs, executors, administrators, successors and permitted
assigns of the firm with respect to all covenants herein, and cannot be changed except by
written agreement signed by both parties. The term ‘The firm’ wherever used in this
Agreement shall mean and include its employees, agents and representatives and the heirs,
executors, administrators, successors and assigns of all such employees, agents and
representatives.

17.0 ASSIGNMENTS:

17.1. In the event of a reorganization, merger, or acquisition or related activity in which The firm
passes management or control to other owners its rights under this Agreement, the Bank
reserves the right to review the terms of this Agreement. The Bank retains the right to
terminate this Agreement if management or control of the firm vests in any of the Bank’s
competitors, whether a direct or indirect competitor.

17.2. The firm shall not transfer, or assign this Agreement or any right or obligation under it to any
other person, firm, bank or entity without the Bank’s prior written consent and any such
assignment shall be void and not bind the Bank. If such assignment is as a result of
operations of any laws, then the Bank shall have the option on such assignment to terminate
this Agreement and the firm shall be liable to compensate the Bank for damages suffered by
the Bank for what would otherwise have been remainder of the agreed tenure of this
Agreement.

17.3. Nothing contained herein shall prevent the use by or the assignment of this Agreement by
the Bank to any of its subsidiaries or affiliates.

18.0 FORCE MAJEURE:

18.1 If the whole or any part of the performance by the Parties or any part of their respective
obligations hereunder is prevented or delayed by causes, circumstances or events beyond
the control of the parties including delays due to floods, fires, accidents, earthquakes, riots,
explosions, wars, hostilities, acts of government, custom barriers, or other causes of like
character beyond the control of the parties, then to the extent the parties shall be prevented
or delayed from performing all or any part of its obligations hereunder by reason thereof
despite due diligence and reasonable efforts to do so notwithstanding such causes,
circumstances or events, the parties shall be excused from performance hereunder for so
long as such causes circumstances or events shall continue to prevent or delay such
performance.

19.0 ARBITRATION:

In the event of disputes, controversies, differences of opinion and claims arising out of or in
connection with this Agreement or in any way relating hereto or any term, condition or
provision herein mentioned or the construction of interpretation thereof or otherwise in
relation hereto, the parties shall first endeavor to settle such differences, disputes, claims or
questions by friendly consultation and failing such settlement, the same shall be referred to
Arbitration of two Arbitrators, one to be appointed by The firm and the other to be appointed
by the Bank, for determination of specific issues. An expert Arbitrator will be mutually agreed
upon by the parties hereto and such Arbitrators shall appoint an Umpire before entering on
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the reference. Such Arbitration shall be held in accordance with The Arbitration and
conciliation Act, 1996 or any statutory modification or re-enactment thereof for the time
being in force and shall be held in Mangalore or at the place of transaction as the case may
be and be conducted in the English language. During the period of dispute there shall be no
suspension of the agreement and each party must continue its obligations under this
agreement.

20.0 GOVERNING LAW/JURISDICTION:

20.1 This agreement shall be governed by and construed in accordance with the laws of India and
shall be subject to the exclusive jurisdiction of the court of as the case may be, at the place
of transaction.

21.0 FORBEARANCE:

21.1 The failure on the part of the Bank to insist upon the performance of any terms and
conditions of this Agreement, to exercise any right or privilege conferred in this Agreement,
or to demand any penalties resulting from any breach of any of the terms or conditions of
this Agreement shall not to be construed as a waiver on the part of the Bank of any terms,
conditions, rights or privileges, but the same shall continue and remain in full force and
effect, nor will such waiver affect any subsequent breach or subsequent action in that
behalf.

22.0 RIGHTS AND REMEDIES:

22.1 All rights and remedies conferred under this Agreement or by law shall be cumulative and
may be exercised singularly or concurrently.

23.0 GENERAL PROVISIONS:

23.1 Severability: If any term or provision of this Agreement should be declared invalid by a court
of competent jurisdiction, the remaining terms and provisions of this Agreement shall remain
unimpaired and be in full force and effect.

24.0 THIRD PARTY BENEFICIARIES:

24.1 Except as specifically set forth or referred to herein, nothing contained or implied herein
is intended or shall be construed to convey any rights upon any person or entity other than of the
firm and the Bank.

25.0 COMPLETE AGREEMENT:

25.1 This agreement supersedes any and all agreements, contracts or addenda relating to The
firm. This Agreement is entire in itself and cannot be changed or terminated orally. No
modification waiver or amendment of this Agreement shall be binding unless communicated
in writing and signed by both parties. All legally required amendments shall automatically
become an integral part of this Agreement.

25.2 This Agreement, together with Schedules A, Schedule-B & Schedule- C, and the addenda, is
the entire agreement and expresses the complete, exclusive and final understanding of the
parties with regard to the subject matter herein and may not be altered, amended or
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………………………………………………………………………………………………………………………………………………..
modified except in writing and signed by the parties. In the event of any conflict or
inconsistency between this Agreement, the schedules and addenda, the order or
precedence to use in resolving such conflict or inconsistency shall be this Agreement, the
schedules and the Addenda.

25.3 By executing the duplicate of this Agreement and Annexure the firm shall be deemed to
acknowledge having understood the terms hereof and the procedure set out in and
terminology used in the annexure and to accept and agree to the terms hereof and the firm
shall be bound to comply with the same.

