पदोन्नति 2024-25

PADONNATI
खंड /Volume 1

वििरणात्मक अध्ययन सामग्री

Descriptive Reading Material

अनुसंधान व प्रकाशन अनुभाग,/Research & Publication Section,

केनरा बैंक प्रबं धन सं स्थान, मतिपाल/C I B M, Manipal
अध्ययन व तवकास शीर्ष /Learning & Development Vertical
From the desk of Chief Learning Officer

Dear Canarites,

In today’s rapidly evolving banking environment, success is

driven by the ability to adapt, learn, and excel. With this
understanding, we introduce "Padonnati 2024-25", pre-promotion material,
meticulously crafted to empower our participants on their journey toward professional
growth and career advancement.

"Padonnati 2024-25" serves as a comprehensive study guide designed to support our

staff in preparing for the upcoming promotion process. It is structured into two distinct
volumes— Volume I, which provides in-depth theoretical insights, and Volume II, which
offers Multiple Choice Questions to reinforce your knowledge through practice.

This material goes beyond merely preparing for pre-promotion exam; it is a tool that can
enhance your day-to-day banking operations, offering clarity and practical
understanding that can be applied in your respective roles. Our goal is to equip our
participants with both the knowledge and the skills necessary to succeed in a dynamic
and challenging environment.

I strongly believe that the efforts of our Learning and Development Vertical will go a
long way in aiding you in your present endeavor.

I am confident that with your unwavering commitment and dedication, you will come
out successful in the upcoming promotion process.

WISH YOU ALL THE SUCCESS!

श्रीनाथ जोशी/ Shreenath Joshi

मुख्य शशक्षण अशिकारी/ Chief Learning Officer

Internal
 विषय सूची/INDEX
क्रम सं/Sl No. अध्याय/Chapter पृष्ठ सं/Page No.

1. अपने ग्राहक को जानें (के िाईसी) 1-18

Know Your Customer (KYC)
2. जमा 19-48
Deposits
3. सामान्य बैंककं ग 49-67
General Banking
4. बैंकों में कानूनी ढांचा 68-86
Legal Frame Work in Banks
5. विवजटल उत्पाद 87-106
Digital Products
6. सरकारी कारोबार मोड्यूल 107-119
Government Business Module
7. वित्तीय समािेशन 120-133
Financial Inclusion
8. नामांकन एिं मृत्यु दािा 134-144
Nomination & Death Claim
9. राजभाषा 145-149
Official Language
10. मानि संसाधन विकास एिं कममचारी मामले 150-159
HRD & Staff Matters
11. सामान्य अवग्रम 160-207
General Advances
12. प्राथवमकता क्षेत्र 208-214
Priority Sector
13. कृ वष 215-241
Agriculture
14. सूक्ष्म, लघु और मध्यम उद्यम (एमएसएमई) 242-270
Micro, Small and Medium Enterprises (MSME)
15. सरकार प्रायोवजत योजनाएँ 271-291
Government Sponsored Scheme
खुदरा उधार
16. 292-327
Retail Lending
17. विदेशी विवनमय 328-361
Foreign Exchange
18. बेसल एिं जोवखम प्रबंधन 362-372
Basel & Risk Management
19. वििेकपूर्म मानदंि और आवतत िगीकरर् 373-377
Prudential Norms & Asset Classification
20. ऋृण समीक्षा एवं निगरािी 378-391
Credit Review & Monitoring
21. एनपीए, िसूली विवधक पहलु 392-423
NPA , Recovery Legal Aspects
22. कममचाररयों को अवग्रम 424-438
Advances To Employees

[अद्यतन/Updated till 30.09.2024]

 केनरा बैंक प्रबंधन संस्थान

अपने ग्राहक को जानो (केिाईसी)

KNOW YOUR CUSTOMER (KYC)

KYC/Anti-Money Laundering (AML)/Combating of Financing Terrorism (CFT)

CFT- Countering Financing of Terrorism

Definitions:

1. Money Laundering:
As per Sec 3 of Prevention of Money Laundering Act, “Money Laundering” is an offence
committed by anyone who acquires, owns, possess or transfers any proceeds of crime or
knowingly enters into a transaction which is related to proceeds of crime, either directly or
indirectly or conceals or aids in the concealment of the proceeds or gains of crime within India
or outside India commits the offence of money.

 The Financial Action Task Force (FATF) which is an inter-governmental body established in
1989 by the Ministers of its member jurisdictions, sets standards and promotes effective
implementation of legal, regulatory and operational measures for combating money
laundering, terrorist financing and other related threats to the integrity of the
international financial system. India, being a member of FATF, is committed to upholding
measures to protect the integrity of international financial system.

 The Prevention of Money-Laundering Act, 2002 and the Prevention of Money-Laundering

(Maintenance of Records) Rules, 2005, form the legal framework on Anti-Money Laundering
(AML) and Countering Financing of Terrorism (CFT).

2. Designated Director:
“Designated Director" means a person designated by the bank, financial institution, etc. to
ensure overall compliance with the obligations imposed under chapter IV of the PML Act and
the Rules and includes.
· The Managing Director or a whole-time Director duly authorized by the Board of Directors, if
the reporting entity is a company.
· The Managing Partner if the reporting entity is a partnership firm.
· The Proprietor if the reporting entity is a proprietorship concern.
· The Managing Trustee if the reporting entity is a trust.

· A person or individual, as the case may be, who controls and manages the affairs of the
reporting entity, if the reporting entity is an unincorporated association or a body of
individuals, and such other person or class of persons as may be notified by the Government if
the reporting entity does not fall in any of the categories above.

The name, designation and address of the Designated Director shall be communicated
to the FIU-IND. Further, the name, designation, address and contact details of the
Designated Director shall also be communicated to the RBI. In no case, the Principal
Officer shall be nominated as the 'Designated Director'.
3. Principal Officer:
The Principal Officer shall be responsible for ensuring compliance, monitoring transactions,
and sharing and reporting information as required under the law/regulations. The name,
designation and address of the Principal Officer shall be communicated to the FIU-IND.
Further, the name, designation, address and contact details of the Principal Officer shall
also be communicated to the RBI.

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4. Customer:
For the purpose of KYC Norms, a ‘Customer’ is a person who is engaged in a financial
transaction or activity with the Bank and includes a person on whose behalf the person who is
engaged in the transaction or activity, is acting.

5. Person
In terms of PML Act a ‘person’ includes:
 An individual,
 A Hindu undivided family,
 A company,
 A firm,
 An association of persons or a body of individuals, whether incorporated or not,
 Every artificial juridical person, not falling within any one of the above persons, and any
agency, office or branch owned or controlled by any of the above persons.

6. Transaction
“Transaction” means a purchase, sale, loan, pledge, gift, transfer, delivery or the arrangement
thereof and includes-
 opening of an account;
 deposits, withdrawal, exchange or transfer of funds in whatever currency, whether in cash
or by cheque, payment order or other instruments or by electronic or other non-physical
means,
 the use of a safety deposit box or any other form of safe deposit,
 entering into any fiduciary relationship,
 any payment made or received in whole or in part of any contractual or other legal
obligation, or
 establishing or creating a legal person or legal arrangement.

7. Suspicious transaction:
Suspicious transaction is a “transaction” as defined below, including an attempted transaction,
whether or not made in cash, which, which, to a person acting in good faith:
a) gives rise to a reasonable ground of suspicion that it may involve proceeds of an offence
specified in the Schedule to the Act, regardless of the value involved; or
b) Appears to be made in circumstances of unusual or unjustified complexity; or
c) Appears to not have economic rationale or bona-fide purpose; or
d) Gives rise to a reasonable ground of suspicion that it may involve financing of the activities
relating to terrorism.

 Customer Due Diligence: “Customer Due Diligence (CDD)” means identifying and verifying
the customer and the beneficial owner using reliable and independent sources of
identification.
8. Know Your Client (KYC) Identifier:
Know Your Client (KYC) Identifier is the unique number or code assigned to a customer by the
Central KYC Records Registry.
 Central KYC Records Registry: In terms of PML rules, “Central KYC Records Registry
(CKYCR)” means an entity to receive, store, safeguard and retrieve the KYC records in
digital form of a Customer.

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9. Beneficial Owner (BO): Where the customer is a Company, the beneficial owner is the
natural person(s), who, whether acting alone or together, or through one or more juridical
persons, has/have a controlling ownership interest or who exercise control through other
means

“Controlling ownership interest” means ownership of/entitlement to more than 10 per cent of
the shares or capital or profits of the company.

1. “Control” shall include the right to appoint majority of the directors or to control the
management or policy decisions including by virtue of their shareholding or management rights
or shareholders agreements or voting agreements.

a) Where the customer is a Partnership firm, the Beneficial Owner is the natural
person(s), who, whether acting alone or together, or through one or more juridical
person, has/have ownership of/entitlement to more than 10 per cent of capital or
profits of the partnership or who exercises control through other means.

b) where the client is an unincorporated association or body of individuals, the beneficial

owner is the natural person(s), who, whether acting alone or together, or through one
or more juridical person, has ownership of or entitlement to more than fifteen percent
of the property or capital or profits of such association or body of individuals;

c) Where the customer is an Unincorporated Association or Body of individuals, the

Beneficial Owner is the natural person(s), who, whether acting alone or together,
or through one or more juridical person, has/have ownership of/entitlement to
more than 15 per cent of the property or capital or profits of the unincorporated
association or body of individuals.

Term body of individuals includes societies. Where no natural person is identified

under (a), (b) or (c) above, the beneficial owner is the relevant natural person who
holds the position of senior managing official.

d) where the client is a trust, the identification of beneficial owner(s) shall include identification
of the author of the trust, the trustee, the beneficiaries with 10% or More Interest in the
trust and any other natural person exercising ultimate effective control over the trust through
a chain of control or ownership and

e) Where the customer is a Self Help Groups (SHGs) or Joint Liability Group (JLGs), the Office
Bearers of SHG/JLG may deemed to be the Senior Managing Officials. Hence, they shall be
treated as Beneficial Owners of SHG/JLG.

10. Aadhaar Number:

Aadhaar number” shall have the meaning assigned to it in clause (a) of section 2 of the Aadhaar
(Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act, 2016 (18 of
2016).

 Aadhaar Number is a 12 Digit Unique Identity Number which UIDAI will issue for all Indian
residents including infants.

11. Certified Copy: Obtaining a certified copy shall mean comparing the copy of the proof of
possession of Aadhaar number where offline verification cannot be carried out or officially

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valid document so produced by the customer with the original and recording the same on the
copy by the authorized officer of the bank.

Provided that in case of Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs), as
defined in Foreign Exchange Management (Deposit) Regulations, 2016 {FEMA 5(R)},
alternatively, the original certified copy, certified by any one of the following, may be
obtained:
• Authorized officials of overseas branches of Scheduled Commercial Banks registered in India,
• branches of overseas banks with whom Indian banks have relationships,
• Notary Public abroad,
• Court Magistrate,
• Judge,
• Indian Embassy/Consulate General in the country where the non-resident customer resides.

12. Digital KYC

Digital KYC” means the capturing live photo of the customer and officially valid document or
the proof of possession of Aadhaar, where offline verification cannot be carried out, along
with the latitude and longitude of the location where such live photo is being taken by an
authorized officer of the branch.

13. Video based Customer Identification Process (V-CIP):

An alternate method of Customer identification with facial recognition and Customer Due
Diligence by an Authorized Official of the Bank by undertaking seamless, secure, live,
informed-consent based audio-visual interaction with the Customer to obtain identification
information required for CDD purpose, and to ascertain the veracity of the information
furnished by the Customer through independent verification and maintaining audit trail of the
process. Such processes complying with prescribed standards and procedures shall be treated
on par with face-to-face Customer Identification Process for the purpose of this Policy. In V-
CIP, the face Match threshold is 50.01% in case of PAN & 75.01% in case of Aadhar. If Face
Match is below the threshold, same need to be rejected under permanent rejection.

14. Equivalent e-document: Equivalent e-document” means an electronic equivalent of a

document, issued by the issuing authority of such document with its valid digital signature
including documents issued to the digital locker account of the customer as per rule 9 of the
Information Technology (Preservation and Retention of Information by Intermediaries
Providing Digital Locker Facilities) Rules, 2016. “Digital Signature” shall have the same
meaning as assigned to it in clause (p) of subsection (1) of section (2) of the Information
Technology Act, 2000 (21 of 2000).

15. Officially Valid Document:

The Officially Valid Documents are as under:

(1) Passport
(2) Driving License
(3) Proof of possession of Aadhaar number
(4) Voter Identity Card issued by Election Commission of India
(5) Job card issued by NREGA duly signed by an officer of the State Government
(6) Letter issued by the National Population Register containing details of name and address

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*Where the client submits his proof of possession of Aadhaar number as an officially valid
document, he may submit it in such form as are issued by the Unique Identification Authority
of India (UIDAI) and Proof of possession of Aadhaar shall include the following: (a) Aadhaar
letter issued by UIDAI which carry name, address, gender, photo and date of birth details of
the Aadhaar number holder.
(b) Downloaded Aadhaar (e-Aadhaar) which carries name, address, gender, photo and date of
birth details of the Aadhaar number holder in similar form as in printed Aadhaar letter. This is
digitally signed by UIDAI.
(c) Aadhaar Secure QR code generated and digitally signed by UIDAI containing carries name,
address, gender, photo and date of birth details of the Aadhaar number holder.
(d) Aadhaar paperless offline e-KYC which is an XML document generated by UIDAI and digitally
signed by UIDAI containing carries name, address, gender, photo and date of birth details of
the Aadhaar number holder.

In case, Officially Valid Documents (OVDs) furnished by the customer does not contain updated
address, the following documents or the equivalent e-documents there of shall be deemed to
the OVDs for the limited purpose of proof of address:-
(i) Utility bill which is not more than two months old of any service provider (electricity,
telephone, post-paid mobile phone, piped gas, water bill);
(ii) Property or Municipal tax receipt;
(iii) Pension or family pension payment orders (PPOs) issued to retired employees by Government
Department or Public Sector Undertakings, if they contain the address;
(iv) Letter of allotment of accommodation from employer issued by State Government or Central
Government Departments, statutory or regulatory bodies, public sector undertakings,
scheduled commercial banks, financial institutions and listed companies and leave and license
agreements with such employers allotting official accommodation.

(The Client shall submit updated Officially Valid Document with current address within a period
of three months of submitting the above document).

 Wealth: Wealth is the market value of all the tangible & intangible assets (movable or
immovable) owned by a person or company or any other entity, as reduced by the debts
contracted. Wealth is generally measured through the net worth.

Key Elements of “Know Your Customer” Policy:

The four key elements of KYC Policy include,

 Customer Acceptance Policy

 Customer Identification Procedures,
 Monitoring of Transactions
 Risk Management.

1. Customer Acceptance Policy (CAP):

(i) No account is opened or maintained in anonymous or fictitious / benami name.
(ii) Parameters of risk perception are clearly defined in terms of the nature of business activity,
location of the customer and his clients, mode of payments, volume of turnover, social and
financial status, etc. so as to enable in categorizing the customers into low, medium and high
risk.

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(iii) While opening an account and during the periodic updation, documents and other information
to be collected from different categories of customers
(iv) No Account will be opened where the bank is unable to apply appropriate customer due
diligence measures i.e. bank is unable to verify the identity and/ or obtain required documents
either due to non-cooperation of the customer or non-reliability of the documents /
information furnished by the customer. Bank shall consider filing an STR, if necessary,
when it is unable to comply with the relevant CDD measures in relation to the
customer .Bank may also consider closing an existing account under similar circumstances.
(v) Additional information, where such information requirement has not been specified
in the internal KYC Policy, is obtained with the explicit consent of the customer.

(vi) No transaction or account based relationship is undertaken without following the CDD
procedure.
(vii) Circumstances, in which a customer is permitted to act on behalf of another person/entity,
shall be clearly spelt out in conformity with the established law and practice of banking.
(viii) Before opening the account ensure that the identity of the customer does not match with
any person or entity, whose name appears in the sanction lists circulated by the Reserve
Bank.
(ix) Apply the CDD procedure at the UCIC (Unique Customer Identification Code) level. Thus, if
an existing KYC compliant customer desires to open another account with our bank, there
shall be no need for a fresh CDD exercise.
A Unique Customer Identification Code (UCIC) shall be allotted while entering into new
relationships with individual Customers as also the existing Customers. The Banks shall, at
their option, not issue UCIC to all walk-in/occasional customers provided it is ensured that
there is adequate mechanism to identify such walk-in customers who have frequent
transactions with them and ensure that they are allotted UCIC.
(x) CDD procedure is followed for all the joint account holders, while opening joint account.
(xi) Where Permanent Account Number (PAN) is obtained, the same shall be verified from the
verification facility of the issuing authority.
(xii) Where an equivalent e-document is obtained from the customer, verify the digital
signature as per the provisions of the Information Technology Act, 2000 (21 of 2000).
(xiii) Where Goods and Services Tax (GST) details are available, the GST number shall
be verified from the search/verification facility of the issuing authority.

It is important to bear in mind that the adoption of customer acceptance policy and its
implementation should not be too restrictive and which result in denial of banking facility to
members of the general public, especially those, who are financially or socially disadvantaged.

Risk Perception in respect of Customer:

"Customer Risk" refers to the money laundering and terrorist funding risk associated with a
particular customer from a Bank's perspective. This risk is based on risk perceptions associated
with customer profile and level of risk associated with the product & channels used by the
customer.

For categorizing a customer as Low Risk, Medium Risk and High Risk, the parameters considered
are customer‟s identity, social/financial status, nature of business activity, information about the
clients‟ business and their location etc. While considering customer‟s identity, the ability to

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confirm identity documents through online or other services offered by issuing authorities may
also be factored in.
Low Risk Customers (Level 1 customers): Individuals (other than High Networth) and entities
whose identities and sources of income can be easily identified and transactions in whose accounts
by and large conform to the known profile may be categorised as Low Risk, such as:

- Salaried employees.
- People belonging to lower economic strata of the society.
- Government Departments.
- Government owned companies.
- Regulatory and Statutory bodies, etc.

For the above category, the KYC requirements of proper identification and verification of proof of
address would suffice.

Medium Risk Customers (Level 2 customers):

Customers who are likely to pose a higher than average risk to the Bank should be categorized as
medium or high risk.
For this category, higher due diligence is required which includes customer’s identity, social/
financial status, nature of business activity, and information about the customer’s business
and their location, geographical risk covering customers as well as transactions, type of
products/services offered, delivery channel used for delivery of products/ services, types of
transaction undertaken – cash, cheque/monetary instruments, wire transfers, forex
transactions, etc. besides proper identification.
An indicative list of Medium Risk Customers is as under:
- Gas Dealers.
- Car/boat/plane dealers.
- Electronics (wholesale).
- Travel agency.
- Telemarketers.
- Telecommunication service providers.
- Pawnshops.
- Auctioneers.
- Restaurants,
Retail shops, Movie theatres, etc.
- Sole practitioners.
- Notaries.
- Accountants.
- Blind.
- Purdanashin.

High Risk Customers (Level 3 customers):

For this category, higher due diligence is required which includes customer’s background, nature
and location of activity, country of origin, source of funds and his client profile, etc. besides
proper identification. Bank shall subject such accounts to enhanced monitoring on an ongoing
basis. An indicative list of High Risk customers is as under:

Trusts, charities, NGOs and organizations receiving donations.

- Companies having close family shareholding or beneficial ownership.
- Firms with sleeping partners
- Accounts under Foreign Contribution Regulation Act.

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- Politically Exposed Persons (PEPs).

- Customers who are close relatives of PEPs and accounts of which PEP is the ultimate
beneficial owner.
- Those with dubious reputation as per public information available.
- Accounts of non-face-to-face customers.
- High Net worth Individuals*
- Non-Resident customers (Based on the risk profile of country where the customer is
domiciled).
- Accounts of Cash intensive businesses such as accounts of bullion dealers (including sub-
dealers) & jewelers.
Risk categorization of Customers undertaken by the Bank:

1. Customer Type:-All customer profiles/accounts of NRIs, HNIs, PEPs, NGOs, Trusts,

Cooperative Societies, HUF, Exporters, Importers and Accounts having Beneficial Owners
are to be invariably categorized as High Risk, irrespective of the lower risk category
(low/medium) allotted under other parameters in the Matrix
2. Customer Profession
3. Type of Business:
4. Product code:
5. Account Status:
6. Account vintage: Average balance in deposits in SB/Current/Term Deposit accounts.

Account
High Risk Medium Risk Low Risk
Type
Rs 25 lakhs &
All Deposit
Rs 100 Lakhs and Above but Less
Accounts Less than Rs 25 Lakhs
Above than Rs 100
(SB+CA+TD)
Lakhs

 When an existing customer opens a new SB/CA account, the vintage parameter need not
be taken into account for risk categorization of such accounts and the account may be
classified basing on the risk category allotted to the customer on the other 6 parameters.
 Branches should categorise customers/ accounts under “High Risk” category as and when
complaints (from legal enforcement authorities) are received or fraud is reported against
the customer/account holder.
 Accounts of dealers in jewellery, gold/silver/bullions, diamonds and other precious
metals/stones are to be categorized under High Risk.

Risk Categorisation for NRI Customer:

The process of Risk categorization of NRIs shall be based on the risk profile of the “Country where
the customer is domiciled‟. The risk assigned to all product codes of NRI shall be changed
automatically based on the risk profile of the country without change in other parameters of risk
categorization. The final risk categorization shall be done taking into consideration the rating in
all the seven parameters.

Export Credit Guarantee Corporation of India Ltd (ECGC) is updating the country risk classification
on regular basis.

The detail of classification is as under:

ECGC Classification Risk Category Final Risk Allotment
A1 Insignificant LOW

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A2 Low Risk
B1 Moderately Low Risk
B2 Moderate Risk MEDIUM
C1 Moderately High Risk
C2 High Risk HIGH
D Very High Risk

Parameters for defining High Net-worth Individuals:

Customers with any of the following:
1) Average balance of Rs. 100 lakh and above in all deposit accounts (SB+CA+TD).
2) Enjoying Fund based limits/term loans exceeding Rs.100 lakh.

2. Customer Identification Procedure (CIP)- Customer Identification Procedure to be carried out

at different stages, i.e.,
i. While establishing a banking relationship;
ii. While carrying out a financial transaction;
iii. Carry out any international money transfer operations for a person who is not an account
holder of the bank.
iv. When the Bank has a doubt about the authenticity or adequacy of the customer
identification data it has obtained;
v. While selling third party products as agent;
vi. While selling Banks own products, payment of dues of credit cards/sale and reloading of
prepaid/travel cards and any other product for more than Rs. 50,000/-.
vii. When carrying out transactions for a non-account based customer, that is a walk-in-
customer, where the amount is equal to or exceeds Rs. 50,000/-, whether conducted as a
single transaction or several transactions that appear to be connected;
viii. When the Branch has reason to believe that a customer (account based or walk-in) is
intentionally structuring a transaction into a series of transactions below the threshold of
Rs. 50,000/-.
ix. Bank shall ensure that introduction is not to be sought while opening accounts.
Mandatory information required for KYC purpose which the customer is obliged to give while
opening an account should be obtained at the time of opening the account/ during periodic
updation.

CDD Procedure and sharing KYC information with Central KYC Records Registry (CKYCR):
Government of India has authorised the Central Registry of Securitisation Asset Reconstruction
and Security Interest of India (CERSAI), to act as, and to perform the functions of the CKYCR.
Branches shall capture the KYC information for sharing with the CKYCR.

CDD PROCEDURE AND SHARING KYC INFORMATION WITH CENTRAL KYC RECORDS REGISTRY
(CKYCR):
1. Branches shall capture the KYC information for sharing with the CKYCR in the manner mentioned
in the Rules, as required by the revised KYC templates prepared for ‘individuals’ and ‘Legal
Entities’ as the case may be. Government of India has authorized
the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI),
to act as, and to perform the functions of the CKYCR vide Gazette Notification
dated November 26, 2015.

2. KYC data of individual accounts is to be uploaded to Central KYC Registry (CKYCR) within

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T+5 days from the date of establishing account based relationship.

3. Branches shall invariably upload the KYC data pertaining to all new individual accounts
opened on or after January 1, 2017 with CKYCR. In order to ensure that all existing KYC records
of individual customers are incrementally uploaded on to CKYCR, Branches shall upload the KYC
data pertaining to accounts of individuals opened prior to January 01, 2017, at the time of periodic
updation or earlier when the updated KYC information is obtained/received from the customer in
certain cases.

4. As the CKYCR is now fully operational for individual customers, it has been decided to extend
the CKYCR to Legal Entities (LEs). Accordingly, Branches shall upload the KYC data pertaining to
accounts of LEs opened on or after April 1, 2021, with CKYCR in terms of Rule 9 (1A) of the PML
Rules. The KYC records shall be uploaded as per the LE Template released by CERSAI.
5. In order to ensure that all KYC records are incrementally uploaded on to CKYCR, Branches shall
upload/update the KYC data pertaining to accounts of Legal Entities opened prior to April 1, 2021,
at the time of periodic updation or earlier, when the updated KYC
information is obtained / received from the customer.
6. Once KYC Identifier is generated by CKYCR, it is to be ensured that the same is communicated
to the individual/legal entity as the case may be
7. It is to be ensured that during periodic updation, the customers‟ KYC details are migrated to
current Customer Due Diligence (CDD) standards.
8. Where a customer, for the purpose of establishing an account based relationship, submits
a KYC Identifier, with an explicit consent to download records from CKYCR, then such branch shall
retrieve the KYC records online from CKYCR using the KYC Identifier and the customer shall not
be required to submit the same KYC records or information or any other additional identification
documents or details, unless –
a) There is a change in the information of the customer as existing in the records of CKYCR
b) The current address of the customer is required to be verified;
c) The branch considers it necessary in order to verify the identity or address of the customer, or
to perform enhanced due diligence or to build an appropriate risk profile of the client.

Accounts of married woman:

A copy of marriage certificate issued by the State Government or Gazette notification indicating
change in name, together with a certified copy of the “Officially Valid Document” in the existing
name of the person while establishing an account based relationship or while undergoing periodic
updation exercise.

Accounts of Foreign students studying in India:

 Open a Non Resident Ordinary (NRO) bank account of a foreign student on the basis of his/her
passport (with visa & immigration endorsement) bearing the proof of identity and address in
the home country together with a photograph and a letter offering admission from the
educational institution in India.
 Branches should obtain a declaration about the local address within a period of 30 days of
opening the account and verify the said local address.
 During the 30 days period, the account should be operated with a condition of allowing foreign
remittances not exceeding USD 1,000 or equivalent into the account and a cap of monthly
withdrawal to Rs. 50,000/-, pending verification of address.
 The account would be treated as a normal NRO account after verification of address and will
be operated in terms of existing guidelines issued in the Manual of instructions on Non-Resident
Deposits and Circulars issued from time to time.

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 केनरा बैंक प्रबंधन संस्थान

 Students with Pakistani nationality will need prior approval of the Reserve Bank of India for
opening the account.

Accounts of Politically Exposed Persons (PEPs) resident outside India

Politically Exposed Persons are individuals who are or have been entrusted with prominent public
functions in a foreign country, e.g., Heads of States/ Governments, senior politicians, senior
government/judicial/military officers, senior executives of state-owned corporations, important
political party officials, etc. Bank shall gather sufficient information on any person of this category
(whether as customer or beneficial owner) intending to establish a relationship and check all the
information available on such person in the public domain & apart from performing normal
customer due diligence

Money Mules:
Money Mules are individuals with bank accounts who are recruited by fraudsters to receive cheque
deposit or wire transfer for the purpose of money laundering. “Money Mules” can be used to
launder the proceeds of fraud schemes (e.g., phishing and identity theft) by criminals who gain
illegal access to deposit accounts by recruiting third parties to act as “money mules.”

Simplified norms for Self Help Groups (SHGs):

In order to address the difficulties faced by Self Help Groups (SHGs) in complying with KYC norms
while opening Savings Bank accounts and credit linking of their accounts, following simplified
norms shall be followed by branches:
(a) KYC verification of all the members of SHGs need not be done while opening the Savings Bank
account of the SHGs and KYC verification of all the office bearers would suffice.
(b) Customer Due Diligence (CDD) of all the members of SHG may be undertaken at the time of
credit linking of SHGs.

Accounts of persons other than individuals:

(i) Accounts of Companies:

(i) Certificate of incorporation;
(ii) Memorandum and Articles of Association;
(iii) Permanent Account Number of the company;
(iv) A resolution from the Board of Directors and Power of Attorney granted to its managers,
officers or employees to transact on its behalf;
(v) Corporate Identification Number (CIN);
(vi) One copy of an Officially Valid Document containing details of identity and address, one recent
photograph and Permanent Account Numbers or Form No.60 of related beneficial owner, the
managers, officers or employees, as the case may be, holding an attorney to transact on the
company’s behalf.
(vii) the names of the relevant persons holding senior management position; and
(viii) the registered office and the principal place of its Business, if it is different.
(ii) Accounts of Partnership firms
(i) Registration Certificate; (ii) Partnership Deed;(iii) Permanent Account Number of the
partnership firm;(iv) One copy of an Officially Valid Document containing details of identity and
address, one recent photograph and Permanent Account Numbers or Form No.60 of related
beneficial owner, managers, officers or employees, as the case may be, holding and an attorney
to transact on its behalf. (v) the names of all the partners, and (vi) address of the registered
office, and the principal place of its Business, if it is different.

(iii) Accounts of Trusts

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 Canara Institute of Bank Management

(i) Registration Certificate;(ii) Trust Deed;(iii) Permanent Account Number or Form No.60 of the
trust;(iv) One copy of an Officially Valid Document containing details of identity and address, one
recent photograph and Permanent Account Numbers or Form No.60 of the related beneficial
owner, managers, officers or employees, as the case may be, holding an attorney to transact on
its behalf.
(v) the names of the beneficiaries, trustees, settlor, protector, if any and authors of the Trust.
(vi) the address of the registered office of the Trust; and
(vii) list of trustees and one copy of an Officially Valid Document containing details of identity and
address, one recent photograph and Permanent Account Numbers or Form No.60 for those
discharging the role as trustee and authorised to transact on behalf of the Trust.

(iv) Accounts of Unincorporated association or a body of individuals:

Where the client is an unincorporated association or a body of individuals, certified copies of
following documents or the equivalent e-documents are to be submitted:
(i) Resolution of the managing body of such association or body of individuals;(ii) Permanent
Account Number or Form No.60 of the unincorporated association or a body of individuals;(iii)
Power of Attorney granted to the person who will transact on its behalf;(iv) One copy of an
Officially Valid Document containing details of identity and address, one recent photograph and
Permanent Account Numbers or Form No.60 of the person holding an attorney to transact on its
behalf; (V)Such information as may be required to collectively establish the legal existence of such
association or body of individuals.

(v) Accounts of Proprietary Concerns

For Proprietary concerns, Customer Due Diligence of the individual (proprietor) are to be
carried out and any two of the following documents or the equivalent e-documents in the name
of the proprietary concern should be submitted as a proof of business/activity:

(i) Registration Certificate (in the case of a registered concern); Registration Certificate including
Udyam Registration Certificate (URC) issued by the Government.
ii) Certificate/licence issued by the Municipal authorities under Shop & Establishment Act; iii)
Sales and income tax returns; iv) CST/VAT/GST certificate (Provisional/Final);v) Certificate /
registration document issued by Sales Tax / Service Tax / Professional Tax authorities; vi) The
complete Income Tax return (not just the acknowledgement) in the name of the sole Proprietor
where the firm’s income is reflected, duly authenticated/acknowledged by the Income Tax
Authorities; vii) Utility bills such as electricity, water and landline telephone bills; viii) IEC
(Importer Exporter Code) issued to the proprietary concern by the office of DGFT /
Licence/certificate of practice issued in the name of the proprietary concern by any professional
body incorporated under a statute.
(vi) For opening accounts of juridical persons not specifically covered above, such as Societies
, Universities and Local bodies like Village Panchayats:
The certified copies of the following documents or the equivalent e-documents thereof are to be
submitted:
i) Document showing name of the person authorized to act on behalf of the entity;
ii) (a) Any Officially Valid Document which contains proof of identity/address in respect of person
holding an attorney to transacts on its behalf and
(b)PAN or Form 60 as defined in the Income Tax Rules, 1962 issued to the person holding a power
of attorney to transact on its behalf.
iii) Such documents as may be required to establish the legal existence of such an entity/juridical
person

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Provided that in case of a Trust, the Bank shall ensure that trustees disclose their status at the
time of commencement of an account-based relationship or when carrying out transactions as
under ::
a. Carrying out any international money transfer operations for a person who is not an account
holder of the Bank.
b. Carrying out transactions for a non-account-based customer, that is a walk-in customer, where
the amount involved is equal to or exceeds rupees fifty thousand, whether conducted as a single
transaction or several transactions that appear to be connected.
c. When a Bank has reason to believe that a customer (account- based or walk-in) is intentionally
structuring a transaction into a series of transactions below the threshold of rupees fifty thousand.

(vii) Accounts of Foreign Portfolio Investors (FPIs) for Portfolio Investment Scheme (PIS):
Accounts of FPIs which are eligible/ registered as per SEBI guidelines, for the purpose of
investment under Portfolio Investment Scheme (PIS), shall be opened by accepting KYC documents
subject to Income Tax (FATCA/CRS) Rules.

(viii) Client accounts opened by professional intermediaries:

If the client account opened by a professional intermediary is on behalf of a single client, that
client shall be identified. Bank may hold 'pooled' accounts managed by professional intermediaries
on behalf of entities like mutual funds, pension funds or other types of funds.
(ix) Identification of Beneficial Ownership
For opening an account of a Legal Person who is not a natural person, the beneficial owner(s) shall
be identified and all reasonable steps to verify his/her identity shall be undertaken keeping in
view the following:
(a) Where the customer or the owner of the controlling interest is (i) an entity listed on a stock
exchange in India, or (ii) it is an entity resident in jurisdictions notified by the Central Government
and listed on stock exchanges in such jurisdictions, or (iii) it is a subsidiary of such listed entities;
it is not necessary to identify and verify the identity of any shareholder or beneficial owner of
such entities.

(b) In cases of trust/nominee or fiduciary accounts whether the customer is acting on behalf of
another person as trustee/nominee or any other intermediary is determined. In such cases,
satisfactory evidence of the identity of the intermediaries and of the persons on whose behalf
they are acting, as also details of the nature of the trust or other arrangements in place shall be
obtained
(x) Accounts of Non Profit Organisations
A Non-Profit Organization (NPO) means any entity or organization that is registered as a Trust or
a Society under the Societies Registration Act, 1860 or any similar State Legislation or a company
registered under Section 8 of the Companies Act 2013. All transactions involving receipts by these
NPOs of value more than Rs.10 lac or its equivalent in foreign currency is to be reported to FIU-
IND centrally from Head Office. However, if the Bank has reason to believe that a customer is
intentionally structuring a transaction into a series of transactions below the threshold of Rs. 10
lac; the Bank shall consider filing a Suspicious Transaction Report to FIU-IND.
Bank shall ensure that in case of customers who are non-profit organisations, the details of such
customers are registered on the DARPAN Portal of NITI Aayog. If the same are not registered, Bank
shall register the details on the DARPAN Portal.

(xi) Accounts operated by Power of Attorney Holders/Letter of Authority Holders:

In case of accounts operated by Power of Attorney (POA) Holders / Letter of Authority (LOA)
Holders, KYC documents shall be obtained from such POA holders/ LOA holders and records shall
be maintained/ updated in the system.

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(xii) Introduction of New Technologies - Credit cards / debit cards / smart cards / gift cards
/ Mobile Wallet/ Net Banking/ Mobile Banking/RTGS/ NEFT/ECS/IMPS etc.
Bank shall pay special attention to any money laundering threats that may arise from new or
developing technologies including internet banking that might favour anonymity, and take
measures, if needed, to prevent the same being used for money laundering purposes. The
Electronic Cards (debit card, credit card, etc.) issued by the Bank to the customers may be used
by them for buying goods and services, drawing cash from ATMs and electronic transfer of funds.

Bank shall ensure that appropriate KYC procedures are duly applied before issuing the cards to the
customers/introducing new products/services/technologies. Bank shall ensure full compliance
with all KYC/AML/CFT guidelines issued from time to time, in respect of add-on/ supplementary
cardholders also. Further, where marketing of these cards is done through the services of agent,
the agents will also to be subjected to due diligence KYC measures.
Further, Bank shall ensure:
(a) to undertake the ML/TF risk assessments prior to the launch or use of such products, practices,
services, technologies; and
(b) adoption of a risk-based approach to manage and mitigate the risks through appropriate EDD
measures and transaction monitoring, etc.
Periodic updation of KYC
A. CDD requirements for periodic updation:
Banks shall adopt a risk-based approach for periodic updation of KYC ensuring that the
documents, information or data collected under CDD process is kept up-to-date and
relevant, particularly where there is high risk. Periodic updation shall be carried out at
least once in every two years for high risk customers, once in every eight years for medium
risk customers and once in every ten years for low risk customers from the date of opening
of the account/last KYC updation, as per the following procedures:

B. Temporary ceasing of operations:

In case of existing customers, Branch shall obtain the Permanent Account Number or Form No.60,
failing which Bank shall temporarily cease operations (by giving notice) in the account till the time
the Permanent Account Number or Form No. 60 is submitted by the customer.
Provided that before temporarily ceasing operations for an account, the bank shall give the client
an accessible notice and a reasonable opportunity to be heard. Further, bank shall include, in its
internal policy, appropriate relaxation(s) for continued operation of accounts for customers who
are unable to provide Permanent Account Number or Form No. 60 owing to injury, illness or
infirmity on account of old age or otherwise and suchlike causes. Such accounts shall, however,
be subject to enhanced monitoring.
Provided further that if a customer having an existing account-based relationship with a bank gives
in writing that he does not want to submit his Permanent Account Number or Form No.60, Bank
shall close the account and all obligations due in relation to the account shall be appropriately
settled after establishing the identity of the customer by obtaining the identification documents
as applicable to the customer.
Monitoring of Transactions: Branches should exercise ongoing due diligence with respect to every
customer and closely examine the transactions to ensure that they are consistent with the
customer’s profile and source of funds.

(a) The extent of monitoring will depend on the risk category of the account. High risk accounts
have to be subjected to more intensify monitoring.
(b) Branches should pay particular attention to the following types of transactions:

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 केनरा बैंक प्रबंधन संस्थान

i) Large and complex transactions including RTGS transaction, and those with unusual patterns,
which have no apparent economic rationale or legitimate purpose.
ii) Transactions which exceed the thresholds prescribed for specific categories of accounts.
iii) Transactions involving large amounts of cash inconsistent with the normal and expected
activity of the Customer.
iv) High account turnover inconsistent with the size of the balance maintained.
v) Deposit of third party cheques, drafts, etc. in the existing and newly opened accounts followed
by cash withdrawals for large amounts.

(c) Branches should closely monitor the transactions in accounts of marketing firms, especially
accounts of Multi-level Marketing (MLM) Companies. Branches should analyse data in cases where
a large number of cheque books are sought by the company, there are multiple small deposits
(generally in cash) across the country in one bank account and where a large number of cheques
are issued bearing similar amounts/dates. Where such features are noticed by the branches and
in case they find such unusual operations in their accounts, the matter should be immediately
reported to AML/CFT Centralized Unit, Transaction Monitoring Wing, Head Office for onward
reporting to Reserve Bank and other appropriate authorities such as FIU-IND.

(d) Supervisors should keep a vigil over the transactions involving huge amounts. Transactions
should generally have a bearing with the occupation and /or line of business of the account
holders. In case of any doubt, necessary enquiries should be made with the Account Holders.

(e) While accepting the cheque for collection, it is to be ensured that the name mentioned in the
Challan and name of the Beneficiary of the instrument are same.

(f) Branches are advised to mandatorily obtain either PAN or equivalent e-document and verified
while undertaking transactions as per the provisions of Income Tax Rule 114B applicable to banks,
as amended from time to time or Form 60 (if PAN is not available) for opening of accounts and
also at the time of accepting cash receipt for Rs. 50,000/- and above. If the customer appears to
be structuring the transactions into a serious of transactions below the threshold of Rs. 50,000/-,
branches are required to obtain PAN or Form 60 (if PAN is not available) from the customer.
Branches are advised to aggregate the split transactions across accounts of same customer to
decide on the matter of obtention of PAN or Form 60, wherever the aggregate amount of
transactions is Rs.50,000/- and above.

(g) All the staff members are instructed to maintain the standards of good conduct and behavior
expected of them and not to involve in any activity that would bring disrepute to the institution
and not to advise potential customers on the lines that would be an infringement of the legal
process/ could facilitate money laundering/ could defeat the KYC norms or the norms of due
diligence prescribed by RBI from time to time

(h)Bank shall put in place a system of periodical review of risk categorization of accounts and the
need for applying enhanced due diligence measures. Such review of risk categorisation of
customers shall be carried out at a periodicity of not less than once in six months.

Risk Management: Branches should exercise ongoing due diligence with respect to the business
relationship with every client and closely examine the transactions in order to ensure that they
are consistent with their knowledge about the clients, their business and risk profile and where
necessary, the source of funds.

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 Canara Institute of Bank Management

CORRESPONDENT BANKING AND SHELL BANK:

In addition to performing normal CDD measures for approving cross-border correspondent banking
and other similar relationships shall be subject to the following conditions:
a) Sufficient information in relation to the nature of business of the respondent including
information on management, major business activities, level of AML/CFT controls, purpose of
opening the account, identity of any third party entities that will use the correspondent banking
services, regulatory/supervisory framework in the respondent Bank’s home country, and publicly
available information regarding the reputation of the institution and the quality of supervision,
including whether it has been subjected to a ML/TF investigation or regulatory action, shall be
gathered.
b) Prior approval from senior management shall be obtained for establishing new correspondent
banking relationships. However, post facto approval of the Board or the Committee empowered
for this purpose shall also be taken.
c) The responsibilities of each Bank with whom correspondent banking relationship is established
shall be clearly documented and understood.
d) In the case of payable-through-accounts, the correspondent Bank shall be satisfied that the
respondent bank has conducted CDD on the Customers having direct access to the accounts and is
undertaking on-going 'due diligence' on them.
e) The correspondent Bank shall ensure that the respondent Bank is able to provide the relevant
CDD information immediately on request.
f) Correspondent relationship shall not be entered into with a Shell Bank.
g) It shall be ensured that the correspondent banks do not permit their accounts to be used by
Shell Banks.
h) Banks shall be cautious with correspondent Banks located in jurisdictions which have strategic
deficiencies or have not made sufficient progress in implementation of FATF Recommendations.
i) Banks shall ensure that respondent Banks have KYC/AML policies and procedures in place and
apply enhanced 'due diligence' procedures for transactions carried out through the correspondent
accounts.
j) Bank is having a separate policy on establishment of Correspondent Banking (CB) relationships
managed by Integrated Treasury Wing. Any kind of arrangements envisaged in the CB policy shall
adhere to the governing framework outlined in Master Circular IC/467/2023 dated 01.06.2023

REPORTING REQUIREMENTS:
Cash Transaction Reports (CTR):
The Bank shall scrupulously adhere to the following:
 The Cash Transaction Report (CTR) for each month shall be submitted to FIU-IND by 15thof
the succeeding month. Bank shall ensure to submit CTR for every month to FIU-IND within
the prescribed time schedule.
 While filing CTR, details of individual transactions below Rupees Fifty Thousand need not
be furnished.
 CTR shall contain only the transactions carried out by the Bank on behalf of their clients/
customers excluding transactions between the internal accounts of the Bank. .
 All accounts where the summation of cash transaction exceeds 10 lakhs either by way of
credit or debit in a month are to be reported under CTR. A summary of cash transaction
report for the Bank as a whole shall be compiled by the Principal Officer of the Bank every
month in physical form as per the format specified. The summary shall be signed by the
Principal Officer and submitted to FIU-IND. In case of Cash Transaction Reports (CTR)
compiled centrally by banks for the branches having Core Banking Solution (CBS) at their
central data centre level, banks may generate centralized Cash Transaction Reports
(CTR)in respect of branches under Core Banking Solution at one point for onward

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 केनरा बैंक प्रबंधन संस्थान

transmission to FIU-IND, provided the CTR is generated in the format prescribed by FIU-
IND.
 A copy of the monthly CTR submitted to FIU-India in respect of the branches shall be
available at the Bank for production to auditors/inspectors, when asked for.
 The instruction on „Maintenance of records of transactions‟ and „Preservation of records
“as contained at Para 6 (i) and (ii) respectively shall be scrupulously followed by the
branches.

SUSPICIOUS TRANSACTION REPORTS (STR)

While determining suspicious transactions, Bank shall be guided by the definition of suspicious
transaction as contained in PMLA Rules as amended from time to time.
It is likely that in some cases transactions are abandoned/ aborted by customers on being asked
to give some details or to provide documents. Bank shall report all such attempted transactions
in STRs, even if not completed by the customers, irrespective of the amount of the transaction.
Bank shall make STRs if there is a reasonable ground to believe that the transaction involves
proceeds of crime irrespective of the amount of transaction and / or the threshold limit envisaged
for predicate offences in part B of Schedule of PMLA, 2002.
The Suspicious Transaction Report (STR) shall be furnished within 7 days of arriving at a conclusion
that any transaction, whether cash or non-cash, or a series of transactions integrally connected
are of suspicious nature. The Principal Officer shall record his reasons for treating any transaction
or a series of transactions as suspicious. It shall be ensured that there is no undue delay in arriving
at such a conclusion once a suspicious transaction report is received from a branch or any other
office. Such report shall be made available to the competent authorities on request.
In the context of creating KYC/AML awareness among the staff and for generating alerts for
suspicious transactions, branches may consider the indicative list of suspicious activities contained
in KYC Policy of the Bank.
Bank shall not put any restrictions on operations in the accounts where an STR has been filed.
Bank and their employees shall keep the fact of furnishing of STR strictly confidential, as required
under PML rules. Moreover, it shall be ensured that there is no tip off to the customer at any level.

The Bank has implemented centralized processing and submission of STRs on the following
lines:
i) AML/CFT Centralized Unit, Transaction Monitoring Wing, Head Office shall process the AML
alerts generated / reported. AMLRO HO shall process the AML alerts and escalate suspicious
transactions, if any, to MLRO HO for review and submission of STRs to FIUIND, Delhi.
ii) AML/CFT Centralized Unit, Transaction Monitoring Wing, HO shall review a percentage (as
decided from time to time) of closed alerts by the HO AMLROs.
iii) Circle should ensure reporting of all offline alerts as detailed in internal circular. The Manager–
in-charge of BS&IC Section at Circle would be the Anti-Money Laundering Officer (AMLRO). The
Executive overseeing BS&IC Section would be the Money laundering Reporting Officer (MLRO).
iv) Although there is no timeframe defined by FIU-India for resolution of alert, AML/CFT
Centralized unit should ensure that no alert is pending for resolution beyond 30 days from the
date of generation/receipt.

NON-PROFIT ORGANISATION (NPO):

The report of all transactions involving receipts by non-profit organizations of value more than Rs
10 Lakhs or its equivalent in foreign currency should be submitted every month to the Director,
FIU-IND by 15th of the succeeding month in the prescribed format.
COUNTERFEIT CURRENCY REPORT (CCR): All cash transactions, where forged or counterfeit
Indian currency notes have been used as genuine shall be reported by the Principal Officer of the
Bank to FIU-IND in the specified format (Counterfeit Currency Report- CCR) within 15th of the

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 Canara Institute of Bank Management

succeeding month. These cash transactions shall also include transactions where forgery of
valuable security or documents has taken place and may be reported to FIU-IND in plain text form.
Monthly consolidated data to be submitted by the concerned BS&IC Sections of Circle Offices,
covering details of such reporting’s of branches/currency chests falling under their jurisdiction

Cross-border Wire Transfer Report: Cross-border Wire Transfer Report (CWTR) is required to be
filed by 15th of succeeding month for all cross border wire transfers of the value of more than
Rupees five lakh or its equivalent in foreign currency where either the origin or destination of fund
is in India. The information shall be furnished electronically in the FIN-Net module
developed by FIU-IND.

MAINTENANCE OF KYC DOCUMENTS AND PRESERVATION PERIOD:

Bank shall maintain all necessary information in respect of transactions prescribed under Rule 3
of PML Rules, 2005 so as to permit reconstruction of individual transactions, including the following
information:
(a) The nature of the transactions;
(b) The amount of the transaction and the currency in which it was denominated;
(c) The date on which the transaction was conducted and
(d) The parties to the transaction.

Bank shall take appropriate steps to evolve a system for proper maintenance and preservation of
account information in a manner that allows data to be retrieved easily and quickly whenever
required or when requested by the competent authorities.

Bank shall maintain for at least five years from the date of transaction between the bank and
the client, all necessary records of transactions, both domestic or international, which will permit
reconstruction of individual transactions (including the amounts and types of currency involved if
any) so as to provide, if necessary, evidence for prosecution of persons involved in criminal
activity.

Bank shall ensure that records pertaining to the identification of the customers and their address
(e.g. copies of documents like passports, identity cards, driving licenses, PAN card, utility bills
etc.) obtained while opening the account and during the course of business relationship, are
properly preserved for at least five years after the business relationship is ended as required under
Rule 10 of the Rules ibid. The identification records and transaction data shall be made available
to the competent authorities upon request.

Bank shall maintain records of the identity of clients, and records in respect of transactions with
its clients referred to in Rule 3, in hard or soft format.

Threshold Limit- to be fixed as per limits mentioned by customer at the time of opening the
account and review the threshold limits once in 6 months,
CATEGORY Rural Semi - Urban Urban Metro
SB General (101) 50000 One lac Two lacs Three lacs

BSBD / Small /Can Champ 50000/- 50000/- 50000/- 50000/-

(108)/109
SB Staff (111) One lac One lac One lac One lac
Current/OD/OCC 2 Lacs 3 Lacs 4 Lacs 5 Lacs

**********

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 केनरा बैंक प्रबंधन संस्थान

जमा
DEPOSITS

 Savings Bank Deposit is called the "Mother of all Deposits".

 SB interest is calculated on daily product basis will be credited on 1st of February, 1st of
May, 1st of August and 1st of November every year.
 Joint accounts: No restriction on number of persons.
 In case of joint accounts with Illiterate and Literate: Operation by Illiterate or Jointly. In
special cases, operation can be permitted by literate only, by taking “Authorisation cum
Indemnity letter” from illiterate person on stamped paper with requisite value.
 Cheque book can be issued to blind person for specific purpose.
 Minimum amount of withdrawal / deposit is Rs. 10/- Stipulation of cash deposit as initial
deposit for newly opened Savings Bank Deposit accounts has been waived.
 Minors of age 10 years age can open self-operated account. SMS alerts are sent to the
parents regarding all transactions in the account.
 Common Deposit account opening form for all types of deposit accounts for Resident
Individual- NF1018 and Non – individuals – NF 1019.
 CASA account opening is centralised at Centralized Processing Hub (CPH). There are 7 CPHs
Pan India and they are at Patna, Ranchi, Bhubaneswar, Vishakhapatnam, Vijayawada,
Manipal and Ernakulum.
 Opening of NRI account under product Code SB-NRE 103 and SB NRO 104 is centralised at
CPH Ernakulum exclusively.
 Video Based Customer Identification Process (V-CIP) has been introduced digitally to on
board non face to face customers (304/2024). The modified procedure for V-CIP is discussed
in [Link]/193/2024.
 Minimum balance - for ordinary SB accounts (Product 101) (HO Cir 3/2023)

Category Monthly Average Minimum Balance (MAMB)

(With or Without Cheque Book)
Rural Rs. 500.00
Semi –Urban Rs. 1000.00
Metro / Urban Rs. 2000.00

Charges of Non- Metro/Urban Branches

Maintenance of AMB maintained in the account against Charges per month for
Minimum Balance based the stipulated ₹2000/- violation of AMB
on
₹ 1999/- to ₹ 1500/- ₹25/-+GST
Average Monthly
₹ 1499/- to ₹ 1000/- ₹35/-+GST
Balance
₹ 999/- and below. ₹45/-+GST

Charges of Non- Semi Urban Branches

Maintenance of Minimum AMB maintained in the account Charges per month for
Balance based on Average against the stipulated ₹1000/- violation of AMB
Monthly Balance ₹ 999/- to ₹700/- ₹ 25/-+GST
₹ 699/- to ₹400/- ₹35/-+GST
₹ 399/- and below ₹ 45/-+GST

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 Canara Institute of Bank Management

Rural Branches
Charges of Non- AMB maintained in the account Charges per month for
Maintenance of Minimum against the stipulated ₹500/- violation of AMB
Balance based on Average ₹ 499/- to ₹350/- ₹25/-+GST
Monthly Balance ₹ 349/- to ₹200/- ₹35/-+GST
₹ 199/- and below ₹45/-+GST

Scale IV and above authorities only are delegated with powers to permit TODs up to 10000.00
in SB account. TOD may be permitted by Branch-in-charge (Scale I, II & III) in such accounts up
to a maximum of Rs 5,000/- for a period not more than 15 days, duly obtaining prior permission
from the Advances Section, Circle Office. Such permission can be permitted by an authority not
below the rank of Scale IV and the permission granted shall be duly confirmed as per prevailing
guidelines. No Powers to sanction TOD in SB/CA by authorities up to Scale III.

General Conditions:
 Cheque Leaves: First 25 cheque leaves free in a calendar year. Beyond 25 leaves,
Rs.4.00+GST per cheque leaf (HO Cir 95/2022) excluding special scheme accounts like under
Canara basic saving Bank deposit, Canara pay roll package account, Canara Jeevan Dhara,
Canara Defence Saving Bank account, Gen Y account etc.
 50 debit entry per half year. If Debit Entries (excluding Alternate Channels) exceeds 50 per
half-year, either by cheques or otherwise, charges at Rs.10/-+GST per debit to be
collected. (February to July and August to January).
 Transfer of Savings Bank accounts to any of our branches: Flat Rs. 50+ GST + Out of Pocket
expenses (95/2022)

Documents required by a foreign student to open a Bank account (2/2024)

(1) Proof of Identity: Passport, Valid Visa with photograph.
(2) Proof of Admission: A letter from the University or College.
(3) Address Proof: A letter from the College or Hostel, certificate from the Embassy of the
country of origin or any appropriate Legal Authority certified local address in India/rent
agreement/certification of registration issued by Foreigner Registration Regional Office (FRRO).
 Provided that a declaration about the local address shall be obtained within a period of
30 days of opening the account and the said local address is verified.

 Provided further that pending the verification of address, the account shall be operated
with a condition of allowing foreign remittances not exceeding USD 1000 or equivalent
into the account and a cap of rupees fifty thousand on aggregate in the same, during
the 30-days period.

List of Eligible Institutions permitted by RBI for opening SB accounts and earning
Interest there on:

 Primary Cooperative Credit Society financed by the Bank

 Khadi & Village Industries Board
 Agriculture Produce Marketing Committee.
 Societies registered under the Societies Registration Act, 1860 or any other
corresponding law in force in a State or a Union Territory except societies registered
under the State Co-operative Societies Acts and specific state enactment creating Land
Mortgage Banks.
 Companies licensed by the Central Government under Section 8 of Companies Act, 2013
or Section 25 of Companies Act, 1956 or under the corresponding provision in the Indian
Companies Act, 1913 and permitted, not to add to their names the words ‘Limited’ or

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 केनरा बैंक प्रबंधन संस्थान
the words ‘Private Limited’.
 Institutions other than those mentioned in section 28(h) and whose entire income is
exempt from payment of Income-tax under the Income-Tax Act, 1961.
 Government Departments, bodies, agencies in respect of Grants, Subsidy released for
implementation of various programmes, sponsored by Central government/ State
Governments subject to production of an authorization from the respective Central /
State Government departments to open Savings Bank account.
 Development of Women and Children in Rural Areas (DWCRA).
 Self Help Groups – Registered and Unregistered.
 Farmers' Clubs - Vikas Volunteer Vahini - VVV.

List of Organizations/Institutions whose SB should not be opened:

 Government Departments, bodies depending on budgetary allocation for performance
of the functions.
 Municipal Corporations, Committees, Panchayat Samithis.
 State Housing Boards.
 Water and Sewage Drainage Boards.
 State Text book Publishing Co-operative Societies.
 Metropolitan Development Authority.
 State, District level Housing Co-operative societies.
 Any Political Party.
 Any Trading or Business or Professional concern, where such concern is Proprietary or
Partnership firm or a Company or an Association.

Minimum balance waived in following circumstances:

 NRI while opening the account or having other deposits
 Zero balance accounts at the time of opening the account or if we are having any other
deposit
 Students Accounts
 PMJDY account
 SB account of senior citizen (60 years and above)
 Pensioners drawing pension through our Bank.
 Employees of our Bank
 Ex-employees of the Bank who are eligible for preferential rate of interest.
 Balance requirement /Waiver of minimum balance charges as permitted by the
respective Wings.

CBS–SB Product code in brackets:

 Canara Basic Savings Bank Deposit Account(108)
 Canara Small Savings Bank Deposit Account(127)
 Canara Champ Savings Bank Account(109)
 Canara NSIGSE Savings Bank Account(128)
 Canara SB Gen-Y Account(129)
 Canara Savings Bank Defence Account(130)
 Canara Jeevandhara for Senior Citizen(110)
 Canara SB “Jeevandhara – Diamond” (149)
 Canara SB “Jeevandhara – Platinum” (150)
 Canara Junior Saving Account(120)
 Canara SB Power Plus Account(132) (Only Initial Deposit Zero)

पदोन्नति- तििरणात्मक 2024-25 21

 Canara Institute of Bank Management

 Canara SB Public Financial Mgmt. System Scheme (140) (min balance Zero)
 Canara SB- CNA Account (142)
 CANARA SB SELECT Savings Account (147)
 Canara SB Premium Payroll – Silver(148)
 Canara SB Premium Payroll – Gold (144)
 Canara SB Premium Payroll – Diamond (145)
 Canara SB Premium Payroll - Platinum (146)
 CANARA ANGEL – LAVENDER (1628)
 CANARA ANGEL – ROSE (1629)
 CANARA ANGEL – ORCHID (1630)
 CANARA ASPIRE (1631)
 SB EX-STAFF JEEVANDHARA- DIAMOND (1625)
 SB EX-STAFF JEEVANDHARA- PLATINUM (1626)

Canara Basic Saving Bank Deposit Account (BSBDA)(108)

 It’s a no-frills account with no minimum balance requirement.
 5 basic minimum facilities offered in BSBD a/c free of charge:
 Deposit of cash at bank branch as well as ATMs/CDMs
 Receipt of money through any electronic channel or by means of deposit of cheques
drawn by Central/State Govt. agencies and departments
 No limit on number and value of deposits that can be made in a month.
 Maximum of four withdrawals in a month, including ATM Withdrawals
 ATM Card or ATM-cum-Debit Card
 The availment of such additional services are at the option of the customers and will
not make a BSBD account a non-BSBD Account.
 Holders of Canara BSBD are not eligible for opening any other Savings Bank Deposit
account in the Bank. If a customer has any other existing Savings Bank Deposit account
in the Bank, he/ she will be required to close it within 30 days from the date of opening
a Canara Basic Savings Bank.
 “Canara Nayee Disha” is an umbrella of various financial Schemes custom made for
the poor and the economically disadvantaged (for Canara Saral Account holders)

Canara Small Savings Bank Deposit account (127): Deposit policy

 "Smallvalueaccounts"meanstheaccountsofthosepersonswhointendtokeep
i) Balances not exceeding Rs50,000/-(Rupees fifty thousand only)in all of their
accounts taken together at any point of time.
ii) The aggregate of all credits in a financial year does not exceed Rs 1 lac and
iii) The aggregate of all withdrawals and transfers in a month does not exceed
Rs10,000/-
Eligibility: People from lower strata of society/migratory workers etc., who are unable to
provide full KYC documents to open normal bank accounts.
 This account can be opened on production of a self-attested photograph and affixation
of signature or thumb impression as the case may be, on the form for opening the
account, provided that the bank official while opening the account certifies under his
signature that the person opening the account has affixed his signature or thumb
impression as the case may be, in his presence.
 This account can also be opened by submitting the NREGA job card duly signed by an
officer of the State Government, or the letters issued by the Unique Identification
Authority of India containing details of name, address and Aadhaar number, etc.
 Beneficiary of this product cannot maintain any other SB account if already maintained

Padonnati – Descriptive 2024-25 22

 केनरा बैंक प्रबंधन संस्थान
that is to be closed within 30days. Other term & conditions as per no frill account.
 Accounts of Prisoners can be opened under Canara Small Saving Bank Deposit Account
under (Product Code 127) on production of self-attested photograph in the absence of
proof of identity and residential proof. The signature or thumb impression shall be
affixed in presence of the officer in-charge of the jail and the said officer shall certify
the same under his signature. The account shall remain operational on annual
submission of certificate of proof of address issued by the officer-in-charge of the jail.
 No stipulation of Initial deposit and minimum balance.
 Foreign Remittance cannot be credited without complying KYC formalities.
 The account initially remain operational for 12 months which may be extended by
another 12 months, if person provides proof of having applied for an officially valid
document.
 No charges for non-operation/activation of inoperative Canara Small SB account.
 Holders of Canara Small Savings Bank Deposit Account will not be eligible for opening
any other savings bank deposit account in the Bank. If a customer has any other existing
savings bank deposit account in the Bank, he/she will be required to close such existing
accounts within 30 days from the date of opening of “Canara Small Savings Bank Deposit
Account”.

SB Canara Champ Deposit Scheme (109) (Cir 303/06, 107/07, 509/2014)

 Scheme for Children up to the age of 12 years (i.e. till 11years, 364 days)
 Initial deposit can be any nominal amount with a minimum of Rs100/-
 Minimum 2 credits in a half year, aggregating Rs500 in Rural/Semi-Urban and Rs1000 in
Urban/Metro excluding interest have to be made.
 No penalty for non-maintenance of minimum balance.
 Transfer of balance, in the account, in excess of Rs.5000/- for opening Kamadhenu
Deposit upon the request of the account holder is permitted. The proceeds of the
Kamadhenu Deposit upon maturity/closed before maturity has to be credited back to
the SB Canara Champ Account. The KDR should be only in the name of minor
represented by the guardian.”
 Cheque books are not issued under the scheme.
 Joint accounts cannot be opened under the scheme.
 Conversion of the account into regular SB account after the child attains majority.
 A/c holder is eligible for EL if no withdrawals are there in SB t i ll 10+2 Education of
child.
 One Savings Box and Photo folder will be given.
 Free collection of cheques up to Rs.25,000/-gifted to child.
 Nomination & net banking facility available.

Canara SB Gen Y- Product Code129 (Cir 503/2013, 353/2014, 705/2022)

To target young generation prospective VIP customers.
 Canara SB Gen Y Scheme (Product Code 129) is now extended for the branches approved
by respective Circles.
 SB accounts under the scheme can be opened for students of identified Premier
Educational Institutions.
 Circle Head is empowered to approve Premier Educational Institutions other than those
specified in the circulars.
 Initial Balance - Nil, Min Balance - Nil, Welcome Kit Will be given, Debit Card-Free.
 Credit Card with free personal accident insurance coverage. Canara Global Gold Card
will be issued. Minimum income Rs.2.00 Lacs and above. First year free of charge.

पदोन्नति- तििरणात्मक 2024-25 23

 Canara Institute of Bank Management

Limit is Rs.1.00 Lac.

 ATM cash withdrawal per Day Rs.40,000.00 daily.
 Statement of Account through email Free every 15 days.
 NET Banking, NEFT/RTGS and Transfer of Funds from Parents Accounts to students
accounts (provided parents have accounts with us) anywhere in India by DD/RTGS/NEFT
– Free.

Canara Jeevan Dhara (110) :

 A Savings Bank Product for Senior Citizens/Pensioners.
 Offers Health Insurance on softer terms.
 Offers many value additions and benefits with bundle of products. No Minimum balance.
Free debit Card, SMS Alert Free, IMPS and Net Banking free, 2 NEFT/RTGS Free (p.m.).
 Temporary Overdraft facility up to 50% of previous month pension on request after 15
days from last pension credit (Branch power, branch in charge irrespective of scale).
 50% concession in locker rent, if average balance of Rs.2 Lakhs is maintained on annual
basis, 25% concession for others.
 Concession for Medicine: Up to 25% as per Bank Tie-ups on Time-to-time basis through
ai1 app at present.
 Assistance in writing of Will and Executant service at a nominal fee with full
confidentiality provided.
 Name printed up to 60 leaves per annum free.
 PAIS – Up to Rs. 2 lakhs covered subject to:
a) Maintaining Pension Account with us or
b) Maintaining average minimum balance of Rs.20000/- previous year on anniversary date.
c) For all the accounts opened under the product code during the month, cover will be
available from 1st of succeeding month subject to fulfillment of above criteria. Initially
cover will be available only for accounts opened with pension account with us. The
coverage as per criteria above, will be available from the 1st of succeeding month of
completion of one year from date of opening the account.
 Reverse Mortgage loan facility as per norm.
 The existing pension accounts opened under any product codes including existing
Jeevandhara may be ported in to new variants “Jeevandhara-Diamond” &
“Jeevandhara-Platinum” as per customer request.

Canara SB Jeevandhara – Diamond (149):

 Monthly pension up to Rs. 50000/-.
 Pensioner/Prospective pensioner including all the employees retired on voluntary basis
or normal retirement who has given mandate for credit of their pension in the account
including Defence personnel.
Features:
 Loan against Deposits-1.00% over & above the contractual deposit rate.
 No Initial or Minimum Balance required to be maintained.
 Rupay Platinum debit card with permitted cash withdrawal limit of Rs. 1 lakh per day.
 For Credit card, issuance and AMC charges free.
 Neft/RTGS, Net banking, SMS Alerts, IMPS, DD free
 Locker facility @25% concession.
 [Link] of 16 lakhs, AAI 20 lakhs including Rupay platinum debit Cards.
 B. For Defence Pensioner: PAI 40 lakhs, AAI 40 lakhs including Rupay Platinum Debit
Cards.

Padonnati – Descriptive 2024-25 24

 केनरा बैंक प्रबंधन संस्थान
 C. Insurance will be available till pensioner attains the age of 65 years.
 Insurance for Life Partne r(Spouse):PAI cover Rs.2,00,000/- AAI Cover Rs.4,00,000/-
Insurance will be made available in 30 days from the date of account
opening/conversion.
 No Processing charge for Pension loan AND 25% waiver of Processing Fees may be
provided for HL, VL loan.
 Instant overdraft facility will be subject to regular credit of pension for at least 6
consecutive months (114/2024).
a. Overdraft facility: two-month net pension credited in the account, subject to
max of Rs.100000/.
b. Max age for availing the benefits: 75 years.
c. May be availed through Mobile banking -ai1 app / Branches, Valid for 60 days,
Rate of Interest: RLLR + 2.50%.

Canara SB Jeevandhara – Platinum (150):

Eligibility:
 Monthly Pension above Rs. 50000/-.
 Pensioner/Prospective pensioner including all the employees retired on voluntary basis
or normal retirement who has given mandate for credit of their pension in the account
including Defence personnel.
 Features:
 No Initial or Minimum Balance required to be maintained.
 Loan against Deposits-0.75% over & above the contractual deposit rate.
 Rupay Select debit card with daily ATM cash withdrawal limit of Rs. 1 lakh.
 For Credit card, issuance and AMC charges free.
 Neft/RTGS, Net banking, SMS Alerts, IMPS, DD free
 Locker facility @50% concession.
 Unlimited personalised cheque leaves free.
 [Link] 24 lakhs, AAI 30 lakhs.
 B. For Defence Pensioner: PAI 40 lakhs, AAI 40 lakhs including Rupay Select Debit Card.
C. Insurance will be available till pensioner attains the age of 65 years.
 No Processing charge for Pension loan. And 50% waiver of Processing Fees may be
provided for HL, VL loan.
 Instant overdraft facility will be subject to regular credit of pension for at least 6
consecutive months(114/2024).
 Overdraft facility: Three-month net pension credited in the account, subject to max of
Rs.200000/.
 Max age for availing the benefits: 75 years, May be availed through Mobile banking -ai1
app / Branches, Valid for 90 days and Rate of Interest: RLLR + 2.50%.
 Insurance for Life Partner(Spouse) Insurance will be made available in 30 days from the
date of account opening/conversion. PAI cover Rs.2,00,000/- AAI Cover Rs.4,00,000/-.

SB EX-STAFF JEEVANDHARA- DIAMOND (1625) (806/2023)

 Monthly pension Up to Rs.50000.
 No minimum balance requirement.
 Rupay Platinum Debit Card- ATM Cash Withdrawal. Rs. 100000/ per day, Debit card
Charges/ AMC Free, ATM Transactions Free unlimited at our Bank ATMs, other Banks –
3 at Metro & 5 at Non-Metro centres, Airport Lounge(Domestic Airport) 1 per Quarter,
(International Airport) 2 per Year.
 CREDIT CARD Free Issuance, No AMC.

पदोन्नति- तििरणात्मक 2024-25 25

 Canara Institute of Bank Management

 Free NEFT/ RTGS/ NET Banking/ SMS Alerts/IMPS/DD.

 Locker Facility -25% concession in rent.
 PAI 16 lakhs, AAI 20 lakhs including Rupay platinum debit Cards,Insurance will be
available till pensioner attains the age of 65 years and
 Insurance for Life Partner(Spouse):PAI cover Rs.2,00,000/- and AAI Cover Rs.4,00,000/-
.
 No Processing charge for Pension loan, 25% waiver of Processing Fees may be provided
for HL, VL loan
 TOP UP FACILITY of the loan limit where ever the limit /balance is repaid to 50 % and
/or half of the repayment period is over.
 Overdraft facility: two-month net pension credited in the account, subject to max of
Rs.1,00,000/, Max age for availing the benefits: 75 years, May be availed through Mobile
banking -ai1 app / Branches, Valid for 60 days, Rate of Interest: RLLR + 2.50%. p.a

SB EX-STAFF JEEVANDHARA PLATINUM (1626) (806/2023)

 Monthly pension above Rs.50,000.
 No minimum balance requirement.
 Rupay Select Debit Card- ATM Cash Withdrawal. Rs. 100000/ per day, Debit card
Charges/ AMC Free, ATM Transactions Free unlimited at our Bank ATMs, other Banks –
3 at Metro & 5 at Non-Metro centres, Airport Lounge(Domestic Airport) 1 per Quarter,
(International Airport) 2 per Year.
 CREDIT CARD Free Issuance, No AMC.
 Free NEFT/ RTGS/ NET Banking/ SMS Alerts/IMPS/DD.
 Locker Facility -25% concession in rent.
 PAI 24 lakhs, AAI 30 lakhs including Rupay Select debit Cards, Insurance will be available
till pensioner attains the age of 65 years and
 Insurance for Life Partner (Spouse):PAI cover Rs.2,00,000/- and AAI Cover
Rs.4,00,000/-.
 No Processing charge for Pension loan, 50% waiver of Processing Fees may be provided
for HL, VL loan
 TOP UP FACILITY of the loan limit where ever the limit /balance is repaid to 50 % and
/or half of the repayment period is over.
 Overdraft facility: Three-month net pension credited in the account, subject to max of
Rs.2,00,000/, Max age for availing the benefits: 75 years, May be availed through
Mobile banking -ai1 app / Branches, Valid for 60 days, Rate of Interest: RLLR + 2.50%.
p.a

Canara SB Power Plus (132)(163/2014, 01/2015,197/2020)

 Designed to cater to needs of premier segment of customers who would maintain a
quarterly average balance of Rs.1 lac and above
 Account can be opened with zero balance. In case of non-maintenance of minimum
balance, a penalty of Rs.250 per quarter will be levied till regularization.
 Issue of DDs, Locker Operations, Net Banking, Standing Instruction and Reset of
Password in Internet Banking – free of charge.
 Name printed cheque books upto 300 cheque leaves per annum issued free.
 Platinum Debit Card will be issued with daily Cash Withdrawal limit of Rs.50000 and
with personal accident death insurance. No charges to be debited for Platinum debit
card with photo irrespective of usage.
 Credit Card: First year free of charge. Personal accident insurance (death only)
available upto Rs.2.00 Lakhs to Rs 8.00 Lakhs for self / spouse.
 Auto sweep-in and sweep-out can be carried out as per customer’s choice/request for

Padonnati – Descriptive 2024-25 26

 केनरा बैंक प्रबंधन संस्थान
balance beyond Rs.1 lakh.
 A/C closure charges Rs.1000 penalty + service charges.
 Allotment of locker on priority, subject to availability. 25% concession in locker rent
irrespective of size in the first year. Free unlimited locker operations.
 Now Canara SB Power Plus Scheme is now extended to NRE/NRO Customers also
 Product Code – 133 – for Canara SB Power Plus – NRE
 Product Code – 134 – for Canara SB Power Plus – NRO

Canara Payroll Package Scheme -Silver Variant(148) (476/2023)

 All employees of a firm/company with minimum 5 employees are eligible to open
account under this product.
 Age 18-65 years. Customer types: Individual, Senior Citizen, Blind and Illiterate
 Salary Mandate is required.
 Salary of Upto Rs.50,000/- are eligible.
 Cheque Book: Free 200 cheque leaves/annum
 Eligible for issue of Rupay Platinum Debit Card and with enhanced Daily ATM withdrawal
limit up to Rs.1,00, 000/- and POS Rs.5,00,000/-,NFC 25000/- per day.
 Free unlimited at our Bank ATMs. Transactions at other Banks – 3 at Metro & Urban
Centres. 5 at Semi Urban & Rural Centres.
 Lounge access: 1 per Quarter(20+ Domestic Airport Lounges) 2 per year (500 +
International Airport Lounges)
 Baggage Cover - Rs.25000/- and Purchase Protection - Rs.25000/-
 Temporary overdrawing allowed up to 50% of net salary with terms and conditions. TOD
facility will not be available if customer already availed Personal Loan.
 TOD in account (Max Two times in a calendar year) Max Upto 50% of last month Net
salary credit with maximum up to Rs. 10000/- of tenure 15 days @ RLLR+2.4% at
branches only.
 No Minimum balance required. In case of non-crediting of salary for three continuous
months or four months in discrete way in the financial year or prorate basis thereon
there shall be penalty Rs. 250 plus applicable GST.
 Rupay Platinum Debit Card - Issuance free Annual Maintenance Charges (AMC) -100%
Waived. All the concession /features of debit will be available under Rupay Platinum
Debit card only.
 Credit Card Will be issued free of charges, credit limit based on annual income. All
other charges will be applicable.
 Two DDs free (per month) to the extent of average balance available in the account
RTGS/NEFT/IMPS Free.
 Personal Loan facility is available with Competitive ROI
 Account Opening will be through TAB Banking & Aadhar Based Insta A/c opening. Gross
salary & Organization name shall be captured mandatorily.
 In case the monthly salary is not credited into the account for more than
Three consecutive months, the special features offered under the facility stands
withdrawn and the account shall be treated as Normal savings account and all charges
shall be levied as applicable.
 This Variant will provide the Customer a term Life insurance of Rs. 1 lakh, PAI – Rs.
10 lakhs & AAI – Rs. 10 lakhs (476/2023). (Insurance will be made available in 10 days
from the date of account opening/conversion.)

CANARA PREMIUM PAYROLL PACKAGE SCHEME - GOLD VARIANT (144) (476/2023)

 All employees of a firm/company with minimum 5 enrolments for customised services.

पदोन्नति- तििरणात्मक 2024-25 27

 Canara Institute of Bank Management

 Individual, Senior Citizen, Blind & Illiterate are eligible.

 Salary of Rs.50,000/- to less than Rs.1,00,000/- are eligible.
 Salary Mandate is required.
 Cheque Book:Free 200 cheque leaves/annum
 No minimum balance requirement.
 Unlimited DDs free (per month) to the extent of average balance available in the
account RTGS/NEFT/IMPS Free.
 Rupay Platinum Debit Card - Issuance free Annual Maintenance Charges (AMC) –Waived
Fully.
 Daily ATM withdrawal limit up to Rs.1,00, 000/- and POS Rs.5,00,000/- and NFC 25000/-
per day.
 Debit Card transactions: Free unlimited at our Bank ATMs. Transactions at other Banks
– 3 at Metro & Urban Centres. 5 at Semi Urban & Rural Centres.
 Lounge access: 1 per Quarter (20+ Domestic Airport Lounges), 2 per year (500 +
International Airport Lounges).
 Baggage Cover - Rs.25000/- and Purchase Protection - Rs.25000/-
 Credit Card: Issuance Free Annual Maintenance Charges (AMC) -25% waiver and on
Retail Loans 25% concession in processing charges.
 Personal Loan facility is available with Competitive ROI.
 TOD Facility:2 months net salary up to – Max Rs. 1 lakh TOD facility is available in ai1
for 15 days & at Branches for 2 months. TOD facility will not be available if customer
has already availed Personal Loan. TOD is available after 6 months’ regular salary credit
in every month after account opening (114/2024).
 Concession on locker Rent 5 %, Locker Operations Unlimited free.
 Account Opening will be through TAB Banking & Aadhaar Based Insta A/c opening. Gross
salary & Organization name shall be captured mandatorily.
 In case of non-crediting of salary for three continuous months or for months in discrete
way in the financial year or prorate basis thereon there shall be penalty Rs. 500 plus
applicable GST.
 Free Zero balance Family Accounts (Spouse+ 1 Child).
 Term Life Insurance Rs. 2 lakhs, PAI – Rs. 26 lakhs (incl. Cover under Rupay Platinum
Debit Card)
(Additional Rs.2.00 lakhs PAI from NPCI), AAI – Rs. 28 lakhs (incl. Cover under Rupay
Platinum Debit Card) and also for spouse Rs.2.00 lakhs PAI and Rs.4.00 lakhs AAI and
other in built benefits.

CANARA PREMIUM PAYROLL PACKAGE SCHEME - DIAMOND VARIANT(145)(476/2023)

 All employees of a firm/company with minimum 5 employees are eligible to open
account under this product.
 Individual, Senior Citizen, Blind & Illiterate are eligible.
 Salary of Rs.1,00,000/- to Rs.1,50,000/- are eligible.
 Salary Mandate is required.
 Cheque Book: Free 200 cheque leaves/annum
 No minimum balance requirement.
 Unlimited DDs free (per month) to the extent of average balance available in the
account RTGS/NEFT/IMPS Free.
 Rupay Select Debit Card - Issuance free Annual Maintenance Charges(AMC) –Waived
Fully.
 Daily ATM withdrawal limit up to Rs.1,00, 000/- and POS Rs.5,00,000/- and NFC 25000/-

Padonnati – Descriptive 2024-25 28

 केनरा बैंक प्रबंधन संस्थान
per day.
 Debit Card transactions: Free unlimited at our Bank ATMs. Transactions at other Banks
– 3 at Metro & Urban Centres. 5 at Semi Urban & Rural Centres.
 Lounge access: 1 per Quarter(20+ Domestic Airport Lounges), 2 per year (500 +
International Airport Lounges).
 Baggage Cover - Rs.25000/- and Purchase Protection - Rs.25000/-
 Credit Card: Issuance Free Annual Maintenance Charges (AMC) -50% waiver and
Processing Charges on Retail Loans 50% concession in processing charges.
 Personal Loan facility is available with Competitive ROI.
 TOD Facility:3 months net salary up to – Max Rs. 2 lakh TOD facility is available in ai1(15
days)& at Branches(2 months) as well. TOD facility will not be available if customer
already availed Personal Loan. TOD is available after 6 months’ regular salary credit in
every month after account opening (114/2024).
 Concession on locker Rent 10 %, Locker Operations Unlimited free.
 Account Opening will be through TAB Banking & Aadhar Based Insta A/c opening. Gross
salary & Organization name shall be captured mandatorily.
 In case of non-crediting of salary for three continuous months or four months in discrete
way in the financial year or prorate basis thereon there shall be penalty Rs. 750 plus
applicable GST.
 Free Zero balance Family Accounts (Spouse+ 2 Children) .
 Term Life Insurance Rs. 4 lakhs, PAI – Rs. 44 lakhs (incl. Cover under Rupay Select Debit
Card)
(Additional Rs.10.00 lakhs PAI from NPCI), AAI – Rs. 38 lakhs ([Link] under Rupay
Platinum Debit Card) and also for spouse Rs.2.00 lakhs PAI and Rs.4.00 lakhs AAI and
other in built benefits.

CANARA PREMIUM PAYROLL PACKAGE SCHEME - PLATINUM VARIANT (146) (305/2023)

 All employees of a firm/company with minimum 5 employees are eligible to open
account under this product.
 Individual, Senior Citizen, Blind & Illiterate are eligible.
 Salary of Rs.1,50,000/- and above are eligible.
 Salary Mandate is required.
 Cheque Book: Free 200 cheque leaves/annum
 No minimum balance requirement.
 Unlimited DDs free (per month) to the extent of average balance available in the
account RTGS/NEFT/IMPS Free.
 Rupay Select Debit Card - Issuance free Annual Maintenance Charges (AMC) -100%
waiver.
 Daily ATM withdrawal limit up to Rs.1,00,000/- and POS Rs.5,00,000/- and NFC 25000/-
per day.
 Debit Card transactions: Free unlimited at our Bank ATMs. Transactions at other Banks
– 3 at Metro & Urban Centres. 5 at Semi Urban & Rural Centres.
 Lounge access: 1 per Quarter (20+ Domestic Airport Lounges), 2 per year (500 +
International Airport Lounges).
 Baggage Cover - Rs.25000/- and Purchase Protection - Rs.25000/-
 Credit Card: Issuance Free Annual Maintenance Charges (AMC) -100% waiver and
Processing Charges on Retail Loans 75% concession in processing charges.
 Personal Loan facility is available with Competitive ROI.
 TOD Facility:3 months net salary up to – Max Rs. 3 lakh TOD facility is available in ai1(15
days)& at Branches (3 months) as well. TOD facility will not be available if customer

पदोन्नति- तििरणात्मक 2024-25 29

 Canara Institute of Bank Management

already availed Personal Loan. TOD is available after 6 months’ regular salary credit in
every month after account opening (114/2024).
 Concession on locker Rent 15 % waiver, Locker Operations Unlimited free.
 Account Opening will be through TAB Banking & Aadhar Based Insta A/c opening. Gross
salary & Organization name shall be captured mandatorily.
 In case of non-crediting of salary for three continuous months or four months in discrete
way in the financial year or prorate basis thereon there shall be penalty Rs. 1000 plus
applicable GST.
 Free Zero balance Family Accounts (Spouse+ 2 Children).
 Term Life Insurance Rs. 6 lakhs, PAI – Rs. 54 lakhs (incl. Cover under Rupay Select Debit
Card)
(Additional Rs.10.00 lakhs PAI from NPCI), AAI – Rs. 58 lakhs (incl. Cover under Rupay
Platinum Debit Card) and also for spouse Rs.2.00 lakhs PAI and Rs.4.00 lakhs AAI and
other in built benefits.

