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Training on

Loan Documentation and


Property Mortgage
Presented by: Operations Division
Date: 5th & 6th July 2014

Training Topic
Session A

General Loan Documentation


Session B

Equitable Mortgage/ MDTD


Session c

Registered Mortgage

Session A

General Loan Documentation

Why documentation
Comply
internal policy
& guidance

Ensure
enforceability

Comply
external
policy &
guidance

Approval
Credit facility request from
borrower
Board/ CRM approval
Unconditional accepted sanction
letter by the borrower
Pre approval checking

Clean CIB report


Search report from RJSC for limited
company

Approval Terms
Obey
certain
covenants

Provide
assets as
collateral

Repayment
commitment

Repayment
Guarantee
Capacity to execute contractual obligation and possess
assets by the obligor.

Borrowers Legal Form


Proprietary Concern
Type of business entity which legally has no
separate existence from its owner.
Proprietorship
Partnership
Any non-incorporated group
Company/ Organizations
A form of body corporate or corporation,
generally registered under the Companies
Acts or similar legislation.
Privet Limited Company .
Public Limited Company.
NGO/ Societies registered under the legislation

Legislations
for
Incorporation
Societies
Registration
Act
Cooperative
Society Act
Company
Act

Creates
Creates legal
legal entity
entity and
and may
may Sue
Sue or
or be
be
Sued.
Sued.

Legal Entity Creation

RJSC certified copy

Latest copy of Schedule-X


Latest copy of Form XII
Certifcation of Commencement
Certifcation of incorporation
Memorandum & article of association
Photo ID/ Address proof

Borrowing Power

Other applicable regulatory approvals


Membership of relevant trade body, if applicable
Department of environment clearance, if
applicable
Export registration certifcate, if applicable
Import registration certifcate, if applicable
Audited fnancial report
VAT registration certifcate
TIN registration with up to date clearance
certifcate
Trade license

Regulation

Board resolution covering object clause of the borrower with amount &

Letter of set-of over deposit account


Letter of disbursement
Letter of arrangement
Letter of continuity/ revival
Demand promissory note
Facility agreement

General Loan Documents

Undertaking, if necessary
Title Deed (Equitable mortgage)
Possession Deed
Rental Deed

Auxiliary Documents

Net worth statement of


all personal guarantors
certifed by tax authority

Letter of personal
guarantee

Personal Guarantee

Board resolution covering object clause of corporate


guarantor with amount & signatory of guarantee
Audit report/ net worth statement

Latest copy of Form XII

Memorandum & article of association

Letter of corporate guarantee

Corporate Guarantee

Hypothecation
Fixed Assets
Capital assets
Floating Assets
Assets in cycle
Fixed Charge
Over specifc assets
Floating Charge
Over certain type of assets

List of assets under fxed charge


Notarized IGPoA to sell the hypothecated
assets
Certifcate of registration from RJSC
RJSC Form-XVIII and receipt of flling with
RJSC
Letter of hypothecation

Hypothecation

List of assets under fxed charge


Certifcate of modifcation
registration from RJSC
RJSC Form-XIX and receipt of
flling with RJSC
Modifcation of letter of
hypothecation

Hypothecation
Modification

Charge Creation
RJSC
Registratio
n of Charge

Ranking of
Charges
Charge filing with RJSC within 21 days of execution

Authority to complete cheque


EMI cheque
Undated cheque
Post dated cheque

Security Cheque

Indemnity against peril


Policy & premium payment
End to end coverage
Insurance coverage
amount
Why insurance?

Insurance

Lien authority
Letter of lien & authority for
encashment 1st or 3rd party
Lien over BBL FDR
Pledge over FDR with other Banks

Lien over FDR

Security takeover
Mortgage & FDR

Disburse takeover
portion of the loan
Balance confrmation

Loan Takeover