26.0 CORPORATE AUTHORITY/FURTHER ASSURANCES:

26.1 The firm represents that it has taken all necessary corporate action to authorize the
execution and consummation of this Agreement and will furnish satisfactory evidence of
same upon request. An authenticated list of the Officers of The firm who are authorized to
sign and/or execute this Agreement and/or other related documents and writings shall be
provided to the Bank duly authenticated by the firm.

27.0 MONTHLY FEEDBACK:

27.1 The Firm shall note to submit the monthly feedback report as per Schedule-C to the Zonal
Office, before the 5th of every succeeding month, lest the Bank will have the right to
withhold any amount payable to the firm.

28.0 NOTICES:

28.1 All notices to be given pursuant to the provisions of this Agreement shall be sent to the
parties at the following address

DDA The Bank

Punjab & Sind Bank,


Head Office,
21, Rajendra Place
New Delhi - 110008

28.2. All correspondence, notices or any other communication, shall be deemed to have been
duly and sufficiently served on the parties seven (7) days after the same shall have been
delivered to the post office, properly addressed to the parties at their above mentioned
respective address or, as otherwise intimated by the parties, and if delivered to the parties
against acknowledgment such correspondence, notices, or any other communication shall
be deemed to have been duly served as on the date of delivery.

28.3 This agreement shall be subject to the policy of the Reserve Bank of India or any other
regulator, regulating outsourcing services by the Bank on outsourcing of financial services
from time to time.

IN WITNESS WHERE OF the parties hereto have hereunto set and subscribed their respective
hands and seal at the day, month and year first hereinabove written.

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Signed and delivered by the within named Signed and delivered by the Punjab & Sind
M/s………………………………………………… Bank through its Authorized Signatory, on the
……………….. through its Authorized Signatory, on other part:
one part: Mr.
Mr. [ ]
[ ]
In the presence of: In the presence of:
Witness: Mr. Witness: Mr.
[ ] [ ]

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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………………………………………………………………………………………………………………………………………………..
Schedule A
The objective of conducting Physical Due Diligence is as under:

 To properly establish the identity of the persons who have approached for bank finance.
 To weed out all unscrupulous , not trust worthy persons from availing bank finance
 To form an independent opinion on the integrity, standing of the persons, who have
approached for Bank Finance.
 To ensure that persons are genuine and committed for the cause of the business they are
dealing in.
 To ensure that they are residing in the place for long.
 The properties / securities offered are genuine and they are the real owners of those
properties.
 The unit / business set up by them.

The objective of conducting Financial Due Diligence is as under:

 To get an independent opinion about the financial position of the units sought to be
financed.
 To read beyond the Balance Sheet, and to know the true financial position of the unit and
its implications on the future borrowing programme, sought to be financed
 To know the liquidity and solvency position of the units.
 To know their banking operations – track record of their dealings.
 To ensure that the payment track records of these units to its suppliers / from its
customers are reasonably good and money can be lent to them- whether payments are
made promptly and receivables are realized in time. The quality of its debtors and
creditors would be known to a large extent.
 For double checking the facts and figures furnished by these units and an independent
opinion is formed before committing bank’s funds.
 To ensure the unit is statutory compliant with regard to payment of Sales Tax/ VAT, Service
Tax, Excise , PF, ESI etc.
 Unit is approved by the Pollution Control Board.

Activities to be covered under Due diligence by the DDA.


Telephone Verification of Residence/ Office of Applicant, Co-Applicant & Guarantor

Note: DDA shall confirm the number by cross verifying the telephone number with the telephone bill and/or
also by making call to the person/s residence and to their office
Field Verification of Residence/ Office of the Applicant , Co-Applicant & Guarantor [ maximum of 6 cases]
Note: DDA shall invariably pay surprise visit to the residence and /or place of work to ascertain that the person
is actually residing/working at the given address or the said property is belonging to him.
Prior intimation about the visit should not be given to them either by the Branch or DDA. This is necessary to
prevent the fraudulent borrowers resorting to impersonation or designing misleading plans or placing wrong
facts before the DDA.
Verification of the Property/ Site/ Flat/ or the property offered as security and site verification.
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Note: DDA shall invariably visit the property to ascertain whether the property to be purchased/mortgaged to
the Bank exists and owned/to be owned by the borrower/s, guarantor as the case may be.

Where the property has been rented /leased out, enquiry shall be made with the tenants and neighbors about
the ownership of the property.

In case of house under construction, information may also be gathered from the workers present at the
construction site. In case of flat under construction, information regarding the name and address of the person
who has booked the flat may be obtained from official records of the builder/developer. Verbal information from
the builder/developer shall not be obtained. The information about the local standing of the builder/developer
such as his reputation, timely completion of earlier projects, litigations, if any, need to be ascertained.

DDA shall visit the property without any prior intimation.