CANARA SB SELECT Savings Account (147) (306/2023, 428/2023,457/2023,147/2024)

 Exclusively Designed for Quality Customers & Tech Savvy Individuals.
 Rupay Platinum Debit Card with NIL Issuance Fee and AMC Charges on issued Platinum
Debit Card will apply as per Card Policy, if required minimum Monthly Average Balance
is not maintained for three consecutive months or four months in a year.
 Portability is available from existing Savings Account product to Canara SB Select and
vice versa.
ELIGIBILITY Individuals
MINIMUM MONTHLY Branch Type Rural Semi-Urban Urban Metro
AVERAGE BALANCE INITIAL Rs.10,000/- Rs.15,000/- Rs.20,000/- Rs.25,000/-
(MAB) and INITIAL DEPOSIT
DEPOSIT Minimum MAB Rs.10,000/- Rs.15,000/- Rs.20,000/- Rs.25,000/-
 Airport Lounge Access - 1 Free per Calendar quarter.
 Personal Accident Insurance (PAI) Cover for Death under CANCARE Policy– for Rupay
Platinum Debit Card Holders: Air Accident:  Rs 8.00 lakhs for self and Rs 4.00 lakhs
for spouse. Other than Air Accident: Rs 4.00 lakhs for self and Rs 2.00 lakhs for spouse.
Baggage Insurance cover: Rs. 25000/- (per card) under CANCARE policy, Purchase
Protection cover: Rs. 25000/- (per card) under CANCARE policy.
 ATM CASH WITHDRAWAL Rs.1,00,000/- in our Bank ATM.
 CHEQUE BOOK 25 Cheque leaves free in a Calendar Year.
 Unlimited Free Locker Operations
 NEFT / RTGS / IMPS: Free

CANARA ANGEL:
 All Women aged from 18 years up to 70 years as on date of account opening – Individual
/ Senior Citizen / Blind / Illiterate.
 Offers in top e-com sites like Urban Company, BookMyShow, Myntra, Swiggy and
Amazon.
 Free health insurance cover upto Rs. 10 Lakhs for cancer care protection
 Personal accident cover upto 20 Lakhs (over and above card-based insurance) to the
primary account holder.
 Zero service charges on SMS alerts, IMPS/RTGS/NEFT and locker Operations
 Eligible for Free airport lounge access - 1 Domestic Airport Lounge access per quarter
and 2 International Airport Lounge access annually (Participating lounges are listed on
the Rupay website.

Padonnati – Descriptive 2024-25 30

 केनरा बैंक प्रबंधन संस्थान
 Processing charges waived for education loans for the Canara Angel customers and their
daughter/s.

CANARA ANGEL – LAVENDER (1628) (313/2024, 347/2024,535/2024):

 Quarterly Average Balance –Rs.5000.
 Cancer Care protection - Rs. 3,00,000/-, PAI-2,00,000/-,PAI Under Cancare Policy-
4,00,000/- and As per Rupay Debit Card-2,00,000/-AAI-Rs.8,00,000/- for self ; for
Spouse PAI-Rs.2,00,000/- and AAI-Rs.4,00,000/-
 Preferential Rate for retail Loans 0.05% on ROI
 Free up to 25 Cheque leaves per Annum
 Rupay Platinum Debit Card AMC Charges waived. ATM Cash Withdrawal Limit-
Rs.1,00,000/-, POS Limit Rs.5,00,000/-,Free 5 Transactions (Financial + Non-Financial)
in our Bank and in other Bank ATMs 3 at metro and 5 at other centres.
 Charges for account closed before 1 year Rs.200/- and non-maintenance of balance
Up to Rs.100/-.

CANARA ANGEL – ROSE (1629) (313/2024,347/2024,535/2024):

 Quarterly Average Balance –Rs.30,000/-.
 Cancer Care protection - Rs. 5,00,000/-, PAI-10,00,000/-,PAI Under Cancare Policy-
4,00,000/- and As per Rupay Debit Card-2,00,000/-AAI-Rs.8,00,000/- for self ; for
Spouse PAI-Rs.2,00,000/- and AAI-Rs.4,00,000/-
 Preferential Rate for retail Loans 0.05% on ROI.
 Free up to 50 Cheque leaves per Annum
 Rupay Platinum Debit Card AMC Charges waived. ATM Cash Withdrawal Limit-
Rs.1,00,000/-, POS Limit Rs.5,00,000/-,Free 5 Transactions (Financial + Non-Financial)
in our Bank and in other Bank ATMs 3 at metro and 5 at other centres.
 Zero Balance account for any 2 family members (Spouse/children).
 10% Locker rent waiver for first year
 Charges for account closed before 1 year Rs.500/- and non-maintenance of balance
Up to Rs.150/-.

CANARA ANGEL – ORCHID (1630) (313/2024,347/2024,535/2024):

 Quarterly Average Balance –Rs.1,00,000/-.
 Cancer Care protection - Rs. 10,00,000/-, PAI-20,00,000/-,PAI Under Cancare Policy-
4,00,000/- and As per Rupay Debit Card-2,00,000/-AAI-Rs.8,00,000/- for self ; for
Spouse PAI-Rs.2,00,000/- and AAI-Rs.4,00,000/-
 Preferential Rate for retail Loans 0.05% on ROI.
 Free up to 200 Cheque leaves per Annum
 Rupay Woman Platinum Debit Card AMC Charges waived. ATM Cash Withdrawal Limit-
Rs.1,00,000/-, POS Limit Rs.5,00,000/-,Free 5 Transactions (Financial + Non-Financial)
in our Bank and in other Bank ATMs 3 at metro and 5 at other centres.
 Zero Balance account for any 3 family members (Spouse/children).
 15% Locker rent waiver for first year.
 Charges for account closed before 1 year Rs.1000/- and non-maintenance of balance
Up to Rs.750/-.

CANARA ASPIRE –Savings Account for Youth (1631) (Cir No. 687/2024)
 Exclusively designed focussing on onboarding young customers to our portfolio between
 Age group 18-28 Years.
 Complimentary one certificate course through Coursera Platform for customers
maintaining QAB above Rs. 5000/- and one more additional course for customers
maintaining QAB above Rs. 25000/-
 ROI concession of 0.50% for fresh education loans, over and above the applicable ROI.
 No minimum balance stipulation.
 Free SMS alerts.
 Free Rupay Platinum Millennial debit card with AMC waived.

पदोन्नति- तििरणात्मक 2024-25 31

 Canara Institute of Bank Management

 Card based offers from top brands like BookMyShow, Swiggy, Amazon, Gaana, etc.
 Account can be opened through all modes (CPH, Tab Banking, Online A/C Opening, Diya,
 KIOSK and through other digital channel
 Portability available for existing SB Accounts.
 PAI cover of 6 Lakhs (Card based + Cancare Policy)
 Airport Lounge Access
 Joint accounts are not allowed
 Only one account per customer can be opened
 Cheque book free up to 25 leaves per annum.

CANARA SB & CA PFMS - New SB & CA Product for opening PFMS accounts (17/2023)
SB
 New product code – 143 is enabled for opening SB account for Govt. Departments.
 Minimum balance Zero Balance
 Eligibility
A. G1 – Central Government
B. G2 – State Government
C. Trust Regd. U/Indian Trust Act
D. Registered Associations/Societies/ NGO’s (A, A1, M2, S4, S5, X, X1 & X2)
 Rate of Interest as applicable to Savings Bank Account
 Cheque book and SMS facility is available.
 Internet banking facility is available along with transactions rights.
 Portability is available for the similar accounts.
 All other terms and conditions except above are as applicable to other SB.
 All applicable charges are waived including cheque returning and cash handling
charges.
 Parent Child Identification to be maintained under CHX40 Screen in CBS
 Account opening is only at CPHs

CANARA SB CCMS (1627) (149/2024)

 No initial deposit / minimum monthly balance.
 Corporates Entities, Govt. institutions and all other Institutional Clients availing CCMS
facilities are eligible to open account under this product.
 Account opening permitted only at specific branches, duly permitted by CCMS Section,
Large Corporate Credit Wing, Head Office, Bengaluru.
 Corporate Internet Banking & Mobile Banking facility are available.
 Passbook/Debit Card facility is not available for the accounts opened under these
products.
 Inter Product portability is allowed from existing CASA accounts to the new product.
 All other terms and conditions are as applicable to normal SB/CA account.

CURRENT ACCOUNT
 For Traders, Businessmen, Corporate bodies etc who operate the account frequently.
 The minimum amount to be deposited for opening an account is Rs 1000/- for Rural, Rs.
2000/- for Semi Urban, 5000/- for Urban and Rs. 7500/- for Metro branches. The
minimum average monthly balance also has to be mentioned as per above ceiling. (HO
Cir 496/2023)
 Withdrawals are normally permitted only by cheques issued by the Bank. There is no
restriction on the number of withdrawals.
 Purdanashin Women: CA not to be opened generally. However, they can be opened with

Padonnati – Descriptive 2024-25 32

 केनरा बैंक प्रबंधन संस्थान
prior permission of Operations section of respective CO.
 Illiterate person’s Current Account: Manager/SM can take decision and open.
 Accounts with Minor as Proprietor: Should not ordinarily be opened. However, there is
no bar in opening such accounts, but over-drawings not to be permitted.
 No Interest on CA. Interest at SB rate in case of deceased parties.
 RRBs sponsored by us ONLY may be paid interest as advised by HO.
 Permissible TOD: 10% of the delegation of powers for sanction of clean loans by Scale
IV and above authorities.
 Upto Scale III: NO TOD sanctioning power. TOD may be permitted by Branch-in-charge
(Scale I, II & III) in such accounts up to a maximum of Rs 5,000/- for a period not more
than 15 days, duly obtaining prior permission from the Advances Section, Circle Office.

WHO CAN OPEN A CURRENT ACCOUNT

Current Accounts may be opened by:
a. Individuals (Single Account).
b. Two or more individuals no restriction in number of persons (Joint Accounts).
c. Sole Proprietary Concerns.
d. Partnership Firms.
e. Limited Liability Partnership.
f. Hindu Undivided Family.
g. Private and Public Limited Companies.
h. Public Corporations.
i. Registered or Unregistered Societies or Associations/Clubs.
j. Trusts/Provident Funds.
k. Executors and Administrators.
l. Government/Semi-Government Bodies etc. Departments, Taluk/District Boards, Local
Bodies.
m. Charitable and Religious institutions.

Opening of Current Account -294/2022, 496/2023

 Branch to generate CIBIL iScan report to ensure compliance of RBI guidelines. In case of
violations account not to be opened. It also reflects availment of credit facility if any.
 Branch to obtain undertaking/declaration from the customer as per annexure-I of HO Cir
740/2020 for having availed credit/non-credit facility from the banking system.
 Branch to submit covering letter as per Annexure-II of HO Cir 740/2020 to CPH for opening
account.
 Branches can open current account of prospective customers who have not availed any
credit facility from the Banking System.
A. Opening of Current Accounts for borrowers availing Cash Credit / Overdraft facilities
from the Banking System:
 1st case: Where aggregate exposure is less than Rs. 5 Crore from banking system, any bank
branch can open Current account subject to obtaining an undertaking from the customer
to inform the branch as and when the overall credit facility availed either reaches or
exceeds Rs. 5 crores.
 2nd case: Where aggregate exposure from the banking system is Rs. 5 Crore or more:
anyone of the CC/OD lending banks having overall exposure of 10% or more and in absence
of that any CC/OD lending bank having the highest share can open CA.
 Other lending banks may open only collection accounts subject to the condition that funds
deposited in such collection accounts will be remitted within two working days of receiving

पदोन्नति- तििरणात्मक 2024-25 33

 Canara Institute of Bank Management

such funds, to the above-mentioned CC/OD Lending bank maintaining current accounts
for the borrower.
 Non-lending banks are not permitted to open current/ collection accounts.
B. Opening of Current Accounts for borrowers not availing Cash Credit / Overdraft
facilities from the Banking System:
 In case of borrowers where aggregate exposure of the banking system is less than ₹5 Crore,
any Bank Branch may open current account subject to obtaining an undertaking from them
that they (the Customers) shall inform the bank(s), if and when the credit facilities availed
by them from the banking system becomes ₹5 Crore or more.
 In case of borrowers where aggregate exposure of the banking system is ₹5 Crore or more
but less than ₹50 Crore, there is no restriction in opening of current accounts by the lending
banks. While, non-lending banks can open only collection account.
 Where exposure is Rs. 50 Crore or more from the Banking system – an escrow mechanism
is mandatory. All lending banks should be part of the escrow agreement. Only escrow
managing bank can open Current account of such borrowers, other lending banks can open
only collection account and non-lending bank shall not open any current/collection
account.

C) Opening of Current Account for Customer who have availed credit facilities only
from NBFCs/FIs/Co-operative Banks/ Non-Bank Institutions
Banks are free to open current accounts, without any of the restrictions as mentioned
above, for borrowers having credit facilities only from NBFCs/ FIs/ co-operative banks/
non-bank institutions, etc. However, if such borrowers avail aggregate credit facilities
of ₹5 Crore or above from the banks covered under these guidelines, the provisions
discussed above shall be applicable.

D) Opening of Current Account for Customers who have not availed any credit facilities
from Banking System:
Branches are free to open current accounts of prospective customers who have not
availed any credit facility from the banking system, subject to necessary due diligence
as per existing guidelines.

Padonnati – Descriptive 2024-25 34

 केनरा बैंक प्रबंधन संस्थान
“CANARA PRARAMBH” CURRENT ACCOUNT (1659) (172/2024):
 Designed to cater to Start-ups recognized by DPIIT.
 Account to be opened under Product Code – 1659.
 Rent Free Point of Sale (POS) and BHIM QR Sound Box.
 Personalised Cheque Book free up to 500 leaves per annum.
 NEFT / RTGS / IMPS / SMS / Folio Charges – Waived.
 Demand Draft (issuance) – Free Five DDs per month.
 Locker Operations free.
 Personal accidental insurance cover available from Rs.2.00 Lakhs to Rs.8.00 Lakhs, as
an in-built facility under Rupay Platinum Debit card with ATM Cash Withdrawal of
Rs.50,000/- per day
 Required Minimum Balance- Quarterly average balance ₹ 25000 & above.
 Non Maintenance of Minimum Balance Rs.1500/- plus GST per quarter.

SPECIAL NON-RESIDENT RUPEE (SNRR) ACCOUNT CURRENT ACCOUNT(1657) (74/2024):

 Designed to cater to needs of any person resident outside India, having a business
interest in India.
 Type of account – Current Account (Denominated in INR).
 The balances in the SNRR account shall be eligible for repatriation.
 SNRR accounts to be opened through Centralised Processing Hub (CPH).
 The business interest, apart from generic business interest, shall include the following
INR transactions, namely:
1. Investments made in India,
2. Import of goods and services,
3. Export of goods and services,
4. Trade credit transactions and lending under External Commercial Borrowings (ECB) frame
work,
5. Business related transactions outside International Financial Service Centre (IFSC) by IFSC
units at GIFT city like administrative expenses in INR outside IFSC, INR amount from sale of
scrap, Government incentives in INR, etc.
 The operations in the SNRR account shall not result in the account holder making
available foreign exchange to any person resident in India against reimbursement in
rupees or in any other manner.
 The SNRR account shall not bear any interest.
 The debits and credits in the SNRR account shall be specific/ incidental to the business
proposed to be done by the account holder.
 All the operations in the SNRR account should be in accordance with the provisions of
the Foreign Exchange Management Act.
 All transactions in the SNRR account will be subject to payment of applicable taxes in
India.
 The tenure of the SNRR account shall be concurrent to the tenure of the contract/
period of operation/ the business of the account holder and in no case should exceed
seven years

RERA Current Account (216), Ref cir 53/2022), (496/2023):

 RERA account can be opened by any individual /Partnership firm or Limited Liability
Partnership/Companies etc carrying out business transactions as per the Act.
 RERA Current Account scheme is a combination of three current accounts
 [Link] RERA collection a/c (Pooling a/c),
[Link] Project’s RERA Designated a/c
[Link] Current a/c of the customer/builder.
All these 3 a/cs to be opened in same customer ID.
 For each project, there shall be separate and dedicated RERA collection a/c, where
operation by the customer will not be allowed.
 On receipt of collection proceeds of the project amount, deposited by the customer in

पदोन्नति- तििरणात्मक 2024-25 35

 Canara Institute of Bank Management

the RERA collection account (Pooling account), seventy percent (70%) of the deposited
amount in project Collection Account will be automatically remitted to project’s RERA
Designated Current Account (for the purpose of construction and land cost), remaining
thirty percent (30%) of the deposited amount will be automatically remitted to
customer’s regular Current Account (as specified in the Request Letter) on a real time
basis. However, realtor may decide for transfer of 30 % of collections to their operating
CC / OD account instead of regular current account.
 The balance in project collection account will be zero at the end of each day. No
cheque book, no Debit/Credit Card - only internet viewing facility to be provided in the
Collection a/c as well as the RERA designated account.
 In RERA Designated a/c, withdrawal is permitted in proportion to completion of project
as certified by an engineer, an architect and a chartered accountant.
 As the RERA Current Account will entail multiple deposits in one account, these
accounts will be categorized as High-Risk Accounts.

Account Type RERA Collection account RERA Project Account RERA Operative Account
(Builders account)
Product code 216 216 201/214
Scheme Code RCA RPA ROA
Eligibility
Realtor/Real Estate Developers etc. eligible for RERA As applicable to Normal
Registration. Current Account
Average
Monthly As applicable to Normal
Balance N.A. Current Account
Charges All debits of return
clearing/wrong NEFT, RTGS All Charges to be All Charges of RCA & RPA
adjustments. Cheque return debited/ adjusted from to be debited/ Adjusted
charges to be adjusted from ROA only. from ROA.
operative account (ROA)
only.
Non Home
branch debit Not allowed Not allowed As applicable to Normal
Current Account
Alternate
channel Disabled Disabled As applicable to Normal
linkage Current Account
Internet
Banking Only View Facility Only View Facility As applicable to Normal
Current Account
Closure of
Account After Completion of the After Completion of the As per the discretion of
Project/ Phase Project the customer
Account
Closure Nil at present Nil at present As applicable to Normal
charges
Current Account

Further, The Competent Authority has permitted Sweep-out facility / Issuance of Term Deposits
from RERA Designated Account, as below: (HO Cir 673/2023)

Padonnati – Descriptive 2024-25 36

 केनरा बैंक प्रबंधन संस्थान
I. Sweep-out facility (673/2023)
 Threshold Limit : Rs. 5,00,000/- and in multiples of Rs. 5,00,000/- for TD.
 Sweep-Out Frequency: weekly, on every Monday. If Monday happens to be a holiday or
last day of the month, the sweep-out will take place on the next working day.
II.. Issuance / Transfer to Term Deposits ::
 Threshold Limit : Rs.5,00,000/-
III. Sweep-out facility / Issuance of Term Deposits shall be allowed only if permitted by the
concerned RERA Authority of the State. No loan can be granted against such fixed deposits nor
any lien/charge can be created.

IV. Premature penalty will be applicable as per extant guidelines.

V. This facility of Sweep-out / Issuance of Term Deposits shall be made available fora period of
7-45 days, initially.

NOTE: Request from the Customer for Sweep-out / Term Deposit should be routed through
Circle Office with Circle Head recommendation to S&R Wing, Head Office for consideration.
General Manager, S&R Wing is delegated to permit the aforesaid facility.

Canara Privilege Current Account (Cir164/2014, 362/2014, 496/2023,109/2024)

 Quarterly average balance of Rs.1 lac and above.
 Accounts to be opened under Product Code–214
 For non-maintenance of minimum balance : Charges Rs.1000/- per Quarter.
 Account closed before one-year ----penalty of Rs. 2000/- + service charges
 Cash handling charges free upto Rs.5 Lakhs per day for de-Nominations of Rs.100
&above at any branch/Kiosk/BNA. Maximum remittance not to exceed Rs.50 Lakhs per
month. Beyond, the above limits specified, Re.1/- per thousand to be collected on
remittance in excess of daily/monthly limit.
 RTGS/NEFT/IMPS and ISSUANCE of DD–---- Free
 Name printed cheque books:----- Free upto 500 cheque leaves per annum.
 Locker Operations----- Free
 Credit Card: ----------1st Year Charge free
 Issuance of Platinum Debit Card with daily Cash Withdrawal limit of Rs. 50000 in our
Bank ATMs and in other bank ATMs as per the respective bank’s permissible ceiling.
The Platinum Card extends additional free personal accidental death insurance cover
from Rs.2 lakhs to Rs.8 Lakhs available to self /spouse as an inbuilt facility.
 Auto sweep facility available for balance over ₹1.00 lakh in steps and period opted by
the customer. (CBS options CHM32 and CHM39).

CANARA ELITE Current Account (218) Cir 295/2022,496/2023, 109/2024)

 Designed to cater needs of elite segment of CA customers who maintain quarterly
average balance of Rs.5 lac and above.
 For non-maintenance of minimum balance: Charges Rs. 2000/- per Quarter.
 If Account closed before one-year : Penalty 2000 + service charges
 POS MDR charges are applicable as per existing guidelines
 BENEFITS:
 NEFT/RTGS/IMPS/SMS Charge – Free.
 POS terminal rent-- waived
 Name printed cheque books -----free upto 700 cheque leaves per annum
 Demand Draft ---------Free upto 5 DDs per month
 Locker Operations-----Free
 CASH HANDLING charges----- free upto Rs.10 lac per day for de-Nominations of Rs.100
&above subject to a maximum cash deposit of Rs.1 Cr per month at any

पदोन्नति- तििरणात्मक 2024-25 37

 Canara Institute of Bank Management

branch/Kiosk/BNA.
Beyond the stipulated limit, Charges @ Re.1/- per thousand to be collected.
 Platinum Debit Card will be issued with the following benefits: FREE issuance& No AMC
 Daily Cash Withdrawal limit of Rs. 50000/-
 Personal Accident Insurance Cover from Rs.2 lakhs to Rs.8 Lakhs available to self
/spouse as an inbuilt facility under Platinum Debit Card/Credit Card.
 Auto Sweep facility available for balance above Rs. 5 lac for 15 days to 181 days in
multiples of Rs.5 Lac.
 Portability from other products including Canara Privilege permitted.

CANARA DELITE Current Account ((1656) Ho Cir 304/2023, 496/2023)

 Designed to cater to needs of Higher Business Class segment who maintain a quarterly
average balance of ₹ 10 lakh & above.
 Non maintenance of Minimum Balance: ₹ 2500 per quarter, If the required Balance is
not Maintained for more than a Quarter the Freebies will be withdrawn. If account
closed before 1 year, penalty of Rs. 2500+Service charge to be collected.
 Point of Sale (POS) Machine monthly rentals – Waived for three terminals, if entity has
3 separate Units.
 NEFT / RTGS / IMPS/SMS Charges, Locker Operations – Free
 Unlimited Name Printed Cheques -Free
 Cash Handling Charges: Free Unlimited at Home Branch only
 Demand Draft (issuance) – Free unlimited in number upto Max Rs.10 lakh /month.
 Rupay Select Debit Cards with FREE Issuance and AMC charge:
 Such debit cards integrated with free Personal Accidental Death Insurance under
CANCARE Policy as follows:
 Air Accident: ₹ 8,00,000 for Self and ₹ 4,00,000 for Spouse,
Other Than Air Accident: ₹ 4,00,000 for Self and ₹ 2,00,000 for Spouse.
Baggage Insurance and Purchase Protection Cover – ₹ 25000/ card
 Portability from existing Current Account / Canara Privilege / Canara Elite products to
Canara Delite and vice versa is available.
 ATM Cash Withdrawal------- ₹ 1,00,000 per day,
POS/ E-Com -------------------₹ 5,00,000 per day
NFC(Contactless) -------------₹ 25,000 per day.
 Auto sweep facility available for balance above ₹ 10.00 lakh and for Period 15 to 181
days in multiples of ₹ 5 lakh
 If MSME Term Loan is availed, borrower will be eligible for 10% waiver in applicable
processing charges.

CANARA CA CCMS(CORPORATE CASH MANAGEMENT SERVICES) (1658) (149/2024)

 No initial deposit / minimum monthly balance.
 Corporates Entities, Govt. institutions and all other Institutional Clients availing CCMS
facilities are eligible to open account under this product.
 Account opening permitted only at specific branches, duly permitted by CCMS Section,
Large Corporate Credit Wing, Head Office, Bengaluru.
 Corporate Internet Banking & Mobile Banking facility are available.
 Passbook/Debit Card facility is not available for the accounts opened under these
products.
 Inter Product portability is allowed from existing CASA accounts to the new product.
 All other terms and conditions are as applicable to normal SB/CA account.

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Canara CA-CNA Account - Central Sector Scheme 388/2022,295/2024

 New product (Product code 1652) for opening CA account under Govt. Sponsored
Scheme.
 Eligibility – Private Bodies & other eligible Customer Types identified and permitted
as implementing Agencies by Govt. Of India.
 Minimum balance – zero (outstanding Balance in the zero-balance subsidiary will be
re-credited to the main account at EOD).
 Cheque book, SMS & Internet banking facility provided but Debit Card will not be
provided.
 Account opening permitted only at specific branches through CPH, selected and
permitted by Circle Head and enabled by DIT on request from Circle.
 All other terms and condition as applicable to other CA.
 All applicable service charges are waived.
 One time porting of account from Current account product is allowed.
 Auto creation of sweep-in limit in CBS for Sub agencies under CNA module-All zero
balance subsidiary accounts will have allocated drawing limits to be decided by the
CNA concerned from time to time and will draw on real time basis from the Central
Nodal Account of the scheme as and when payments are to be made to beneficiaries,
vendors etc. The available drawing limit will get reduced by the extent of
utilization.(885/2023)

Canara CA – Holding Account (PFMS) 389/2022

 CA for Public Financial Management System for Centrally Sponsored Scheme to monitor
utilisation of fund released regarding payment of Statutory deduction/tax/duties/
levies /fees/municipal charges
 Eligibility – Central Govt.(G1), State Govt.(G2), Quasi Govt. Body other than State
Electricity Board (G3), State Electricity Board (G4), Non-Departmental commercial
Undertaking (G5) and other Govt./Semi Govt./Local Body/Authority, Trust registered
under Indian Trust Act, Private Ltd and other customer type permitted by GOI to open
PFMS account.
 Cheque book, SMS & Internet banking facility provided but Debit Card & Passbook will
not be provided. Service charges NEFT/RTGS/SMS/Cheque Book and other Charges
waived.
 Account opening permitted only at specific branches permitted by Circle Head and
enabled by DIT.
 Maximum time for which the funds can be held in the a/c shall be 14 days, after which
the money shall be credited back to the SNA Account of the Implementing Agency (IA).
 Product Code -1653. Portability from Product Code 201 is permitted.

Term deposits (163/2023)

An account will be considered fully KYC compliant if documents of KYC, i.e., Proof of identify
and Proof of Address are submitted by the Proposed Account Holder.

Fixed Deposits (FDR)

 Fresh deposits as well as renewals etc., may be accepted in odd amounts with a minimum
of Rs. 1000/-.
 The agreed period of deposit should be 15 days or more (Minimum 7 days in case of Rs.5
lakh & above) but should not exceed 10 years (120 months). However, under Court Orders
deposits can be accepted even for period exceeding 10 years.

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 Canara Institute of Bank Management

 Deposits in the name of minors can be accepted for more than 10 years provided the
branches are otherwise satisfied to the effect that the funds deposited are to safeguard
the interests of the minors and the branches are convinced that it is necessary to do so.
 In case of single deposits of Rs.2 crore and above, wherever closed before maturity -
applicable ROI-Card Rate as ruling on the date of deposit for the period run or the contracted rate,
whichever is lower.
 Interest shall be calculated at quarterly intervals on term deposits and paid at the rate
decided by the Bank depending upon the period of deposits. Interest on Fixed Deposit is
payable either monthly at discounted value or quarterly or half yearly or yearly or on
maturity.
 Monthly payment of Interest: Minimum deposit Rs.1000/-and minimum period 1 year. If
deposit is Rs.10,000/- and above, less than 1 year period also monthly interest payable.
 In order to simplify the application process of Term Deposit/ Recurring Deposit for the
existing Customers (Individuals/ Non-Individuals/ Non-Resident Indians etc.) whose
details are already available with the Branch, a new form “NF 1049 - Application Form
for opening of Term Deposit/ Recurring Deposit Account (for Existing Customers)” is
introduced by our Bank. (758/2022)

Kamadhenu Deposits (Cir.33/2011), 163/2023:

Features:
 Minimum Rs.1000/- No maximum ceiling. Interest compounded quarterly and payable at
maturity or on the date of closure of account along with the principal amount.
 Minimum period 5months, Maximum 10years (120 months). Court orders – more than 10
years also.
 1% Penal Cut for closure before maturity.
 No interest payable if the deposit is closed before maturity before completion of 7 days
period.
 Loan upto 90% of balance subject to servicing monthly interest.
 No penal cut on deposit (accepted after 12/03/19) of Rs.2.00 Crore and above, if closed
before maturity, will earn interest at the rate as applicable for the amount slab of
Rs.2 Cr & above as ruling on the date of deposit and as applicable for the period run
OR the rate at which the deposit has been accepted, whichever is lower. (441/2019)
 Penalty of 1% is applicable on Term deposit under Capital Gain Account Scheme - 1988,
which are prematurely converted / withdrawn/closed, irrespective of the size of
deposit amount.
 Cash payments can be made to the depositors by obtaining discharge across the revenue
stamp of appropriate value on the reverse of DR, provided however that the aggregate
of deposits with interest payable thereon standing in the individual name of the
depositor or jointly with others with the Branch is not more than Rs. 20,000/-.
 If the amount of the receipt does not exceed Rs. 5000/- revenue stamp need not be
affixed.
 VSL: For Loan amount up to and including Rs.2.00 Crore: 2% over and above the deposit
rate for loans against our domestic Term Deposits. For Loan amount above Rs.2.00
Crore: 1% over and above the deposit rate for loans against our domestic Term
Deposits.(H.O. Cir 621/2023).

Canara Tax Saver :

 Minimum Deposit Rs.100/- and multiples of Rs.100/- maximum Rs.1.5 lakh
 Opened as KDR or FDR.
 Individual account – can be in the name of the individual or in the capacity of karta for

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 केनरा बैंक प्रबंधन संस्थान
HUF.
 Joint accounts upto 2 persons only.
 Under Section 80C of Income Tax Act,1961
 Period: 5 years only.
 No loan facility and cannot be accepted as collateral security also.
 Nomination available. In case of death, deposit can be closed before maturity and paid
to nominee.
 In the event of death of the first holder of the Canara Tax Saver Deposit, in case of joint
account, the other holder of the deposit shall be entitled to encash the term deposit
before its maturity by making an application to the Bank, supported by proof of death
of the first holder of the deposit. The interest shall be payable at the rate applicable
for the period that the deposit actually remained with the Bank, as ruling on the date
of deposit, without any penal cut.(Cir259/2012)
 No Nomination shall be made in respect of deposit applied for and held by or on behalf
of a minor.
 No closure before maturity
 Preferential rate of interest: Employees/ex-employees/ex-employees senior Citizen 1%
EXTRA, senior Citizens 0.50%

Canara Green Deposit (396/2024, 503/2024)

The proceeds of the Green Deposits will be deployed for lending towards projects (Green
Finance) in renewable energy, green building, smart agriculture, water or waste management
etc., as part of Green Deposit Policy Framework of our Ban.

 Product is available for three tenors 1111 days, 2222 days and 3333 days only
 Minimum Deposit: a. For Callable: Rs.1000/- (Both Offline and Online) &
b. For Non-Callable: Rs. 3,00,00,000/- (Offline, through Branches)
 Maximum Deposit: No Maximum Limit for Callable and Non-Callable deposits
 Rate of interest (ROI) – As per the chart mentioned in this circular
 Eligibility: Individuals, Staff & Ex-staff Senior citizen, NRIs, Firms, Companies,
Institutions, and other entities, including Trusts, HUFs, Charitable organizations,
Government agencies
 Auto renewal facility is available subject to availability of same tenor on maturity.
However, as per the extant guidelines, Non-callable deposits shall not be auto renewed.
 Pre mature closure/ part withdrawal is not permitted for Non – callable Deposits.
 All other guidelines regarding penalty and preferential interest rates to Senior Citizen
and
Employees/ex-employees of the Bank is as per prevailing guidelines for term deposits
RATE OF INTEREST (% P.A.)
Non-Callable
Period of Callable Deposits
Slabs Deposits
deposit
Less than Rs.3 Crore Rs. 3 Crore & above Rs. 3 Crore & above
General Public General Public General Public
1 1111 Days 6.70% 4.95% 5.00%
2 2222 Days 6.65% 4.95% 5.00%
3 3333 Days 6.65% 4.95% 5.00%

Capital Gains Accounts Scheme (Cir35/2014)

 Exemption under Section 54, 54B, 54D, 54F or 54G of Income-Tax Act.
 Accounts can be opened by an individual or on behalf of a minor, HUF, a firm, a company
or an association of persons or a body of individuals. Joint Accounts cannot be opened under
the scheme.

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 Canara Institute of Bank Management

 Capital Gains accounts can be opened as SB-Capital Gains Account Scheme or Term Deposits
– Capital Gains account scheme (similar to KDR or FDR)
 Current Account Capital Gains Scheme can be opened by Bohra Muslim community only.
 Except under circumstances specially permitted for the purpose, withdrawals can be made
only after the expiry of the period for which the deposit under this account has been made
and accepted.
 No Cheque book facility.
 Nomination: Depositor of this scheme may nominate upto 3 nominees.
 NRE, FCNR accounts cannot be opened.
 Minimum balance applicable as regular deposits.
 Preferential rate of interest should not be allowed for Capital Gains Account.
A penalty of 1% applicable on TDs under Capital Gains Account scheme, closed before maturity,
irrespective of the size of the deposit amount. (441/19)

Call Deposits:
Call Deposits can be accepted from contractors for submission to Govt. Departments or any
other semi quasi–Govt. Bodies/Departments relating to any contracts. No loans against Call
Deposits.

NON-CALLABLE DEPOSITS – DOMESTIC (91/2024)

 A Non-callable deposit are those deposits which cannot be closed before maturity and the
Bank will offer additional interest rate above the rate as applicable to General Public for
callable deposits.
 PERIOD OF DEPOSIT: Minimum - 46 days for Domestic/NRO and for NRE Deposits Minimum
1 Year and Maximum –10 years for all the deposits.
 All types of Customers who are eligible for opening Domestic Term Deposit Account.
 Minimum Amount– Above Rs.1.00 Crore and Maximum Amount– No Limit.
 It cannot be redeemed / closed before maturity except death claim settlement.
 PART-WITHDRAWAL: Not Permitted.
 SWEEP-IN/SWEEP OUT: Not Permitted.
 AUTO RENEWAL: Facility not available
 The branch accepting the non-Callable term deposit should invariably affix a Rubber
stamp/super scribe that “PREMATURE WITHDRAWAL IS NOT PERMITTED” on the Deposit
Receipt.
 The Non-callable overdue deposits cannot be renewed from the due date. Branches have to
accept the deposit as a fresh deposit from the date of presentation. Branches have to pay
prevailing SB rate of interest from the date of maturity till the date of
withdrawal/presenting the Non-callable overdue deposit as a fresh deposit

BULK DEPOSITS:
 As per RBI Master Direction on Interest Rates on Deposits, "Bulk Deposit" is defined as “Single
Rupee term deposit of Rs.3 Crore and above” with effect from 07.06.2024 (435/2024).
 The rate of interest for Bulk Deposits is decided by the Asset Liability Committee of the
Bank (ALCO), who has been delegated with such powers by the Board of the Bank
 A Penalty of 1.00% shall be levied for premature closure/part withdrawal of Domestic/NRO
term deposits of less than Rs.3 Crore that are accepted / renewed on or after 12.03.2019
 A penalty of 1.00% shall be levied for premature closure of NRE term deposit of less than
Rs.3 Crore that are accepted / renewed on or after 12.03.2019
 Such prematurely closed/part withdrawn/prematurely extended deposits will earn interest

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 केनरा बैंक प्रबंधन संस्थान
at the rate as applicable for the amount slab of Rs.3 Crore & above as ruling on the date of
deposit and as applicable for the period run OR the rate at which the deposit has been
accepted, whichever is lower. Further, No interest will be payable on Domestic term
deposits prematurely closed/prematurely extended before completion of 7th day.
 Penalty is waived for premature extension of Domestic / NRO/NRE term deposits of less
than Rs.3 Crore during the tenure, where extension is for a period longer than the period
originally agreed to (979/2023).
 The upper limit for a branch, to accept single term deposit at Card rate, has been enhanced
to less than Rs.10 Crore with effect from 26.03.2020.
 if branches are desirous of quoting deposits with validity period / preferential rate for Bulk
Deposit of Rs.3 Crore and above to less than Rs.10 Crore then permission has to be obtained
from Integrated Treasury Wing through their respective Circle office.
 For Single Bulk Domestic term deposit of Rs.10 Crore and above, only Designated branches
shall take up with T & I Division, Integrated Treasury Wing, Mumbai, HO through respective
Circle office for obtaining permission to accept the deposit. Head of S P & D Wing is
permitted to designate any branch (other than Designated branches) to open Single Bulk
Term Deposit of “Rs.10 Crore and above” in exceptional circumstances based on business
needs and on the recommendation of the Circle Head.

DEPOSIT DUE NOTICE:

TD604 - Deposit Due Notice. - About 14 days before the date of maturity.
TD610 – Reminder -1 for overdue deposits - Immediately on the deposit becoming overdue.
TD611 – Reminder -2 for overdue deposits - Soon after the deposit is transferred to overdue
deposits, without mentioning the amount of deposit.

Renewal & Interest Payable on Overdue Term Deposit:

Minimum period for renewal of domestic / NRO term deposits is 7 days irrespective of the size
of deposit.
 Overdue term deposits (term deposits which have matured) will be paid interest at
applicable to Savings account or the contracted rate of interest on the matured Term
Deposit, whichever is lower from Date of maturity till date of payment/re-investment.
 Renewal of overdue term deposits from the date of maturity is prohibited. If such deposit
is continued (entire amount or in part), the same will be treated as fresh deposit from the
date of presentation, at the rate prevailing on the date of presentation for the period of
fresh term deposit.
 The above guidelines are applicable for all Domestic/ NRO/ NRE term deposits. These
guidelines are applicable for RD/NND/Canara Tax Saver deposits also, that are presented
for depositing in FDR/KDR.
 In case of a deposit which is renewed automatically on the due date (where no instructions
for Auto Renewal was given by the depositor) and is presented for closure before maturity,
prevailing SB rate is to be paid for the period from the date of maturity till the date of
closure of the deposit. (Canara Tax Saver deposits, CGA deposits and Non-callable Deposits
are not being automatically renewed).
 In case of a deposit which is renewed automatically on the due date (where no instructions
for Auto Renewal was given on the date of opening the term deposit) and the depositor
has requested for renewal for a different maturity period, interest at prevailing SB rate is
to be paid for the period from the date of maturity till the date of presentation for renewal
of the deposit for a different maturity period. The same is applicable for an auto-renewed
deposit presented for part renewal / alternate instructions which are different to the
originally contracted terms of the deposit.
 In case of death of the depositor before maturity of the deposit and the deposit is

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 Canara Institute of Bank Management

automatically renewed on the due date, the deposit will earn interest at the contracted
rate till the date of maturity and at SB rate from the date of maturity till the date of claim
settlement.
 In case of death of the depositor after the date of maturity of the deposit, the Bank shall
pay interest at SB rate operative on the date of maturity, from the date of maturity till
the date of payment.

NRE Term Deposit.

Renewal of NRE Term Deposit:
Automatic Renewal of NRE Term Deposits:
 The deposit receipt contains Clause, which enables the branch to renew the deposit
automatically for an identical period even without production of deposit receipt.
 The clause regarding automatic renewal incorporated in Account Opening Form, will
facilitate automatic renewal on the due date only once.

Premature closure of NRE term deposits:

 Where NRE deposit is to be closed before maturity before completion of one year from the
effective date of the deposit, no interest shall be payable on such premature closure.
 Where the NRE deposit is to be closed before maturity on or after completion of one year
from the effective date of deposit, interest payable on such premature closure shall be at
the stipulated rate of interest applicable to the scheme for the actual period for which the
deposit remained with the Bank as ruling on the date of depositor at the contracted rate,
whichever is lower. Interest should be calculated at the said revised rate for the actual
period run.
 A penalty of 1.00% shall be levied for premature closure/premature extension of NRE term
deposit of less than Rs.2 Crore that are accepted /renewed on or after 12.03.2019.
 The penalty of 1.00% is waived in case of premature closure/premature extension of NRE
callable term deposit of Rs.2 Crore & above that are accepted/renewed on or after
12.03.2019.
 A penalty of 1.00% shall be levied for premature closure/premature extension of NRE term
deposits of Rs.1 Crore & above that are accepted /renewed from 29.12.2011 to 12.10.2012.

Extension of period of NRE Deposit:

 The period of NRE deposits can be extended during the tenure of the deposit for a period
longer than the balance period (i.e. the remaining period of the deposit). The period of the
extended deposit shall be minimum of one year and a maximum of 10 years effective from
the date of extension.
 The depositor should continue to be non-resident at the time of extension of deposit.
 For extension of period of NRE deposits, branches should follow the guidelines applicable to
pre-mature closure and renewal of the deposit.

Recurring Deposits: 163/2023

 Minimum Deposit Rs.50/- and in multiples of 50/-
 Minimum period: 6 months and in multiples of 3months thereafter, maximum: 120 months.
 Irregular RD is one where instalments are not paid regularly but maintained till maturity.
 A discontinued RD is one where there is continuous default of 4 instalments.
 Penal charges:
 Rs.1.50/- per Rs.100/- instalment per month in case of RD for 5 years and less,
 Rs.2.00/-per Rs.100/- instalment per month for RD over 5 years.


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 A Recurring Deposit account matures for payment on the ostensible maturity date or one
month after the final stipulated instalment has been paid, whichever is later.
 (Ostensible maturity date is the date on which the account completes the agreed period of
deposit as calculated from the date of opening the account)
 Due date of instalment: The instalment should be deposited on or before the last working
day of the particular calendar month for which it is due. Delay in paying the instalments
will attract penal charges. The final instalment should be deposited on or before the
ostensible maturity date.
 Wherever the due date of the RD falls on non-existent date, the date of maturity of the
deposit would fall on the immediate succeeding day.
 Preferential interest of 0.50% for Senior Citizen’s RD accounts.
 For RD accounts which have not completed 15 days, no interest to be paid.
 For RD which have not completed 3 months, but completed 15 days, only simple interest to
be paid.
 Branches should recover the actual amount of interest payable OR a sum of Rs.5/- whichever
is lower as service charges, for RD accounts closed before maturity within 3 months from
the date of opening.
 TDS is applicable on interest earned on RD wef 01.06.2015.

Canara Dhanvarsha(Cir 596/2013, 02/2015), 163/2023

 A Flexible Recurring Deposit scheme with facility of depositing Additional amount & upto
four instalments skip facility.
 Instalment upto 10 times of regular instalment (including regular one) can be paid which
earns contracted rate of interest on daily balance basis.
 Instalment of Dhanvarsha NRE to be received as debit from NRE-SB account or other
approved inward Remittances.
 No penalty will be charged for premature withdrawal of RD. Rate of Interest will be
applicable rate for the period at the time of opening of account or at contracted rate
whichever is less.
 The minimum amount of instalment (or deposit) under the scheme, is Rs.500 per month and
maximum Rs.1 Lakh. Top up amount up to 10 times of the instalment (including regular
instalment) can be deposited per month.
 Minimum period of deposit is 1 year and run in multiples of 3months; Maximum 10 years
 Where there are more than four skips of regular RD instalments, simple interest will only be
paid.
 All other terms and conditions, as applicable to Recurring Deposit Accounts.

Resident Deposit Jointly with NRI (FX/06/2014)

AD banks may include an NRI close relative (as defined in Section 6 of the Companies Act, 1956)
in existing / new resident bank accounts as joint holder with the resident account holder on
"Either or Survivor" basis subject to the following conditions:
i) Such accounts on "Either or Survivor" basis are treated as Resident accounts only and
not NRO accounts. All regulations applicable to a resident bank account shall be
applicable to such accounts.
ii) Money belonging to NRI cannot be credited to such accounts.
iii) Branches shall permit outward Remittances from such account as permitted for Resident
account only.
iv) Branches shall satisfy themselves about the actual need for such account before
permitting operation by NRI and obtain Declaration duly signed by the non-resident
account holder in appropriate format.

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 Canara Institute of Bank Management

Nitya Nidhi Deposit (NND) (165/2023):

 With effect from 01.04.2020, Pigmy Deposit Scheme of erstwhile Syndicate Bank and New
Nitya Nidhi Deposit (NNND) Scheme of Canara Bank are merged and renamed as NITYA NIDHI
DEPOSIT (NND) Scheme.
 No new account will be opened under NNND and Pigmy Deposit on or after 01.04.2020. Such
accounts shall be opened only under this modified NND Scheme.
 All existing accounts under the NNND scheme and Pigmy Deposits will continue to run as per
existing terms and conditions till maturity.
 NITYA NIDHI DEPOSIT (NND) – Account may ordinarily be opened in a single individual’s name
only, if specially requested by parties, may be opened in joint names of two or more
individuals, minor duly represented by guardian, partnership firm, sole proprietary firms,
Partnership concerns or clubs and Associations on duly obtaining constitution letters and
conditions of repayment. Not eligible to open are - Corporate bodies, Staff.
 Nomination can be made in the case of individuals account only. Sole proprietary concerns
can also nominate.
 Minimum amount of daily contribution to NND scheme is Rs 50/-, and maximum amount per
day- Rs1000/-([Link].30000/- in a month).No Interest and commission shall be paid beyond
this amount. The life of this Deposit is 63 months. Collections are made only for 62 months.
Thereafter no collections are to be made towards the account. No commission will be paid
on such collections if any.
 Earns interest on monthly products at the rate fixed from time to time.
 The minimum balance in the account between the first working day of the month and the
last day of the month has to be reckoned for the purpose of interest calculation. This
balance will be the product for the particular month.
 Transfer of NND Accounts from one branch to another will not be permitted from 01-04-
2020 onwards.
 Refund before maturity: Powers to refund after completion of 12 months have been granted
to branches. Regional Head is authorised to permit the branches to refund NND accounts
before completion of 12 months. Refunds / payments for Rs 20,000/- and above should not
be paid in cash.
 Rate of Interest for prematurely closed deposits: Less than 12 months 0.10% (A penalty of
0.05% on the interest payable for premature closure of NND Deposit (when closed within 12
months of opening) will be charged.); Completed 12 months & less than 24 months – 0.25%;
Completed 24 months and less than 39 months – 0.50%; Completed 39 months and less than
63 months – 1.00%; 63 months (on maturity) -2.00%. (Cir 485/2023)
 Loans can be granted against NND accounts subject to delegation of power up to a maximum
of 75% of the balance outstanding in the deposit account together with collection already
made pending credit to the account.
 No fresh applications for engagement as NND Agents shall be entertained by branches and
Regional Offices or at any level.

Dishonour of inward cheques / ECS (Cir.134/2010, 181/2015, 205/16, 182/2017,

244/2020): Policy of Dishonour of Cheques 23-24
Cheques which have not been drawn as per apparent tenor or without adequate balance shall
be dishonoured. Apart from charging appropriate penal charges and interest, Bank reserves
the right to close the account. In such cases, account should be closed after giving 14- day
notice to the account holder.

Dishonour of cheques of value less than Rs.1 crore and Dishonour of ECS mandates for the
reason “Insufficient Funds”:

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 केनरा बैंक प्रबंधन संस्थान
 Dishonour of a cheque on six occasions during the financial year will attract stoppage of
cheque book facility and closure of account.
 If cheque is returned for 5th time for the reason insufficient funds, a cautionary advice will
be issued to the concerned constituent, and inform that if cheque is returned for 6thtime
during a financial year, account will be closed.
 Bank will be constrained to close the account, if ECS mandates are dishonoured for the
reason insufficient funds on four occasions during the financial year. Serve notice to party
after returning ECS for third time.
 If the ECS mandate is dishonoured for the reason insufficient funds for a third time in a
particular account a cautionary advice will be issued to the concerned constituent.
 Bank has the discretion to waive the above condition, on case-to-casebasis.

Dishonour of cheques of value Rs.1crore and above and cheques favouring Stock Exchanges
irrespective of the amount, for the reason “Insufficient Funds”:
 In the event of dishonour of cheques valuing more than Rs.1 Crore and above and cheque
favouring stock exchange irrespective of amount on 4 occasions during a financial year for
want of funds, NO fresh cheque book should be issued and Bank may consider closure of
such account.
 Closure of such accounts (including OD/OCC A/c) may be considered at discretion.

Service Charge for Cash Deposit of Small Denominations (Rs. 50 and Below) (Applicable To
SB/CA/OD/CC (47/2023)
 Automation of Service Charge for Small Denomination Notes (Rs.50 and below) during cash
deposit if the number of pieces is more than 1000 (10 packets)- (APPLICABLE TO
SB/CA/OD/CC)
 ₹10/- per packet or part thereof – Minimum ₹10/- Maximum of ₹10000/-+GST
 This is in addition to normal Cash Handling Charges.

Authorization of withdrawals / cheques (354/2023)

 Cash withdrawal using Withdrawal Order Form (WOF) NF-708 is permitted to the account
holder in person on presentation of pass book. Now withdrawal through WOF is permitted
without pass book, provided the account holder presents PAN, Aadhaar Card or any other
OVD which is already registered in CBS.
 Upto Rs.1.00 lakh by an officer Scale I by Withdrawal Order Form
 Beyond Rs.1.00 lakh by Withdrawal Order Form, an official in scale II and above
 JMG Sc I can pass staff cheque up to Rs. 1.00 lakh.
 Cut off upper limit to pass cash cheque by Officer Scale I is Rs.2.00 lakh

Duties of Customer Service Associate (CSA): (w.e.f. 1st April, 2024) (195/2024)
 In dedicated and exclusive cash counters, there shall be no limit for accepting / paying cash
from / to the customers.
 In other counters, receipt of cash and authorization of the cash received upto Rs. 50,000.
 Cash receipts for issuance of pre-signed DDs, etc. independently upto and including Rs.
50,000.
 Passing cash cheques and other like instruments independently upto and including Rs.
50,000.
 Passing clearing/transfer vouchers/other similar instruments independently upto and
including Rs. 1,00,000.
 Passing clearing and transfer vouchers and other similar instruments of Rs. 1,00,000 and
above but upto Rs. 2,00,000 jointly with another Customer Service Associate/ upto
Rs.2,50,000/- with Senior CSA (Cash) / upto Rs.4,00,000/- with Special CSA.

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Duties of Senior Customer Service Associate (Cash):

1. Passing cash cheques and other like instruments independently upto and including Rs.
50,000.
2. Cash receipt and authorisation independently upto and including Rs.50,000.
3. Cash receipt for pre-signed DD, etc. independently upto and including Rs.50,000.
4. Passing clearing/transfer vouchers/other similar instruments independently upto and
including Rs. 1,50,000.
5. Passing clearing and transfer vouchers and other similar instruments of Rs. 1,50,000
and above but upto Rs. 2,50,000 jointly with another Customer Service Associate/ upto
Rs.4,50,000 with Special CSA

Duties of Special Customer Service Associate

1. Passing cash cheques and other like instruments independently upto and including Rs.
1,00,000.
2. Passing clearing/transfer vouchers/other similar instruments independently upto and
including Rs. 3,00,000.
3. Passing clearing and transfer vouchers and other similar instruments of Rs. 3,00,000
and above but upto Rs. 4,00,000 jointly with another Customer Service Associate/ upto
Rs.4,50,000 with Senior CSA (Cash).
4. Authorisation of Cash receipt independently upto and including Rs.2,00,000.

General Guidelines:
 Wherever withdrawal exceeds four figures (i.e., Rs.10,000/- and above),identity of the
payee should be established by obtaining suitable KYC documents so that such persons can
be identified later in case of need and the drawer’s signature should be carefully tallied.
 In all payments involving large amounts, the account holder should be contacted over the
phone for confirmation of the payment, wherever possible.
 In the case of suspicion of alteration/erasure on the cheque by chemical means, the same
can be detected by holding it against light, as thinning at the space where the
alteration/erasure has been made would be visible. Wherever necessary, the instrument is
to be passed through ultra-violet lamp.
 Deposits upto Rs 5 lakh per person per Bank are having insurance coverage from DICGC.
Premium is 10 paise per Rs100- per annum, payable half yearly.
 Passport size Photograph of depositor/authorized signatories are to be obtained.
 Signature of both the depositor and the supervisor are to be obtained on reverse of photo.
Photo not necessary for Pension accounts, employees accounts, term deposits below
Rs10,000/-, NND a/c.
 PAN is mandatory for depositing cash exceeding Rs.50,000/- or obtain form 60 in absence
of PAN. PAN should be quoted on cash Transaction of Rs.50000/-and above and any
transactions of an amount exceeding Rs.2.00 lakh regardless of the mode of payment. Where
a person is a minor and does not have any income chargeable to tax, he shall quote the PAN
of his father/mother/guardian.
 It is now mandatory to obtain Form 60 if PAN is not available for all non-financial purpose
also.
 In case of accounts wherein Direct Benefits Transfer (DBT) is to be received, the Aadhaar
seeding & Mapping has to be done mandatorily. For all the cases of Aadhaar seeding and
mapping a written consent should be obtained from the customer as per the annexure.

**********

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सामान्य बैंतकंग
GENERAL BANKING

Positive Pay System (PPS) – Need to popularize the facility by displaying the features in
notice board and display of flexi/banners/colour prints etc. (HO CIR 695/23):
 As per prevailing guidelines of RBI, Banks have been advised to enable PPS facility for all
account holders issuing cheques for amount of Rs 50,000 and above. While availing of this
facility is at the discretion of the account holder, banks may consider making it mandatory
in case of cheque for amounts of Rs 5,00,000 and above.
 PPS is an effective fraud prevention tool that reduces the cheque related frauds.

Customers opting the PPS have to submit the cheque and following account details to the
drawee Bank immediately after issue:

 Account Number
 Name of the beneficiary/payee name
 Cheque Number and Date of Issue
 Amount
 MICR Code

Customer can register the above details of the cheque at Branch or by through the following
channels:
 Mobile Banking.
 Internet Banking
 Call Centre

Penalty for high percentage of ACH debit returns. (752/2023, 253/2024)

 Restrict the representation of the returned transactions to 2 times (1 presentation + 2
representations).
 Representation of a returned transaction can be done only after 3 days from the date of
return.
 Representation to be done only after confirmation from the customer concerned on the
availability of balance.
 Additional Charges of Re 1/- per return transaction levied on corporates with return above
50% from 01.04.2024.
 The additional charges increased to Rs 5/- per return transactions on corporates with returns
above 50% from 01.07.2024
 From 01.10.2024, Corporates with return transaction above 50% will be barred from
registering new mandates

Revamped CHIPS-II package- SAS Based Cheque Indent Processing Phase-II for handling
undelivered Personalized Cheque books from CPHs to respective Branches (789/2023):

 The Branches shall mark the Personalized Cheque books "Returned Undelivered" and pending
for delivery for more than 30 days from the date of issue, as cancelled by writing the word
"CANCELLED" across Cheque leaves including Cheque requisition slip available in the
Personalized Cheque books and simultaneously cancel in the system against respective
account. The cancelled Personalized Cheque books shall be destroyed on the last working

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day of the calendar quarter in the presence of custodians by duly recording the same in the
Register.
 Branches to submit Monthly Compliance Certificate for Balancing Undelivered Personalized
Cheque book to RO Operations Section on or before 5th day of succeeding month & Quarterly
Compliance Certificate for destroyed Undelivered Cheque book to RO Operations Section for
June/Sep/ Dec/March quarters on or before 5th day of succeeding month.

Incidents of frauds in collection, payment and returning of cheques (500/2024):

 Frauds are being frequently reported in the area of collection and payment of cheques.
 Account opening based on fake/fabricated KYC documents
 Presentation of stolen/materially altered/cloned/forged cheques through the accounts
Withdrawal of entire funds immediately
 Depositing stolen/materially altered/cloned cheques at far away/upcountry branches for
collection through money mule accounts.

Precautions:
 KYC compliance in letter and spirit
 Vigilant while handling high value cheques. Check the balance and operations in comparison
with the cheque amount
 Fixing of threshold limits while opening accounts
 Due diligence in high value cheque and if required contact the customer
 Extra due diligence in case of requests for funds transfer through non home branches. To
contact home branch or customer in case of need.
 handling only 100% CTS-2010 compliant cheques
 UV lamp verification for cheques of amounts exceeding Rs 5000.
 Under No Circumstances, branches shall refuse to accept the cheques over the counter.
 Branches shall give proper acknowledgment when cheques are tendered across the counters.
 Customers are not asked to put a small Round Stamp of the Bank on counterfoils as proof of
receipt.
 The facility is restricted to the customers to drop cheques for clearing purpose only.
 Only crossed cheques are to be dropped into the box and notice regarding this is to be written
boldly on the box itself.
 Branches to display on the cheque Drop Box for information of customer, the Cut-of time for
clearance of cheques for clearing purpose.

Depositor Education and Awareness Fund Scheme, 2014 – Interest rates payable on
unclaimed interest bearing deposits by RBI (792/2023):
Sl. No. Period Rate of Interest
1 From DEA fund transfer date to 30.06.2018 4% Simple Interest per annum
2 01.07.2018 to 10.05.2021 3.5% Simple Interest per annum
11.05.2021 to till the date of payment to the
3 3% Simple Interest per annum
depositor/claimant

QUOTING PAN OR AADHAR NUMBER IN CERTAIN TRANSACTIONS WITH BANK (837/2023):

Revision in Form 60 : CBDT has prescribed the Revised format for Form 60.

Amendment in Rule 114B: Rule 114B stipulates mandatory quoting of PAN in relation to various
transactions. The second proviso to Rule 114B allows a person to furnish a declaration in Form
No.60 if he doesn’t possess a PAN.

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 केनरा बैंक प्रबंधन संस्थान
The CBDT has amended this proviso to exclude a company or a firm from the requirement to
furnish Form No. 60. i.e. Form No. 60 cannot be accepted in case of Company or Firm, except
Foreign Company as below:

A new proviso has been inserted to allow a foreign company to furnish a declaration in Form
No. 60 subject to below conditions:

a) if such foreign company has no income which is chargeable to tax in India and
b) Such Foreign company does not have PAN Number and
c) With an “IFSC Banking Unit”, such Foreign company entered into following transactions
namely:
 Opening an a/c (other than a time-deposit as mentioned below) with a banking company or
a co-operative bank.
 A time deposit of amount exceeding Rs. 50,000/- or aggregating to more than Rs.5 lakhs
during a financial year with a banking company or a co-operative bank/Post office/ a Nidhi
referred to in section 406 of the Companies Act, 2013/ a non-banking financial company.

Amendments in Rule 114BA and Rule 114BB Rule 114BA/Rule 114BB of the Income Tax Rules,
1962 stipulates mandatory quoting of PAN/Aadhaar Number in relation to various transactions
and the specified transactions are as under:
SI No Nature of Transactions
Cash deposit or deposits aggregating to Rs.20 lakhs or more in a financial year, in
1
one or more accounts of a person
Cash withdrawal or withdrawals aggregating to Rs.20 lakhs or more in a financial
2
year, in one or more accounts of a person
3 Opening of a current account or cash credit account by a person

Safe Deposit Locker/Safe Custody Article Facility – Reiteration of RBI guidelines (850/2023):
 KYC compliance for hiring of locker.
 System of interchange of locks when the keys are surrendered by hirer.
 Branches shall conduct Surprise periodic verification of surrendered/ vacant Lockers.
 Recording of break open process and preservation of video.
 Obtain recent passport size photographs of locker hirers and persons authorized to operate
the locker.

 Where the customer visited the branch for locker facility, if there is no locker vacancy in
the Branch, the branch officials shall submit the request of customer in CBS under FP SB002.
The customer will receive the acknowledgement and waitlist number through SMS. Mobile
number and email ID of locker hirer to be entered in system.
 Duly signed and stamped locker agreement to be obtained original of which to be retained
at branch and duplicate provided to hirer
 Identification Code of the bank / branch is embossed on all the locker keys with a view to
facilitating identification of lockers / locker ownership by law enforcement agencies in case
of need.
 Maintain record of operation of lockers including date and time.
 The ingress and egress register for access to Vault Room by locker-hirers or any other
individual including the branch staff shall be maintained to record the movement of
individuals in the Vault Room area with their signatures at appropriate place in the records.
 The Branch custodian shall check whether the lockers are properly closed post locker
operation. If the same is not done, the lockers must be immediately closed, and the locker-

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 Canara Institute of Bank Management

hirer shall be promptly intimated through e-mail, if registered or through SMS, if mobile
number is registered or through letter so that they may verify any resulting discrepancy in
the contents of the locker. The Branch custodian shall record the fact of not closing the
locker properly in the register and its closure by the bank with the date and time. Further,
the custodian of the locker room shall carry out a physical check of the locker room at the
end of the day to ensure that lockers are properly closed, and that no person is inadvertently
trapped in the locker room after banking hours.
 Branches are allowed to obtain a term deposit at the time of allotment, which would cover
3 years rent and the charges for breaking open for locker in case of such eventuality.
 If there is any event such as merger/closure/shifting of branch warranting physical
relocation of the lockers, Branches shall give public notice in 2 newspapers (including one
local daily in vernacular language) in this regard and the customers shall be intimated at
least 2 months in advance along with options for them to change or close the facility.
 Branches may cover the entry and exit of the strong room and the common areas of operation
under CCTV camera and preserve its recording for a period of not less than 180 days
 Branches shall have the discretion to break open any locker following due procedure if the
rent has not been paid by the customer for 3 years in a row.
 If the locker remains inoperative for a period of 7 years and the locker-hirer cannot be
located, even if rent is being paid regularly, the bank shall be at liberty to transfer the
contents of the locker to their nominees/legal heir or dispose of the articles in a transparent
manner, as the case may be.

DISPOSAL OF E-WASTE FROM BRANCHES/OFFICES (858/23): List of Electronic Equipment

identified to be taken under E-Waste. Normal Lifespan of Computers & Printer & Accessories:
5 YEARS.

PSB Reforms Agenda - Enhanced Access & Service Excellence (EASE) 6.0(862/23, 668/2024):
The first edition (EASE 1.0 for FY 2018-19) of EASE program aimed at laying the foundation for
themes such as Customer responsiveness by enabling banking from the comfort of home &
mobile, grievance redressal, improved governance and financial stability through
institutionalizing risk appetite framework and risk based pricing, etc.
EASE 1.0 and EASE 2.0, supported capacity building in multiple areas of banking - such as
digitization, technology, analytics, asset quality improvement, outcome-centric HR, and overall
governance.

EASE 3.0 focused on enabling the transformation of PSBs into digital and data-driven entities.
These included introducing digital-first reforms such as "Dial-a-Loan", "Credit @ Click", etc.

EASE 4.0 represented the next step in the EASE journey, with a focus on technology enabled
and collaborative banking

EASE 5.0 focused on long-term reforms to be achieved over a three-year period, with a focus
on enhancing digital experience and strengthening data-driven, integrated, and inclusive
banking

EASE 6.0 for FY 2023-24 focuses on transforming the Banks to become more customer centric
and it is concentrated towards four key initiatives for Public Sector Banks to adopt viz.

a. Delivering excellence in customer service with digital enablement

b. Digital and analytics driven business improvement
c. Tech and data enabled capability building
d. Developing people and enhancing HR operations

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22 Action Points are covered under these 4 themes. To improve ranking of the Bank under
EASE 6.0 and to be among the top 3 PSBs in FY 2023-24, the performance of the Bank under
the following areas needs improvement. Hence, the Branches are hereby instructed to
undertake the following to ensure desired outcome
A. Customer Service
B. Financial Inclusion & Social Security
C. Digital Banking
D. NPA and Slippage Management.

EASE 7.0 Economic Development; Customer Delight; Resilient Banking (FY 2024-25):
5 key themes and 21 action points:
a. Banking towards ‘Viksit Bharat’
b. Excellence in customer service
c. Adoption of new-age technology and other advanced capabilities
d. Effective risk/fraud management, collections and recovery
e. Developing employee capabilities for emerging banking priorities.
Our aim is to be among the top 3 PSBs in FY 2024-25.

A. Customer Service
 Extend prompt and courteous service to reduce customer complaints.
 Ensure all complaints are captured in CPGRS and resolved within the prescribed TAT by the
Corporate Office
 Popularise the online death claim settlement portal and ensure timely disposal of claims.
 Collect feedback from the customers to improve service quality.
B. Deposit growth
 Improve CASA account opening and deposit mobilization.
 Focus on new customer retention and deepening relationship with both our existing & new
customers to decrease the customer attrition and improve product per customer.
 Broaden CASA penetration beyond basic accounts i.e High end CASA and improve onboarding
of new female customer.
 Improve the percentage of green deposits.
 Popularise Customer Relationship Officials (CROs) and extend best banking services to HNI
customers.
C. Credit Delivery
 Ensure sanction and disbursement of loans within the prescribed Turn Around Time (TAT) as
per the scheme guidelines.
 Increase cross selling of products to Retail & MSME Borrowers to maximize number of
products per customer.
 Promote our End to End Digital Journey for RAM segment lending.
 Focus on acquiring & retaining MSME customers
 Enhance access to financial product for women and young customers across retail and MSME
banking.
 Increase the proportion of green financing in total portfolio.
 Improve our share (%) of business generated through analytics-based models.
 Ensure achievement of targeted growth under RAM segment.
D. Financial Inclusion & Social Security

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 Increase cross selling of non-banking products viz., Life insurance, General insurance, Retail
health insurance, Mutual Fund, Gold Bond, PPF, APY, Sukanya Samridhi etc.
 Motivate BCs and monitor their performance to increase number of transactions through BC
channel.
 Focus on enhancing the value of women customer portfolio and Agriculture segment lending
in government schemes and service
E. Digital Banking
 Popularize Digital Channels like Mobile Banking, Internet Banking, IMPS, UPI etc
 Encourage customers to adopt our technology products for both Financial and Non-Financial
Transactions.
 Promote the use of Self Service machines viz., ATM, BNA, pass book printing, Tab etc.
provided at branches.
 Increase digital transactions by ensuring uptime of Self Service machines.
 Encourage opening of new SB & TD accounts digitally.
 Popularise the available digital banking features for MSME/Corporate customers.
 Expand the reach and boost the adoption of our messaging apps.
F. NPA and Slippage Management
 Contain fresh slippages by effective monitoring of SMA accounts. Improve the collections in
SMA accounts.
 Focus on the recovery in NPA Accounts and ensure timely action under SARFAESI, DRT etc
 Popularise the e-OTS portal and ensure to capture all OTS proposals on the platform.
 Ensure adequate monitoring of DRT proceedings and reduce NPA & SMA cases compared to
last year.

Revision of ROI on Floating Rate Savings Bond, 2020 (taxable) – FRSB 2020 (T) for the Period
1st July 2024 to 31st December 2024. (494/2024)
 Interest on the Bonds will be payable at Half-Yearly intervals on 1st January and 1st July
every year.
 No option to pay interest on cumulative basis
 The coupon / interest on the Bonds would reset at half yearly intervals on 1st July and 1st
January and will be linked/pegged with prevailing National Saving Certificate (NSC) rate with
a spread of (+) 35 bps over the respective NSC rate
 The coupon rate for coupon period July 01, 2024 to December 31, 2024 and payable on
January 1st, 2025 remains unchanged from the previous half-year at 8.05%
 Premature redemption not allowed except for specified categories of Senior Citizens.

Reporting of Counterfeit Notes detected in the Branches/Currency Chests – Revised

Instructions (38/24, 288/2024, 429/2024):

 Adopting a Centralized Reporting System for reporting of Counterfeit Notes through Forged
Note Vigilance (FNV) Cell.
 Periodicity of reporting the activities of FNV Cells to RBI has been changed from quarterly
to half-yearly intervals.
 Data on Counterfeit Notes detected by all branches and currency chests of the bank shall be
compiled and reported by FNV Cell of the concerned bank ONLY to the Issue Office of RBI
under whose jurisdiction the FNV Cell is functional.

Reporting: Monthly basis, by 7th of the following month.

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 केनरा बैंक प्रबंधन संस्थान
FNV Cell shall submit a status report on a half-yearly basis (as at the end of March and
September every year).

Master Direction on Counterfeit Notes, 2023- Detection, Reporting and Monitoring –(HO Cir
288/2024) & Detection, Reporting and Monitoring of Counterfeit Notes – Revision of Penal
Provision – (HO Cir 429 2024)

The Counterfeit Notes can be impounded by:

(i) All Banks

(ii) Issue Offices of RBI

 Banknotes tendered over the counter shall be examined for authenticity through machines.
 Banknotes received directly at the back office / currency chest through bulk tenders shall
also be examined through machines
 Counterfeit Notes shall not be returned to the tenderer or destroyed by the bank branches
 Failure of the banks to impound Counterfeit Notes detected at their end will be construed
as wilful involvement of the bank concerned in circulating Counterfeit Notes and penalty
will be imposed
 For cases of detection of Counterfeit Notes up to four (04) pieces in a single transaction, a
consolidated report in the prescribed format (Annexure III) shall be sent by the Nodal Bank
Officer to the police authorities or the Nodal Police Station, along with the suspect
Counterfeit Notes, at the end of the month
 Detection of Counterfeit Notes of five (05) or more pieces in a single transaction, the
Counterfeit Notes shall be forwarded immediately by the Nodal Bank Officer to the local
police authorities or the Nodal Police Station for investigation by filing FIR in the prescribed
format (Annexure IV)
 A copy of the monthly consolidated report / FIR shall be sent to the Forged Note Vigilance
(FNV) Cell constituted at the Head Office of the bank
 Acknowledgement from police authorities to be obtained and kept on record
 Banknotes in the denominations of ₹100 and above are not put into re-circulation without
the notes being machine processed for authenticity
 Dispensation of Counterfeit Notes through the ATMs would be construed as an attempt to
circulate the Counterfeit Notes by the bank concerned. Care should be taken while loading
ATMs
 Detection of Counterfeit Notes in chest remittances is also liable to be construed as wilful
involvement of the chest branches concerned in circulating Counterfeit Notes and may
attract special investigation by police authorities, and other action like suspending the
operation of the chest concerned
o Recovery of loss to the extent of the notional value of such notes in case of denominations
of Rs 5, Rs 10 and Rs 20 notes and recovery of loss to the extent of notional value PLUS
penalty at 50% of the notional value of counterfeit notes in case of denominations of Rs
50 will be imposed when Counterfeit Notes are detected in the soiled note remittance of
the bank.
o When counterfeit notes are detected in soiled notes in denominations of Rs 100 and
above, graded penalty based on CPM (Counterfeit notes per million) in addition to
recovery of notional value of notes.
 If CPM<5 penalty will be 100% of notional value of counterfeit notes.
 If 5 ≤ CPM < 20 penalty will be 150% of notional value of counterfeit notes.
 CPM ≥ 20 penalty will be 200% of notional value of counterfeit notes.
 CPM = (No. of counterfeit notes in 100 and above X 10,00,000) / Number of

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 Canara Institute of Bank Management

 pieces in the remittance in 100 and above.

o b) If Counterfeit Notes are detected in the currency chest balance of a bank during
Inspection / Audit by RBI:
 denomination of Rs 5, 10 and 20 – recovery of notional value of notes.
 denomination of Rs 50 - A penalty at 50% of notional value of counterfeit notes in addition
to the extent of recovery of notional value of counterfeit notes.
 denomination of Rs 100 and above - A penalty at 200% of notional value of counterfeit
notes in addition to the extent of recovery of notional value of counterfeit notes.
o Counterfeit notes detected in ATM dispensations/ disbursement over the counter or for
wilful non-impounding of counterfeit notes detected at the banks.
 A monetary penalty of 10,000 (Rupees Ten Thousand) per instance.

 Counterfeit Notes received back from the police authorities/courts shall be carefully
preserved in the safe custody of the bank and a record thereof be maintained by the branch/
CC concerned.
 The Counterfeit Notes at branches/CCs shall be subjected to verification on a half-yearly
basis (on 31st March and 30th September) by the Officer-in-Charge of the bank concerned.
They shall be preserved for a period of three years from the date of receipt from the police
authorities or 3 years after closure of Court proceedings.
 After the preservation period, such notes shall be sent to the concerned Issue Office of RBI
under whose jurisdiction the branch/ CC is functional, with full details of the case.

Enhancement of Locker Rent concession to Staff/Ex-staff members of the Bank:

 50% locker rent concession on Small /Medium Locker types to Staff/Ex-staff w.e.f.
01.04.2024 (Cir 69/2024).
 Also, 25% locker rent concession on Large and Very Large Lockers to Staff/Ex-staff.

Endorsement of Instruments for Cash payments - Reiteration of guidelines (72/2024):

Section 15 of NI Act, 1881 defines endorsement as “When the maker or holder of the negotiable
instrument signs the same, otherwise than as such maker, for the purpose of negotiation on the
reverse or face thereof or on a slip of paper annexed thereto.

Cheques tendered for cash payment:

Payment of cheques at other than Base Branches:
1. Withdrawal of cash from operative SB & CA (including NRI customers) Upto Rs 50,000/- per
occasion.
2. Permitted to all the customers including NRO/NRE account holders.
3. Payment of cash upto Rs 50,000/- per occasion in SB and Current Account only to the drawer
against self cheques.
4. Payment of cash upto Rs 50,000/- per occasion to OD accounts of staff for the drawer only
against self cheques at all host branches
5. No loose leaf facility to be permitted.
6. Home branch to ensure that all cautions such as Stop Payment instructions, Lien, Tax or
other attachments, uncleared balances, etc., is updated in system without fail.
7. Cash payment to third parties are to be made at base branches only.

Guidelines on reporting of unusual Cyber Security Incidents (81/2024):

Reporting of Unusual Cyber Security Incidents to hoisg@[Link] and
ciso@[Link]

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 केनरा बैंक प्रबंधन संस्थान
Bank is required to report these incidents to the Reserve Bank’s Cyber Security and IT
Examination (CSITE) Cell, CERT-In and other regulators within 6 hours of detection.
Cyber security - Preservation of confidentiality, integrity and availability of information and/or
information systems through the cyber medium. In addition, other properties, such as
authenticity, accountability, non-repudiation and reliability can also be involved

Cyber Incidents - cyber event that adversely affects the cyber security of an information asset
whether resulting from malicious activity or not.

Mandatory verification of Important Daily report (166/24):

Now all branches are instructed to mandatorily print, verify, authenticate and preserve the
following 06 Daily reports duly signed by Branch-in-charge and second in command. The
reports are to be filed date-wise and made available for mandatory verification by the Auditors
during RBIA.

The list of 06 Mandatory reports are listed below:

1 Cash Payment Waste Br / Teller - TPX603 : Daily
2 Cash Receipt Waste Br / Teller - TPX604 : Daily
3 Transfer Extract_TPX6002: Daily
4 DAY BOOK cum TRIAL BALANCE : Daily
5 Login Exception Report_SM5003 : Daily
6 GL Voucher details – GLX604 : Daily
The overseeing executives of Branches at ROs/Cos, during their branch visit should invariably
verify whether branches are preparing slips for all transactions done, generating/ printing/
preserving the mandatory reports duly authenticated by Branch In-Charge & second-in-
command and the same should be incorporated in Branch visit reports.

Reorganization of Circle offices, Regional Offices and Branches with effect from
01.04.2024. (206/2024):
 2 new Circle offices Kozhikode (7593) and Tirupati (7595) opened (thereby increasing total
number of Circles from 24 to 26).
 6 new Regional offices opened and 5 existing Regional offices closed. Hence, in total Bank
have 177 ROs .

NACH Mandate duration, Mandatory final collection date in XML & Revised NACH Mandate
Format (233/24):
 Maximum period for which a mandate can be issued: Mandate can be issued for a maximum
duration of 40 years from the date of issuance.
 NPCI restricted the representation of returned transactions to 2 times i.e. 1 presentation
+ 2 representation.

DoorStep Banking - Master Circular- Consolidated Guidelines (246/2024):

The project was launched by the Hon’ble Finance Minister of India on 9th September, 2020
From 01.11.2023 onwards, there is only one DSB Application / DSB Web portal / DSB Vendors’
Call Centre which is hosted by Integra Micro Systems Private Ltd, for registration and booking
DSB services by all our customers from selected centers on Pan India Basis. Portal and
application level technical support will be provided by M/s. Integra Micro Systems Pvt Ltd.
Feet on street will be dealt by 2 vendors viz., M/s. Integra Micro Systems Pvt Ltd & M/s. BLS
International Services Limited based on the centres allocated to them

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 Canara Institute of Bank Management

M/s. PSB Alliance Pvt. Ltd will be managing Doorstep Banking Activities on behalf of all 12 PSBs.
Selected Financial and non-financial services will be provided through the following two
vendors. 1. M/s. Integra Micro System Private Limited. 2. M/s. BLS International Services
Limited DSB services were provided in 100 Centres/locations till 12.12.2023 and extended to
1000 centers gradually.

The services can be booked through the following modes:

a) Call Center: Customer can dial Toll free no of Vendor: 1800 121 3721 from the registered
mobile number.
b) Mobile App: Customer can download the Doorstep Banking App from Google Play store in
Android phone. In play store “DSB (Doorstep Banking) by Integra Micro Systems (P) Ltd” is to be
downloaded and to be registered. At present, DSB Apps are not available on IOS (iPhone
Operating System) platform.
c) Web Portal:
d) DSB services can also be availed by the customer by clicking on the tab “Doorstep Banking
with Integra”, available in our Internet Banking Application & Mobile Banking Application.

List of services offered through DSB:

1. Non-financial Services:
a) Pick up Services b) Delivery Services
1)Cheques/ Instruments for Collection / Clearing 1) Statement of account
2) Cheque Book Requisition Slip 2) Term Deposit Receipt
3) IT / Govt./ GST Challan with Cheque 3) TDS & Form 16 A Certificate Issuance
4) Standing Instructions 4) Pre-paid Instruments
5) Form 15G/15H 5) Demand Draft, Pay Orders
6) Nomination (Add/Modify/Delete)
7) Funds Transfer ( max up to Rs.25,000/- per day)
(Customer can place a maximum of 3 fund
transfer requests under one DSB service request)

Financial (Cash) Services:

1) Cash Withdrawal (minimum Rs. 1,000/- and maximum Rs. 10,000/- per request
2) Cash Deposit (yet to be implemented)

Other Services:
Submission of Life Certificate

ACCOUNTS ELIGIBLE UNDER DOORSTEP BANKING: DSB services will be provided for all KYC
complied accounts in Individual capacity/ Joint Accounts with operating condition as Either or
Survivor/ Proprietorship A/c’s

Eligible account Types:

 SB A/c’s – Individual, Joint A/c’s under E or S
 CA – Individuals, Proprietorship
 OD/ OCC - Individuals, Proprietorship

ACCOUNTS NOT ELIGIBLE UNDER DOORSTEP BANKING:

 Customer Types: Minor a/c’s, NRE accounts, Mobile number linked with multiple
customer IDs, Joint accounts with operating condition jointly, Partnership A/c’s, Trust,
Firm, Company A/c’s etc., are not eligible

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 केनरा बैंक प्रबंधन संस्थान
 Account Types: Account with no debit/ Inoperative/ Memo attached account/ Blocked
accounts etc. will not be covered under DSB services

DSB CHARGES:

Service Charges applicable to

Service Description
customers
Calls pertaining to DSB Call
1 NIL
Center
Services where deployment of
2 Rs. 75+ Applicable GST
DSB Agent is required

After pick-up/delivery address is selected, customer to identify branches of the Bank within 5
km radius of the customer’s address. If home branch falls within 5 km radius from customer’s
location, then home branch will be displayed as a default branch. In other cases, the branch
which is in a shortest distance from customer’s location will be displayed as a default branch.

Turn Around Time (TAT): For all the services registered in DSB System, customer will be asked
for a preferred date and time. Any services preferred up to 3 PM on any working day has to be
completed on the same day, within 3 hours of preference. Services booked after 3 PM will have
an option to choose only the next day as preferred day and it has to be completed within 3
hours of the preferred time on the next day. Turn Around Time refers to end to end delivery of
service.

Master Directions on Canara Vidya Jyothi Scheme (CVJ) - A Corporate Social Responsibility
Initiative: (261/2024 & 304/2024 & 368/2024):

 Canara Vidya Jyothi Scheme, to provide scholarship assistance to meritorious SC/ST girl
students – Extended for the Financial Year 2024-25.
 The scheme shall be implemented mandatorily by all Rural, Semi-urban & Urban Branches.
 Students shall belong to BPL family.
 Student should be Top scorer / second Top scorer in the immediate previous year final
examination among SC/ST girl students.
 The Branches shall extend the scholarship assistance to one girl student each from class 5,
6,7, 8, 9 & 10 from SC/ST communities studying in Government / Government aided schools
in their common area.
 Rs.3000.00 per student per year for students of 5th to 7th standard (Total of Rs.9000.00 per
school).
 Rs.5000.00 per student per year for students of 8th to 10th standard (Total of Rs.15000.00
per school).
 A total of Rs.24000.00 per school per year
 Valid up to 31st March 2025.

Master Direction on Penal Provisions in reporting of transactions/ balances at Currency

Chests (289/24):
 Reporting of Currency Chest Transactions: The minimum amount of deposit into / withdrawal
from currency chest shall be ₹1,00,000 and thereafter, in multiples of ₹50,000.
 Time limit for Reporting: The currency chests shall invariably report all transactions through
CyM – CC portal on the same day by 7 pm

Delayed Reporting / Wrong Reporting of Currency Chest Transactions.

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Levy of penalty:
 Reporting of soiled note remittances to RBI: Soiled note remittances to RBI shall not be
shown as withdrawal by chest(s). In case such remittances to RBI are wrongly reported as
'withdrawals', a penalty of ₹50,000 shall be levied irrespective of the value of remittance
and period of such wrong reporting.
 Reporting of diversions in CyM – CC portal: All currency chest diversions (both between
chests of the same bank and between chests of different banks) have to be reported through
‘Diversion Module’ of CyM-CC Portal. The CC sending the diversion should initiate the entry.
The receiving CC should acknowledge the same. Diversions should not be reported as
deposit/withdrawal. A penalty of ₹50,000 shall be levied for any such wrong reporting.
 Delayed reporting where currency chests had “Net Deposit”: A flat penalty of ₹50,000
shall be levied on the currency chests for delayed reporting, irrespective of the value of net
deposit.
 Rate of penal interest: Penal interest shall be levied at the rate of 2% over the prevailing
Bank Rate for the period of delayed reporting/wrong reporting/inclusion of ineligible
amounts in chest balances.

