Case Study 3

Mr K. Ganesan aged 72 Years is a retired KVB Bank Chief Manger, drawing monthly pension of Rs.
56,000/- from his bank. Apart from that he has own house at Trichy which is rented out for Rs.
40,000/ per month. The market value of the house is Rs.150 lakh. Currently he is residing at
Tambaram, Chennai in his own house along with his spouse aged 68 Years, who is home maker.
They are childless. Hence they adopted their relative girl currently aged 28 Years as their daughter.
But they are yet to comply with due formalities for legalizing the adoption. Their adopted daughter
and her husband aged 32 years together are working in Don-Bosco School, Egmore, Chennai as
Teachers and both are drawing salary of Rs. 50,000 each.

Now Mr. Ganesan is in need of term loan of Rs.40 lakh to be repayable in 120 EMI of Rs.57,389/- @
12%. He is ready to legalize adoption of relative girl as their daughter as per bank formalities. His
wife, his adopted daughter and adopted daughter husband are ready to stand as Co-applicants. He
needs a part of the loan amounting of Rs.20 lakh to close the existing Gold Loan of Rs.20 lakh taken
for his adopted daughter marriage purpose and thereby to redeem pledged gold ornaments and the
balance term loan amount of Rs.20 lakh to settle his brother eligible share amount of rights from
ancestral property. Applicant and 3 Co-applicants do not have any bank loans other than Gold Loan
of Rs.20 lakh. Their gross Income put together are Rs. 1.90 lakh. He has approached our Tambaram
Branch

Question: Assuming you as Branch Head of Tambaram Branch, whether you will process and
sanction this loan? If so, what precautions you would take and what would be sanction terms and
conditions to be laid down by you?