Income Tax Returns verification with Income Tax office
Note: The DDA shall visit Income Tax office and ascertain that the IT returns /IT Assessment Order submitted
by the borrowers are genuine.
Salary slip/certificate verification of the applicant /co applicant [ maximum 3 cases ] [applicable for retail loans
only]

Note: The DDA shall visit the office of the employee to ascertain the genuineness of Salary slip/Certificate.
Thus it will also help to confirm that the borrower is working at the given office address. Net income shown in
the salary slip/certificate may be cross verified with the salary credit shown in borrowers statement of account.
Balance Sheet /Auditor's Report verification.
Note: Turnover/Profit shown in the financial statements shall be cross verified with Sales Tax Returns /
Statement of Account / IT Return and can be confirmed from Auditors. Verification with MCA site.
Trade License and other verifications (Telephone Bill/ Electricity Bill/ Office Identity/ Voters Card/ Driving
License).
Note: Genuineness of these documents can be ascertained from web-portal of the concerned authorities. Print
out taken from web-portal may be enclosed to the DDA report.
Bank Account verification
Note: The DDA shall visit the Bank /Branch to ascertain the facts that the account is actually in the name of the
borrower and the statement is genuine. Further, the statement shall also be verified to ascertain PDC/ECS
debits to know other borrowings, instances of cheque/ECS returns, if any, of the borrowers.
In case of NRI borrowers:

Note: In addition to the above, the DDA shall telephone to office of the overseas employer of the borrower or to
their branch located in India to confirm that the borrower is working in their organization. Information of the
borrower may also be obtained from neighbors of his parents/ local residence. Details mentioned in other
documents such as Passport etc., may be cross verified from web-portal also.
The DDA shall conduct due diligence exercise and submit its report (Annexure V (A/B)) containing all relevant
information within the TAT.
The DDA shall certify that he has visited the borrower/s, guarantor & the property and the information furnished
by him in his report is true and correct and the report is complete in all aspects.
Balance sheet analysis: To read beyond the Balance Sheet, and to know the true financial position of the unit
and its implications on the future borrowing programme, sought to be financed.

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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Schedule B

Fees payable to M/s ……………………………………………………………………………………


for the due diligence work done shall be as under:

Loan amount Maximum DDA fee per file


Rs.__________+ Service Tax
Rs.__________+ Service Tax
Rs.__________+ Service Tax

DDA shall submit the bill along with the list of proposals for which due diligence has been conducted
(Schedule C) during the month to Zonal Office for approval.

On receipt of approval from the zonal office, the branches shall pay the DDA fee by debit to the
borrower account based on the irrevocable letter of authority cum undertaking obtained from the
borrower along with application. DDA shall not collect the fees directly from the borrower.

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Schedule C

STATUS REPORT REGARDING DUE DILIGENCE WORK UNDERTAKEN AS ON ………..…..


(Monthly Report)

Client Name: Punjab & Sind Bank Name of DDA:

S.N Name of the Inward Application Applicant Report date Status


Branch Date No. (Positive/
Negative)

Date: Signature of the DDA Official with seal

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Annexure IV

Under taking letter from Due Diligence Agency


(To be obtained on fresh appointment & on every renewal)
(The Undertaking letter need not be stamped)

From:
M/s……………………………………
………………………………………………………
……………………………………………………..

To:
Punjab & Sind Bank,
Zonal Office,
……………………………..

Sub: Due Diligence Agreement executed by us on…………………………..

With reference to the above, we hereby declare as under:

i. That none of the Partners / Directors of our Agency is related to any of the Directors of the Bank.

ii. That any of the employees of the Bank are not related to any of the Partners / Directors/
proprietor of our Agency.

iii. That no complaint against us or any of our proprietor/ partner/ directors have been filed with CBI/
SFIO/ police/ court of law &/ or blacklisted by any Bank/ FI/ IBA/ SEBI/ any regulatory authority,
Government Department, any PSU and we have not been removed from any assignment by
RBI.

iv. That our firm/ agency or any of our proprietor/ partner/ directors professional have ever been
convicted of any offence and sentenced to imprisonment /found guilty of misconduct in
professional capacity / convicted under IT Act &/or WT Act &/or Gift Tax Act &/or Service Tax
Act, shall not be eligible

v. That the Agency is presently not engaged /appointed for concurrent audit/ Statutory audit work of
the Bank.

vi. That the Agency will not collect the Due Diligence charges directly from the borrowers

vii. That in case we are already appointed as statutory auditor of the client for whom due diligence is
to be carried out, the same will be informed to the Bank beforehand.

Place: Yours’ faithfully,


Date:
Signature (authorized signatory)

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Annexure-V -A
(For MSME Proposals)
Due Diligence Report

Date of Visit
Persons Met

Name Designation Years of Service

1.BORROWER
Borrower’s Name and Address
Telephone (Residence/ Office)
Electricity
Other site(s) of the borrower / site (s)
Trade Licensee
Constitution of the Borrower
Names of the Proprietor / Partners / Directors 1.
2.
3.
4.
2. BACKGROUND VERIFICATION
Year of Establishment
Registrations / Affiliations
(Any change in promoters’ registration / affiliations)
Any Awards won
Any change in Registered Office
Legal proceedings against the borrower
Disputes, if any
3. BUSINESS ACTIVITIES
Profile (Nature of Activity)
Products
Installed Capacity
Details of Fixed Assets

No. of Employees
Premises

Present Banking Relationship


Bank Nature of Credit Sanctioned Outstanding Balance EMI
Facility Loan Amount

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1. PERSONAL ASSETS OF THE PROPRIETOR / PARTNERS / DIRECTORS:


Name Description of the Amount (Rs. in Whether offered as Security
Assets owned by lakh)
them
1.
2.
3.
4.
2. DETAILS OF CLIENTS: (Major Customers)