RBI Master Direction – Scheme of Penalties for Branches including Currency Chests for
deficiency in rendering customer service to the members of public (290/24)
Penalties:
Nature of Irregularity Penalty
For notes in denomination up to ₹50: ₹50/-
per piece in addition to the loss
For notes in denomination of ₹100 & above:
Equal to the value of the denomination per
Shortages of notes in soiled note piece in addition to the loss
remittances and shortages of notes and For coins in all denominations: Equal to the
coins in currency chest balances value of the denomination per piece in
addition to the loss
The recovery of loss and imposition of penalty
shall be done immediately on detection of
shortage, irrespective of number of pieces
₹50 per piece irrespective of the denomination
Mutilated notes (including deliberately cut in addition to the loss.
notes and built-up notes) detected in soiled
note remittances and currency chest The recovery of loss and imposition of penalty
balances shall be done immediately on detection,
irrespective of number of pieces
Non-compliance with operational
guidelines by currency chests detected by
RBI officials:
Penalty of ₹5,000 for each instance of
a) Non-functioning of CCTV, noncompliance
irregularity.
with rules / guidelines pertaining to CCTV,
recording preservation period and related
Penalty shall be enhanced to ₹10,000 in case
issues
of repetition / recurrence of irregularity in
b) Branch cash / documents kept in strong
consecutive inspection cycles or earlier.
room (CC’s vault)
c) Non-utilization of Note Sorting Machines
Penalty shall be levied immediately
(NSMs) for sorting of notes (NSMs not used
for sorting of high denomination notes, i.e.
notes of denomination ₹100 and above,

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 केनरा बैंक प्रबंधन संस्थान
received over the counter or not used for
sorting notes remitted to chest / RBI)
d) Non-conduct of surprise verification of
currency chest balances at i. bimonthly
intervals by officials unconnected with the
operations of currency chest and ii. six-
monthly intervals by officials from the
Controlling Office
Violation of any of the terms of agreement
with RBI (for opening and maintaining
currency chests) or deficiency in service
in providing exchange facilities, as
detected by RBI officials :
₹10,000 for any violation of agreement or
a) Non-issue of coins over the counter to any
deficiency of service
member of public despite having stock
b) Refusal by any bank branch to exchange
₹5 lakh in case there are more than 5 instances
soiled notes / refusal by any currency chest
of violation of agreement/ deficiency in
branch to adjudicate mutilated notes
service by the currency chest/ branch in
tendered by any member of public.
consecutive inspection cycles or earlier. The
c) Denial of facilities / services to linked
levy of such penalty shall be placed in public
branches / linked CCs of other banks.
domain.
d) Non acceptance of lower denomination
notes (i.e. denomination of ₹50 and below)
Penalty shall be levied immediately
tendered by members of public and linked
bank branches for exchange/deposit
e) Detection by RBI of mutilated, built up,
counterfeit notes in reissuable packets
prepared by the currency chest branches

Appellate Authority: Regional Director/Chief General Manager/Officer-in-Charge of the

Regional Office concerned, within one month from the date of debit.

Master Direction on Framework of incentives for Currency Distribution & Exchange Scheme
for bank branches including currency chests (292/2024):
Incentives:
Nature of Service Particulars of Incentives/Service Charges
Opening of and maintaining Capital Cost: Reimbursement of 50% of capital expenditure
currency chests at centres (inclusive of all taxes) subject to a ceiling of ₹50 lakh per
having population of less than CC. In the North Eastern region, up to 100% of capital
1 lakh, in under banked states expenditure is eligible for reimbursement subject to the
ceiling of ₹50 lakh (inclusive of all taxes)
b. Revenue cost: Reimbursement of 50% of revenue
expenditure (inclusive of all taxes) for the first 3 years. In
the North Eastern region, 50% of revenue expenditure
(inclusive of all taxes) is eligible for reimbursement for the
first 5 years.
Exchange of soiled notes / Exchange of soiled notes – ₹2/- per packet for exchange of
adjudication of mutilated soiled notes in the denominations up to ₹ 50/- and below
notes over the counter at Adjudication of mutilated notes – ₹2 per piece
bank branches
Distribution of coins. i. ₹65 per bag for distribution of coins.

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 Canara Institute of Bank Management

ii. An additional incentive of ₹10/- per bag shall be paid for

coin distribution in rural and semi-urban areas on the
submission of a Concurrent Auditor (CA) certificate to this
effect
Cash deposit by non-chest Service charge to be levied by the CC on the non-chest
branches under Linkage branches
scheme with CCs a. Large modern CCs1- ₹8/- per 100 pieces
b. Other CCs - ₹5/- per 100 pieces

UDGAM portal – Centralized Web Portal for searching Unclaimed Deposits (316/2024):
 UDGAM: Unclaimed Deposits – Gateway to Access inforMation).
 RBI on 17th August, 2023 launched a centralized web portal UDGAM (Unclaimed Deposits –
Gateway to Access inforMation). This portal has been developed by RBI to facilitate the
depositors to search their unclaimed deposits across multiple banks at one place pertaining
to 30 Banks including our Bank.

Master Circular on Conduct of Government Business by Agency Banks- Payment of Agency

Commission (331/24, 483/2024):

 As per agency bank agreement, RBI pays agency commission at rates determined by it. The
rates applicable with effect from 1.7. 2019 are as under:

For Physical Receipts Rs. 40/- per challan / transaction

For e mode Receipts Rs. 9/- per challan / transaction
For Pension payments Rs. 75/- per transaction
For other payments 6.5 paise per Rs. 100/- turnover

 Agency banks would be eligible to claim agency commission for pension transactions at the
rate of ₹75 per transaction only when the entire work relating to disbursement of pension
including pension calculation is attended to by them. If the work relating to pension
calculations etc. is attended to by the concerned Government Department / Treasury and
the banks are required only to credit the amount of pension to the pensioners' accounts
maintained with them by a single debit to Government Account, such transaction is to be
categorised under ‘other than pension payment’ and would be eligible for payment of agency
commission @6.5 paise per ₹ 100/- turnover w.e.f 1.7.2019.
 The number of transactions eligible for payment of agency commission should not exceed 14
per pensioner per year.(1 monthly credit each and 2 DR arrears per year)

ANNUAL CIRCULAR ON e-LEARNING FOR THE FY 2024-25 (348/2024)

 Mandatory Learning is applicable to Officers in Scale I to III and Executives in Scale IV and V
[collectively referred to as Eligible Officers].
 All Eligible Officers have to complete 15 Mandatory Courses and qualify 4 Mandatory “Know
your Circular” Quizzes on or before 28th February 2025.
 Mandatory Courses carry a total of 6 marks in Annual Performance Appraisal Report (APAR)
(15 Courses, each carrying 0.30 mark totaling 4.50 marks.
 Early completion of courses will carry 1.5 bonus marks).
 One (1) bonus mark will be awarded if the eligible Officer completes 8 courses before 30th
September 2024 and 0.50 bonus mark will be awarded if the eligible Officer completes all
the 15 courses before 31st January 2025.

Padonnati – Descriptive 2024-25 62

 केनरा बैंक प्रबंधन संस्थान
 Mandatory Know Your Circular (KYC) Quizzes carry a total of 4 marks in Annual Performance
Appraisal Report (APAR) (4 qualifying KYC quizzes each carrying one (1) mark eventually
totaling 4.0 marks

The Mandatory Courses shall be assigned as per the job profile/family of the eligible Officer.
1 course from the following subject groups must be mandatorily assigned:
a) Cyber/Information Security
b) Business Ethics
c) Operational Risk
d) 2 Courses related to Digital Banking/Technology
These 5 courses (i.e. Cyber/Information Security, Business Ethics, Operational Risk and Two
courses related to Digital Banking/Technology) will be allotted centrally to all eligible Officers
from the backend.

Reward scheme for toppers in KYC Quiz: Employees are divided into 5 categories. Reward
matrix is as follows:

4000 Points to be 2000 Points to be given to 1000 Points to be given

Scale
given to each Staff each Staff to each Staff

Topper (1) of the Next Top 10 Participants of Next Top 10 Participants

Workman
Group the Group of the Group

Topper (1) of the Next Top 10 Participants of Next Top 10 Participants

SCALE 1
Group the Group of the Group

Topper (1) of the Next Top 10 Participants of Next Top 10 Participants

SCALE 2
Group the Group of the Group

Topper (1) of the Next Top 10 Participants of Next Top 10 Participants

SCALE 3
Group the Group of the Group

SCALE 4 & Topper (1) of the Next Top 10 Participants of Next Top 10 Participants
ABOVE Group the Group of the Group

Total 5 50 50

Capital Gain Tax Exemption Bonds under Section 54EC of the IT Act, 1961(406/24):
 Our Bank has been nominated as arranger for Issue of Capital Gain Bonds in respect of the
following 3 listed Public Sector Enterprises of GOI, by way of private placement every year.
1. M/s Rural Electrification Corporation Ltd (REC)
2. M/s Indian Railway Finance Corporation (IRFC)
3. M/s Power Finance Corporation (PFC)
 Tenor of the bond is 5 years from the deemed date of allotment
 Issue opening date 01.04.2024 Issue Closing date 31.03.2025
 The Bond is Non-transferable, Non-Marketable, Non-negotiable and cannot be offered as
a security for any loan or advance.
 The Bank will earn a Commission of 0.20% (up to Brokerage Annual collection of Rs. 125 Cr)
and 0.22% (above Brokerage Annual collection of Rs. 125 Cr) of the amount mobilized (plus
applicable GST) by using Canara Bank broker code.

“Handing Over and Taking Over (HOTO) Charge” – MASTER CIRCULAR (445/24):

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 Canara Institute of Bank Management

 The Branch-in-charge/New incumbent has to submit the report within 15 days of

commencing the Charge taking process through SAS package.
 HRM Section – RO, shall review the charge taking over report in SAS package and initiate
necessary action for rectification of deficiencies reported/ wherever found necessary by
pushing back to Branches / Office otherwise forward the report to HRM Section, CO within
15 days.
 HRM Section – CO, shall review the charge taking over report and initiate necessary action
for rectification wherever found necessary, otherwise it can close the report within 15 days
 The entire process has to be completed within 45 days from that of report.

SOP for Bi-Monthly & Half-Yearly surprise cash verification and Frisking at Currency Chests
(507/24):

 Surprise Bi-monthly Verification of Balance of CC: (at least 2%): Feb/Apr/Jun/Aug/Oct/Dec)

by Manager/SM or group of Manager and officer not connected with the operations of the
Currency Chest deputed by CO.
 At least 2% of the balances held by the CC in all denominations including soiled notes should
be subjected to detailed verification through Note Sorting Machines (NSMs), by selecting any
of the bins on random basis.
 Inspecting Official shall also furnish comments/remarks on the 9 points of verification
stipulated by RBI.

Surprise H/Y Verification of Balances of CC: (at least 5 %): (January/July) by MGR/SM or
group of Manager and officer deputed by the CO.
 Inspecting Official shall furnish comments/remarks on the 51 points of verification stipulated
by RBI.
 It is the responsibility of respective Inspecting officials who are deputed for surprise cash
verification to ensure that all the guidelines are adhered to and no penalties are imposed by
RBI.
 CC in Charge shall be responsible for implementing and ensuring the guidelines with regard
to frisking. Frisking duties in the CC will be undertaken by 2 Security Guards (Bank’s own
guards / Private Security Guards), one of whom will be located at the entrance to CC, and
other at entrance to the Vault and Sorting Room.

Guidelines on Soliciting of Insurance Business (512/24):

 Only IRDAI certified “Specified Persons “should source insurance business.
 Process of Business Solicitation has to be fair, honest & transparent.
 Adherence to KYC / AML / CFT guidelines is essential.
 Not to adopt restrictive practice of forcing a customer to either opt for
 Insurance products of a specific company or link sale of Insurance to any Banking products.
 Strict adherence to the Code of Conduct prescribed by IRDA
 Shall ensure grievances of customers are dealt at suitable level and are disposed within 14
days
 Forward any information received from the client regarding a claim or an incident that may
give rise to a claim without delay, and in any event within 3 working days

Time line for closure of Surprise Branch Visit Reports in PVMS portal (533/2024):
 Time lines for rectification/acceptance/closure/review of observations/report made by the
VO in the PVMS portal shall be as under:

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 केनरा बैंक प्रबंधन संस्थान
 It is to be ensured that entire exercise of closure of surprise branch / unit visit report should
be completed within 45 days from the date of submission of surprise branch / unit visit
report by the Vigilance Officer.
Time Norms for Rectification /
Levels Closure of observation made by
VO
Surprise Branch Visit Report Submission date by VO T
Rectification of VO observations by Branch (T1) T + 15 days
Acceptance of branch reply by Regional Office (T2) T1 + 10 days
Closure of report by Circle Office (T3) T1 + 10 days
Review of closure report by Head Office T1 + 10 days

Introduction of GL Enable/Disable package in SAS for Branches/Offices (588/2024):

GL Enable/Disable Package introduced for branches/offices to submit request for enabling
Interest Paid / Interest Collected GLs / Minor subsidiary restricted GLs instead of routing the
requests through emails.
Package is introduced for making the process automated and to reduce TAT.
Integration of Incident Management Module with GL Enable/Disable Package for fetching
Incident ID to proceed with GL Enabling request
At Branch level, the Maker shall be CSA/officers in Scale I and above & Checker shall be Branch
in Charge/ Scale 2 and above.

Officials authorised at Owner Wing to approve in the Package:

The authorities at respective Owner wings shall authorise the requests as mentioned here
under:
Up to Rs. 25,000.00 – Scale 2/3
Up to Rs. 1,00,000.00 – Scale 4 and above
Above Rs. 1,00,000.00 - Scale 5 and above

Important amendment s in Income Tax /TDS Provision by the Finance Act,2024 for the
Financial Year 2024-25 (Assessment Year 2025-26) (630/2024):

NEW TAX REGIME:

Total Income Tax Rate Tax Calculator (Rs.)

Up to Rs.3,00,000 Nil Nil

From Rs.3,00,001 to Rs.7 ,00,000 5% (Total Income – 3,00,000)*5%

From Rs.7,00,001 to Rs.10 ,00,000 10% 20,000 + (T.I. – 7,00,000)*10%

From Rs.10,00,001 to Rs.12,00,000 15% 50,000+(T.I.– 10,00,000)*15%

From Rs.12,00,001 to Rs.15 ,00,000 20% 80,000 + (T.I. – 12,00,000) * 20%

Above Rs.15,00,000 30% 1,40,000 + (T.I. – 15,00,000) * 30%

Allowable Deductions/ Incentives in New Tax Regime:

Standard Deduction: Rs.75,000/-
Employer Contribution to NPS: 14% Salary (Basic + DA)

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 Canara Institute of Bank Management

WEF: 01.10.2024
194H – TDS on Payment of commission or brokerage: 2%.
194-IB- TDS on Payments of Rent by certain Individual or HUF: 2 %
Interest on delay in deposit of TCS: 1.5 %
193- TDS on Interest on security: TDS on Floating rate saving bonds, 2020 (Taxable) and on
Notified Securities if interest exceeds 10,000/-
195-Tax deduction in case of Foreign Company on other income (including interest): 35%

Section 194-IA- TDS on sale of immovable property : .Tax is to be deducted by the purchaser of
the property (other than agricultural land) at the time of payment or at the time of giving
credit whichever is earlier at 1% where the consideration paid or payable for the transfer of
the property exceeds Rs.50,00,000/-
Section 206C(1F) Tax collected at source on sale of Motor Vehicles : .Every person being a seller
who receives any amount as consideration for a sale of a motor vehicle of the value exceeding
Rs 10 lakhs shall at the time of receipt of such amount, collect from buyer, a sum equal to 1%
of the sale consideration

Implementation of Revamped Branch Visit Reporting System (BVRS) – V2 in SAS (646/24):

Provision for Uploading the following 5 Photos has been enabled --Final Submission by Executive
can be done only after uploading all photos
A) Branch Visit Photo
B) Branch ambience Photo
C) Staff Meeting
D) Customer Meeting
E) Seating arrangement for Senior Citizens near Counter

CORPORATE AGENCY TIE-UP WITH LIC OF INDIA (LIC) (653/2024):

The tie-up with LIC of India is for a period of 3 years w.e.f 08.08.2024 and will be in addition
to the existing Bank’s tie up with Canara HSBC Life Insurance Co. for Life Insurance business.
LIC is the biggest Life Insurance Co. in the country with above 62.5% market share as at
31.03.2024 and only Public Sector Life Insurance Company with 96.5% GOI holding and having
Sovereign Guarantee in the country from GOI .

Changes in MMS Data sharing frequency (681/2024):

Mandate Management System (MMS) facilitates the processing of mandates across Banks
allowing the customers to issue mandates for various purposes. The current frequency of sharing
inward and response files with the banks is on daily basis at End of Day (EOD)
In order to improve the customer experience, NPCI has modified the frequency of Mandate
Registration Data sharing at a higher frequency viz. on hourly basis from 7 AM to 8 PM instead
of single time per day.

For mandates registration data received post 8 PM, consolidated inward and response files will
be shared with respective banks at 7:00 AM on next day.

Submission of instances of Conflict of Interest – (686/2024 Dated 03.10.2024)

 All employees of the Bank are required to disclose all potential conflicts of interest to their
reporting authority
 Either business or personal relationships with customers, suppliers, business associates or
competitors of the Bank.
 The reporting authority shall report the matter to the Compliance Department at Head
Office

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 Status on Conflict of Interest is to be reported annually in the month of April and also on
quarterly basis regularly as and when there is a change in the Conflict of interest

Interest rates on Small Savings Schemes till 31.12.2024 (696/2024):

 SCSS – Senior Citizens Savings Scheme – 8.20% p.a.
 PPF – Public Provident Fund Scheme – 7.10% p.a.
 SSA – Sukanya Samrudhi Account Scheme – 8.20% p.a.
 KVP – Kisan Vikas Patrika – 7.50% p.a. (will mature in 115 months)

NPS (National Pension System) Vatsalya Scheme – (699/2024):

 NPS Vatsalya Scheme launched for the minor
 The scheme shall be regulated by Pension Fund Regulatory and Development Authority
(PFRDA)
 The account shall be opened under the scheme by the natural/legal guardian in the name of
the minor, who shall be the sole beneficiary
 Know Your Customer (KYC) norms to be applicable to the guardian shall be in accordance
with the KYC norms stipulated by the PFRDA from time to time.
 The account shall be operated by the guardian for the exclusive benefit of the minor until
 attainment of age of majority (18years)
 The parents or the guardians of children up to 18 years of age can make contribution into
the NPS Vatsalya account
 The minimum contribution is Rs. 1000 per annum and there shall be no limit on maximum
contribution.
 The initial contribution for enrollment under the scheme is Rs 1000.

Introduction of Balanced Life Cycle Fund (BLC) under National Pension System (NPS)
(703/2024)
 Balance Life Cycle Fund has been introduced under NPS
 Balance Life Cycle fund shall be in addition to the existing choices under NPS viz. “Active
Choice” and “Auto Choice”
 The maximum equity allocation under BLC shall be 50% which shall taper down after the age
of 45 years as compared to 35 years under existing life cycle funds
 The existing “Moderate Life Cycle Fund (LC50)” shall continue to be the default choice

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बैंक ों में कानूनी ढाोंचा

LEGAL FRAMEWORK IN BANKS

Negotiable Instrument Act -1881

Introduction:
 Extends to whole of India.
 Negotiable Instruments recognized as per NI Act, S e c t i o n 13 are, Promissory notes, Bills o f
exchange and cheques. As per practice, Bank Drafts, Certificates of Deposit and Commercial Papers
are also treated as Negotiable instruments.
 A “Promissory note” is an instrument in writing (not being a bank-note or a currency-note)
containing an unconditional undertaking, signed by the maker, to pay a certain sum of money only
to, or to the order of, a certain person, or to the bearer of the instrument (Section 4).
 A “bill of exchange” is an instrument in writing containing an unconditional order, signed by the
maker, directing a certain person to pay a certain sum of money only to, or to the order of, a
certain person or to the bearer of the instrument (Section 5).
 A “cheque” is a bill of exchange drawn on a specified banker and not expressed to be payable
otherwise than on demand and it includes the electronic image of a truncated cheque and a cheque
in the electronic form (Section 6).
 Holder: A person entitled in his own name the possession thereof and to receive or recover the
amount due thereon from parties thereto (Section 8).
 Holder in due course: Who receives the negotiable instruments for value and in good faith
(Section 9).
 If neither Bearer nor Order is written on negotiable instrument, it is treated as payable to ORDER.
 If both are written i.e. Bearer and Order and none is struck, then it is payable to BEARER.
 As per Section 31 of RBI Act, 1934, no person other than Central Government or Reserve Bank of
India or any other person authorized in this behalf, can issue bearer promissory notes and demand
bills of exchange payable to bearer.
 Inchoate (Incomplete) Instrument: An instrument on which date, payee or amount is not mentioned,
it is inchoate instrument. It can be completed by the holder and the completion is not treated as
material alteration (Section 20).
 An instrument without signature is not treated as an instrument at all.
 Ambiguous instrument: An instrument which can be treated as bill of exchange or Promissory
note. Holder can treat it as BoE or PN (Section 17).
 Bearer instrument is negotiated by mere delivery.
 Order instrument is negotiated by endorsement followed by delivery.
 An instrument which is endorsed by a deceased person, Legal heirs cann ot complete negotiation
by delivery.
 Endorsement: Signing of an instrument on the back or face thereof or on a slip or paper annexed
thereto for the purpose of negotiation is called endorsement (Section 15).
 Blank endorsement: It makes an instrument drawn originally payable to Order to Bearer.
 An endorsement in which the endorser himself becomes endorsee is called as back to back
endorsement. In this case, the endorsee can recover the amount only from parties prior to his own
endorsement.
 When a drawer of a cheque himself becomes endorsee, it is called Negotiation Back. This cheque
is treated as Satisfied.
 Endorsement can be made only for full amount. But in case part payment has been received and
a note to that effect is made on the instrument, then the same can be endorsed for the balance

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amount.
 Protection to Paying Banker: Paying B a n k e r i s concerned about regularity of endorsement and
not its genuineness (Section 85).
 Payment in Due Course: Payment in accordance with apparent tenor of the instrument, with good
faith and without negligence (Section 10).

Payment of A Cheque:
 Form of cheque has not been given in the Act (CTS 2010 STD).
 Different Ink: A cheque can be drawn in different inks, different handwritings or different scripts.
It can be paid.
 The cheque should be written in Hindi or English or Regional language.
 Ante dated cheque: A cheque dated prior to its date of presentation and can be paid within 3
months from the date of issue.
 Post-dated cheque: A cheque which is dated subsequently to the date of presentation.
 Both ante-dated and post-dated are valid as per Law. A post-dated cheque can be passed only on
the date written on it or within 3 months thereafter.
 A cheque becomes stale after 3 months of its issue.
 A drawer of a cheque may reduce the validity of the cheque for less than 3 months. Such cheque
should not be paid after that validity period.
 A cheque with impossible date like 31-06-2010 should be paid on the last day of the month or within
3 months of the last day of the month.
 If the Amount in words and figures differs, the amount written in words will be the amount
intended to be payable. Amount in words can be paid (Section 18).
 If the balance available in the account is just equal to the amount of cheque, the cheque can be
paid.
 If number of cheques are presented at the same time and the balance is not sufficient to pay all
the cheques, then normally priority is given to cheques favouring revenue authorities, then cheques
favouring public authorities. If balance is left, maximum number of cheques should be paid taking
care that cheque of very small amount is not dishonoured.
 The payment of a cheque should be made only during banking hours. Otherwise, it will not be
a payment in due course
 If there is any mutilation of the cheque, it should be confirmed by the drawer.
 Material Alteration: Any change in date, amount or name of payee is called material alteration.
The change from Order to Bearer, Cancellation of Crossing or converting Special Crossing into
general crossing is also called as material alteration.
 Bearer to Order, c rossing a cheque, converting general crossing to special crossing is not
material alteration.
 If any material alteration is there on a cheque, it can be paid only after confirmation from
drawer i.e. drawer has to authenticate material alteration with full signature.
 Paying banker gets protection in case of payment of materially altered cheque if the alteration is
not apparent at the time of payment and payment has been made in due course (Section 89).
 If The Payee Is Fictitious Person: Cheque can be paid to bearer if it is payable to bearer.
 Bearer or Order: If cheque is payable to Bearer or Order, it can be paid to bearer. If neither
bearer nor order is written, it is payable to order.
 If there is Forgery i n Signatures, such instrument is null and void. Paying banker will not
get protection if it pays such a cheque even though the drawer might have been careless
in custody of the cheque book or bank might have sent statement of account and customer did
not point out the mistake.

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Crossing
 Sec 123 of NI Act: If a cheque or draft bears across its face addition of two parallel transverse lines
with or without addition of words “and Company” or any abbreviation thereof, it is called General
Crossing.
 General Crossing is direction to PAYING BANKER to pay the cheque or draft through some bank.
 Even if the name of a city is written between two parallel lines like “Delhi”, it will continue to be
a general crossing and the cheque can be paid to any bank.
 Sec 124 of NI Act: When a cheque or Draft bears the name of bank across its face with or without
two parallel transverse lines either with or without the words “Not Negotiable” it is said to be
specially crossed.
 A cheque with special crossing can be paid only to the named bank or his authorized agent for
collection
 The special crossing is in favour of a Bank and not in particular of Branch.
 The act does not restrict the payment of a Crossed Cheque to the banker in cash.
 For special crossing, it is not necessary that the cheque should bear two parallel lines.
 Provisions to crossing are applicable only to cheques and drafts and not to Promissory Note and Bill
of Exchange.
 Sec 127 of NI Act: A cheque crossed to two banks has to be returned unpaid unless crossed by one
bank to another as his agent for collection.
 Account Payee crossing is not recognized by law but is a long standing practice among bankers.
 Account Payee Crossing is direction to COLLECTING BANKER. Cheque should be credited to named
payee.
 Not Negotiable Crossing takes away an important characteristic of negotiability. It can
be transferred, but the transferee does not get better title. (Sec 130)
 Cancellation of crossing can be done by drawer only under his full signatures by writing the words
crossing cancelled. In such cases, payment can be made in cash to a person known to the Bank.
 Sec 128 of NI Act: Paying banker will get protection in respect of crossed cheques or drafts provided
the instrument has been paid in accordance with the requirement of the crossing and payment has
been made in due course.
 Sec 129 of NI Act: If a banker pays a cheque in violation of the crossing direction, it shall be liable
to true owner of the cheque for any loss he may sustain owing to payment of the cheques.
 Sec 131: Protection to collecting banker, against the risk of Conversion.
 Conversion is illegal interference with rights of true owner of instrument inconsistent with his rights
of ownership. Such protection is available to banker: when cheque/draft is crossed before it is
lodged with bank for collection, the bank receives payment for his customer, the bank acts as agent
for collection and not as holder for value and it receives payment in good faith and without
negligence. As per amendments made to the Negotiable Instrument Act, 1881 by virtue of
Negotiable Instruments (Amendments and Miscellaneous Provisions) Act, 2002 whereby among
others the Sections 6,64,81,89 and 131 of the NI Act, 1881 are also suitably amended to incorporate
the validity of the truncated image of the cheque. As per the amendment “It shall be the duty of
the banker who receives payment based on an electronic image of a truncated cheque held with
him, to verify the prima facie genuineness of the cheque to be truncated and any fraud, forgery or
tampering apparent on the face of the instrument that can be verified with due diligence and
ordinary care.”

Dishonor of cheques due to insufficient funds:

 Sec 138 of NI Act: If a cheque drawn by a person on an account maintained by him with a
banker for payment of any amount of money to another person for the discharge, in whole
or in part of any debt or other liability, is returned by the bank unpaid, either with the

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reason funds insufficient or similar reason, such person shall be deemed to have committed
an offence.
 Maximum punishment: 2 years imprisonment or twice the amount of cheque or both.
 As per Supreme Court judgement, cheques dishonoured on account of the payment being
stopped by the drawer or account being closed will attract penalty under Sec 138.
 Conditions to be satisfied before preferring court proceedings sec 138: A) cheque has been
presented to the banker within a period of 3 months from the date on which it is drawn or
within the period of its validity whichever is earlier. B) cheque has been received for
consideration. C) The payee or holder in due course of the cheque makes a demand for
the payment of the said amount of money by giving notice, in writing to the drawer, of the
cheque, within 30 days of the receipt of information by him from the bank regarding return
of cheque. D) The drawer of cheque fails to make the payment of the said amount, to the
holder in due course of the cheque, within 15 days of the receipt of the said notice.
 Sec 141 of NI Act: In case of a company, every person, who at the time of offence was
committed, was in charge of and was responsible to the company for the conduct of
business of the company as well as the company shall be deemed to be guilty of offence.
Nominee Directors shall not be responsible.
 Complaint should be made in the court of a metropolitan magistrate or a Judicial
magistrate of first class or above within one month of the date of cause of action, ie
payment not made within 15 days.
 Bank’s cheque returning memo having official mark of the bank shall be presumed to be
proof of dishonor of cheque.
 Same rights and remedies will be available to the payee against dishonour of electronic
funds transfer as are available to the payee under Section 138 of the Negotiable
instruments Act, 1938.
 The Central Government through The Negotiable Instrument (Amendment) Act, 2018 has
notified amendments to the NI Act by incorporating several new provisions.
 Two important amendments to the NI Act i.e. Section 143A and Section 148 are related to
interim compensation during the pendency of the criminal complaint and the criminal
appeal.
 Section 143A empowers the court to provide interim compensation to the complainant
which could be upto 20% of cheque amount during the pendency of court proceedings. In
case of acquittal of the drawer, amount has to be return back within 60-90 days to the
drawer with interest @ RBI published bank rate.
 Section 148 empowers appellate court to ask the appellant to deposit minimum 20% of the
fine or compensation awarded by the trial court. Under this Section the Court is free to
determine the sum payable in the course of the appeal, considering the facts and
circumstances of each case.
 Section 143A applicable prospectively and Section 148 retrospectively.

Bill of exchange:
 A Documentary bill is one which is accompanied by any document of title to goods like LR,
RR, Bill of Lading etc.
 Accommodation Bill means a bill issued without consideration. Dealing in such bill is called
as Kite Flying.
 To accept bill, drawee is allowed 48 hours excluding public holidays to accept the bill.
 If a usance bill is payable after date, its due date is calculated from the date of bill and if
it is payable after sight, its due date is calculated from the date of acceptance.
 Sec 22 of NI Act: 3 days grace period is allowed in the case of Usance Bills. If the due date

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is fixed on a particular day, no grace period.

 Sec 25 of NI Act: If a bill matures for payment on public holiday, it falls due on immediate
next preceding business day.
 If the drawee does not accept the bill within stipulated period, it is treated as dishonoured
by non-acceptance. If is not paid on due date, it is dishonor by nonpayment.
 If the dishonor is got certified from Notary Public, such certificate is called a Protest. (Sec
100 of NI Act). For foreign bills, noting & protesting is compulsory.
 If a Bill is dishonoured by Non-Acceptance, the holder can recover the amount from all
prior parties except drawee. In this case, the drawer will be Principal Debtor.
 If the bill is dishonoured due nonpayment (after acceptance), the holder can recover
amount from all prior parties including the acceptor of the bill. In this case, acceptor will
be Principal Debtor.
 Demand Bill need not be stamped.

Section 85A: Demand Draft: An order to pay money, drawn by one office of a bank upon another
office of the same bank for a sum of money payable to order on demand.

Following instruments are LEGALLY RECOGNIZED AS NEGOTIABLE INSTRUMENTS as per Customs and
Usages of the trade:
 Pay Order or Banker’s Cheque, Government Promissory Note, Certificate of Deposit,
Commercial Paper, Treasury Bills, Hundi, Bill of Lading, Railway Receipts
 Airway Bill is neither a document to title to goods nor recognized as negotiable instrument.
 In case of promissory notes payable in instalments, on default in payment in one
instalment, entire amount becomes payable.
 Certificate of Deposits and Commercial Papers are also being recognized as usance
promissory notes.

Calculation of Due date:

Sec 22 of NI Act: 3 days grace to be added. If due date is mentioned, no grace period. In case of
Usance Promissory notes, 3 days of grace are to be added. In case of CD, CP no grace period and
the date mentioned in instrument is due date.
th th
Calculation of due date: From 15 January, one month: 15 + 3 days of grace ie 18 February.
st
If the bills drawn in days, then while calculating the due date, 1 day is to be excluded and last
day to be included.
th th
Eg: 45 days from 10 Jan: Days of January after 10 :21
th
Days of February:24 days, Total 45 days. Adding 3 days of grace for Feb 24; due date is 27
February. If maturity day is Sunday or Holiday, it will become payable on next Preceding business
day.

Electronic Cheque: A cheque which contains the extract mirror image of a paper cheque, with
the use of digital signatures.

Endorsement by Minor: A minor can endorse under section 26 of NI Act, but he will not be liable
as an endorser.

Reserve Bank of India Act, 1934: w.e.f 01-04-1935.

 Established as per recommendations of Hilton Young Commission
 Sec 31 of RBI Act: Prohibits drawing, accepting, making or issue of any bill of exchange,

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hundi, promissory note payable to Bearer on demand, except by Central Government or

RBI.
 Sec 33 of RBI Act: Assets of issue department of RBI shall consist of gold coin, gold bullion,
foreign securities, rupee coins and rupee securities. The aggregate value of gold coin, gold
bullion and foreign securities held shall not any time be less than Rs. 200 crores of which
gold coin and gold bullion not less than Rs.115 crores.
 Sec 42 of RBI Act: CRR: Banks are required to maintain certain percentage of Net
Demand and Time Liabilities as CASH with RBI.
 No Floor or Ceiling rate for CRR wef 01-04-2007. RBI will fix CRR rate. At present: 4.50%
 RBI will not pay any interest to Banks on CRR balances wef 31-03-2007.
 Banks are required to maintain minimum CRR balances upto 90% of total CRR requirement
on all days of the fortnight. If it is not maintained, penal interest @3% above bank rate for
first day and second day onwards, Bank rate plus 5%.

Banking Regulation Act, 1949: Banking Companies Act w.e.f 16-03-1949 & changed to Banking
Regulation Act from 01.03.1966 J&K from 1956, Co Op Banks from 2020
 Not applicable to Primary Agriculture Credit Societies, Co-op Land Mortgage Banks, Non
Agricultural Primary credit societies.
 The Banking Regulation (Amendment) Bill, 2020 amends the BR Act to expand RBI's
regulatory control over co-operative banks in terms of management, capital, audit and
liquidation.
 Sec 8 of BR Act Prohibits banks doing trading activities except in connection with
realization of security given to or held by it.
 Sec 9 of BR Act: Bank cannot hold any immovable property howsoever acquired except for
own use, for a period exceeding 7 years from acquisition thereof. It can be extended by
RBI by another 5 years.
 Sec 13: Payment of exchange, brokerage on shares: Max.2.5% of paid up value of shares.
 Sec 17(1) of BR Act: Banking Company is required to transfer to Reserve Fund profits before
declaring dividend. Isn’t it 20%????
 Section 19(1) : Forming subsidiary by Bank
 Sec 19(2) of BR Act: No Banking Company can hold shares in another company whether as
pledge, mortgagee or absolute owner of an amount exceeding 30% of the paid up share
capital of that company or 30% of its own paid up share capital and reserves, whichever is
less.
 Sec 20 of BR Act: No banking company shall grant loans or advances on the security of its
own shares as it tantamount to reduction of capital.
 Sec 21A: Rate of Interest charged by Banks are not subject to scrutiny of courts.
 Sec 22 of BR Act: Obtaining a licence from RBI by a banking company.
 Sec 24: SLR: Maximum 40%. No Minimum prescribed now (earlier 25%). RBI fixes SLR
rate periodically. Currently it is 18% of NDTL.
 SLR can be kept in the form of Cash or in gold valued at a price not exceeding the current
market price, or in unencumbered approved securities valued at a price specified by RBI
from time to time.
 Following are excluded from DTL: Paid up capital & Reserves, surplus balance in P & L
a/c, Refinance from RBI, Exim Bank, NABARD,NHB, SIDBI etc., Provision for Income
Tax in excess of estimates, DICGC & ECGC claims received & not adjusted. Amount received
from insurance companies pending judgment in courts, Amount received from court
receiver. Inter-bank liabilities with maturity from 15 days to 1 year. DTL in Offshore
Banking Units.

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 Sec 26 of BR Act: Return on Unclaimed Deposits i.e. not operated for last 10 years, as on
31st December every year. Banks to submit to RBI within One Month.
 Sec 35A of BR Act: Banking Ombudsman, Clean Note Policy, KYC guidelines and other
customer service related matters.
 Sec 45Y of BR Act: Preservation of Records. Central Govt. has powers to frame rules in this
regard.
 Sec 45Z: Return of Paid Instruments to customers after a true copy of all relevant parts of
such instruments and by taking undertaking letter from the party to preserve the
instrument for 8 years.
 Nomination in Deposits (Sec 45ZA), Safe Custody (Sec 45ZC) and Locker Accounts (Sec
45ZE).
 Sec 49A of BR Act: Restriction on acceptance of deposits withdrawable by cheque by anyone
other than a Banking Company.

Banker Customer Relationship

Transaction Bank Customer
Deposit in the Bank Debtor Creditor
Loan from the Bank Creditor Debtor
Purchase of Draft Debtor Creditor

Payee of Draft Trustee Beneficiary

Safe Deposit Locker Lessor Lessee
Safe Custody Bailee Bailor
Money deposited without any instructions Trustee Beneficiary
Collection of cheque and standing instruction Agent Principal
Pledge Pawnee Pawner
(Pledgee) (Pledger)
Mortgage Mortgagee Mortgagor
Assignment Assignee Assignor
Sale/purchase of securities on behalf of Agent Principal
Customer
Articles left by mistake Trustee Beneficiary

Minors:
 Not attained the age of 18 years (of Indian Domicile). (Indian Majority Act 1875 Sec 3).
Where a guardian is appointed by court (for person, property or both) or where a court of
ward is appointed as guardian, a person attains majority on completion of 18 years of age.
 Sec 11 of Indian Contract Act: Minor is not competent for contract and contract with
minor is void ab initio.
 Sec 183 of Indian Contract Act: A Minor cannot appoint an agent. A Minor cannot delegate
powers to others. A Minor can be appointed as an agent and bind his principal.
 Sec 26 of NI Act: A minor can draw, endorse or negotiate a cheque or bill but he cannot be
liable. Other parties to that instrument are liable.
 A Minor cannot appoint Nominee. A minor can be appointed as nominee.
 A Minor cannot become a partner but can be admitted to benefits of partnership firm. On
attaining majority, within 6 months, he has to exercise his option to continue in
partnership. If he is silent, he is liable ab initio. A minor cannot stop payment of cheque
issued by partnership firm.

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 Minor account operated by guardian: On minor attaining majority, we should not pay
cheques signed by guardian, though the cheque is dated prior to attaining majority
 Mother as guardian of Minor: Permitted by Supreme Court: Even if father is alive, mother
can open and operate all types of deposit accounts of minor.
 A Minor can open and operate accounts on attaining 10 years age and he is literate. Joint
accounts of 2 minors can be opened provided both are at least 10 years age and literates,
belonging to same family and operation jointly
 In our Canara Bank, minors of age 10 years age can now also open self-operated account in
all our branches. The Bank will be implementing the provision of sending SMS alerts to the
parents regarding all transactions in the account, as a precautionary measure.
 Minor cannot delegate authority in self operated accounts.
 In case of Joint accounts with minor and guardian, we can accept either or survivor
operation condition and on attaining majority, he can also operate the account.
 A bearer cheque presented for cash payment by minor may be paid as a minor can give a
valid discharge in the capacity of Payee.
 When a loan has been raised on a term deposit in the name of major person, his request
for addition of the name of minor cannot be entertained.
 Minor cannot be declared as insolvent.
 As per Sec 6 of the Hindu Minority and Guardianship Act, 1956, father is the natural
guardian of a Hindu Minor boy or an unmarried girl and after him, the mother.
 When a guardian of a Hindu minor ceases to be a Hindu or he becomes a hermit or sanyasi,
he ceases to be natural guardian.
 Guardian appointed by father of a minor, is called as Testamentary Guardian and
testamentary guardian will come into picture only after death of father & mother.
 As per personal law applicable to Muslims, father is natural guardian. A muslim father can
appoint a testamentary guardian and even mother of a muslim child can be testamentary
guardian.
 If father dies without leaving behind a will, father’s father ie paternal grandfather is the
guardian. If father appoints testamentary guardian, testamentary guardian will have
priority.
 After death of paternal grandfather, testamentary guardian appointed by paternal
grandfather will be guardian. If grandfather not appointed any testamentary guardian and
dies, then court will appoint testamentary guardian.
 Declaration given by natural guardian is sufficient proof of date of birth.
 Cheques issued by the guardian prior to the date on which the minor attains majority, but
presented after the above date, are to be treated as invalid.

Joint accounts:
 Either or Survivor: It means, anyone can operate the account till both are alive. After death
of either of them, the bank can pay the balance to the survivor without any formality.
 Payable Jointly: Payable jointly till both are alive, if one or the two expires, the bank
would pay balance to survivor along with legal heirs of deceased person.
 Any one of account holders can stop payment of cheque but revocation has to be done by
all jointly.
 In case of either or survivor, alteration of cheque can be confirmed by any of the account
holders.
 All persons signatures are required for: a) opening the account b) closure of account c)
making or alteration of nomination, d) raising loan against term deposit, e) premature
payment of term deposit.

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Repayment of Term Deposit-Operation Condition:

Either or survivor- On maturity withdrawal- Anyone or survivor, Before maturity withdrawal- All
depositors has to sign, Before maturity when one of depositor is deceased- Legal heir of deceased
and survivor

Former or survivor- On maturity withdrawal- Former, when former is deceased then survivor,
Before maturity withdrawal- All depositors has to sign, Before maturity when one of depositor is
deceased- Legal heir of deceased and survivor

In case of term deposits with "Either or Survivor" or "Former or Survivor" mandate, it is permitted
to allow premature withdrawal of the deposit by the surviving joint depositor on the death of the
other, only, if there is a joint mandate from the joint depositors to this effect. The facility of such
mandate is incorporated in the Account Opening Form (NF 1018). The joint deposit holders are
permitted to give the mandate either at the time of placing the fixed deposit or anytime
subsequently during the term / tenure of the deposit.

The Companies Act 2013:

A company is an artificial person, created by law that has got a separate legal entity from, its
members, with perpetual succession, operating under a common seal, has limited liability and
ownership of which is divided into equal units called shares.

Private Limited Company {Section 2(68)}:

 No minimum paid-up capital requirement.
 Minimum number of members – 2 (except if private company is One Person Company, where it will
be 1). Maximum number of members – 200, excluding present employee-cum-members and
erstwhile employee-cum-members.
 Right to transfer shares restricted.
 Prohibition on invitation to subscribe to securities of the company.
 Small company is a private company.
 One Person Company can be formed only as a private company.
 Private company need to have minimum two directors.
Public Limited company {Section 2(71)}:
 It is not a private company (Articles do not have the restricting clauses).
 Shares freely transferable.
 No minimum paid up capital requirement.
 Maximum numbers of members – No limit.
 Subsidiary of a public company is deemed to be a public company.
 Further, a private company which is a subsidiary of a public company shall also be deemed to be a
public company for the purposes of this Act, even where such subsidiary company continues to be
a private company in its articles.
 Minimum Number of directors- 3.

One Person Company Limited {Section 2(62)}:

 Concept of One Person Company (OPC limited) introduced by way of Company Bill 2013. Number of
Director 1.
 Minimum paid up capital – no limit prescribed.
 The memorandum of OPC shall indicate the name of the other person, who shall, in the event of

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the subscriber’s death or his incapacity to contract, become the member of the company.
 No person shall be eligible to incorporate more than one OPC or become nominee in more than one
such company.
 No minor shall become member or nominee of the OPC or can hold share with beneficial interest.
 Such Company cannot carry out Non-Banking Financial Investment activities including investment
in securities of anybody corporate.

Memorandum of Association {Section 2(56)}:

 Constitution of the Company and it establishes the relationship of the company with the rest of the
world. Company cannot go beyond the memorandum. It contains: Name of the Company with Ltd
as last word, Registered Office address or State in which the registered office of the company is
situated.
 Object/objectives of the company.
 Authorised Capital/Issued capital of the company.
 Limited liability clause.
 Borrowing powers of the company.
 For alteration of memorandum, special resolution with 3/4th majority in general body meeting will
be passed and approval from Central Govt is required.
 Any violation of memorandum is ultra vires of the company and intra vires of the directors ie
company is not responsible for violation and directors are responsible.

Articles of Association {Section 2(5)}:

 These are by laws and internal rules and regulations of the company.
 Articles are indoor management of the company.
 Borrowing powers of directors, procedures for appointment and removal, retirement and rotation
of directors.
 Articles can be amended by general body resolution. If the borrowing powers are silent, still the
company can avail the loan because every trading company has the implied powers to borrow.

Certificate of Incorporation: Registrar issues this certificate. This is birth certificate of company.

Certificate of Commencement of Business:

 This certificate is not required in case of private limited companies.

Other matters relating to companies:

 Public Ltd Company: Borrowing powers – up to paid up capital plus free reserves of the
company. If requires more than this, consent of shareholders in general body meeting is required.
 Death of a Director: does not affect the operations in the account.
 The Directors cannot delegate their authority to any other person.
 Common Seal in their account opening form, is not a mandatory requirement.
 Even in those cases, where the Memorandum of Association and Articles of Association of the
Company require affixing of Common Seal, the Company shall be allowed to provide the same
voluntarily and the account opening form of the banks shall not have any such requirement for
providing the Company Seal
 Charge creation is required to be registered when charge created on by way of Pledge,
Hypothecation of stocks, book debts, mortgage of immovable properties, ship, goodwill, uncalled
share capital of the company etc.
 Sec 77 Companies Act: Charges created on a company’s assets have to be registered with Registrar
of Companies within 30 days of creation of the charge.
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 ROC can grant extension of 270 days in filing particulars of charge. Max 300 days from the charge
creation. Company required to pay additional fees.
 A person cannot have more than 20 Directorships concurrently (Sec 165(1) of companies Act.)
 Getting charge registered is company’s responsibility. If company getting failed to register
charge, as creditor, bank can register charge.
 Non Filing of particulars/ non-registration renders the bank as unsecured creditor and loan
becomes payable immediately.
 When charge in favour of two banks is registered, priority of charge is in favour of bank whose
charge got registered first.
 Form CHG-1 – New Loan (new Charge) & Modification of existing charge.
 Form CHG-4 – Satisfaction of Charge.

Hindu Undivided Family (HUF):

Under Hindu Law, an HUF is a family which consists of all persons lineally descended from a common
ancestor and includes their wives and unmarried daughters. An HUF cannot be created under a
contract, it is created automatically in a Hindu Family. Jain and Sikh families even though are
not governed by the Hindu Law, but they are treated as HUF under the Act.

 Under Mitakshara School of Hindu Law, HUF can be formed by the Hindus, Sikhs, Jains and
Buddhists.
 The eldest coparcener including Female is Karta. All male and female major members are
coparceners.
 The eldest member will be KARTA even if he/she lives outside India. Karta can appoint any other
coparcener or third party to conduct business of HUF. Coparcener cannot stop payment of cheque
unless he is authorized to operate the account.
 Karta alone has the power to incur debts for family business and legal necessity of the family.
 Supreme Court’s judgment: "A HUF directly or indirectly cannot become partner of a firm because
the firm is an association of individuals. HUF is a floating body whose composition changes by births,
deaths, marriages and divorces. A HUF not being a ‘legal person’ cannot enter into an agreement
of partnership.

The Indian Partnership Act 1932:

Partnership” is the relation between persons who have agreed to share the profits of a business
carried on by all or any of them acting for all. Persons who have entered into partnership with
one another are called individually “partners” and collectively “a firm”, and the name under
which their business is carried on is called the “firm name” (Section 4).

 As per The Companies Act 2013 (Section 464), the maximum number of partners can be 100 (Earlier
this number was restricted to 10 for Banking Business and 20 for business other than banking.)
 NBFC, HUF, Minor, Insolvent, Insane & alien enemy cannot become a partner in partnership (Section
11 of The Indian Contract Act, 1872).
 NBFCs are prohibited from contributing capital to any partnership firm/LLPs/Association of
Persons or to be partners in partnership firms/LLPs/Association of Persons and in case of existing
partnership firms/LLPs/Association of Persons, NBFCs shall seek early retirement from the
partnership firms.
 Each partner is an agent of the firm and also agent for other partners (Section 18).
 Partners are jointly and severally liable for all the acts (Section 25).
 One partner has the power to countermand (stop payment) the cheque given by other partner.
 Dissolution of the firm: Death, insolvency, retirement of a partner– causes dissolution.

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 If account is having credit balance, the remaining partners can give a valid discharge to the
bank.
 If the account is having debit balance, operations should be stopped to decide the liability of the
deceased /insolvent/retired partner. Otherwise, the rule in Clayton’s case will apply.
 A registered partnership firm can sue others to enforce its rights arising out of contractual
obligations.
 An unregistered firm cann ot sue others in its own name though others can sue it in its name.
(Sec 69 of Indian Partnership Act, 1932)
 Any partner including sleeping partner has authority to stop payment of a cheque issued by
another partner of the firm. However, revocation of stop order requires signatures of all partners
on revocation letter.
 A partner, being agent of partnership firm, cannot delegate his authority to an outsider without
the written consent of all other partners.

Account of trusts:
 Unless specifically provided for in the trust deed, No trustee or trustees can raise loans against the
security of the assets of trust.
 Trustees can’t delegate powers to outsiders even with mutual consent.
 Death or insolvency of trustee does not affect the trust property and the bank can pay cheques
issued by the trustee prior to his death.

Mandate and power of attorney:

 A mandate does not require witnessing or stamping.
 Power of Attorney is stamped as per Stamp Act as applicable in concerned State. It must be
registered or notarized.
 Any cheque signed by agent and presented for payment after cancellation of authority shall not be
paid.
 Power of Attorney or Mandate is revoked by death, insanity, insolvency of the Principal.
 In case cheque issued by the agent is presented for payment after his death, the same can be paid
so long as the principal is alive, provided the same is dated prior to date of death of agent.

The Limited Liability Partnership Act, 2008:

 Extends to whole of India.

 A unique form of Business Organisation which combines the flexibility and simplicity of a Partnership
Firm with that of the Limited Liability feature of a Company.
 The liability of the Partners in case of any Partnership Firm is unlimited. The liability of the
shareholders in any Company is restricted to the unpaid value of shares held by them. However, in
case of Limited Liability Partnership, the liability of the Partners is Limited.
 A limited liability partnership is a body corporate formed and incorporated under this Act and is a
legal entity separate from that of its partners with perpetual succession. Any change in the partners
of a limited liability partnership shall not affect the existence, rights or liabilities of the limited
liability partnership (Section 3).
 Any Individual of body corporate who is competent to contract can become a partner in LLP.
 The minimum number of Partners in an LLP is 2, whereas there is no limit on maximum number of
Partners.
 The LLP has to be mandatorily registered with the Registrar of Companies (ROC). The ROC within a
time of 14 days will issue a Certificate of Incorporation to the LLP (Section 12).
 Every limited liability partnership shall have either the words "limited liability partnership" or the
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acronym "LLP" as the last words of its name (Section 15).

 Unlike shareholders of a company, partners of LLP can directly manage the affairs of business. In
other words, there is no separation between the management and ownership in case of LLP.
 The liability of the LLP is to the extent of its assets. The partners are liable to the extent of the
amount they have agreed to contribute to the LLP.
 A partner cannot be held responsible for the misconduct or negligence of the other partners.
 There shall be a minimum of two designated Partners who are individuals and at least one of them
shall be the resident of India.
 A private or unlisted public company and firm can be converted into LLP.
 The winding up of an LLP is either voluntary or by the High Court.

Nomination:
 Section 45ZA & 45ZB of BR Act – Nomination in Deposit Accounts.
 Section 45ZC & 45ZD: Nomination of Safe Custody articles
 Section 45ZE & 45ZF: Safe Depositor Lockers Nomination facility
 Status of Nominee: trustee for legal heirs.
 Nomination can be for individual accounts and proprietorship accounts only and not for
partnership accounts, companies, trusts, societies, HUF.
 Only an Individual can be nominee. He can be Resident or Non-Resident, Minor or even insolvent
person.
 In Case of Safe Custody Article-Single nominee only. In case of Joint Lockers with joint
Operations, there can be 2 nominees.
 A Minor cannot appoint nominee. On his behalf nomination facility can be exercised by the
person legally competent to act on behalf of the minor.
 In case of accounts in the name of single persons, nomination must be obtained. If the depositor
does not want to nominate anybody, a written letter should be obtained from him in this regard.

Banking Ombudsman - BO:

Reserve Bank of India has introduced new Integrated Ombudsman Scheme 2021 with effect from
12.11.2021 as per notification CEPD. PRD. No.S873/13.01.001/2021-22 dated 12 Nov 2021 and has
directed Banks to comply with the new Scheme. The existing Banking Ombudsman Scheme, 2006
is repealed with the implementation of new Scheme.

The salient features of the Integrated Ombudsman scheme 2021.

1. RBI has integrated the three Ombudsman schemes
(i) The Banking Ombudsman Scheme, 2006, as amended up to July 01, 2017,
(ii) The Ombudsman Scheme for Non-Banking Financial Companies, 2018 and
(iii) The Ombudsman Scheme for Digital Transactions, 2019 into one “Integrated Ombudsman
Scheme, 2021”.
2. The complaints can be made online in RBI CMS portal ([Link] or through
electronic mode (E-mail)/ physical form, including postal and hand-delivered complaints.
3. The physical complaint should be signed by the complainant or any Authorised representative
other than an Advocate.
4. The RBI has established the Centralised Receipt and Processing Centre (CRPC) at Chandigarh
for receipt of the complaints Pan India.
5. Any customer aggrieved by an act or omission of a Bank resulting in deficiency in service may
file a complaint under the Scheme.
6. Before submitting a complaint to the Ombudsman, customer should make a written complaint
to the concerned Bank. Customer can lodge complaint with Banking Ombudsman only in respect

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of rejected & partially redressed complaints, cases where complainant is not satisfied with the
reply & cases where no reply is received from Bank within 30 days after submitting the
complaint.
7. Complaints which are in the nature of suggestions or seeking guidance or explanation shall not
be treated as valid complaints. Complaints falling under non-maintainable category will not be
entertained by Reserve Bank. Instead of eligible Grounds of Complaint in clause 8 of earlier BO
scheme 2006, RBI has introduced a list of Non-maintainable complaints in the new integrated
scheme (Clause 10 of chapter IV of the scheme).
8. There is no limit on the amount in a dispute that can be brought before the Ombudsman for
which the Ombudsman can pass an Award.
9. For any consequential loss suffered by the complainant, the Ombudsman have the power to
provide a compensation up to Rupees Twenty lakhs, in addition to, up to Rupees One lakh
for the loss of the complainant’s time, expenses incurred and for harassment/mental
anguish suffered by the complainant.
10. The compensation that can be awarded by the Ombudsman shall be exclusive of the amount
involved in the dispute.
11. The Bank should furnish written reply along with all the relevant documents to the Ombudsman
within 15 days of receipt of complaint. In case Bank omits/fails to file its written version and
documents within 15 days, then Ombudsman may proceed ex-parte based on the evidence
available on record and pass appropriate Order or issue an Award.
12. Non-furnishing of documents/ information within 15 days by Bank may lead to an Award by the
Ombudsman.
13. If any amicable settlement of the complaint is arrived at between the parties, the same shall
be recorded and signed by both the parties and thereafter, the fact & terms of settlement may
be recorded, directing the parties to comply with the terms within the stipulated time.
14. The complaint would be deemed to be resolved when: (a) It has been settled by the Bank with
the complainant upon the intervention of the Ombudsman; or (b) The complainant has agreed
in writing or otherwise (which may be recorded) that the manner and the extent of resolution
of the grievance is satisfactory; or (c) The complainant has withdrawn the complaint
voluntarily.
15. The Ombudsman shall pass an Award in the event of: (a) Non-furnishing of
documents/information as enumerated in clause 14(4); or (b) The matter is not getting resolved
under clause 14(9) based on records placed, and after affording a reasonable opportunity of
being heard to both the parties. (c) The Ombudsman shall also take into account, in addition,
the principles of banking law and practice, directions, instructions and guidelines issued by the
Reserve Bank from time to time and such other factors as may be relevant, before passing a
reasoned Award.
16. The Award shall contain, inter alia, the direction, to the Bank for specific performance of its
obligations and the amount, if any, to be paid by the Bank to the complainant by way of
compensation for any loss suffered by the complainant.
17. The Award passed shall lapse and be of no effect unless the complainant furnishes a letter of
acceptance of the Award in full and final settlement of the claim to the Bank concerned, within
a period of 30 days from the date of receipt of the copy of the Award.
18. The Bank should comply with the Award and intimate compliance to the Ombudsman within 30
days from the date of receipt of the letter of acceptance from the complainant.
19. Both Bank & Complainant have 30 days’ time from the date of receipt of communication of
Award or closure/rejection of the complaint, to appeal before the Appellate Authority.
20. Branches to ensure that a copy of the Scheme is available with them and to be provided to the
customer upon request.

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Internal Ombudsman - BO:

Reserve Bank of India (RBI) had, in May 2015, advised all public-sector and select private and
foreign banks to appoint Internal Ombudsman (IO) as an independent authority to review
complaints that were partially or wholly rejected by the respective banks. The IO mechanism was
set up with a view to strengthen the internal grievance redressal system of banks and to ensure
that the complaints of the customers are redressed at the level of the bank itself by an authority
placed at the highest level of bank’s grievance redressal mechanism so as to minimize the need
for the customers to approach other fora for redressal. RBI has reviewed the arrangement and
issued revised directions under Section 35A of the Banking Regulation Act, 1949 in the form of
‘Internal Ombudsman Scheme, 2018.

The relevant guidelines for the information / guidance of Nodal Officers:

1. he Bank shall examine the grievances as per its internal grievance redressal mechanism
and in case the Bank decides to reject a complaint and / or decides to provide only partial
relief to the complainant. It should invariably forward such cases to the Internal
Ombudsman for further examination along with copies of all documents.
2. Bank shall in their final reply to the complainant after obtaining internal Ombudsman’s
decision, explicitly mention that the complaint has been examined by the Bank’s Internal
Ombudsman.
3. Before submitting reply to Ombudsman complaints RO / CO to obtain the views of Internal
Ombudsman.
4. In no case the complaints shall be rejected by the branch or office without the knowledge
of Internal Ombudsman.
5. The Internal Ombudsman’s decision shall be binding on the bank.
6. The Internal Ombudsman will not entertain and examine First Resort Complaints, which
need to be first examined by the bank’s internal grievance redressal mechanism. The other
grievances i.e. complaints outside the purview of the Banking Ombudsman Scheme can also
be dealt with by the Internal Ombudsman only after they have been examined by the bank’s
internal grievance redressal mechanism and left unresolved /unresolved to the satisfaction
of the complainant.

Consumer Protection Act (2019)

 The Central Government has notified certain parts of the Consumer Protection Act, 2019
(hereinafter the ‘Act’) with effect from 20/07/2020.
 The Consumer Forums has been renamed as Consumer Disputes Redressal Commissions viz
District Consumer Disputes Redressal Commission, State Consumer Disputes Redressal
Commission and National Consumer Disputes Redressal Commission.
 Under the 2019 Act a complaint can also be filed at the place where the Complainant resides
or works for gain.
 A consumer can file complaint within 2 years from the date of action.
 Pecuniary Jurisdiction
District Consumer Disputes Complaints where value of the goods or services paid as
Redressal Commission consideration does not exceed ₹ 50 lakhs
State Consumer Disputes Redressal Complaints where value of the goods or services paid as
Commission consideration exceeding ₹ 50 lakhs up to ₹ 2 Crores.
National Consumer Disputes Complaints where value of the goods or services paid as
Redressal Commission consideration exceeds ₹2 Crores.

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 The appeals against order of the Commissions can be filed in the following manner:
Original Appellate Limitation Pre-Condition
Forum Authority
District State Within 45 days from date Deposit of 50% of the amount as
Commission Commission of order ordered by the Commission.
State National Within 30 days from date Deposit of 50% of the amount as
Commission Commission of order. ordered by the Commission
National Supreme Court Within 30 days from date Deposit of 50% of the amount
Commission of India of order. ordered by the Commission.

Garnishee order and Attachment Order

Garnishee Order Attachment Order
Issued by Court of Law Issued by Revenue Authorities
Applies to balance in the account at the time of Besides balance in the accounts at the time
receipt of order. Future credits are not covered. of receipt of order, it covers future credits.
Applicable only when relationship is that of Applicable when relationship between the
debtor and creditor between the bank and the bank and the customer is of debtor and
customer creditor at the time of receipt of order or at
a future date
When issued in single name, does not apply to When issued in single name, applies pro-
a joint account of the judgement debtor rata to joint account of the assesses with
with others. other person
When issued in joint names, applies to individual When issued in joint names, applies to their
accounts of judgment debtor with others. individual accounts like a
garnishee order
When issued in the name of a partner in as garnishee order
his individual capacity, not apply to
partnership a/c Same
When issued in the name of firm, applies to Just like garnishee order
individual account of partners
Applies to deceased accounts also Applies to deceased accounts also
Bankers right of set off enjoys priority Bankers right of set off enjoys priority
Applies to all accounts including FD not due Applies to all accounts including FD not due
Order received simultaneously. Preference to Attachment order
Preference to Attachment Order

 The bank upon whom the order is served is called Garnishee.

 Court first issues order nisi and then order absolute.
 It does not apply to overdraft or cash credit account of the borrower as no debt is due to
judgement debtor.
 Garnishee order can be issued to Head office of Bank which will communicate to branch
within reasonable time.
 ATTACHMENT ORDER without mentioning the amount is invalid order.
 If Bank fails to comply with Attachment Order, it will be liable for the amount of order and
deemed as an assessee in default.

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Kinds of charges over securities:

Nature of Security Types of security Kind of charge Defined Act
Immovable Property Land & Building Mortgage Sec 58 of TP Act

Actionable Claims ie Book Debt, FDR, NSC, Assignment Sec130 of TP Act

Unsecured Debts LIC policies
Movable Property/ goods Plant & Machinery, Pledge or lien or Indian contract act
Stocks, Vehicles etc Hypothecation SARFAESI Act
Paper Securities Shares, Bonds Lien Sec-170, 171 of
Debentures, Units, Indian Contract Act
Personal Promoters and 3rd Personal Liability Sec-126 of Indian
Guarantee party guarantee Contract Act

Lien:
 Lien is creditor’s right (given by debtor) to retain the possession of goods and securities
owned by the debtor until the loan has been paid. LIEN IS NOT AVAILABLE ON DEPOSITS.
 Particular lien (sec 170 of Indian Contract Act) available for single loan.
 General Lien (sec 171 of Indian Contract Act) available for a series of loans.
 Banker’s lien is general lien and also implied pledge. Right of set off is available.
 Law of limitation does not apply to lien.
 Lien is available: a) where possession is given by borrower to secure the loan b) loan is
due and lawful c) reasonable notice is given d) the loan and security is in the same name
and same capacity.
 Lien is not available: Where goods are held inconsistent with the right, held by bank in
trust or as an agent, or for a specified purpose, owned by more than one person, held in
safe custody or left in possession of the bank by mistake.

Negative lien: An undertaking by the owner of assets for not selling certain assets and not creating
any charge on these assets without permission from the creditor. It has no legal force and has
moral value only.

Right of set off:

 Combining 2 or more accounts having debit and credit balance in same or different
branches.
 It can be exercised if there is relationship of debtor and creditor, creditor and debtor
simultaneously, in the same name and capacity.
 Law of limitation does not apply for this.
 Available on deposit of guarantor after serving reasonable notice. (recall notice)
 On FDRs, available on maturity only and not during tenancy.
 Right can be exercised before meeting the garnishee order or attachment order.
 It cannot be exercised if the deposit is held as trustee, if held jointly (and loan is in single
name), if held by partnership firm (loan in partner’s name)
Mortgage:
 Right of Redemption is available for all types of mortgages
 Right of foreclosure is available for Mortgage by Conditional Sale only
 Personal liability of mortgagor is not available for Mortgage by conditional sale and
usufructuary mortgage
 Right to sale is available in simple, English and Equitable Mortgages

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 Right to sale without court intervention is available in English Mortgage

 Registration of Mortgage with Registrar of Assurances not required in case of Equitable
Mortgage. Other mortgages to be registered within 4 months. Additional 4 months can be
allowed by RoA.
 Equitable Mortgage (EMT) can be created by deposit of title deeds (Preferably original title
deeds) of the immovable property.
 Property located anywhere can be mortgaged anywhere, if the place is State notified one
 In case of Company, registration of mortgage is required within 30 days

Assignment:
 Transfer of actionable claim in favour of creditor to secure a loan.
 Actionable claim is an unsecured debt such as FDR, LIC Policy, NSC, Book Debt etc.
 Assignment is possible through writing only
 Acknowledgement to be given to the original debtor under Sec-131.
 Assignor cannot give to assignee, better title than what assignor has
 In case of default, the assignee can recover the actionable claim amount from the original
debtor without reference to assignor.

The Limitation Act, 1963:

 It extends to whole of India.

 Where the prescribed period for any suit, appeal or application expires on a day when the court is
closed, the suit, appeal or application may be instituted, preferred or made on the day when the
court re-opens (Section 4).
 Day from which limitation period starts (reckons) shall be excluded. Suit can be filed on the
anniversary date (Section 12).
 Acknowledgement in writing before the expiry of limitation period gives fresh period of limitation
from the time when the acknowledgement was so signed (Section 18).
 Payment by the debtor / his agent before expiry of prescribed period provides fresh period of
limitation from the time that payment was made (Section 19).
 Right of set off / lien is always available to the lender for the securities pledged, even after the
period of limitation is expired. If the limitation period as per the act is over, the lender loses the
right to file suit against the borrower in the court of law.
 The Limitation period for various types of loan account is as follows:
Demand Loan i.e. advance on the basis of
an agreement that it is payable on 3 years from the date of advance
demand.
Demand Promissory Note (DPN) 3 years from the date of execution of DPN
Advance on the basis of agreement where Limitation for each instalment will run separately
the amount is to be paid in instalments for a period of 3 years from the due date
Temporary Overdrafts 3 years from the date of overdraft
Limitation for each instalment will run separately
Term Loan
for a period of 3 years form the due date.
Cash Credit Hypothecation 3 years form the date of documentation
Cash Credit Pledge Limitation period not applicable
Bills of exchange / Promissory Note –
3 years from the date of presentation of the bill.
Payable at sight
Bills of exchange / Promissory Note –
3 years from the due date of the bill / note date.
Payable at a fixed time after

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Mortgage of immovable property where 12 years from the date of creation of mortgage
the mortgage debt is repayable on demand deed for the relief of sale of the mortgaged
and no instalments are agreed to property.
12 years from the date of first default of principal
If the mortgaged debt is repayable by
and / or interest for the relief of the sale of the
instalments
mortgaged property
3 years from the date of demand promissory note
Personal liability of the mortgagor
/ acknowledgement
Suit by mortgage for foreclosure 30 years when money becomes due
Execution of decree 12 years form the date of decree
3 years from the date of transaction (not from the
Credit Card overdues
date of FTV)
TOD in CASA 3 years form the date of allowing TOD
Limitation commences from the date of
commencement of repayment:

 AOD / LOR to be obtained after 24 months but

Education Loan before 27 months from the date of
commencement of repayment.
 For Minors– Appendix 5 of the Documentation
manual – Volume 1 to be obtained in addition
to AOD / LOR from both student and guardian.

 Period spent abroad is excluded for computation of limitation for filing suit. However, if in this case
AOD is mandatorily required, that can be obtained through post, must be stamped according to the
local law of the land where the borrower is residing, witness of the borrower must be done by the
foreign banker/ any other NRI having account with our bank / consulate officer of Indian embassy
situated over there and needs to be stamped as per local Indian law within a period of 3 months from
the date it is received in India.
 Illiterate or signed in Vernacular Language – AOD along with NF- 821 to be obtained with LTI / RTI
/signature in vernacular language.
 Partnership Firm – AOD to be signed by all the Partners or the partner who is duly authorized by all
the partners.
 Company – AOD to be signed by duly authorized person as per the constitution documents or approved
by the board of Directors.
 Housing Loan – No AOD is required for regular accounts. However, even if a single default occurs AOD
should be obtained as per the existing guidelines.
 AOD – NF760
 AOD from Legal heirs – NF761
 LOR – Appendix – 11 of the documentation manual.
 Significant change in signature – Appendix 10 of the documentation manual.

***************

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 केनरा बैंक प्रबंधन संस्थान

तितिटल उत्पाद
DIGITAL PRODUCTS
Debit Cards:

Acceptance:
 Domestic (within India) usage and Global usage.
 All RuPay Domestic cards issued by our Bank are also be accepted at:
i) NETS Network in Singapore (PoS terminals)
ii) BC Card Network in South Korea (ATM, PoS and E-commerce)
iii) Mercury Payments Services Network in UAE (ATM, PoS and E-commerce).
iv) Royal Monetary Authority (RMA) of Bhutan for Merchant Locations and ATM.
v) Network of Nepal SBI Bank Limited (NSBL), Nepal for PoS and ATM.
 Service charges for financial and non-financial transactions for our customers for usage
at ATM in Singapore, South Korea and UAE are ₹200 + GST & ₹50+GST, respectively.
 Service charges for financial(₹50+GST) and non-financial (₹10+GST) transactions
towards card usage at ATMs in Nepal in addition to existing charges are to be levied.
 International usage can be activated through ATM, Mobile banking or Net banking or
branches.

Affiliation: Visa/ Master/ RuPay Cards.

(A) Eligible Accounts:
Canara Bank Debit Cards can be issued to only to customers having Savings Bank/Current
Accounts. Bank will not issue debit cards to cash credit/loan account holders. These can be
issued to:
i) Individual accounts/Sole Proprietor
ii) Joint Account with operation severally
iii) Employees including those under suspension, ex-employees
iv) Non-Resident Indian (NRI)
v) Minor students who are aged 10 years and above.
vi) Illiterate customers
vii) P.A. Holder/ Holder of mandate
(B) Ineligible Accounts: The following accounts are not eligible for the Canara Bank Debit Card
facility:
a. Joint Accounts where operation condition is ‘Jointly’.
b. Accounts of all minors except Minor Students who are aged 10 years & above.
c. Accounts under Garnishee/ attachment orders or which are subject to litigation/ dispute.
d. Encumbered accounts.
e. Overdraft accounts with inventory limits like Cash Credit Accounts and other Loan Accounts.

(C) Features:
1. Cash withdrawal is permitted for Debit Cards linked to Staff OD accounts but International
Transactions are not permitted (690/2021)
2. The restriction on cash transaction through Debit card for OD accounts is not be applicable to
overdraft facility provided to Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. (365/2021)
3. OD/OCC Accounts Other than in the nature of personal loans and with any specific end-use
restrictions are not eligible for issuance of Debit card.
4. Debit Card Number is of 16 digits:
 The first 6 digits /8 digits represent Bank’s Identification Number (BIN).
 The next 9 digits/7 digits will be the running sequence of the card under a particular BIN.
 The last digit is the Checksum Digit number for determining the validation of the card
number.
 Non personalized cards are generated without any dependency on branch DP code.
5. The Bank has introduced “Virtual Debit Card” depending upon the business need, market /
industry trend or to meet customer needs.

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 Canara Institute of Bank Management
6. Bank has introduced National Common Mobility Card (NCMC) with offline & online
functionality as per the Regulatory guidelines.

Activation:
 Debit card holder can generate/regenerate PIN through GREEN PIN / FORGOT PIN option of
our Bank ATM. If Green Pin is generated, card will get activated. Bank has also facilitated
green pin generation facility through IVRS/MB/IB channels
 Physical PIN mailer is issued only for PMJDY (SB Product 119/108/127), BSBD and NRI (SB
Product 103) accounts. (74/2020)

Blockage of card / Hot Listing

The Debit card can be hot listed through CBS option CM01, Internet Banking, Mobile Banking (ai1
App) or Toll Free Number.

Validity:
The validity of debit cards is upto 5 years from the month of issue subject to being under the
validity of with the EMV certification (at present 31.12.2028)
Auto renewal on expiry of cards shall be extended only for active cards i.e. cards used at least
once for financial/non-financial transaction in the last 1 year.

Debit Card Transaction limits:

CARD TYPE TXN TYPE DAILY LIMIT

CASH 75,000/-
CLASSIC DEBIT CARD POS/E-COM 2,00,000/-
NFC (CONTACTLESS) 25,000/-
CASH 1,00,000/-
PLATINUM/ BUSINESS/ SELECT
POS/E-COM 5,00,000/-
DEBIT CARD
NFC (CONTACTLESS) 25,000/-

NOTE: Contactless transaction allowed upto ₹ 5000/- per occasion and 5 transactions per
day

 Cash withdrawals through Point of Sale Machines: Any number of transactions with a per-day
per card limit of ₹2000 in tier III to VI cities ₹1000/- in Tier I & II cities. The cash withdrawal
shall be in multiples of Rs. 100/- only
 OTP is required for Cash withdrawal above Rs 10,000 cumulative in a day by Canara Bank
Debit Card holders in Canara Bank ATMs. NRE & NRO accounts (SB Product Codes 103 and
104) are exempt from this requirement.
 IMPS through ATM: Funds can be transferred upto ₹50,000/= per day subject to a maximum
of Rs 2,50,000/- per month through ATM to inter/intra bank accounts with the input of MMID
and Mobile number of the beneficiary
 For making online transactions using Debit Card, as part of two factor authentication, OTP
and CVV is used to authorize online transaction

 Charges for ATM transactions beyond free transactions:

Our Bank ATMs (On Us Transactions):
 Free Transactions in a Calendar month (Financial and/or Non-Financial): For Customers-
6; Sr. Citizens-8; Staff-10.
 Charges above free transaction (Financial)-₹20 + GST; Charges above free transaction
(Non-Financial)- ₹5 + GST
Other Bank ATMs (Remote On Us):
 Free Transactions in a Calendar month (Financial and/or Non-Financial): Metro-3; Non-
Metro-5
 Charges above free transaction (Financial)-₹21 + GST; Charges above free transaction
(Non-Financial)- ₹10 + GST

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 केनरा बैंक प्रबंधन संस्थान

 Withdrawals by using other bank ATMs, each withdrawal is restricted to ₹10,000/-.

 For all the transactions that are rejected due to insufficient funds, ₹ 17/- Plus applicable
GST is levied.

Tariff Structure for Debit Card Issuance (excluding GST):

Charge Type Classic/Standard Platinum Business Select

Enrolment Fee NIL NIL NIL NIL
Activation/ NIL NIL NIL NIL
Membership Fee
Annual Fee Rs. 200/- Rs.500/- Rs.500/- Rs.1,000/-
Hotlist/Duplicate Rs. 150/- Rs. 150/ Rs. 150/ Rs. 150/
card on account of
loss of card
Replacement Rs. 150/- Rs. 150/- Rs.150/- Rs. 150/-
card
Debit card NIL NIL Rs.300/- NIL
inactivity fee
Charges for SMS On Actual On Actual On Actual On Actual
alerts
First time Green Pin Free Free Free Free
Generation
Regeneration of Rs.50/- Rs.50/- Rs. 50/- Rs.50/-
Green Pin

ATM Failed transactions:

In terms of Reserve Bank of India guidelines, the wrongful Debit/disputed amount in the
customer’s account, on account of ATM failed transactions shall be reversed within T+5 days
from the date of transaction. (T is the day of transaction and refers to the calendar date)
failing which a penalty of ₹100/- for each day of delay shall be credited to the customer’s
account along with the disputed amount.

Monitoring of Cash in ATM

 Timely replenishment of cash in ATMs to avoid Cash-outs.
 Penalty of ₹10,000/-if cumulative cash out in ATMs exceeds 10 hours in a month

Reconciliation and complaint redressal related to all types of financial transactions with
Debit Cards shall be attended by the concerned section of Reconciliation Vertical,
Operations Wing as defined in the functions of the wing.

Debit Card Variants:

Canara Campus Card (Cir 79/2011,216/2012, 369/2015)

 Canara Campus Card is a variant of Debit Card issued to the students.

 It is issued co-branded with reputed Educational Institutions
 Can be issued to minor students who are studying in 8th standard and above and who have
attained the age of 13 years & above
 Bank will provide rent-free Point of Sale Electronic Data Capturing Machine (POSEDC) at the
Campus of the College.
 No merchant commission will be collected from the Institutions where the Canara Campus
Cards are used at the POSEDC machines provided by us.
 The Canara Campus Card can be used like any other normal Debit Card besides using it to
pay College Fees.

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 Canara Institute of Bank Management

 The Student and the Institution shall open an account with the core banking branch of the
bank

Kisan Rupay Debit Card

 This card is issued to customers who have availed loans under Kisan Credit Card Scheme or
Kisan Suvidha Scheme
 Card is linked to SISO Account opened as Current Account under Product 226.
 Sweep-in & Sweep-out instruction is maintained between this SISO account & KCCS loan
account
 Features are similar to Rupay Classic Debit Card- Per day transaction limit allowed is ATM
Cash withdrawal allowed is ₹75,000 and POS terminal is ₹ 2,00,000/-

Canara Platinum Debit Card

Eligible accounts:
 Premium Variants of the card for elite customers.
 Issued in association with Visa, Master & NPCI
 Card Cash Withdrawal limit is ₹1,00,000/-
 Purchase limit POS/Online is ₹5Lacs

Benefits:
 Complementary Insurance Benefits
 Lost Card liability is limited upto₹5 lakhs from the time of intimation to the Bank.
 Baggage Insurance & Purchase Protection up to ₹ 50,000/- (Cir 647/2024)
 Risk of Death Due to Accident
 Death due to Air Accident: For self ₹ 8.00 lakh, For spouse ₹ 4.00 lakhs
 Death due to other than Air accident: For self ₹ 4.00 lakhs , For Spouse ₹ 2.00 lakhs

Canara Rewards Scheme in Platinum Debit card variant

 One Reward Point [equivalent to ₹ 0.25] for every successful non-cash transaction of
₹200/- through Platinum Debit cards. (Fraction of ₹ 200.00 will be excluded)

Canara Rupay Select Debit Card

 Global validity: Available; Card validity-5 Years;
 Per day cash withdrawal Limit-₹1,00,000; Per Day purchase Limit-₹5.00 lakhs;
 Accident Death & Permanent Total Disability Insurance’ cover by NPCI-₹ 10.00 lakhs;
 Insurance cover for Death due to Personal Accident – for card holder and spouse
o Air Accident:₹ 8.00 lakhs for self; ₹ 4.00 lakhs for spouse
o Other than Air Accident :₹ 4.00 lakhs for self; ₹ 2.00 lakhs for spouse
 Lost Card Liability’ Insurance cover-In excess of ₹ 1000 from the time of reporting of loss of
Card
 Purchase protection cover/: Baggage Insurance:-₹ 50,000/
 Reward Points from M/s Loyalty Rewards-One point for every ₹200/ transaction for
purchases/ payments. Value of each point is ₹ 0.25/-.
 Annual fee-₹ 1000/- + GST.

Canara RuPay Junior Debit Card:

 This card is personalized Debit Card, specially designed for issuing in the name of
minor students above the age of 10 years. The card is issued in Canara Junior
Accounts and the maximum withdrawal is restricted to ₹ 5000.
LAUNCH OF THREE NEW PREMIUM VARIANTS OF DEBIT CARD (IC/180/2024)
Launch of three new premium variants of Mastercard Debit Card:
1. Canara Mastercard World Debit card
2. Canara Mastercard Platinum Women Debit card
3. Canara Mastercard Platinum Millennial Debit card

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 केनरा बैंक प्रबंधन संस्थान

Lounge Access:
Mastercard Mastercard
Mastercard World
Platinum Women Platinum Millennial
Debit card
Debit card Debit card
Lounge Access 2 Self + 1 Guest per
2 per Qtr for Self 2 per Qtr for Self
(Domestic) Qtr
Lounge Access 2 Self + 2 Guest per
NA NA
(International) Year

NPCI INSURANCE:
 NPCI has continued insurance cover for RuPay Premium Cards for the Financial Year 2024-25
i.e., up to ₹2 Lacs for RuPay Platinum Cards and up to Rs 10 Lakhs for RuPay Select Cards to
eligible RuPay Cardholders for Accidental death or Permanent Total Disablement only.
 RuPay Insurance Program FY 2024-25 for RuPay PMJDY Debit Cards will be continued with
The New India Assurance Company Ltd & for Rupay premium cards, TATA AIG General
Insurance Company Ltd. is a service provider.
Insurance Claim on Loss of Card (IC/648/2024):
Sum Insured (INR) – Individual
Card Variant
(Each in excess of Rs. 1,000)
Canara Domestic/ Global Debit Cards 2,00,000
Canara Platinum/ Business/ Select/ Signature/World
5,00,000
Debit Card

Modification in Rupay Platinum Debit Card Lounge Program (IC/479/2024):

The new limits for Rupay Platinum debit cards will be in effect from 01.07.2024.
a. 1 (one) Domestic Airport lounge access per quarter
b. 2 (two) International Airport lounge access per annum

The limits for Rupay Select debit cards will remain as follows:
a. 3 (three) Domestic Airport lounge access per quarter
b. 3 (three) International Airport lounge access per annum
Introduction of new procedure for the management of Undelivered Debit Cards in branches.
(IC/411/2024):
a. Branches to enter/update in package (Integrated Debit Card Management) upon receipt of
undelivered Debit Cards for effective Monitoring.
b. Branches have to re-dispatch these return consignments to the respective customer address or
handover directly duly punching in the package.
c. All personalized Debit cards lying undelivered/ unclaimed at Branches beyond a period of 3
months from the date of return shall be destroyed at branches as per extant procedure after
exhausting all possible efforts for delivery.

AUTOMATED ISSUANCE OF 100 NON-PERSONALIZED RUPAY CLASSIC DEBIT CARDS TO BRANCHES

HAVING LESS THAN 200 CARDS INVENTORY (IC/375/2024):
Whenever the stock of Non personalized debit card in branches falls below 200, HO will
automatically process and dispatch 100 Non-Personalized RuPay Classic Debit Cards to the
respective Branches.

System-level restrictions to prohibit International Payments i.e., foreign outward remittance

transactions effected through Debit Cards linked to the following types of accounts
(IC/191/2024):
Non-Resident Ordinary (NRO) accounts
Savings Bank (SB) account / Current Account (CA) of Resident Individuals without PAN details in
CBS

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 Canara Institute of Bank Management
Canara Bank Credit Cards:
Variants of Canara Bank Credit card:
 Classic/Standard Credit Card, Gold Credit Card, World Credit Card (MasterCard), Platinum
Credit Card, Select Credit Card, Corporate Credit Card, Secured Credit Card

Minimum Eligibility Condition:

 Classic/Standard: Independent income with a minimum of ₹1 lakh gross per annum
 Gold Card: Independent income with a minimum of ₹2 lakh gross per annum
 World Card: Independent income with a minimum of ₹10 lakh gross per annum
Staff Members:
 Staff members should have a minimum annual gross income of ₹60000/- and minimum net
take home salary of not less than ₹4000/- p.m. For arriving at the net take home salary,
repayment towards housing loan may be added back to the salary.

For Secured Credit Card: For persons not having Income Proof, another variant of Credit Card
i.e. Secured Credit Card against Security of Term Deposit (KD and FD). Where the Credit Limit is
75% of the ledger balance for KDR and 75% of the Principal Amount of FDR.

For Corporate Credit Card: Credit Cards to Corporate are issued to our customers only after duly
complying with KYC Norms.
 Borrowers: With Asset Classification “Standard” status.
 Non-Borrowers: Credit worthiness to be ensured and must have 12 months’ satisfactory
dealings. This condition can be relaxed by sanctioning authority of RO Head and above duly
ensuring the credit worthiness

In case of non-individuals like Companies, Trusts, Clubs and associations, the relevant
documents like Memorandum of Association, Articles of Association, Certificate of incorporation,
Certificate of Commencement of Business, Board Resolution, Trust Deed, Rules and by-laws of
Clubs are to be obtained and reviewed wherever applicable.

NRI Nationals:
 Applicant should be an Indian Passport holder.
 The applicant should give an undertaking to the Bank that if he/she ceases to be an Indian
Passport holder, he/ she will surrender the card to the Bank without fail.
 The applicant should maintain a NRE/NRO account with our Bank.
 In case of NRIs, the cash withdrawal limit is fixed at ₹50,000/-per month subject to 50% of
the Card limit. (or equivalent in other than INR)

Features of Our Credit Cards:

Classic/ Gold credit World Credit

Platinum Select
Standard Card Card
Maximum 30% of gross 30% of gross 30% of gross 30% of gross 30% of gross
Limit annual annual annual annual annual
income, income income income income
Max- Max- Max- Max- Max-
₹5,00,000 ₹25,00,000 ₹50,00,000 ₹50,00,000 ₹50,00,000
Cash 50% of Card 50% of Card 50% of Card 50% of Card 50% of Card
withdrawal limit with Max limit with Max limit with Max limit with Max limit with Max
Limit ₹50000 ₹50000 ₹50000 ₹50000 ₹50000
Minimum
₹25000/- ₹25000/- ₹50,000/- ₹1,00,000/- ₹1,00,000/-
Limit
Maximum
Add-On 4 4 4 4 4
Cards

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Secured Credit Card:-Max Limit-75% of the ledger balance for KDR and 75% of the Principal
Amount for FDR. Term Deposit maturity should be at least one year at the time of sanction of
credit card subject to maximum ₹ 50,00,000/-.

Secured Credit Card issuance to Deposit Holders through Centralized web portal by marking
lien on deposits through STP (IC/896/2023):
 The facility enables the customer to request for secured credit card through Centralized web
portal without visiting the branch.
 For issuance of secured credit card by marking lien on deposits of customer, who have term
deposit of more than ₹40000.00 through Straight Through Processing (STP).

Cash withdrawal Limit-50% of Card limit with Max ₹50000,

Minimum Limit-₹25000/-,
Maximum Add-On Cards-4.
 The deposit shall be closed only after 7 days from the date of closure of Card to
obviate any probable claim by acquirer Bank at a future date

Corporate: - Max Limit-30% of gross annual income maximum ₹ 2,00,00,000/-.Cash withdrawal

Limit-50% Credit Card limit subject to maximum of ₹5 Lakhs. (For add on Card, per Card Maximum
Cash withdrawal limit is ₹25,000/-), Minimum Limit - ₹50,000/-, Maximum Add-On Cards-99

Acceptance: Domestic (within India) usage and Global usage

Affiliation: Visa/MasterCard/RuPay
Validity: 5years

Billing of dues in Credit Cards:

Normally the bills are generated on the following days:
a. Canara Visa (All Variants)/ Corporate Cards: 20th of every month.
b. Canara MasterCard/Rupay (All variants): 18th of every month.

Depending on the dates of transactions and billing cycle, the interest free repayment period
ranges from minimum of 20 days to a maximum of 50 days (applicable for purchases and cash
withdrawal).

There are two types of billing for our Cardholder viz.,

i) Direct billing,
ii) Debit to operative account of the cardholder with our Bank Branches.

Under direct billing, settlement of bills can be made by the cardholder in any of the following
modes by tendering:
1. NEFT (Account Number: 16-digit Card Number, IFSC code: CNRB0001912)
2. IMPS (Account Number: 16-digit Card Number, IFSC code: CNRB0CCIMPS)
3. Payment through Canara Mobile App (ai1 app)
4. Payment through Canara Bank ATM.
5. Through Canara Bank Branches.
6. Through branch via CBS Fast Path 14400.

NPA categorization in compliance to IRAC norms:

i. Once card overdues completes 90 days past due and slips to NPA, the NPA Card liability will
be transferred to CBS under product code (1170) attached to the DP code of the Card issuing
branch where the original Credit Card Application is available.
ii. Deemed NPA card liability also will be transferred as above.
iii. Interest applicable for NPA credit card liability shall be @ 2.50% per month.

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 Canara Institute of Bank Management
Credit card variant wise inactivity fee :
Sl No. Credit Card Variant Inactivity Fee
1 Classic and Standard Credit Card Rs.100 + Applicable GST
2 Gold Credit Card Rs.150 + Applicable GST
3 Platinum Credit Card Rs.200 + Applicable GST
4 Select and World Credit Card Rs.300 + Applicable GST

If the Card holder reaches minimum threshold usage (inclusive of add-on card) as per the
card variant, inactivity fee will not be charged:

Credit Card Variant wise - Threshold Limit for Turnover in the Card:

Turnover or the sanctioned Credit

Sl No. Card Variants
Card limit, whichever is lower
1 Classic and Standard Credit Card ₹ 12,000/-
2 Gold Credit Card ₹ 25,000/-
3 Platinum Credit Card ₹ 50,000/-
4 Select and World Credit Card ₹ 100,000

Other Fees
Particulars Fee Charged
Enrolment fees for Corporate Card(Main Card) ₹ 250/-
Annual Fee for Visa Corporate Credit card ₹ 400/- per Add-on Card
Replacement Fee ( Primary and Add on Card) ₹ 300/- per card
Mark up in case of transaction in foreign currency Upto 3% of transaction amount
Transaction fee for cash withdrawal against Credit Rs. 30/- per thousand or part
account at our ATMs and branches. thereof, with a minimum of Rs.
30/ per withdrawal.
At Abroad. At abroad 3% with a Min. of 5 US$
Charges in respect of notices/reminders sent to ₹ 50/- per notice
cardholders having overdues

Levying of Charges on default:

a) In case of default, interest charges at the rate of 2.50% per month + applicable GST will
be levied on carried over liability, till clearance.
b) In case of unsuccessful payment on the due date, a late payment fees of ₹250/- +
applicable GST will be levied per billing cycle, as per prevailing fee structure)
c) Penal interest, late payment charges and other related charges will be levied only on
the outstanding amount after the due date and not on the total amount.

Free Credit period: 20-50 days

Revolving Facility: The sanctioning authority may permit revolving payment facility to the
cardholders at its sole discretion and at the request of the card holder. The cardholder can pay
5% of the outstanding amount plus any services charges/fee/tax/ EMIs applied during billing
which will be mentioned as Minimum Amount Due (MAD) in the credit card statement.

The balance amount will attract service charge of: 2.50% per month (Annualized Percentage Rate
of 30%) + applicable GST. In case of Secured Credit Cards the service charge shall be 2% per
month (Annualized percentage Rate of 24%) plus applicable GST.

EMI Facility:
Purchases of ₹ 5,000/-(excluding Cash withdrawal and jewellery purchases) and above, can be
converted to EMI facility with repayment in instalments of 3,6,9 ,12,18 and 24 months.

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 केनरा बैंक प्रबंधन संस्थान

EMI conversion of Credit Card transactions in Canara ai1 app is also available.(696/2023)
EMI Charges:
EMI Processing fee - 2% of transaction amount with minimum of ₹100/- and Maximum of ₹200/-
Rate of interest on EMI - 13% p.a. for EMI period of 3,6 and 9 of 18 months
14% p.a. for EMI period of 12,18 and 24 months.
EMI Pre-closure penal charges: 2% of outstanding principle.

Cash withdrawal limit per billing cycle:

(i) 50% of the card limit subject to maximum ₹50,000.
(ii) For corporate cards, cash withdrawal limit is upto 50% of credit card limit subject to ₹5
lacs & for add-on card, maximum cash withdrawal limit is ₹25000/-per card.

Hot listing:
Canara Bank Credit Card can be hot-listed through Ai1 Mobile Banking app, Internet Banking,
SMS, IVRS

Credit Card Block functionality through Email (IC/155/2024)

Credit card customer can hotlist the card by sending email to “reportfraud@[Link]” with
subject line in the below format from his/her registered e-mail id :
Email Subject – BLOCKCC<Space><last 6 digits of credit cards>

Delegation of Power

Quantum and Sanctioning Authority:

[Link]. Individuals Corporate Sanctioning Reviewing Authority
Authority
Wherever circle is headed
Upto 30% of Upto 30% of by CGM- GM sanction at
General Manager/
Gross Annual Gross Annual Circle Office to be
Chief General
1 Income with Income with reviewed by respective
Manager at Circle
maximum of maximum of CGM, Circle Office. In all
Offices
₹50.00 Lakhs ₹200.00 Lakhs other cases, review shall
be done by DBS Wing Head.
Up to 30% of Upto 30% of Deputy General
Gross Annual Gross Annual Manager at
General Manager/ CGM at
2 Income with Income with Regional Offices /
respective Circle Office
maximum of maximum of Circle Offices/
₹25.00 Lakhs ₹50.00 Lakhs Branches
Up to 30% of Upto 30% of
Assistant General
Gross Annual Gross Annual Deputy General Manager at
Manager at
3 Income with Income with Regional Offices / Circle
Regional Offices /
maximum of maximum of Offices / Branches
Circle Offices
₹15.00 Lakhs ₹25.00 Lakhs
1) Assistant
General 1)Deputy General Manager
Up to 30% of Upto 30% of
Managers at at Regional Offices/Circle
Gross Annual Gross Annual
RAH/Branches Offices/Branches
4 Income with Income with
2) Assistant General
maximum of maximum of 2) Chief
Managers at Regional
10.00 Lakhs ₹15.00 Lakhs Manager/Divisio Offices /Circle Offices
nal Manager at
Regional Offices
Up to 30% of Upto 30% of Chief
Assistant General Manager,
Gross Annual Gross Annual Manager/Division
Regional Offices / Circle
5 Income with Income with al Manager at
Offices/ Branches / Retail
maximum of maximum of Retail Assets Hubs
Assets Hubs
₹5.00 lakh Rs.10.00 Lakhs / Branches
6 Up to 30% of NA Branch Head of Chief Manager / Divisional

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 Canara Institute of Bank Management

Gross Annual Small Medium, Manager / AGM/ at

Income with Large Branches or respective Regional
maximum of Manager/ Senior Offices/ Circle Offices /
Rs.1.00 lakh Manager in other Branches / Retail Asset
categories of Hubs, as the case may be.
branches like
RAH,VLB,ELB,MCB
, LCB etc.
(subject to the
below conditions)

Conditions:
1. Centralized auto debit is mandatory for all the sanctions up to AGM. However, it can be
relaxed at the discretion of the sanctioning authority of DGM and above.
2. Restriction in Credit Card Limit sanctioning powers to authorities up to Scale III:
Sanctioning powers of Credit Card Limit (fresh/enhancement) to Individuals up to Rs.
1,00,000/- of Manager/Senior Manager in charge of Small, Medium, Large & Very Large
Branches are restricted to the following customer segments only:
a) To salaried class where salary is being credited in their account with our Bank for the last
SIX months.
b) All Government & PSU employees (both State & Central Government) & Quasi Government
Employees who are confirmed in the service.
c) To all pre-approved customers published by Head Office.

d) Secured Credit Cards against the security of FD/KD: (up to the Delegated powers as per
the below table)
e) To all Mortgage based loan borrowers where repayment is prompt and not reflected
in SMA1/SMA2 during the last six months.
f) Customers where average balance in SB/Current Account for the last 12 months is
Rs. 50,000/- & above

Serial
Credit Card Variant MINIMUM LIMIT MAXIMUM LIMIT
Number
1 Classic and Standard Credit Card ₹ 25,000.00 ₹ 5,00,000.00
2 Gold Credit Card ₹ 25,000.00 ₹ 25,00,000.00
3 Platinum Credit Card ₹ 50,000.00 ₹ 50,00,000.00
4 Select Credit Card ₹ 1,00,000.00 ₹ 50,00,000.00
5 World Credit Card ₹ 1,00,000.00 ₹ 50,00,000.00

GREENPIN-A Go Green initiative:

New Debit /Credit/Prepaid Card applicants can generate new Pin through Green PIN. Existing PIN
holders can generate PIN through Forgot PIN.
Credit Card holders can generate green pin through; ATM Channel, Mobile Banking, Internet
Banking, IVRS.

Introduction of option to modify Credit Card billing cycle (IC/643/2024):

Customer can now request a change in their billing cycle through branch. Branches/offices can
exercise this option through Credit Card CMS package available in SAS as a onetime measure to
modify the billing cycle as per customer request.

Network Existing Payment Due Optional Billing Payment Due

SN
Type Billing Date Date Date Date
4th of
Mastercard/ 18th of 8th of succeeding 14th of every
1 succeeding
RuPay every month month month
month

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 केनरा बैंक प्रबंधन संस्थान

6th of
20th of 10th of 16th of every
2 Visa succeeding
every month succeeding month month
month

Insurance Claim on Loss of Card (IC/648/2024)

Sum Insured (INR) – Individual
Card Variant
(Each in excess of Rs. 1,000)
Canara VISA / MASTERCARD / RUPAY Credit cards
2,00,000
(Classic / Standard / Visa Corporate Cards)
Canara VISA/MASTERCARD/RUPAY Credit Cards
5,00,000
(Gold/ World/ Platinum/ Select)

Canara Bank Pre Paid Cards (Domestic)

We have three variants of Pre-Paid Cards, viz.:
 Canara Prepaid Card – Reloadable “Canara Prepaid Classic Card” –
 Canara Prepaid Card – Reloadable “Canara Prepaid Plus Card”
 Canara Prepaid Card – Non Reloadable “Canara Gift Card”

Salient Points about Domestic Pre Paid Cards

 The Card will be issued to our Customers only. In case of Corporates / Government
Departments / Institutions / Organizations who would be issuing the same to their
employees/ beneficiaries, have to furnish the list with details & copy of KYC document.
 The purchaser account should be fully compliant with KYC/AML/CFT as per extant guidelines
for issue of the Prepaid Card.
 Validity: Prepaid Classic & Prepaid Plus- Maximum: 5 years & Gift Card Maximum: 1 years.
Card will be issued with minimum un-expired period of 6 months.
 Card is meant only for domestic usage and denominated & settled in INR only.
 No interest is payable on the balances held in prepaid card account
 PPIs with no financial transaction for a consecutive period of one year shall be made inactive
by the Bank after sending a notice to the PPI holder/s. These can be reactivated only after
validation and applicable due diligence. These PPIs shall be reported to RBI separately.
 AS per the latest RBI guidelines, the maximum value of prepaid instruments issued to a
customer shall not exceed Rs 2,00,000/-. Also, maximum load amount in all prepaid
instruments issued per person (aggregate of all prepaid instruments issued to a person under
the customer ID) is capped at Rs 2, 00,000/- at any point of time in tune with RBI guidelines.
 Maximum Value of Gift card cannot exceed 10,000/-
 In case of Small PPI’s, the maximum load amount in any month cannot not exceed ₹10,000
and the total amount loaded during the financial year cannot not exceed ₹1,20,000;
 Gift cards cannot be reloaded.
 Cash-out or refund or funds transfer in Canara Gift Card is not permitted.
 Alerts shall be sent to the Prepaid Instrument (PPI) holder during the 45 days prior to expiry
of validity period of the PPI through SMS/ E-mail/ post or by any other means in the language
preferred by the holder indicated at the time of issuance of PPI.
 Registration of Mobile Number in CBS for Customers and Providing Mobile Number of
Beneficiary is Mandatory for sending OTP and transaction alerts.

In case of bank issued PPIs, cash withdrawal is permitted. However, cash withdrawal at PoS
devices shall be subjected to a limit of ₹2,000/- per transaction within an overall monthly limit
of ₹10,000/- across all locations (Tier 1 to 6 centres)

Enhancement in Daily limit for POS and E-com Transaction of Prepaid Plus Cards (IC/423/2024):
Card Type Txn Type Existing Daily Limit Revised Daily Limit
Visa Prepaid Gift Cash NA No change
Card POS/ E-Com Rs 10000 No change
Visa Prepaid Cash Rs 10000 No change

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 Canara Institute of Bank Management

Classic Card POS/ E-Com Rs 10000 No change

Visa Prepaid Plus Cash Rs 40000 No change
Card POS/ E-Com Rs 50000 Rs 200000

Insurance Claim on Loss of Card (IC/648/2024):

Card Variant Sum Insured (INR) – Individual (Each
in excess of Rs. 1,000)
Prepaid Card – International Travel 3,00,000
Prepaid Cards (Domestic) 50,000

Prepaid Wallet:
 National Electronic Toll Collection Tag (NETC) christened as FASTag is one of the prepaid
instruments facilitating electronic toll collection at Toll plazas on National Highways access
ing to the pre-paid amount of the tag holder through Radio Frequency Identification (RFID)
Technology.
 FASTag is a Domestic Prepaid Wallet used for toll payment.
 FASTag is issued to fully KYC compliant CASA account holders to comply with KYC/AML
guidelines.
 Transfer from FASTag wallet to wallet holder’s operative account through which it was
purchased is permitted.
 Maximum load amount in the wallet account per person (aggregate of all Tag wallets issued
to a person under the Customer ID) is capped at Rs 2.00 lakh at any point of time in tune
with RBI guidelines.
 Validity of FASTag is 3 years

 FASTag is only for domestic usage.; It is a semi closed prepaid Instrument.

 FASTag issuance is in tune with NPCI guidelines and FASTag colours varies with category of
vehicles,Tag application, RC copy of the vehicle, TAX PAN and mobile number are mandatory
for tag issuance.
 FASTag transactions are based on RFID technologies. Any applicable toll amount will be
deducted while the vehicle passes through the tollgate though RFID reader installed at
tollgate by NETC acquiry.
 FASTag reload option will be available at Branches through the POS (Point of Sale portal) of
the product provided by the vendor besides online alternate banking channels which includes
BBPS, Net Banking, Mobile Banking, UPI and Cards.
 FASTag runs on NFS network of NPCI.

FASTag issuance & loading fee:

Issuance Fee Re-issuance Fee Convenience Fee
(Inclusive of GST in ₹) (Inclusive of GST in ₹) (In ₹ exclusive of GST)
Convenience fee for online re-load
100.00 100.00
of Tag will be actual cost+₹10.00
SECURITY DEPOSIT: Security Deposit is a one-time deposit stored in the Tag-wallet permitted by
NPCI for NETC project to cover the risk.

Sl No Type of Vehicle Colour of Security

FASTag Deposit(Rs)
1 Car/Jeep/Van/Tata Ace and similar Light Commercial Violet 200
Vehicle
2 Light Commercial Vehicle–2Axle Orange 300
3 Bus–3Axle Yellow 400
4 Truck–3Axle Yellow 500

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5 Bus 2 Axle/ MiniBus,Truck2Axle Green 400

6 Tractor/Tractor with trailer,Truck,4,5&6axle Pink 500
7 Truck7 Axle and above Blue 500
8 Earth moving/Heavy construction Machinery Black 500

THRESHOLD AMOUNT: Threshold Limit is the minimum load amount to be maintained in the Tag
wallet account at all point of time and is dependent on category of vehicle (fixed based on the
average fee on the toll gate).
Sl No Type of Vehicle Colour of Threshold
FASTag Amount
1 Car/Jeep/Van/Tata Ace and similar Light Commercial Violet 100
Vehicle
2 Light Commercial Vehicle –2 Axle Orange 140
3 Bus –3Axle Yellow 300
4 Truck –3Axle Yellow 300
5 Bus 2Axle/ Mini Bus, Truck 2Axle Green 300
6 Tractor/Tractor witht railer,Truck,4,5&6axle Pink 300
7 Truck 7Axle and above Blue 300
8 Earth moving/ Heavy construction Machinery Black 300

Canara International Travel Prepaid Card

Canara International Travel Prepaid Card is designed exclusively for customers who travel outside
India. It is a unique product with multiple currencies loaded on the same card.

FEATURES:
The card is a multi-currency prepaid card – the value of the card shall be paid up front.

Validity - 5 years
The Card is a non-personalized EMV CHIP Card with PIN/Signature.
The card can be used for making payments for online purchase, merchant outlets as well as to
withdraw cash from ATM abroad.
If the card contains more than one currency, any transaction done in the currency that does not
exist in the card, default currency wallet (set by Visa / MasterCard / NPCI as the case may be)
or as per the currency hierarchy, chosen by the card holder, will be debited.

Canara International Travel Prepaid Card kit contains two cards & respective PIN mailers, Primary
card & the backup card.
In case the cardholder lose/misplace the primary card or the primary card is damaged, the
Backup card can be activated through International Travel prepaid card Web Package provided
to Branches (CBITPC Package)/ or calling call centre/ by logging in to the Customer portal
provided in the Bank’s website.
The card cannot be used in India, Nepal, Bhutan, and the exempted countries Democratic People's
Republic of Korea, Iran, Myanmar as per RBI/regulatory guidelines.

Cardholders can retain the unspent foreign exchange in the card up to USD 2000 or its equivalent
in other currency for future trips till expiry of the card, as per extant FEMA guidelines. Unspent
currency in the card in excess of USD 2000 or its equivalent in other currencies needs to be
surrendered within 180 days of arriving in India.

Type of Card: Non-personalized EMV CHIP card with PIN/Signature

Type of Currencies: Up to three currencies can be loaded in the same card [Cir155/2021]:
(i) United States Dollar(USD)
(ii) EURO (EUR)
(iii) Australian Dollar(AUD)

CardValidity: 5 years with Re-loadable options

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 Canara Institute of Bank Management
Card Usage Abroad: Travel Card can be used for POS, Online Payment, Online Shopping and ATM
Withdrawal at foreign locations. The cardholder shall solely be responsible for compliance with
FEMA, AML and CFT guidelines or any other regulatory guidelines issued from time to time.

Charges:
Initial Card Sale Charges: ₹ 200 + GST
Reload Fee: ₹50+GST
Encashment Charges: ₹ 100 +GST
Cross currency Markup fee: 3%

Hotlisting of Canara International Travel Prepaid Card:

 Along with Primary Card, a “Back up” card will also be provided in the card kit. In case of
emergency situation like loss of Primary Card, cardholder can hotlist the primary card &
activate the backup card.
 Cardholder can hotlist the primary card & activate the backup card by logging into the
cardholder’s web portal provided in Bank’s website.
 In case the cardholders require a replacement card despite the above facility, they may
contact our call center and the card shall be re-issued free of cost & dispatched to the
desired address.

Canara Bank International Travel Prepaid CARDS (CB-ITPC) - modification in SOP for Liberalised
Remittance Scheme (LRS) Limit Check & Tax Collection At Source (TCS) on Loading/ Re-
Loading. (IC/624/2024)
Loading/reloading of ITPC is equivalent to foreign outward remittance and should be considered
under Liberalised Remittance Scheme (LRS). After consolidating the utilized limit and proposed
limit, limit should not cross the maximum permissible LRS limit i.e. USD 2,50,000. Tax Collection
at Source (TCS) collection on Loading/reloading Canara International Prepaid Cards to be done
as per guidelines issued by ETT Section, Financial Management Wing.

Canara Bank Internet Banking:

Canara Bank Internet Banking Facility is available for Retail and Corporate customers.

Eligibility:

Accounts Wise:
Retail:
1. Any running account of individual/s including Staff, NRI and Minor represented by Guardian,
Minor above 10Years.
2. Joint Account/s where operation condition is severally- Joint or First (JOF) or Joint or others
(JOO).
3. Such account/s should be fully KYC compliant.

Corporate:
 Proprietorship firm.
 Partnership concern.
 Joint Stock Companies (Both Public and Private).
 Societies/ Club/Associations/Co-operatives/Trusts
 Government Bodies.
 Hindu Undivided Family (HUF)

Eligible Persons:
Retail
 Individuals
 By account holder himself/herself.
 Minor accounts operated by Guardians, by guardian of the minor.
 In respect of joint accounts where operation condition is specified as JOF or JOO, different
user ids will be issued to each account holder of the account on specific request to the Bank.

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 केनरा बैंक प्रबंधन संस्थान

 Visually challenged persons can access the Net Banking services using screen reading
software and Braille Key board.

Corporate:
1. Sole Proprietorship Firm:
The Sole Proprietor of the firm.
Letter of authority holder/Power of Attorney Holder of the proprietor.

2. Partnership Firm:
Those partners who are authorized to operate the account.
Authorized person/s nominated by the Partners

3. Companies:
Both Public and Private Companies including Government Bodies.
Authorized person/s to operate the account as per latest Board Resolution/Mandate.

INELIGIBLE ACCOUNTS FOR NET BANKING FACILITY:

 Joint accounts where operation condition is other than severally.
 Account/s of illiterate persons.
 Account/s under Court orders/Attachment orders
 Dormant account/s.
 Frozen account/s for various reasons like disputes, litigation etc.
 Any other accounts not included under eligible accounts category.

Internet Banking – Retail :

The Retail Internet Banking can be accessed by visit the corporate website or through the
following url : [Link]

New Facilities Added:

 FOREX Transactions
 CIDL – Canara Insta Deposit Loan. Online loan on Deposits
 Profile updation: Facility to update Address, PAN, Email online without visiting branch.
 Agriculture loan repayment and download of statement online.
 Investment in Government Schemes such as Public Provident Fund(PPF),
SukanyaSamriddhiYojana(SSY), Senior Citizen Savings Scheme (SCSS), KisanVikasPatra (KVP),
National Pension Scheme (NPS).
 Payment of bills online through Bharat Bill Pay System (BBPS).
 Insurance products are made available online.
 Opening of Demat Account Online.
 Application for Equity, SME and Debt IPO's and Rights Issue online.
 Application for Mutual Fund online.

On Boarding:
The retail users and Proprietorship concerns can be on-boarded either through admin module or
through self-registration mode.

Pre-requisites for Self Registration

I. Mobile Number must be registered with the Account Number
II. Account Number must be linked with Active Debit Card
III. Account should be fully KYC compliant
IV. Among corporate customers only proprietorship customers can avail the self-registration
facility.
V. Transaction Password can be generated using active Debit Card or Aadhar (if linked to the
account) The Internet Banking admin user creation & maintenance activity, corporate user
creation & maintenance activity is done by TM sections of Circle Offices

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 Canara Institute of Bank Management
Services offered (Internet Banking Corporate):

The following add-on features are available for Internet Banking Corporate:
(i) Bulk File Upload. Customers can now upload upto 25 files per day.
(ii)Maker Checker Facility for TAX/ GST/ CUSTOMS Payment
(iii) Trade Finance: Initiate LC, shipment etc.

Security and Safety Measures:

I. SMS alerts are sent to the registered mobile number while performing major financial and
non-financial transaction like successful logging in, adding Beneficiary, effecting funds
transfer and Amount debited, credited etc.
II. Transaction limits can also be modified to suit the customer
III. CanDigital: ‘CanDigital’ which is implemented for IMB users is a safe and secure method of
online Banking. It ensures that customers are always connected to the correct site and
protects them from hacking /malicious programs. All corporate customers have to use it
mandatorily to access Net Banking. If they want waiver, a request has to be made as per
format in HOCir293/2013.

Funds transfer Limits:

Retail Customer:
1. Own account transfers: No maximum limit.
2. Within Canara Bank Other Account/ Multiple Accounts: Maximum 50,00,000/.
3. Quick Pay Within Bank: Maximum 50,000/-
4. NEFT: Maximum 50,00,000 /-
5. RTGS: Maximum 50,00,000/-
6. IMPS: Maximum 5,00,000/-
7. Quick Pay through IMPS: Maximum 10,000 /-
8. GBM Tax Payment: No maximum limit.
9. IIT External Payment: 2,00,000/-
10. Payment Gateway Transaction: Maximum Rs 50,00,000/-
11. Indian Railway Catering and Tourism Corporation Limited: Max 2,00,000 /-

Sanctioning Authority: Retail Internet Banking:

Per Day Transaction
Sl NO Eligibility Sanctioning Authority
Limit Package
The customers can do it in Self
Rs 5,10 and 15.00 Individuals having
1 Service Mode or the Branch Head/ In
Lakhs satisfactory dealings
charge/
and also based on need
2 Rs 25.00 Lakhs RO Head
/ purpose of higher
3 Rs 50.00 Lakhs Circle Head
limits
4 Above Rs 50.00 Lakhs DBS Vertical Head

For Corporate Customers:

The following global limits have been introduced in Internet Banking – Corporate module namely:
1) Corporate Standard Limit
2) Corporate Silver Limit
3) Corporate Gold Limit
4) Corporate Customized limit
For new registrations including that of Proprietorship accounts, Corporate Standard Limit will
be set as default limit.

Default limit is as under:

(i) Own account – No Limit

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 केनरा बैंक प्रबंधन संस्थान

(ii)NEFT and RTGS – 2Cr (Standard Limit), 5 Cr Silver Limit, 20 Cr Gold Limit
(iii) Bulk– 5Cr Standard Limit, 8 Cr Silver Limit, 20 Cr Gold Limit
(iii) Bill Payment–30Lacs (Standard), 50 lacs (Silver), 100 lacs (Gold)

Mobile Banking:

Canara ai1 Super App

The upgraded and revamped version of our Mobile Banking App with more than 300 features has
been launched on 22.07.2022.

The app has been renamed Canara ai1.

The app is available on play store/app store.

ELIGIBILE ACCOUNTS:
Mobile banking and UPI facility is presently available only for the customers of the type
“Individual” or “Sole Proprietorship”. Mobile banking and UPI facility is extended to following
account for the above mentioned customers.

 CASA accounts - Savings Bank, Current Account, Overdraft (individual account only).
 Joint Account/s where operation condition is severally - Joint or First (JOF) or Joint or others
(JOO).
 Mobile Banking is available for Residents and Non Resident Accounts in tune with account level
restrictions. Non-Resident accounts shall be on-boarded to UPI with Indian Mobile number for
performing domestic transactions.
 Account/s should be fully KYC compliant.
 Account/s of Visually Challenged Person/s
 Individually operated Account of Minor students. Aged above 10 years and up to 14 years: Non-
Financial Rights (View Only). Aged above 14 years and up to 18 years: Financial Rights (up to
Rs 5,000/- per day).

INELIGIBLE ACCOUNTS
 Joint accounts where operation condition is other than severally.
 Account/s of illiterate person/s.
 Account/s of Minor/s. (Other than Individually operated and aged between 10 to 18 years.)
 Letter/Power of Attorney holders
 Account/s of HUFs, Trusts, Clubs and Associations.
 Account/s under Court orders/Attachment orders
 Dormant account/s.
 Corporate Accounts.
 Frozen account/s for various reasons like disputes, litigation etc.
 KYC non-compliant accounts.
 Any other accounts not included under eligible accounts category.

MOBILE BANKING SERVICES

Mobile Banking Services can be accessed only through the Mobile Handset equipped with
functioning SIM (same Mobile Number should be registered with Bank) and Internet Connectivity.
Our mobile banking app Canara ai1 has 300+ features/services,

Transaction Limits:

Mobile Banking:
 Quick Pay : Rs 25000/- per day
 Cumulative per day Transaction limit for user is Rs.15,00,000/- (Inter Bank Rs. 7,50,000/- and
Intra Bank Rs.7,50,000/-).
For fund transfer through IMPS, the upper ceiling per day per customer is Rs.5,00,000/

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 Canara Institute of Bank Management
UPI :
UPI transaction limits (debit) on SB/CA/OD

Limit per Cumulative Max no of

Category Trnx daily limit Trnx
20 trx in 24
Fund transfer between Individuals (P2P) 1 lakh 1 lakh hours
Payment to Non Verified Merchants (P2PM/P2M)
1 lakh 1 lakh No Limit
Payment to Verified Merchant and Special
category (Mutual Funds, Insurance etc.) P2M) 2 Lakhs 2 Lakhs No Limit
Collect request, Share Intent link & Pay and
QR share Pay for P2P, P2PM & P2M (Non Verified offline
Merchants) 2000 10000 5 Trnx per day
IPO, ASBA 5 lakhs 10 lakhs 3 Trnx per day
Payment to Hospitals and Educational
services (Verified Merchants) 5 lakhs 5 lakhs No Limit
UPI Lite 500 4000 No Limit

A maximum cumulative of Rs.4,00,000/- or 25 transactions shall be permitted to be credited to

a single account under Peer to Peer (P2P) category in 24-hours.
Maximum 20 number of UPI debit transactions shall be allowed from a single account under Peer
to Peer (P2P) transaction category in 24-hours.

Transaction limit for Rupay Credit Card on UPI:

Payment to Merchants, Special category merchants. (P2M)

Existing Modified
Limit per TRNX Rs. 1 lakh Rs. 2 lakhs
Cumulative daily
Rs. 1 lakh Rs. 3 lakhs
limit
No. of Txns No limit No limit

Cooling Period for new beneficiary added in Mobile Banking: (Policy/55/2024 and
IC/840/2023):

Permitted Transaction Limits for New Beneficiary

Beneficiary added Full Limit (Up to per
between Nil Up to Rs.50,000/- day cumulative
limit permitted)
6.00 AM and 9.00 After 1 hour and up
0 to 1 hour After 12 hours
PM to 12 hours
After 1 hour or 6.00
9.00 PM and 6.00 AM whichever is
0 to 1 hour After 12 hours
AM later and up to 12
hours

Introduction of Corporate Mobile Application (ai1 Corporate) for Bank’s Corporate Customers.
((IC/835/2023):
All Corporate Customers who are registered for Corporate Internet Banking are eligible for
registering on the App. A new option “Register/Deregister for Corporate Mobile Application” is
be enabled in the Internet Banking login page of the users. Using this option, the users can
“Register” or “Deregister” for Corporate Mobile App. On boarding of the same user from Multiple

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devices is restricted.

BHIM Aadhaar POS:

Eligibility criteria for the Merchant:

The applicant Merchant can have any CASA account/s of category Individual, Proprietorship or
Joint Account (operating condition –JOO & JOF only) with the Bank and the settlement will be to
the account provided by Merchant during the process of On-boarding

MDR Charges – NIL; Rent – ₹ 50/- per month

Switching and Interchange Fee: BHIM Aadhaar Pay successful transactions have an interchange
fee of 0.05% + taxes and Switching fee of₹ 0.25 (exclusive of taxes).

The transaction limits for Merchants and Customers transacting under BHIM Aadhaar PoS is
mentioned below:

Revised Limit
Particulars [Link] Transaction
(Rs.)
Minimum transaction limit NA 10/-
Maximum transaction limit (Issuer Side) NA 10,000/-
Issuer / Remitter limit per day 5 10,000/-
Weekly Limit for Issuer / Remitter 10 15,000/-
Monthly Limit for Issuer / Remitter 15 20,000/-
Acquirer / Merchant limit per day NA 50,000/-
Weekly Limit at Acquirer / Merchant Side NA 2,00,000/-
Monthly Limit at Acquirer / Merchant
NA 5,00,000/-
Side
Cooling Period (transaction gap between 02
2 HOURS
transaction at Issuer Side

BHIM QR:
 BHIM QR is a QR Code based payment collection mechanism for the Merchant to accept
payment for the Goods/Services rendered. The Customer upon purchase of Goods/Services
rendered can make payment to Merchant by scanning the BHIM QR code using any of BHIM UPI
(our Bank UPI app or any other Bank UPI app or NPCI BHIM app) enabled applications.
 All enrolled merchants are provided with coloured BHIM QR standee along with 2 stickers in
standard size centrally.

Introduction of BHIM QR Merchant Self Onboarding Functionality (IC/215/2024):

 BHIM QR Merchant Self Onboarding functionality will enable eligible customers to onboard
themselves on Canara Bank BHIM QR Merchant platform via SMS link shared with them
 Sound Box facility for Bhim QR Merchant is also available.
 Monthly rental for the same is Rs 130/-+ GST
 Waiver of monthly rental for net worthy customer on the basis of cost benefit analysis as per
below mentioned criteria which will be waived automatically through CBS functionality for
those who maintaining average CASA balance of Rs 50,000 and above or OD limit of Rs 10 lacs
and above.
 Waiver of Monthly rental charges on Sound Box facility for BHIM QR merchants for Canara
Privilege (214), Canara Elite (218) and Canara Delite (1656) Current Accounts also available.

MDR Charges – Waived for both offline and online QR.

Merchant Discount Rate: For Unsecured OD Accounts, NPCI has issued OC 108/2021-22 and

पदोन्नति- तििरणात्मक 2024-25 105

 Canara Institute of Bank Management
instructed to charge 1.5% interchange fee of transaction value for UPI transaction on unsecured
OD Accounts Merchants.

Rental Charges:
 There is NO rental charge for the QR Codes delivered to the Merchants. However, for availing
sound box facility to receive BHIM QR Transaction notification the nominal rental charges to
be borne by merchants.
 Bank shall be providing sound boxes for a period of 5 years under OPEX model on monthly
rental basis to the above BHIM QR merchants. Sound box facility will be provided to Canara
Bank merchants at a nominal monthly rent of Rs130/- plus GST per device.
 While providing Sound boxes to BHIM QR merchants, Branches shall obtain Consent Form –
cum- Letter of Undertaking from the Merchant as per Annexure – I(IC/232/2023). In case of
non-recovery of terminal due to loss or in case of physical damage, merchant needs to
reimburse the cost of device @ Rs. 1,500+GST.

Point of Sale (PoS):

MDR for Debit Cards:

 For Rupay debit cards irrespective of merchant category and transaction value- Nil
 For debit cards powered by VISA and MasterCard,
o For Small Merchants (Turnover upto Rs,.20 Lakhs during the previous financial year).-
Physical POS-Not exceeding 0.40%
o For Other Merchants (Turnover above ₹20 Lakhs during the previous financial year).
 Single Txn upto value upto Rs 2000 – 0.40%; above Rs 2000/- - 0.90%

MDR for Credit Cards:

 Classic/standard Cards-₹1.50% + GST
 Premium Cards-₹2.25 % + GST
 Super Premium Cards-₹2.50 % + GST
 International cards (Both Debit and Credit cards)-₹ 3.00 % + GST

Standard rent fixed for MEs (POSEDC / BHARAT QR):

 QR code-₹50 + GST; MPOS-₹200 + GST; PSTN (wired POS)-₹400 + GST; GPRS without printer-
₹450 + GST; GPRS with printer-₹500 + GST; Android POS without printer-₹550 + GST; Android
POS with printer-₹ 600 + GST

WHATSAPP Banking Services (IC/833/2023):

 Our Bank has introduced WhatsApp Banking Services through Mobile No.90760 30001.
 30+ services that are non financial, re-directional and Generic in Nature are available
including balance enquiry, account summaries, EMI calculators etc.
 Any vital information request will be replied based on OTP authentication

INTRODUCTION OF UPI 123PAY: FACILITY FOR EXTENDING UPI SERVICES THROUGH IVRS
(IC/834/2023):
 IVR number for availing the facility is 9558123123
 Services are offered in 8 regional languages apart from English and Hindi. Users can give voice
input for performing transactions.
 Services offered under UPI 123PAY are:
 Money transfer to Mobile Number, Balance Enquiry., UPI PIN change and Language selection.
 Maximum Limit per transaction is Rs 1000, Maximum limit per day is Rs 5000/-

****************

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सरकारी कारोबार मोड्यूल

GOVERNMENT BUSINESS MODULE

SOVEREIGN GOLD BOND SCHEME 2023-2024 (IC/494/2023, 878/2023):

Central Government issued one scheme called “Sovereign Gold bond scheme” and has distinct
series for every tranche and the same will be indicated on the bond issued to the Investor.
It can be issued by Schedules commercial banks, designated Post Offices, Stock Holding
Corporation of India Ltd. (SHCIL), Clearing Corporation of India (CCIL) and authorized stock
exchanges as specified in the annexure of the govt. notifications generated time to time.
Issuance: - To be issued by Reserve Bank of India on behalf of the Government of India
Eligibility:-The SGBs will be restricted for sale to resident individuals, HUFs, Trusts, Universities
and Charitable Institutions.
Denomination: - The SGBs will be denominated in multiples of gram(s) of gold with a
basic unit of One gram

Quantum:- Minimum permissible investment will be One gram of gold. The maximum limit of
subscription shall be 4 Kg for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities
per fiscal year (April-March) notified by the Government from time to time. A self-declaration to
this effect will be obtained. In case of joint holding, the investment limit of 4 KG will be applied
to the first applicant only.

Issuance Price:-Price of SGB will be fixed in Indian Rupees on the basis of simple average of
closing price of gold of 999 purity, published by the India Bullion and Jewellers Association
Limited (IBJA) for the last three working days of the week preceding the subscription period.
The issue price of the SGBs will be less by Rs. 50/- per gram for the investors who subscribe
online and pay through digital mode.

Issuance form:- The SGBs will be issued as Government of India Stock under Government
Securities Act, 2006. The investors will be issued a Certificate of Holding for the same. The SGBs
will be eligible for conversion into demat form.

Redemption Price: - The Redemption Price will be Indian rupees based on simple average of
closing price of gold of 999 purity, of previous three working days published by IBJA Ltd.

Interest: -The investors will be compensated at a fixed rate of 2.50 percent per annum payable
semi-annually on the nominal value.

Payment option: -Payment for the SGBs will be through cash payment (up to a maximum of Rs.
20,000/-) or demand draft or cheque or electronic banking.

Tenure: - After 8 years from the date of issue, premature redemption may be permitted after
5th year from date of issue. The gold bonds issued in form of Stock certificate are transferable
and tradable.

Loan against bond: - The SGBs can be used as collateral for loans. The loan- to- value (LTV)
ratio will be as applicable to any ordinary gold loan mandated by the Reserve Bank from time to
time

Tax: -The interest on SGBs shall be taxable as per the provision of Income Tax Act, 1961 (43 of
1961). The capital gains tax arising on redemption of SGB to an individual is exempted. The
indexation benefits will be provided to long term capital gains arising to any person on transfer
of the SGB.

KYC documentation: -Know-your-customer (KYC) norms will be the same as that for purchase of

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 Canara Institute of Bank Management
physical gold. KYC documents such as Voter ID, Aadhaar card/PAN or TAN /Passport will be
required. Every application must be accompanied by the ‘PAN Number’ issued by the Income
Tax Department to individuals and other entities.

Tradability: -SGBs shall be eligible for trading.

SLR eligibility:- The SGBs acquired by the banks through the process of invoking
lien/hypothecation/pledge alone, shall be counted towards Statutory Liquidity Ratio.

Commission:-Commission for distribution of the SGB shall be paid at the rate of one percent of
the total subscription received by the receiving offices and receiving offices shall share at least
50 percent of the commission so received with the agents or sub agents for the business
procured through them

Sovereign Gold Bond Premature Redemption and Data Management Package(519/2024):- To

facilitate the ease of entire process of SGB premature redemption and other service requests, a
new in-house SAS package “Sovereign Gold Bond Premature Redemption and Data Management
Package” has been made available under SAS w.e.f. 1st July, 2024.
SAS > Govt. Business > Govt. business admin Module > RBI Bond > SGB redemption.
 In the package, the following functionalities has been enabled: - 1) SGB Premature redemption
Request 2) SGB Certificate Issue Request 3) Demat Conversion Request 4) Nominee Addition
Request 5) Miscellaneous updation request 6) Death claim transfer – Transfer to Nominee / Legal
Heirs and third-Party Transfer 7) SGB forms

THE PUBLIC PROVIDENT FUND SCHEME, 2019 (IC/332/2024):

As per the powers conferred by Section 3 of the Public Provident Fund Act, 1968 (23 of 1968),
the Central Government hereby makes the Public provident fund scheme,[Link] has come into
force from 1st July 1968. New rules were introduced in July 2019

Eligibility:-Any individual (Self or on behalf of a minor or a person of unsound mind of whom he

is the guardian), Joint account is not permitted.

Not Eligible:- NRIs / HUFs are not eligible(In case an account holder, who is an Individual or
Minor or a person of unsound mind, subsequently becomes Non-resident Indian during the period
the account is in operation, the account may be continued till its maturity and the benefits
available to the depositor in the said account shall be available only on non-repatriation basis
and the account shall not be allowed to be extended or continued beyond maturity). If an
account holder ceases to be a citizen of India, the account shall be closed or deemed to be
closed from the last day of the month preceding the month in which the depositor ceases to be a
citizen of India. Only one account allowed for an Individual.

KYC and other documents: Usual KYC with PAN card. If PAN is not available, Form 60 as
defined in the Income Tax Rules, 1962 shall be submitted by the account holder, provided the
PAN is submitted to the Branch within a period of six months from the date of opening of the
Account. An individual shall also submit Aadhaar Number issued by the Unique
Identification Authority of INDIA, where the Aadhaar Number has not been assigned,
proof of application of enrolment for Aadhaar at the time of opening an account and
furnish the Aadhaar number within a period of six months from the date of opening of
account for linking the account with Aadhaar Number, if a depositor has already opened
an account and has not submitted his Aadhaar number to the Branch, he shall do so
within a period of six months with effect from the 1st day of April, 2023 and in the
event of failure of the depositor to submit the Aadhaar number within the specified
period of six months, his account shall cease to be operational till the time he submits
the Aadhaar Number to the Branch;

Limit of Subscription: - Any amount not less than Rs. 500 and not more than Rs. 1,50,000/- in a

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year. If excess contribution is made in a year it will not carry any interest (In multiples of Rs
50/-)

Number of subscription: As per new PPF rules, there is no restriction on the number of deposits
in the PPF account in a year.

Transfer of Account: -Transfer from one bank to another bank/ Post office and vice versa is
permitted by charging a fee of Rs 100/-.

Duration:
 15 years from the end of the Financial Year in which the PPF account was opened.
 Can be extended for one or more block period of 5 Years (Request for extension of
account for each maturity period shall be made by the accountholder before the expiry
of 1 year from the maturity of the account).
 It requires minimum 16 yearly contributions and the account matures for closure on the
1st day of the 17th Financial Year.

Interest:
 Interest shall be eligible for a calendar month on the lowest balance at the credit of an
account between the close of the fifth day and the end of the month.
 Interest shall be credited to the PPF account at the end of each year.
 Interest shall be credited at the end of the financial year irrespective of the change of
the account office due to transfer of the account during the year.

Nomination :
 Maximum 4 Nominees

Discontinuation of account: -
 Any account, in which the account holder, having deposited Rupees Five Hundred in the initial
year, fails to deposit the minimum amount in the following years, shall be treated as
discontinued.
 An account treated as discontinued as mentioned above, may be revived during its maturity
period on payment of a fee of Rs 50/- along with arrears of minimum deposit of Rs 500/- for
each year of default:
 The account holder of a discontinued account shall not be eligible to open a new account before
closure of such discontinued account after maturity: no loans to be granted against discontinued
accounts.

Withdrawals from the Fund: -

 Any time after the expiry of five Years from the end of the Financial Year in which the account
was opened, the account holder may, avail withdrawal from the balance to his credit, an
amount not exceeding fifty per cent of the amount that stood to his credit at the end of the
fourth Financial Year immediately preceding the year of withdrawal or at the end of the
preceding year, whichever is lower:

 Provided that the amount of loan outstanding, if any, along with interest shall be paid by
the account holder before availing the facility of withdrawal under this paragraph:
 “Provided further that the facility of withdrawal may be availed only once in a Financial
Year only from the accounts which have not become discontinued”.
 In case of an account opened on behalf of a minor, or a person of unsound mind, the
guardian may apply for the withdrawal for the benefit of the minor or a person of unsound
mind by submitting the following certificate to the Branch, namely: - “Certified that the
amount sought to be withdrawn is required for the use and welfare of Shri/Smt./Master/
Kumari……………………………. who is a minor/ a person of unsound mind/ a person incapable of
operating his account due to physical infirmity and is alive on this……the day of………….
(month), ………. (year)”

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 Canara Institute of Bank Management
Closure of account or continuation of account without deposits after maturity:-

 Any time after the expiry of 15 years from the end of the Financial Year, in which the
account was opened, the account holder may apply to the branch for the closure of his
account. The branch shall allow the withdrawal of the entire balance along with due
interest up to the last day of the month proceeding the month in which the account is
closed.
 The account holder may retain his account after maturity without making any further
deposits for any period and the balance in the account will continue to earn interest at
the rate applicable to the scheme:
 Provided that the account holder may make one withdrawal, in each financial year, of
any amount within the balance.
 Once the account is continued without deposits for more than a year, the account holder
shall not have the option again to continue the account with deposits.

Extension of account with deposits after maturity: -

 The account holder on the expiry of 15 years from the end of the Financial Year in which
the account was opened, may extend his account and continue to make deposit for a
further block period of 5 years by applying to the branch.
 The option of extension of account shall be made by the account holder before expiry of
one year from the maturity of the account. No deposits can be made in the account, if
the account holder fails to give his option to continue the account within one year from
the date of maturity. Any deposit made in such account shall be treated as irregular and
refunded by the branch immediately without any interest, provided that the balance in
the account on the date of maturity shall continue to earn interest up to the end of the
month preceding the month of closure.
 Facility of partial withdrawal of the Scheme shall be available to the account extended,
subject to the condition that the total withdrawal during the block period of 5 years
shall not exceed 60 % of the balance at credit at the commencement of the block
period, provided that the withdrawal, subject to the ceiling as specified above may be
made either in a single or in yearly installments.
Loans:
 At any time after the expiry of one year from the end of the Financial Year in which the
initial subscription was made but before expiry of five years from the end of the
Financial Year in which the initial subscription was made, the account holder may apply
to Branch for obtaining a loan consisting of a sum of whole rupees not exceeding 25% of
the amount that stood to his credit at the end of the second Financial Year immediately
preceding the year in which the loan is applied for.

Repayment of loan and interest:-

 The principal amount of a loan shall be repaid by the account holder before the expiry of
36 months from the first day of the month following the month in which the loan is
sanctioned, provided that the repayment may be made either in one lump sum or in
installments.

 After the principal amount of the loan is fully repaid, the account holder shall pay
interest thereon in not more than 2 monthly installments at the rate of one per cent per
annum of the principal for the period commencing from the first day of the month
following the month in which the loan is drawn up to the last day of the month in which
the last installment of the loan is repaid, provided that where the loan is not repaid, or is
repaid only in part, within a period of thirty six months, interest on the amount of loan
outstanding shall be charged at six per cent per annum instead of at one per cent per
annum with effect from the first day of the month following the month in which the loan
was obtained, to the last day of the month in which the loan is finally repaid.
 Interest rate on loan against PPF is 1 % above the prevailing rate on PPF deposit.

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Tax Benefits:
 Contributions to PPF account qualify for deduction from Income under Section 80C of the
Income Tax Act subject to the limit of Rs 1,50,000/- in a Financial Year.
 Interest credited in the PPF account is totally exempted from Income Tax under Section 10.3 I
of the Income Tax Act.
 The balance held in the PPF account is completely free from Wealth Tax.

Premature closure of account:

 An account holder shall be allowed premature closure of his account or the account of a minor
or person of unsound mind of whom is the guardian on any of the following grounds, namely:
i) Treatment of life threatening disease of the account holder, his spouse or dependent
children or parents, on production of supporting documents and medical reports confirming
such disease from treating medical authority;
ii) Higher education of the account holder, or dependent children on production of documents
and fee bills in confirmation of admission in a recognised institute of higher education in India
or abroad;
iii) On change in residency status of the account holder on production of copy of Passport and
visa or Income-tax return, Provided that an account under this Scheme shall not be closed
before the expiry of five years from the end of the year in which the account was opened.
Provided further that on such premature closure, interest in the account shall be allowed at a
rate which shall be lower by one percent than the rate at which interest has been credited in
the account from time to time since the date of opening of the account, or from the date of
commencement of the current block period of five years, as the case may be.

Closure of account on death of the account holder:

 In the event of the death of the account holder, the account shall be closed and the nominee
or the legal heir shall not be allowed to continue the account. The balance in the account of
the deceased account holder shall earn interest till the end of the month preceding the month
in which the eligible balance is paid to the nominee or the legal heir, as the case may be.

Protection of credit balance from attachment:

 Amount standing to the credit of any account holder shall not be liable to attachment under
any order or decree of any court in respect of any debt or liability incurred by the account
holder. Now, customers can use NEFT facility (807/2023) for sending the contribution amount
from the Bank account maintained with other bank to PPF account maintained at our Bank
(Canara Bank) by using the following details: - Account: PPF account number IFSC Code:
CNRB0001953

SENIOR CITIZENS’ SAVINGS SCHEME, 2019 (326/2013, 153/2020, 140/21, 516/2021,

IC/125/2022,IC/297/2023, IC/396/2023, IC336/2024):
All the Branches are authorized to open accounts under the Senior Citizens’ Savings Scheme,
2019.

Eligibility: Resident Individual

a) Who has attained 60 years of age on the date of account opening.
b) Who has attained the age of Fifty Five (55) years or more but less than 60 years, and who
has retired on superannuation or otherwise on the date of opening of an account under
this Scheme, subject to the condition that the account is opened by such individual
within one month of the date of receipt of the retirement benefits and proof of date of
disbursal of such retirement benefit(s) along with a certificate from the employer
indicating the details of retirement on superannuation or otherwise, retirement benefits,
employment held and period of such employment with the employer, is attached with the
application.

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 Canara Institute of Bank Management

c) The retired personnel of Defense Services (excluding Civilian Defense employees) shall be
eligible to open an account under this scheme on attaining the age of 50 years subject to
the fulfillment of other specified conditions.

Type of account:-Individual capacity or jointly with the spouse (First applicants age will
determine the eligibility and no age-limit for second applicant). Both the spouses can open
single account and joint accounts with each other with the maximum deposit of up to Rupees
Thirty Lakhs in each account provided both are individually eligible to open the account.

No. of account: -Can have more than 1 account but total deposit should be maximum Rs.
30,00,000/-

Deposit: -Only One deposit in an account. Min Rs. 1000/- and in multiples of Rs. 1000/- Max Rs.
30,00,000/-and amount is restricted to the retirement benefits (payment due to the account
holder on account of retirement on superannuation or otherwise like PF/Gratuity/commuted
pension/Leave encashment/ ex gratia etc.) received. Excess to the ceiling amount, deposited
shall be refunded to the account holder immediately.

Duration: -5 Years, can be extended only once for a further period of 3 years but should apply
within 1 year from the date of maturity and it will be deemed to have been made from the date
of maturity.

Interest: -The deposit made under this Scheme shall bear interest as per the Interest rate
prevailing on the date of opening; the present rate of interest being 8.20 % per annum w.e.f
01.04.2023 till further revision.
Interest shall be payable from the date of deposit to 31st March/30th June/ 30th
September/31st December on first working day of April/July/October/January, as the case may
be, in the first instance and thereafter interest shall be payable on first working day of
April/July/October/January as the case may be. Interest is calculated on the basis of quarter
not on no of days.
The interest for any period less than a quarter shall be calculated as per the following formula: -
Number of days in the period x Interest for the quarter
Total number of days in the quarter

Premature closure of an account:

1. In case an account is closed before one year after the date of opening of account, interest
paid on the deposit in the account shall be recovered from the deposit and the balance shall
be paid to the account holder.
2. In case the account is closed after the expiry of one year but before the expiry of two years
from the date of its opening, an amount equal to 1.5 % of the deposit shall be deducted and
the balance shall be paid to the account holder.
3. In case the account is closed on or after the expiry of two years from the date of its opening,
an amount equal to 1 % of the deposit shall be deducted and the balance shall be paid to the
account holder. iv. In case the account is closed before expiry of one year from the date of
extension, an amount equal to 1 % of the deposit shall be deducted and the balance shall be
paid to the account holder.
4. The account holder availing the facility of extension of account may withdraw the deposit
and close the account at any time after the expiry of one year from the date of extension of
the account without any deduction.
5. Multiple withdrawals from an account shall not be permitted

Closure of account:
The deposit made at the time of opening of the account shall be paid on or after the expiry of 5
years or after the expiry of each block period of three years where account was extended as per
norms
. In case of death of the account holder before maturity or extended maturity, the account shall
be closed and deposit refunded on an application along with interest as applicable to this
Scheme till the date of the death of the account holder, to the nominee or the legal heirs, as

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the case may be.

Provided further that in case of a joint account, or where the spouse is the sole nominee, the
spouse may continue the account by applying to the Branch, on the same terms and conditions
as specified under this Scheme, if the spouse meets eligibility conditions under the Scheme on
the date of death of the account holder.
Where both the spouses have opened separate account or accounts under this Scheme
and either of the spouses dies during the currency of such account or accounts, then
such account or accounts standing in the name of the deceased account holder shall not
be continued in accordance with the first proviso of sub-paragraph (ii) and shall be
closed.

Nomination: - Can nominate up to 4 individuals.

Death Claim Settlement:

Where valid nomination is in force on date of death of Depositor(s) - Branch has full powers in
case of death claim of SCSS where nomination is available in an account.
Where no valid nomination is in force on date of death of Depositor(s)
a) Eligible amount not exceed Rupees five lakh, the Authorized Officer of the Branch or the
authority specified by the Government Savings Bank to which the Branch belongs, for reasons
to be recorded in writing, may pay the same to any person appearing to him as the rightful
claimant and to his satisfaction to be entitled to receive the amount or to administer the
estate of the deceased, on an application in Form- 11 accompanied by the following
documents; namely: - a) Death certificate of the account holder; b) Passbook or deposit
receipt or statement of account in original; c) Affidavit in Form-13; d) Letter of disclaimer in
Form-14; e) Bond of Indemnity in Form-15; and f) Identity proof of the legal heir;
b) Eligible amount above Rupees five lakh, the amount shall be paid by the Branch to the
claimant on submission of the probate of his will or letters of administration of estate or a
succession certificate granted under the Indian Succession Act, 1925 (39 of 1925) issued by
the Court, or legal heir certificate issued by the revenue authority not below the rank of
Tahsildar having jurisdiction along with the following documents; namely: -Claim form;
Passbook or deposit receipt or statement of account in original; Death certificate of the
account holder; and Identity proof of the legal heir;
c) Provided further that, in case of any dispute raised before the Branch and before the
payment of claim, the amount shall be paid by the Branch to the claimant on submission of a
succession certificate granted under the Indian Succession Act, 1925 (39 of 1925) issued by
the court only along with the following documents; namely: - a. Claim form; b. Passbook or
deposit receipt or statement of account in original; c. Death certificate of the account
holder; and d. Identity proof of the legal heir.”

Transfer of a/c: - Transfer of SCSS account from Branch to Branch or from our Bank to other
Bank/Post Office and vice-versa is permitted, by charging a fee of Rs 100/- only.

NPS-ALL CITIZEN MODEL SCHEME GUIDELINES (225/2019, 870/2020, 614/2021,

833/2021, IC/434/2023):

Objective
To provide old age income & extending old age security coverage to all citizens - Reasonable
market based returns over the long term

Operational Framework
It is a Government of India Scheme - Administered by PFRDA (Pension Fund Regulatory and
Development Authority) - NSDL (National Security Depository Ltd) would act as CRA (Central
Recordkeeping Agency) - National Pension System Trust (NPST) established by PFRDA is the
registered owner of all assets under NPS. NPS opening service also available at B.C. locations
(833/2021).

Eligibility: Any individual citizen of India (both resident and Non-resident) in the age group of

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 Canara Institute of Bank Management
18-70 years (as on the date of submission of NPS application) can join NPS and continue or defer
their NPS Account up to the age of 75 years. Corporates like entities registered under the
Companies Act, 2013 or a cooperative society registered under any law relating to Co-operative
societies, bodies established or incorporated under any act of Parliament or any law enacted by
a state legislature or under any order/notification issued by the Central / State Government,
Public Sector Enterprises or any Government company, registered Partnership Firms, Limited
Liability Partnerships (LLPs), Proprietary Concerns, Trusts / Society, Foreign companies having
registration u/s 591- 608 of Companies Act 1956 in respect of their eligible Indian employee(s) ,
Foreign / diplomatic missions operating in India (Embassy/High Commission/Consulate etc.) in
respect of their eligible Indian employee(s)., International Organizations operating in India (UN /
WHO / World Bank / ADB / IMF etc.) in respect of their eligible Indian employee(s). etc. are
also eligible to join the scheme.

Features:-
Every individual subscriber is issued a Permanent Retirement Account Number (PRAN) card and
has a 12 digit unique number.

Under NPS account, two subaccounts – Tier I & II are provided.

TIER- I TIER- II
Individual Pension Account Optional Account – Require an active Tier-I
Withdrawal as per rules/regulations only Unrestricted withdrawals
Minimum contribution to open Rs. 500 Minimum contribution to open Rs. 1000
Minimum contribution per year Rs. 1000 Minimum contribution Rs. 250
There is no upper limit for the maximum There is no upper limit for the maximum
contribution contribution
Tax benefits are available No tax benefits on contribution/gains

 NRI/OCI having Tier-I account are restricted to activate Tier-II account

 Subscriber can select different Pension Fund and Investment Option for his/her NPS Tier I
and Tier II accounts.

Fund Management Schemes

The NPS offers two approaches to invest subscriber’s money:

(I). Active choice – NPS offers with the flexibility to design customer’s own portfolio. Depending
on his/her risk appetite, one can design their portfolio by allocating Funds amongst available
four asset classes. This is called Active Choice. Following are the four asset classes are
available under Active choice:
a. Asset class E or Equity upto a maximum of 75%
b. Asset Class C or Corporate Bonds upto a maximum of 100%
c. Asset Class G or Government Securities upto a maximum of 100%
d. Asset Class A or Alternate Assets upto a maximum of 5%
(II). Auto choice -In Auto choice, Amount will be automatically invested in asset classes - E, C
and G - in defined proportions based on customer’s age. As individual’s age increases,
exposure to Equity and Corporate Debt is gradually reduced and that in Government
Securities is increased.

Depending upon the risk appetite of subscriber, there are three different options available within
Auto Choice-Aggressive, Moderate and Conservative.
a. Aggressive (LC-75) – Maximum Equity exposure is 75% up to the age of 35
b. Moderate (LC-50) - Maximum Equity exposure is 50% up to the age of 35
c. Conservative (LC - 25) – Maximum Equity exposure is 25% up to the age of 35. Switch of
investment scheme / Pension Fund Manager (PFM) to another.

 Subscriber can select different Pension Fund and Investment Option for his/her NPS Tier I and

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Tier II accounts.

 NPS offers its subscriber the option to change the scheme preference four times in a financial
year.

Multiple NPS account:

Multiple NPS accounts for a single individual are not allowed.

Selection of Pension Funds (PFs) registered under NPS:-

1. Pension Funds (PFs) for Government Sector:-
i) SBI Pension Funds Pvt. Ltd. ii) LIC Pension Fund Ltd. iii) UTI retirement solutions ltd.
2. Pension Funds (PFs) for other than Government Sector:-
i) SBI Pension Funds Pvt. Ltd. ii) LIC Pension Fund Ltd. iii) UTI retirement solutions Ltd. iv)
HDFC Pension Management Co. Ltd. v) ICICI Prudential Pension Fund Management Co. Ltd.
vi) Kotak Mahindra Pension Fund Ltd. vii) Aditya Birla Sunlife Pension Management Ltd.
viii) TATA Pension Management Ltd. ix) MAX Life Pension Fund Management Ltd. x) Axis
Pension Fund Management Ltd.

Tax benefit for NPS Contribution:

Exclusive Tax Benefit for NPS subscribers u/s 80CCD (1B) an additional deduction for the
investment up to Rs. 50,000 in NPS (Tier I account) has been introduced under subsection 80CCD
(1B). This is over and above the deduction of Rs. 1.5 lakh available under section 80CCE.

Exit and Withdrawal:

Partial Withdrawal: After completion of 3 (Three) years subscriber can withdraw 25% of
his/her own contributions for specific reasons viz illness, disability, education or marriage of
children, purchasing or construction of residential House or Flat in own or joint name, starting a
new venture. A subscriber can partially withdraw upto a maximum of 3 times during his/her
entire tenure in NPS.

Premature Withdrawal: In case of pre-mature exit (exit before attaining the age of
superannuation/attaining 60 years of age) from NPS, at least 80% of the accumulated pension
wealth of the Subscriber needs to be utilized for purchase of an annuity providing for a regular
pension to the Subscriber and the balance pension wealth is paid as a lump sum to the
Subscriber. However, Subscriber can exit from NPS only after completion of 5 years in NPS. In
case the total corpus in the NPS account is less than or equal to Rs. 2.5 lakh, the Subscriber can
avail the option of complete (100%) Withdrawal.

Normal Withdrawal: When a Subscriber reaches the age of Superannuation/attaining 60 years of

age, at least 40% of the accumulated pension wealth of the Subscriber needs to be utilized for
purchase of an Annuity providing for a regular pension to the Subscriber and the balance pension
wealth is paid as lump sum to the Subscriber. In case, the total corpus in the NPS account is less
than or equal to Rs. 5 lakh, Subscriber can avail the option of complete (100%) Withdrawal.

Subscriber also has the option to:

1. Continue in NPS till the age of 75 years or exit any time after such continuance before 75
years.
2. While exiting from NPS, subscriber can
a) Defer receiving the lump sum (60% corpus) till the age of 75 years or withdraw the same
in installments till 75 years
b) Defer Annuity purchase (40% corpus) for a maximum period of 3 years.

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In case of unfortunate event of death of a subscriber, the nominee/legal heir can withdraw the
entire accumulated corpus. The nominee / family members of the deceased subscriber can also
purchase annuity, if they so desire.

Pension Fund Regulatory and Development Authority (PFRDA) has appointed an Ombudsman
(422/2024) to receive, consider, and facilitate the resolution of complaints or grievances under
the ambit of PFRDA (Redressal of Subscriber Grievance) Regulations, 2015 and amendments
thereto hereinafter referred to as ‘Grievance Redressal Regulations’ (hosted on the website of
Authority i.e. [Link]).

In terms of the aforesaid Grievance Redressal Regulation, an appeal to the Ombudsman may be
filed by the complainant under the following circumstances:
(a) whose grievance has not been resolved within 21 days from the escalation of the grievance
with the NPS Trust; or
(b) where a complaint has been made directly against the NPS Trust and is unresolved within 21
days; or
(c) In relation to a complaint against any other pension scheme regulated by PFRDA, whose
grievance remains unresolved for a period of 30 days from the filing of complaint against such
pension scheme;

SUKANYA SAMRIDDHI ACCOUNT SCHEME 2019 (295/2016, 155/2020, IC/397/2023)

As per the notification of Ministry of Finance, the Central Government. All the Branches are
authorized to open accounts under Sukanya Samriddhi.

Salient features.

ELIGIBILITY:
Only one a/c for the girl child, who has not attained the age of 10 Years by the resident
Guardian by submitting the Birth certificate issued by Municipal Authority or any office
authorized to issue Birth and Death Certificate by the Registrar of Births and Deaths or the
Indian Consulate.
A maximum account of 2 girl children in one family can be opened, more than 2 a/cs are
permitted only when the guardian submits affidavit and proof of Birth of Twins/ Triplets in first
or Second order of Birth. But the same is not permitted if two or more surviving girl child results
in family in the first order of Birth itself.

Opening of Sukanya Samriddhi Scheme Accounts [140/2021]

With the introduction of the Hybrid Business Correspondent (BC) Model, Opening of Sukanya
Samriddhi Scheme Accounts is one of the new services offered at Business Correspondent
Outlets. Availability of the subject services will facilitate customers of rural/ unbanked areas to
utilize the same at the Business Correspondent locations at their convenience, instead of visiting
Branches.

QUANTUM:-
● Minimum Initial Deposit Rs 250/- And In Multiples Of Rs 50/-
● Subsequent Deposit :- In Multiples Of Rs 50/-
● Minimum in a Financial Year Rs 250/- & maximum Rs 150000/- till 15 Years from the date of
opening of account.
● Below Rs 250/- in a year will be treated as default and can be regularised any time during
the period of deposit by paying penalty of Rs 50/- and the minimum deposit of Rs 250/-for
each defaulted financial Year.
● Any deposits made more than 150000/- due to technical reasons, should be refunded
immediately and shall not be eligible for interest.

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● Period of deposit: -
The Sukanya Samriddhi Account matures on completion of a period of twenty-one years (21
Years) from the date of the opening of account. But the deposits may be made in the
account till the completion of a period of fifteen years from the date of opening of account.

ROI:- Deposits in the account shall earn interest as notified by the Government of India from
time to time and the present rate being 8.20 % per annum w.e.f . 01.04.2024.

The interest shall be calculated for the calendar month on the lowest balance in the account
between the close of fifth day and the end of the month. The interest shall be credited to the
account at the end of each financial year.

NOMINATION: - Maximum 4 individual can be nominated.

TAX BENEFITS: - The investments made in the Scheme will be eligible for deduction upto a
maximum of Rs.1.50 Lakhs for the amount deposited in the SSY account under Section 80C of the
Income Tax Act. The Interest accruing on deposits is such account will be exempt from Income
Tax.

PAN No.: - Required to be submitted, if not available at the time of opening of a/c form 60 can be
obtained but the same is to be submitted within 6 months, failing which the a/c shall ceaseto be
operational till submission of PAN.

TRANSFER: -A/c can be transferred from one branch to other branch or to other bank/ Post
office and vice versa by paying Rs 100/-. Interest will not be credited on the day of transfer to
other bank/ Post office but will be paid by the transferee bank for the current FY.

WITHDRAWAL: -For Education Purpose of the a/c Holder, actual requirement, maximum up to
50% of the balance outstanding on preceding year can be withdrawn provided the a/c holder has
th
attained the age of 18 Years or passed 10 std (with documentary proof) whichever is earlier.
It can be one lump sum or maximum 5 installments (one per year) The application for
withdrawal under sub-paragraph (i) shall be accompanied by documentary proof in the form of a
confirmed offer of admission of the account holder in an educational institution or a fee-slip
from such institution indicating such financial requirement. Provided that the amount of
withdrawal shall be restricted to the actual requirement on account of fee and other charges
required at the time of admission as shown in the offer of admission or the relevant fee-slip
issued by the educational institution

PREMATURE CLOSURE OF ACCOUNT:-

● Due to death of the a/c holder (balance along with interest due till the date of death and
afterwards at the rate applicable to Post Office Savings a/c, will be paid to guardian)
● Case of extreme compassionate grounds such as medical support in life-threatening diseases
of the account holder or death of the guardian and the operation /continuation of a/c is
causing undue hardship to the a/c holder, provided branch is satisfied. But not before
completion of 5 Years from the date of a/c opening. Outstanding balance in the account with
interest due as applicable to the Scheme will be paid.
● For the reason of intended marriage of the a/c holder on furnishing of a declaration duly
signed on non-judicial stamp paper attested by the notary supported with proof of age
confirming that the applicant will not be less than eighteen years of age on the date of
marriage and just before 1 month of intended marriage or after 3 months of Marriage.
Outstanding balance in the account with interest due as applicable to the Scheme will be
paid.

CLOSURE ON MATURITY: After 21 years from the date of opening of a/c .

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Now, customers can use NEFT facility (807/2023) for sending the contribution amount from the
Bank account maintained with other bank to SSY account maintained at our Bank (Canara Bank)
by using the following details: - Account: SSY account number IFSC Code: CNRB0001953

KISAN VIKAS PATRA (465/2018,499/2020, IC/401/2023):

All our PPF authorized Branches are designated to implement the new Kisan Vikas Patra Scheme,
2019.

ELIGIBILITY:
● Only Resident Individuals, individuals on behalf of Minor.
● Either singly or Two individuals jointly (E or S or Jointly) in the names of up to three adults.

NOT ELIGIBLE:NRIs and HUFs, Companies Firms etc.

DEPOSIT: Minimum Rs 1000/- and in multiples of 100/- with no Maximum limit

PERIOD:-Deposit made in the account doubles on maturity. Duration being 115 months w.e.f.
01.04.2023 (9 Years 7 months)

ROI:- presently7.5%pa(Subject to govt. notification from time to time)

DEPOSIT:-By cash, Cheque, DD (Certificate will be issued from the date of realization)

MAHILA SAMMAN SAVINGS CERTIFICATE, 2023 (538/2023):

Eligibility: Woman for herself. Guardian on behalf of minor girl.

Type of account: Single holder account from 01.04.2023 to 31.03.2025

Interest: The deposit made under the scheme shall bear interest at the rate of.5% per annum,
compounded Quarterly (If Deposit isn’t in consonance with the provisions of this scheme Interest
payable at the rate applicable to Post Office Savings Account.)

Investment/ Deposit: Minimum Deposit: 1000/- and any sum in multiples of 100. Maximum
Deposit: 200000/- Only one investment in one account allowed, any number of account can be
opened upto max Rs.2,00,000/- however a gap of 3 months to be there between existing and
new account.

Tenure/Payment on Maturity: Deposit shall mature on completion of 2 Years from the date of
the deposit.

Withdrawal from account: After expiry of one year from the date of opening of account but
before maturity of the account by submitting application in Form-3.

Premature closure of account: Premature closure is allowed in case either death of account
holder or extreme compensate ground.

Nomination: Maximum 4 individual can be nominated.

Issue of Passbook/Deposit Receipt/Statement of Accounts: The passbook or deposit receipt or
statement of account shall be duly stamped and signed by the authorised official of the branch
and issue to customer.

Agency charges payable to the authorised banks: Receipt – Physical Mode –Rs. 40, Receipt – e-
Mode – Rs. 9, Payments 6.5 Paise per Rs.100 turnover.

Interest Rates on Small Savings Schemes for Q2 of FY 2024-25 (From 1st July, 2024 to 30th
September, 2024)(490/2024).

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FLOATING RATE SAVINGS BONDS 2020 (Taxable) (424/2023)

Eligibility for Investment: A person resident in India, (a) in her or his individual capacity, or (b)
in individual capacity on joint basis, or (c) in individual capacity on any one or survivor basis, or
(d) on behalf of a minor as father/mother/legal guardian, Hindu Undivided Family (HUF) (If the
holder of the bond subsequently becomes Non-Resident Indian during the currency of the bond,
shall continue to hold the bonds and reparability of Interest/maturity proceeds would be subject
to provisions of FEMA guidelines.)

Limit of Investment: No maximum limit for investment

Tax Treatment: Interest on the bonds will be taxable under the Income tax Act, 1961
Subscription: Cash (up to Rs. 20,000 only)/Drafts/Cheques or any electronic mode acceptable to
the Receiving Office.

Form of the Bonds: Electronic form and held at the credit of the holder in an account called
Bond Ledger Account (BLA), opened with the Receiving Office.

Nomination: Nomination and its cancellation shall be in accordance with the provisions of the
Government Securities Act, 2006 (38 of 2006) and the Government Securities Regulation, 2007,
published in Part III, Section 4 of the Gazette of India dated December 1, 2007.

Transferability: Nontransferable, except transfer to a nominee(s)/legal heir in case of death of

the holder of the bonds.
Interest (Floating):
(i) Option – The interest on the bonds will be payable at half yearly intervals on Jan 1st and
July 1st every year. There is no option to pay interest on cumulative basis.
(ii) Rate – The coupon/interest of the bond would be reset half yearly starting with Jan 1st,
2021 and thereafter every July 1st and Jan 1st.
(iii) Base Rate – The coupon rate will be linked/pegged with prevailing National Saving
Certificate (NSC) rate with a spread of (+) 35 bps over the respective NSC rate.

Brokerage: Brokerage at the rate of 0.5% of the amount mobilized will be paid to the Receiving
Offices, and they shall share at least 50% of the brokerage so received with brokers/sub brokers
registered with them, on the applications tendered by them and bearing their stamp, on behalf
of their clients.

***************

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तित्तीय समािेशन
FINANCIAL INCLUSION
Financial inclusion means connecting all individuals, including those living in the remotest of rural
areas, to a well-functioning financial system and would include -
a) Easy access to bank accounts for safe parking of savings.
b) Availability of cheap credit through appropriately designed loans for poor & low income
households and small entrepreneurs.
c) Availability of basic financial products like micro pension, micro insurance covering not only
life and death but also crops, assets and accidents.
d) Provide secured affordable digital transactions.
e) Provide safe money transfers.
f) Provide financial literacy &counseling.
g) Provide add-on services like agricultural portals.
h) Extensive usage of unique identifiers like Aadhaar to facilitate hassle free biometric
identification of customers to facilitate banking transactions and their authentication.

Pradhan Mantri Jan DhanYojana (PMJDY) was introduced by Govt of India on 28.08.2014 by the
honourable Prime Minister to facilitate implementation of Financial Inclusion (FI) in a mission
mode. The plan envisages universal access to banking facilities with at least one basic banking
account for every household, financial literacy, access to credit, insurance and pension facility. In
addition, the beneficiaries would get RuPay Debit card having inbuilt accident insurance cover of
Rs.1 lakh. The plan also envisages channeling all Government benefits (from Centre / State / Local
Body) to the beneficiaries’ accounts and pushing the Direct Benefits Transfer (DBT) scheme of the
Union Government. The technological issues like poor connectivity, on-line transactions were to be
addressed. The focus was shifted from villages having a population of > 2000 to each household.
The mammoth task of providing one basic bank account to all households was to be completed
before 26th January 2015.

HO Cir 483/2014: Comprehensive Financial Inclusion under Pradhan Mantri Jan DhanYojana
(PMJDY) was introduced.

HO Cir 510/2014: PMJDY envisages Universal access to banking facilities under which all the 6 lakh
villages across the entire country would be mapped, organized into Sub Service Areas (SSAs) of
1000-1500 households and allocated to the Banks to provide at least one fixed point Banking outlet
in the form of either a branch or a Business Correspondent (who is named as Bank Mitra). The other
components of the plan are providing at least one Basic Banking Account to each household with
RuPay Debit card having inbuilt accident insurance cover of Rs. 1 lakh; an overdraft facility of
Rs.5000 after satisfactory operations in the account for six months. Further, additional life
insurance cover of Rs.30,000/- is also available to accounts opened up to 26.01.2015.

After 28.8.2018 the focus of FI changed from opening of accounts from “every household” to
“every adult”.

FINANCIAL INCLUSION PRODUCTS AND FACILITIES:

Canara Basic Savings Bank Account (Canara BSBD-108)

Canara Small Basic Savings Bank Account (Canara Small BSBD-127)

Providing financial products may not necessarily promote inclusion. Such product should result in
increased economic activity in the area. Interest should be generated amongst the unreached BPL

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households about “BSBD accounts” in such a way that they should voluntarily approach the bank for
the product.
⮚ RuPay Debit Card to be provided should have inbuilt accident insurance cover of Rs.1.00
lakh for accounts opened before 28.08.2018.
⮚ Pradhan Mantri Jan DhanYojana (PMJDY) beyond 28.08.2018 with the change in focus of
opening of Accounts from “every household” to “every adult” & the inbuilt accident
insurance cover of Rs. 2.00 lakhs for new accounts opened on or after 28.08.2018.

Apart from providing the entire range of products and services available in the Bank, the following
products are also offered to FI customers:
⮚ Micro Insurance – To cover all eligible PMJDY account holders with PMSBY and PMJJBY.
⮚ Inbuilt - Overdraft facility to PMJDY accounts holders up to a limit of Rs.10000/- per
customer subject to complying the stipulated conditions and OD up to a limit of Rs.2000/-
without any conditions for persons in the age group of 18-65 years. The overdraft facility
will be covered under credit guarantee. Whereas in the proposed revised PMJDY OD Scheme,
there will be no condition attached for sanctioning of OD up to the limit of Rs.2000/- for
general customers and Rs.5000/- for verified women SHG members.

Bank may also develop suitable additional products depending upon the need and requirement of
the FI customers, from time to time. The product to be developed should be approved by the
Competent Authority.

The Bank had introduced “Basic Banking No Frill accounts” titled as “Canara Saral Savings Bank
Deposit Accounts” and RBI directed the Banks to convert the existing Basic Banking “No frills”
accounts into “BSBD Accounts”.

Pradhan Mantri Jan DhanYojana (PMJDY) [HO Circular: 61/2024]

✔ Pradhan Mantri Jan DhanYojana was launched on 28th August 2014. As per the
implementation plan all households were to be covered under the banking system by
31.01.2015.
✔ Facilities as available in the accounts opened under PMJDY would also be applicable to
existing accounts (510/2014)
✔ The components of the plan are:
 Providing at least one Basic Banking Account to each household with RuPay Debit card
(beyond 28.08.2018, change in focus of opening of Accounts from “every household” to
“every adult”).
 Inbuilt accident insurance cover of Rs. 1 lakh (which has been raised from Rs.1 lakh to
Rs.2 lakhs to new PMJDY accounts opened after 28.8.2018).
 In built overdraft facility of Rs.5000 (increased to Rs.10,000/-as per HO Cir 498/2018)
 Life insurance cover of Rs.30,000/- is available to accounts opened up to 26.01.2015.
✔ Aadhaar number will be part of every Bank account opened under PMJDY. (551/2014)
✔ Non-personalized RuPay debit card to be issued immediately on opening the account.
✔ For every verified women SHG member having a Jan Dhan Bank account, an overdraft of Rs
5,000.00 shall be allowed'.
✔ OD facility of Rs. 5,000 is available to the verified SHG women members only and this will
be available even if the other member of the family has already availed OD facility under
PMJDY.
✔ Rate of Interest on all existing and future PMJDY OD facility (Including PMJDY OD to verified
women SHG Member) RLLR +3.35 % subject to maximum of MCLR+3% (134/2022)
✔ PMJDY accounts are eligible for Direct Benefit Transfer (DBT), Pradhan Mantri Jeevan Jyoti
Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Atal Pension Yojana
(APY), Micro Units Development & Refinance Agency Bank (MUDRA) scheme.

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Overdraft facility to PMJDY account holder (498/2018, 577/2018, 241/2020, 328/2020,
121/2022, 134/2022)

⮚ Purpose: General purpose loan to provide hassle free credit to low income group /
underprivileged customers to meet their exigencies without insistence on security, purpose
or end use of the credit.
⮚ Eligibility:
✔ PMJDY accounts, which are operated satisfactorily for at least six months.
✔ OD to be granted to the earning individual.
✔ The account should be active with regular credits. Credits could be from DBT or DBTL or
from any other source. As per extant guidelines outlined in PMJDY mission document,
PMJDY account would be the single point for receipt of all Direct Benefit Transfers (DBT)
from the Central Government/ State Government / Local Bodies.
✔ Banks’ request for overriding marking of PMJDY account shall be considered by NPCI in cases
where OD facility is permitted.
✔ Age of applicant between 18 years to 65 years.
✔ OD facility of Rs. 5,000 is available to the verified SHG women members only and this will
be available even if the other member of the family has already availed OD facility under
PMJDY.
(Not eligible: Minors, KCC/GCC borrowers, more than one member of the same family)

⮚ Nature of facility: Running OD facility in PMJDY account

⮚ Period of Sanction: 36 months subject to annual review of the account.

⮚ Loan amount:
a) Minimum OD amount Rs 2,000/- and maximum Rs 10,000/-
b) Beyond Rs 2,000/- following stipulations to be followed:
✔ 4 times of Average monthly balance
✔ or 50% of credit summations in account during the preceding 6 months
✔ or, Rs 10,000/- whichever is lower
⮚ Security: Nil
⮚ ROI:RLLR +3.35 % subject to maximum of MCLR+3%
⮚ No processing charge.
⮚ Branch in charge is the sanctioning Authority.
⮚ Amount can be withdrawn through Branch/BC/ATM/POS.
⮚ Simple document of loan application-cum-undertaking and Arrangement letter duly
accepted by the Account Holder are to be obtained.
⮚ Inspection waived for all standard assets.