Sl. No Name of the Location Relationship Credit


Customers & their (No. of years) Period
contact numbers Allowed

Quality of Debts shall be ascertained and stated


6. DETAILS OF SUPPLIERS

Sl. No. Name of the Location Relationship Credit Period


suppliers & their (no. of Years) Allowed)
contact numbers

Payment track record shall be stated


7.DETAILS OF ASSOCIATE / GROUP CONCERNS

Sl. No. Name of the Nature of Bankers


Associate / Activity
Group
Concerns

8. INSURANCE DETAILS:
Unit’s Assets covered Policy No. / Validity Sum Assured Risk Covered
Cover Note

9. FINANCIAL ANALYSIS

Last available financial statement


(Year ended dd/mm/yyyy)
Recent summary financials
(upto a period not more than two months old)
Advance Taxes Paid
Change in borrowings
(from FY …… to FY……..)
Debtors Position
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(At last month end____ specify amount > 90 days)
Creditors Position
(At last month end____ specify all suppliers not paid
for more than 90 days)
Stock Position (at last month end)
Drawing Power
Any other material development
Critical ratios Current Ratio
Debt-Equity Ratio
DSCR
TOL / TNW
Promoter’s Contribution

10. OTHER BUSINESS INTERESTS OF THE PROMOTERS

[Comments]

11. REVIEW OF BANK STATEMENTS FOR THE LAST SIX MONTHS

Number of Credit / Debits, month-wise


Month-wise Credits into the Account
(Block credits and bounces / reversals to be ignored)
Cheque bounces
Evidence of servicing existing debt obligations
Line Utilisation – any evidence of perennial overdrawing
Evidence of statutory dues being paid on time
PF and employee related
Municipal and Corporation Taxes
Last utility payment made (electricity, water ,telephone etc)
12. ACIVITY LEVELS AT THE TIME OF VISIT

Number of Employees observed


Level of Activity (description of production / Delivery / Customers)
13. FOR MANUFACTURING ENTITIES / FACTORY SITE (S)

Location of Plot, accessibility,


proximity to other units
Principal raw material(s) and
sources
Manufacturing Process
Major branded and imported
machines, installed

Pollution Control: Any


pollutants being generated and
their disposal.

Permission obtained from the


Pollution Control Board.
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Power: Connected load and
back up availability
Inventory / WIP / Finished
Goods at the Site
Storage / Security / Perishability /
Susceptibility to fire and weather
Quality Certification
Workers / Split of temporary and
permanent / any unions
History of any strikes / any child
labour / working conditions
14. OTHER PARTICULARS
Months (during the current year) Purchases Sales

Documents verified
15. RECORD OF ORIGINALS VERIFIED:
Balance Sheets and
schedules
Profit & Loss statements and
schedules
Computation of income
Income Tax Return
Photo Identification
SUMMARY OF ROC SEARCH REPORT

i. Details of Directors
Name & Designation Address Date of Appointment Date of Cessation

ii. Index of Charges


Sr. Charge ID Name of Date of Creation Final Remarks Page
No. Chargeholders / Modification of Amount No.
Charge Secured by
the Charge
(in Rs.)

Particulars of Charges registered with the Registrar of Companies, NCT of Delhi & Haryana:
Charge Holder ----- Bank

Charge Creation / Date of Date of Amount Secured Security


I. D. Modification Creation / Registration
No. Modification

15. PROPERTY PROPOSED TO BE MORTGAGED


Identification of the Property : (Proposed to be mortgaged to the bank)
a) Name and address of the person, who has identified the property.
Name:
………………………………………………………………….…………………….

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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………………………………………………………………………………………………………………………………………………..
Address:...............................................................................................................................
.............................................................................................................................................
b) Date of visit to the spot
....................................................................................................
c) Whether original Title Deeds / Tax Receipts verified Yes / No
d) Others (specify)
16. SWOT ANALYSIS OF THE UNIT
STRENGTHS WEAKNESS

OPPORTUNITIES THREAT
17. CONCLUDING REMARKS / SUMMARY OF FINDINGS:
Particulars Summary of findings

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Annexure V - B
DUE DILIGENCE REPORT ON PROSPECTIVE HOME BORROWER/ LOAN AGAINST PROPERTY/
MORTGAGE BACKED LOANS/ VEHICLE LOANS/ OTHER RETAIL LOANS

1. BORROWER

Name of Applicant

Permanent Address

Telephone Number
Type of Loan
Trade Licence
Date and Time of Visit
Address Confirmed by (Self/ Family member/
Neighbors/ guard/ Others please specify)
Whether the applicant is existing account holder ? Yes / No
If yes, Dealing with the Bank Since ..................... Nature of Account ........................................
In case applicant is banking with other banks,
whether confidential opinion called for: - Yes/ No
If so, whether opinion is satisfactory: - Yes/ No
Other observations, if any: ………………………………….
2. VEHICLE DEALER VERIFICATION (In case of Vehicle Loans)
Name and Address of the vehicle dealer (Applicable for Vehicle Loans Only)

Year of Establishment

Whether Authorised Dealer (If yes, Since when)

Reference made:
(a) Local Dealer of same or similar product
(b) The Manufacturer / Their Reg., Office
(c) Visit Made (if)

3. RESIDENCE VERIFICATION

FOLLOWING INFORMATION IS TO BE OBTAINED IF THE APPLICANT AND HIS FAMILY MEMBERS ARE CONTACTED

No. of Residents in House Years of Current Residence


No. of earning family members Residential Status (Owned/ rented/ PG/ Parents/ relatives/ Others
please specify):
Vehicles:
FOLLOWING ARE BASED ON VERIFIER’S OBSERVATION AND ARE NOT TO BE ASKED FROM APPLICANT:

Location: Easy/ Difficult/ Untraceable/ Gulli

Locality/Surroundings Slum/ Chawl/ Underdeveloped Area/ Residential Buildings/


Small/Medium Size Shops/ Big Housing Complex/ Commercial Building
Is the entrance motorable Yes/ No
Is the address confirmed Yes/ No
Correct Pin Code
Prominent Land Mark
Types of Accommodation Chawl - Small Independent House - Hostel - Small Unit within a

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PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
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house (Garage/Varsati, etc.) – Block – Slum – Flat - Hotel/Lodge/
Mansion - Large Independent House - Bachelor/Shared
Accommodation - Others (Pl Specify)
Standard of Living Upper - U Middle Class – Middle – L Middle - Lower

Colour of House/ Complex

Interior Conditions Painted – Furnished – Carpeted - Curtains


Assets seen Television Refrigerator AC Music System
No. of Stories Watchman Yes/No Lift Yes/No
Society Board and Name in the register of society Yes No

Applicant’s Name outside door/gate Yes No


No. of cars seen in and around residence
External appearance of the building/Society Excellent Good Fair Poor
Separate parking slot alloted Yes No
Entry into residence permitted Yes No Door locked
Person Contacted
Relationship
Approximate size of
flat/house (sq/sq. yards/
grounds)
OBSERVATION/REMARKS:
Neighborhood check Person contacted
Remarks
If the house is found to be locked after 2 visit
attempts, following information s to be obtained
from neighbors/ third party:

a. No of Residents in House
b. Years Lived at Residence
c. Occupation
Person met
4. SOURCE

Borrower identification is made through:

a) Identity card issued by employer b) Voter’s ID card


c) PAN Card d) Others (Specify)

Address Verification is made through:

a) Passport (must for NRIs) b) Voter’s ID card c) Telephone/Electricity Bill


d) Driving Licence e) Society Bill f) Ration Card g) Others (Specify)

Employment / Occupation verification is made through:


a) Identity card from employer b) Certificate from employer c) Pay Slip
d) Land Pass Book (for Agriculturists)
e) Proof of Business (for self-employed/ businessmen)
– Income Tax / Sales Tax clearance certificate
– Copy of licence issued by a Govt. Agency

Page 39 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
Telephone/ Fax verification, both office and residence [by making calls, searching directory listing etc.]
Date and time called ………………………
Name of the person contacted: ……………………….. e-mail id: ………………….
Information collected:
5. PROPERTY PROPOSED TO BE MORTGAGED
Identification of the Property : (Proposed to be mortgaged to the bank)
a) Name and address of the person, who has identified the property.
Name: ………………………………………………………………….…………………….
Address:...............................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
.............................................................................................................................................
b) Date of visit to the spot ....................................................................................................
c) Whether original Title Deeds / Tax Receipts verified Yes / No
d) Others (specify)
6. In case of Builders:

Established Since:
Number of Projects executed, so far:
Number of flats sold:
Number of flats constructed:
Market enquiries on reputation

Enquiry Source 1
Enquiry Source 2

Quality of Construction [as per Market Report]:


Nature of Property: Agricultural/ Non- agricultural
Whether project approved by Zonal Office: Yes/ No

7. TAKEOVER

In case of takeover of loans,


Reason/ s for takeover: ……………………………….…………………………………………
………………………………………………………………………………………………
Amount of Original Advance: ………….……………/-
Amount Outstanding: ………….……………/-
Whether regular: Yes/ No
Residual Period of the loan: ………………
Verification of Pass Book/ Loan account sheet etc., Verified on ……………..
Confidential opinion from other banks with whom party is banking:

Page 40 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
8. LATEST ITR VERIFICATION REPORT

S.N Particular AY….. AY……. AY……..


1 Acknowledgement No.
2 Whether PAN No. OK
3 Whether ITR Filed Properly
4 Gross Total Income
5 Total Taxable income
6 Total Tax as per ITR
7 TDS
8 Self assessment Tax Paid
9 Date of Fling
Remarks/ Observations on ITR

9. DETAIL OF BANK ACCOUNT VERIFICATION

Last 6 month’s Bank account verification Report for the Borrower or the Co-applicant who forms major
contributor for repayment.

1.Name of the Applicant


2.Bank Account No.
3.Name of the Bank and Branch
4.Observations/Remarks on the major/regular
debits in the account like credit cards, debit
cards, EMI charges for the bank if observed.
10. VERIFICATION OF THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT PROVIDED
WITH THE RELEVANT ITR FILED WITH INCOME TAX DEPARTMENT & BALANCE SHEET
WITH MCA WEBSITE FOR THE FY ENDED 31.03.20…... :

[COMMENTS]

VERIFICATION OF INCOME DETAILS (IN CASE OF SALARIED PERSONS)

Amount Remarks
Salary (Net)
Rental Income
Other Source of Income

VERIFICATION OF BANK ACCOUNT OF LAST 6 MONTHS

[COMMENTS]

Page 41 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
11. BUSINESS VERIFICATION REPORT (Strictly Private and Confidential) [Self employed/ Employed in service/
Business]