Credit Guarantee Cover: (241/2020, 328/2020)

✔ Overdraft limit of Rs.10000/- (Rs. Ten thousand only) granted under PMJDY accounts is also
eligible for cover under CGFMU.
✔ ‘First Loss Portfolio Guarantee’, wherein first loss to the extent of 3 % of the amount in
default, will be borne by the MLI and therefore, will be excluded for the claim. Out of the
balance portion, the ‘extent of guarantee’ will be to a maximum extent of 75% of ‘Amount
in Default’ in the portfolio or such other percentage as may be specified by the Fund from
time to time on a pro-rata basis.

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Accidental Insurance Cover for PMJDY account holders:

[HO Cir 438/2019, 480/2019, 641/2020,496/2021, 401/2022, 277/2024]

✔ M/s NPCI has extended the RuPay Insurance Program for the Financial Year 2024-25 also
i.e., from 01.04.2024 to 31.03.2025 (277/2024 dated 04/04/2024).
✔ RuPay Insurance Program FY 2024-25 for RuPay PMJDY Debit Cards will be continued with
The New India Assurance Company Limited.
✔ TATA AIG General Insurance Company Ltd. will be the Insurer for RuPay Insurance Program
FY 2024-25 for RuPay Premium cards which are higher variant of cards.
✔ Risk covered: Death or any permanent disability due to accident.
✔ Claim amount: Max. Rs. 1 lakh and at various percentage as per the loss/disability for the
PMJDY -RuPay cards up to 28.8.2018, for the cards issued after 28.8.2018 the maximum is
Rs.2 lakhs and prorate percentage for different losses/disabilities.
✔ Age: 5 years and above w.e.f.1st April 2019. (480/2019)
✔ Eligibility: Card holders who have performed minimum one successful transaction: Financial
or Non-Financial transaction at any Channel both Intra and Inter-bank i.e. on-us (ATM/Micro
ATM/POS/e-com/Business Correspondent of the bank at locations by any payment
instrument) within 90 days prior to date of accident including accident date of RuPay PMJDY
Cardholders or off us (same bank channels- Bank Customer/RuPay cardholder transactions at
other bank channels).
✔ PMJDY account with RuPay issued IIN (Issuer Identification Number First 6 Digits of Card
Number) with 608031,607392 & 817509 are only to be covered under Rupay Insurance
Program for FY 2024-25.
✔ Branches are advised to issue only Rupay PMJDY Debit Cards (BIN NO. 608031,607392
&817509 ) to all PMJDY accounts for getting insurance benefits.

Claim Procedure under The New India Assurance Company Limited :

✔ All the claims where incident has happened in the financial year 2024-2025, should be
intimated to the dedicated claims id rupay@[Link]. All emails sent for the purpose
of follow up should be marked to NPCI Insurance mail id: rupayinsurance@[Link]
✔ A printed copy of the captioned intimation email should be sent to The New India Assurance
Co. Ltd. along with all other documents.
✔ Claim intimation should be within Ninety (90) days from the date of accident. In case where
a person is hospitalized (and under a critical condition) and is unable to file claim within 90
days of loss/incident such claim cases will be accepted by The New India Assurance Co. Ltd.
for investigation and honoured, if all terms under the policy are met as on date of accident.
✔ All supporting documents relating to the claim must be submitted within sixty (60) days
from the date of intimation.
✔ The eligible claims will be settled in ten (10) working days from the date of receiving the
complete documents set.

Claim Procedure under TATA AIG General Insurance Company Ltd :

✔ All the claims where incident has happened in the financial year 2024-25, should be
intimated to TATA AIG toll free number 18002667780 or to [Link]@[Link],
along with incident details.
✔ TATA AIG will register the claim and provide the claim number to the Member Bank within 2
working days with the policy number in subject line.
✔ Claim intimation should be within Ninety (90) days from the date of accident. In case where
a person is hospitalized (and under a critical condition) and is unable to file claim within 90

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days of loss/incident such claim cases will be accepted by TATA AIG for investigation and
honored, if all terms under the policy are met as on date of accident.
✔ Once the claim is registered scan images of all required documents to be uploaded to
[Link]

Pradhan Mantri Suraksha Bima Yojana (PMSBY) [144/2023, 230/2024]

✔ PMSBY is an Accident Insurance Scheme offering accidental death and disability cover for
death or disability on account of an accident.
✔ PMSBY offers Rs 2,00,000/- accidental death cover.
✔ All SB customers aged between 18-70 years are eligible.
✔ Aadhaar would be the primary KYC for the Bank account.
✔ Annual premium of Rs.20/- (HO Cir.144/2023 dt.03/03/2023), of this, Rs.18/- is the
insurance premium payable to insurance company, Re.1/- per member is the commission
payable to BC/ agents, etc. by the insurer (for new enrollments only) and Re.1/- per annum
per member is the administrative expenses payable to participating Bank by the
insurer.(144/2023)
✔ The amount of commission payable to Business Correspondents, agents, etc. as specified
above saved, in case of voluntary enrolment by an account holder through electronic means,
shall be passed on as a benefit to the subscriber by correspondingly reducing the amount of
the Insurance Premium payable.
✔ Premium is paid only by debit to the SB account of the beneficiary; subsequent renewals
will be by 'auto debit' facility in one installment on or before 1st June of each annual
coverage period. Cover shall be from 1st June to 31st May every year.
✔ In case of multiple SB accounts held by an individual in one or different Banks, Insurance
cover is restricted to only one SB account of the member from all the banks and the
premium paid in more than one account shall be liable to be forfeited.
✔ Coverage is Rs.2 Lacs for death or total and irrecoverable loss of both eyes or loss of use of
both hands or feet or loss of sight of one eye and loss of use of hand or foot.
✔ Coverage of Rs.1 lac is for total and irrecoverable loss of sight of one eye or loss of use of
one hand or foot.
✔ In order to educate and facilitate the nominee with the claim settlement process, branches
are advised to send an official intimation to the registered nominees/deceased address
under PMJJBY & PMSBY, upon the death of the insured. (587/2023).
✔ The Department of Financial Services, Ministry of Finance Government of India has
prescribed a Turn Around Time (TAT) for settlement of claims. TAT prescribed is 14 days
from the date of receipt of claims papers from the claimants (within seven days Bank has to
forward the claim form to Insurance company and claims should be processed and
sanctioned within seven days from the date of receipt of claim if claim is in order).

Pradhan MantriJeevanJyotiBimaYojana (PMJJBY) [144/2023, 230/2024]

✔ PMJJBY is an insurance scheme offering life insurance cover for death due to any reason.
✔ Life Insurance Cover of Rs.2 lakhs (payable on death).
✔ All SB account holders aged between 18 and 50 years are eligible.
✔ Aadhaar would be the primary KYC for the Bank account.
✔ Annual premium of Rs.436/-, of this Rs. 395/- insurance premium to insurance company,
Rs.30/- commission payable to BC/ agents, etc.(for new enrolments only) and Rs.11/-
administrative expenses payable to participating Banks. (144/2023)
✔ The amount of commission payable to Business Correspondents, agents, etc. as specified
above saved, in case of voluntary enrolment by an account holder through electronic means,

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 Canara Institute of Bank Management

shall be passed on as a benefit to the subscriber by correspondingly reducing the amount of

the Insurance Premium payable.
✔ In case of multiple SB accounts held by an individual in one or different Banks, the person
would be eligible to join the scheme through one savings bank account only.
✔ The premium is paid by debiting to the SB account of the beneficiary and annual renewal
will be by auto debit to the SB account on or before 1st June every year.
✔ Termination: Once a member attains age 55 Years (age nearest to birth day) subject to
annual renewal up to that date (No entry beyond the age of 50 years) Closure of account/
Insufficiency of balance.
✔ In case a member is covered under PMJJBY with LIC/ other company through more than one
account and premium is received by LIC/other company, insurance cover will be restricted
to Rs.2 lacs and the premium shall be liable to be forfeited.
✔ If the insurance cover is ceased due to any technical reasons such as insufficient balance,
the same may be reinstated on receipt of full annual premium and a satisfactory statement
of good health.
✔ Coverage under the Scheme is in addition to cover under any other insurance scheme.
✔ Lien period of 30 days shall be applicable from the date of enrolment. Death due to
accident is exempted from the lien clause.
✔ Bank has entered into MoU with Canara HSBC OBC Life Insurance Co. (w.e.f. 1st June 2017)
to implement the scheme.

Implementation of Jansuraksha(JNS) Portal (230/2024)

✔ The enrolments under PMJJBY & PMSBY schemes are enabled through branch assisted mode and
self-subscribing mode in JanSuraksha portal ([Link]
✔ Branch assisted mode – Upon receipt of the enrolment or consent form from the customer,
branch user has to log in to the portal and enroll the customer under the scheme(s).
✔ To initiate subscription through JNS Portal, branches can opt for OTP validation or physical
signature verification (the user has to declare that the signature in consent form is verified
with CBS). Obtaining customer’s consent for insurance is mandatory in both the cases.
Confirmation message along with Certificate of Insurance (COI) will be sent to subscriber
through his / her registered mobile number &/or registered mail ID immediately after the
enrolment is successful.
✔ Self-Subscribing mode – JNS portal is also enabled for customers to enroll themselves (self-
subscription mode) through web portal by registering and creating login credentials. Customer
can register into the portal to create login ID credentials for which he / she can select the
name of the bank, account number and Date of Birth. Customer can self enroll into the
schemes once he / she logs in the portal.
✔ Branches should obtain duly signed Consent cum Declaration form from the customer before
making entry in JNS Portal. All enrolment forms should be preserved in the double lock.

Atal Pension Yojana (APY) (371/2023, 358/2024, 61/2024)

✔ Government of India has launched a scheme to provide social security to unorganized sector
workers w.e.f 01.06.15.
✔ Scheme is administered by PFRDA and NSDL acts as Central Record keeping Agency.
✔ Eligibility: All Bank account holders aged between 18-40 years, who are not the members of
any statutory social scheme. Swavalamban subscribers would be automatically migrated to
APY.
✔ Any citizen between the age of 18 and 40 years, who is an income tax payer, shall not be
eligible to join APY w.e.f 1st October 2022.

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✔ Pension payment commences at the age of 60 years.
✔ Minimum contribution is for 20 years.
✔ Delayed contribution attracts a penalty. Contribution can be monthly/ quarterly/ half yearly.
✔ If there is inadequate balance in SB a/c of subscriber till last date of the month/ last date of
the first month/ quarter/ last day of the first month in a half year, it will be treated as a
default and contribution will have to be paid in the subsequent month along with overdue
interest for delayed payment.
✔ Overdue interest for delayed contribution: Re.1 per month per Rs.100 or part thereof, for
each delayed monthly payment. Overdue interest amount collected will remain as part of the
pension corpus of the subscriber (587/15).
✔ Fixed pension ranges between Rs 1000 - Rs 5000 (depend upon Age and contribution).
✔ Central Government co-contributes 50% of subscriber's contribution (Maximum Rs.1000 per
annum) for 5 years till 2019-20. For co-contribution, subscriber should have joined NPS before
31st March 2016.
✔ For co-contribution, subscribers should not be a taxpayer. Upon death after 60 years of age,
spouse would get a monthly pension. Corpus would be paid to the nominee on death of
subscriber and spouse both.
✔ Trinity Circle, Bangalore branch is the focal point.
✔ Scheme of sharing incentive for mobilizing new APY accounts with SHGs, NGOs, Trusts,
Societies, Associations, Ex-employees and Social workers with proven track record is
continued. Incentives will be paid by the branches on quarterly basis to the accounts of the
concerned group/ Individual.
✔ Minimum applications mobilized should be TEN. Maximum incentive per each mobilized
application is Rs.70/-(233/2017).
✔ The existing Swavalamban subscriber whose age is above 40 years and subscribers aged
between 18-40 if unwilling to migrate to Atal Pension Yojana can continue in the existing
Swavalamban scheme. (327/15)
✔ APY accounts which are closed within a period of 12 months from their opening or which have
NIL balances, no incentive will be admissible to Banks from the Government for such
accounts. (341/2016)

Return of Corpus to the nominee of Subcriber: (358/2024)

✔ In the event of death of subscriber, the spouse of the subscriber shall be entitled to
receive the same pension amount as that of the subscriber until the death of the spouse.
✔ After the demise of both the subscriber and the spouse, the nominee of the subscriber
shall be entitled to receive the pension wealth, as accumulated till age 60 of the
subscriber.

APY Voluntary exit: (341/2016, 408/2019, 358/2024)

✔ Exit before 60 years of age is generally not permitted. However, it may be permitted in
exceptional circumstances such as due to terminal illness or death of the subscriber.
✔ If the APY account is closed due to terminal illness or death of the subscriber, the
accumulated corpus (subscriber contribution, Government co-contribution and the returns
thereon) in the subscriber account will be returned to the subscriber or the nominee as the
case may be.
✔ In case a subscriber, who has availed of Government co-contribution under APY, chooses to
voluntarily exit APY before attaining the age of 60 years, he/she shall be refunded the
contributions made by him/her to APY along with the net accrued income earned on his/
her contributions after deducting the account maintenance, investment management, etc.
charges. The Government co-contribution and the accrued income earned on the
Government co- contribution shall not be given to such subscribers.
✔ Branch / Admin office shall attend and process the voluntary exit requests opted by the
customers within T+7 days

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Business Correspondents & Financial Inclusion Policy(61/2024)

⮚ Business Correspondent:
Business Correspondents are financial intermediaries engaged by Banks for the purpose of providing
financial and banking services to the financially excluded persons.

Bank envisages extension of Banking & Financial Services to under-banked &unbanked areas through
ICT based “branchless banking” model, where integrated Tab/Tablet devices would be used by
Business Correspondents and/or their authorized agents to deliver financial and banking services.
The Bank has already implemented ICT based solutions in allotted Sub Service Areas and in other
areas as decided by the Bank.

Bank has selected five new Corporate Business Correspondents (BCs) viz. M/s SanjivaniVikas
Foundation Bihar, M/s Vision India Software Exports P Ltd, M/s Gram Tarang Inclusive Development
Services P Ltd, M/s Fino Payment Bank Ltd & M/s AISECT Ltd., for providing HYBRID OPEX MODEL
(KIOSK & MOBILE) - using TABLET BC Services through RFP process for a period of 3 years

These corporate BCs are responsible for engaging BC Agents in locations allotted to them by the
Bank.

⮚ Business Correspondent Agents

BC Agents are established in all the Sub-Service Area villages and Locations recommended by our
Circles and permitted by FI Wing, HO. The BC Agents are engaged by the Corporate BCs for the
purpose of providing Financial and Banking Services to the financially excluded persons.

⮚ Technology Service Provider:

“Technical Service Provider” (TSP) means any entity with whom the Bank enters into agreement for
providing services of Business Correspondent with the Technology oriented solutions by combining
the processes and functions of software, hardware, networks, telecommunications and electronics.

⮚ Hand Held Devices:

“Hand Held Devices or Front end Devices or Field devices mean Micro-ATMs or Hand Held Machines,
Mobile Handsets / Mobile Devices / Tablets /Laptop coupled with accessories like Finger print / IRIS
scanner, PIN pad and receipt printer or any other peripherals that are required for carrying out
transactions both in Online/Offline manner.

⮚ BC- TAB solution:

The TAB solution is a centralized solution provided by Technology Operations Wing, HO. which will
be accessed by the Bank Business Outlets (BBO) or Business Correspondents Agents (BBA). Uniform
services are rolled out to the BBOs/BCAs pan India as the software is provided centrally.
TABs will be operated using Android OS (version 7 or above) with added peripherals for Scanning
Fingerprint, PIN Pads and Printers. These peripherals will be integrated/ connected to TABs through
Bluetooth technology. The TAB with the said combination of devices is certified (OEMs/TSPs). The
Registered Device is also certified by UIDAI for BIOMETRIC authentication. These TAB devices should
be preferably complied with Mobile Application Management (MAM)/ Mobile Device Management
(MDM) securities.

Hybrid Model – The Technology/Solution will be provided by TSP, centrally which has to be
accessed by the BC Agents both in KIOSKs (fixed point/outlet) and Mobile (Mobility), through
TAB/Tablet supported devices.
⮚ Biometric Authentication:
Biometric authentication is a process by which the Aadhaar Number along with biometric
information of an individual is submitted to Central Identities Data Repository (CIDR) of UIDAI, for
its verification regarding the correctness or otherwise on the basis of information available with

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 केनरा बैंक प्रबंधन संस्थान
CIDR, after which the authority returns a digitally signed response. The biometric information for
authentication can be the finger prints or the scans of iris/es for matching with the data stored in
CIDR.

⮚ National Strategy For Financial Inclusion :

RBI has prepared NSFI 2019-2024 under the aegis of Financial Inclusion Advisory Committee and
based on the inputs/suggestions from GOI, SEBI, IRDAI and PFRDA. An inclusive financial system
ably supported through sound financial inclusion policies; focus on financial education and
customer protection is not only pro-growth but also pro-poor with the potential to reduce income
inequality and poverty, promote social cohesion and shared economic development. Financial
exclusion, on the other hand, leaves the disadvantaged and low- income segments of society with
no choice other than informal options, making them vulnerable to financial distress, debt, and
poverty.

⮚ Entities eligible for appointment as Business Correspondents (BC/TSP):

a) NGOs/MFIs set up under Societies/ Trust Acts
b) Cooperative Societies registered under Mutually Aided Cooperative Societies Acts or the
Cooperative Acts of States/ Multi State Cooperative Societies Act.
c) Section 25 companies.
d) Post Offices.
e) Retired Bank employees
f) Ex-Service men.
g) Retired Govt. Employees.
h) Individual kirana/ medical/fair price shop owners.
i) Individual Public Call Office (PCO) operators.
j) Agents of small savings schemes of Government of India/ Insurance Companies
k) Individuals who own petrol pumps.
l) Retired teachers.
m) Authorized functionaries of well-run Self Help Groups (SHGs) linked to banks.
n) Individual members of Farmer’s Clubs.
o) Individual members of Self Help Groups.
p) Individual operators of Rural Multipurpose kiosks/ Village Knowledge Centres
q) Individuals/ proprietors/ owners who manage Agri Clinics/ Agri Business Centres.
r) Retired Post Masters.
s) Individuals such as auto dealers, tractor dealers and FMCG stockiest.
t) Insurance agents including private insurance companies (IRDA certified) and postal
agents.
u) Individuals operating Common Services Centers (CSCs) established by Service Centre
Agencies (SCAs) under the National e-Governance Plan (NeGP).
v) Companies registered under the Indian Companies Act 1956 with large and wide spread
retail outlets, excluding Non-Banking Financial Companies (NBFCs).
w) * Payment Banks as per RBI Guidelines/Approved by RBI
x) Any other individual considered suitable by the bank.

Business Correspondents - Hybrid Model (HO Cir 61/2024, 96/2024, 150/2024)

To widely and effectively implement financial inclusion through business correspondents, bank has
introduced a Hybrid Model, which is Unique in the banking industry. Total of 10000 locations will be
covered in the Hybrid model, in a span of 3 years. In the 1st phase, 2707 locations will be migrated
to the Hybrid model immediately. The Technology/ Solution will be provided by Tata Consultancy
Ltd centrally, which has to be accessed by the BC Agents both in KIOSKs (fixed point/outlet) and
Mobile, through TAB/Tablet supported devices.

Existing Corporate BC agreement with existing vendors viz. M/s Vision India Software Exports
Limited, M/s Manipal Business Solutions Pvt Ltd, M/s Integra Micro Systems (P) Ltd and M/s Fino

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 Canara Institute of Bank Management

Payments Bank Ltd, M/s Atyati Technologies Pvt Ltd, M/s Smart Chip Pvt Ltd & M/s Sub-K Impact
Solutions Ltd has expired on 30.11.2021(759/2021).

Now, Bank has selected and issued work orders to five new Corporate Business Correspondents
(BCs) viz. M/s SanjivaniVikas Foundation Bihar, M/s Vision India Software Exports P Ltd, M/s Gram
Tarang Inclusive Development Services P Ltd, M/s Fino Payment Bank Ltd & M/s AISECT Ltd for
providing HYBRID OPEX MODEL (KIOSK & MOBILE) - using TABLET BC Services through RFP process
for a period of 3 years.

Some salient features of the model are:

✔ The BC services will be on the OPEX model.

✔ The BC Agent has to ensure minimum working of 4 hours at the BCOs every day of the
banking working days, apart from visiting the field for Mobile BC activity.
✔ BC shall provide infrastructures such as a minimum building space of 100 Sq. ft. in a
prominent place accessible to customers and acceptable to the Bank. Also, hardware,
software, personnel, technical services, connectivity, maintenance, providing training and
operational support for the end-to-end infrastructure. Arranging insurance coverage for cash
and devices at the BCO is by BC.
✔ The device to be given to BCA should be interoperable through the gateway of NPCI so that
the customer can access to any bank by using the device. The device must have biometric
facility plus card or PIN/password plus card. Corporate BC will ensure repairs or
replacement of faulty front-end equipment within 72 hours of reporting. Adequate number
of spare machines / batteries, etc. should be maintained by BC for immediate replacement.
✔ Each BCA will cater to a group of areas/villages which are contiguous and shall visit each
village at least once in a week on a pre- determined day for extending services.
✔ Cash management is Corporate BC’s responsibility. Hence, Branches shall not pay any Cash
to BC/BC Agents under any circumstances whatsoever.
✔ BCA should provide the receipts printed for each transaction to the customer. The receipts
and statements will be in English or vernacular language as may be stipulated by the Bank.
✔ In the absence of online mode due to link/network failure, no transactions will be
conducted.
✔ The BC agents appointed by the corporate BCs, are required to open a current account
(under product code 201) in their individual name at the base/link branch. The account
nomenclature may be standardized as Name of the BC agent followed by Corporate BC name
ex:-Mr XXXXXX – M/s. Integra Micro Systems (P) Ltd.
✔ No Credits/Debits shall be made to this account such as interest, service charges, folio
charges, Cash handling charges, non-maintenance of minimum balance charges, GST etc.,
Branches to tick the waiver flag in CBS option SCM03 for these settlement accounts.
✔ Branches are required to mandatorily obtain customer consent to ‘Enable’ or ‘Not to Enable’
AePS services in their savings bank account at the time of account opening.
✔ Each customer is permitted Two Transactions (Debit/Credit) per day with a maximum of
Rs.5000/- per transaction (including Receipt and Payment) for non-Aadhaar based
transactions and Rs.10000/- for Aadhaar based transactions.
✔ Any dispute arising of non-payment, non -receipt by the eligible customer has to be
attended and resolved within ten days from the date of dispute.
✔ Branch Managers/officials should introduce the BCA to villagers at a Gramsabha/ meeting in
the villages they cater to.
✔ The solution is capable of handling Aadhaar enabled payment transactions &RuPay Card
based transactions both ON US and OFF US, Third party deposits etc.

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 केनरा बैंक प्रबंधन संस्थान
✔ During the launch the transactions of AePS, RuPay card and Third party deposit transactions
along with Balance enquiry and Mini statement will be released. The other features
supported by the solution like RD, FD, remittance, Social Security Schemes and loan
products like KCC, etc. will be released in the 2nd Phase soon.
✔ B C shall not collect non -refundable deposits/ interest free deposits from BCAs.
✔ The Branding design (one for exterior of the fixed location/outlet) and one for the interior
display) has been done at HO level and will be sent to circles. The same design is to be used
at all BC locations for uniformity.
✔ Circles to print the Branding Flexes including BC Agent details and Photo and supply to all
the base branches, both in English and vernacular language including BC Agents details &
Photo.
✔ The branches may be guided to paint the interior of the fixed point (BCO) with SKY BLUE
color, to have uniformity and ensuring uniqueness.
✔ The Dos and Don’ts of the BC Agent & the Guidelines to the Customers to be prominently
displayed at all Fixed locations/outlets, which has been furnished in Annexure 2 to Ho Cir
540/2018, Circles to translate the same in vernacular for display at the BCOs.
✔ Bank has now integrated Business Correspondent (BC) Services with Bharat Bill Payment
System (BBPS) to facilitate the customers in villages and in unbanked areas to pay their
monthly utility bills like telephone, electricity, water, gas supply, post-paid mobile charges,
etc., using BC Services. For the said utility services, per transaction limit of Rs. 5000/- is
enabled as of now. The BC Agents can accept utility bills payments only from the existing
customers of our Bank. To begin with, the BC agent can accept only cash deposits from
customers. The remaining modes of bill payment by account transfer and using RuPay Debit
Card are being enabled in course of time. (457/2019)

Bank has floated RFP for Hybrid OPEX model (Kiosk and Mobile) for ICT- BC based outlets in
around 9000 locations pan India. The locations are grouped into eight clusters. Details of
successful bidders and rates quoted by them for each cluster areas below:
Cluster Vendor Name Circle Fixed charges Variable
(inRs)* Charges
(perRs100
)**
A M/S SANJIVANI VIKAS MADURAI
FOUNDATION BIHAR &THIRUVANANTHAPURAM 1500 0.20
B M/S VISION INDIA SOFTWARE CHENNAI
EXPORTS P LTD 0 0.15
C M/S VISION INDIA SOFTWARE BENGALURU & 0 0.15
EXPORTS P LTD MANGALURU
D M/S GRAM TARANG HUBBALLI & MANIPAL
INCLUSIVE DEVELOPMENT 2000 0.15
SERVICES P LTD
E HYDERABAD &
M/S FINO PAYMENT BANK VIJAYAWADA 1000 0.18
LTD
F M/S VISION INDIA SOFTWARE AHMEDABAD,BHOPAL,BHU
EXPORTS P LTD BANESWAR, LUCKNOW, 0 0.20
MUMBAI & PUNE
G M/S VISION INDIA SOFTWARE AGRA, CHANDIGARH,
EXPORTS P LTD DELHI, JAIPUR & KARNAL 0 0.20
H M/S AISECT LTD GUWAHATI, KOLKATA, 0 0.22
PATNA & RANCHI

Payment Conditions:

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 Canara Institute of Bank Management

1) The fixed charges to be shared between BCA and BC at 75:25 ratio.

2) The fixed charges will be paid to the BCA/BC, wherein the BCA should be active as under:
a) Kiosk should work minimum 4 hours in a day, on all working days
b) Non-functioning on working days shall attract pro-rate reduction in fixed charges to be
calculated as follows;
(No. of days active/ No. of working days) X fixed charges.
c) The BCA shall work for a minimum of 10 days to be eligible for payment of fixed charges.
d) To consider BCA as active, BCA should have carried out at least TWENTY FIVE financial
transactions through TAB during a month. In case of Tier 6 Locations of North Eastern
States, Left Wing Extremist Districts, Island Locations, BCA should have carried out at least
TEN financial transactions through TAB during a month. A Penalty of Rs.5,000/- shall be
levied per BCA per Month for inactive BCAs.

The mandatory reports to be generated and registers to be maintained by the BCA are:
Reports:
The following reports will be made available to the Branch users.
1. Number of FI accounts opened & closed in a day by BCA
2. FI customers list serviced by BCA
3. Branch wise number of transactions and amount of transactions
4. Branch wise rejected terminal transactions report
5. BC location wise transaction details.
Maintenance of Registers:
Bank Mitra shall maintain:
1. Daily Cash Transaction Register.
2. Movements register.
3. Register for noting details of equipments, devices and any other machinery with serial number
and make, model and date of receipt, contact details for servicing and problems related to
hardware/equipment.
4. HHM/TAB log book.
5. Complaints/Grievance/ Suggestion register.
6. Application Forms Movement Register.
7. Register for AMC details.

Aadhaar Seva Kendra (ASK)

Unique Identification Authority of India (UIDAI), New Delhi vide their communication D.O.4
(4)/57/146/2016/E&U/[Link]/Pt. dated 07.10.2017 informed about the amendment of the
Prevention of Money Laundering (Maintenance of Records) Rules 2005 directing that every Bank
account in the country is to be verified with Aadhaar authentication.

In order to ensure that the people should not face any difficulties in linking their Aadhaar numbers
with their Bank accounts and also verifying them, it has been advised by UIDAI that Banks need to
provide enrolment and authentication facilities inside the bank premises pan India immediately. In
tune with the UIDAI guidelines, our Bank has established 1201 Aadhaar SevaKendras at identified
branch premises.

In addition to above guidelines, we have vide our HO circular 313/2017 dated 27.06.2017,
highlighted the provisions of Aadhaar act, 2016 and Information Technology Act, 2000 and the rules
framed under for strict compliance. Roles & responsibilities of Branch, operator cum supervisors at
ASK centres, verifiers at Branch are as below:

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⮚ Role of Branch:
✔ Aadhaar Enrolment kits shall always be operated inside the branch premises only.
✔ No enrolment/updates should happen outside the branch.
✔ Ensure Resident’s consent is available with the branch.
✔ Ensure that the Resident is told about the reason for the collection of Aadhaar number.
✔ Branch head shall entrust duty of the verifier to one officer who has the following
responsibilities-
a) Verify the original ID document presented by residents
b) Compare the details entered in the enrolment/updation form with the original ID
details provided.
c) Certify the genuineness of details on the enrolment form.
✔ Banners shall be displayed outside and inside the branch premises prominently indicating
the functioning of the enrolment centre.
✔ Banner should display the approved rates for various services rendered by the centre.
✔ No additional/other charges, other than that stipulated by UIDAI.
✔ The charges collected for updation etc., shall be credited to our commission
✔ Miscellaneous account and charges collected for GST may be credited to commission GST.
✔ Each ASK centre shall maintain the records of enrolment done, updation and other activities
carried out in a separate register (countersigned by branch head on monthly basis) (as per
Annexure-XIV) for verification of inspectors and same should be made available for officials
inspecting the ASK.

As a pre-requisite, the Officers who are assigned with verifier and supervisor roles and working at
designated branches are to be imparted with training at respective LDC/RSTCs and shall appear for
an examination conducted by NSEIT and get certified as supervisor. The certification as supervisors
is mandatory as per UIDAI guidelines for working as supervisors at ASKs.

CONTINUATION OF AADHAR SEVA KENDRA SERVICES - OPEX MODEL (ASK KITS AND MANPOWER
OUTSOURCED) (153/2022)(12/2024)

To bring uniformity in the services rendered by ASK Services engaged by Canara Bank (CAPEX Model
–Kits Owned by Bank & Manpower supplied by Service Providers) and e-Syndicate Bank (OPEX Model-
Kits and Manpower supplied by Service Providers),it was decided to float new RFP for ASK Services
under OPEX model.

Accordingly, Bank has floated new RFP for providing ASK services to Canara I & II ASK locations and
have selected & issued work order to Four Corporate Service Providers viz M/s Zephyr Ltd, M/s
Orion Security Solutions Pvt Ltd, M/s Comtech Info Solutions Pvt Ltd, & M/s Asuja Eserv Pvt LTd for
a period of 3 years w.e.f.,01.04.2022.

UIDAI has come out with new models for functioning of ASKs namely In-house model, UCL model and
Hybrid model and have requested Bank to select one from the above category for carrying out ASK
services. Accordingly, competent authority has permitted to carry our ASK services at Bank
branches as per UCL model. Under UCL model transactions such as address update, email update,
mobile number update and document update are permitted. New enrolment and mandatory updates
are not permissible under UCL model.

The software is provided by UIDAI. The Corporate Vendors have to supply ASK kits and manpower for
all the allotted locations along with the requisite Hardware (Laptop/Desktop, IRIS Scanner, Slap
Scanner & Printer cum Scanners, Digital cameras, GPS Devices, as per the specifications given by
UIDAI (STQC). The human resources and infrastructure (support services, facility, hardware and
connectivity) are required to be maintained, managed and operated by the Corporate Vendors only.
Branches shall provide space, tables, chairs, electricity & seating area for setting up of ASKs.

It is branch’s responsibility to ensure safeguarding of the ASK kits specially laptop. Under any
circumstance the devices shall not be permitted to be taken out of branch premises without written
communication from HO LB&FI Wing ASK Section (hofiuid@[Link]).

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 Canara Institute of Bank Management

The details of service providers Circle/Zone wise is listed below-

ZONE VENDOR CIRCLE NO OF

LOCATIONS
NORTH M/S ZEPHYR LTD AGRA, CHANDIGARH, DELHI, 244
KARNAL, LUCKNOW
EAST M/S ORION SECURITY BHUBANESWAR, GUWAHATI, 244
SOLUTIONS PVT LTD KOLKATA, PATNA, RANCHI
WEST M/S COMTECH INFO AHMEDABAD, BHOPAL, 244
SOLUTIONS PVT LTD JAIPUR, MUMBAI, PUNE,
HYDERABAD, HUBBALLI
SOUTH M/S ASUJA ESERV PVT BENGALURU, CHENNAI,MADURAI,
LTD MANGALURU,MANIPAL,VIJAYAWA 242
DA, THIRUVANANTHAPURAM,

All payments pertaining to ASKs will be effected centrally at Head Office. No amount shall be
payable by Branches/ROs/ COs.

Introduction of new BASE functionality package (Bharat Aadhaar Seeding Enabler) in

our Bank’s corporate website. (Cir 317/2024)

 NPCI has launched New Bharat Aadhaar Seeding Enabler (BASE) platform to facilitate Direct
Benefit Transfer by enabling the citizens to carry out certain activities in digital mode.

 For Canara Bank Customers, New BASE functionality package (Bharat Aadhaar Seeding Enabler)
has been launched in our Bank corporate website [Link] under ‘CUSTOMER
SERVICES’ section/Online Aadhaar Seeding/Deseeding

 By using BASE platform, the citizens can perform the following activities using Account
number and last 6 digit of registered mobile number.

o Check Aadhaar Seeding Status

o Aadhaar Seeding
o Aadhaar De-Seeding
o Move Aadhaar from Other Bank to Canara Bank

********************

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नामाां कन एवां मृत्यु दावा

NOMINATION & DEATH CLAIM

NOMINATION:
Nomination is the facility made available to depositor/s whereby depositor/s can nominate a person
as nominee, who, in case of death of depositor/s, can easily withdraw that deposit without having
to go through the cumbersome procedures of filling claim applications, obtaining succession
certificate etc.
Nomination can be made in respect of all types of deposit accounts/Safe Deposit Lockers/ Safe
Custody Articles held by individuals jointly or singly including sole proprietorship accounts.
Nomination facility is not available for the deposit accounts held by other than individuals i.e.
Partnership, Company, Trust, association, clubs etc. Since an overdraft account is not a deposit
account, no nomination facility is available for credit balances held in overdraft accounts.
There cannot be more than one nominee in respect of single/ joint deposit account.
A nominee cannot appoint another nominee for the reason that only the depositor/locker holder
can make a nomination. Nomination can be accepted in favour of an individual only. A nominee
cannot be an Association, a Society, a Trustee or any other Organization or Office bearer in his
official capacity.
A minor also can be appointed as a nominee. However, in such cases, the depositor may appoint
another individual, not being a minor, to receive the amount of deposit / contents of locker / Safe
custody articles on behalf of the nominee in the event of the death of the depositor/s / Locker
hirer during the minority of the nominee.
An illiterate person also can be appointed as a nominee. Only when an illiterate account holder
nominates someone, two literate witnesses are required.
In case of joint deposits/Lockers (other than jointly operated lockers) where no nomination has
been made, on the death of one or more of the joint depositors, the surviving depositors, joining
together can make nomination irrespective of the operational conditions of the deposit.
In case the depositor/Locker holder has already some deposit accounts / Lockers in respect of
which nomination has not been made, then nomination in respect of all these deposit accounts can
be made through a single NF 1037, for SDL as available in Locker Agreement& for Safe Custody
Articles NF 343, if the same individual is nominated as nominee for all the deposit accounts /
Lockers, duly entering the details of deposit accounts / Lockers.

 Nominee is a Trustee, accountable to legal heirs.

Minor’s Account: - In case the depositor is a minor, the nomination should be made by a lawfully
entitled person to act on behalf of the minor. When such minor attains majority, a fresh
nomination form or a consent letter should be obtained from the depositor (erstwhile minor) and
kept along with the nomination form. In the case of minor deposits where the mother of the minor
has been permitted to act as the guardian, she is entitled to exercise the power of nomination.
If term deposit with nomination facility is renewed with same name/s with same repayment
condition, on or after the maturity date of the deposit, the existing nomination will continue. A
fresh nomination need not be obtained. Further, when a deposit with nomination facility is
extended, the existing nomination will be valid and fresh nomination need not be obtained at the
time of extension of the deposit.
TYPES OF SETTLEMENT:

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a) Settlement based on Nomination;

b) Settlement based on production of Legal Representation (Succession Certificate, Will, Letter
of Administration etc.);
c) Settlement in the absence of any Nomination or Legal Representation.

(a) SETTLEMENT OF CLAIMS UNDER NOMINATION:

The right of the nominee always arises only after the death of the depositor or all the depositors in
the case of joint accounts. As soon as the intimation of the death of depositor/s is received, the
authenticity of the information should be verified by making discreet enquiries. Then a letter
should be addressed to the person nominated for the accounts in NF 148.
SAFE DEPOSIT LOCKERS AND SAFE CUSTODY ARTICLES
Where the lockers are hired jointly and operated jointly, on the death of any of the joint hirers,
the contents of the locker are allowed to be removed only jointly by the nominee(s) and the
survivor(s) after an inventory is taken in the prescribed manner. In the case of jointly hired lockers,
on the death of one of the joint hirers, no further operations should be allowed. The locker is to be
vacated and contents handed over to the nominee and the surviving hirers jointly.
Nominations can be accepted even when some arrears of rent/charges are due on the locker/safe
custody article.
In the case of lockers hired jointly by two or more individuals, nomination can be made in
favour of more than one person.
Settlement of Claims under Nomination
In case the nominee is in possession of the locker key, he may be requested to call on the branch
on a convenient day after fixing up prior appointment with the Manager of the Branch to remove
the contents of the locker on identification (such as Election ID Card, PAN Card, Passport etc.) and
verification of proof of death of locker hirer. Before permitting the Nominee to remove the
contents of the Safe Deposit Locker, the branch shall prepare an inventory of the articles in the
presence of nominee(s) and two independent witnesses. The independent witnesses should not be
employees/Ex-employees of the Bank.
In case the nominee is not in possession of the key, a letter from the nominee to the effect that he
is not in possession of the key and requesting the bank to arrange for breaking open the locker has
to be obtained. A suitable date for breaking open the locker is to be fixed. Necessary charges
should be collected and kept in Sundry Liabilities Account, if not already collected and kept in
Term Deposit.
In case the locker is hired to more than one person and if one of the joint hirers dies, then the
nominee/s as well as the surviving hirers should be called to the branch for the above purpose. The
surviving hirers alone should not be permitted to take away the contents of the locker.
Claims submitted for settlement including under nomination should be entered in the Death Claim
Register (NB.157).
Account in Operational
Nominee Situation What is to be done
of the name instructions
A Self X X dies A can change the nomination
X will be given access to the locker and liberty
A Self X A dies
to remove contents
B can continue to operate locker. After
Either or submitting death certificate of A locker will be
A, B X A dies
Survivor under sole ownership. He can give fresh
nomination.
A, B Either or X B dies A can continue to operate locker. After

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Survivor submitting death certificate of A locker will be

under sole ownership. He can give fresh
nomination.
Either or A&B X will be given access to the locker and liberty
A, B X
Survivor dies to remove contents
B along with X and Y will be given access to the
A, B Jointly X& Y A dies
locker and liberty to remove contents jointly
A along with X and Y will be given access to the
A, B Jointly X&Y B dies
locker and liberty to remove contents jointly
A&B X and Y jointly will be given access to the
A, B Jointly X&Y
dies locker and liberty to remove the contents

(b) PROCEDURE FOR SETTLEMENT OF CLAIMS BASED ON PRODUCTION OF LEGAL

REPRESENTATION:
Settlement based on Legal Representation shall include settlements based on Succession
Certificate, Probated Will or Letter of Administration or court order.
Probate is not mandatory in the case of Hindus, Buddhists, Sikhs or Jains, whose Wills are made
outside the Presidency towns and in the case of Mohammedans and Indian Christians and any Will
which is duly executed and attested by two Witnesses is valid in the eye of law. However,
Probating of the Will should be mandatorily insisted upon in the case of Wills made by any Hindu,
Buddhist, Sikh or Jain where the Wills are made in the Presidency towns i.e., Chennai, Kolkata and
Mumbai and in such other places notified by respective State Governments. The Will executed
outside these areas governing the properties situated outside the said areas is not required to be
probated mandatorily.
Where a Legal Representation in the said manner is produced by the Claimant(s), Bank is legally
bound to make payment to the persons mentioned therein as per the terms of such Legal
Representation irrespective of having registered nomination in the account and Bank will get a
valid discharge by settling the claim in favour of such persons
(c) PROCEDURE FOR SETTLEMENT IN THE ABSENCE OF ANY NOMINATION OR LEGAL
REPRESENTATION:
 Claims up to 10,000/-: Claim settlement can be made to any one or more of the claimants –
preferably to the widow of the deceased, without insisting for signature of all the
claimants. However, in such cases branch should obtain the claim-cum-declaration as per
the prescribed format along with KYC of the claimant.
 Claims above 10,000/- up to 50,000/-: Claims arising out of other than testamentary
succession in deposit accounts having aggregate balance of or in securities the value of the
securities pledged with the Bank is Rs 50,000/- or below (the prevailing market value is the
basis is to be settled without insisting upon death certificate and other claim forms, but on
the basis of either the personal knowledge of the manager or by making due enquiries and
against a simple claim-cum-declaration form as per the prescribed format. Such claim-cum-
declaration should be certified by a third party well known to the bank and good for the
amount. This simple claim- cum declaration form should be signed by all the major legal
heirs and in respect of minors by the natural guardian.
 Claims above 50,000/-: With respect to claims above 50,000/- the Claimants will have to
furnish Application Form under NF 1020 along with the applicable annexures duly executed
in the prescribed manner and all the documents required by the bank to process the claim.
NOMINATION FACILITY IN GOLD LOANS
Gold loan with nomination: Nomination facility is extended for all Gold Loan schemes to release
the gold ornaments to the nominees in the event of death of the borrowers at the earliest possible
time. The said nomination facility is voluntary and is at the discretion of the borrower.

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The jewels pledged by the borrower can be returned to the designated nominee in the event of
his/her death on clearance of all dues standing in his/her and legal heirs will be bound by the
terms of the contract executed by the deceased borrower.
Gold loan without nomination: In respect of gold loan without nomination, the claim has to be
settled in favour of Legal heirs, (or any one of them as mandated by all the legal heirs) on
verification of the authority of the legal heirs and proof of the death of the borrower on clearance
of all dues standing in his/her and legal heirs will be bound by the terms of the contract executed
by the deceased borrower.
Branches can settle the claim as per the Delegation of powers. For the purpose of reckoning the
claim amount, appraised value of gold ornaments as stated in the related pledge letter, should be
taken into consideration.
Additional nomination rule for gold loan:
Minor cannot be Nominee
Only one Nominee in each Gold Loan Account.

DEATH CLAIMS WITHOUT NOMINATION (Delegation of Powers):

DESIGNATION SETTLEMENT AMOUNT
ON DEATH OF THE DEPOSITOR
Managers/Sr. Managers heading the Rs. 2,00,000/-
branches & Wherever the Executives of
Scale IV & V heading the branches are on
leave / absence beyond 7 days, powers to
Managers / Senior Managers
Executives in Scale-IV Heading the Rs. 3,00,000/-
branches
Executives in Scale-IV in RO / Executives Rs. 5,00,000/-
in Scale V heading the branches
Executives in Scale-V in RO/ Heading ROs Rs. 10,00,000/-
DGM heading Branches/DGM of COs/ROs Full Powers
DGM of CO Safe Deposit Lockers and Safe Custody Articles
Irrespective of the amount
DEPOSITOR REPORTED MISSING
Branch-in-charge: Rs. 50,000/-
Domestic Accounts in Individual capacity only
DGM of Circle Office: Irrespective of amount:
 Joint Accounts
 Deposits held as per court orders
 NRI Accounts
 Deposits/securities which are security to loans.
 Safe deposit lockers & Safe custody articles.
 Deposits for which will of missing person is available.
 Person missing in country other than India.
Above Rs. 50,000/-
Domestic Accounts in Individual capacity only
*Officers heading Branches - claims to be settled at Regional Offices through the RO Legal Section
(Advances Section, in case legal Section is not available at RO).
Wherever nomination is available, Branch head can settle the claim irrespective of the amount.
In respect of gold jewellery, for the purpose of reckoning the claim amount, appraised value of
gold ornaments as stated in the related pledge letter, NF – 497 / NF 1009 /NF 1026 /NF 1030,
should be taken into consideration.

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SETTLEMENT OF CLAIMS IN RESPECT OF MISSING PERSONS:

The settlement of claims in respect of missing persons is governed by the provisions of Section
107/108 of the Indian Evidence Act, 1872. Section 107 deals with presumption of continuance and
Section 108 deals with presumption of death. As per the provisions of Section 108 of the Indian
Evidence Act, presumption of death can be raised only after a lapse of seven years from the date
of his/her being reported missing (from the date of FIR or publication in newspaper whichever is
earlier). As such, the nominee / legal heirs have to raise and express presumption of death of the
subscriber under Section 107/108 of the Indian Evidence Act before a competent court. If the court
presumes that he/she is dead, then the claim in respect of a missing person can be settled on the
basis of the same.
Claim up to a threshold limit (Rs. 50,000/-):
1) FIR for reporting missing of a person. It should be confirmed that 7 years have elapsed since
the date of reported missing
2) Non Traceable report issued by Police Authority
3) Affidavit & Indemnity from claimant (Appendix - 9 & 10)
4) Other documents applicable for Death Claims up to the Threshold limit.
Additional documents required for claim above Rs. 50,000/-
In respect of claims of deceased depositors above the threshold limit, i.e. above ₹50,000/-, in
addition to the documents stipulated for Settlement of Death Claims, Order issued by competent
Court raising express presumption of death of the depositor/customer under Sections 107/108 of
Indian Evidence Act has to be produced, so as to settle the claims to the nominee/legal
heirs/survivor(s).
Copy of Paper publication regarding missing of the person. (If the complaint was filed before police
authorities regarding missing of the person within a reasonable period (say 3 months), copy of the
paper publication need not be insisted).

LEGAL TERMINOLOGY: -
 Testamentary Succession/disposition: Testamentary succession/disposition means distribution
of the property of the deceased on the basis of a Will.
 WILL: “WILL” means the legal declaration of the intention of a testator (one who makes a will)
with respect to his property which he desires to be carried into effect after his death (Section
2(h) of Indian Succession Act, 1925). It includes codicil also.
 A WILL comes into operation only on the death of the testator.
 WILL can be revoked at any time by the testator during his life time.
 If there is any mistake in a WILL, it cannot be rectified by any Court of Law.
 No consideration is required for making a WILL.
Note: -
 A minor is legally incompetent to make a WILL and a WILL by minor is not a legal declaration.
 A WILL may be in any form. It may be written in any language and no technical words are
necessary. It may be written in ink or pencil.
 A WILL need not be stamped as it is exempted from stamp duty.
 The WILL shall be attested by two or more witnesses in the presence of the testator. A WILL is
not rendered void merely for the reason that it is witnessed by any of the beneficiaries under
the WILL.

 Codicil: A Codicil means an instrument made in relation to a Will and explaining, altering or
adding to its dispositions and shall be deemed to form part of the WILL (as per Section 2(b) of
Indian Succession Act, 1925). Codicil has no value in absence of will. If the existence of the

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Will is not proved, the Codicil will not be admitted to Probate. It is supplemental to and
considered as annexed to a Will previously made, being executed for the purpose of addition,
varying or revoking the provisions of that Will.

 Probate: A Probate means a copy of a Will certified under the seal of a Court of competent
jurisdiction with a grant of administration to the estate of the testator (Section 2(f) of Indian
Succession Act 1925). A Probate is conclusive as to the representative title of the Executor to
represent the estate. It is also conclusive proof as to the due execution of the Will and as to
the genuineness of the Will.

 Executor: Executor means a person to whom the execution of the last Will of a deceased
person is, by the Testator’s appointment confided (Section 2(c) of the Indian Succession Act
1925). Court shall recognize the rights of an Executor in Probate. A period of seven clear days
is required to pass after the death of the person dying leaving a Will or Codicil, before Probate
can be granted. The Office of an Executor or Administrator is not assignable; nor does it
survive after the death of a sole executor or administrator, in favour of his heirs.

 Letters of Administration: When a person dies leaving a Will without appointing an executor or
if the executor appointed by the Will is legally incapable or refuses to act or who has died
before the testator or before he has proved the Will, an administrator can be appointed only
by a competent court as distinguished from an executor to administer the property, who can
be appointed only by a person by his Will or Codicil. Letters of administration are granted
under Section 232 of the Indian Succession Act.

 Administrator: An Administrator means a person appointed by a competent authority to

administer the estate of a deceased person when there is no executor (Section 2 (a) of Indian
Succession Act, 1925). If a person governed by this Act dies without leaving a Will (i.e.,
intestate), a person is appointed to administer his estate, as provided in Section 218 and 219 of
the Act. The person so appointed is called an “Administrator”.

WHAT IS A CLAIM AND WHO HAS TO CLAIM?

Survivorship: CASA DEPOSITS & TERM DEPOSITS (Account opening form printed in or after
2011):
In Term Deposit account opening form where protective clause is available.
“In the event of death of any of the joint depositor/s prior to the maturity of the deposit the bank
will at the written request of the surviving depositor/s be at liberty though not bound and at its
absolute discretion to pay interest till the date of settlement, to repay the deposit before maturity
or to grant an advance against the security thereof any one or more of the surviving depositor/s
with the consent of other surviving depositor/s, on such terms as the bank may decide and to
add/delete/substitute any names therein. The discharge given by such surviving depositor(s)/any of
the surviving depositor/s shall give the bank a valid discharge.”
In such case, the surviving joint depositor/s may be permitted premature withdrawal of the
term deposit.

Type of Operation condition Claimants

deposit
Single Sole owner Under Claims
Depositor
E or S / Former or Survivor
On the death of 1 or more depositor, Not a claim
but not all (Deceased name can be/to be removed)
On the death of all depositors Under Claim

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Jointly
Joint Accounts On the death of 1 or more depositor, Under Claim
but not all
On the death of all depositors Under Claim
Illiterate or Survivor
On the death of illiterate Not a claim
(Deceased name can be/to be removed)
On the death of all depositors Under Claim

TERM DEPOSITS:
Account opening form obtained printed PRIOR to 2011 (without protective clause):

Type of deposit Maturity Instructions When claimed Claimants

Single Depositor Sole owner Any time Under Claims
E or S / Former or Survivor
On the death of 1 or more Before Maturity Under Claim
depositor, but not all
On or after Maturity Not a Claim
On the death of all Any time Under Claim
depositors
Jointly
On the death of 1 or more Any time Under Claim
Joint Accounts depositor, but not all
On the death of all Any time Under Claim
depositors
Illiterate or Survivor
On the death of illiterate Before Maturity Under Claim
On or After Maturity Not a Claim
On the death of all Any time Under Claim
depositors
On the death of depositor Any time Not a Claim
other than illiterate one

Payable to Illiterate or Survivor:

In case of death of Illiterate depositor:

TIME OF DEATH PAYMENT PERIOD TO BE CLAIMED BY

Before Maturity Before Maturity Survivor + Legal heirs of deceased
Before Maturity After Maturity Survivor
After Maturity After Maturity Survivors + Notarized Indemnity

Exception for Lockers & Safe Custody Articles

 Joint Lockers: - Wherever old formats of agreements NF-285 containing terms and conditions
have been obtained, in jointly hired lockers, where clause No.5 of the agreement is deleted
under the authentication of all the joint hirers or where a notice in writing cancelling the
above clause is received by the Bank from any of the joint hirers when one or more of the joint
hirer die, a claim has to be preferred by the surviving hirer/s and legal heirs of the deceased
hirer. However, if the legal heirs/ executor/ administrators of the deceased give
consent/authority, access may be allowed to the locker by the survivors of such hirers.

 Safe custody article joint: - In the case of jointly deposited articles where one of the joint
depositors dies and the application does not provide for delivery of the article to the surviving

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depositor in case one of the joint depositors dies, a claim has to be preferred by the surviving
depositor and the legal heirs of the deceased depositor.
Deposits in the name of deceased Minor: In the case of deposits in the name of minor/s, if a claim
arises before maturity of the deposit, it should be settled only in favour of the legal heirs and not
in favour of the guardian alone.
Claimants where Will is available: Copy of will along with copy of Probate orders to be called for.
Probating of the Will should be insisted upon only in the case of Will made by any Hindu, Buddhist,
Sikh or Jain where the Will is made in the Presidency towns i.e., Chennai, Kolkata, Mumbai and in
such other places notified by respective State Governments.
 Claim is to be preferred by Executor/Administrator as per Probate orders.
 Branch to scrutinize will to ascertain whether the testator has bequeathed his assets that are
now with the Bank to the beneficiaries now claiming. In case the Will is silent over Bank
Assets/Accounts, the claim will have to be preferred by all the legal heirs despite the existence
of a Will.
Claimants where Succession Certificate is available: -
If any Succession Certificate has been issued is favour of any person by the Court of Law, that
person alone will be entitled to prefer the claim.
MINOR AS A CLAIMANT
As per The Majority Act of 1875 Section 3(1) Minor means a person who has not completed 18 years
of age. Every person claiming in India shall attain the age of majority on his/her completing the age
of eighteen years and not before.
GUARDIAN
Guardian means a person having the care of the person of a minor or his property or both.
TYPES OF GUARDIAN: -
 Natural Guardian
 Testamentary Guardian
 Guardian ad litem
 Court Appointed Guardian
 De-facto Guardian
WHO WILL BE NATURAL GUARDIAN: -
Guardianship is decided according to religion of Minor (as per Religion law i.e. Hindu Law, Muslim
Law, Christian Law & Parsi Law)
Guardian of Hindus Minor: -
Father is the natural guardian of his minor sons / daughters and if the father is not alive, mother of
the minor is the natural guardian.

 Mother of a Hindu minor can act as a Natural Guardian even if the Father is alive in the
following Circumstances:
 Where the Father and Mother have agreed to that effect.
 Where the Father is totally indifferent to the matters of the minor.
 The Father is physically unable to take care of the minor because he is staying away from the
minor or because of his physical or mental incapacity
 Minor as a Guardian (Hindu): - A minor is incompetent to act as guardian of any minor except
his own wife or child, or, where he is the managing member of an undivided Hindu family, the
wife or child of another minor member of that family.

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Guardian of Christian Minor: -

In Normal Circumstances, father is the natural guardian of his minor sons / daughters and if the
father is not alive, mother of the minor is the natural guardian.

 Some states like Kerala, enacted legislations on guardianship, making paternal grandfather,
after him, full brothers in the order of seniority, half-brother by the same father, paternal
uncles in the order of seniority and maternal uncles in the order of seniority as legal guardians.
In such cases State law to be followed.
ADDITIONAL POINTS REGARDING GUARDIANSHIP IN HINDU, CHRISTIAN & PARSI
Natural guardian of an illegitimate Hindu/Christian/Parsi child: In the case of illegitimate child,
mother will be the natural Guardian and after her, the Father.
GUARDIAN AD LITEM:
Guardian ad Litem means a guardian appointed by a Competent Court to be the guardian of the
minor to look after the interest of the minor in a particular suit/ legal proceeding. Such Guardian
ad litem is appointed after hearing the father, mother or other guardian of the minor, if any.
COURT APPOINTED GUARDIAN: -
In case both the father and mother are not alive, only a person appointed by the Court can act as
guardian for the minors
Guardian of Muslim Minor: The order of guardianship is as under: -
1. Father
2. Person appointed by Father’s will (Testamentary Guardian)
3. Father’s Father
4. Person appointed by the Will of the Father’s Father (Testamentary Guardian)
In the absence of the above persons, only a person appointed by the Court can act as guardian of
the property of the minor. However, at the discretion of the Manager, mother of the minor can be
allowed as guardian to receive the share of the minor, without insisting on court guardianship,
provided the share of the minors does not exceed Rs. 2000/-.
SETTLEMENT OF CLAIMS: -
IN ABSENCE OF LEGAL REPRESENTATION (Will / Succession Certificate / Letter of
Administration)
Inheritance of the assets of the deceased depends on his religion and relative Succession Acts.
CLAIMS IN NON-RESIDENT ACCOUNTS: -
Where claimants/legal heirs are Indian Residents: -
Same formalities to be complied with as applicable in the case of disbursement of claims to the
legal heirs of a resident account holder. All legal formalities as in the case of local disbursement
are also to be complied with in such cases.
Where claimants/legal heirs are Non Residents Indian (NRI):
The amount may be credited to his NRO account and the amount may be repatriated abroad
through Treasury Department, after obtaining 15CA & 15CB 3CB & 3CD forms related to said
amount.
 Amount can be claimed by NRI at the time he/she visit India (if he/she is sole heir)
 If NRI is one of the legal heirs he/she has to claim along with other legal heirs.
 If NRI is unable to visit India, he can do following things for his/her share:
 NRI can relinquish his/her right by executing relinquish deed.

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 NRI can execute Special Power of attorney in favour of Indian Resident (duly providing Name,
Age and address)
 Can execute claim form Appendix 2 / Appendix 3 /NF 1020 (as per claim amount) in the
country NRI is residing
All above documents i.e. Relinquish Deed/SPA/Claim forms are to be duly witnessed by two
witnesses and to be attested by our bank branch there/Notary Public in that country/ Indian
Embassy/High Commission in that country. If the same is attested in India, the same is to be
attested by Embassy/High Commission of that County in India. KYC documents of all parties to
be enclosed with said documents are also to be attested by our bank branch there/Notary
Public there/Indian Embassy there.
HUF (Hindu undivided family): -
Status of HUF will continue even after the death of Kartha. After the death of Kartha of the HUF,
account is to be operated by the coparcener who has taken charge of HUF as Kartha. It can be
dissolved by partition of HUF property among the members of HUF. In such case, all coparceners
will be jointly entitled to the assets of HUF subject to partition deed executed, if any. Hence,
death claim formality does not arise.
PAYMENT OF INTEREST: -

Death of depositor Amount Claimed on Interest to be paid

Before the date of maturity of After Maturity date Contractual rate till the date of maturity
the deposit and simple interest thereafter
Before Maturity date Rate of interest applicable (at the time of
opening deposit) for term deposit for the
period run without penal cut
After the date of maturity of After Maturity date Contracted rate till maturity. The amount
the deposit and proceeds are left unclaimed with the bank after maturity
unpaid (not renewed shall attract rate of interest as applicable to
automatically) saving account or the contracted rate of
interest on the matured TD, whichever is
lower. (495/2021)

Credit balances lying in Current / OD accounts of the deceased individual and sole proprietorship
will earn interest at the rate applicable to SB accounts from the date of death to the date of
settlement. If such accounts are held in joint names, then the above benefit will accrue only when
all the joint account holders die.

Category of Claim Form Number

Testamentary Succession Appendix-1
Up to Rs. 10,000/- Appendix 2
Above Rs. 10,000/- up to Rs. 50,000/- Appendix 3
Above Rs. 50,000/ NF 1020

PAYMENT OF CLAIM AMOUNT / REDEMPTION OF ASSETS:

Payment should be made against Receipt. For amount up to Rs. 50,000/- as per Appendix 5 of
Manual of instructions on Settlement of death claims & for amount above Rs. 50,000/- as per
Annexure H of NF 1020 where amount is paid through Banker’s cheque.
Where each claimant’s share is Rs. 20,000/- and above, amount should be settled by way of credit
to account or Account payee DD only.
CLAIMS IN SAFE DEPOSIT LOCKERS AND SAFE CUSTODY ARTICLES: -
In the case of safe deposit lockers, a claim will arise when:

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 Canara Institute of Bank Management

o The sole locker hirer dies.

o In jointly hired lockers, the agreement does not provide for access to the lockers by the
surviving hirers when one of the joint hirers dies.
 The claimant/s to the contents of the locker held by the deceased renter.
 The valuer and
 Two officials of the branch.
 The inventory should enumerate the contents of locker and it should be signed by those in
whose presence the locker has been opened.
 The jewel appraiser’s assessment of the value of each item of the inventory should be in
triplicate, one copy for the Court, the second to the claimant and the third to be retained on
branch record.
o The method of preferring claims is similar to that as in the case of deposit. However, the
following additional points are to be taken care of.
 In case no claim comes forth and there are some arrears of rent to be collected, then a notice
is to be addressed to the legal heirs asking them to pay the up to date arrears of rent and to
surrender the key if the legal heirs are in possession of it. The notice should also state that in
the event of non- compliance, the Bank would take steps to break open the locker, dispose of
the contents if any, and recover the rent due and that which may fall due.
 If no response comes forth, the Bank may proceed to break open the locker adopting the
procedure laid down in the Manual of Instructions on “Safe Deposit Lockers & Safe Custody
Service”.
 In case the branch is unable to ascertain the names and addresses of the legal heirs even after
making local enquiries, a public notice is to be released before proceeding to break open the
locker.
As per RBI guidelines all Death claims are to be settled within the stipulated timeline of 15 days
from the date of submission of complete set of requisite claim documents by the claimant
(ICOM/195/2024)
Timeline of 15 days shall start immediately after punching of the claim papers by the claimant in
the package, so branches need to respond in package itself till completion of pending documents /
details to stop the period.
Branches to handhold the customers who are approaching the branch with complete set of claim
settlement documents and assist them in punching of claim through DCS Web portal.
No customer / claimant be denied of the services by stating / directing them to punch their claim
by themselves.
A deceased Claim where Death Certificate in respect of the deceased customer is issued
outside of India: Banks to get such certificate authenticated by any one or more of the following
modes, done in the country of its issuance.
 Verified by the Branch / Office of the Bank (wherever feasible) or
 Notarized by the Notary Public, or
 Apostilled, or
 Consularised
In case of accounts where nomination is held, branches may not ask for any documents other than
Death certificate (of the Deceased Customer) and KYC documents of the Claimant(s). (Cir.
648/2023).

***************

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राजभाषा
OFFICIAL LANGUAGE

The official language policy of the Union encompasses the following key dimensions:
CONSTITUTIONAL PROVISIONS:
On September 14, 1949, Hindi was recognized as the official language of the Union.
 Constitutional Status of Hindi –
The Constitution contains provisions related to the Official Language in its 17th part, consisting
of 9 articles from Article 343 to 351.
 Official language provisions in the constitution
As per Article 343(1) of the Constitution, Hindi is designated as the Official Language of the
Union, with the Devanagari script and the International form of Indian numerals prescribed for
official purposes.
Additionally, English may also be used for official purposes, as stated in Section 3 of the Official
Languages Act 1963.
The Official Language Policy came into effect on January 26, 1950.
OFFICIAL LANGUAGE ACT, 1963:
The Official Language Act of 1963, which came into effect on January 26, 1965, holds the
following characteristics:
As per the provision of Article 343(3) in Part-17 of the Constitution, the Act was enacted by the
Parliament.
The Act consists of a total of 9 sections and 11 sub-sections.
It allows for the continued use of both Hindi and English.
The Act mandates the use of Hindi and English for various official correspondences between the
Union and the States, as well as between the States.
It specifies the compulsory usage of both Hindi and English for 14 types of official documents,
including resolutions, general orders, rules, notifications, administrative reports, press
communiques, Administrative and Other Reports laid before a House or the Houses of Parliament,
Official Papers laid before a House or the Houses of Parliament, contracts, agreements, licenses,
permits, notices, and tender forms.

COMMITTEE OF PARLIAMENT ON OFFICIAL LANGUAGE:

The Committee of Parliament on Official Language operates with the following arrangements:
a) To ensure the implementation of the Official Language, a Parliamentary Committee will be
established, comprising 30 members, with 20 members from the Lok Sabha and 10 members
from the Rajya Sabha.
b) The Third Sub-Committee of the Committee of Parliament on Official Language conducts
inspections of bank branches/offices.
c) The Drafting & Evidence Sub-Committee of the Committee of Parliament on Official
Language conducts inspections of TOLICs (Town Official Language Implementation
Committees).

OFFICIAL LANGUAGE RULES, 1976:

o The Official Language Rules, formulated in 1976, comprise 12 rules.
o These rules are applicable to all states and union territories, excluding Tamil Nadu.

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 Canara Institute of Bank Management

o As per the Official Language Rules 1976, the term "Central Government Office" encompasses
ministries, departments, and offices of the Central Government, as well as offices of
commissions, committees, tribunals appointed by the Central Government, and offices of
corporations or companies owned or controlled by the Central Government.
o Rule 5 of the Official Language Rules 1976 mandates that replies to letters received in Hindi
must be given only in Hindi.
o Under Rule 11 of the Official Language Rules 1976, all manuals, codes, procedural literature,
forms, registers, name plates, signboards, letterheads, inscriptions on envelopes, and
stationery items must be in Hindi and English.
o According to Rule 12 of the Official Language Rules 1976, it is the responsibility of the
administrative head of each Central Government office to ensure compliance with the
provisions of the Act, these rules, and any directions issued under Rule 2, and to establish
effective check-points for this purpose.
 Regions are classified into A, B, and C regions based on linguistic criteria as per Rule 2 of the
Official Language Rules 1976. The details of three Regions viz. ‘A’, ‘B’ and ‘C’ are as follows:

Region A Region B Region C

States of Bihar, Chhattisgarh, States of Gujarat, All other States or Union
Haryana, Himachal Pradesh, Maharashtra and Punjab Territories not included in
Jharkhand, Madhya Pradesh, and Union Territories of the ‘A’ and ‘B’ Regions.
Rajasthan, Uttar Pradesh and Chandigarh,
Uttarakhand and Daman & Diu and Dadra &
National Capital Territory of Nagar Haveli.
Delhi and Andaman & Nicobar
Islands Union Territory.

OFFICIAL LANGUAGE IMPLEMENTATION COMMITTEE (OLIC) (Cir No.: 191/2023)

In each branch/office, the Official Language Implementation Committee will be constituted

under the chairmanship of the branch in-charge/head of office.

The Official Language Implementation Committee will hold meetings once every quarter to
review the progressive use of Hindi.

An attendance register will be maintained, and the meeting minutes will be prepared in
bilingual format.

Town Official Language Implementation Committee (TOLIC) (Cir No135/2023):

• To promote and implement the progressive use of the Official Language in Central
Government Offices/Undertakings/Banks across the country, Town Official Language
Implementation Committees (TOLIC) have been established.
• TOLICs are formed in towns where 10 or more Central Government Offices are functioning.
The Department of Official Language, MHA, GOI, will identify a Central Government Office or a
Bank in that town where a senior-level official is present and propose the formation of TOLIC,
along with instructions to conduct half-yearly meetings.
Central Government Offices, Undertakings, Banks, etc., located in the town must become
members of this committee.

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QUARTERLY PROGRESS REPORT (STR-18):

The Quarterly Progress Report (STR-18) Part I(Quarterly) and II(Yearly) on progressive use of
Official Language Hindi should be submitted within the stipulated time frame through SAS
Package by each Branches/Offices.
Annual Programme for 2024-25 for use of Hindi:
An Annual Programme for the promotion and progressive use of the Official Language Hindi is
prepared by Department of Official Language, MHA, GOI every year by setting the targets for
implementation by the Central Government Offices.
[Link] DETAILS OF WORK ‘A’ R EGION ‘ B ’ R EGION ‘C’ R E GION
1. From A to A 100% 1. From B to A 90% 1. From C to A 55%
1.
2. From A to B 100% 2. From B to B 90% 2. From C to B 55%
3. From A to C 65% 3. From B to C 55% 3. From C to C 55%
Originating
4. From Region 100% 4. From Region 90% 4. From 55%
Correspondence in
A to Offices/ B to Offices/ Region C to
Hindi (including E-
Individuals in Individuals in Offices/
mail)
States / UTs of States / UTs of Individuals in
A & B region A & B region States / UTs
of A & B
region
Letters received in
2.
Hindi to be 100% 100% 100%
answered in Hindi

3. Noting in Hindi 75% 50% 30%

OFFICIAL LANGUAGE IMPLEMENTATION IN CANARA BANK:

 Canara Bank has developed the 'Rajbhasha Akshay Yojana' to promote the implementation
of Official Language Hindi in its Branches, Offices, Sections, and Wings. This scheme aims to
recognize and reward the Best Implementation of Official Language by presenting Shields to
deserving Branches, Offices, Sections, and Wings.
 To encourage employees to use Hindi in their day-to-day official work, Canara Bank has
introduced the 'Rajbhasha Puraskar Yojana'. Under this scheme, employees are eligible to
receive Medals, Certificates of Excellence, and Cash Prizes. Eligibility – Employees working
in Region ‘A’ & ‘B’ should have used minimum 25000 words and in Region ‘C’ 15000 words in
a year to their day to day work.
 Furthermore, to foster Hindi proficiency among staff members, Canara Bank organizes the
All India Intra Bank Hindi Essay Writing Competition annually. This competition serves as a
motivation for employees to enhance their Hindi language skills.
 For employees who do not possess a working knowledge of Hindi, Canara Bank conducts the
Canbank Correspondence Course to provide them with the necessary training and resources.

HINDI INCENTIVE SCHEMES (Circular IC/371/2022 dated 01-06-2022):

1. Incentives/Allowances Payable on Passing Hindi Examinations/Working in Hindi

Sl. Name of the Level of Hindi Passing but Passing on Passing Passing on
No. Examination below 70% own efforts with 70% own efforts
and above and 70% and
above
In ₹
01 Hindi Teaching a) Prabodh 4000 4000 6000 8000

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 Canara Institute of Bank Management
Scheme (HTS) b) Praveen 5000 5000 7500 10000

c) Pragya 6000 6000 9000 12000

CanBank Hindi - - - 12000

Correspondence
Course
Examination Equivalent to 6000 6000 9000 12000
conducted by Pragya of HTS
02 voluntary Hindi
Organizations and
recognized by Govt.
of India(Ministry of
Education & Social
Welfare)
Diploma course 6000 xxxx 9000 xxxx
conducted by Equivalent to
03 Central Hindi Pragya of HTS
Directorate
(correspondence)
Hindi Incentive Typists 160 pm
04 allowances to
English typists/ Stenographers 240 pm
Stenographers

2. Hindi incentive scheme for employees on attaining higher qualifications in Hindi

[Link] on obtaining higher qualification in Hindi

Sl. No. Qualification in Hindi Incentive Amount (₹)
1. Ph.D. in Hindi or equivalent 30,000/-

2. M. Phil. / PG (Degree / Diploma) in Hindi of 25,000/-

durationmore than one year, or equivalent

3. M. Phil. / PG (Degree / Diploma) in Hindi of 20,000/-

durationone year or less, or equivalent
4. Degree in Hindi of duration of three years or more 15,000/-

2.b. Reimbursement of course fee:

[Link]. Qualification in Hindi Incentive Amount (₹)
1. Ph.D. in Hindi or equivalent 25,000/-
2. For other exams 15,000/-

Incentive on making special contribution in the field of Hindi literature

Sl. No. On making special contribution in the field of Hindi Incentive
literature Amount (₹)
Original Creative Literature in Hindi Language – Written in
1. Hindi by the employee and published byany reputed publication
and receives award by state/ Central Government or by any 10,000/-
reputed institution recognized by State / Central Government.

Important guidelines related to the scheme are as follows:

● Officers and workmen employees who have obtained the mentioned higher qualification after
joining the Bank, specifically on or after 01.07.2017, are eligible to claim incentives under this
scheme.

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● The Degree/[Link]. /Ph.D. in Hindi should be obtained from universities recognized by UGC.
● All officers and workmen employees who wish to pursue the mentioned courses should inform
the HRM Section at their respective Circle and the HOSA Section at the Head Office in advance,
obtaining the necessary permission.
● However, the pursuit of these courses should not hinder the discharge of their duties in the
Bank.
● Permission for officers/employees to attend classroom learning/training, granted by the HRM
Section/HOSA Section, is subject to administrative exigencies.
● Under this Hindi Incentive Scheme for special contributions in the field of Hindi Literature,
employees' literary works in Hindi should have been published by a reputable publisher and
recognized by the state or central government or a reputed institution recognized by the
State/Central Government. Proof of awards and other supporting documents must be submitted
along with the claim form.

3. Hindi incentive scheme to employees of the Bank on passing ‘Parangat’ examination

conducted by Hindi teaching scheme for attaining proficiency in Hindi.
Sl. No. Passing Criteria Incentive Amount (₹)
1. On passing with 55% to 59% marks 4,000/-
2. On passing with 60% to 70% marks 7,000/-

3. On scoring above 70% marks 10,000/-

Important guidelines related to the scheme are as follows:

● All officers and workmen employees, excluding sub-staff, who have working knowledge of Hindi
are eligible to take the "Parangat" examination.
● Employees who already possess proficiency in Hindi are not eligible to take the "Parangat"
Exam.
● The "Parangat" examination will be conducted by the Hindi Teaching Scheme, New Delhi, every
year in the months of May and November.

4. The honorarium given for the Hindi articles published in the "Canara Jyoti", bilingual
house magazine of our Bank are as follows;
Sl. No. Types of Entry Honorarium (₹) Minimum
Words
1. Poems 1,000/- -
2. Short Story & Other short articles 1,500/- 2000

3. Travelogue/Humorous Article/Stories 2,500/- 2500

4. Articles on Current Economic/Banking Topics 3,000/- 3000
5. Hindi language/official language article/Essay 3,000/- 3000

*************************

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मानव संसाधन ववकास एवं कममचारी मामले

HRD & STAFF MATTERS

HA for Officers (Cir IC/196/2024) w.e.f.01.04.2024

Metro Major A class Area I Other places

Grade/Scale of officers
(Rs.) cities (Rs.) (Rs.) (Rs.)
Officers in scale VI and above 4050/- 2925/- 2475/- 2150/-
Officers in scale IV and V 3375/- 2925/- 2475/- 2150/-
Officers in scale I/II/III 2925/- 2475/- 2150/- 1800/-

HA For Workman / Sub staff (Cir IC/195/2024) w.e.f. 01.04.2024

Sl.
Population Clerical staff (Rs.) Subordinate staff (Rs.)
No.
1 12 lakh and above and states of Goa 1500/- 1100/-
5 lakh and above and state capitals/
2 capitals of union Territories not 1350/- 900/-
covered in Sl. No. 1
3 Other places 1000/- 600/-

Provided that an employee can also claim lodging expenses reimbursed by production of Hotel Rent
Receipts subject to ceilings as below:

Sl.
Population Clerical staff (Rs.) Subordinate staff (Rs.)
No.
1 12 lakh and above and states of Goa 3000/- 1500/-
5 lakh and above and state capitals/
2 capitals of union Territories not 2500/- 1250/-
covered in Sl. No. 1
3 Other places 2000/- 1000/-

In such cases of reimbursement of Hotel Rent, Boarding charges at 25% of the Halting Allowance shall
be payable.

Eligibility for HA during taking over charge period: (if quarters /own house not available at
transferee place) IC/1/2022
Halting Allowance on merits up to a maximum period of 15 days or till the date of providing/fixing of
quarters, whichever is earlier is permitted; i.e., now, Halting Allowance payable to Officer Employee
on transfer is linked to providing / fixing of quarters at the transferee place.
A new portal under SAS package has been introduced by Bank in order to automate the process and to
facilitate systematized submission of Handing Over and Taking Over Charge (HOTO) report of the
Branch at the time of regular transfer, deputation/training period of absence up to one month,
deputation for more than one month (223/2022).

OTHER EXPENSES ON TRANSFER:

Shifting charges / Packing expenses on declaration basis towards packing / loading / unloading / local
transportation / transit insurance etc. in connection with transfer.

Sl. Sale Packing allowance

No. on declaration
1 Probationary Officers Rs.2000/-
2 Scale I/II/III Rs.40000/-
3 Scale IV/V/VI/VII Rs.50000/-

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Reimbursement of expenses towards shifting of own car by lorry/container over and above the
freight charges entitlement of the officer employees. (462/2022)

Reimbursement of Lodging Expenses to Officers upto Scale III w.e.f. 20.10.2022: (CIR68/08,
635/2022)

Grade of officers Eligibility Maximum room tariff permissible (Exclusive of

admissible taxes)
Major A class cities Area I Other places
Scale II and III 2* Hotel ( Non AC) 3400/- 2300/- 1800/-
Scale I 1* Hotel ( Non AC) 2600/- 2100/- 1600/-

Reimbursement of Lodging Expenses to Executives w.e.f. 01-03-2008 :(CIR 68/08)

Grade of officers Eligibility Maximum room tariff permissible (Exclusive of
admissible taxes)
Major A class cities Area I Other places
Scale VI and VII 4* Hotel 6800/- 3400/- 3000/-
Scale IV and V 3* Hotel 4000/- 2400/- 2000/-

Mementos to Retiring Employees on Superannuation (Cir186/2020):

Bank has introduced a Scheme for presenting Mementos to retiring employees on Superannuation in
recognition of their services to the Bank.

Cadre of Employees Total Amount payable (Rs.)

Executives 35000
Officers 30000
Clerical Staff 25000
Sub-staff 20000

Scheme for Providing Furniture / Fixtures to Officers (IC/671/2023):

Eligibility: The scheme will be applicable to the Officers residing in Bank's accommodation/leased
residence/residence owned by the Officers and/or residence taken by the Officers on rent.
 All confirmed Officers in Scale-I to Scale-VIII are eligible.
 Promoted Scale-I Officers on probation are eligible to avail the scheme.
 Direct Recruit Probationary Officers (including Specialist Officers) who are posted to a
Branch/Office on regular posting during probation are eligible to avail the facility under the
scheme, subject to execution of the BOND for the total cost of the furniture items purchased.
Whereas, Direct Recruit Probationary Officers posted to different Branches/Offices for on the Job
training periodically are not eligible to avail the facility until their confirmation.
 Officers on contract are not entitled to avail the facility under the scheme.
Monetary ceiling/limit fixed (excluding GST)for purchase of furniture / fixtures in respect of
various scales of officers are as under:

Sl. Scale Amount Sl. Scale Amount

No. No.
1 Scale I Rs.1.75 lac 5 Scale V Rs.3.50 lac
2 Scale II Rs.2.25 lac 6 Scale VI Rs.4.75 lac
3 Scale III Rs.2.50 lac 7 Scale VII Rs.5.50 lac
4 Scale IV Rs.2.75 lac 8 Scale VIII Rs.6.50 lac

 Carryover of unavailed limit of the previous scale/s shall also be considered.

 Reimbursement of annual Maintenance expenses -5% of the OCP or monetary ceiling/limit
whichever is less is eligible after 3 years and cut-off date for reckoning 3 years is 30th September.
Annual Maintenance expenses can be accumulated for a maximum period of 3 years. To be applied
through HRMS.

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 There is sub- limit of Rs 40,000/- for purchase of revenue items and there is no cost ceiling to
purchase Carpets/Curtains.

Scheme for Reimbursement of expenses incurred towards purchase of cleaning materials to

Officer Employees (Cir 186/2020)
Scheme for reimbursement of the expenses incurred by the Officer Employees towards purchase of
cleaning material to upkeep the ambience of the quarters/residence. The details are furnished below:

Cadre Amount (in Rs.)

Top Executive Grade Scale-VII 1500
Top Executive Grade Scale-VI 1000
Senior Management Grade Scale-V 750
Senior Management Grade Scale-IV 600
Middle Management Grade Scale-III 400
Middle Management Grade Scale-II 400
Junior Management Grade Scale-I 300

The reimbursement is permitted to Officers staying in the quarters allotted by the Bank/Bank leased
quarters/quarters on personal lease/own houses.
 Submission of claim through HRMS before 7th of succeeding month.
 The reimbursement is non-cumulative and on declaration basis.

News Paper Reimbursement: (Cir186/2020)

Cadre Eligibility

Top Executives Grade Scale-VI & VIII Any Three Dailies

Senior Management Grade Scale -IV &V 90% of cost of any two dailies

JMG Scale I to III 80% of cost of any two dailies

Workmen Employees 90% of cost of one daily.

Lunch Expenses (Cir. 186/2020)

A scheme for reimbursement of Lunch Expenses in lieu of subsidised Canteen facility is extended as a
welfare measure. The amount eligible for reimbursement in a month is limited to the extent of actual
expenses incurred by the employee in the previous month for coffee/tea/lunch subject to a maximum
of Rs.350/- per month. Employees to claim the lunch expenses through HRMS package before 10th of
succeeding month.

Scheme for reimbursement of conveyance expenses: (Cir 186/2020)

Conveyance is payable in full even if Officer Employee attends the office for one day of that particular
month for which conveyance is payable.

Scale Monetary limit on Petrol limit for Officers/POs who own a vehicle
consolidated basis for
officers/POs who do not
own vehicle
MMG -III Metro and Area I 1200 Branch Head

Area II &III 1000 Metro A-I A-II A-III

4-W 80 75 70 65
2-W 55 50 45 45
Prob. 45 40 35 35
Other than Branch Head
Metro A-I A-II A-III
4-W 70 65 60 55

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2-W 50 45 40 40
Prob. 45 40 35 35
Scale Monetary limit on Petrol limit for Officers/POs who own a vehicle.
consolidated basis for
officers/POs who do not
own vehicle
MMG -II Metro and Area I 1100 Branch Head

Area II &III 900 Metro A-I A-II A-III

4-W 60 55 50 50
2-W 55 50 45 45
Prob. 45 40 35 35
Other than Branch Head
Metro A-I A-II A-III
4-W 50 45 40 40
2-W 50 45 40 40
Prob. 45 40 35 35

Scale Monetary limit on Petrol limit for Officers/POs who own a vehicle.
consolidated basis for
officers/POs who do not own
vehicle
JMG -I Metro and 1000 Branch Head
Area I
Area II &III 800 Metro A-I A-II A-III
4-W 60 55 50 50
2-W 55 50 45 45
Prob. 45 40 35 35
Other than Branch Head
Metro A-I A-II A-III
4-W 50 45 40 40
2-W 50 45 40 40
Prob. 45 40 35 35

Employees Suggestion Scheme: (233/2010, IC/122/2022, IC/261/2023, IC/649/2023)

 The suggestion under Employees Suggestion Scheme is to be given by the Employee in
Document Management System (DMS) through SAS package or accessing the link made available
in CANNET.
 All cadres of employees (including executives) of the Bank are eligible.
 Cash Prize of Rs. 10000/- for each accepted suggestion.
 There is no ceiling for the number of suggestions accepted for cash awards.
 Annual Awards: Out of 36 Top Suggestions selected during the entire financial year, ESS
Screening Committee will decide Top three suggestions based on increasing profit/ reducing
expenditure/ innovative product for ANNUAL AWARD IN REWARDS & RECOGNITION
PROGRAMME.
 All suggestions related to Marketing also should be submitted under ESS.
 Last week of every month will be observed as “ESS Week”.