Name
Address and e-mail address
Telephone No.
Electricity Bill.
Date and time of Visit
Type of business/co. Public ltd.-Pvt. Ltd. – Proprietorship-Partnership –Others
Type of Loan
Land mark
Locality of Office Posh – Good – Average - Poor
Ownership status of business premises Owned Rented
Type of Office Industrial / Factory/Workshops
Underdeveloped Area
Small Production Units
Slum/Chawl
Residential –cum-Commercial
Underdeveloped
Residential
Working Hours
Describe the Building Shop – Office Complex
Website of Co/ Employer
No of employees
Nature of Business Manufacturing-Trading – Services-Others
No. of Branches
Terms of employment(for employee) Full time- Part time-Temporary-Other
Grade(employee) Executive- Supervisory – Clerical – Subordinate -Other
Years of employment/business established since
If the business is conducted in own residence, is there Yes/ No
separate area earmarked
Company’s name place seen outside premises: Yes/ No
Status of Premises Reception area Yes/ NO
Security Guard Yes/ No
Cabin Yes/ No
Security/Typist Yes/ No
Air Conditioner Yes/ No
Xerox Yes/ No
Fax Yes/ No
Computer Yes No

Business Activity Seen Yes/ No


Assets seen Xerox-Fax-Telephone – PC- Printer-Others
Approximate size of Office
Amount of Business Active/ Inactive
Briefly describe the nature of Business
No. of employees
Neighborhood check Person contacted
Year of operations at his address
Nature of Business

Page 42 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..

Terms of Reference:

Activities to be covered under DDA


Telephone Verification of Residence/ Office of Applicant, Co-Applicant & Guarantor

Note: DDA shall confirm the number by cross verifying the telephone number with the telephone bill and/or
also by making call to the person/s residence and to their office
Field Verification of Residence/ Office of the Applicant , Co-Applicant & Guarantor [ maximum of 6 cases]

Note: DDA shall invariably pay surprise visit to the residence and /or place of work to ascertain that the
person is actually residing/working at the given address or the said property is belonging to him.

Prior intimation about the visit should not be given to them either by the Branch or DDA. This is necessary to
prevent the fraudulent borrowers resorting to impersonation or designing misleading plans or placing wrong
facts before the DDA.
Verification of the Property/ Site/ Flat/ or the property offered as security and site verification.

Note: DDA shall invariably visit the property to ascertain whether the property to be purchased/mortgaged to
the Bank exists and owned/to be owned by the borrower/s, guarantor as the case may be.

Where the property has been rented /leased out, enquiry shall be made with the tenants and neighbors about
the ownership of the property.

In case of house under construction, information may also be gathered from the workers present at the
construction site. In case of flat under construction, information regarding the name and address of the
person who has booked the flat may be obtained from official records of the builder/developer. Verbal
information from the builder/developer shall not be obtained. The information about the local standing of the
builder/developer such as his reputation, timely completion of earlier projects, litigations, if any, need to be
ascertained.

DDA shall visit the property without any prior intimation.


Income Tax Returns verification with Income Tax office.

Note: The DDA shall visit Income Tax office and ascertain that the IT returns /IT Assessment Order
submitted by the borrowers are genuine.
Salary slip/certificate verification of the applicant /co applicant [ maximum 3 cases ] [applicable for
Retail loans only]

Note: The DDA shall visit the office of the employee to ascertain the genuineness of Salary slip/Certificate.
Thus it will also help to confirm that the borrower is working at the given office address. Net income shown in
the salary slip/certificate may be cross verified with the salary credit shown in borrowers statement of
account.
Balance Sheet /Auditor's Report verification.

Note: Turnover/Profit shown in the financial statements shall be cross verified with Sales Tax Returns /
Statement of Account / IT Return and can be confirmed from Auditors. Verification with MCA site.
Trade License and other verifications (Telephone Bill/ Electricity Bill/ Office Identity/ Voters Card/
Driving License).

Note: Genuineness of these documents can be ascertained from web-portal of the concerned authorities.
Print out taken from web-portal may be enclosed to the DDA report.
Bank Account verification

Note: The DDA shall visit the Bank /Branch to ascertain the facts that the account is actually in the name of
Page 43 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
the borrower and the statement is genuine. Further, the statement shall also be verified to ascertain
PDC/ECS debits to know other borrowings, instances of cheque/ECS returns, if any, of the borrowers.
In case of NRI borrowers:

Note: In addition to the above, the DDA shall telephone to office of the overseas employer of the borrower or
to their branch located in India to confirm that the borrower is working in their organization. Information of the
borrower may also be obtained from neighbors of his parents/ local residence. Details mentioned in other
documents such as Passport etc., may be cross verified from web-portal also.
The DDA shall certify that he has visited the borrower/s, guarantor & the property and the information
furnished by him in his report is true and correct and the report is complete in all aspects.
Balance sheet analysis: To read beyond the Balance Sheet, and to know the true financial position of the unit
and its implications on the future borrowing programme, sought to be financed.

THIS REPORT HAS BEEN PREPARED BASED ON UNIT VIST, THE FINANCIAL RECORDS AND
EXPLANATIONS GIVEN BY THE DIRECTORS OF……………………………..AND THE FACTS STATED
IN THE SAID REPORT SEEM TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF

Due Diligence Audit By: Signature:


Date: Name:

(to be signed by the promoter of the company / partners of the partnership firm/ Proprietor of the
proprietorship firm)

Page 44 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..

PUNJAB & SIND BANK Annexure V - C


……………………Branch
DUE DILIGENCE REPORT
(Applicable for Industry/Trade/Business/Service)
Name of the Age…………Years
Borrower
Address ………………………………………………………………………………………… Phone
………………………………………………... ………………………..
………………………………………………………………………………………… ………………………..
………………………………………………………………………………….............
...................................................................................................

Activity In business since


……….(years)
Sr.No. Name of the information/Sources Enquired by Date

Confidential information gathered from Informant No. 1 Informant No. 2 Informant No. 3
informants
1 What is the general opinion on the
business standing of the applicant?
2 How is the financial position?
3 Is the party prompt in meeting trade
obligations?
4 What is your estimate of the net worth of
the applicant?
5 What is your opinion about the
experience, sincerity of the applicant?
6 What is your opinion about the
managerial competence of the applicant?
7 Whether the applicant is know to indulge
in unethical practices?
8 Do you have any information on legal
cases, if any, filed against the applicant?

Signature
Branch Manager

Instructions:
Care should be taken while selecting the informants. Informants so selected should be dependable and of good standing in the
society. Informants should represent various segments of the society.
While recording the reply from informants, the gist of the reply should be in the form of following:
1. Excellent
2. Good
3. Normal
4. Weak
In the case of item No. 4 and 5, approximate amount in lakhs should be recorded. In the case of item No.8, the reply must
be affirmative/negative (yes/no).
Page 45 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
PUNJAB & SIND BANK Annexure V - C
……………………Branch

DUE DILIGENCE REPORT


(Applicable for Industry/Trade/Business/Service)
Pre-inspection Due Diligence Report in respect of the applicant and the vehicle dealer
1 Name of the Applicant Age: …..……..Years Son/Wife of :

2 Present Occupation Experience: Years


3 Address: Residence Address: Office/B usiness
……………………………………………….. ………………………………………………..
……………………………………………….. ………………………………………………..
……………………………………………….. ………………………………………………..
……………………………………………….. ………………………………………………..
Phone: Phone:
4 Source of verification/identification of the applicant
(a) Employer’s certificate (b) Employer’s Identification Card (c ) Voter’s ID Card
(d) PAN Card (e) Others (e.g: Telephone Bill etc., specify)
5 Particulars of references made: (at least 2 references shall be obtained to confirm the identity of the applicant )
Reference No. 1 Reference No. 2
Name………………………………………… Name………………………………………………….
………. Address:……………………………………………..
Address:……………………………………… ……………………………………………………………
…….. ……………………………………………………………
………………………………………………… ……………………………………………………………
………… Phone No.
………………………………………………… Email Id.
…………
…………………………………………………
…………
Phone No.
Email Id.
6 Name and Address of the vehicle dealer
Year of Establishment
7 Whether Authorized Dealer: Yes/No. If Yes, since when:
8 Reference made (a) Local Dealer of same or similar product
(b) The Manufacturer/Their Reg., Office
(c) Visit Made (if)
9 Remarks of the official who made the enquiries
10 I confirm that I have carried out verification as above and details furnished above are true to the best of my
knowledge and belief.
11 Details in respect of the Official who
conducted the verification the verification.
Name Signature:
Mr./Ms………………………………………… Date:
……
E.No……………………………………………
……..
Designation……………………………………
….

Page 46 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..

PUNJAB & SIND BANK Annexure V - C


Branch……………………

DUE DILIGENCE REPORT ON PROSPECTIVE HOME BORROWER/BUILDER &


PROPERTY
1 Name of applicant: ……………………………………….Age: ……………………Years
Son/Daughter/Wife of:
2 Present Occupation…………………………….. Experience: …………… Years
3 Address: Residence ………………………………………………..
……………………………………………….. ………………………………………………..
……………………………………………….. ………………………………………………..
……………………………………………….. ………………………………………………..
……………………………………………….. Phone:
Phone:
4 Whether the applicant is existing account holder? Yes/No
If yes, Dealing with the Bank since…………Nature of Account………………………………………
In case applicant is banking with other banks,
Whether confidential opinion called for: - Yes/No
If so, whether opinion is satisfactory: - Yes/No
Other observations, if any:………………………………………………………………………………………….
5 Borrower identification is made through:
a) Identity card issued by employer b) Voter’s ID Card
b) PAN Card d) Others (Specify)
Address Verification is made through:
a)Passport (must for NRIs) b)Voter’s ID Card c) Telephone/Electricity Bill
d) Driving Licence e) Society Bill f) Ration Card g) Others (Specify)
Employment/Occupation verification is made through:
a) Identity card from employer b) Certificate from employer c) Pay slip
d) Land Pass Book (for Agriculturists)
e) Proof of Business (for Self employed/businessmen)
● Income tax/Sales Tax clearance certificate
● Copy of licence issued by a Govt. Agency
Telephone/Fax verification, both office and residence (by making calls, searching directory listing etc.)
Date and time called …………………………………..
Name of the person coantacted……………………………. E-mail id:…………………………………………
Information collected:
6 Particulars of References made: At least two references shall be obtained to confirm the identification of the
applicant.
Reference 1 Reference 2
Name: Name:
Address: ……………………………………. Address: …………………………………….
……………………………………………… ………………………………………………
……………………………………………… ………………………………………………
…………………………………………….... ………………………………………………
Phone: Phone:

Whether above named persons are contacted? Yes- (over phone/in person)/ No
Information collected:

Page 47 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
7 Identification of the Property: (Proposed to be mortgaged to the bank)
a) Name and Address of the person, who has identified the property.

Name:…………………………………………………………………………………………………………………………………………

Address:……………………………………………………………………………………………………………………………………..

…………………………………………………………………………………………………………………………………………………..