Incentive Scheme for capacity building for officers and clerical employees (IC/275/2024)
All Officers discharging their duties in the following identified areas will have to mandatorily obtain at
least one CERTIFICATION relevant to their functional/work area.
a. Treasury Operations: Dealers, Mid-office Operations, Foreign Exchange Operations

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b. Risk Management: Credit Risk, Market Risk, Operational Risk, Enterprise-wide Integrated Risk
(EWIRM), Information Security, Liquidity Risk, Mid-office Operation
c. Accounting: Preparation of Financial Results, Audit Function
d. Credit Management: Credit Appraisal, Rating, Monitoring, Credit Administration

 Cash incentive: Group –I course: Rs.6000, Group II course: Rs.10000, Group III: Rs.15000
 Reimbursement/Cash Incentives shall be restricted to three (03) Courses/ Certifications per
Financial Year
 Fee reimbursement: Group I courses - Maximum Rs 50,000/-, Group II courses- Maximum
Rs.1,00,000/- for Group III courses - Actuals.
 Upon completion of either Life insurance or General insurance certification: Incentive Rs.3000/-
along with fee reimbursement. In any case, the total cash incentive paid to an employee for
clearing Life Insurance, General Insurance & Composite Insurance Certifications put together shall
not exceed Rs. 6,000/-.
 Claims for reimbursement of course fee/incentives to be considered only if the process of
intimating and claiming incentive & reimbursement of examination fee in respect of Capacity
Building Scheme has been made online in HRMS Package.
 The claim application is to be submitted to the respective processing office (CO/HO) within 12
months from date of declaration of the results.

Definition of 'family': (Medical facilities & LFC purposes)

 'Family' = employee's spouse + wholly dependent unmarried children (including stepchildren and
legally adopted children) + wholly dependent physically challenged brother/sister with 40% or
more disability, widowed daughters and dependent divorced/separated daughters, sisters including
unmarried/divorced/abandoned or separated from husband/widowed sisters as also parents wholly
dependent on the employee.
 The term wholly dependent means monthly income not exceeding Rs.18000/- p.m. If the income of
one of the parents or the aggregate income of both the parents exceeds Rs.18000/-p.m., both the
parents shall not be considered as wholly dependent.
 A married female employee may include her natural parents or parents-in- law under the definition
of family; but not both, provided that the parents / parents-in-law are ordinarily residing with and
wholly dependent on her.

Whistle Blower Policy:

The Whistle Blowing Mechanism is an important tool for Preventive Vigilance. The policies put in place
as a part of maintenance of Corporate Governance and towards achieving greater transparency, with
an objective to provide a framework to persons to act as whistle blowers. It aims to protect such
whistle blowers wishing to raise a concern about any allegations of corruption or of misuse of office
that could jeopardize the interest of the Bank.
It aims to protect such whistle blowers wishing to raise a concern about any allegations of corruption
or of misuse of office that could jeopardize the interest of the Bank.
As per the revised policy, the employees of the Bank shall submit the complaint to the Designated
Authority at Human Resources Wing, HO either in Physical mode or through SAS package available in
Cannet under the path: Quick Links-> SAS Biometric Login-> General-> Whistle Blower Complaint.

The Chief General Manager and in his absence, General Manager Overseeing IR section, HR Wing,
HO will be the “Designated Authority”.

Group Personal Accident Insurance Policy for Employees: (IC/164/2024)

The Group Personal Accident Insurance Policy for employees under Staff Welfare Measures Scheme has
been renewed for a further period of one year from 01.01.2024 to 31.12.2024 with M/s. National
Insurance Company Limited.

Insurance cover available for Death & Temporary/Partial/Total disability

Category Sum Assured for death

Subordinate Cadre 350000

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Clerks/ Spl. Astt. 500000

Officers in Scale I 650000
Officers in Scale II 850000
Officers in Scale III 1050000
Executive scale IV 1200000
Executive scale V 1450000
Executive scale VI 1700000
Executive scale VII 2200000
Executive scale VIII 2200000

Temporary/ Partial/ Total Disability is covered as standard policy terms and condition.

Permanent Partial Disability- If an employee made with an accident bodily injury during the policy
period that cause permanent partial disability within 12 months, insurance company will pay
certain percentage.

 Additionally, in case of temporary total disablement if the employee is completely prevented from
engaging his/her occupation due to bodily injury, company will make a weekly payment of
Rs.5000/- for 104 weeks.

 If the employee expires due to accident, company will pay a one-time payment of Rs.10000/- as a
cost of education up to 2 dependent children under the age of 19 years.

GROUP TERM LIFE INSURANCE POLICY FOR ALL PERMANENT EMPLOYEES OF THE BANK – 2024-
2025. (IC 434/2024)
Our Bank has renewed Group Term Life Insurance Policy covering all permanent employees of the
Bank including Probationary Employees for the policy period 01.02.2024 to 31.01.2025 from M/s
Canara HSBC Life Insurance Co. Ltd. The Policy is effective from 01.02.2024.

Details of cadre-wise sum assured under the Policy is as under:

Insurance cover available for Death while in service:
Category Sum Assured
Subordinate cadre 20 months gross salary subject to a minimum of Rs. 10.00 lakhs
Clerical Cadre 20 months gross salary subject to a minimum of Rs. 15.00 lakhs
Officers Cadre 20 months gross salary subject to a minimum of Rs. 20.00 lakhs

GENERAL CONDITIONS:
1. The Policy is voluntary in nature and all employees who have either by design or default given
their consent have been covered in the Policy for the Policy Period ending 31.01.2025.
2. 90% of the total premium amount payable including GST for all the active employees has been
borne by the Bank.
3. 10% of the remaining premium amount payable including GST has been borne by the employees.
4. For employees superannuating during the policy period: (i)Bank has paid 90% of the pro-rata
premium payable including GST and the employees have paid the remaining 10% of payable
premium including GST for the period i.e. till the date of their superannuation. (ii)For the
remaining period i.e., from the date on which employees cease to be in the services of the Bank
on attaining the age of Superannuation, till the policy period, if they have paid 100% of the pro-
rata premium payable till the expiry of the Current Policy Period, the coverage has been
extended. (iii)For the employees exiting from the bank on account of VRS and have given consent
to continue in the policy are liable to pay 100% of the pro-rata premium from the date of his/her
exit till the expiry of the policy and the same shall be deducted from his/her account.
5. All new recruitees joining during the policy period shall be covered from the date of joining
the Bank with 90% of the payable premium to be borne by the Bank and remaining 10% by the
newly joined employees.

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IBA MEDICAL INSURANCE SCHEME FOR SERVING EMPLOYEES – RENEWAL OF THE POLICY FOR THE
YEAR 2023-24. (IC 11/2024)
Now the policy further renewed for a period from 01.10.2023 to 30.09.2024 with M/s. National
Insurance Company Limited as lead insurer. The details of the Policy are as under:

Cadre Insurance cover

Officers Rs4.00 lakh per family
Clerical/sub-ordinate Rs.3.00 lakh per family
Sub ordinate cadre employee Rs.3.00 lakhs per family

Officers/ employees (not dependents) shall be provided with Critical Illness cover of Rs.1 lakh, if the
employee contract critical illness in terms of the policy guidelines of the Insurance Company for first
time during the Policy period.
New born baby is covered from day one. All expenses incurred on the new born baby during Maternity
will be covered in addition to the maternity limit up to Rs, 20000/- per child.
If no period is stated for claim, the prescription for the purpose of reimbursement shall be valid for a
period not exceeding 90 days.
The Third Party Administrator [TPA] to be contacted is Raksha Health Insurance TPA Pvt Ltd.

Mandatory Leave (IC/370/2022)

The policy has been framed with an objective that it will be a tool of preventive vigilance and as an
operational risk management measure. The Policy will also provide an opportunity to all the staff
members to rejuvenate themselves by taking a break from work. The sensitive posts in the Bank are
decided by the 3 CGMs/ GMs Committee formed for the purpose of defining sensitive positions of the
Bank
 All staff members who are covered under Mandatory Leave shall compulsorily be sent on leave for
a not less than 10 working days in a single spell every calendar year by the leave Sanctioning
Authority, without giving any prior intimation to the staff, thereby maintaining an element of
surprise.
 The Branch Head / Manager (Administration)/ Leave Sanctioning Authority shall ensure that the
leave of the employee proposed to be sent on Mandatory Leave is punched in HRMS package
immediately on issuing the letter to the employee as per Annexure-B. It shall also be ensured that
the CBS password of the employee thus going on leave has been disabled during the period of
leave.
 Transfer from a particular position will be treated as compliance with the provisions of the
Mandatory Leave policy. For this purpose, the change in position should be to other
branch/office/department.
 Subordinate staff members are exempted from Mandatory Leave policy.

Introduction of online application in HRMS for seeking permission for Leave on Loss of Pay under
‘Sabbatical Leave Scheme’ (IC 518/2024)
As a part of digitalization & in order to eliminate the manual process involved related to sabbatical
Leave, a new module for submission of application & conveying the sanction/rejection by the
competent authority with reduced TAT is made live.
The path for forwarding the application by respective HRM at RO/CO/HOSA/SAS:
HRMS > Manager Self Service > Manage Leave Details > Sabbatical Leave
 Once the application is submitted, the same shall be forwarded by the supervisor (Leave
approving authority).
 Once the application is forwarded by the Supervisor, the same shall be forwarded &
Recommended by respective HRM Sections as per Workflow mentioned below.
 Once the application is recommended by the respective HRM Sections at CO/HOSA/SAS, upon
obtaining the necessary clearances, the application is then available to PM Section for
approval/denial.
 Upon approval/denial, mail will be triggered to the respective RO/CO/HOSA/SAS/Employee on
the status of the application.
Return of movable/ immovable and valuable property as at 31st March 2024 (IC 328/2024)
In terms of Regulation 20(2) of Canara Bank Officer Employees’ (Conduct) Regulations, 1976, “Every
Officer employee shall every year submit a return of his movable, immovable and valuable property

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including liquid assets like shares, debentures as on 31st March of that year to the Bank before 30th
June of that year”. The Annual Return shall be submitted through HRMS package and a signed copy of
the Return is to be sent to respective HRM Section/ HOSA Section, HO/ SA Section, Inspection Wing,
HO, Bangalore.
It may be noted that non-submission of the Annual Return within the stipulated time is contravention
of Canara Bank Officer Employees’ (Conduct) Regulations, 1976 and constitutes misconduct which
attracts appropriate action.

Social Media Policy of the Bank: (IC/488/2024, POLICY/44/2024)

The Bank has been utilizing different media options in Print (Newspapers) & Electronic Media (TV &
Radio) effectively to publicize the Bank’s schemes and products and also to communicate with the
customers.
The Social Media Policy of the Bank aims at providing a holistic view on why and how the Bank should
have presence on Social Media. Hence, the Bank proposes to undertake Social Media Marketing and
Publicity, to derive certain benefits.

No employee of the Bank shall create / form / promote any group/ community on any internet site
which uses the name or logo of Canara Bank and or shall become member of any such group or
community, unless such group is expressly created by the Bank. The recognized Majority Union
/Association of employees/ Officers of Canara Bank may use or continue to use their name containing
the name of Canara Bank in their Social Media/ Web Blog/webpage/website without bank logo. It shall
be mentioned in a conspicuous manner on the page of such group, Web Page, Blog, Website that
“Views, opinion and information expressed herein, does not necessarily reflect that of CANARA BANK.”

No employee of the Bank:

a) Shall express any view on any internet site or social media about the working of Canara Bank or
business of Canara Bank or generally about Canara Bank, its management, polices or any of its
employees, either in his / her own name or anonymously or in the name of any other person
including his / her family members and relatives.
b) Shall post / express any views or opinion on behalf of the Bank or by using his / her official
position in the Bank either in his / her own name or anonymously or in the name of any other
person including his / her family members and relatives.
c) Shall publish any official information / circulars/ memorandum / manual / documents, any other
communication etc., which are of the record of the Bank on any internet site/ social media or in
the form of Book, e-publication or e-paper or in any electronic form either in his /her own name or
anonymously or in the name of any other person including his / her family members and relatives.
d) Shall comment on confidential financial information such as Bank's future business performance,
business plans, about alliances, or prospects anywhere in the world, in conversations including
with friends.

CanDLE (Canara Digital Learning Experience) – Annual Circular on e-Learning –Financial Year 2024-
25 (348/2024)
The e-Learning facility of our Bank christened as 'CanDLE' [Canara Digital Learning Experience] has
been launched on 07.03.2019. E-Learning is a formalized learning process created by interaction with
digitally delivered content, services and support. Computers, mobile devices and the Internet are the
major components of e-Learning and the delivery of education is made 24x7 to a large number of
recipients at the same time.

 Launching of e-Learning for employees of our Bank through URL:[Link]

 Self-registration has been enabled for all the staff members

Mandatory e-Learning Courses for Employees in Scale I to V Awarding of bonus marks in APAR on
successful completion of assigned courses.
All Eligible Officers have to complete 15 Mandatory Courses and qualify 4 Mandatory “Know your
Circular” Quizzes.

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• All Eligible Officers have to complete mandatory courses and qualify “Know Your Circular” Quizzes
on or before 29th February 2025.
• Total marks in Annual Performance Appraisal for Mandatory Learning – 06 Marks (15 Courses, each
carrying 0.30 mark totalling 4.50 marks. Early completion of courses will carry 1.5 bonus marks)
• One(1) bonus mark will be awarded if the eligible Officer completes 8 courses before September
30th and 0.50 bonus mark will be awarded if the eligible Officer completes all the 15 courses before
31st January 2025.
One course from the following subject groups must be mandatorily assigned:
a) Cyber/Information Security b) Business Ethics c) Operational Risk d) Two Courses related to Digital
Banking/Technology
• Total marks in Annual Performance Appraisal for “Know your Circular” Quizzes – 04 Marks. (4
qualifying quizzes each carrying one (1) mark eventually totalling 4.0 marks)
• Branches/Offices shall strictly follow the extant guidelines w.r.t. completion of mandatory learning
and securing & qualifying “Know your Circular” Quizzes.
Passing criteria: 60% or70 % depending on the number of questions.
The rewards shall be linked to the employee's active credit card, allowing them to redeem points for a
variety of benefits.
All SWOs (A & B) can view the courses available in the Portal under SELF PACED LEARNING for
knowledge. These courses will not have any Assessments.

Professional Dress Code in the Bank – (IC/763/2023)

It is observed that despite guidelines in place, many of the employees are not following the Dress
Code and are not attending duties in formal dress. Further, many employees are not wearing ID cards
while on duty.
Banking being a service industry, employees are considered as the face or ‘Brand Ambassadors’ of the
Bank. As such, the appearance and conduct of the employees will have a great impact on the image of
any service industry. In view of above, a need is felt to reiterate the guidelines on Dress Code of the
Bank for the benefit of all the employees:

 Staff members shall wear the official ID card provided to them while on duty so that their name is
visible to the customers / visitors.
 Staff members who are provided with livery /uniform i.e. Sub-staff/ HKPs/Armed Guards/ any
other staff members, shall wear Crisp and Clean livery/ uniform while on duty.
 Staff members shall wear clean shoes/ footwear and not slippers while on duty.
 Wearing of shorts, three fourths i.e. trousers other than full length trousers-shirts, jeans and
sneakers/ sport shoes etc., to be avoided.
 The formal dresses worn shall be smart, pleasing, neat, tidy and presentable.
 Maintenance of Personal hygiene is required not only for good health but also for pleasant
appearance.

EMPLOYEES’ GRIEVANCE(S) REDRESSAL POLICY (POLICY/47/2024, POLICY/6/2024)

The Employees’ Grievance(s) Redressal Policy was introduced to lend an ear to the genuine individual
grievance(s) relating to the service conditions of the employee/s, so that the same can be considered
for speedy resolution.
‘Grievance(s)’ for the purpose of this policy would mean a grievance relating to any employee arising
out of the implementation of the policies/rules/ regulations governing his service conditions viz.,
matters relating to leave, increment, non-extension of benefits under rules, interpretation of Service
Rules/ Regulations, etc., of individual nature.
Exclusions: However, grievance(s) pertaining to or arising out of the following shall not come under
the purview of this Policy:
a) APAS rating /Confidential Reports;
b) Promotions, non-promotion;
c) The grievance(s) pertaining to Transfer/Postings and other administrative matters;
d) Where the grievance(s) does not relate to an individual employee;

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e) Matter which are subjudice before any Court of law/Tribunal/ Authorities;

f) Complaint under Whistle Blower Scheme; and
g) Any other matter where already a separate redressal mechanism is provided
h) The employee can upload the documentary proof, if any, while raising the complaint in CGRS
package. In case, if any complaints are received in physical mode by the Circle Office/ HOSA / SAS
as the case may be, the same shall be entered by the HRM Section of Circle Office/ HOSA / SAS as
the case may be, in CGRS package.
i) The grievance so received shall be entered in a register at HRM Section.
j) The HRM Section shall acknowledge the grievance(s) immediately, in any case within 6 working
days of receipt of such grievance(s) and place the same before the Committee at Circle level.

DIGITAL END TO END STAFF LOANS INITIATION & PROCESSING THROUGH WEB AND APP BASED -
IC/537/2024 dated 26.07.2024
Under EASE Reforms 6.0, one of the requirement was to provide an ‘End to end staff loan initiation
and processing’ facility through a web based and app based portal.
 New module for submission of application for Staff loans is enabled in HRMS under CANNET
(Intranet mode)
 Staff loans like Staff DPN and Staff OD (only fresh applications) are facilitated for applying in
HRMS module as first phase.
 HR clearance from competent authority shall be obtained by RO before loan processing
 Loan shall be disbursed by branch after obtention of appropriate documentation.
 From 01.08.2024, manual submission of loan application by employees for Staff DPN & Staff OD
(Fresh loan) shall be dispensed with. In the first phase, Staff DPN and Staff OD (fresh
applications) are facilitated for applying in HRMS Module.

BEREAVEMENT LEAVE FOR THE EMPLOYEES (IC/593/2024)

All permanent staff including the probationers of our Bank will be eligible for Bereavement Leave.
The Bereavement Leave (BL) will be extended on the demise of a family member of the employee.
For the purpose of Bereavement Leave, the expression ‘Family’ of an employee shall be limited to
the following members: Spouse, Children, Parents and Parents-in-law.
Bereavement Leave will be for a maximum period of 7 days at each instance including intervening
holidays. This leave period will not be considered as "Active Service" for the purpose of Privilege
leave calculation. The entire Bereavement Leave shall be availed in a single instance and
completed within 15 days from the date of demise of family member.
REIMBURSEMENT OF EXPENDITURE FOR TRANSPORTATION OF MORTAL REMAINS OF THE
DECEASED EMPLOYEE TO NATIVE PLACE/ PLACE OF DOMICILE WHEN DEATH HAPPENS OUTSIDE
HIS/HER NATIVE PLACE / PLACE OF DOMICILE (IC/591/2024)
Eligibility: All permanent employees/ employees under probation.
Amount to be paid: Charges for transporting mortal remains
MODE AMOUNT

By Air Actual cost or Rs.25000/- whichever is lower

By Road (Upto 500 Kms) At Rs.30 per km subject to a minimum of
and maximum of Rs.15,000/-
Rs.5000/-
By Road (Upto 500 Kms) At Rs.30 per km subject to a minimum of
and maximum of Rs.15,000/-
Rs.5000/-
By Road (Upto 500 Kms) At Rs.30 per km subject to a minimum of
and maximum of Rs.15,000/-
Rs.5000/-
By Road (Upto 500 Kms) At Rs.30 per km subject to a minimum of
and maximum of Rs.15,000/-
Rs.5000/-
*****************

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सामान्य अग्रिम
GENERAL ADVANCES
CREDIT POLICY (CIR No. 586/2024, 516/2024)

Thrust Areas: Agriculture sector, Industrial Sectors, MSME sector, Export segment, other segments
in Priority Sectors, and other sectors, which have growth potential. Funding well-structured
infrastructure project initiatives in various sectors is a thrust area for the Bank.

Non-thrust areas: Commercial Real Estate, NBFCs other than HFCs, Capital Market,
industries/sectors which do not have growth potentials, based on the Bank’s evaluation of
industries/sectors taking into account the prevailing economic scenario, performance,
concentration of exposure, outlook etc.

Definition of Start Up:

As per notification of Ministry of Commerce and Industry, Government of India dated 19.02.2019,
an entity shall be considered as a Startup;
1. Upto a period of 10 years from the date of incorporation/registration
2. Turnover of the entity for any of the FYs since incorporation/ registration has not exceeded ₹100
crore.
Provided that an entity formed by splitting up or reconstruction of an existing business shall not
be considered a ‘Startup’.

● Credit Information Companies

● Under the present regulation, the information is shared with following Companies:
 M/s. TransUnion CIBIL Limited
 M/s. Experian Credit Information Company India Private Ltd.(ECICI)
 M/s. Equifax Credit Information Services Private Ltd. (ECIS)
 M/s. CRIF High Mark Credit Information Services Pvt. Ltd. (CHMCIS)

Credit Information Report (CIR):

The obtention of CIR shall be a pre-sanction exercise and is not a substitute for verifying default
borrowal data under RBI defaulters' list/ willful defaulters' list/ list of undesirable parties at
branches or Specific Approval List (SAL) of ECGC etc.
CICs have categorized the credit information under two groups:
 Consumer Accounts - Borrowal accounts in the name of Individuals
 Commercial Accounts - Borrowal accounts of other than Individuals
Credit reports under Consumer Segment are available in following variants:
 Basic Report without score (gives all the details of the loan / advances of the borrower with
asset classification)
 Enhanced Report with Score (Basic Report plus Credit Bureau Score).
Credit Bureaus evaluate the information present on credit report and assign a three digit score
(representing probability of default over one year horizon period) to the individual, which are
typically in the range of 300 to 900 with score of 300 representing highest risk and 900 representing
lowest risk.
The credit scores are applicable for consumer segments only (i.e., individual borrowers only).

The mapping of CIC scores and Internal Risk Grades are as under:
CIBIL/CRIF/Equifax/Experian Risk Grade Risk Description
750 and above CS: 1 Low Risk
749-700 CS: 2 Normal Risk
699-650 CS: 3 Moderate Risk
Below 650 CS: 4 High Risk

Applicability of drawing Credit Information Report:

a. In case of Consumer accounts, obtention of CIR shall be mandatory except the following:
 Loans against our Own Deposits  Staff loans

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b. The Canara Retail Grade (CRG) shall be applicable for the Retail Lending schemes which are
listed in HO Cir 825/2021 and HO Cir 47/2022
c. The CIR shall be obtained at the time of processing credit proposals from existing clients of the
Bank as well as credit proposals received from applicants who are new to our Bank. The CIRs in
case of existing accounts shall be obtained at the time of processing renewal/enhancement
proposals.
d. Criteria for drawing CIR from multiple Credit Information Companies (CICs) for consumer
segment are as under: (Amount in ₹)
Report from Reports from
Sl No. Particulars One CIC Two CICs
Limit up to Limit above
I Secured Loans (other than Gold Loans)
(a) Personal Segment
(i) Housing Loans 10.00 Lakhs 10.00 Lakhs
(ii) Car loans 5.00 Lakhs 5.00 Lakhs
(iii) Education loans 7.50 Lakhs 7.50 Lakhs
(iv) All other secured loans 5.00 Lakhs 5.00 Lakhs
(b) MSME Segment 10.00 Lakhs 10.00 Lakhs
(c) Agri. Segment 3.00 Lakhs 3.00 Lakhs
(d) All other loans 10.00 Lakhs 10.00 Lakhs
II Unsecured Loans
(a) Personal Segment
(i) Personal loans 1 Lakh 1 Lakh
(ii) Education loans 4 Lakhs 4 Lakhs
(iii) All other loans under Personal Segment 5 Lakhs 5 Lakhs
i) In respect of existing accounts, if the threshold limit as mentioned above is crossed on account
of credit proposal on hand, the CIR shall be obtained as per guidelines.
ii) Wherever the two CIRs are to be obtained, Branches / Offices shall be free to obtain the report
from ANY of the CICs.
iii) Branches / Offices shall consider the score of ANY of the Two CICs (wherever
applicable) for the purpose of reckoning the delegation; lower/worst of the two risk grades shall
be considered.

e. Criteria for drawing CIR from multiple Credit Information Companies (CICs) for Gold Loans:
Only one CIR is required to be drawn from any of the CICs, irrespective of quantum of loan.

● Business Loans to Proprietorship Concern or Other Entities:

The risk grade-based delegation is not applicable in case accounts classified as Proprietorship,
partnership, One-person company or Corporate Entities. In all such cases the Branches shall obtain
the CIR under Commercial segment and extant guidelines shall be adhered to. Additionally, the
Branches shall draw the CIR without score under consumer segment for the beneficial owner(s) and
perused for the payment delays, delinquency status and mix of the loans & advances.
Respective sanctioning authority shall take suitable credit decision in respect of the proprietorship
firm and other entities as applicable to commercial segment.
The Risk Grade/Credit score-based delegation of powers shall not apply in case of ‘Commercial
Segment’
 Business Loan to individuals: The respective Internal Risk Rating Model shall be considered for
deciding delegated authority. Further, CIC report of the individual borrower needs to be generated
and perused for the payment delays in the existing loans, delinquency status and mix of the loans
& advances.
In case, CIC score of the borrower as per CIC Report (Consumer) is less than 650, proposal may be
sanctioned as under:
Sanctioning Authority Permitting Authority
Up to RO Head CAC Next Higher Authority
Above RO Head CAC Respective CACs
● Wherever sufficiently long credit histories in respect of borrowers are not available, CICs are not
allotting 3 digit scores, but a 2-digit score or risk index (-1 to 5) is displayed in the report. In such

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cases, suitable credit decision shall be taken and loans shall be sanctioned based on the normal
credit sanctioning powers as detailed in HO Scheme of Delegation of Powers for credit sanctions
updated from time to time based on merits.
● It may be noted that index displayed by any CIC other than 3 digit score need not be reckoned for
the purpose of delegation of power.
● Further, if a score of -1 is displayed in the TransUnion CIBIL report, it shall be interpreted as the
individual has no credit history available in the last 36 months. Such proposals shall be processed
as a New Credit Customer, and normal sanctioning powers shall be exercised and the scoring norms
shall not be applicable.
● Since the cost of drawing CIR is proposed to be recovered from the borrower, the copy of the CIR
if demanded by the borrowers shall be given by the branches/offices free of cost.

 Introduction of Risk Tiers for retail borrowers and fixation of Risk Limit to Near Prime & Sub
Prime Borrowers (HO Cir 198/2024):
 Bank to frame a suitable policy and put in place mechanism to monitor the risk limits for lending
to subprime and near prime retail borrowers in tune with the risk appetite of the bank.

a) Risk Tiers for Retail Borrowers: Risk tiers is introduced based on Canara Retail Grade (CRG)
and CIC score (wherever CRG is not applicable) for all the retail lending schemes as under:
Where CRG Where CRG not applicable (CIC Score
Risk Tier
applicable Band)
Near Prime CRG-3 730-681
Sub Prime CRG-4 300-680

b) Fixation of limits for Near Prime and Sub Prime exposures in Retail Portfolio: In order to
contain the concentration of lending in the Near prime and Sub Prime tiers and to monitor the
same, maximum ceiling for lending to Near Prime and Sub Prime borrowers on the fresh retail
sanctions is fixed in a FY as under:
Trigger limit
Risk Tier Maximum Ceiling as a percentage where CRG where CRG
of Retail loans sanctions during is is not
the year (%) applicable applicable
Near Prime 10% 9% 8%
Sub Prime 5% 4.5% 4%

c) Delegation of Powers for borrowers in Sub Prime Risk Tier: (198/2024)

Category of Accounts falling under the Sanctioning Authority
Borrower power of: based on Risk Tier
Accounts presently upto RO
NHA up to their DOP
Head CAC power
Sub Prime
A/cs presently above RO Head Respective CACs up to
CAC power their DOP

d) Additional spread over the Bench mark:

Sanctioning Authority based on Risk
Risk Category
Tier
Near Prime NIL
Sub Prime 0.25%

● Loans to Real Estate Sector: The Real Estate Sector has been broadly classified into Non-
Commercial and Commercial.

o Non-Commercial Real Estate Sector to include Bank’s exposure to:

i. All Housing Loans to individual customers under Bank's Housing Finance scheme and Golden Jubilee
Rural Housing Finance Scheme and RBI Housing loan Scheme.
ii. Investments in Mortgage Backed Securities relating to residential houses.
iii. Indirect exposure through lending / investments to / in National Housing Bank (NHB), Housing

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Finance Companies (HFCs) and other housing intermediary agencies

iv. Exposures to entrepreneurs for acquiring real estate for the purpose of their carrying on business
activities, which would be serviced out of cash flows generated by those business activities.
v. Loans extended to a company for a specific purpose, not linked to a real estate activity, which is
engaged in mixed activities including real estate activity.
vi. Loans extended against the security of future rent receivables provided there are certain in built
conditions which have the effect of delinking the repayment from real estate price volatility like,
the initial/original lease rental agreement between the Lessor and lessee has a lock in period which
is not shorter than the tenor of loan and there is no clause which allows a downward revision in the
rentals during the period covered by the loan.
vii. Credit facilities provided to construction companies which work as contractors.
viii. Financing of acquisition/renovation of self-owned office / company premises.
ix. Exposures towards acquisition of units / to industrial units in SEZs.
x. Exposure towards development of SEZ.
xi. Advances to Housing Finance Companies
xii. When financing 2nd housing unit onwards and the future/expected rental income from the property
to be purchased/constructed may be considered while computing eligible loan amount and NTH
under Housing Loan (all variants).

o Commercial Real Estate (CRE) Exposure

i. For an exposure to be classified as CRE, the essential feature would be that the funding will result
in the creation/acquisition of real estate where the prospects for repayment would depend
primarily on the cash flows generated by the asset. The primary source of cash flow (i.e. more than
50% of cash flows) for repayment would generally be lease or rental payments or the sale of the
assets as also for recovery in the event of default where such asset is taken as security.

o Commercial Real Estate – Residential Housing (CRE-RH)

i. A separate sub-sector has been carved out from Commercial Real Estate sector.
ii. Loans to builders/developers for residential housing projects (except for captive consumption).
iii. Integrated housing projects comprising of some commercial space (e.g. shopping complex, school
etc.) provided that the commercial area in the residential housing project does not exceed 10% of
the total Floor Space Index (FSI) of the project.
However, In cases where the FSI of the commercial area in the pre-dominantly residential complex
exceeds the ceiling of 10%, such case will not be classified under CRE-RH, but will be classified as
CRE.

o Exposures NOT to be treated as CRE

If the repayment primarily depends on other factors such as operating profit from business
operations, quality of goods and services, tourist arrivals etc., the exposure shall not be counted
as Commercial Real Estate.
 Treatment of Housing loans sanctioned for 3rd and subsequent Dwelling units
As per Basel II Framework, loans secured by a single or small number of condominium or co-
operative residential housing units in a single building or complex also fall within the scope of the
residential mortgage category and such loans need not necessarily be classified as CRE Exposures.
However, if the total number of such housing units is more than 2, the exposure for the third unit
onwards may be treated as CRE Exposure as the borrower may be renting these housing units and
the rental income would be the primary source of repayment.
It is clarified that the number of dwellings owned by an individual, irrespective of source of funding
(self-finance/Bank loan - active as well as liquidated), are to be considered while classifying
exposure as Commercial Real Estate.

o Bank Finance to Real Estate including Housing Projects

i. As regards financing of land acquisition by banks, banks may extend finance to public agencies and
not to private builders, for acquisition and development of land provided it is a part of the complete
project including development of infrastructure such as water systems, drainage, roads, provision
of electricity, etc. Where land is acquired and developed by State Housing Boards and other public
agencies, banks may extend credit to private builders on commercial terms by way of loans linked

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to each specific project.

ii. Banks may issue guarantees to private builders favoring Govt. Departments towards External
Development Charges & Internal Development Charges for development of land.
iii. However, banks are not permitted to extend fund based or NFB facilities to PVT builders for
acquisition of land even as part of a housing project.
iv. Bank finance can be granted to individuals for purchase of a plot, provided a declaration is obtained
from the borrower that he intends to construct a house on the said plot, within such period as
stipulated by the Bank (currently 18 months).
o Project Parameters – Commercial Real estate
i. The maximum exposure to a particular project by the Bank shall not exceed ₹500 Crores or 3.33
times of the Tangible Net Worth of the borrower whichever is lesser.

Relaxations to the above guidelines on a case-to-case basis may be permitted as under:

Sanctioning Authority Authority to permit relaxation
Up to and including Circle Head – CAC CGM/GM-HO-CAC
CGM/GM-HO-CAC and above authorities RSA up to their delegated powers

ii. Broad project benchmark parameters prescribed for financing commercial real estate projects
where the repayment is out of the cash flow from the sale of assets and/or from the lease rentals
are as follows:
Project Parameters Benchmarks
Debt Equity Ratio Not more than 3:1
Overall DSCR Where repayment of the TL is made out of lease rentals, Overall DSCR may be
stipulated at 1.50.
In exceptional cases, sanctioning authority can accept up to 1.25.
Promoters’ Minimum promoters’ contribution for CRE projects shall be as under:
contribution*  Min of 25% of project cost - in the form of equity/quasi equity, out of which
at least 17% - by way of equity capital. in addition to the 17% equity capital,
Quasi equity - up to 8%.
 Margin in the form of Advance money - 25% of project cost, provided the land
is already purchased/financed out of own resources.
 If not, the entire contribution of 50% - in the form of equity/quasi equity, out
of which at least 34% - by way of equity capital, in addition to the 34% equity
capital, Quasi equity – upto 16%.can also be considered.
In view of the above, Min contribution for CRE projects shall be 50%.

In case the land is to be purchased from Govt. agencies the overall margin shall
be 40%. Out of which:
Min of 40% of project cost - in the form of equity/quasi equity, out of which at
least 28% - by way of equity capital. in addition to the 28% equity capital, Quasi
equity - up to 12% can also be considered.
FACR/Asset 2:1 and above for the TL; Can be relaxed up to 1.75 on a very selective basis
Coverage Ratio by CGM/GM-HO-CAC and above authorities.
Repayment Period In cases where repayment is made from sale of the property, repayment period
up to 3 years from DCCO; In cases where repayment is made out of lease rentals
from the property, repayment period up to 7 years from DCCO, with a maximum
of 10 years including moratorium.

The capital infused after latest ABS shall be reckoned for arriving at the equity while calculating
various benchmark financial ratios in respect of Companies subject to submission of certificate
from the Chartered Accountant. Authenticity of additional capital infusion shall be invariably
cross verified from Ministry of Corporate Affairs (MOCA) website. Such proposals shall be
sanctioned by Circle Head CAC & above authorities up to their delegated powers.

iii. Cost of land–taken as part of Project cost for loan assessment. Only purchase price to be considered.
(not market value)
iv. LTV ratio is computed as percentage of the total outstanding liability (Principal + accrued interest
+ other charges to the loan) in the account in the numerator and realizable value of property in the

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denominator. Valuation shall be obtained once in 3 years, in general. If the account appears in SMA
1, shows any early warning signals or on occurrence of any adversities affecting the marketability
of the property, valuation shall be obtained once in a year.
v. The facility extended to CRE shall be TLs and wherever WC finance is extended it should be a sub-
limit under the TL and shall be only project specific. Regular WC facility shall not be granted.
vi. In case of loans under Canara Rent, Canara LRD and Canara Mortgage the margin stipulated as per
the scheme shall be applicable.
vii. Adherence to National Building Code (NBC) 2005: The NBC guidelines, in our Bank, for the present
are applicable in respect of loans for construction of building exceeding ₹25 Cr.
viii. National Disaster Management Authority Guidelines (NDMA): All types of Real Estate Exposures
of ₹1 Cr. and above including Housing Loans.
ix. The exposure to entities for setting up Special Economic Zones (SEZs) or for acquisition of units in
SEZs which includes real estate would be treated as exposure to commercial real estate sector for
the purpose of Provisioning, Risk Weight and capital computation. The above exposure may be
treated as exposure to Infrastructure sector only for the purpose of Exposure norms.

● Modification in Existing Guidelines and Consolidation of Guidelines on “Canara LRD” (207/2024)

 Canara LRD (Lease Rent Discounting).
 Nature of Loan facility: TL
 Eligibility:
 All corporate/non-corporate clients that are rated upto MR internally.
 Individual borrowers shall have risk grade of at least CS-3 as per the latest CIRs.
 Loan under the scheme cannot be extended/originated from rural branches
 Purpose:
 To provide loan to the Customers (non-regulatory retail) customers against rent receivables to
meet any requirement of the borrower/s other than for speculative purposes.
 The property should be leased/rented out to PSUs/Central/State/Semi Govt. Undertakings,
Corporates, Banks, Financial Institutions, Insurance Companies or MNCs. Loan can also be
provided for property let out to our bank’s branch/any other office premises provided in cases
where the lessor and lessee belong to the same group.
 The loan can be extended against the property/ies situated at Metro, Urban, Semi Urban or Rural
places where the property is leased out.
 Loan quantum: 90% of NPV of the net rent receivables for the unexpired period of lease
(certain+option) net of TDS, less advance rent, maintenance charges and other taxes including
GST or 75% of the net rent receivables, whichever is lesser.
 ED-CAC & above authorities (upto their DOP) can permit loan upto 95% of NPV of the net rent
receivables for the unexpired period of lease (certain+option) net of TDS, less advance rent,
maintenance charges & other taxes including GST or 85% of the net rent receivables, whichever
is lesser.
 Other than the above, the proposals shall be sanctioned by MC of the Board.
 NPV shall be arrived at by the prevailing 1 year MCLR.
 Unexpired lease period (both certain+option) or 15 yrs whichever is lower.
 Loan quantum arrived as mentioned above shall be more than ₹7.50 Crores
 Repayment: Upto 180 months or unexpired lease period (including repayment holiday, certain +
option period) whichever is lower in monthly installments. Interest to be recovered as and when
due.

 DELEGATION OF POWERS FOR SANCTION OF PROPOSALS UNDER CANARA LRD:

Loan Amount:
Rating CGM/GM-CO-CAC CGM/GM-HO-CAC ED-CAC CAC of the Board
Low Risk ₹10 Crores ₹30 Crores ₹50 Crores ₹100 Crores
Normal Risk ₹8 Crores ₹20 Crores ₹40 Crores ₹75 Crores
Moderate Risk No powers ₹15 Crores ₹25 Crores ₹50 Crores

● Lending to borrowers classified as capital market exposure

o Solo Basis: The aggregate exposure of the Bank to the capital markets in all forms (both FB & NFB)
shall not exceed 40% of the net worth, as on March 31st of the previous year. Within this overall

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ceiling, the Banks’ direct investment in shares, convertible bonds/debentures, units of equity-
oriented mutual funds and all exposures to Venture Capital Funds (VCFs) [both registered and
unregistered] shall not exceed 20% of the net worth.

o Consolidated Basis: The aggregate exposure of the consolidated Bank to capital markets (both FB
& NFB) shall not exceed 40% of the consolidated net worth as on March 31st of the previous year.
Within this overall ceiling, the aggregate direct exposure by way of the consolidated Bank’s
investment in shares, convertible bonds/debentures, units of equity oriented mutual funds and all
exposures to Venture Capital Funds (VCFs) [both registered and unregistered] shall not exceed 20%
of the consolidated net worth.

o Computation of exposure: For computing the exposure to the capital markets, loans/advances
sanctioned and guarantees issued for capital market operations would be reckoned with reference
to sanctioned limits or outstanding, whichever is higher. However, in the case of fully drawn TLs,
where there is no scope for re-drawal of any portion of the sanctioned limit; bank will reckon the
outstanding as the exposure. Further, bank's direct investment in shares, convertible bonds,
convertible debentures and units of equity-oriented mutual funds would be reckoned at their cost
price.

o Exposure to Share and Stock Brokers

i. NFB facilities to the share & stock brokers: can be extended towards Margin money guarantee and
Security Deposit guarantee.
ii. Fund based facilities to the share and stock brokers can be extended in the following form and
purposes:
1. OD against pledge of shares as a regular WC with a min margin of 50% against market value of
approved shares.
2. Adhoc over limit for gap in pay-in / pay-out (Intra-day exposure) - Margin 20%
3. CDB/LCDB for discount of cheques arising out of trading activities - Margin 50%.
4. Overdraft against property to stock brokers.

o Margin on advances against shares / issue of guarantees:

• A uniform margin of 50% shall be applied.
• In case of shares/debentures held in Demat form, a min margin of 25% shall be maintained.
• A min cash margin of 25% (within the margin of 50%) shall have to be maintained in respect of
guarantees issued by Bank for Capital Market operations favoring stock/ commodity exchange.
• Bank shall also comply with various regulatory restrictions on loans & advances against shares.

o Valuation of shares / debentures / bonds:

Shares / debentures / bonds should be valued at prevailing market prices when they are
lodged as security for advances.
o Advances against units of Mutual Funds:
1. Units of Mutual Funds which are listed/traded in stock exchange which have completed the
minimum lock-in-period stipulated in the relevant scheme shall be considered for granting
advances/loans.
2. The units should be listed in the Stock Exchanges or repurchase facility for the unit should be
available at the time of lending. The amount of advance should be linked to the Net Asset
Value (NAV) or the re-purchase price or the Market Value (MV) whichever is less and not to face
value of the units.
3. The units issued by Mutual Funds relating to tax saving equity plans are not to be treated as
approved securities for the purpose of considering loans.
4. SEBI approved Mutual Funds.
5. Advances should not be granted for subscribing to or boosting up the sales of another
scheme of the mutual funds or for the purchase of shares/debentures/bonds etc.

o Loans to Mutual funds: Loans to Mutual funds by the banks granted to meet the temporary liquidity
needs for the purpose of repurchase / redemption of units with- in the ceiling of 20% of the net
asset of the scheme and for a period not exceeding 6 months, if extended to equity-oriented Mutual
Funds, will form part of banks’ capital market exposure.

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● Lending to NBFCs:
The NBFCs are categorized:
 In terms of the type of liabilities into Deposit and Non-Deposit accepting NBFCs,
 Non deposit taking NBFCs by their size into systemically important and other non-deposit
holding companies (NBFC-NDSI and NBFC-ND) and
 By the kind of activity they conduct.
● Bank Finance (WC and/or TL) only to those NBFCs which are registered with RBI and who are
engaged in Principle Business of asset financing, loan, factoring, infrastructure financing and
investment activities (i.e. where real/physical asset and income is not less than 50% of assets and
income respectively).

● Different types of NBFCs are as follows:

i. Asset Finance Companies–
 Principal business is financing of physical assets supporting productive/economic activity.
 Examples of productive/economic activities are Automobiles, Tractors, Lathe machines,
Generator sets, Earth moving and material handling equipment, Moving on own power and
General purpose Industrial machines.
 Principal business is as aggregate of financing real/physical assets supporting economic activity
and income arising there from is not less than 60% of its total assets and total income
respectively.
ii. Investment Companies – Principal business is acquisition of securities.
iii. Loan Companies – Principal business is providing finance for any activity other than its own but does
not include an asset finance company.
iv. Infrastructure Finance Companies –
 Deploys at least 75% of its total assets in infrastructure loans.
 Minimum net owned funds of ₹300 Crores.
 Minimum credit rating “A” or equivalent.
 CRAR of 15%.
v. Systemically Important Core Investment Company (CIC-NDSI)
 Hold not less than 90% of its Total Assets in the form of investment in equity shares, preference
shares, debt or loan in group companies.
 Investment in the equity shares in group companies including instruments compulsorily
convertible into equity shares within a period not exceeding 10 years from the date of issue,
constitute not less than 60% of its Total Assets.
 Does not trade in its investment in shares, debt or loans in group companies except through
block sale for the purpose of dilution or disinvestment.
 Does not carry on any other financial activity, section45 I(c) & 45 I(f) of the RBI Act, 1934
except investment in bank deposits, money market instruments, government securities, loans
to and investments in debt issuances of group companies or guarantees issued on behalf of
group companies.
 Asset size is ₹100 Crores or above.
 Accepts public funds.
vi. Infrastructure Debt Fund (IDF-NBFC):
 Facilitates the flow of long term debt into infrastructure projects.
 Raise resource through issue of Rupee or Dollar Denominated bonds of minimum 5 years
maturity.
 Only Infrastructure Finance Companies (IFC) can sponsor IDF-NBFCs.
vii. NBFC- Micro Finance Institutions (NBFC-MFI):
Non deposit taking NBFC having not less than 75% of its assets in the nature of qualifying assets.
viii. NBFC - Factor:
 Principal business of factoring and constitutes 50% of its total assets.
 Income derived from factoring business should not be less than 50% of its gross income.
ix. Mortgage Guarantee Companies (MGC):
 90% of the business turnover is mortgage guarantee business; OR
 90% of gross income is from mortgage guarantee business.
 Net owned fund is ₹100 crores
x. NBFC Non-Operative Financial Holding Company (NOFHC):

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 It’s a wholly owned Non-Operative Financial Holding Company.

 Promoter / promoter groups will be permitted to set up a new bank.
 It will hold the bank as well as all other financial services companies regulated by RBI or other
financial sector regulators, to the extent permissible under the applicable regulatory
prescriptions.

o Activities not eligible for Bank Credit:

i. Bills discounted/rediscounted by NBFCs (other than factoring companies), except for rediscounting
of bills discounted by NBFCs arising from sale of commercial vehicles (including light commercial
vehicles) and two wheeler and three wheeler vehicles, subject to the following conditions:
 The bills should have been drawn by the manufacturer on dealers only;
 The bills should represent genuine sale transactions as may be ascertained from the
chassis/engine number; and
 Before rediscounting the bills, bank should satisfy themselves about the bona-fides and track
record of NBFCs which have discounted the bills.
ii. Investments of NBFCs both of current and long-term nature, in any company /entity by way of
shares, debentures, etc. However, Stock Broking Companies may be provided need-based credit
against shares and debentures held by them as stock-in-trade.
iii. Unsecured loans/inter-corporate deposits by NBFCs to/in any company.
iv. All types of loans and advances by NBFCs to their subsidiaries, group companies/entities.
v. Finance to NBFCs for further lending to individuals for subscribing to Initial Public Offerings (IPOs)
and for purchase of shares from secondary market

o Prohibitions on Bank Finance to NBFCs:

i. NBFCs are prohibited from contributing capital to any partnership firm or partner in a partnership
firm (including LLP, AOP).
ii. Bridge loans of any nature/interim finance against capital/debenture issues shall not be sanctioned
to any NBFCs including residuary NBFCs.
iii. Shares and debentures cannot be accepted as collateral securities for secured loans granted to
NBFC borrowers (other than stock broker).
iv. Banks shall not execute guarantees covering inter-company deposits/loans thereby guaranteeing
refund of deposits/loans accepted by NBFCs/firms from other NBFCs/firms.
v. Banks shall not enter into lease agreements with equipment leasing companies as well as other
NBFCs engaged in equipment leasing.
vi. A certificate from statutory auditors of the respective borrower companies shall be obtained on
completion of each FY for having complied with the prudential norms prescribed by the RBI from
time to time.
vii. The certification regarding the activity status of the NBFC as registered with RBI shall also be
obtained on yearly basis.
viii. Loans sanctioned to NBFCs for on-lending to individuals or other entities against gold jewellery,
are not eligible for classification under agriculture sector.
ix. Investments made by banks in securitized assets originated by NBFCs, where the underlying assets
are loans against gold jewellery and purchase / assignment of gold loan portfolio from NBFCs are
also not eligible for classification under agriculture sector.
o Stipulation of Asset Coverage Ratio while financing to NBFC:
The asset coverage ratio is a financial metric that measures how well a company can repay its
debts by selling or liquidating its assets. The higher the asset coverage ratio, the more times a
company can cover its debt.
Asset Coverage Ratio (ACR) = [Assets] / [Total outside Liability (TOL)]
Asset - Total standard loan portfolio of the Company, Investments and Cash & bank balance
Minimum Asset Coverage Ratio (ACR) for financing NBFCs is stipulated as below:
a) NBFC-MFI - 1.10
b) NBFC (other than NBFC-MFI) - 1.25
External credit rating for NBFCs AAA AA A
Minimum ACR 1.10 1.15 1.20

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o Finance to PFI:
 A Financial Institution, other than NBFC registered with RBI and HFC registered with NHB, shall be
considered as Public Financial Institutions [PFI] if:
1) It is registered as PFI by Ministry of Corporate Affairs, Government of India under Section 465 of
Companies Act, 2013.
2) It is established or constituted under any Central or State Act or not less than 51% of paid up share
capital is held or controlled by Central Government or State Government or partly by the Central
Government and partly by one or more State Governments.
At the time of putting up the proposal for PFI following factors need to be critically analyzed and
commented upon:
 Capital Adequacy Ratio  Asset Quality  Resource Base  Liquidity
 Proportion of Fee Income in the total Income  Operating Efficiency

o Securitization Transaction: RBI vide two separate notifications dated 24.09.2021 has issued Master
Directions with regard to Transfer of Loan Exposures and Securitization of Standard Assets
respectively.
Based on the RBI’s direction, Bank’s policy guidelines with regard to Securitization of Standard
Assets and Transfer of Loan Exposure have been issued separately.
In case of Securitization of Standard Assets, the guidelines as enumerated in LDGM 02/2022 dated
05.03.2022 may be referred to.
In case of Transfer of Loan Exposures, the guidelines as enumerated in LDGM 03/2022 dated
05.03.2022 may be referred to.
These directions are effective immediately from the date of issuance and have replaced the bank’s
existing policy guidelines on purchase of pools through Direct Assignment of cash flows from
originating NBFCs/Banks/FIs.

o Lending to Software:
 WC finance and TL.
 Financing of software units shall be confined to a few select branches in Circles with the prior
permission of the Circle Head.
 Margin on computer hardware – 40% to 50% (could be kept lower 25% to 30%: in cases where
vendor has provided guarantee for up-gradation of equipment or has entered into buy-back
arrangement with the user unit).
 TL – Repayment shall not exceed 3-4 years including moratorium period.
 Proposal within the sanctioning powers of CO/HO shall be placed directly to the competent
authority for consideration.
 The credit exposure to software sector shall be subject to an overall ceiling fixed for the Bank
as a whole.

o Scheme for financing producers of feature films:

 For financing production of feature films, involving the entire gamut of functions involving
pre and post production processes.
 Finance to Film Producers who have a Good track record of at least 5 years.
 Not defaulters with NFDC or any other financial institution.
 Finance should not exceed 35% of the project cost.
 Remaining portion of funds should be sourced as margin from promoters (25%) and 40% as
advance from distributors.
 Delegated authority for sanction is at HO only.

o Amended Technology Upgradation Fund Scheme (ATUFS):

● Ministry of Textiles, Government of India, has modified the existing provisions of Revised
Restructured Technology Up-gradation Fund Scheme (RRTUFS).
● It offers credit-linked subsidies under Make in India and Zero Defect Zero Effect initiatives.
● Approved for implementation from the date of resolution of Ministry i.e. 13.01.2016 for a
period of 7 years up to 31.03.2022 i.e. till FY 2022, provides one time capital subsidy for
investments in the employment and technology intensive segments of the textile value chain,

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keeping in view promotion of exports and imports substitution.

o Bills discounting:
 As a part of WC finance and accordingly, the bills limit shall be assessed and sanctioned within
the overall WC limits sanctioned to the borrower.
 Part of MPBF (tolerance level 10%) where limits are permitted.
 Drawings against cheques sent in clearing (DACC) are over and above the assessed MPBF
 To purchase/discount/negotiate bills, the Bank would ensure the genuineness underlying
commercial and trade transactions of its constituents.
 RO Head CACs & above authorities under their respective DOP, may permit negotiation of
Bills drawn under LC restricted to our Bank even though the beneficiary of the LC is not a
constituent of our Bank subject to the condition that the proceeds shall be remitted to the
regular banker of the beneficiary. However, the restriction on negotiating bills under
unrestricted LCs to non-constituents shall continue.
 Bank would be more cautious and prudent while discounting bills drawn on allied
concerns/subsidiaries set up by the constituent borrowers.
 Discount of bills drawn by front finance companies set up by large industrial groups on
companies of the same group shall be analysed with caution and circumspect.
 Not to rediscount bills earlier discounted by NBFCs except in respect of bills arising from sale
of light commercial vehicles and two / three wheelers.
 Ensure proper commercial judgment in discounting of bills of services sector.
 To treat finance against discounting of services sector bills as unsecured advance.
 Borrowers (Corporates and other constituent) having sales turnover of over ₹50 Crores shall
disclose, “Ageing schedule” of their overdue payables in their periodical returns/statements
submitted to the Bank.
 Not to enter into repo transactions using bills discounted / rediscounted as collaterals.
 Undertake vendor bill financing in respect of large corporates by offering invoice bills
discounting facility.

o Bills discounted under LCs (BULC): (718/2024, 232/2024)

PURPOSE:
 To facilitate discounting of high value bills, co-accepted/ backed by LCs of SBI and its
subsidiaries, nationalised banks, foreign prime banks operating in India, select private sector
banks, and LCs of our bank.
 The bills should have arisen out of genuine sale transaction and hence should have correlation
to the turnover of the corporates/non-corporates. Strict care should be taken to ensure that
accommodation bills are not financed.
 The bills with shorter maturities may be encouraged under the subject scheme and in any case,
the usance period of bills should not exceed 180 days.

ELIGIBILITY CRITERIA FOR FINANCING UNDER THE SCHEME:

 Bills under LC advised through ‘Structured Financial Messaging System’ (SFMS) shall only be
negotiated.
 Bills, co-accepted/ backed by LCs of Co-Operative Banks and Non-Prime foreign Banks shall not
be eligible under the scheme.
 The scheme can be made available to:
o Constituent borrowers (Corporate/ Non-corporates) with satisfactory performance. The
account shall be under Low/Normal Risk / Moderate Risk/High Risk and/or having external
rating grade up to B (externally rated B or better). Wherever both internal and external ratings
are available, only current external rating shall be taken into account. However, in respect of
constituent borrowers internally rated as high risk or externally rated as B, the BULC limit shall
be capped at 25% of the turnover recorded in the previous year.
o Non-constituent borrowers (Corporates/Non-Corporates) subject to the condition that the bills
drawn under LC are restricted to our Bank. The proceeds shall invariably be remitted to regular
Bank account of the beneficiary. LCs not restricted to our Banks shall not be negotiated. In this
regard, Branches /Circles shall strictly comply with the extant Know Your Customer / Anti
Money Laundering guidelines of the bank issued from time to time.

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GUIDELINES ON BILLS DISCOUNTED UNDER LCS (BULC):

 Bills purchased/discounted/negotiated under LC “where the payment to the beneficiary is not
made under reserve”- exposure on LC issuing bank.
 Negotiation “under reserve” – exposure on borrower.
 Bills discounting/purchasing/negotiating bank and LC issuing bank are different entities, the
exposure on account of LC discounting should be taken to be on the LC issuing bank and not on
the third party/ borrower.
 Bills discounting/purchasing/negotiating bank and LC issuing bank is at branches of our Bank-
the exposure is on the third party/borrower and not on the LC issuing bank (our Bank).
 The bills under the scheme may be discounted/negotiated for non-constituents of the bank,
i.e., Suppliers of our customers, as beneficiaries of LCs subject to the following:
o Due diligence to be carried out.
o Account to be opened in the name of the beneficiary of the LC by observing the KYC norms.
o Remitting the amount directly to the beneficiary’s WC account with their banker.
o LC advised and Bills accepted through Structured Financial Messaging Service (SFMS) of IDRBT
shall only be negotiated.
 BULC is now linked to STRLLR.

SANCTIONING AUTHORITY:
o Negotiation of inland bills drawn under LCs established by our branches:
 Full extent and upto twice the normal delegated power for secured facility.
 For the purpose of arriving at delegated amount only regular WC facility shall be reckoned.
 While negotiating the bills under LCs established by our branches, prior clearance has to be
obtained from the following authorities:
Up to and including RO power account RO-Head CAC
Above RO power accounts Circle-Head-CAC

B. Negotiation of inland bills drawn under LCs of other banks:

 Negotiation of Inland Bills by LCB Heads (for Constituent / Non-Constituent Borrower):
 LCB In case of LCBs/MCBs maximum power shall be irrespective of the aggregate limit
sanctioned: DGM Headed-upto ₹75 Cr, AGM Headed- upto ₹50 Cr DM Headed- upto ₹25 Cr.
 AGMs and DMs at branches (other than LCB/MCB) may permit Negotiation of Bills drawn under
LCs (including LCs of other banks), up to ₹25 Crore and ₹15 Crore respectively irrespective of
the aggregate limit sanctioned.
Note - The above power to permit negotiation of Bills under LC shall be borrower wise. All such
sanctions shall be reported to LCCW, HO and also sent to CA&M Wing, HO for Review (on monthly
basis). LCCW, HO shall submit the LCB wise position, on monthly basis, to
CAC, RM Wing for monitoring of the ceiling.
The guideline on seeking exposure clearance from CGM/GM, RM Wing, HO in case of Bills drawn
under LCs of Private Sector Banks stands withdrawn.
LCB Head (DGM/AGM) may permit negotiation of Bills drawn under LC restricted to our bank
even though the beneficiary of the LC is not a constituent of our bank subject to the condition
that the proceeds shall be remitted to the regular banker of the beneficiary. However, the
restriction on negotiation of bills to non-constituents under unrestricted LCs shall continue.

 Negotiation of Inland Bills by Branches other than LCB for Constituent Borrower (entity
having WC exposure with us):
 Branch Head starting from Scale IV, Regional Head CAC and DM-CAC at MSME Sulabh and above
authorities are delegated with powers to discount bills under this scheme upto their normal
delegated powers for secured advances i.e. Documents drawn under LCs of other banks except
private sector banks can be negotiated within the delegated powers of the respective
authorities.

 Negotiation of Bills by branches other than LCB for Non constituents (entities not having WC
exposure with us):RO Head CAC and above authorities under their respective sanctioning
powers, may permit negotiation of Bills drawn under LC restricted to our bank even though the
beneficiary of the LC is not a constituent of our Bank subject to the condition that the proceeds

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shall invariably be remitted to the regular Bank account of the beneficiary. However, the
restriction on negotiation of bills to non-constituents under unrestricted LCs shall continue.

 Aggregation of Limits for the purpose of BULC (Constituent Borrower):

 Applicable for our branch LC as well as of other Banks.
 Designated Branches can negotiate Bills under LC, to the extent of Normal Delegated Powers for
secured facilities, even if the existing exposure / proposed exposure including the BULC limit
falls under the powers of higher authority.
 If the Branch is reporting to CO, the proposal shall be placed to RSA at CO.

C. Discounting of bills under LC (BULC) on without recourse basis:

a. Discounting of bills under LC (BULC) where the LCs bearing the legend “without recourse”
may be permitted on a case to case basis subject to the condition that the LCs should have
been issued by PSBs/ICICI Bank/ HDFC Bank.
b. The delegation for permitting discounting of bills under LC (BULC) bearing the legend
“without recourse” shall be vested with ED-CAC and above authorities.
c. Discounting of bills under LC (BULC) issued on behalf of PSUs (State & Central) and ‘A’ rated
companies shall be vested with Circle Head CAC and above authorities.
d. Additional ROI of 0.25% over and above the applicable card rate shall be applicable for such
BULCs.
e. BULCs issued on behalf of PSUs/ Companies externally rated as ‘A’, additional ROI of 0.25%
is not applicable.
f. In other cases, additional ROI of 0.25% may be waived by the Next Higher Authority on a
case to case basis based on merits with due justification.

RATE OF INTEREST:
Constituent Borrowers & Non Constituent Borrowers:
Description Rate of Interest
Bills up to 90 days Usance STRLLR+1.25%
Bills above 90 days up to 180 days STRLLR+1.50%
ED-CAC and above authorities shall be authorized to permit the concession in Rate of Interest
under BULC scheme (for Constituent & Non-Constituent borrowers), up to STRLLR for accounts
up to their delegated powers. The rate of interest is subject to change as advised by the HO
from time to time.

o Short Term Corporate Loan:

● Eligibility: PSUs, other Govt. organizations, listed companies, other Corporates, Indian Joint
Ventures (Indian Co holding> 51%), Wholly Owned Subsidiaries abroad (ceiling 20% cap of unimpaired
Tier I + Tier II capital funds fixed by RBI)
● Purpose: For meeting WC requirement, project related expenses, to repay/swap high cost debts,
to meet on-going capital expenditure, for acquisition of commercial assets, any other business
related purposes/short term cash flow mismatches, other general corporate purposes other than
investment in capital market, purchase of land, any speculative activities or any purpose which is
restricted under RBI/ Government guidelines or which is falling under statutory/ regulatory
restrictions stipulated under RBI/ Government guidelines.
o The exposure ceiling for Short Term Corporate Loans for the FY 2024-25 is continued at ₹50,000
Crores, of which the exposure under unsecured STCL (including STCL-STRLLR) shall be restricted to
₹40,000 Crores (excluding Government/PSU accounts).
o The validity of the ceiling fixed for the current year shall continue until review during the 1st
quarter of next FY/till next review.
● Bank has introduced Short TL scheme with pricing benchmarked to Short Term Repo Linked Lending
Rate (STRLLR) w.e.f. 17.10.2020 for financing Government Undertakings and other select
Corporates.

o TYPES OF STCL
o Secured STCL:
● The security shall be fully secured.

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● The maximum tenor of the fresh loan - 12 months. Permitted to only the borrowers having good
repayment track history and there shall not be any overdue.
● Repayment shall be in suitable installments or Balloon payment supported by cash flow statement
for the tenor of the loan. Monthly interest is to be serviced in all the cases.
● Rollover may be permitted only once for a maximum period of 06 months during the tenure of the
said STCL. Maximum period including rollover-12 months.
● STCLs can be availed within a maximum period of 03 months from the date of sanction.

o Unsecured STCL:
● Unsecured Short Term Corporate Loan shall be permitted only to Profit making PSUs and
Government Organizations.
● The loan shall be sanctioned only upto a maximum period of 6 months.
● The loan sanctioned shall have to be availed within a maximum period of 30 days from the date of
sanction and in not more than 2 tranches.
● The Short Term Corporate Loans (STCLs) which are unsecured in nature can be sanctioned only by
Management Committee (MC) of the Board and cannot be done through Circular Resolution.
● All such exposures (Secured / Unsecured STCL) with a contractual maturity of one year or less, ECAI
rating for short term exposures (P1+, P1, P2or equivalent) shall be taken into account, if available
in place of any long term rating.

o Corporate loan scheme:

● Eligibility: PSUs, other Govt. organizations, listed companies, other Corporates
● Purpose: For any genuine funding purpose in line with the business activity of a customer viz., for
building up/shoring up Net WC, meeting project related expenses including project expansion, on-
going capital expenditure, acquisition of commercial assets, meeting research and development
expenditure etc.
● Loan is secured & medium term in nature. Tenor is 60 months. CAC of Board & above committee
delegated to sanction.

● Loans/Advances to Subsidiaries:
● Eligibility: subsidiaries sponsored by Bank
● While appraising/sanction, it shall maintain Arm’s length relationship with each such entity/
subsidiary in regard to business parameters and operations to ensure that no undue advantage is
taken while dealing with such proposals.
● The Arm’s length relationship means a transaction between two related parties that is conducted
as if they were unrelated, so that there is no conflict of interest.

o CONSORTIUM/JOINT LENDING ARRANGEMENT (JLA/MBA/LOAN SYNDICATION)

o Consortium advances:
● Bank shall participate in a consortium as a member or a leader.
● As far as possible meaningful participation is ensured by taking a share of at least 10% of the total
Fund Based limits. In deserving cases, lower share may also be accepted.
● Work towards a coordinated approach among the members in the matter of appraisal, Assessment
and disbursal of credit to the borrower. Also sharing of Information among the participating banks.
● Monitor utilization of limits on a pro-rata basis and sharing of pro-rata business amongst the
members of consortium
● There is no ceiling on the number of banks to participate. Without the consent of existing
consortium members, no other bank can extend any other credit facility to a borrower who is
enjoying credit facility under consortium.
● Each bank to classify the loan account according to conduct of accounts with the bank concerned,
irrespective of the classification of the loan account with other banks.
● Approval of assessment made by the Leader Bank - to be taken up with respective Sanctioning
Authorities, wherever, we are members. Wherever, we are leaders, assessment is to be made as
per the laid down guidelines as per our CRM Policy.

● Guidelines on Periodicity & Participation in Consortium Meetings:

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 Consortium Meetings are to be attended as under:

 In the case of consortium accounts where we are leader:
Circles should be
Credit Limits Sanctioned Remarks
headed By presided by
₹25 Crores & above ++++++++++++ CGM/GM Presence of Branch-in-Charge is also
Less than ₹25 Crores CGM/GM DGM mandatory. Second-in-command in
DGM DGM – CO HEAD absence of Branch Head.
 In the case of consortium accounts where we are member:
 to be attended by an official not less than the rank of Divisional Manager at Circle.
 Presence of Branch-in-Charge is also mandatory.
 In the absence of Branch-in-Charge, second-in-command to attend such meetings.
 Before attending the meeting, the concerned Executive should obtain briefing from the Deputy
General Manager/ Assistant General Manager of the Circle.
 Wherever required, briefing from concerned User Wing at Head Office should also be obtained.

o Joint Lending Arrangement (JLA)

● With a view to inculcate the required financial discipline in the borrowers and to enable financing
banks to take informed decision on credit matters and as a risk mitigant, the ground rules governing
JLA has been introduced:
 The Scheme shall be applicable to all lending arrangements, with a single borrower with aggregate
credit limits (FB+NFB) of ₹150 Cr and above involving more than one PSB. All non-investment grade
borrowers rated below BBB or equivalent irrespective of the amount of exposure.
 Borrowers having exposure below ₹150 Cr, under MBA may also be encouraged to come under JLA,
so that the wholesome view of assessment of credit requirement as well as the entire operations
of the customers can be taken by the Bank.
 Banks/consortia shall treat borrowers having multi-division/multi product companies as one single
unit, unless there is more than one published balance sheet is available
 Similarly in case of merger, the merged unit shall be treated as a single unit. In case of split, the
separate units shall be treated as separate borrower accounts, provided there is more than one
published balance sheet.
 Banks participating in TLs extended to a borrower should normally also provide WC finance.
However, if so warranted, other banks may also provide WC finance, subject to compliance with
other conditions contained under JLA guidelines. To that extent, WC JLAs can be distinct and
separate from TL syndications/arrangements.
 In case of large projects, often, the size of the funding requirements as TL would necessitate Joint
financing by more than one bank under Syndication arrangements. In such cases, participating banks
may, for the purpose of their own assessment, refer to the appraisal report prepared by the lead
bank/sub-committee or have the project appraised jointly.

o Multiple Banking Arrangement (MBA)

● Certain amount of Operational freedom is available to borrowers under MBA. To inculcate
discipline, regulation and to maintain credit quality, Pari-Passu charge over the security
hypothecated to be obtained from the financing bankers. Banks also to adopt a coordinated
approach in assessing the limit, fixing DP and monitoring the accounts.
● A quarterly exchange of information among the financing banks under the arrangement shall be
ensured. Certificate from the Company Secretary or the Chartered Accountant on compliance of
various statutory/regulatory guidelines in vogue on half yearly basis shall be obtained in tune with
the RBI guidelines.
● Declaration about the credit facilities enjoyed with other banks, duly certified by auditors, should
be obtained each time any fresh facilities/enhancements are sought or limits are renewed.
o Minimum information such as name of borrower & address, Names of Directors, Names of
Guarantors, details of limits sanctioned etc., are to be shared with other banks under MBA. Other
banks shall also be informed about any fraudulent actions by the borrower which might have come
to Bank's notice.
o RBI has advised strict compliance as under:
● Banks should strictly adhere to the instructions regarding sharing of Information relating to credit,
derivatives and unhedged forex exposures among themselves.
● Any sanction of fresh loans/adhoc/renewal of loans to new/existing borrowers should be done only

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after obtaining/sharing Information

● Non adherence to these instructions would be viewed seriously and banks would be liable to action,
including imposition of penalty.

o LOAN SYNDICATION:
● “Loan Syndication” refers to a Bank/FI (syndicator / lead manager) assessing the financial options
of a medium/ large project for a client (usually a corporate client) and if found bankable, arrange
for funding either on BEST EFFORTS BASIS or on UNDERWRITING basis.
● Parties:
• Arranger/Lead Manager –
 Awarded with mandate by the borrower
 Responsible for syndicating the debt with other banks.
 Ensures that the debt under syndication is fully subscribed.
 Entitled to the Syndication / Underwriting fee.
• Underwriting Bank –
 Commits to finance the debt requirement of the borrower from its own sources in the
event of loan not being subscribed.
 The lead manager or another bank may play this role.
 Not all the syndications are underwritten.
• Participating Bank -
 participates in the process of debt tie-up/down selling by lending a portion of debt
requirement of the borrower
• Facility Manager/agent-
 Takes care of all the administrative arrangements like disbursement, repayments, compliance
etc.
 Acts on behalf of the participating banks.
 May be either the Lead Manager or the Underwriting Bank.
● Based on the orders of NBAC committee for EoI [Expression of Interest], Syndication Group shall
seek the acceptance of the terms and conditions of EoI from the client.

o CO-SYNDICATION / JOINT SYNDICATION:

● In certain cases, our Bank may join hands with other leading players in Syndication in order to
garner the business.
● Fee Structure for Loan Syndication:
• Ranging from 0.10% to 1.25% of the syndication amount or any other rate as permitted by NBAC
committee or by sanctioning authority in credit sanction note proposal.
• The syndication fee will be inclusive of the appraisal fees and exclusive of all other fees related to
proposal like upfront/ processing charges etc. The syndication fee to be charged is inclusive of the
hold position of the debt.
• Payment of fees shall be negotiated based on prevailing market condition. The terms of milestone
payment shall be placed to authority duly incorporating in key terms and conditions to NBAC/ during
credit sanction note. The fees payable shall be exclusive of GST and any other prevailing taxes and
levies. The fees shall be inclusive of out-of-pocket expenses. However, Syndication Group may
negotiate with client for travel arrangement to undertake site visit, representation to participating
lenders etc.

● Foreign Currency Loan to Residents [FCLR]

o Permitted in USD, GBP & in EURO to the existing corporate/firms with Credit Risk Rating up to
LR/NR & MR, where the exposure is hedged or natural hedge is available and having an excellent
track record.
o Can be permitted to MR Accounts if,
• In case of PSU/PSE on case-to-case basis.
• Other than PSU – collateral to be at least 125% of proposed FCLR exposure.
● Also permitted to new Blue Chip Cos. within first 500 ranks/EOU/PSU with rating LR.
● Min loan: Equivalent to USD 1,50,000 for WC/TL and USD 50,000 equivalent for Short term Import
financing.
● Disbursement: in Foreign Currency & Monitoring: Both in INR & FC
● Translation purpose: Maintained in INR equivalent @ MTM rate.

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● Tracking overdue/Breaches: INR need not be reckoned and limit shall be FC amount sanctioned
● For monitoring overdues/breaches: Amount of FC dated of respective disbursements shall be
reckoned as the limit in case of existing FC loans sanctioned in INR equivalent.
o Granting FCLR for liquidation of existing Rupee TL:
 FCLR TLs can be granted for conversion of Rupee TLs already availed by the constituents with our
bank/takeover of Rupee TL availed from Financial Institution (FIs).
o Permitted in specific cases where residual repayment is within 5 years.

o Granting of FCLRs to NBFCs:

● Considered for AAA rated NBFCs & Low Risk-excellent track record.
● Other conditions: The maximum upper limit per NBFC is USD 5 Million.
● Repayment:
a) Working capital - for periods up to 1 year
b) TLs - for periods upto 3 years
● Borrowers to obtain forward cover to hedge exchange risks.

● Secured Overdraft (SOD):

o SOD shall be granted for WC purpose only.
o No WC facility shall be extended without assessment and shall be need based only.
o Stock/Book Debts statement shall be obtained periodically at least once in 6 months.
o Primary /collateral security of immovable property (L&B), Bank Deposit, NSC, KVP, Insurance Policy
(SV), SGB and any other approved liquid collateral security shall fully cover the facility including
margin.
o Wherever only Collateral Security available – Sanction by Scale-IV and above authorities

● Net Means: Whenever proposals are received from new parties for credit facilities and the parties
are reported to have accounts with other banks, satisfactory OPL have to be obtained from such
other banks. Confidential report calling letter (NF-365) & Opinion Giving Letter (NF-214)
Terms Used Means (in ₹) Terms Used Means (in ₹)
Very Small Means Up to ₹1 Lakhs Good means Above ₹25 Lakhs to ₹1 Cr
Small Means Above ₹1 Lakhs to ₹4 Lakhs Very Good means Above ₹1 Cr to ₹10 Cr
Moderate Means Above ₹4 Lakhs to ₹10 Lakhs Large means Above ₹10 Cr to ₹25 Cr
Fair Means Above ₹10 Lakhs to ₹25 Lakhs Very Large means Above ₹25 Cr

 Large Borrowal Framework (LBF): Large Borrower Framework (LBF) shall be applicable on all
single counterparties:
o DEFINITION OF THE SPECIFIED BORROWER: If the aggregate sanctioned limit is more than-
• ₹25,000 Crores at any time during FY 2018;
• ₹15,000 Crores at any time during FY 2019;
• ₹10,000 Crores at any time from April 1, 2019 onwards;

● Lending to Infrastructure Investment Trusts (InvITs):

o An Infrastructure Investment Trust (InvIT) is Collective Investment Scheme similar to MFs.
o The InvIT structure shall have mainly four parties namely: (i) Sponsor(s), (ii)Trustee,
(iii) Investment Manager and (iv) Project Manager, all being separate entities.
o The InvIT shall be set up as a Trust under the provisions of the Indian Trusts Act 1882.
o InvIT should be rated “A” & above by Credit Rating Agencies registered with SEBI.
o The Holding of the InvIT in the underlying assets should not be less than ₹1,000 Crores, as per
Valuation report not older than 6 months.
o The InvIT to which loans are extended should have a net-worth of not less than Rs.1000 crore as
per latest financial results filed with SEBI.
o The trust is required to invest a min. of 80% of the value of InvIT assets in completed & revenue
generating infra assets & not more than 10% of the value of the assets shall be invested in under-
construction infra projects, whether directly or through holdco. or SPVs.
o “InvIT Assets’ means assets owned by the InvIT whether directly or through a SPV and includes all
rights, interests and benefits arising from and incidental to ownership of such assets.
o Nature of Facility: TL
o Classification: Capital Market Exposure

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o Quantum of Loan: The aggregate exposure ceiling for financing InvITs has been fixed at ₹1,000
Crorores which is including of investment exposure. Within this ceiling, Individual InvITs may be
financed up to a ceiling of ₹100 Crores which is the prudential ceiling in respect of Society and
Trust other than Educational Institutions and Hospitals.
o Exposure Ceiling:
o Disbursement: Promoter’s Contribution [Min 50% to be available in account with our bank] + Bank
Loan should be remitted directly to the sponsor (Developer) from whom the equity of the SPV is
proposed to be acquired.
o Security: Against the security of the assets of the Borrowing InvIT or the assets of the company/SPV
acquired.
o Cash flows of the InvIT/SPV/s should be routed through Escrow Account maintained with our Bank.
Our Bank to have a lien on these cash flows.
o The shares of the company/SPV being acquired may be accepted as collateral security and not as
primary security, The security charged to the Bank should be marketable.
o Delegation: Upto and including ₹100 Cr - CAC of the Board; Above ₹100 Cr – MC of the Board.
o The handling/processing of credit proposals for financing InvITs shall be restricted to LCB’s/MCB’s
only. Declaration from the Investment Manager to be obtained.
o NOC from Concessionaire for availing bank finance is mandatory and NOC from the bank is to be
obtained for changing project/investment manager any time after availing bank finance.
o The Trust deed of the InvIT must provide for availing bank finance and assignment of future cash
flows of the InvIT and the underlying SPVs/Holdcos.
o Reporting & Monitoring: Branch should obtain half yearly (as on 30th Sept’ & 31st Mar’ of each FY)
compliance certificate to be signed by the statutory auditor of the InvIT and to be submitted by
Circle office to CAM Wing HO for review of compliance.
o Financial Benchmark for TL are as follows:
Project Parameters Benchmarks
Debt Equity Ratio Not more than 1:1
Promoters’ (InvIT)  Minimum of 50% of the finance required for acquiring promoter’s stake in
contribution* the SPV being acquired.
 Further, the aggregate consolidated borrowings and Deferred Payments of
each InvIT [including their HoldCos& SPV’s], net of cash & cash equivalents
shall never exceed 49% of the value of the InvIT assets.
(Leverage is relaxed to 70% for “AAA” rated InvITs.
Overall DSCR Not less than 1.50.
In exceptional cases, sanctioning authority can accept up to 1.25.
Repayment Period Not be longer than 7 yrs. CAC of the Board may permit longer tenor.
Moratorium Period No moratorium period is proposed in respect of InvIT acquiring completed &
revenue generating projects. (If loan is sanctioned to InvIT for investing in
equity for acquiring company which is having pre-COD project, moratorium
period will be as arrived by PAG, HO in their appraisal report.)
o General Conditions:
● The InvIT should not be holding less than 51% of the shares in the SPV. Such SPV should not
undertake any activity other than specified in the concession arrangement.
● The InvIT should invest in infrastructure projects belonging to only one sector/sub-sector only.

Inter Bank Participation Certificate (IBPC): To provide an additional instrument of liquidity for the
bank to address the issue of concentration risk in the portfolio.
o Inter-Bank Participation with Risk Sharing (Purchase Transaction):
o Subscription to IBPCs raised by SCBs and RRBs on Risk sharing basis on the following terms:
● The SCBs should have a minimum CET 1 + CCB + CCCB (if applicable) should be not less than that
stipulated by the regulator with a minimum CRAR of 10%.
● The Viability rating shall not be less than the sovereign rating (currently BBB-).
● However, in case of Public sector Banks, a viability rating of BB may be accepted subject to the
CRAR of the Bank being higher than 10.00%.
● In case of RRBs the CRAR shall not be less than that stipulated by Regulator.
● The min period of such participation will be 91 days, while the max period will be 180 days.
● Delegated Powers: Respective Wing shall originate the transaction based on the characteristics of

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the pool of asset to be purchased.

a. Upto ₹400 Crores by CAC of the Board @ prevailing Base Rate or above
b. Beyond ₹400 Crores as well as any exposure Below Base Rate by MC of the Board.
● The aggregate amount of such Participations in any account should not exceed 40 per cent of the
out standings in the account at the time of issue.
● Participations will not be transferable in terms of RBI guidelines.

Connected Counterparties:
o In some cases, a bank may have exposures to a group of counterparties with specific relationships
or dependencies such that were one of the counterparties to fail, all of the counterparties would
very likely fail. A group of this sort, referred to in this framework as a group of connected
counterparties, must be treated as a single counterparty.
o Two or more natural or legal persons shall be deemed to be a group of connected counterparties if
at least one of the following criteria is satisfied:

Control relationship:
● One of the counterparties, directly or indirectly, has control over the other(s) or the counterparties
are, directly or indirectly, controlled by a third party (bank may or may not have exposure towards
this third party).
● If one entity owns more than 50% of the voting rights of the other entity.
● From prudential perspective, these types of clients (connected by control) form a single risk.
● In addition, banks must assess connectedness between counterparties based on control using the
following evidences:
a) Voting agreements – e.g - control of a majority of voting rights pursuant to an agreement with
other shareholders.
b) Significant influence on the appointment or dismissal of an entity’s administrative, management
or supervisory body.
c) Significant influence on senior management, e.g., an entity has the power, pursuant to a contract
or otherwise, to exercise a controlling influence over the management or policies of another
entity.
d) The above criteria may also be assessed with respect to a common third party (such as holding
company), irrespective of whether the bank has an exposure to that entity or not.
● While determining control relationship, banks should also examine cases where clients have
common owners, shareholders or managers.
● Where control has been established based on any of the above criteria, a bank may still demonstrate
to the RBI in exceptional cases that such control does not necessarily result in the entities
concerned constituting a group of connected counterparties.

o Economic interdependence
● If one of the counterparties were to experience financial problems, in particular funding or
repayment difficulties, the other(s), as a result, would also be likely to encounter funding or
repayment difficulties.
● In establishing connectedness based on economic interdependence, banks must consider, at a
minimum, the following criteria:
a. Where 50% or more of one counterparty’s gross receipts or gross expenditures (on an annual basis)
is derived from transactions with the other counterparty;
b. Where one counter party has fully or partly guaranteed the exposure of the other counter party,
or is liable by other means, and the exposure is so significant that the guarantor is likely to default
if a claim occurs;
c. Where a significant part of one counterparty’s production/output is sold to another counterparty,
which cannot easily be replaced by other customers;
d. When the expected source of funds to repay the loans of both counter parties is the same (with
no other source of income).
e. Where financial problem of one counter party may cause difficulties to another counter party in
terms of fully and timely repayment of liabilities.
f. Where the insolvency or default of one counterparty is likely to be associated with the insolvency
or default of the other(s).

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● When two or more counterparties rely on the same source for the majority of their funding and, in
the event of the common provider’s default, an alternative provider cannot be found - in this case,
the funding problems of one counterparty are likely to spread to another due to a one-way or two-
way dependence on the same main funding source.
● Relation between interconnectedness through control and interconnectedness through
economic dependency: Group of counterparties based on control and economic interdependence
are to be assessed separately. However, there may be situations where the two types of
dependencies are interlinked and could therefore exist within one group of connected
counterparties in such a way that all relevant clients constitute a single risk.
● Risk of contagion is present irrespective of type of connectedness (i.e. control or economic
interdependence) between counterparties.
● The chain of contagion leading to possible default of all entities concerned is the relevant factor
for the grouping and needs to be assessed in each individual case

 Policy on Partial Credit Enhancement to Corporate Bonds and Bonds issued by NBFCs and HFCs:
 Banks can provide PCE to a project as a non-funded subordinated facility in the form of an
irrevocable contingent line of credit which will be drawn in case of shortfall in cash flows for
servicing the bonds and thereby improve the credit rating of the bond issue.
 The facility may also be permitted as revolving facility.
 Banks cannot provide PCE by way of guarantee.
 Banks may offer PCE only in respect of bonds whose pre-enhanced rating is BBB or better.
 Quantum and Ceiling of Credit Enhancement:
 to a single entity shall be maximum ₹50 Crores
 The overall Bank ceiling under the scheme shall be ₹500 Crores.
 Enhancement in the overall ceiling or maximum Single Borrower ceiling may be delegated to
CRMC.
 PCE exposure to a single counterparty or group of counterparties shall not exceed 5% of the bank’s
Single Borrower / Group Borrower limit to the counterparty to whom the PCE is provided.
 The aggregate PCE exposure of a bank shall not exceed 20% of its Tier 1 capital.
 NBFCND-SI/HFC shall be restricted to one percent of capital funds of the bank within the extant
single/group borrower exposure limits.
 The aggregate exposure limit from the banking system is maximum up to 50% of the bond issue
size, with a limit up to 20% of the bond issue size for an individual bank.
 Permitted Uses: The contingent PCE will be available only for Bond debt service shortfall.
 Bank in consultation with other lenders shall appoint Lenders’ Independent Engineer and in all
cases, where it deems fit.
 CA & M Wing shall maintain the details of the PCE extended by the Bank and submit review note to
Board of Directors on half yearly basis. Bank (CRRD, RM Wing) shall at half-yearly interval track the
financial position of the issuer.
 Bank shall not make investment in any of the Bond issue in which our Bank / any Other Bank has
provided the PCE.