……………………………………………………………………………………………………………………………………………………

b) Date of visit to the spot………………………………………………………………………………………………………………

c) Whether original Title Deeds/Tax Receipts verified Yes/No

d) Others (specify)

8 Neighbourhood checks to ascertain correctness of address, period of stay:


Date of visit:
Information collected:
9 Visit to Office/business place:
Cate of visit:
Information collected:
10 In case of takeover of loans,
Reason/s for takeover:……………………………………………………………………………….
……………………………………………………………………………………………………….
Amount of Original Advance:……………………………………………………………………….
Amount Outstanding:………………………………………………………………………………..
Whether regular: Yes/No
Residual period of the loan:…………………………………………………………………………
Verification of Pass Book/Loan account sheet etc., verified on ……………………………………
Confidential opinion from other banks with whom party is banking:
11 Nature of property: Agricultural/Non-agricultural
Name of the seller:
Relationship of the seller with the buyer:
12 In case of traders/businessmen
Nature of activity:
Income of the business entity for past 3 years:
IT statement/ST orders of the Unit/Borrower:
Confidential opinion from other banks with whom party is banking:
Turnover of the business for past 2 years:

Page 48 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
Annexure VI

Status report regarding DUE DILIGENCE WORK undertaken by DDA as on ………..…..


(Monthly Report)

Client Name: Punjab & Sind Bank Name of DDA:

S.N Name of the Inward Application Applicant Report date Status


Branch Date No. (Positive/
Negative)

Date: Signature of the DDA Official with seal

Page 49 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..

Annexure VII (part A)

Punjab & Sind Bank

Zonal Office…………………

To: The General Manager


HO Retail Department

Dear Sir,

REPORT ON REVIEW OF THE PERFORMANCE OF EXTERNAL DUE DILIGENCE AGENCY


for the year ended March …………………….
[to be submitted within 15 days from closure of year]

Name of the DDA


Date of first appointment
Present Contract period From: To:

No of proposals Out of which


handled
Marked Fees Paid Marked Fees Paid (b) Fees Paid
Positive (a) Negative (a+ b)
# Rs.

During the year


Cumulative from
01.04.20…
(beginning of
the FY)
(# In case, the proposal is rejected after Due Diligence, the Due Diligence fee shall be borne by the Bank.)

Average time taken for submission of due diligence


report

Observations regarding the performance:


Recommendations:

[Signature of Zonal Head]

Page 50 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..

Annexure VII (Part B)


REVIEW REPORT ON DUE DILIGENCE AGENCY

S.N Particulars Remarks/ Comments


1 Name and address of the Service Provider

2 Brief Description of the services taken from


DDA
3

on-viable
proposals at the initial stage itself.

4 Whether the agency is owned or controlled by


any Director or Officer/ Employee of the Bank
or their relatives?
5 Whether the name of the service provider is
included in the caution list maintained by IBA?
6 Whether due diligence is conducted and
guidelines issued by RBI /CVC/ and other
regulatory authorities complied with?
7 Whether the agreement is in force [Mention
expiry date of agreement]?
8 If no, explain the reasons for continuing activity
without agreement and steps taken for renewal of
same.
9 Confirm that you have a mechanism to ensure
renewal of the agreement well before the date of
expiry of existing agreement.
10 Whether clearance from Legal Services Division
is obtained in respect of legal effect and
enforceability of the written agreement/s with
the service provider?
11 Whether the agreement contains provision for
following clauses such as:

a. Dispute resolution process in an


expeditious manner
b. Continuation of service during the
dispute resolution period
c. Customer information to be used by the
staff of the DDA only on ‘need to know’
basis and not for any other purpose.
d. Provision for grievance redressal
machinery to deal with complaints
relating to DDA
Page 51 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..
e. Types of audit to be conducted
(including internal/ external along with
periodicity) and reports the bank is
entitled to receive from the DDA
f. Termination clause and minimum period
to execute the termination clause? If yes,
mention the minimum period.

12 Whether for the work assigned, the DDA


maintains contingency plan, including plan for
disaster recovery and periodic testing of backup
facilities?
13 What is the Bank’s plan to carry out the activity
if the service provider fails to deliver the
services?
14 Whether any review (annually/half yearly) of the
financial statements and operational condition of
the service provider has been done? If yes then
whether the impact on the bank due to the failure
of a service provider has been adequately
assessed and what is the result of assessment?
15 Whether details of expenses incurred in respect
of Due Diligence are being maintained? If yes,
please enclose the details of expenses
16 Whether any of the DDA is terminated
prematurely during the period?

If yes, then give the reason for termination.

Whether the same is reported to IBA/ other self-


regulatory bodies?

Place:
Date: Signature of Zonal Head

Page 52 of 53
PUNJAB & SIND BANK - H.O. Credit Monitoring and Policy Dept. 21, Rajendra Place, New Delhi
REG: FRAMEWORK FOR EMPANELMENT OF EXTERNAL DUE DILIGENCE AGENCIES (DDA)
………………………………………………………………………………………………………………………………………………..

Annexure VIII

IRREVOCABLE LETTER OF AUTHORITY - CUM - UNDERTAKING

From Place:
Date:

To
The Branch Manager,
Punjab & Sind Bank
............................Branch

Dear Sir,

Sub: My/Our MSME/ Retail Loan Proposal for Rs.........................

I / We, by this irrevocable letter of authority - cum - undertaking, hereby irrevocably authorise you to
debit my /our account ………………………………an amount of Rs………………………

(Rupees …………………………………………………………………...) towards the due diligence charges in connection


with our above referred loan proposal.

Yours faithfully

Borrower/s

Page 53 of 53