● Risk acceptance:
o No authority other than CAC of the Board and MC of the Board is empowered to permit credit
facilities to new borrower clients rated High Risk.
o Exposure ceiling for substantial exposure
● It is sum total of exposures assumed in respect of those single borrowers enjoying credit facilities
in excess of a threshold limit, say, 10% or 15% of capital funds.
● RBI had also indicated that the substantial exposure limit could be fixed at 600% or 800% of the
capital funds depending upon the degree of concentration risk the bank is exposed to.
● For substantial exposure the threshold limit is fixed at10% of capital funds.

o Exposure ceiling for single and group borrowers:

● The single and group exposure norms are aligned with Large Exposure (LE) Framework.
● As per Large Exposure Framework eligible capital base is only Tier-I capital of the Bank.
o The exposure ceiling (Regulatory limits) prescribed by the RBI in respect of Single and Group
borrowers are:

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 Canara Institute of Bank Management

20% of eligible capital base. i.e. no special

Single borrower (including Single borrower
dispensation for Infra lending; all class of borrower
undertaking infrastructure projects)
shall be treated at par under LE framework;
Borrower group (including Borrower group
25% of eligible capital base. (30% up to 30.06.2021)
undertaking infra projects)
Exceptional cases, with board approval, max. 5% of eligible capital base enhancement considered
to a single borrower, consenting appropriate disclosure of in annual returns.

o Ceilings on single / group exposure limit: Not applicable where principal & interest are fully
guaranteed by the Govt. of India. Hence exposure to PSUs and backed by Govt. guarantee, ceiling
is not fixed based on rating grades. However, in case of those undertakings rated Moderate
Risk/unrated and not backed by Govt. guarantee, norms will be as applicable for MR.
o EXPOSURE includes both credit (FB and NFB) and investments as also facilities extended by way of
equipment leasing, hire purchase, factoring services, investment in CP by the Bank and derivative
products such as Forward Rate Agreements, Interest Rate Swaps, forward contracts, options etc.
as advised by the RBI from time to time.

o Exemptions from the applicability of the ceiling:

● Exposures to the Govt. of India and State Governments which are eligible for zero percent Risk
Weight under the Basel III– Capital Regulation framework of RBI;
● Exposures to Reserve Bank of India;
● Exposures where the principal and interest are fully guaranteed by the Govt. of India;
● Exposures secured by financial instruments issued by the Govt. of India, to the extent that the
eligibility criteria for recognition of the credit risk mitigation (CRM) are met;
● Intra-day interbank exposures; & Intra-group exposures;
● Borrowers, to whom limits are authorized by the Reserve Bank for food credit;
● Banks’ clearing activities related exposures to Qualifying Central Counter parties (QCCPs);
● Deposits maintained with NABARD on account of shortfall in achievement of targets for priority
sector lending.
● The exposures under the TLTRO and TLTRO 2.0 will not be reckoned under Large Exposure
Framework (LEF)
o Group: The ‘commonality of management’ and ‘effective control on the management’ shall be the
basis for determining a group/associate concern

o Credit exposure ceiling for individual and non- corporate borrowers:

S. Prudential Exposure Ceiling
Category of borrower
No. (FB+NFB) (₹ in Cr)
Individual borrowers
a) for personal loans for Non business purpose (Other than 30
1.
schematic loans)
b) for Business purpose 75
2. Proprietorship Concerns 75
3. Single entity with constitution as association& HUF 75
Single entity with constitution as Society & Trust
a) Educational Institutions & Hospitals
Low Risk 350
4. Normal Risk 250
Moderate Risk 200
High Risk* 125
b) other than Educational Institutions and Hospitals 100
5 Partnership Concerns 125
6 Limited Liability Partnerships (LLPs) 125
*The exposure limit & DOP to HR a/cs is only for the purpose of renewal/holding on
Operations/additional exp in the event of restructuring for existing a/cs & not for fresh exp.

o Exposure ceiling for unsecured advances and unsecured guarantees

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 केनरा बैंक प्रबंधन संस्थान

● Unsecured exposure is defined as an exposure where the realizable value of security, as assessed
by the Bank/approved valuers/the RBI is not more than 10% ab-initio, of the outstanding exposure.
● Annuities under build-operate-transfer (BOT) model in respect of road/highway projects and toll
collection rights where there are provisions to compensate the project sponsor if a certain level of
traffic is not achieved may be treated as tangible securities.
● Further, in case of Public-Private Partnership (PPP) projects, the debts due to lenders may be
considered as secured to the extent assured by the project authority in terms of Model Concession
Agreements (MCAs) published by Planning Commission and adopted by various Ministries and State
Governments.
● It is the endeavour of the Bank to reduce the unsecured advances and ensure such exposures are
adequately backed by collaterals.

o Exposure norms to various industries: ED overseeing Risk Management Wing is authorized to

permit enhancement in the exposure ceiling fixed to various sectors and sub-sectors upto an extent
of 20% on case-to-case basis.
o
o Exposure to Non-Banking Financial Companies (NBFCs):
● Both lending and investment, including off balance sheet exposures to a single NBFC/NBFC- Asset
Financing Companies (AFC) / Infrastructure Finance Companies (IFC): Not to exceed 20%, of the
Bank’s Tier-I capital funds as per the last audited balance sheet.
● For NBFCs having gold loans to the extent of 50% or more of its total financial assets: Upto 7.5% of
their Bank’s capital funds.

o Exposure to Capital Market:

● Lending to Capital Market: Aggregate exposure (FB & NFB) not to be > 40% of Net Worth of last FY.
In this ceiling, Bank’s investment in shares, convertible bonds, exposure to Venture Capital Funds
etc. not to exceed 20%.

● Loans against shares, convertible bonds, convertible debentures and units of equity oriented
mutual funds to individuals:
 ₹20 Lakhs per individual for the securities are held in Demat form.
 For subscribing IPOs: ₹10 Lakhs.
 ESOP: 90% of purchase price with max ₹20 Lakhs.

● Overdraft against property to stock brokers: Bank may permit overdraft facility against mortgage
of property with 40% margin on the market value of the property offered as security.

● Advances to stock brokers for intra-day exposure: Bank may provide credit facilities to broker
clients on the basis of prudent commercial judgment keeping in view the past trend and assessed
peak requirement to meet the pay-in/pay-out obligations as intraday exposure. The exposure shall
be within the sub-ceiling fixed for credit exposure on stock brokers.

● Assessment – Working Capital [WC]

● Turnover Method – (For MSME up to ₹5.00 Crores / Others: up to ₹2.00 Crores):
 The eligible FB credit limit shall be computed at 20% of the projected gross annual sales turnover
accepted by the Bank ensuring maintenance of minimum margin of 5% on the projected gross
annual sales turnover accepted by the Bank.
 The minimum margin of 5% shall be by way of promoter's contribution towards WC margin.
 If the available NWC in the system exceeds stipulated 5% min margin, the same shall be reckoned
for assessing the extent of Bank finance and limits will be determined accordingly.

● MPBF Method – (Up to ₹25.00 Crores):

 The assessment of WC finance requirement is made based on the overall study of the borrower’s
business operation, the production / processing cycle of the industry which results in estimation
of a reasonable buildup of current assets supported by Bank finance.
 Proper classification of current assets and current liabilities shall be made on the lines given in
the CMA data format and Method II of lending will be applied.

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 A normal current ratio of 1.33 shall be insisted subject to specific deviations/relaxations.

● Cash Budget Method – (Over ₹25.00 crores):

 The WC needs are assessed based on projected Cash Flow and the estimate of Cash Deficit.
 It used for Specific industries/seasonal activities such as software development, construction,
tea and sugar, Traders, Merchants, Exporters, others etc. who are not having a pre-determined
manufacturing/trading cycle if the same is found to be more appropriate.
 Credit facilities to NBFCs shall be assessed based on this method.
 Bank shall finance the discounted Net Cash flow in form of TL not exceeding 3 years to the
entities having valid legal contract for receiving definite cash flow from government entities or
AAA rated corporate or credit card receivables where our bank POS machine is installed.
 Limits over ₹25 crore can be assessed on the basis of MPBF system or cash budget system at the
option of the borrower.

● Assessment of WC limits for Construction companies: The FB WC limits (not exceeding the peak
level deficit in the cash flow statement) and the NFB limits sanctioned to a borrower, put together
generally should not exceed 9 times the Net Owned Funds (NOF) of the entity.
● This can be selectively waived for Low Risk/AA equivalent A/c by GM-HO-CAC and above authorities.
Normal Risk and below A/c – CAC of board and above.

● Assessment for NBFCs: Bank can extend need based WC facilities as well as TL to all NBFCs
registered with RBI and engaged in equipment leasing, hire-purchase, loan, factoring and
investment activities, Infrastructure finance companies IFCs predominantly engaged in
infrastructure financing activities. Credit facilities to NBFCs shall be assessed based on Cash Budget
method. While assessing the limits, Asset-Liability mismatches in NBFCs/HFCs shall be within the
regulatory gaps prescribed by RBI/NHB.

o Lending on the guarantee issued by other banks / FIs:

● The borrower shall have satisfactory dealings with the Bank for at least 3 years.
● The guaranteeing bank should have a fund-based exposure to the party to the extent of at least
10% of the amount guaranteed.
● Guarantees issued by following banks are accepted for granting credit facilities:
SBI, All PSBs, Foreign Prime Banks, Private sector banks and Non-prime Foreign banks with tangible
net worth of ₹1,000 Crores and above.

o Pricing of credit linked to Credit Risk Rating (CRR)

[Link] Category of the Borrowers Pricing based on
1. Exposures above ₹25 Crore Grid Methodology
Canara Internal Rating model
2. Exposures above ₹25 Crore
(CIRM Model)/ CIRM Hybrid Model
Exposures above ₹2 Lakh and up to ₹2 Crore for
Internal Rating
loans and advances to MSME & other sectors.
(S m al l Value Model / Manual
3.
Model)
Exposures above ₹2 Lakh and up to ₹2 crore for
Scoring Norms
agriculture & allied activities.
4. Retail Lending Products of the Bank Schematic
ROI as advised by the Bank from
5. Exposure up to ₹2 Lakh
time to time
● Banks shall, at their option specify interest reset dates on their floating rate loans.
● Banks shall have the option to offer loans with reset dates linked either to the date of first
disbursement of the loan/credit limits or to the date of review of MCLR.
● The Marginal Cost of Funds based Lending Rate (MCLR) prevailing on the date of first disbursement,
whether partial or full, shall be applicable till the next reset date, irrespective of the changes in
the benchmark during the interim. Future reset dates shall be determined accordingly.
● The periodicity of reset shall be one year or lower. The exact periodicity of reset shall form part of
the terms of the loan contract.
● In case of rating downgrade, the MCLR will not be immediately changed, but get refixed on the
Review / Reset date stipulated whichever is earlier.

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o Fixation of time schedules for working capital limits:

● Maximum period/tenability of WC limits shall be fixed at 12 months irrespective of risk
rating/category excluding Staff ODC, GL OD (including all Gold Loan WC variants), KCC Crop Loan
limits and any area specific schemes approved by the Board which are to be continued as per
existing guidelines.

o Relaxation in submission of Auditor certificate on book debts:

● Applicable for borrowers rated upto Moderate risk only
● Cut off limit for obtaining the auditor’s certificate on book debts – ₹50 Lakhs
● Periodicity of such certificate is Yearly as at March of every year

o Loan System for Delivery of Bank Credit:

● The Loan System for Delivery of Bank Credit (LSDBC) shall be applicable in the case of borrowers
enjoying FBWC limit of ₹150 crores and above from the banking system.
● The bifurcation of the WC into loan and cash credit components shall be effected after excluding
the export credit limits (Pre-shipment and Post-shipment) and bills limit for inland sales from the
WC limits.
● The amount and tenor of the loan component may be fixed by banks in consultation with the
borrowers, subject to the tenor being not less than 7 days.
● Banks/Consortia/syndicates will have the discretion to stipulate repayment of the WCLs in
instalments or by way of a “bullet” repayment, subject to IRAC norms.
● Effective from April 1, 2019, the undrawn portion of cash credit/overdraft limits sanctioned to the
aforesaid large borrowers, irrespective of whether unconditionally cancellable or not, shall attract
a credit conversion factor of 20%.
● In respect of borrowers having aggregate FB WC limit of ₹1,500 million (₹150 crore) and above from
the banking system, a minimum level of ‘loan component’ shall be 60%, as already made effective
from July 1, 2019. The guidelines may also be made applicable in respect of parties with WC limit
of less than ₹150 crore at their option.
● Hence, for such borrowers, drawings upto 60% of the total FB WC limits shall only be allowed from
the ‘loan component’. Drawings in excess of the minimum ‘loan component’ threshold may be
allowed in the form of cash credit facility.

o Computation of Drawing Power:

 Drawing limit shall be computed as per the existing policy wherein the creditors arising out of
purchase of goods/raw materials are deducted from stock value to determine drawing limit.
 In exceptional cases, based on merits thereof, drawing limit can be determined without
deducting sundry creditors for goods subject to permission from delegated authorities GM-HO-
CAC/CGM-HO-CAC/ED-CAC/CAC of Board/MC.
 In exceptional cases, based on merits thereof, delegated authorities as stated hereunder shall
permit computation of drawing limit by adding:
 Receivables from Joint Ventures/ Special Purpose Vehicles
 Advance payment to Suppliers.

 The following additional conditions shall be complied:

A). Computation of Drawing limit against Receivables from Joint Ventures [JV]/ Special
Purpose Vehicles [SPV]:
 In case of JV/SPV, our borrower shall be the major shareholder.
 JVs/SPVs shall be dealing exclusively with our bank. In other words, these guidelines are not
applicable in respect of JVs/SPVs which are enjoying credit facility with other banks.
 Escrow account of the JV/SPV shall be with our bank.
 Transaction against which the drawing power is proposed should have been routed through our
account.
 The % of receivables from JVs/SPVs considered for the purpose of calculating drawing limit
shall not be more than 10% of the total receivables of the borrower.

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 Quarterly CA Certificate confirming the fact that there is no double financing in respect of
drawing power permitted against receivables from JVs/ SPVs to be obtained.

B). Computation of Drawing limit against Advance paid to suppliers:

 Invoices drawn for the advance payment shall be obtained and perused.
 Genuineness of the invoice shall be ensured.
 Transaction against which the drawing power is proposed should have been routed through our
account.
 Delegated Authorities:
 CGM/GM-HO-CAC – For accounts falling upto their sanctioning powers.
 ED-CAC and CAC of the Board Power accounts -The respective sanctioning authority.
 MC power accounts - CAC of the Board.

o TLs and DPG/ Bills co-acceptance for capital goods:

● TL is a loan which has a specified maturity and payable in installment or in bullet form and with
maturity in excess of one year.
o The categories of TLs based on repayment period are as under:
Term Loans All TLs with maturity in excess of one year
Medium Term Loans Above one year up to 3 years
Long Term Loans Above 3 years

● Non-Fund Risk of project (compliance failures, Operation challenges etc.):

● Escrow Agreement/TRA – specific provision that any revenue/inflow from the project including but
not limited to terminal payment/invocation of guarantee arising out of project would be first
deposited in the account and lenders will have first charge.

o TLs to Infrastructure projects:

● A credit facility extended by lenders (i.e., banks and select All India Term Lending and Refinancing
Institutions) to a borrower for exposure in the following infrastructure sub-sectors will qualify as
‘infrastructure lending’.
● Categories of projects:
● Transport & Logistics
• Subsectors: - Roads & Bridges; Ports; shipyards; Inland waterways; Airport; Railway track;
tunnels; Urban Public transport; Logistic Infrastructure include Multi model logistic park
comprising of
Min. investment Min. area
Inland Container Depot (ICD) ₹50 Cr 10 acre
Cold chain facility & or ₹15 Cr 20,000 sq. ft.
Warehousing facility ₹25 Cr 1 Lakh sq. ft.
● Energy
Subsectors: Electricity Generation, Transmission & Distribution; ESS [Energy Storage Systems];
Oil/Gas/LNG Storage facility
● Water & Sanitation
Sub-sectors: Solid waste management; Water Treatment Plants; Sewage collection, treatment and
disposal system; Irrigation; Storage Water Drainage System.
● Communication: Telecommunication (Fixed network); Telcom towers & services; Data Centers
● Social & Commercial Infrastructure:
Education institutions (capital stock); Sports Infrastructure; Hospitals (capital stock); 3
star/Higher category Hotels outside cities of population > 10 lakh; common infrastructure for
industrial parks and other parks with industrial activity such as food parks, textile parks, SEZ,
tourism facilities and agricultural markets; Post harvest storage infrastructure for Agri &
Horticulture Produce including Cold Storage; Terminal Markets; Soil testing laboratories; Cold
Chain; Exhibition cum Convention Centre Project with min built-up floor area of 1,00,000 sq. mtr;
Affordable Housing (defined as housing project using at least 50% of the Floor Area Ratio
(FAR)/Floor Space Index (FSI) for dwelling units with carpet area* of not more than 60 Square
meters.

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● In respect of Infrastructure proposals, for fresh/enhancement/additional limits and other

restructuring/refinancing cases shall be screened by Infrastructure Advisory Committee. -Headed
by-DGM CCW HO, Members: Processing section, PAG, Credit Risk Rating Desk, SAM wing.
● However infra projects viz., construction 1) of Educational Institutions and Hospitals, of 2)
projects involving Agro-processing & supply of inputs to agriculture, 3) for preservation and storage
of processed agro-products, perishable goods such as fruits, vegetables and flowers need not be
routed through the above Advisory Committee.
o While considering infrastructure proposals, mechanisms like “Escrow”, “Creation of Debt Service
Reserve Account”, Monitoring cash flows through “Trust and Retention Account” and appointment
of lenders’ independent engineers etc. should be explored to ensure better access and control on
project cash flows.

o Revision of Liquidity premium for Rupee Loans & advances - w.e.f. 16.01.2024: (30/2024):
 Liquidity premium for 6 different tenors introduced.
 The revised liquidity premium shall be applicable for all new rupee loans and advances sanctioned
(wherever applicable) w.e.f. 16.01.2024.
 For Existing borrowers, rupee loan and advances sanctioned and availed prior to 16.01.2024, the
existing liquidity premium rate shall be continued till closure.
 Revision in liquidity premium to be loaded to the Card rates additionally for loans repayable more
than 1 year as under:
Tenor of the Loan Liquidity premium
> 1 year to 2 years 0.10%
> 2 years to 3 years 0.15%
> 3 years to 5 years 0.25%
> 5 years to 7 years 0.30%
> 7 years to 10 years 0.30%
> 10 years 0.45%
o Liquidity premium shall be loaded to the card rates additionally for loans repayable more than 1
years, unless specifically exempted. No concession/ waiver shall be permitted.

o Guidelines with regard to conduct of project appraisal: In respect of New Borrower project
appraisal shall be applicable to proposed projects including infrastructure with project cost of
₹1,000 Lakhs and above

o In respect of existing borrowers, project appraisal shall be applicable as under

Project Cost of the proposed project including infrastructure
Risk rating of the borrower Borrowers dealing with our Borrowers dealing with our
bank for less than 3 years bank for 3 or more years
Internally rated as Low (CNR I to
CNR V) / Normal Risk (CNR VI)
₹1,500 Lakhs and above ₹2,000 Lakhs and above.
or externally rated BBB or
better for borrowers
Internally rated as Moderate Risk
(CNR VII and CNR VIII) or ₹1,000 Lakhs and above
externally rated BB
 For Commercial Real Estate [CRE] Proposals - all the projects irrespective of the project cost.
 For CRE-RH [Residential Housing] Proposals - up-to project cost of ₹5 crores.
 For CRE (Others) - existing guidelines to continue
 Project Appraisal report shall be prepared by any one of the following:
- Project Appraisal Group (PAG), HO
- Project Appraisal Cells (PAC) at Circle offices
- State / Public Financial Institutions (SFI / PFI)
- Public sector banks and Private sector banks like ICICI Bank and HDFC Bank Ltd.
o In some cases, like extension of COD/delay in commencement of project implementation may have
impact on the projected financials and also on the viability of the project. In such cases, vetting of
financials along with the comments of PAG on the viability of the project may be obtained from
PAG.

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o In case of TLs under TUF Scheme, Project Appraisal as per extant guidelines shall be undertaken.
o In the case of consortium accounts where Bank is a member, Bank shall fall in line with the decision
of the consortium.
o For existing borrowers (Except CRE Exposures) of the Bank going for expansion, modernization and
diversification, waiver for Project Appraisal can be permitted in exceptional cases by the following
authorities with proper justifications:
Up to including Circle Head power accounts – DGM-CO-CAC / GM-CO-CAC / CGM-CO-CAC
HO (CGM/GM-HO-CAC/ ED-CAC/ CAC of the Board/ MC) power accounts - CGM-HO-CAC
o Irrespective of sanctioning authority, Project Appraisal Cell (PAC) at Circles shall conduct appraisal
of TL proposals as under:
● CGM/GM headed Circles – Project Cost up to ₹100 Crore.
● DGM headed Circles – Project Cost up to ₹50 Crore.
● In respect of proposals under HO powers, the appraisal report shall be submitted to HO for vetting
by Project Appraisal Group, HO.
● TL proposals with project cost beyond the above limit shall be appraised by Project Appraisal Group
(PAG), HO, after obtention of EoI from the respective NBACs before appraisal.

o Approval of the Project Appraisal Report:

● Report submitted by PAC/PFD to CO–DGM overseeing the PAC/PFD.
● Report submitted by PAG at HO to DGM overseeing the PAG*
● *in the absence of above authority – Concurrent to approve.
o Lenders’ Independent Engineer Report (LIE Report) may be accepted in case of projects where LIEs
are appointed.

o Financial / Project Benchmark Parameters:

 Project cost upto ₹100 Lakhs:
Parameters Benchmarks
Debt / Equity Ratio [DER] Not more than 4:1
Promoter’s contribution Minimum of 20% of Project Cost
Fixed Assets Coverage Ratio [FACR] Not less than 1.33; Exceptions upto 1.20
Repayment period Upto 7 years excluding moratorium, but not
to exceed an overall tenor of 10 years
Overall Debt Service Coverage Ratio [DSCR] Not below 1.50

 Project cost above ₹100 Lakhs:

Parameters Benchmarks
Not more than 3:1.
Debt / Equity Ratio [DER] In exceptional cases sanctioning authorities not less than RO
Head CAC can accept upto 4:1 duly justifying the reasons.
Promoter’s contribution Minimum of 20% of Project Cost
Fixed Not less than 1.33.
Assets In Exceptional case:
Coverage FACR Authority to permit
Ratio Up to 1.20 Sanctioning authorities not less than DGM-CO-CAC (Circle Head)
[FACR] Up to 1.25 Sanctioning authorities not less than RO Head CAC
Upto 7 years excluding moratorium, but not to exceed an overall
Repayment period
tenor of 10 years
Overall Debt Service
Not below 1.50
Coverage Ratio [DSCR]
Upto 7 years in exceptional up to 10 years excluding moratorium,
Repayment period
but not to exceed an overall tenor of 12 years
Overall Debt Service Not less than 1.50; In exceptional
Coverage Ratio [DSCR] 1.40 – Not less than DGM-CO-CAC
Internal rate of return (Post
Tax) (Applicable to Project At least 4% above estimated weighted average cost of funds
cost of ₹25.00 crore & above)
Repayment period Upto 7 years in exceptional up to 10 years excluding moratorium,

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but not to exceed an overall tenor of 12 years

 Transport Operators:
Parameters Benchmarks
Debt / Equity Ratio [DER] Not more than 3:1; can be relaxed upto 4:1
Repayment period Upto 6 years excluding moratorium period of
maximum 3 months
Overall Debt Service Coverage Ratio [DSCR] Not below 1.50

 Financial/ project Benchmark parameters for Food Processing industries (for exposures above
₹100 Lakhs): (HO CIR 586/2024)
Parameters Benchmarks
Corporates MSME
Debt / Equity Ratio [DER] Not more than 3:1 Not more than 4:1
Promoter’s contribution Min of 25% of Project Cost Min of 20% of Project Cost
Not less than 1.25
Fixed Assets Coverage In exceptional case up-to 1.20
Not less than 1.33
Ratio [FACR] may be permitted by not less
than DGM-CO-CAC
Interest Coverage Ratio Not less than 1.67 Not less than 1.25
Current Ratio Not less than1.33 Not less than1.25
At least 4% above estimated
weighted average cost of funds;
Internal rate of return
At least 4% above estimated In exceptional case, up-to 3%
(Post Tax) (Applicable to
weighted average cost of over & above the estimated
Project cost of ₹25.00
funds weighted average cost of funds
crore & above)
may be permitted by not less
than DGM-CO-CAC.
Upto 7 yrs in exceptional
Upto 7 yrs in exceptional cases
cases upto 10 yrs excluding
upto 10 yrs excluding
Repayment period moratorium, but not to
moratorium, but not to exceed
exceed an overall tenor of 12
an overall tenor of 12 years
years
Overall DSCR Not below 1.50 Not less than 1.25

o As per HO Cir 586/2024, Financial/Project benchmarks for 9 industries viz. Food Processing, Paper
& Paper Products, Petroleum, Coal Products and Nuclear Fuels, Chemicals and Chemical Products,
Cement and Cement Products, Basic Metal and Metal Products, All Engineering, Vehicles, Vehicle
Parts and Transport Equipment’s and Construction has been modified.
o Bank has also put in place separate sectoral policy for financing proposals under:
 Power Sector  Airlines Sector  Mining & Quarrying Sector
 Textile Sector  Iron & Steel Sector  Gems & Jewellery Sector
o Guidelines with regard to Power Sector is enumerated in 591/2014 dated 21.10.2014.
o Guidelines with regard to Airlines Sector is enumerated in LDGM 2/2016 dated 02.03.2016.
o In case of Mining & Quarrying Sector, Textile Sector, Iron & Steel Sector and Gems & Jewellery Sector,
the guidelines as enumerated in Ho Cir 671/2016 dated 01.12.2016 may be referred.

o Appraisal of TLs through TEV consultants:

 The services of Externally empanelled TEV consultants – Up to the Project cost of ₹250 Cr
 For project cost beyond ₹250 Crores, the existing guidelines of PAC/ PAG are applicable.
 CO Head & Respective Wing Head shall be the competent authority to allot Project Appraisals to
PAC/PAG or to Externally Empanelled TEV Consultants for proposals falls under the CO power and
HO power respectively upto the project cost of ₹250 Cr.
 In case of utilization of services of externally empanelled TEV consultants, their appraisal reports
shall be vetted at PAC/PAG and vetting report shall include a certificate stating that PAC/PAG
have verified the Financial and Technical aspects of the project and the project is technically
viable and economically feasible.

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 TEV consultants shall submit the appraisal report within maximum 10 working days from the
receipt of all required documents. Further, appraisal report shall be vetted by PAC/PAG within
maximum 3 working days from the receipt date of the appraisal report.
 The above guidelines on Appraisal of TLs through TEV consultants shall be applicable in respect
of both Greenfield and Brownfield projects.
 However, the guidelines shall not be applicable to Agricultural TL proposals eligible for appraisal
by the Agricultural Innovation Centre (AIC), Head Office.

o PAC FEE (785/2023, 663/2022)

● Applicable Project Appraisal Fee for TL Projects: Report is strictly for internal use-
Loan Amount Up to ₹10 Cr – 0.50% of the Loan Amount with Min of ₹1 Lakh. Max ₹5 Lakhs.
Above ₹10 Cr & Up to ₹50 Cr– 0.40% of the Loan Amt with Min of ₹5 Lakhs, Max ₹20 Lakh.
Above ₹50 Cr & Up to ₹100 Cr– 0.35% of the Loan Amt with Min of ₹20 Lakhs, Max ₹35 Lakh.
Loan Amount above ₹100 Cr – 0.30% of the Loan Amount with Min of ₹35 Lakh, Max ₹3 Cr.

● Applicable Project Appraisal Fee for TL Projects: Report is to be shared with customers-
Loan Amount Up to ₹10 Cr – 1.00% of the Loan Amount with Min of ₹2 Lakh. Max ₹10 Lakhs.
Above ₹10 Cr & Up to ₹50 Cr–0.75% of the Loan Amt with Min of ₹10 Lakhs, Max ₹37.5 Lakh.
Above ₹50 Cr & Up to ₹100 Cr–0.60% of the Loan Amt with Min of ₹37.5 Lakhs Max ₹60 Lakh
Loan Amount above ₹100 Cr – 0.50% of the Loan Amount with Min of ₹60 Lakh, Max ₹5 Cr.

Applicable service charges shall be calculated on the basis of the loan amount and not on project
cost

o Liquidity & Current Ratio Norms:

● The liquidity and current ratio norms are as specified in the respective methods of assessment of
WC.
● The benchmark current ratio is a minimum of 1.33 or 1.25 for borrowers whose WC limits are
assessed under any of the accepted methods of assessment.
● TLs and NFB limits for acquisition of fixed assets and for other purposes (other than for WC), are
excluded from the current ratio norms.
● In respect of contractors undertaking construction contract and / or those who either enjoy only
NFB limits or predominantly NFB limits for the WC purposes, these norms may be relaxed by the
respective sanctioning authority.
● In respect of accounts where the Current ratio is less than the prescribed norms and where
exposure of the Bank is ₹50 Cr and above, cash flow statements shall be obtained at the time of
appraisal itself and subsequently on a quarterly basis.
● Bank may also obtain quarterly cash flow statements in respect of borrowers having WC limits of
₹50 cr and above from the Bank.
● In case of large projects with project loan of over ₹250 Crore & above from banking system, cash
flow of the company may also be monitored by an approved/ empanelled firm for the specified
purpose by the Bank whenever as decided by the Bank.
● The above guidelines shall also apply in case of entities having WC exposure of ₹250 Crore & above
from the banking system.
● Waiver in case of Consortium/any other Joint Lending Mechanism – CAC of the Board. Waiver to
fall in line with consortium decision/Joint Lenders Decision.
● The Bank shall ensure proper end use of WC finance. Even within the business activity, the Bank
shall not, encourage diversion of short-term funds for long term uses by the borrower.
● In respect of borrowal accounts enjoying aggregate WC limits of ₹1 crore and above, if any
diversion of WC is noticed, the related details shall be placed before the sanctioning authority
concerned.
● In order to recognize the true financial leverage, Bank may take into account the adjusted net
worth of the corporate after netting their investment in subsidiary/ies

o Credit Risk Management-Risk Rating Policy

o Rating Assignment Horizon: Internal ratings and PDs are based on a one year forward looking risk

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horizon.
o Point in Time (PIT): PIT assessment reflects the obligor’s default risk over a one year horizon based
on the current state of the credit cycle.
o Through the cycle (TTC): TTC assessment reflects the obligor’s default risk overthe one year
horizon based on the long term average of the credit cycle.
o Master Rating Scale: Represents a Bank wide rating scale used to rank order borrower/ obligor
default risk in a consistent manner. (As per cir 578/2023)
o Facility rating: Represents rating system for each credit facility which reflects the estimated
economic loss on an exposure following the default of the obligor and is expressed in terms of LGD.
It assesses the effect of the transaction structure on the economic loss of an exposure following
the default of an obligor and is usually based on transaction level characteristics such as collateral
type, product type, seniority ranking etc.
o Economic loss: A loss arising from an obligor default is measured as loss of economic value to the
bank.
o Recovery rate: Refers to the present discounted value of recoveries received (net of material
direct and indirect costs associated with collecting the exposure) at the date of default. Recovery
rate is expressed as a % of the exposure at default (EAD).

o Current Borrower Rating Systems: For borrower’s risk rating, Our bank is adopting 4 models under
Risk rating. Bank uses Canara Internal Risk Rating Model (CIRM)/CIRM Hybrid Model, Manual Model,
Small Value Model and Portfolio Method.
Sl. No. Particulars Models
1. Aggregate Exposure <= ₹2 Lakhs Portfolio Model
2. Aggregate Exposure >₹2 Lakhs and<=₹20.00 Lakhs Small Value Model
3. Aggregate Exposure >₹20 Lakhs and<=₹2 crore. Manual Model
4. Aggregate Exposure >₹2.00 crore. (CIRM Hybrid Model Canara Internal Rating
for borrowers having exposure above ₹2 Cr to ₹7.5 Cr) Model (CIRM)

o Short Term and Long Term Ratings:

● For Exposures with a contractual maturity of less than or equal to one year (except Cash Credit,
Overdraft and other Revolving Credits), short term ratings given by ECAIs will be applicable. For
other assets which have a contractual maturity of more than one year, long term ratings accorded
by the ECAIs would be relevant.
● For domestic cash credit, overdraft and other revolving credits irrespective of the period and TL
exposures of over 1 year, long term ratings given by ECAIs will be applicable. For overseas
exposures, irrespective of the contractual maturity, long term ratings given by International Credit
Rating Agency will be applicable.

o Specified categories
● Venture Capital Funds [FB & NFB] will attract risk weight of 150%.
● Consumer Credit including Personal Loans but excluding housing loans, education loans, vehicle
loans and loans secured by gold and gold jewelry, shall be 125%.
● Capital Market exposures will attract a 125% risk weight
● Vehicle Loans shall be Risk weighted at 100%
● Loans secured by gold and gold jewelry, shall be Risk weighted at 125%.
● Credit Card Receivables shall be Risk weighted at 150%
● Loans and advances to Banks’ own staff which are fully secured by superannuation benefit and/or
mortgage of flat/house will attract 20% risk weight.
● Other loans and advances of bank’s own staff will be eligible for inclusion under regulatory retail
portfolio and will therefore attract 75% risk weight.
● In the case of Clearing Corporation of India Ltd. (CCIL), the risk weight will be 20%
● All other assets will attract a uniform risk weight of 100%

o Restrictions for Lending as per RBI guidelines:

● Advances against Bank’s Own Shares: Section 20 (1) of the Banking Regulation Act, 1949
● Credit to Companies for Buy-back of their Securities: provisions of the Companies Act, 2013
● Loans and Advances to Banks’ Directors/Bank Officers and their relatives.

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● Holding shares in companies: In terms of Section 19(2) of the Banking Regulation Act, 1949, Bank
shall not hold shares in any company except as provided in sub- section (1) whether as pledgee,
mortgagee or absolute owner, of an amount exceeding 30% of the paid-up share capital of that
company or 30% of its own paid-up share capital and reserves, whichever is less.
● Further, in terms of Section 19(3) of the BR Act, 1949, Bank shall not hold shares whether as
pledgee, mortgagee or absolute owner, in any company in the management of which any managing
director or manager of the Bank is in any manner concerned or interested.
● In case of advances against Levy Sugar, a minimum margin of 10% will apply.
● No Loans/Advances against Fixed Deposit Receipts (FDRs) issued by other banks.
● No Loans/Advances to Agents/ Intermediaries based on consideration of Deposit Mobilization

● Loans against Certificate of Deposits (CDs): Banks are not allowed to grant loans against
Certificate of Deposits, unless specifically permitted by the Reserve Bank of India.
● No loans to be granted against partly paid shares.
● No loans to be granted to partnership/proprietorship concerns against the primary security of shares
and debentures.

● Advances against Gold Bullion/Primary gold: Banks should not grant any advance for purchase of
gold in any form including Gold Bullion/ Primary Gold, gold jewellery, gold coins, units of Gold
Exchange Traded Funds (ETF) and units of gold Mutual Funds. However, specially minted gold coins
sold by banks are not to be treated as “bullion” or “primary gold” and hence Bank may grant loans
against such coins subject to ensuring the end use of funds.
● However, while granting advance against security of specially minted gold coins sold by the banks,
they should ensure that the weight of the coin(s) does not exceed 50 grams per customer and the
amount of loan to any customer against gold ornaments, gold jewellery and gold coins (weighing
upto 50 grams) should be within the limit prescribed by the respective banks i.e. gold coins
exceeding 50 grams per customer shall not be accepted as security.
● Banks should desist from granting advances to the silver bullion dealers which are likely to be
utilised for speculative purposes.

● Advances for Construction activities not eligible for finance: Bank should not grant finance for
construction of buildings meant purely for government/ semi government offices, including
Municipal and Panchayat Offices. However, Bank may grant loans for activities which are
refinanced by institutions like NABARD.
● Restrictions on grant of financial assistance to industries producing/consuming Ozone Depleting
Substances (ODS).

● Bank shall adopt ESG related risk as a strategic priority in due course.
● Key Fact Statement (KFS) to be provided to the borrower before the execution of the contract in
a standardized format for all digital lending products.
● Discounting of bills under LC (BULC) where the LCs bearing the legend “without recourse” may be
permitted on a case to case basis subject to the condition that the LCs should have been issued by
PSBs/ICICI Bank/HDFC Bank. Delegation shall be vested with ED-CAC and above authorities.
Additional ROI of 0.25%.
● Bank cannot grant loans for acquisition of/investing in small savings instruments including Kisan
Vikas Patras.
● Bank shall not grant any loans/advances for subscription to Indian Depository Receipts (IDRs) and
also against security/collateral of IDRs issued in India.
● No loan to be granted to willful defaulters of our Bank/other banks/financial institutions.
● Projects undertaken by public sector entities which are not corporate bodies may not be financed
by Bank.
● Once a case is filed before a Court/DRT/BIFR, any settlement arrived at with the borrower is
subject to obtaining a consent decree from the Court/ DRT/ BIFR concerned.
● Bank should not extend bridge loans against amounts receivable from Central/State Governments
by way of subsidies, refunds, reimbursements, capital contributions, etc.

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● Bank can continue to finance subsidy receivables under normal Retention Price scheme for period
upto 60 days in case of fertilizer industry and grant finance against receivables from Government
by exporters (duty drawback and IPRS).
● Banks are permitted to sanction bridge loans to companies for a period not exceeding one year
against expected equity flows/issues.

● Key Fact Statement [KFS]: [350/2024]

 KFS is a statement of key facts of a loan agreement, in simple and easier to understand language,
provided to the borrower in a standardised format to assist the borrower in taking an informed
financial decision before executing the loan contract.
 RBI vide Ref RBI/2024-25/18 [Link].13/13.03.00/2024-25 dated 15.04.2024 issued revised
guidelines in order to enhance transparency in pricing of credit and provide prospective borrower
with an overview on applicable cost likely to be incurred in various loan products offered by the
banks.
 Key Facts of a loan agreement between an RE/a group of REs and a borrower are legally significant
and deterministic facts that satisfy basic information required to assist the borrower in taking an
informed financial decision.
 Applicability: All new retail and MSME TLs sanctioned on or after October 1, 2024, including fresh
loans to existing customers.
 Annual Percentage Rate (APR) is the annual cost of credit to the borrower which includes RoI and
all other charges associated with the credit facility.
 Equated Periodic Instalment (EPI) is an equated or fixed amount of repayments, consisting of both
the principal and interest components, to be paid by a borrower towards repayment of a loan at
periodic intervals for a fixed number of such intervals; and which result in complete amortisation
of the loan. EPIs at monthly intervals are called EMIs.
 Validity period refers to the period available to the borrower, after being provided the KFS by the
bank, to agree to the terms of the loan.
 Guidelines on issuance of Key Fact Statement:
 Bank shall provide a KFS to all prospective borrowers to help them take an informed view before
executing the loan contract, as per standardised format in the Appendix-IV of Credit Policy
(516/2024).
 The KFS shall be written in a language understood by the borrowers. Contents of KFS shall be
explained to the borrower and an acknowledgement shall be obtained that he/she has understand
the same.
 The KFS shall be provided with a unique proposal number and shall have a validity period of at
least 3 working days for loans having tenor of 7 days or more, and a validity period of 1 working
day for loans having tenor of less than 7 days. The bank shall be bound by the terms of the loan
indicated in the KFS, if agreed to by the borrower during the validity period.
 Charges recovered from the borrowers by the bank on behalf of third-party service providers on
actual basis, such as insurance charges, legal charges etc., shall also form part of the APR and
shall be disclosed separately.
 In all cases wherever the bank is involved in recovering such charges, the receipts and related
documents shall be provided to the borrower for each payment, within a reasonable time.
 Any fees, charges, etc. which are not mentioned in the KFS, cannot be charged by the bank to the
borrower at any stage during the term of the loan, without explicit consent of the borrower.
 The KFS shall also be included as a summary box to be exhibited as part of the loan agreement.
 Credit card receivables are exempted from the provisions.
 Generation of KFS for MSME TLs in LAPS Package as per format provided in HO Cir. IC/350/2024.
o Contents of KFS shall be explained to the borrower and an acknowledgement shall be obtained that
borrower has understood the same and shall be preserved along with loan papers.

o Revalidation / Cancellation of sanction:

 The validity of sanctions shall apply to sanctions to new borrowers, single transaction limits, fresh
limits and enhancement of limits to existing borrowers.
 In case of all credit limits sanctioned, if no part is availed within the validity period of sanction,
the sanction shall lapse and specific cancellation of limits is not required.
 In case disbursement from sanctioned limit has not been availed for a period of 12 months from the
date of documentation, from our bank/any member banks in the consortium/JLA, such cases have

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to be taken up for revalidation of sanction with the sanctioning authority. A suitable clause in this
regard to be incorporated in the sanction conveying letter.
 In case of non-achievement of financial closure due to unavoidable circumstances, the sanctioning
authority may permit revalidation of sanction for a period of upto another 6 months after which a
fresh sanction shall be obtained. The revalidation of sanction shall be permitted only once during
the validity period
The validity periods of sanctions for various facilities unless otherwise specified in the respective
schemes are as under:
STCL/Corporate Loan 1 month
Working Capital 3 months
TL 6 months
Adhoc Credit Facility 15 days (No revalidation shall be permitted)
Credit Facilities sanctioned under Consortium Up-to 6 Months
Lending Arrangement (Where our Bank is Leader (As per HO Cir 620/2023)
or Member)
Working Capital/TL to NBFC 3 Months (620/2023)

 Revalidation charges for Term Loans: (134/2024)

Up to ₹5 Cr - 30% of the applicable up-front fee with a maximum of ₹75,000.
>₹5 Cr to ₹25 Cr - 30% of the applicable up-front fee with a maximum of ₹3.50 Lakhs.
>₹25 Cr to ₹100 Cr - 30% of the applicable up-front fee with a maximum of ₹10 Lakhs.
Above ₹100 Cr - 30% of the applicable up-front fee with a maximum of ₹15 Lakhs.
 Revalidation charges for Working Capital Limits: (134/2024)
Up to ₹5 Cr - 50% of the applicable up-front fee with a maximum of ₹75,000/-
>₹5 Cr to ₹25 Cr - 50% of the applicable up-front fee with a maximum of ₹3.50 Lakhs.
>₹25 Cr to ₹100 Cr - 50% of the applicable up-front fee with a maximum of ₹10 Lakhs.
Above ₹100 Cr - 50% of the applicable up-front fee with a maximum of ₹15 Lakhs.

o Unique Document Identification Number (UDIN): Whenever certificates from CAs are received,
the same can be verified and genuineness of the same shall be checked by visiting UDIN portal.

o Cross Default :
● Cross Default can be defined as default with one lender that may trigger default with another
lender. It can also be defined as that default in particular debt of a borrower at parent level, which
would trigger a default in group/subsidiaries, vice versa. Cross default includes not only default in
repayment of dues; it also covers breach of various financial covenants stipulated.
● The P&L covenants for the above eligible listed companies are to be monitored on quarterly basis
and Balance Sheet covenants are to be monitored on yearly basis to ascertain deviation from
sanctioned/accepted levels, if any. Breach in financial covenants would deemed to have occurred
if there is a deterioration of more than 10% in the actual level, vis-à-vis sanction level/last review
level.
● The following to be treated as Cross Default to comply with EASE 2.0 agenda:
 Default by the borrower to any other lender [The cross default would be deemed to have occurred
only in case default to particular lenders(s) is not cured within 30 days].
 The above cross default provisions/covenants are to be stipulated by Bank and the same are to be
incorporated in Loan Sanction/Documentation with suitable remedial measures.

 Financial Covenants: P & L and Balance Sheet covenants to be adhered by the listed corporate
with total exposure of ₹50 Cr & above and listed MSMEs with exposure of ₹1 Cr & above
.
o Valuation of Fixed assets: In case the immovable properties are recently purchased (12 months
prior to the date of valuation) & if the guideline value has been revised after the date of sale deed,
then the purchase price as per the sale deed or the guideline rate, whichever is higher and not the
market value shall be reckoned as for arriving at the value of the property. The period for recent
purchase shall be taken as 12 months from the date of sale deed.
● Valuation of movable property: Where the value of Plant & Machinery to be charged is ₹50 Crores
& above, valuation of such P&M must be done from minimum 2 valuers on the Bank’s approved
panel.

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● The fixed assets of the borrower, viz., land & building (other than agricultural property), plant &
machinery, etc. obtained as primary and/or collateral security should be subjected to valuation by
competent valuers from the panel of valuers once in 3 years.
● However, in respect of fixed assets (primary/collateral) mortgaged to loan accounts (classified as
standard assets) under all Housing Loan variants, Canara Mortgage, Canara Rent, Canara LRD &
Canara Site where loan outstanding is ₹50 lakhs or above, revaluation of property has to be
undertaken through the empanelled valuers once in every 5 years
● Valuation of properties (Land and Building) of ₹5 crore and above: minimum 2 independent
valuation reports from 2 empanelled valuers. Lowest to be factored. Accounts of ₹5 Cr & above and
complicated cases irrespective of amount, are entrusted to valuers in Panel―A. Other accounts are
entrusted to Panel―B.
● Valuation of only the landed property without any superstructure (other than Agriculture):
● The acquisition cost as per registered sale deed may be considered as cost of land, if it is acquired
within immediate preceding 1 year.
● If the land is acquired/purchased beyond preceding one year, 85% of the Fair Market Value assessed
by the Bank’s approved Valuer should be taken as value of the land.
● Frequency of updation of the immovable property value -once in 3 years.
● Valuation of Large Borrower account– ₹5.00 Cr & above – Second opinion– permission of CO
● Periodicity of valuation of fixed assets: once in 3 years
● Valuation in case of takeover: The first time valuation shall be got done before disbursement of
the loan irrespective of the loan quantum.
● Valuation in case of NPA Accounts: A normal cooling period of one quarter shall be provided for
up-gradation/rectification of default. In case the account continues to be NPA even after cooling
period, Valuation shall be undertaken within a maximum period of 6 months of account turning
NPA.
● This is applicable only if the unexpired period of existing valuation is 6 months or more. However,
if the existing valuation has already completed 3 years when the account gets classified as NPA,
then fresh valuation shall be taken immediately and subsequent frequency of valuation shall be
once in 3 years.
● For purpose of computing Provision for NPA accounts, only Realizable Value of the Security as
mentioned in the Valuation Report is to be reckoned
● Substandard & doubtful assets: No waiver of valuation.
● Waiver of valuation of fixed assets of a consortium account: Permitted by the sanctioning
authority based on merits of individual cases. In the case of CAC of the Board/MC power accounts,
the waiver can be permitted by CAC of the Board.
● The Circle Head CAC & above authorities, if required, can get the valuation of immovable asset
done at lower frequency. In case of valuation is carried out at frequency lesser than 3 year then
value of property shall be taken at 85% of the present value of the property (latest valuation) and
valuation shall be carried out by value other than the valuer who had given the earlier report.
● CA&M Wing, HO has to place a review note on pendency of valuation of Standard Assets that have
completed 33 months as at the end of every month to the respective Reviewing Authority/Wing
Head.

Due Diligence Report: broadly covers:

● External Due Diligence report from empanelled agencies to be obtained for MSME units who
approach our Bank for the first time for the credit facility requirement of above ₹10 Lakhs and
eligible to be covered under CGTMSE.
● Ownership pattern and Management–Profile of Proprietor/partners/Directors.
● Organizational structure, controls and systems
● Key management personnel
● Details of properties owned (as confirmed by management)
● Business profile
● Demand and supply side analysis
● Current and past financial performance (analysis of various financial parameters)
● Current banking facilities
● Group companies and Firms

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● Site visit details

● Third party checks, customer’s feedback, supplier’s feedback, other bankers feedback.
o External due diligence needs to be conducted through Credit Rating Agencies for MSME units for
first time where credit facility is >₹10 lakh and covered under CGTMSE.
o List of credit rating agencies having MOU with Bank due diligence services are(666/24, 641/2024)
S.N Agency Amount Bracket Validity Charges
Upto ₹2 Crores ₹5,000
M/s. Acumen Business
1. >₹2 Cr <₹10 Cr 03.08.2024 to 02.08.2027 ₹7,500
Consultancy Pvt. Ltd.
Above ₹10 Crores ₹10,000
Upto ₹25 Lakhs ₹5,500
M/s Infomerics Analytics and
2. >₹25 Lakhs < ₹75 Lakhs 15.09.2024 to 14.09.2026 ₹7,500
Research Pvt. Ltd.
Above ₹75 Lakhs ₹9,500
Up to ₹75 Lakhs ₹5,000
3. M/s CRIF Solutions Pvt. Ltd. 20.09.2024 to 19.09.2026
Above ₹75 Lakhs ₹6,000
4. M/s. SMERA Ratings Pvt. Ltd. Irrespective of Loan amt 03.08.2024 to 02.08.2027 ₹12,000

● TAT for Providing Due Diligence Report:

• Within 3 days–Contractual Charges (CC); After 3 days to 7 days–50% of CC; Above 7 days - NIL.

DELEGATION OF POWERS: (701/2024, 698/2024, 587/2024, 539/2024, 431/2024, 257/2024)

o The Credit Approval Committee (CAC) of the Board shall exercise powers with regard to credit
proposal beyond the powers of ED-CAC but upto ₹800 Cr for an individual exposure and ₹1600 Cr
for group exposure. In respect of Credit Sanctions for exposure under Commercial Real Estate (CRE),
applicable Chart is as under:
Low Risk ₹50,000 Lakhs Normal Risk ₹40,000 Lakhs
Moderate Risk ₹25,000 Lakhs High Risk ₹15,000 Lakhs
o The credit proposals beyond the above limit shall be placed before the MC of the Board.

o New Business Approval Committee (NBAC):

o Chairman - MD & CEO or senior most Executive Director in the absence of MD & CEO (on
superannuation or otherwise).
o The NBAC shall Provide Expression of Interest (EOI) on the following proposals falling under
CGM/GM-HO-CAC and above authorities powers:
● Existing Clients – Credit facilities for projects by diversifying to their new line of business
● TL/WC proposals of New clients rated A & below (external) and/or internally rated NR & below.
(PSU proposals, who are new clients and All TL/WC proposals received from new clients who are
externally rated AA & above are exempted under NBAC)
o NBAC can accord EOI in respect of such proposals. However, such EOI shall be valid for a period of
2 months and automatically lapses after this period.
o Validity of endorsement given by Credit Committee shall be maximum 45 days and the proposal
shall be placed to the respective Credit Approval Committees within this period. If the same is not
complied, fresh note shall be placed to the Credit Committee again.
o NBAC will provide EOI on new proposals based on:
● Industry outlook for sector
● Strength and capacity of promoter
● Adherence to prudential exposure ceiling

o Revision of NBG proposal charges: ₹5 Lakhs per proposal. Further, NBAC may stipulate the charges
up to ₹10 Lakhs per proposal.
o The proposals from clients who had earlier limits with us and approaching for fresh limits within 6
months of closure of earlier limits need not be routed through NBAC, provided there is no change
in the line of activity.
o Quorum of the meeting chaired by MD & CEO shall be any 5 of which presence of MD & CEO or senior
most ED in the absence of MD & CEO (on superannuation or otherwise), ED/s, CGM/GM RM Wing
(Wing Head), CGM/GM FM Wing (Wing Head), and Senior Most CGM/Senior Most GM (In the absence
of CGM) of LCCW /MCCW shall be mandatory.

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o The quorum for the meeting chaired by Executive Director shall be 5 (Five) of which presence of
senior most ED, other ED/s, CGM/GM RM Wing (Wing Head), CGM/GM FM Wing (Wing Head) and
Senior Most CGM/Senior Most GM (in the absence of CGM) of LCCW/MCCW shall be mandatory
o The quorum for the meeting chaired by CGM/GM of LCCW/MCCW shall be 5 (Five) of which Presence
of CGM/GM of RM Wing (Wing Head), CGM/GM of FM Wing (Wing Head), any 2 CGM/GMs of the
Credit Wings (LCCW, MCCW, SAMW) & CGM/GM presenting the proposal shall be mandatory.
Convenor of ED-CAC (Designated executive from Board Unit) shall be the convenor for the New
Business Approval Committees chaired by MD & CEO and Executive Director. Convenor of CGM/GM-
HO-CAC, Designated executive from MCCW shall be the convenor for the NBAC (CGM/GM-HO)

● Branch do not have powers to sanction-

o Loans and advances to NGO for on-lending to SHG
o Opening of LC for purchase of capital goods; clean LC/FLC; opening of LC stipulating drawing
documentary bill accompanied by country craft receipts; Opening of Revolving LC & LC with onerous
clauses; discounting of BE backed by Govt. guarantee in lieu of Banker’s co acceptance; Creation
of WCTL/FITL;Loans to diamond exporters.
o clearing agents/ginning factories / cold storage units for clearing, forwarding and storing services.

● Branch Categorization
Branch Avg. advances Incumbency
Avg. business for 2 yrs
category for 2 yrs norms
Small Up to ₹10 Cr (excl. urban & metro branches) -- Confirmed Scale I
All branches including (Urban & Metro) with avg.
Medium total business of>₹10 Cr<=₹50 Cr;all urban & Metro -- MMG Scale II
branches with Avg. total business up to ₹10 Cr
Large >₹50 Cr<= ₹100 Cr >₹15 Cr<=₹40 Cr MMG Scale III
VLB >₹100 Cr<= ₹500 Cr >₹40 Cr<=₹150 Cr SMG Scale IV
ELB >₹500 Cr >₹150 Cr SMG Scale V

● Arrangements for exercising powers during the absence of particular sanctioning authority:
o In the absence of GM/DGM/AGM of Circle on account of leave/tour/ training / not otherwise
available for any reasons, the corresponding authority to execute the DOP are as under:

Authority who can exercise the powers

SANCTIONING
In the absence of authority When authority in Column “B” is exercising
AUTHORITY
in Column “A” the powers of authority in Column “A”
“A” “B” “C”
CGM-CO-CAC GM-CO-CAC DGM-CO-CAC*
GM-CO-CAC DGM-CO-CAC -
AGM-CO-CAC
DGM-CO-CAC -
(In DGM Headed Circle only)
*When GM-CO-CAC is exercising the powers of CGM-CO-CAC, DGM-CO-CAC will be the authority to
exercise powers of GM-CO-CAC.
o At Branches, in respect of branches headed by scale I/II/III, whenever any officer/manager
officiates in higher posts on account of absence / leave / training of the permanent incumbent,
the officer officiating shall exercise the powers conferred on that higher post.
o But such sanctions shall be placed before the permanent incumbent for information/views after he
resumes office.
o Views of the permanent incumbent shall be submitted to reviewing authority along with the
documents submitted for sanction review.
o In the absence of CM/AGM (VLB/ELB/RAH), the Credit Manager/Senior Manager of VLBs/ELBs/ RAHs
can exercise sanctioning powers up to their delegated powers only. Proposals, beyond their
delegation of powers, shall be placed to next higher authority at RO/CO for decision.

● Group accounts: For group accounts, the following criteria to be adopted:

o The “commonality of management” and “effective control on the management “shall be the basis
for determining a group.

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 Canara Institute of Bank Management

o In case of a split in a group, if the split is formalised, the splinter groups shall be regarded as
separate groups. However, if there is a doubt that the split has been engineered to prevent
coverage under the group approach, the decision of the respective sanctioning authority shall be
final.
o Exposure to JVs floated by the parent organization and SPVs shall also be brought under group
exposure.
o All electricity companies in same state treated as one group
o W.r.t. PSUs, single borrower limit applicable.

● Delegation in respect of Group accounts:

Sanctioning Authority Maximum powers for credit sanctions
DM-CAC at RO/ACCs/MSME Sulabh
AGM-CAC at RO/CO/ MSME Sulabh
DGM-CAC at RO/CO/ MSME Sulabh
GM-CO-CAC Twice the Maximum sanctioning powers for
CGM-CO-CAC Single entity*
CGM/GM-HO-CAC
ED-CAC
CAC OF THE BOARD
*Twice the Maximum sanctioning powers shall not be available in respect of advances to the
following category of borrowers:
o Stock and share brokers.
o If the group comprises of only partnership firms and all partners are the same.
o If the group comprises of only proprietorship firms and proprietor is same for all the firms.

● Simple Mortgage transactions–Revised guidelines:

o SMT can be put through by branches / offices, only after obtaining permission from following
authority:
Sanctioning Authority Permitting Authority
Below RO Head CAC/ Individual Authority RO Head CAC
RO Head CAC and above Respective CACs
● However, the above guideline shall not be applicable to Agricultural loans.
o Permitting Authority may seek views of Legal Section of Circle before permitting the above
permission.

● DELEGATION OF POWERS FOR PERMITTING LOANS/ADVANCES (VSL/OD) AGAINST OUR DOMESTIC

TERM DEPOSIT:
o RO Head CAC & above - Full powers to grant advances against term deposits with the Bank to the
depositors.
o In case of Loan/advances against third party deposits, - Scale IV & above authorities but below
Circle Head-CO-CAC. CGM/GM/DGM-CO-CAC (Circle Head) and above authorities are delegated with
full powers to sanction such loans.
o MSME Sulabh do not have any delegated powers to sanction Loans against Deposits.
o In case of Large, Medium and Small branches, the quantum of powers have been specified for loans
against third party deposits.

● Loans/ advances against NRE/FCNR (B) deposits to third parties:

o The deposit is to be considered only as a collateral security and the proposal will be subject to
complying with various regulatory guidelines. Advances to third parties against such deposits shall
not be granted on the basis of Power of Attorney.
o Minimum margin of 25%. However, branches headed by Scale I, II & III, - AGM-RO-CAC & Above
authority & CM/AGM/DGM of VLB/ELB/LCB/specialized branches can permit reduction in margin
up to 10%.
 Delegation of Powers for permitting concession in Rate of Interest on Loans/Advances against
Term Deposits standing in the name of Borrower (HO Cir 539/2024) –
1. For Loan against Domestic Term Deposit Standing in the Name of Borrower amount upto

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and including ₹2.00 Crores :

Delegated Authority Minimum Margin Delegated Powers for Concession in ROI
RO Head CAC 10% with Minimum of Deposit Rate plus 1.00%
Circle Head CAC 5% with Minimum of Deposit Rate plus 1.00%
CGM/GM-HO-CAC 5% with Minimum of Deposit Rate plus 0.75%
ED-CAC 5% with Minimum of Deposit Rate plus 0.50%
CAC of the Board 5% beyond the delegated powers of ED-CAC
2. For Loan amount Above ₹2.00 Crores:
Delegated Authority Minimum Margin Delegated Powers for Concession in ROI
RO Head CAC 10% No Powers
Circle Head CAC 5% No Powers
CGM/GM-HO-CAC 5% with Minimum of Deposit Rate plus 0.70%
ED-CAC 5% with Minimum of Deposit Rate plus 0.50%
CAC of the Board 5% beyond the delegated powers of ED-CAC

● Advance Payment Guarantee against 100% cash margin shall not be granted, where such margins
are proposed to be released at a later stage by sanction of advance against guarantee limit with
lower margin by higher authority. Sanction of Advance Payment Guarantee against 100% margin
shall be linked to the borrower’s overall requirement for related credit facilities.

● Issuance of LCs & Inland BGs backed by 100% / FLCs backed by 110% cash margin or term
deposits of our Bank:
o Deposit is required in the name of borrower.
o Third party deposit is not accepted as cash margin against LC/BG facilities (though covered with
100% cash margin). However, it can be accepted as collateral security.
● In case, CIC score of the borrower as per CIC Report (Consumer) is less than 650, proposal may
be sanctioned as: Up to RO Head CAC powers A/c – NHA; Above RO Head CAC – RSA

● Delegation of Powers for sanctioning of loans under Commercial Real Estate is linked to the extent
of collateral security offered as detailed under:
Collateral security coverage
Risk Rating of the borrower Sanctioning Authority
(Distress sale value of the property)
100% & above RSA up-to their DOP
Less than 100% to 75% CGM/GM-HO-CAC
Low Risk
Less than 75% to 50% ED CAC
Less than 50% CAC of the Board
100% & above RSA up-to their DOP
Less than 100% to 80% CGM/GM-HO-CAC
Normal Risk
Less than 80% to 60% ED CAC
Less than 60% CAC of the Board
Moderate Risk and High risk 100% & above RSA up-to their DOP

● Restructuring including rephasement:

o The restructuring of an advance envisaged in the first instance and which consists only of
rephasement/re-schedulement of outstanding loans, the respective sanctioning authority in whose
credit sanctioning powers, the aggregate limit fall, could sanction the same. In case restructuring
includes reliefs/concessions such as creation of WCTL/FITL/reduction in interest, fresh finance
(loans/advances/reliefs) However, branches shall not have powers to sanction such scheme.
● Restructuring for second and subsequent times (Repeated Restructuring):
Accounts falling up to the sanctioning powers of DGM-CO-CAC/CGM-CO-CAC/
executives below Circle Head CAC GM-CO-CAC (Circle head CAC)
Accounts under sanctioning powers of Head of circle. CGM/GM-HO-CAC
Accounts under sanctioning powers of CACs at HO Respective SA

Review & Extension of tenability:

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 Canara Institute of Bank Management

o Permitted for a maximum 6 months, inclusive of second extension. Review and Extension on a single
occasion shall not exceed 3 months.
o The first review & extension may be permitted on the existing terms and conditions including
concessions/ permissions granted. However, during second review & extension, all the existing
sanctioned concessions in terms of rate of interest and service charges will be discontinued.
o 1st Review & extension:
● For LR, NR, MR permitted by RSA. (applicable for LCBs Heads also)
● MC power accounts – CAC of board
o 2nd Review & extension:
● Up to RO Head/RO Head CAC sanctions – by RO Head CAC
● CO/HO sanctions – by RSA
● MC power accounts – CAC of board
o Total review & extension period should not be more than 6 months from the date of original expiry
of limits.

o Sanctioning authority Review & tenability extension permitted by (for borrowers rated High
Risk)
o In respect of High Risk Accounts: Permitted only once and not exceeding 2 months. The authorities
are:
● Up to AGM-CO-CAC (in DGM headed Circle): DGM-CO-CAC
● Up to DGM-CO-CAC (in GM headed Circle): GM-CO-CAC
● Up to GM-CO-CAC (in CGM headed Circle): CGM-CO-CAC
● Up to Circle Head CAC: DGM/GM/CGM-CO-CAC (Circle head)*
● CGM/GM-HO-CAC & ED-CAC: RSA
● CAC of Board: ED-CAC
● MC Power a/c: CAC of board
● *subject to ensuring that credit monitoring reports are complied with; no outstanding overdue;
Review/Extension format to be forwarded to CA&M Wing, HO
● In case of borrowers graded ‘High Risk’, second extension shall not be permitted.
o If the sanctioned credit limits are not availed within the stipulated time frame as mentioned above,
the revalidation of sanction can be permitted by the respective sanctioning authority on a case-to-
case basis only once during the validity period of the sanction for a maximum period mentioned
above. In respect of consortium a/cs, it is max 06 months from the date of sanction taking into
account the probable date of financial closure, beyond which fresh sanction to be obtained. The
revalidation of sanction shall be permitted only once during the validity period.

o Cancellation of limits:
● In case of limits sanctioned and partly availed, cancellation of unavailed portion of limits shall be
as specified under:
Authority who has sanctioned the limits Authority who can permit cancellation
Upto sanctions made by Scale IV (branches/offices/
NHA
retail hubs/DMCAC-MSME Sulabh)
Sanctions by Circle Head CAC/DGM-CAC-CO or RO/AGM-
RSA
CO-CA or MSME SULABH/Scale V in branches)
HO power accounts CGM/GM-HO-CAC
With regard to unavailed limits cancelled by CGM/GM-HO-CAC in respect of limits sanctioned by
ED-CAC and above authorities, respective Credit Wings shall place an information note on
cancellation of limits to the sanctioning authority in the ensuing committee meeting.

o Rejection of credit proposals: Authority

● from SC/ST customers NHA
● Loans under govt. sponsored schemes if rejected by branch, register to be maintained with valid
reasons, which shall be examined by the controlling authorities during their branch visits.
● Proposals from MSME- concurrence of the NHA.
● Educational loan- concurrence of the NHA.
● Export credit proposals- reported to MD & CEO
● Proposals once rejected by a higher authority in case recommended again shall be placed before

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such higher authority for sanction even though the subsequent proposal/s say, for lesser amount
falls within the powers of a lower authority.
● Branches are not empowered to reject any proposals originated through Jan samarth Portal. Next
Higher Authority shall be the authority to reject the proposals received under the Jan samarth
Portal as under:
Proposal falls under the delegated powers of Authority for rejection of applications
RAH Head AGM-RO-CAC
DM-RO-CAC (other than RO head) AGM-RO-CAC
AGM-RO-CAC(DGM headed RO) DGM-RO-CAC
AGM-RO-CAC(RO head) DGM-CO-CAC
DGM-RO-CAC GM-CO-CAC

● Borrowers with lower liquidity ratio (Current Ratio less than 1):
Exposure falling under powers of GM-CO-CAC and above → RSA can permit
renewal/enhancement/additional limits
Existing
Exposure falling under powers of below GM-CO-CAC → RSA can permit
Borrower
renewal/enhancement/additional limits.
However Enhancement/addl. Limits permitted with pre sanction clearance from NHA
Circle Head & below authorities not empowered to sanction.
New In exceptional cases, proposals with DOP of CGM/GM-CO-CAC to be placed before
Borrower CGM/GM-HO-CAC for decision.
● Prior sanction of RO-Head CAC & above authorities up to their DOP should be obtained by Branches
in charge headed by Scale I, II, III, IV & V for issuing following type of guarantees except if they
are fully secured by 100% margin in cash/term deposits of the Bank.
o Guarantees where the protective clause is not specified/incorporated.
o Guarantees covering payment of dues such as payment of insurance premia, payment of sales tax,
payment of income tax or any arrears of tax, etc.
o Issuance of guarantees necessitating lodgement of government securities by the Bank.
o Issuance of guarantees in respect of matters under dispute pending in the court.
o Guarantees whether secured by 100% margin or otherwise shall not be issued for more than 10
years. However, CGM/GM-HO-CAC can permit BG > 10 years
o Circle Head-CAC and above authorities are empowered for permitting BGs with the clauses of
Operative clause (i.e. claim settlement at other than issuing branch) & Interest clause up to
their delegated powers.

o Guarantees (Inland/Foreign) with Jurisdiction Clause may be permitted by:

Cash Margin Authority to permit
Fully (100% & above) secured by margin in RO Head CAC & above authorities upto their
Cash / Term Deposits of the Bank powers.
Margin of less than 100% in the form of Circle Head CAC & above authorities upto their
Cash / Term Deposits of the Bank powers. In respect of MC power accounts, CAC of
the Board may permit the same.

● Aggregation of limits for determination of Sanctioning Authority:

o Aggregation of limits based on Limits/liabilities outstanding both FB & NFB.
o Actual o/s or sanctioned limits whichever is higher w.r.t. FB limits, are considered.
o For single transaction viz., TL→ O/s if limit is availed or limit in force if not availed is considered.
o In respect of facilities viz., Credit card or KCC→ Liability o/s shall also be taken for aggregation of
limits
o Under Agri loans, while clubbing the limits / liabilities, Gold loans, Produce Loans; KCC –Krishi Mitra
Scheme need not be taken into account.
o Credit facilities backed by 100% margin /FLCs with 110% margin exempted. This will not apply for
bid bond guarantee with 100% margin.
o In respect of Retail Lending schemes, aggregation of limits/liabilities applied in case of sanction of
second/subsequent loan under same scheme. In respect of HL, all variants of HL clubbed for
deciding the SA, irrespective of fact whether HL belongs to HL-CRE (3rd & subsequent)/HL–Non CRE

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 Canara Institute of Bank Management

(up to 2 Housing Units).

o In respect of Loans/advances to employees of the bank, for the purpose of aggregation of limits to
ascertain the relevant sanctioning authority, the following shall be excluded:
(i) Loans/ advances against term deposits (ii) Housing loans (iii) Vehicle loans to employees, car
repair loans to officers (iv) Advances granted under specific schemes – DPN, Clean OD, etc.
o Designated branches can negotiate Bills under LC to the extent of normal DOP for secured facilities,
even if existing/proposed exposure including BULC Limit falls under NHA powers.
o In case of schematic loans to High Risk rated business concerns like prop concerns, partnership
firms, Corporates etc., enjoying credit facilities, the other facilities/limits sanctioned to the
borrower, if any (including business loans) to be aggregated to decide delegating authority.
o In respect of Canara Vehicle scheme, RSA can consider loan irrespective of the fact that the other
facilities fall under NHA. This criterion is applicable if account is rated up to MR. If the account is
HR rated, the delegation to be decided by aggregating Canara vehicle loan with other credit
facilities.

● Loans / advances to close relatives [Other than Agricultural sector and Personal (Retail) Loans] of
existing individual borrowers, proprietor in case of Prop firms, and partnership firms where any of
the partners are close relatives shall be placed before the NHA for sanction.
● Renewal without enhancement can be sanctioned by RSA, if on previous occasion, it was NHA’s
sanction. Renewal with enhancement in the limit shall be subject to clearance from the NHA.

● Loans/advances to close relatives of existing individual borrowers:

o If mortgage of third party property is accepted as security for first time, prior clearance is required
from NHA at RO i.e., RO Head/CO before conveying the sanction unless specified otherwise in
scheme. This shall be applicable in respect of sanctioning powers below the DOP of Circle Head
level CAC i.e. CGM/GM/DGM- CO-CAC.
o In respect of proposals falling under delegated powers of CGM/GM/DGM-CO-CAC(Circle Head) and
above→ RSA may permit the same.
o Prior clearance from NHA not required in case of security accepted from close relative of borrower.
However, this rule does not apply to relatives of partners / directors.

● For the purpose of applying permission for pre sanction clearance, the following need not be
considered third parties.
o Partners associated with day to day affairs of a partnership firm
o Director (whole time director) of a company, associated with its day to day affairs
o Managing trustee of a trust, associated with its day to day activities
o The RSA, on merits may waive obtention of personal guarantee of third party, who is owner of the
property offering the same as collateral security.

● Third party property taken as collateral security:

o For New borrowal account, If mortgage of third party property is accepted as security for the first
time for lending there against, prior clearance is required from NHA at RO i.e., RO Head/CO
before conveying the sanction unless specified otherwise in scheme guidelines. This shall be
applicable in respect of sanctioning powers below the DOP of Circle Head level CAC i.e.
CGM/GM/DGM-CO-CAC.
o In respect of proposals falling under delegated powers of CGM/GM/DGM-CO-CAC (Circle Head) and
above → RSA may permit the same.
o Prior clearance from the NHA need not be obtained for accepting security standing in the name of
close relatives, i.e., spouse, son, unmarried daughter, father, mother, brother and unmarried sister
of the borrower for all types of loans/advances subject to ensuring that disbursement should be
done after putting thro’ EMT in respect of loans to individuals. This does not apply in case of
relatives of partners/directors.
o In case of renewal/ enhancement/ addl. facilities for existing accounts RSA may permit as per
respective DOP, where prior clearance was obtained from NHA on previous occasion,
● For the purpose of applying permission for pre sanction clearance, the following need not be
considered as third parties:
o Partners associated with day-to-day affairs of the Partnership Firm.
o Director (whole time director) of a company, associated with its day-to-day affairs of company.

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o Managing trustee of a trust, associated with its day-to-day activities.

The RSA, on merits may waive obtention of personal guarantee of third party, who is owner of
the property offering the same as collateral security.

● Advances to relatives of employees:

o Branches do not have powers except loan against Bank deposit, GL against agriculture purposes up
to ₹20,000/-. This is not applicable in case of CM (VLB)/AGM (ELB) Sanctions. If loans are to be
sanctioned to the close relatives of sanctioning authority, then the powers are delegated to NHA.
o Credit facilities sanctioned by any authority (except Management Committee of the Board) to any
relatives of senior officers of scale IV & above or to any firm/company in which they are interested
or hold substantial interest as partner, director or guarantor shall be reported to the Board of
Directors of the Bank.
o However, the term “credit facility”, shall not include loans and advances against (a) Bank’s deposits
(b) Govt. securities (c) LI policies (d) Overdraft upto ₹25,000 and (e) casual purchase of cheques
upto ₹15,000 for the purpose stated above.
o Loans/advances to close relatives of the employees of the Bank including the firms in which those
relatives are interested (except those granted against Term Deposits with the Bank) are to be
sanctioned only by Scale-IV & above authorities depending on the type/quantum of limits and their
respective delegated sanctioning powers

● Delegated powers for permitting reduction in ROI on loans/advances above ₹10 Lakhs against
our Term Deposits applicable to employees, employees with any of his/her close relatives,
spouse of the deceased employees, retired employees:
 GM/DGM-CO-CAC (Circle Head) is delegated authority for permitting reduction in RoI upto 1% over
the deposit rate on very selective basis in deserving case.
 However, in such cases where reduction in ROI is permitted, ROI so permitted shall be made
applicable for the entire loan amount, without applying the existing slab rates of interest.

● Oral instructions/telephonic permissions for sanctioning loans/advances:

 A separate note book/register (Appendix – I) shall be maintained with a provision to record the
details of sanction/instructions, name of borrower, existing limits & liability, overdue if any,
additional facility proposed, limits sanctioned, conditions specified by SA and the reasons for
urgency in seeking telephonic permission.
 In respect of any oral instructions/telephonic permissions, written sanction/confirmation of the
authority empowered to permit the same should be sought by the concerned branch/official,
through telephonic sanctions package in SAS (As per HO Cir IC/276/2024) positively on the same
day of obtention of the telephonic/oral sanction. Also, the branch concerned should follow up and
ensure receipt of the written confirmation of oral instructions/permission from the sanctioning
authority. (The guidelines on submitting physical copy of NF-254 in duplicate has since been
dispensed w.e.f. 04.04.2024).
● The Circles are required to send consolidated statement to RM Wing, HO every quarter viz.,
March, June, September and December with respect to Reporting to HO about unapproved
credit facilities under adhoc/oral/telephonic sanctions
● Ratification of action initiated beyond the delegated powers:
o Action not ratified in stipulated time will be deemed as approved.
o The delegated credit sanctioning powers prevailing as on date of sanction shall be the criteria for
determining the DOP of authority.
o No lower authority can ratify the action of account under Sanctioning powers of higher authority.
o In case of Ratification of action initiated beyond the delegated powers, branches and LCBs shall
submit the ratification note to the MSME Sulabh/RO/CO and CO respectively (as the case may be)
in duplicate retaining one copy for their records. MSME Sulabh/ RO/ CO has to return one copy of
the ratification note to the concerned branch incorporating the orders of the competent authority.
o In respect of LCB accounts (falling under HO powers), LCBs shall submit the proposal directly to the
concerned wing with a copy to their Circle. Circle shall submit their views on the proposal by way
of Front sheet to the respective user wing at HO.
o In respect of HO power accounts, ratification note shall be placed to Circle Head (CGM/GM/DGM)-
CO-CAC for their recommendation and one copy to concerned user wing at HO for ratification.

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 Canara Institute of Bank Management

o Foreign branches shall submit the ratification note to Overseas Banking Division, IO & CCR Wing,
HO.
o The onus of giving the decision on the ratification note lies with the competent authority
concerned, wherever the Notes are submitted by the branches/ offices within the stipulated period.
If the action is not ratified within the stipulated timeline, it will be deemed as approved.
o The orders of the ratifying authority shall be conveyed to the Circle within 2 days from the date of
decision and in turn Circle shall convey to the branch on the same day of receipt of
permission/orders from HO
o Timeline to submit ratification to the authorities within days of permitting the facilty:
For Branch – 2 days; MSME Sulabhs/RO – 7 days; For CO – CO Power A/c – 7 days,
HO Power A/c – 2 days; For HO – CGM/GM-HO-CAC powers A/c – 7 days, ED-CAC/CAC of the
Board Powers A/c – 15 days, MC Powers A/c – forthcoming MC.

● TOD in SB/ Current Account:

o CM/DM:₹10,000/- in SB A/c.
o TOD in CA can be permitted only to the extent of adhoc credit facility as applicable to non-borrower
clients, i.e. 10% of the normal delegated powers for sanction of clean facility.
o Branch head Up to Scale III: No Powers to sanction TOD in SB/CA. However, in respect of
Pension/Salaried where pension/salary is credited on regularly, TOD may be permitted by Branch
in-charge up to a maximum of ₹5,000/- for a period not more than 15 days, duly obtaining prior
permission from the Advances Section, Circle Office.
● Further TOD in SB/CA due to Forced debit of Credit Card dues in the operative account
linked to the card now has been discontinued by bank. (355/2021). Card dues will be remain
in the respective Credit Card Account till classified as NPA for focused follow up. NPA card
liability will be automatically transferred to CBS under the DP code of the Card issuing
Branch.
● Penal charge at the rate of 2.00% p.a. for the period beyond 15 days till the date of
regularization irrespective of TOD amount. This shall not be applied to product specific
guidelines like overdraft permitted under Canara Payroll Package etc. and the same shall be
covered under product specific guidelines. Waiver is not permissible.

● ADHOC CREDIT FACILITY / TEMPORARY OVER LIMIT [TOL]

o Wherever regular limits have been sanctioned to a borrower, need for additional short term
credit facility may arise due to unforeseen business needs either by way of FB or NFB facility.
Such additional facilities may be permitted by way of Ad hoc limits/Temporary Overlimits.
Additional limits/Single Transaction Limits shall also be covered under Ad hoc limts.
o Category of advances - Two: Secured Advances & Clean Advances
o Regular credit facility & Adhoc credit facility
o ‘Adhoc Credit Facility’ can be permitted by the respective authorities within their Maximum
delegated credit Sanctioning powers, as detailed here under:
SANCTIONING AUTHORITYTO SECURED ADHOC CREDIT ADHOC ON CLEAN BASIS /
AUTHORITY PERMIT ADHOC FACILITY REDUCTION IN MARGIN
20% of the sanctioned 5% of the sanctioned
facility (i.e. various limits facility (i.e. various limits/
/sub limits permitted to the sub limits permitted to the
Up to Circle Circle borrower) Or 20% of the borrower) Or 5% of the
Head CAC Head CAC delegated limit/sub limit of delegated limit / sublimit
the permitting authority for of the permitting authority
corresponding secured for sanction of Clean
facility whichever is less. facility which-ever is less.
CGM/GM-HO-CAC,ED- As above
RSA As above
CAC
CAC of the Board& MC CAC of the As above
As above
of the Board Board
o The above facility may be permitted beyond the assessed limit and shall be priced at least 2% p.a.
higher than that stipulated for the regular credit facility. However, this is not applicable to Adhoc
facility permitted for export limits.
o The facility can be permitted for a maximum period of 90 days only.

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o No adhoc credit / additional limits / single transaction limits facility can be permitted in any
account on more than 2 occasions in a FY.
o Respective delegated authority can permit Adhoc within the tenability period as per the sanction.
o Following shall be ensured while permitting an Adhoc facility:
 Availability of the latest ABS not older than 15 months (The period of 15 months can be computed
from the date of receipt of ABS or statutory due date for submission of the ABS whichever is earlier).
 The regular limits permitted are in force.
 There are no overdue in any of the borrowal accounts of the borrower. The account is a standard
asset and not risk rated as ‘High risk’.
 The account has not appeared under SMA 2 for more than 2 occasions in a calendar quarter.
 Adhoc Limits (including additional limits/single transaction limits) in new borrowal account (i.e.
new connection to the Bank even if part of an existing group) during 1st year, shall be permitted
after obtaining concurrence from NHA. However, this guideline is not applicable for permitting
Temporary overdraft [TOD] facility.
 Adhoc Credit facility may be permitted in Restructured accounts on merits, with proper justification
and the same shall be permitted by the next higher authority not below the rank of (GM-
COCAC/DGM-CO-CAC).
 In respect of Group Accounts, the sanctioning authority for Adhoc limit shall be the highest
authority who is empowered to sanction credit facility to all the Group Account.
 No adhoc limit is to be sanctioned to account which is identified as an exit account.

o Adhoc facility to accounts where tenability is extended as under:

● RSA can permit Adhoc within the tenability period as per the sanction.
● In respect of account where tenability is extended, adhoc facility can be permitted only by the NHA
during the extended tenability period.
o Documentation: Documentation shall be obtained before the release of ADHOC Credit facility
irrespective of the tenor.(587/2024)

o Adhoc credit facility for non borrower clients:

● In case of clients who are not enjoying any credit limits with the Bank (non- borrowing client) Adhoc
credit facility can be permitted to the extent of 10% of the normal delegated powers for sanction
of clean facility, subject to the following:
● The facility shall not outstand for a period of more than 15 days, unless otherwise the individual
period of transaction is inherently for a longer period.
● If the Adhoc credit facility is not regularized within the period for which it was allowed, such cases
shall be reported to the next higher authority and steps taken for immediate regularization.

● TEMPORARY OVERLIMIT:
o Temporary over-limit is a short duration facility to meet certain exigencies and may be permitted
once in a month for a period not more than 7 days, within the maximum delegated powers for
credit facility.
o Other conditions:
● No. of times / Maximum period permissible: Only once in a month for a maximum period of 7 days
in a month. If the facility is permitted for less than 7 days in a month, Temporary Over limit cannot
be permitted again during the month.
● Drawing Power: The facility should be adequately covered by Drawing Power.
● Any additional limit / Single Transaction limit, over and above the regular limits sanctioned to the
borrower, may be permitted only by way of Adhoc credit limit/ TOL, duly observing the relevant
guidelines in this regard.
● Asset value: Standard and not rated High risk.
● Regular limit: To be in force and no overdue.
o The following authorities are empowered to permit TOL facilities over the sanctioned limits to
existing borrower’s upto 10% of the sanctioned limit provided the total of such TOL is restricted to:
Designated Functionaries Temporary over limit Ceiling(Rs in Lakhs)
Circle Head CAC (CGM/GM/DGM) 150
CGM/GM-HO-CAC 250
ED-CAC 500

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CAC OF THE BOARD 1000

o To facilitate effective monitoring of adhoc over limit, a BO report (280113)is provided with the
details of the Temporary over limit permitted.
o Further, no adhoc credit / additional limits / single transaction limits facility can be permitted in
any account on more than 2 occasionsin a FY.

● Conversion of limits:
o One-way conversion of limits from LC to BG for purchase of raw materials may be permitted to
Beneficiary entities such as PSUs, SAIL, NSIC and Corporates externally rated AAA/AA, if:
a) Margin as applicable is maintained.
b) Period of BG is within WC cycle subject to maximum one year.
Upto CO power accounts - Circle-Head-CAC; HO power a/cs – RSA and MC power a/cs – CAC of the
Borad can permit the One-way conversion with due justification of the requirement.
o Two-way Conversion of limits from FB to NFB limits and vice-versa may be permitted subject to
compliance of the following conditions:
 NFB limits (only LC Limit & APG for purchase of raw materials) may be converted in to FB Limits
and vice-versa may be permissible for stock purchase only.
 Post-conversion, both FB limits and NFB limits shall be within the assessed MPBF.
 Post-shipment to pre-shipment is not permitted (PC to Bills and not otherwise)
 Secured limits are not to be converted into clean limits
 DOP for conversion of NFB to FB is as under:
Sanctions permitted by Authorized to permit conversion of NFB to FB
Up to & including Circle Head CAC Circle Head CAC can permit conversion of NFB to
FB up to 60% of sanctioned NFB limit.
Up to & including CGM/GM-HO-CAC CGM/GM HO CAC can permit conversion of NFB to
FB up to 60% of sanctioned NFB limit.
ED-CAC and above authorities Respective sanctioning authority – full powers
CAC of the Board can permit conversion of NFB to
FB in respect of MC power accounts

o Margin requirements for NFBs:

● Secured NFB (excluding BGs with tenor exceeding 5 years): Min margin is 15% as TDR and it is in
addition to any collateral securities.
● Reduction in Min Margin by way of Cash/ Deposit can be permitted as per the following DOP:
Authority Margin
RO Head CAC & MSME Not less than 10% in respect of accounts rated upto and including
Sulabh Head CAC Moderate Risk, falling up to its delegated powers.
CO Head CAC Not less than 10% in respect of accounts rated upto and including
Moderate Risk, falling up to its delegated powers
CGM/GM-HO CAC Not less than 10% in respect of accounts rated upto and including
Moderate Risk, falling up to its delegated powers
ED – CAC Not less than 5% in respect of accounts rated upto and including
Moderate Risk, falling up to its delegated powers
CAC of the Board Full powers for accounts upto its delegated powers
● The earlier guidelines on obtaining separate permission for waiver of additional commission
wherever the competent authority has permitted acceptance of lower margin for NFB limits stands
withdrawn.
● However, min margin in respect of Performance BG shall be 15% and min margin for Financial BG
shall be 10%.Waiver of such commission permitted by CGM/GM-HO-CAC & above as per DOP
● ED-CAC & above authorities are empowered to permit reduction in the above margins up to a min
of 5%. CAC of the Board shall have full powers for waiver of margin up to their DOP.
● In cases where the NFB facility (excluding PBG and FBG) is secured by way of at least 50% in the
form of Residential/Commercial Properties (L&B backed by approved building plan), the margin
may be selectively reduced to up to 10% by the respective sanctioning authority.
● Clean NFB limits (excluding BGs with tenor exceeding 5 years): Non inventory based NFB
facilities, which are not secured 100% by collateral and/or margin, are clean NFB facilities.

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o Minimum margin requirement for clean NFB limits shall be 25% as TDR.

o Reduction in minimum requirement for Clean NFB limits by way of Cash/Deposit can be permitted
as under:
Authority Margin
Circle head CAC Not less than 15% in respect of accounts rated upto and including
(CGM/GM-CO-CAC) Moderate Risk, falling up to its delegated powers.
CGM/GM-HO CAC Not less than 10% in respect of accounts rated upto and including
Moderate Risk, falling up to its delegated powers.
ED-CAC Not less than 5% in respect of accounts rated upto and including
Moderate Risk, falling up to its delegated powers.
CAC of the Board Full powers for accounts up to its delegated powers.
o However, min margin in respect of PBG shall be 15% and min margin for FBG shall be 10%.
o ED-CAC & above authorities are empowered to permit reduction in the above margins up to a
minimum of 5%.
o CAC of the Board shall have full powers for waiver of margin up to their delegated powers.
o Both Secured and Clean: BG with tenor exceeding 5 years:
• Minimum margin requirement for BG issued beyond 5 yrs shall be 25% as TDR in addition to any
collateral securities of tangible properties that may be stipulated for the limit.
• Reduction in min margin requirement for BGs extending beyond 5 yrs by way of Cash/Deposit may
permit by the following authorities subject to the conditions as under:
Authority Margin
CGM/GM-HO-CAC Not less than 10% in respect of accounts rated up to and
including Moderate Risk, falling up to its delegated powers.
ED-CAC Not less than 5% in respect of accounts rated up to and including
Moderate Risk, falling up to its delegated powers.
CAC of the Board Full powers for accounts up to its delegated powers.
o All above guidelines may applicable for BG with tenor exceeding 5 yrs

o BG on behalf of third parties: Circle Head CAC may permit issuance of BGs on behalf of third
parties subject to availability of atleast 100% additional collateral security or availability of 100%
Cash margin exclusively for the BGs.
o In other cases, guarantees to third parties shall be permitted by the following authorities:
Internal Rating Authority to permit
For accounts up to MR CGM–GM/CO-CAC & above up to their DOP
For accounts rated as HR CAC of the Board

● POLICY GUIDELINES ON VARIATIONS:

o Generally, such variations which are beyond acceptable parameters provided in CRM policy shall
not be considered. However, in exceptional cases, variations may be examined in borrowal accounts
by Credit Approval Committees at Head Office, on merits of each case with due justification for
the same.
o The variations are classified as–MAJOR & MINOR
o MAJOR:
● Variation in other than retail lending schemes viz., under eligibility norms, loan quantum and
margin, extent of security cover, policy guidelines linked to Risk rating, variation from policy on
hedging of FC exposures, variation from benchmark ratios/policy parameters/moratorium in
project appraisal, Valuation, take over norms.
● Amount of facility, conversion of limits, extent of security, Interest rate, Amount of Margin, Period
of repayment, guarantees cover, etc.
o MINOR:
● Variation under retail lending schemes, viz., eligibility, loan quantum and margin,
modification/waiver of documentation (other than standard loan documents) and variation in
repayment moratorium period in retail lending schemes.
● Sub-limits, validity for availment of limits, substitution of collateral securities etc.
● Loan validity period/disbursement in tranches, conditions attached to concessions/ permissions,

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terms relating to collection of fee/service charges.

o The authorities empowered to permit variations areas under:
o Corporate and MSME proposals, including Commercial Real Estate [CRE]
● CGM/GM-HO-CAC – maximum of 2 variations in a proposal, including major variations, falling up to
their sanctioning powers.
● ED-CAC & CAC of the Board – maximum of 4 variations in a proposal, out of which Major variations
shall not exceed 2.
● Beyond the above – placed before the MC of the Board for prior approval/permission.
● The restriction on maximum number of variations, including major variations, does not apply to
sanctions by MC of Board.
● Proposals relating to Central & State Govt entities and the co-operative bodies constituted under
special statutes - Any no. of variations by CAC of board including major variations up to its DOP.

● Holding on operations: Revision in Policy guidelines and delegation of powers [932/2020]

● Eligibility:
o Holding on Operations can be permitted if the following conditions are fulfilled:
● The account is Standard Asset or NPA Accounts, not “Marked for Recovery”.
● No adverse features/ observations reported on the borrower & its promoters.
● The irregularities are due to developments which were beyond the control of the borrower.
● Decision with regard to rehabilitation / restructuring or otherwise is pending with the Bank, or is
imminent in the near future, say within the next 3 to 6 months.
o Permitted for a maximum 6 months and not exceeding 3 months at a time, before which a decision
shall be taken on the account for further steps/recovery steps, etc., or otherwise.
o Holding on operations shall be used only in genuine cases and it shall be permitted by only CGM/GM-
HO-CAC & above authorities up to their power a/cs and RSA may permit up to ED-CAC & above
power a/cs.
o In respect of accounts falling under the sanctioning powers of MC of the Board, CAC of the
Board is empowered to permit Holding on Operations.

o ISSUANCE OF SOLVENCY CERTIFICATE

 Solvency Certificate should be issued only on behalf our customers.
 Branches headed by Scale I, II & III, CM/SM/CM of VLBs and AGM of ELB, Manager-in-charge of
Credit/AGM/DGM in LCB/DGM headed branches can consider/issue the Certificate.
● To the extent of declared net-worth (NW) of the client up to ₹1 Lakh without insisting any financial
statements.
● To the extent of accepted NW of the client on the basis of Unaudited ABS >₹1 Lakh <= ₹5 Lakhs.
● To the extent of accepted NW of the client on the basis of ABS >₹5 Lakhs.
 Commission to be collected: (785/2023) -
Up to ₹1 Lakh - ₹750/-; >₹1 Lakh <= ₹25 Lakhs - ₹3,000/; >₹25 Lakhs <= ₹50 Lakhs - ₹6,000/-
and >₹50 Lakhs - 0.10% with Min ₹6,000 & Max ₹50,000/-.
 Solvency Certificate shall be generated through SAS Package only and branches shall not issue
these certificates manually to customers. (308/2024)

o ISSUANCE OF CAPABILITY CERTIFICATE

 For submission to Govt. Departments or other Organizations for considering tender application,
execution of contract or for similar other purposes.
 Purpose is to assess capability in performing the work order/contract.
 It is neither in the form of BG nor Solvency.
 Requirement for issue of Capability Certificate: ascertain the track records, full details of the work
orders executed during the last 3 years.
 Capability Certificate can be issued to the extent of last year’s performance + average increase in
last 3 years.
 In the case of customers with proven track record, the Manager/Senior Managers are authorized
to issue capability certificate upto the extent of the eligibility amount specified by the Bank from
time to time.
 As per HO Cir No. 787/2023, The validity of Solvency Certificate and Capability Certificate shall
be restricted to the maximum of one year from the date of issuance.

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 It is issued in prescribed format and judiciously favouring different authorities. Issued in triplicate
(One copy to beneficiary, one copy to be kept in Serial file and third copy in CR file of the party.
 Application NF-548 + Financial and other supporting documents to be obtained.
 No entries in bank’s book. No margin requirements, no security specifications and Bank does not
incur any liability on this account.
 Capability Certificate shall be generated through SAS Package only and branches shall not issue
these certificates manually to customers. (308/2024)
 Capability Cert. 1–for contractors; Capability Cert. 2-for students pursuing studies abroad.
 Commission:(663/2022)-Upto ₹5 Lakhs-₹500; above ₹5 Lakhs - ₹100 per Lakh Max ₹1,500/-
o Additional Capability Certificate in respect of the same student for applying to different
universities/same University within 12 months from original CC: ₹100 per Certificate.

● For sectors identified as stressed sectors by the Bank, credit facilities to new customers
(including takeover proposals of all kinds) shall be sanctioned only with: (587/2024)
a) 100% Collateral coverage in the form of res/comm property/approved securities or
b) Facilities fully covered by Central and/or State Govt. /CGTMSE/CGFMU Guarantee.
 CGM-HO-CAC and above authorities may permit relaxation for accounts up-to their DOP on a case
to case basis. The guidelines shall not be made applicable for area specific schemes.
 In case of existing customers, enhancement/additional limits shall be permitted without any
dilution in collateral coverage ratio.
 For the purpose of application of these guidelines, customers not having any existing credit facilities
with our Bank shall be treated as new customers.

● In respect of accounts with aggregate exposure above a threshold with the lenders, as indicated
below, on or after the reference date, RP shall be implemented within 180 days from the end of
Review Period. The Review Period shall commence not later than:
 if in default as on the reference date; or, The date of first default after the reference date.
● The Reference dates for the above purpose shall be as under:
Aggregate Exposure of the borrower to lenders Reference Date
₹2,000 Cr and above 07.06.2019
₹1,500 Cr and above but less than ₹2,000 Cr 01.01.2020
Less than ₹1,500 Cr To Be announced by RBI in due course

● Where a viable RP in respect of a borrower is not implemented within the timelines given below,
all lenders shall make additional provision as under:
Timeline For implementation of viable Additional provisions to be made as a % of total
RP o/s, if RP not implemented within the timeline
180 days from the end of Review Period 20%
365 days from the commencement of RP 15% (i.e. total additional provisioning of 35%)

● Above additional provision is over and above higher of provisions already held (or) provisions
required to be made as per asset classification status of a/c, subject to total provisions capped not
to be more than 100% of outstanding. (These additional provisions may be reversed upon compliance
of certain terms as per circular 364/2024)
● In respect of such large accounts, where a Resolution Plan involving restructuring/change in
ownership is implemented within the 180-day period, the account should not be in default at any
point of time during the ‘specified period’, failing which the bank shall go for fresh Resolution Plan
or Recovery Measures, as deemed appropriate.

***************

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प्राथमिकता क्षेत्र
PRIORITY SECTOR CREDIT
Categories under priority Sector:
1. Agriculture
2. Micro, Small & Medium Enterprise
3. Export Credit
4. Education
5. Housing
6. Social Infrastructure
7. Renewable Energy
8. Others

Targets /Sub-targets for Priority sector for Domestic commercial banks (excl. RRBs &
SFBs) & foreign banks with 20 branches and above (IC/481/2024):
Categories Mandated Level
Total Priority Sector 40 percent of ANBC* or CEOBE Exposure** whichever is higher.
Agriculture 18 percent of ANBC or CEOBE, whichever is higher. Within the 18
percent target for agriculture, a target of 10 percent of ANBC or
CEOBE, whichever is higher is prescribed for Small and Marginal
Farmers, to be achieved in a phased manner as under
Financial Year Small and Marginal Farmer’s
target
2020-21 8%
2021-22 9%
2022-23 9.50%
2023-24 10.00%
Micro Enterprises 7.5 percent of ANBC or CEOBE, whichever is higher
Weaker Sections 12 percent of ANBC or CEOBE, whichever is higher, to be achieved
in a phased manner as under:
Financial Year Weaker Section target

2020-21 10.00%
2021-22 11.00%
2022-23 11.50%
2023-24 12.00%

Detailed activity wise norms for classification under Priority Sector:

1. Agriculture:
• Farm Credit (short/medium/ long crop loans to farmers)
• Agriculture Infrastructure
• Ancillary Activities
Farm credit A. Loans to individual farmers [including Self Help Groups (SHGs) or Joint
Liability Groups (JLGs), i.e. groups of individual farmers, provided banks
maintain disaggregated data of such loans] and Proprietorship firms of
farmers, directly engaged in Agriculture and Allied Activities, viz., dairy,
fishery, animal husbandry, poultry, bee-keeping and sericulture. This will
include:

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i. Crop loans to farmers, which will include traditional /non-traditional

plantations and horticulture, and, loans for allied activities.
ii. Medium and long-term loans to farmers for agriculture and allied
activities (e.g. purchase of agricultural implements and machinery,
loans for irrigation and other developmental activities for allied
activities.)
iii. Loans to farmers for pre and post-harvest activities, viz., spraying,
harvesting, grading and transporting of their own farm produce.
iv. Loans against pledge/hypothecation of agricultural produce (including
warehouse receipts) for a period not exceeding 12 months’ subject
to a limit up to Rs. 75 lakhs against NWRs/ eNWRs and up to Rs. 50
lakh against warehouse receipts other than NWRs/eNWRs.
v. Loans to distressed farmers indebted to non-institutional lenders.
vi. Loans under the Kisan Credit Card Scheme.
vii. Loans to small and marginal farmers for purchase of land for
agricultural purposes.
viii. Loans to farmers for installation of stand-alone Solar Agriculture
Pumps and for solarisation of grid connected Agriculture Pumps.
ix. Loans to farmers for installation of solar power plants on barren/
fallow land or in stilt fashion on agriculture land owned by farmer.

B. Loans to corporate farmers, farmers’ producer organizations/ companies

of individual farmers, partnership firms and co-operatives of farmers
directly engaged in Agriculture and Allied Activities, viz., dairy, fishery,
animal husbandry, poultry, bee-keeping and sericulture
a) Loans up to an aggregate limit of Rs. 2 crores per borrowing entity.
This will include:

• Crop loans to farmers which will include traditional/non-

traditional plantations and horticulture, and, loans for allied
activities.
• Medium and long-term loans to farmers for agriculture and
allied activities (e.g. purchase of agricultural implements and
machinery, loans for irrigation and other developmental activities
undertaken in the farm, and developmental loans for allied activities.)
• Loans to farmers for pre and post-harvest activities, viz.,
spraying, weeding, harvesting, sorting, grading and transporting of
their own farm produce.

b) Loans up to Rs. 75 lakhs against pledge/hypothecation of agricultural

produce (including warehouse receipts) for a period not exceeding 12
months against NWRs/eNWRs and up to Rs. 50 lakhs against warehouse
receipts other than NWRs/eNWRs.
c) Loans up to Rs. 5 Crore per borrowing entity to FPOs/FPCs undertaking
farming with assured marketing of their produce at a pre-determined
price.
d) UCBs are not permitted to lend to co-operatives of farmers.

Agriculture i. Loans for construction of storage facilities (warehouses, market yards,

Infrastructure godowns and silos) including cold storage units/ cold storage chains
designed to store agriculture produce/products, irrespective of their
location.
ii. Soil conservation and water shed development.
iii. Plant tissue culture and agri-biotechnology, seed production,
production of bio-pesticides, bio-fertilizer and vermi-composting.

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iv. Loans for construction of oil extraction/processing units for production

of bio-fuels, their storage and distribution infrastructure along with
loans to entrepreneurs for setting up Compressed Bio Gas (CBG) plants.

For the above loans, an aggregate sanctioned limit of Rs. 100 crores per
borrower from the banking system, will apply.

Ancillary i. Loans up to Rs.5 crores to co-operative societies of farmers for purchase

activities of the produce of members.
ii. Loans up to Rs. 50 crores to Start-ups, as per definition of Ministry of
Commerce and Industry, Govt. of India that are engaged in agriculture and
allied services.
iii. Loans for Food and Agro-processing up to an aggregate sanctioned limit of
Rs.100 crores per borrower from the banking system
iv. Loans for setting up of Agri clinics and Agribusiness Centres.
v. Loans to Custom Service units managed by individuals, institutions
or organizations who maintain a fleet of tractors, bulldozers, well-
boring equipment, threshers, combine etc. and undertake farm work for
farmers on contract basis.
vi. Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’
Service Societies (FSS) and Large-sized Adivasi Multi-Purpose Societies
(LAMPS) for on-lending to agriculture.
vii. Loans sanctioned by banks to MFIs for on-lending to agriculture sector as
per the conditions specified in Master Directions on Priority Sector Lending
by RBI.
viii. Loans sanctioned by banks to NBFCs (other than MFI) for on-lending to
‘Term lending’ component under Agriculture up to Rs.10 lakhs per
borrower, subject to conditions.
Outstanding deposits under RIDF and other eligible funds with NABARD
on account of priority sector shortfall.

Small and For the purpose of computation of achievement of the sub-target, Small
Marginal and Marginal Farmers will include the following:
Farmers i. Farmers with land holding of upto 1 hectare (Marginal Farmers).
(SMFs) ii. Farmers with a land holding of more than 1 hectare and upto 2 hectares
(Small Farmers).
iii. Landless agricultural labourers, tenant farmers, oral lessees and share
croppers whose share of landholding is within the limits pre-scribed for
SMFs.
iv. Loans to Self Help Groups (SHGs)or Joint Liability Groups (JLGs),
i.e. groups of individual SMFs directly engaged in Agriculture and
Allied Activities, provided banks maintain disaggregated data of such loans.
v. Loans up to Rs.2 lakhs to individuals solely engaged in Allied activities
without any accompanying land holding criteria.
vi. Loans to FPOs/FPC of individual farmers and co-operatives of farmers
directly engaged in Agriculture and Allied Activities where the land-holding
share of SMFs is not less than 75 percent subject to limits for Farm Credit.
PSL target for Non-Corporate Farmers for FY 2024-25 will continue to be 13.78% of
ANBC/CEOBE, whichever is higher (Cir No. IC/428/24).

Common guidelines for priority sector loans

(i) Service charges: No loan related and ad hoc service charges/inspection charges should be
levied on priority sector loans up to ₹25,000.
(ii) Receipt, Sanction/Rejection/Disbursement Register for priority sector advances to be
maintained.
(iii) Banks should issue of acknowledgement of loan applications received under priority sector
loans.

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2. Micro, Small and Medium Enterprises (MSMEs):

Amended for defining MSME units
Manufacturing/ Service Sector
Investment in plant and
Enterprises Turnover
machinery or Equipment
Micro Enterprises Does not exceed Rs.1 Crore Does not exceed Rs.5 Crores
Small Enterprises Does not exceed Rs.10 Crore Does not exceed Rs.50 Crores
Medium Enterprises Does not exceed Rs.50 Crore Does not exceed Rs.250 Crores
If an enterprise crosses the ceiling limits specified for its present category in either of the two
criteria of investment or turnover, it will cease to exist in that category and be placed in the
next higher category but no enterprise shall be placed in the lower category unless it goes below
the ceiling limits specified for its present category in both the criteria of investment as well as
turnover.

Khadi and Village Industries Sector (KVI)

All loans to units in the KVI sector will be eligible for classification under the sub-target of
7.5 Per cent prescribed for Micro Enterprises under priority sector.

Other Finance to MSMEs:

i. Loans upto Rs. 50 Crore to Start-ups, as per definition of Ministry of Commerce
and Industry, Govt. of India that confirm to the definition of MSME.
ii. Loans to entities involved in assisting the decentralized sector in the supply of inputs to and
marketing of outputs of artisans, village and cottage industries.
iii. Loans to co-operatives of producers in the decentralized sector viz. artisans, village
and cottage industries.
iv. Loans sanctioned by banks to MFIs/ NBFC MFIs (Societies, Trusts etc.) which are members of
RBI recognised SRO for the sector for on-lending to MSME sector.
v. Loans sanctioned by banks to NBFC (other than MFIs) for on-lending to MSE sector upto Rs.
20 lakh per borrower with condition.
vi. Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami
Card, Swarojgar Credit Card, and Weaver’s Card etc. in existence and catering to the non-
farm entrepreneurial credit needs of individuals).
vii. PMJDY overdrafts will qualify as achievement of the target for lending to Micro Enterprises.
viii. Outstanding deposits with SIDBI and MUDRA Ltd. On account of priority sector short-fall.

3. Export Credit
The Export Credit extended as per the details below would be classified as priority sector.
i) Export credit under agriculture and MSME sectors are allowed to be classified as PSL in
the respective categories viz. Agriculture and MSME.
ii) Domestic banks / WoS of Foreign banks/ SFBs/ UCBs -Export Credit other than Agriculture
and MSME- Incremental export credit over corresponding date of the preceding year, up to
2 percent of ANBC or CEOBE, whichever is higher, subject to a sanctioned limit of Rs.40
crores per borrower.
iii) Foreign banks with 20 branches and above - Incremental export credit over corresponding
date of the preceding year, up to 2 percent of ANBC or CEOBE whichever is higher.
iv) Foreign banks with less than 20 branches - Export credit up to 32 per cent of ANBC or
CEOBE whichever is higher.
Export credit includes pre-shipment and post-shipment export credit (excluding off-balance
sheet items)

4. Education
 Loans to individuals for educational purposes, including vocational courses, not exceeding

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 Canara Institute of Bank Management
Rs. 20 lakhs will be considered as eligible for Priority Sector classification. Loans currently
classified as priority sector will continue till maturity.

5. Housing
i) Loans to individuals up to Rs. 35 lakhs in metropolitan centres (with population of 10 lakhs
and above) and loans up to Rs. 25 lakhs in other centres for purchase/construction of a
dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan
centre and at other centres should not exceed Rs.45 lakhs and Rs.30 lakhs respectively.
 The housing loans to banks’ own employees should be excluded.
 As housing loans which are backed by long term bonds are exempted from ANBC, banks
should not classify such loans under priority sector.
ii) Loans for repairs to damaged dwelling units, conforming to the overall cost of the dwelling
unit, up to Rs. 10 lakhs in metropolitan centres and up to Rs. 6 lakhs in other centres.
iii) Bank loans to any governmental agency for construction of dwelling units or for slum
clearance and rehabilitation of slum dwellers subject dwelling units with carpet area of
not more than 60 [Link].
iv) Bank loans for affordable housing projects using at least 50% of FAR/ FSI for dwelling units
with carpet area of not more than 60sq.m.
v) Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance,
for on-lending for the purpose of purchase/construction/ reconstruction of individual
dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an
aggregate loan limit of Rs. 20 lakh per borrower,
vi) Outstanding deposits with NHB on account of priority sector shortfall.

6. Social Infrastructure
 Bank loans up to a limit of Rs. 5 crores per borrower for setting up schools, drinking
water facilities and sanitation facilities including construction/ refurbishment of household
toilets and water improvements at household level, etc. and loans up to a limit of Rs. 10
crores per borrower for building health care facilities including under ‘Ayushman Bharat’
in Tier II to Tier VI centres. (In case of UCBs, the above limits are applicable only in centres
having a population of less than one lakh.)
 Bank credit to Micro Finance Institutions (MFIs) extended for on-lending to individuals and
also to members of SHGs/JLGs for water and sanitation facilities will be eligible for
categorization as priority sector under ‘Social Infrastructure’, subject to the criteria laid
down. (#not applicable to RRBs, UCBs and SFBs.)

7. Renewable Energy:
Bank loans up to a limit of Rs. 30 Crore to borrowers for purposes like solar based
power generators, biomass-based power generators, wind mills, micro-hydel plants and for
non-conventional energy based public utilities, viz., street lighting systems and remote
village electrification etc., are eligible for Priority Sector Classification. For individual
households, the loan limit is Rs. 10 Lakh per borrower.

8. Others:
i) Loans provided directly by banks to individuals and individual members of
SHG/JLG satisfying the criteria as prescribed in Master Direction on Regulatory Framework
for Microfinance Loans Directions
ii) Loans not exceeding Rs.2.00 lakh provided directly by banks to SHG/JLG for activities other
than agriculture or MSME, viz., loans for meeting social needs, construction or repair of
house, construction of toilets or any viable common activity started by the SHGs.
iii) Loans to distressed persons [other than distressed farmers indebted to non-
institutional lenders] not exceeding Rs.1.00 lakh per borrower to prepay their debt to non-
institutional lenders.
iv) Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled
Tribes for the specific purpose of purchase and supply of inputs and / or the marketing of
the outputs of the beneficiaries of these organisations.
v) Loans up to ₹50 crores to Start-ups, as per definition of Ministry of Commerce and
Industry, Govt. of India that are engaged in activities other than Agriculture or MSME.

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9. Advance to weaker Section.

(i) Small and Marginal Farmers
(ii) Artisans, village and cottage industries where individual credit limits do not exceed ₹1
lakh
(iii) Beneficiaries under Government Sponsored Schemes such as National Rural Livelihood
Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme
for Rehabilitation of Manual Scavengers (SRMS)
(iv) Scheduled Castes and Scheduled Tribes
(v) Beneficiaries of Differential Rate of Interest (DRI) scheme
(vi) Self Help Groups
(vii) Distressed farmers indebted to non-institutional lenders
(viii) Distressed persons other than farmers, with loan amount not exceeding ₹1 lakh per
borrower to prepay their debt to non-institutional lenders
(ix) Individual women beneficiaries up to ₹1 lakh per borrower (For UCBs, existing loans to
women will continue to be classified under weaker sections till their maturity/repayment.)
(x) Persons with disabilities
(xi) Minority communities as may be notified by Government of India from time to time
(xii) Overdraft availed by PMJDY account holders as per limits and conditions prescribed by
Department of Financial Services, Ministry of Finance from time to time may be classified
under Weaker Sections
(xiii) In States, where one of the minority communities notified is, in fact, in majority, item (xi)
will cover only the other notified minorities. These States/ Union Territories are Punjab,
Meghalaya, Mizoram, Nagaland, Lakshadweep and Jammu & Kashmir.

10. Investments by banks in securitisation notes representing loans to various eligible

categories of priority sector except 'others' category, are eligible for classification under
respective categories of priority sector depending on the underlying assets on provided
conditions.
Investment by banks in securitisation notes with loans against gold jewellery
originated by NBFCs as underlying, are not eligible for priority sector status.
11. Transfer of Assets through Direct Assignments/ Outright purchases of pool of
assets by banks representing loans under various categories of priority sector except 'others'
category, are eligible for classification under respective categories of priority sector
depending on the underlying assets on provided conditions. Loans against gold jewellery
acquired by banks from NBFCs are not eligible for priority sector status.

12. Inter Bank Participation Certificates (IBPCs)

- Bank Participation Certificates (IBPCs) bought by banks, on a risk sharing basis,
if underlying assets are eligible for classification under various categories of priority sector
and Banks fulfil the Reserve Bank of India guidelines on IBPC’s issued.
- IBPCs bought by banks on risk sharing basis relating to ‘Export Credit’ as per Para 3 above,
shall be classified from purchasing bank’s perspective for priority sector categorization.
However, in such a scenario, the issuing bank shall certify that the underlying asset is
‘Export Credit’, in addition to the due diligence required to be undertaken by the issuing
and the purchasing bank as per guidelines in this regard.

13. Priority Sector Lending Certificate.

The outstanding PSLCs bought by banks will be eligible for classification under respective
categories of priority sector provided the underlying assets originated by banks are eligible
to be classified as priority sector advances and fulfil the Reserve Bank of India guidelines
on Priority Sector Lending Certificates.
14. Bank loans to MFIs for on-lending: Banks other than SFBs are allowed to extend credit
to registered NBFC-MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI

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recognised SRO for the sector, for on-lending to individuals and also to members of SHGs
/ JLGs.
- Bank credit as above will be allowed up to an overall limit of 10 percent of an individual
bank’s total priority sector lending. These limits shall be computed by averaging across
four quarters of the financial year, to determine adherence to the prescribed cap.

15. Bank credit to registered NBFCs (other than MFIs) for on-lending will be eligible
for classification as priority sector under respective categories subject to the following
conditions:
- Agriculture: On-lending by NBFCs for ‘Term lending’ component under Agriculture will
be allowed upto Rs.10 lakhs per borrower.
- Micro & Small enterprises: On-lending by NBFC will be allowed upto Rs.20 lakhs per
borrower.

16. Bank loans to HFCs for on-lending Bank credit to Housing Finance Companies (HFCs),
approved by NHB for their refinance, for on-lending for the purpose of
purchase/construction/ reconstruction of individual dwelling units or for slum clearance
and rehabilitation of slum dwellers, subject to an aggregate loan limit of ₹20 lakh per
borrower.

17. Cap on On-lending Bank credit to NBFCs (including HFCs) for on-lending as applicable in
above, will be allowed up to an overall limit of five percent of individual bank’s
total\priority sector lending.

18. Co-lending by Banks and NBFCs to priority sector All Scheduled Commercial Banks
(excluding SFBs, RRBs, UCBs and LABs) are permitted to co-lend with all registered Non-
Banking Financial Companies (including Housing Finance Companies) for lending to the
priority sector.
Monitoring of Priority Sector Lending targets
The data on priority sector advances is required to be furnished by banks to FIDD, Central Office
at quarterly and annual intervals as per the reporting format (quarterly and annual), within
fifteen days and one month, respectively from date of ending of each quarter & financial year.
In respect of RRBs, the data on priority sector advances, in the above format, shall be furnished
to NABARD at quarterly and annual intervals.

Non-achievement of Priority Sector targets

• Banks having any shortfall in lending to priority sector shall be allocated amounts for
contribution to the Rural Infrastructure Development Fund (RIDF) established with NABARD
and other funds with NABARD/NHB/SIDBI/ MUDRA Ltd., as decided by the Reserve Bank from
time to time. Non-achievement of priority sector targets and sub-targets will be taken into
account while granting regulatory clearances/approvals for various purposes.

Adjustments for weights in PSL Achievement (IC/481/24)

To address regional disparities in the flow of priority sector credit at the district level, it was
decided to rank districts on the basis of per capita credit flow to priority sector and build an
incentive framework for districts with comparatively lower flow of credit and a dis-incentive
framework for districts with comparatively higher flow of priority sector credit.
With effect from FY 2024-25, a higher weight (125%) shall be assigned to the incremental
priority sector credit in the identified districts where the credit flow is comparatively lower
(per capita PSL less than ₹9,000), and a lower weight (90%) will be assigned for incremental
priority sector credit in the identified districts where the credit flow is comparatively higher
(per capita PSL greater than ₹42,000).

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कृति
AGRICULTURE

Financing Agriculture and Allied Activities is a major constituent of Priority Sector Advances. There
is a constant need to increase credit flow to Farm Sector to maintain mandatory level of 18% of
ANBC or CEOBE, whichever is higher.

The lending to agriculture sector will include Farm Credit (Agriculture and Allied Activities),
lending for Agriculture Infrastructure and Ancillary Activities.

Disposal Of Application (Sanction/Processing at various levels):

In respect of Branch sanctions
No Nature of Credit facilities At Branch
1 Kisan Credit Card – Branch powers 15 days
2 Other Agriculture Loans up to 25000/- 15 days
3 Other Agriculture Loans above Rs.25000/- 30 days

At RO/CO:
Nature of Facilities Processing at Processing/sanctioning Total Turn
Branch at RO/CO Around Time
Kisan Credit Card
 Up to Rs. 25,000 15 days NA 15 days
 More than Rs. 25000/- 15 days 45 days 60 days
Other Priority Sector Advances
 Up to Rs. 25,000 15 days NA 15 days
 More than Rs. 25,000 15 days 45 days 60 days

At HO:
Nature of Facilities Processing at Processing Processing/ Total Turn
Branch at RO/CO sanctioning at Around Time
HO
Kisan Credit Card
 Up to Rs. 25,000 15 days NA NA 15 days
 More than Rs. 25000/- 15 days 10 days 35 days 60 days
Other Priority Sector Advances
 Up to Rs. 25,000 15 days NA NA 15 days
 More than Rs. 25,000 15 days 10 days 35 days 60 days
Small and Marginal Farmers shall include the following: -
(i) Farmers with landholding of up to 1 hectare (Marginal Farmers).
(ii) Farmers with a landholding of more than 1 hectare and up to 2 hectares (Small Farmers).
(iii) Landless agricultural labourers, tenant farmers, oral lessees and sharecroppers whose share of
landholding is within the limits prescribed for SMFs.
(iv) Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e., groups of individual
SMFs directly engaged in Agriculture and Allied Activities, provided banks maintain
disaggregated data of such loans.
(v) Loans up to Rs 2 lakh to individuals solely engaged in Allied activities without any accompanying
land holding criteria.
(vi) Loans to FPOs/FPC of individual farmers and co-operatives of farmers directly engaged in
Agriculture and Allied Activities where the land-holding share of SMFs is not less than 75 per
cent.

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Agriculture Lending Guidelines:

Agriculture loans is broadly divided into three categories based on repayment period:

a) Short Term: repayable within a period of 6 months to 18 months.

b) Medium Term: repayable from 36 months up to 5 years
c) Long Term: repayment period above 5 years

Eligibility - Individuals (owner cultivators, tenant farmers or landless laborers), Association of

persons, Firms, Companies, Self Help Groups/Joint Liability Groups, HUFs, LLPs Proprietorship
Concern, Partnership, Cooperative Societies, FPOs, etc. having necessary resources, skills,
capacity, Receptive to modern technology and willingness to undertake any productive activity in
agriculture are eligible for loans.
While granting agricultural loans the following guidelines are to be noted:

i) The branches can finance upto 30 kms in their command area for all Priority Sector Advances.
ii) For financing beyond 30 Kms the branches have to obtain the permission of Regional Office for
branch sanctions. Divisional Managers / Assistant General Manager at Regional Office can permit
for financing beyond 30 Kms considering the size of the advance, cluster of loan proposals,
capacity of the branch to service the account, etc.
iii) For the accounts coming under the powers of Chief Managers of branches and Assistant General
Manager CAC of Regional Office and above, the sanctioning authorities themselves can permit
for financing beyond the stipulated distance of 30 kms.
iv) The applicant however should not be a defaulter to any other bank or financial institution.
v) In respect of Govt. sponsored Schemes, Branches have to be guided by service area guidelines
wherein specific villages, generally in geographical contiguous areas, are allotted to Rural and
Semi Urban branches.

Obtaining Document proof for sanctioning loans for Agriculture allied activities: Obtention of
copies of land records regarding lands owned /leased as certified by revenue authorities to be
waived for loans up to Rs 1.60 lakhs wherever only movable assets are created; such as purchase
of Cross Breed Cow/ Goat/Sheep/Pig/Feed/Fodder/Utensils/Equipment etc.
Margin:
For Crop Production Loans/KCCs: Loan amount is as per Scale of Finance decided by the District
Level Technical Committee (DLTC). No separate margin is insisted as it is already factored while
fixing the scale of finance for each crop.

For other than Crop Production Loans/KCCs, the applicant has to bring in margin as under:

For loans upto and including Rs. 1.60 Lakhs NIL

15% to 25% of the project cost
For loans above Rs. 1.60 Lakhs Depending upon purpose & quantum of loan (*with
exceptions)

* Exceptions on Margin Norms- For limits above Rs.1.60 lakhs are as under:
Particulars Minimum margin
Wherever
Subsidy and borrower’s contribution (as specified in the respective
subsidy is
schemes) together will constitute the margin.
available
 Kisan Tatkal Scheme
 KCC Krishi Mitra Credit Card Scheme (Other than crop cultivation sub- Nil
purpose)

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 Scheme for redemption of debts of farmers from non-institutional sources

ALLHV loans
Light vehicles other than Medium & Heavy Commercial vehicles (MCV/HCV) 10%
Medium / Heavy Commercial vehicles or Second-hand vehicles (MCV/HCV) 25%
Scheme for financing farmers for purchase of lands for agricultural purposes 20%
Second hand vehicles 25%
Deep Sea fishing vessels 25%-33%
Second hand Tractors 40%
Estate Purchase Loans 50%
Agri Clinics and agri-Business Centers (ACABC)
For loans up to Rs.5 lacs - No margin
For loans beyond Rs. 5 lacs - 15 % to 25 %
Agricultural Infrastructure Fund Scheme 10%
PM – Formalization of Micro Enterprises 10%
Animal Husbandry Infrastructure Fund Scheme 10-25%
Scheme for redemption of debts of farmers from non-institutional sources Nil
Canara Drone 25%

Security Norms:
Loans are broadly categorized as under for the purpose of applying security norms:
(i) Working Capital (WC) loans like crop production loans which shall include KCCS, Crop loans
etc.
(ii) Investment loans- where moveable assets are created.
(iii)Development loans-where assets are created on immovable properties or result in
improvement of the immovable assets on which development is taken up.
(iv) Loan sanctioned for construction of Farm House to be classified under Priority-Agriculture,
irrespective of loan sanctioned, since it is a part of Agriculture Development loan.

Scheme specific guidelines on security norms as advised by the Govt. of India/State Government
are to be adhered. In other cases, or if the same is not specified in the Scheme guidelines, actual
loan component should be taken into account including subsidy amount receivable.

In respect of Agriculture loans other than where specific relaxations/guidelines are advised, the
security norms is as under:

Loan Quantum Security to be Stipulated

For loan upto Hypothecation of crops/assets created out of
Rs.1.60 lakhs our finance.
In states where online/ manual In states where online/ manual charge
For loans charge creation is not available creation is available
above Rs.1.60  Hypothecation of crops/ assets
lakhs to Rs.  Hypothecation of crops/ assets
created out of our finance
created out of our finance.
2.50 lakhs  Creation of our Bank charge on
 Mortgage of landed properties
land records
 Hypothecation of crops/ assets created out of our finance.
For loans
 Mortgage of landed properties
above Rs.2.50
lakhs
However our Bank charge on the land records to be ensured.

 Existing KCC holders where agricultural land is already mortgaged would be continued as per
existing terms and conditions.

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 Declaration from the borrower containing the details of land holdings, to be obtained for
creation of charge.
 After charge creation, copy of confirmation of the charge to be kept with loan documents.
 In case, party is already having a development/ investment loan, and total exposure including
the proposed exposure exceeds Rs. 1.60 Lakhs, mortgage of landed property is to be stipulated
in addition to hypothecation of crops cultivated.
 KCC Loans with overall limit above Rs. 1.60 Lakhs can be sanctioned by accepting Collateral
Security of Gold Jewelry with the appraised value at least equal to the loan amount. The
procedure of handling of Gold loan packets, balancing, reappraisal etc to be followed as per
the guidelines in Gold Loan Manual.

In cases where tie-up arrangement is available:

In cases where tie-up arrangements (like in case of Sugar Factory, Tobacco Board, Milk Union/Milk
Producers Cooperative Society, etc.) are available for recovery, loans up to Rs.3.00 lakhs can be
extended without insisting on mortgage under KCCS/Investment/Development loans either
individually or put together.
Scheme specific Stipulations on mortgage of landed properties:

Scheme Security
KCCS Krishi Mitra Card Hypothecation of crops cultivated
Kisan Tatkal Existing security/ies obtained for KCC limit to be
continued. No additional securities to be insisted.
However, when total proposed exposure exceeds Rs.1.60
Lakhs (where online charge is not available) & Rs. 2.50
lakhs (Where online charge is available), mortgage of
landed property is to be stipulated in addition to
hypothecation of crops cultivated
Debt swap Clean Advance
Scheme for redemption of debts of Co obligation of spouse/adult children of the borrower to
farmers from non-institutional be obtained so as to ensure family pressure in not reverting
sources to non-institutional borrowings again
Mortgage of landed properties if the existing
limits/liability & the proposed loan exceeds Rs. 1,60,000/-
Credit to Tenant Farmers and Oral
Lessees for raising crops through Clean Advance
JLGs
Purchasing Agricultural lands Hypothecation of crops & Mortgage of lands irrespective of
the limit (subject to the ceiling of Rs.10 lakhs under the
Scheme)- lands presently owned, if any, and to be
purchased
Canara Kisan OD irrespective of For Renewal of existing limit without enhancement,
the limit Mortgage of landed properties are to be obtained with
value at least 200% of the limit as prime security.
For sanctioning of Fresh Loans and enhancement of Existing
limits Mortgage of landed properties are to be obtained
with value at least 200% of the limit as prime security. Out
of which at least 15% security in the form of residential
property.

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If same properties have already been mortgaged to other

limits, the balance value/residual value of securities
available i.e., excluding the existing limits is to be taken.
Tractor loans/power When mortgage of landed property is required to be taken,
tiller/Combine harvester/other the value should be at least equal to the loan amount or
farm machineries security of tangible assets with requisite margin valued
equivalent to the loan amount (relaxations subject to
permission from Circle DGM as enumerated in the product
manual).
Loan for Deep Sea fishing vessels Value of collateral security of immoveable properties
should be at least 200% of the loan amount.
Estate Purchase Loan Primary - Mortgage of property to be purchased.
Collateral: SARFAESI compliant immovable property/ies
secured by mortgage to a minimum extent of 25% of the
loan/exposure as collateral security, wherein Residential/
Commercial Properties (Land & Buildings backed by
approved building plan) should be minimum as follows:
Minimum Residential/
Risk category
Commercial % of Collateral
Low Risk 25%
Normal Risk 35%
Moderate Risk 50%
Investment loans
 Fishing boats (excluding deep Hypothecation of assets
sea fishing vessels)-However, +
discretion is given to SA to stipulate Either mortgage of landed property
additional Collateral securities) or
 Purchase of vehicles under Co-obligation of 3rd party acceptable to bank to be
ALLHV scheme (excluding Medium obtained
and heavy commercial vehicles
such as lorries/trucks)

Agri-clinics / Agri-business:
For loan upto a) Hypothecation of assets created out of our finance.
Rs.5,00,000/- b)Compulsory coverage for credit Guarantee under CGFMU.
For loan above a) Hypothecation of assets created out of our finance.
Rs.5,00,000/- and upto b) Mortgage of landed property if the same is available as a part-
Rs10,00,000/- of prime security.
c) If the developments are undertaken on the leased land and
where legislation permits mortgage of lease hold rights,
mortgage of leased hold right may be insisted.
d) Compulsory coverage for credit Guarantee under CGFMU.
For loans above Hypothecation of assets created out of loan +Mortgage of landed
Rs.10,00,000/- property equivalent to loan amount + Co-obligation/ Guarantor
(In deserving cases co-obligation/ guarantor may be waived by the
sanctioning authority)

For loans extended to Allied activities (pisciculture, Beekeeping, poultry, livestock, grading,
sorting, aggregation agro industries, dairy, fishery) under agriculture upto Rs.10.00 lakhs
under Pradhan Mantri Mudra Yojana (PMMY).

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Loan Quantum Security to be stipulated

Loan upto ₹1.60 lakhs Without Mortgage
a)Hypothecation of assets created out of our bank’s finance.
b) Compulsory coverage for Credit Guarantee under CGFMU.
For Loans above A. Where Tripartite agreement with Milk Union is available:
Rs.1.60 lakhs i. Hypothecation of assets created out of our finance.
and upto Rs.3 lakhs ii. Compulsory coverage for Credit Guarantee under CGFMU.
B. Where Tripartite agreement with Milk Union is NOT available:
i. Hypothecation of assets created out of Bank finance
ii. Mortgage of landed property
OR
CGFMU Coverage
For Loans above a) Hypothecation of assets created out of our finance.
Rs. 3 lakhs and upto (i) In case of developmental activities like construction of cattle
Rs.10 lakhs shed, fish pond, poultry shed, or creation of any other
immovable assets -mortgage of land where primary activities are
undertaken and connected with the activity is to be taken.
(ii) If the developments are undertaken on the leased land and
where legislation permits mortgage of lease hold rights –
Mortgage of leased hold right may be insisted.
(iii) Compulsory coverage for credit Guarantee under CGFMU.

b) If the lease hold rights are not mortgaged, collateral security with
minimum value of 150% of the loan amount to be insisted. In such
cases, the coverage under CGFMU to be waived subject to obtaining
permission from the RO Head.
For Loans Above Rs.10 a) Hypothecation of assets created out of our finance.
lakhs b) In case of developmental activities like construction of cattle
shed, fish pond, poultry shed, or creation of any other immovable
assets - mortgage of land where primary activities are undertaken
and connected with the activity is to be taken.
c) If the developments are undertaken on the leased land and where
legislation permits mortgage of lease hold rights, Mortgage of leased
hold right may be insisted.
 If leasehold rights are mortgaged, Immovable security should
be obtained, value of which should be a minimum 50% of the
loan amount.
 If leasehold rights are not mortgaged, Immovable or
equivalent Collateral security should be obtained, value of
which should be a minimum 150% of the loan amount,
wherein at least 50% security by way of Residential/
Commercial Properties (Land & Buildings backed by approved
building plan).
d) Availability of security by way immovable property/ies secured by
mortgage to a minimum extent of 100% of the loan/exposure as Prime
and collateral securities.

Alternative securities may be obtained: For genuine reasons such as non-availability of original
title deeds, Jamma lands, etc. if the borrower cannot mortgage lands as above alternative
securities as under may be obtained.

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NATURE OF SECURITY MARGIN

Surrender value of LIC policies 10%
Market value of approved 50%
shares/debentures/bonds
Market value of approved 30%
demat shares
Approved units of mutual funds 50% of net asset value (NAV) or market value whichever is less
Govt. Promissory Note 10%
NSC's/Kisan Vikas Patra's (KVP) 25%
Third party term deposits 25%
Gold Jewelry (on appraised Kisan Credit Card: NIL
value) Gold Loan Over Draft:10%
Other Loans: 40%
Alternate landed properties:
Farm development loans/ 50%
Crop loans 31.25%
Investment loans The value of alternate land should be at least equal to the value
of property where developments are proposed.
Development loan in case of The value of alternate land should be at least equal to the post-
allied activities developmental value of property where developments are
proposed.

In respect of development loans considered against the security of alternate landed property, RO
Head CAC is vested with powers for accepting alternate landed property as a security, in case of
accounts falling under Branch sanctions.
However, in case the alternate landed property is a third party security, prior clearance from next
higher authority at RO i.e., RO Head/CO before conveying the sanction, unless otherwise specified
under specific scheme guidelines. This shall be applicable in respect of sanctioning powers below
the delegated powers of Circle Head level CAC i.e. CGM/GM/DGM-CO-CAC.
For proposals falling under the delegated powers of CGM/GM/DGM-CO-CAC (Circle Head) and
above authorities, the respective sanctioning authority may permit the same.

Crop Loans (KCCS): If for any genuine reason, the borrowers cannot mortgage the entire land on
which they are going to raise crops, branches/offices are permitted to grant crop loans against the
security of part of the land valued 125% of the loan amount. Then the mortgage of other lands
need not be insisted.
Tractors & farm machineries: Security of tangible assets like NSCs, KVP, the Bank’s FDs, surrender
value of LIC Policy, Gold (appraised value) etc., with requisite margin valued equivalent to the
loan amount when the mortgage of landed property is partly/fully waived by the competent
Authority.

For loans granted for land development activities such as land leveling, sinking of well, contour
bunding and other farm development loans, loans granted for construction of cold storages, rural
godowns, warehouses, market yard, silos and loans involving development work, value of security
(Post development value) should be minimum of 125% of the loan amount. Loans granted for
construction of cold storages, rural godowns, warehouses, market yard, silos and loans involving
development work, value of security (Post development value) should be minimum of 133% of the
loan amount (with tie up arrangement) or 150% (without tie up arrangement).

However, if the sanctioning authority feels that there is need for additional collaterals depending
on risk factors, the same may be insisted.

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 For development loans under government-sponsored schemes, the security norms as the
respective scheme will be applicable.
 Development loans above Rs. 15000/- and upto Rs.1,60,000/-: where the land is not
obtained as collateral in terms of the guidelines, branches to obtain Photostat copies of available
title deeds duly verifying the same with the original. Also, encumbrance certificate for the past
13 years should be obtained and it should be ensured that there are no prior encumbrances on the
lands owned by the farmer.

Aggregation of loans/liability for security norms:

The liability of the borrower under Gold loans, Bio-gas loans, Marine Fishery loans, ALLHV loans,
ALVSL need not be taken into consideration while deciding security norms.

Granting loan on lease hold landed property:

A. Development & Investment Loans:

Government Leased lands Private Leased lands
Government leased lands include land leased
out by State/ Central Government, Industrial Other than Government leased land
Parks, Industrial area Development Board etc.
Registered lease deed should be available and
the minimum lease period should be for loan
Registered lease deed should be available and
tenor plus 3 years.
the minimum lease period should be for loan
(Loan can be permitted by the respective
tenor plus 3 years.
sanctioning authority, within the delegated
powers if the subject condition is compiled)
Lease deed should permit the LESSEE to
The ownership of the lessor to be verified &
mortgage the lease hold rights. Lease hold
confirmed.
rights are to be mortgaged.
If the sanctioning authority feels that there is Immovable security in the form of land or
need for additional collaterals depending on building or any other acceptable tangible
risk factors, the same may be insisted securities like fixed deposits etc to be obtained,
as under:

If leasehold rights are mortgaged, Immovable

If leasehold rights are not mortgaged,
security should be obtained, value of which
immovable or equivalent Collateral security
should be a minimum 50% of the loan amount.
should be obtained of minimum 150% of the
loan amount, wherein at least 50% security by
If lease hold rights are not mortgaged,
way of Residential/Commercial Properties
Immovable or equivalent Collateral security
(Land & Buildings backed by approved
should be obtained of minimum 150% of the loan
building plan).
amount, wherein at least 50% security by way of
Residential/Commercial Properties (Land &
Buildings backed by approved building plan).
However, in case of existing loans/limits which are sanctioned with minimum 200% of
immovable security, may be permitted to renew without enhancement at the existing
security level till closure.

B. Loan granted under KCCS under:

Bank is already having board approved scheme (Krishi Mitra) for financing crop loans under leased
land cultivation upto Rs.50000/-.
In case of loans above Rs.50000/- under leased land crop cultivation, the following guidelines are
applicable:
a) Wherever farmers do not have own land and cultivating only lease lands;
Upto Rs 1.60 lakhs (for renewal of existing KCC limit only)

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Prime security: Hypothecation of crops/fishes/other assets created out of bank finance

&
Collateral Security: Nil (Agriculture Policy for FY 2024-25, IC /185/2024)

For all fresh loans of limit above Rs 50000

Prime security: Hypothecation of crops/fishes/other assets created out of bank finance
&
Collateral Security: Mortgage of immovable property (Land & Building/commercial property) value
of which should be minimum 125% of the loan amount, wherein value of vacant land should not be
more than 50%, irrespective of the mortgage/non mortgage of lease hold rights and execution/non
execution of registered lease deed. (Agriculture Policy for FY 2024-25)

b) Wherever, farmer is cultivating in both own land and leased land;

Prime Security:
Hypothecation of crops/fishes/other assets created out of bank finance
&
Collateral security:
Mortgage of own land and any other land & building/commercial property, value of which should
be minimum of 125% of the loan amount with value of vacant land should not be more than
50%.However, if the value of the own land is alone 125% of the loan amount, then other collateral
security need not be insisted.

c) In case of existing KCC loans which are sanctioned with collateral security less than 125% of the
loan amount, they may be permitted to renew at the existing security level subject to minimum
100% till closure.
However, enhancement in the limit if any, to be permitted with revised security norms i.e.,
minimum 125% of the loan amount as mentioned in para(a) & (b) above

d) Renewal of existing KCC limits should be permitted upto existing sanctioned limit or limit arrived
as per scale of finance, whichever is lower.

Delegation of powers for sanctioning of loans under consumer segment (based on the Risk
Grade) (IC/257/2024):

For Agriculture:
Risk Grade Risk Description Sanctioning authority
CS-1 Low Risk Respective Sanctioning Authority, including authorities at
CS-2 Normal Risk ROs/COs/HO
Loans up to delegated power of AGM-RO-CAC (other than
Regional Head CAC): Next Higher Authority (wherever
applicable).
Regional Head CAC can consider proposal up to its delegated
CS-3 Moderate Risk powers.
Up to delegated power of AGM-CO-CAC (other than Circle
Head CAC): Next Higher Authority (wherever applicable).
DGM-CO-CAC and above authorities: Respective Sanctioning
Authority).
DGM-CO-CAC and above authorities, subject to ensuring
suitable risk mitigants are in place.
CS-4 High Risk Fresh agri loans above Rs.10.00 lakhs and upto and including
Rs. 25 lakhs where risk grade is High Risk (CS-4) may be
permitted by RO Head CAC.
It may be noted that there is no bar on considering loan proposal in case of the entities rated high
risk based on the credit score. However, Offices/Branches are advised to carefully peruse the full
credit report for presence of overdue/default with financial institutions/banks.

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In respect of the following cases, the concerned Sanctioning Authority can sanction proposals
irrespective of Risk Grade.
 Renewal of existing facilities.
 Government Sponsored Schemes with aggregate loan quantum up to Rs.2 lakh to a borrower.
 DRI loans.
 Gold Loans
 Fully Secured Loans (by Tangible Security) upto and including Rs.2 lakh under Non-priority
Sector in aggregate to a borrower / individual.
 Agri-Loans up to and including Rs. 10 lakh in aggregate to a borrower/ individual.

Upto and including Rs.10 lakh in aggregate to a *Concerned Sanctioning Authority can
borrower / individual for High-Risk accounts sanction
Fresh agri loans above Rs. 10.00 lakhs and upto May be permitted by RO HEAD – CAC.
and including Rs.25.00 lakhs for High-Risk
accounts

Other General guidelines

Particulars Guidelines (Waiver or Exemption or Permission, if any)
Pre-Sanction All Agricultural loans: Pre-sanction visit is undertaken to assess technical
visit feasibility and economic viability of the proposal. Following aspects need to be
observed /assessed
 Present cropping pattern, yield, net income, utility of proposed assets and
need for purchase, etc.
 General aspects relating to the nature of the terrain, linkages in the area,
market viability of the proposed activity etc.
 The genuineness of property documents by verifying the boundaries and
possible encroachments, market enquiries for valuation of the property.
Insurance for Agriculture & Allied Activities
Crop Loans The crop insurance has been an important enabler for the farmers in mitigating
(Including under the risk in their agriculture. Presently the following variants of the crop insurance
KCCS Schemes) scheme are under implementation:

 Pradhan Mantri Fasal Bima Yojana (PMFBY)

 Restructured Weather based Crop Insurance Scheme (RWBCIS)
The participation under the Scheme will be decided by the State
Governments/Union Territories who will accordingly issue notification for
implementation of these Schemes.
Branches have to compulsorily cover all crop loans which are in the notified
areas and granted for notified crops, except in cases of loanee farmers who
have submitted for opting out of the scheme.
Revamped In order to make crop insurance simpler and cheaper for the farmers and to
Pradhan Mantri provide them with better insurance services, a Central Sector Scheme of Pradhan
Fasal Bima Mantri Fasal BimaYojana (PMFBY) has been approved by the Government of India
Yojana (PMFBY) replacing National Agriculture Insurance Scheme (NAIS) and Modified National
and Agriculture Insurance Scheme (MNAIS) and the new PMFBY Scheme came into
Restructured force from Kharif 2016 Season onwards.
Weather Based
All farmers including sharecroppers and tenant farmers growing the notified crops
Crop Insurance
in the notified areas are eligible for coverage. However, farmers should have
Scheme
insurable interest for the notified/insured crops.
(RWBCIS)

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For Govt. Insurance is compulsory.

Sponsored Waived only if specified under any specific scheme.
schemes
Discretion is given to the sanctioning authority to waive insurance cover for assets
For Investment charged to the Bank for loans/advances up to Rs.50,000/- on the merit of each
& Development case. Wherever obtention of insurance is waived, branches should note to obtain
Loans (Except NF 368 i.e., Letter of request for waiving insurance for goods under lien to the
Poultry & bank.
Fisheries)
Renewal Of Insurance Cover:
Branches may waive renewal of insurance cover at their discretion on the
securities charged to the banks when the liability comes down below the
exemption limit (Rs.50,000/-) provided the repayments are regular.
In respect of loans granted under government sponsored schemes for purchase of
livestock, renewal of insurance cover is compulsory as long as asset is available
and loan is outstanding.
However, if borrower insists for waiver of insurance cover, the same can be
waived for renewals by obtaining NF 368 from the borrower.
Note: Insurance cover has to be obtained for full value of the asset and not
for loan amount.
Insurance for Sanctioning Authority may waive Insurance cover on fish crops and bund
fish crops and structures in respect of Working Capital limits for Inland Fisheries Projects,
bund structure subject to the following:
a. Obtention of a corpus Fund as collateral at the rate of 6% of the limit.
for Inland
b. If the limit/loan is secured by way of Immovable Properties for minimum of
fisheries 125% of the exposure.
projects-In c. Experience of the borrower in the line of Inland fisheries for 3 years and
respect of above.
Working capital d. Satisfactory past dealings of the borrower for more than 1 year.
limits In case any of the above conditions is/are not satisfied, the proposal for waiver
of insurance should be referred to the next higher authority as per usual
guidelines
Bird Insurance Waiver of Bird insurance permitted if following conditions are fulfilled:
waiver  Scoring more than 75 as per the scoring matrix. (Conduct Scoring as per
Annexure 25 of Manual of Agricultural lending)
 Availability of security by way immovable property/ies secured by
mortgage to a minimum extent of 100% of the loan/exposure as Prime and
collateral securities, wherein at least 50% security by way of
Residential/Commercial Properties (Land & Buildings backed by approved
building plan).
Or
Availability of security by way immovable property/ies secured by
mortgage to a minimum extent of 150% of the loan/exposure as Prime and
collateral securities
 Compulsorily vaccination of birds. Record should be preserved for the
same.
Wherever waiver of insurance cover for the poultry birds is waived, a corpus fund
at borrower level should be stipulated as collateral. The creation of a corpus fund
will be by way of a Recurring Deposit (converted to KDR at certain intervals)
Corpus Fund to be held as collateral for waiver of insurance of Poultry Birds.

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Category Corpus Fund to be created

Commercial Layer 8% of WC
Commercial Broiler 15% of WC
Parent Broiler 12% of WC
The amount is collected through RD for a period of 5 years and kept as collateral
by converting it to KDR at the end of 5th year
Obtention of To be obtained for all agricultural loans like loans under allied activity such as
Bills / Vouchers dairy, poultry, piggery, etc. above ₹50000/- and development loans above ₹ 2
/ Stamped lakhs.
Receipts Waived for agricultural loan upto ₹50000/-, development loans upto ₹ 2 lakhs
subject to-
 Obtention of declaration from the borrowers for having purchased the
asset/incurred the expenditure as the case may be.
 Conducting Post sanction visit within 15 days from the date of disbursement
of loan for ensuring and confirming the end use.
 For KCCS, Canara Kisan OD, Krishi Mitra Card Scheme Loans & Tenant
farmers groups obtention of bills/vouchers is waived.
Valuation of Valuation of agricultural or landed property as security
Landed  AEOs/AMRDs and AEO / AMRD Promotee Managers - Agricultural loans upto a
Property as limit of Rs.30 lakhs.
Security  Other Managers - Agricultural loans upto a limit of Rs.20 lakhs.
 Independent valuation reports from 2 empaneled valuers in respect of loan
accounts where the value of the property (Land & Building) is Rs 05 crores &
above.
 In all other cases branches have to obtain the valuation reports of landed
property offered as security from revenue officials or approved
consultants/valuers.
 Frequency of Valuation of Agricultural Land:
With structure (like farm house/poultry sheds) - 3 yrs, without structure:5 yrs
Valuation shall be as per guideline Value.
Post sanction REPORTING SYSTEM
visit is NF 594: For loans granted to allied activities such as poultry, dairy, piggery,
undertaken fisheries, duck rearing etc.
within 15-30 NF 595: For loans connected to land-based activities where the repayment is
days of linked to income out of the crops such as crop loans, farm development loans,
disbursement to minor irrigation loans, bio-gas loans, tractor/ALLHVs, etc.
ascertain end Preparation of the post sanction inspection reports in respect of all branch
use. sanction loans is waived.
However, branches have to maintain borrowers profile card in which the
observations made during the farm visits are to be recorded.
FOLLOW UP It is undertaken to find out whether the activity of the borrower is continuing,
VISIT: assets purchased out of bank loans, other securities are in existence, to give
technical guidance to farmers and to remind the borrower of repayment in case
of default.

Crop loans Periodicity of Follow up visits

Short duration First visit must be made within one month after
crops completion of sowing / planting operations &

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 केनरा बैंक प्रबंधन संस्थान

the other visit 15 days before harvest of the

crop.
Long duration In addition to above visits, a visit during the
crops mid-season should be made.
All
other loans: Quarterly visits
In all cases, if installments are not paid, regular course of action is to be
immediately taken up.
Display of Borrowers should display the board with the following words boldly painted.
Hypothecation "AGRICULTURAL FINANCE-ASSISTED BY CANARA BANK"
Boards Display of boards need not be insisted for the following loans:
i) All agricultural loans up to a limit of Rs.25,000/-.
ii) All crop production loans, KCC, and Canara Kisan OD loans irrespective of loan
amount.

PIPR (Project Implementation Progress Report) for project finance–to be submitted by the
branches on quarterly basis during implementation stage of the project, in respect of term loan
limit of Rs.50 lacs and above. The Circle Heads, considering the nature of project may waive
obtention of certificate from Chartered Accountant/approved engineer for limits up to Rs.2
crores.

Credit Review in case of Agricultural Accounts- Monthly (inward cum sanction) register- PRR 20D
(NB 140)

COVERAGE (all fresh sanctions, renewal, ad hoc, enhancement, holding on operations)

All sanctions to a borrower exceeding total exposure (FB+NFB) of Rs.5.00 lakhs (Rs.6.00 lakhs in
case of SHGs) are to be individually sent for review to the next higher authority along with loan
application, sanction processing note and sanction memorandum, etc

All sanctions up to Rs.5.00 lakhs (FB+NFB) and in case of sanction up to Rs.6.00 lakhs to SHGs,
review will be carried out on consolidated basis by ROs based on monthly registers submitted by
branches.
Following loans need not be reported for review to the next higher authority:
 All Gold Loans
 All Loans/Advances sanctioned to Employees and
 All VSLs/OD against the security of deposits with banks and approved securities like
NSCs/KVP/Life Insurance policies.
However, branches have to submit the details in PRR 20D for all such loans not sent for review on
a monthly ongoing basis to facilitate monitoring by controlling offices.

Interest Subvention (271/2023, 714/2022):

As per the Interest Subvention Scheme, all KCC short term crop loans and KCC loans to Agriculture
allied activities (Fisheries and animal husbandry) are eligible for Interest subvention for maximum
limit of up to Rs 3 lakhs per borrower.
Accordingly interest subvention and additional incentive subvention will be passed on to all the
eligible KCC accounts for the following schemes by debiting respective branch SA heads.
1. Interest subvention for Short term Crop loans up to Rs. 3 lakh.
2. Short Term loans to Animal Husbandry farmers upto Rs.2 lakhs.
3. Short Term loans to Fishery farmers upto Rs.2 lakhs.
4. Interest subvention on post harvest credit (Produce Loan) against negotiable warehouse

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receipts.
5. Interest subvention on Loans restructured due to Natural Calamity.
6. Interest subvention/incentive on loans restructured due to severe Natural Calamity.

The applicable lending rate to farmers and the rate of interest subvention for the financial years
2022-23 and 2023-24 are as follows

Rate of Interest Prompt

Lending rate to
Financial year Subvention to lending Repayment
farmers
Institutions Incentive
2022-23 7% 1.50% 3%
2023-24 7% 1.50% 3%

The interest applied on short term loans sanctioned for crop production and agriculture allied
activities is 7% per annum. Regular Interest Subvention of 1.5% will be directly booked to Interest
Collected at half yearly rests.

 In order to discourage distress sale by farmers and to encourage them to store their
produce in warehouses, the benefit of interest subvention under KCC will be available
to small and marginal farmers for a further period of upto six months post the harvest
of the crop against negotiable warehouse receipts on the produce stored in warehouses
accredited with Warehousing Development Regulatory Authority (WDRA), at the same
rate as applicable to the crop loan.
 In case of natural calamities, the interest subvention will continue to be available to Banks
for the first year on the restructured amount.
 To provide relief to farmers affected due to severe natural calamities, the interest
subvention will be made available to banks for the first three years /entire period (subject to
a maximum of five years) on the restructured loan amount. Further, in all such cases, the
benefit of prompt repayment incentive @ 3% per annum shall also be provided to the affected
farmers.

Obtention of Mortgage Confirmation Letter – For continuation of existing facilities by opening

new account under Agriculture:
Branch can obtain below mentioned Mortgage Confirmation Letter for continuation of existing
facilities under Agriculture portfolio –
1. Continuation of Mortgage in favour of Canara Bank post change in product code/ Account
Number on switchover from e-Syndicate Bank loan Product to Canara Bank Loan Product – Mortgage
Confirmation Letter – Annexure 29.
2. Continuation of Mortgage in favour of Canara Bank post change in product code/ Acc Number
on opening of new A/Cs by closing wrongly opened A/Cs – Mortgage Confirmation Letter - Annexure
30.

AGRICULTURAL LOAN SCHEMES

Kisan Credit Card Scheme
 Purpose: Cultivation & other short term needs including consumption
Short Term operative limit (Sub Limit I):

Under Revised KCCS, loan limit should not exceed 200 % of value of the produce.

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Sub - Sectoral limit Norm

i. Crop maintenance (A) As per scale of finance (As decided by
District Level Technical Committee)
X Extent of area cultivated
ii. Post-harvest / household / 10% of (i)
consumption requirements
iii. Repairs and maintenance expenses of 20% of (i)
farm assets
iv. Crop insurance and/or accident Actual cost incurred can be considered
insurance including, health insurance
& asset insurance
Total KCCS First year LIMIT (i)+ (ii) + (iii) + (iv)

 Branch sanction–KCCS to be sanctioned within 15 days from the receipt of application

completed in all respects.
 For all the crops proposed in a year, requirement for the entire year can be worked out and the
same can be fixed as the limit for crop production
 Loan limit should not exceed 50% of value of the produce
 Each withdrawal under the short term sub-limit to be liquidated in 12months (short term
crops)/18 months (in case of long term crops).

WC ASSESSMENT FOR SUCCEEDING YEARS – First year limit for crop cultivation purpose arrived at
as above plus 10% of the limit towards cost escalation / increase in scale of finance for every
successive year (2nd, 3rd, 4th and 5th year) and estimated term loan component for the tenure of
Kisan Credit Card, i.e., Five Years.

10% annual increase in WC Limit subject to satisfactory annual review.

Fixation of limit for KCC: For 2nd and Subsequent year

1. During Annual Review/Renewal of KCC accounts, branches to verify the Scale of Finance
provided by the DLTC. If there is increase in Scale finance10%, then branches to enhance the
limit by 10 % as per the original sanction.
2. If there is no increase in SOF during the year, branches may continue existing limit, without
enhancing the limit of 10% as per the original sanction.
3. In the existing accounts, if the 5th Year limit is already availed, such accounts may be
continued with the existing limit, even though there is no increase Scale Finance as per the
5th Year limit.
4. However, in the cases where the renewal amount is less than the 5th year limit as per the 10%
increase, Branches may consider a higher quantum of loan for crop maintenance based on the
need and in deserving cases to the extent of 15-25% over and above the scale of finance, as
the same was part of KCC guidelines before amalgamation.

Validity/Tenability: The operative short term limit will be valid for 5 years subject to annual
review. Annual review shall be done as per the NF 974 format

Withdrawal: Following delivery channels can be used for withdrawal of limit without any
restriction in number of debits and credits.
a) Operations through branch
b) Operations using Cheque facility
c) Withdrawal through ATM / Debit cards- Max per day Rs 40,000/- as per HO Cir 393/2024

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d) POS Merchant locations in the country, where RuPay Logo is displayed. Per day transaction
limit at POS Merchant Establishment is Rs.1,00,000/-. as per HO Cir 393/2024
FLEXI KCCS - For Marginal Farmers: A flexible limit of Rs. 10,000 to Rs. 50,000 may be provided
(as Flexi KCC) based on the land holding and crops grown including post-harvest warehouse storage
related credit needs and other farm expenses, consumption needs, etc., plus small term loan
investment(s) like purchase of farm equipment(s), establishing mini dairy/backyard poultry as per
assessment of the Branch Manager, without relating it to the value of land.

Term Loan component (Sub Limit II):

Product Codes 859 - KCCS TERM LOAN

The term loan for investment is to be made towards land development, minor irrigation, purchase
of farm equipment and allied agricultural activities. This sub-limit is to meet the present and
anticipated investment / development credit requirements of the farmer. Sub limit – II shall be
limited to 3 times the annual net income of the farmer/a maximum of Rs. 5.00 lakhs.

In case the farmer is an existing borrower and has term loans, then the sub-limit is to be arrived
after deducting existing liability under term loan inclusive of undisbursed portion of the limit, if
any.

Renewal of KCC limit to borrowers who have also availed Crop Cultivation loan/limit from
Primary Agriculture Credit Societies (PACS) upto existing permitted limit or Net limit assessed
as per KCC guideline after deducting limit permitted by PACS, whichever is less.

KISAN CREDIT CARD SCHEME – WORKING CAPITAL FOR ANIMAL HUSBANDRY AND
FISHERIES: (158/2023)

Product Code 880

Working Capital limit: To meet the short term credit requirement of the farmers for rearing
animals, birds, fish, shrimp, other aquatic organisms, capture of fish.
Assessment: The maximum period for assessment of working capital may be based on
1. The cash flow statement or completion of one production cycle &
2. The scale of finance fixed by the District Level Technical Committee (DLTC)

Activity SOF comprising of following inclusions as laid under respective heads

Inland Fisheries and Animal Husbandry experts of the Govt., progressive

Fisheries and entrepreneurs of livestock/fisheries sector, it may include recurring cost
Aquaculture towards seed, feed, organic and inorganic fertilisers, lime/other soil
conditioners, harvesting and marketing charges, fuel/ electricity charges,
Marine labour, lease rent (if leased water area) etc.
Fisheries For capture fisheries, working capital may include the cost of fuel, ice, labour
charges, mooring/landing charges etc. may form part of the scale of finance.
Poultry and
Assessment based on local cost worked out on the basis of per acre/per
small ruminant
unit/per animal/per bird etc.
Dairy

Margin: Nil. No separate margin is insisted as margin is already factored while fixing the Scale
of Finance.

Repayment: The loan will be in the nature of a revolving cash credit limit. Repayment will be
fixed as per the cash flow/income generation pattern of the activity undertaken by the borrower.

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Security–Based on 5th Yr. limit

Loan Quantum Security to be stipulated

UptoRs.1.60 Lakhs Hypothecation of crops/assets created out of our finance.
Compulsory coverage for Credit Guarantee under CGFMU.
For loans above  For Dairy Units
Rs.160000/- upto Rs. A. Where Tripartite agreement with Milk Union is available:
3,00,000/- a) Hypothecation of assets created out of our finance.
b) Compulsory coverage for Credit Guarantee under CGFMU.
B. Where Tripartite agreement with Milk Union is NOT available:
i. Hypothecation of assets created out of Bank finance
ii. Mortgage of landed property OR CGFMU Coverage
 For Others
i. Hypothecation of assets created out of Bank finance
ii. Mortgage of landed property OR CGFMU Coverage.
For loans above 1. Hypothecation of assets created out of finance (stocks of
Rs.300000/- upto Rs. feed/seeds/fuel etc.)
10,00,000/- 2. Mortgage of land where primary activities are undertaken which
forms part of developmental activity.
3. If the developments are undertaken on the leased land and where
legislation permits mortgage of lease hold rights, mortgage of
leased hold right may be insisted.
4. Compulsory coverage under CGFMU.
5. If the developments are undertaken on the leased land and where
legislation permits mortgage of lease hold rights,
• Mortgage of leased hold right may be insisted.
• Compulsory coverage for credit Guarantee under CGFMU.

If the leasehold rights are not mortgaged, collateral security with

minimum value of 150% of the loan amount to be insisted, wherein at
least 50% security by way of Residential/ Commercial Properties (Land
& Buildings backed by approved building plan). In such cases, the
coverage under CGFMU to be waived subject to obtaining permission
from the RO Head.
For loans above Rs. 1. Hypothecation of assets created out of our finance.
10,00,000/- 2. In case of developmental activities like construction of cattle shed,
fish pond, poultry shed, or creation of any other immovable assets
- mortgage of land where primary activities are undertaken and
connected with the activity is to be taken.
3. If the developments are undertaken on the leased land and where
legislation permits mortgage of lease hold rights, Mortgage of
leased hold right may be insisted. If leasehold rights are
mortgaged, Immovable security should be obtained, value of which
should be a minimum 50% of the loan amount.
If leasehold rights are not mortgaged, Immovable or equivalent
Collateral security should be obtained, value of which should be a
minimum 150% of the loan amount, wherein at least 50% security
by way of Residential/ Commercial Properties (Land & Buildings
backed by approved building plan).

Asset Classification Norms:

In case of short duration crops: An account is considered non-performing when drawals and
interest demanded, remains unpaid for a period of 2 crop seasons.
In case of long duration crops: An account becomes non-performing when drawals and interest
demanded, remains unpaid for a period of one crop season (crops with crop season longer than
one year).

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Term loan under KCC (has fixed repayment schedule) & KCCS-AHF: The accounts will be auto
classified as NPA if the installment / interest is not serviced within 90 days from due date.
Gold Loans to Agriculturists:

PURPOSE :
Agriculture purposes and its allied activities:
1. Crop purpose
2. Non crop purpose
 Land Development activities
 Allied activities
3. Overdraft facility to Agriculturist against gold jewellery
4. Loans to employees for agriculture purposes: Crop Purpose : Rs 3 Lacs; Non crop purpose : Rs 5
Lacs ( Gold Loan manual )

Short term loan – Single transaction of loans Overdraft

For meeting For meeting To meet expenses To meet the expenses
Purpose expenses for expenses involved in for carrying out for Crop cultivation or
crop Land Development various allied for other allied
production activities activities activities

ELIGIBILITY :
 The prospective borrower should have an SB account with the branch before availing the loan.
The loan proceeds should necessarily be credited to SB account.
 Gold loans are to be granted only against gold ornaments and not against gold coins, gold
bullion/ Gold Bar, Primary gold. While advancing against the security of specially minted gold
coins, weight of the Gold coins shall not exceed 50 grams per customer.
 It is to be ensured that Jewel Appraiser arrives at the value of gold jewelry based on average
price of 22 karat gold advised by Head Office multiplied by the net weight of 22 karat gold
jewelry and same is entered in appraised value column in the application cum letter of
pledge. The rate per gram considered for arriving at appraised value should be mentioned in
the application.
 Loan to value (LTV) ratio and Rate of advance should not exceed the value stipulated for
various schemes.
 Trigger LTV: For agriculture gold loans, trigger LTV for monitoring is set at 4 % lower than the
regulatory LTV.

Assessment
 The lending rate fixed is as per the guidelines stipulated for the respective schemes by
factoring the stipulated margin. Hence, the loan amount can be arrived by the branches as
per the rate communicated by Gold Loan Wing from time to time, without insisting for further
margin.
 Loan Against Gold Jewellery for Agriculturist (Product Code - 780,836, 842)
Loan to value (LTV) ratio should not exceed 100%. Trigger Value for Agriculture is 96%. Rate
of Advance shall be maximum 80% of the Appraised Value of Gold. In case of loan for crop
cultivation purpose, quantum of finance shall be restricted to Scale of Finance or 80% of the
appraised value of the gold , whichever is less.
The need for such quantum of finance for agricultural and allied activities is also to be
ensured.

 Agri GL OD (Product Code - 269,890)

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Rate of Advance shall be maximum 85 % of the Appraised Value of Gold. Loan amount shall not
exceed scale of Finance (for crop cultivation) /assessed working capital limit (for allied activities)
or 90% of the appraised value of the gold, whichever is less. (Cir-409/2024)

Quantum of Loan:
For STL,The minimum amount of loan that can be sanctioned is Rs.500/- and thereafter in
multiples of Rs.100/-. The Minimum loan amount for GLOD is Rs.1.60 lakhs.

For Crop Purpose : Restricted upto Rs.10.00 lakhs per customer for Crop loans.
Branch to ensure that there is no double finance both under KCC/GL for crop production.

For Other than crop Purpose: Overall maximum Gold loan limit per customer may be fixed at
Rs.35.00 Lakhs.
 As these loans are to be treated as agricultural advances for all purposes, branches should
refer to the section dealing with the Agricultural Gold Loan finance in the Circle
Office/Regional Office as the case may be, for fixing of an overall limit and enhancement
thereto.
 There is no restriction on number of loans per borrower. However, ceiling on quantum of loan
of Loan is to be adhered to.

Sanctioning of Loan:
 Branch Managers/In-charges are empowered to sanction these loans within the overall limit
fixed by the Circle Office/Regional Office. In urban and metropolitan cities, Agricultural gold
loans shall be sanctioned only in the branches designated by the Regional Office duly taking
into account potentiality and security aspects.
 In respect of agricultural advances, branches should refer to the section dealing with the
Agricultural Finance in the Circle Office/Regional Office as the case may be, for fixing of an
overall limit and enhancement thereto.
 Agril. Land records for Gold Loan (339/2024): For aggregate loans upto ₹100000/-declaration
of the party in the application can be accepted and production of land records need not be
insisted.

Repayment :
 The entire loan should be cleared within a maximum period of 12 months from the date of
sanction to be repaid in monthly/quarterly/half-yearly installments or by lump sum
payment.
 The repayment schedule so fixed should depend upon type of agricultural crop
production/Land development/allied activities and cash generation /repayment capacity of
the borrower.
 Branches to review all gold loan accounts during the last quarter of the repayment period
permitted or immediately after completion of the repayment period and can extend the period
of repayment of loan by 6 months provided interest debited till then is recovered.
 The GLOD limit is tenable for a period of 3 years subject to annual review and any point of
time, the liability including interest under GLOD should not exceed the appraised value of the
gold.

Auction & Bidding guidelines:

A notice in NF.387 is to be sent to the borrower by Registered Post Acknowledgement due at the
address provided by them to the Bank before auction (informing them of the Bank's intention to
auction the securities at a particular place, date and time.
After final bid is made,
 Less than Rs.50000/- can be obtained from purchaser in cash or demand draft/remittance.

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 Canara Institute of Bank Management

 Rs.50000/- & above- In cash/demand draft/remittance.

 Wherever cash is accepted, guidelines applicable to cash transactions Rs.50000/- & above to
be adhered to.
Branches should put in a system to declare every 4 th Friday of the month for conducting monthly
auction for sale of gold ornaments to realize and recover the dues of NPA. The entire auction
process to be completed in 45 days for Agriculture Gold Loans and in 30 days for Non-Agriculture
Gold Loans.

Earlier, preparation of notices, seeking permission from Regional Office used to be done manually
by the Branches. Now, “Gold Loan Auction package” has been introduced in SAS package to
facilitate Branches to generate various notices, seek permission to auction Gold Jewellery in
eligible cases.
Branches/Offices shall access the Package from SAS portal under option SAS > GENERAL > GOLD
LOAN AUCTION PACKAGE (GLAP).
The package will serve as a repository for various auction related data. (IC/14/2023)

Wherever branches are not able to recover the value of the gold due to fall in the price of gold,
branch should re-fix the revised reserve price and proceed with next round/s auction by reducing
the reserve price. The Regional Head is empowered to reduce the reserve price up to 10% of the
first auction price. Beyond 10 % the powers are with the Circle Head.

Spurious Gold: Where gold loans are found to be backed by spurious jewelry, non-priority clean
rate of interest is to be charged. The advance is to be recalled immediately on detection of
spurious security and branches to report immediately regarding spurious gold (if any) on the day
of detection (within 24 hours) to Review and Reporting (R R Section) Recovery, Legal and fraud
prevention Wing, Head Office by marking copy to Legal Section, C O and PC Wing, H O for
information.

Canara Kisan OD Scheme:

Eligibility:

1. OD facility for Agriculturists who have received KCC Prompt Repayment Incentive (PRI) for past
three years. (IC/145/2023, Agriculture policy 2024-25)
2. Individual farmers / joint borrowers, partnership firms, private limited companies and public
limited companies who are owner cultivators and / or engaged in allied activities are eligible.
3. Canara Kisan OD can also be sanctioned to GPA holders.
4. Should not be a defaulter to any of the financial institutions.
To repay the private debts Maximum amount that can be financed under this scheme is Rs.
2,00,000/- per borrower subject to compliance of other terms and conditions of the scheme.

Purpose–NOT for crop production as existing KCCS covers the same.

Limit: Sum total of actual WC expenses to be incurred for above mentioned activities or as per
assessment made by AEO or Manager after deducting 15-25% margin, subject to following
conditions:

PARTICULAR ESTIMATED COST MARGIN LIMIT

A WORKING CAPITAL FOR 15-25%
a. Allied activities like Animal Husbandry/
Fisheries/Apiary/Any other Allied activity
b. Farm machinery / maintenance of equipments
B REPAIR AND REPLACEMENTS 15-25%
 Replacement of machinery/animals /pump-sets etc
 Repair/Improvement of developmental nature
(wells/farmhouse etc)
C WORKING CAPITAL FOR NON-FARM SECTOR 15-25%

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The sub limit should not exceed 30% of the total of

(A+B) or 20% of the projected and accepted annual
turnover.
[Link] NEED should not exceed 20% of the 15-25%
total of (A+B+C)
E. Repayment of Genuine Private Debts related to 15-25%
investments and expenses towards family's urgent
(Max. of Rs1 lakh) per borrower).
Total (A+B+C+D+E)
It should be ensured that there is no double financing. Finance should not be extended under
the heads A, C D and E, if the same purposes have been financed under KCCS or under any other
scheme for the same farmer / agriculturist
Care should be taken to ensure that KCCS limit under any other scheme to be sanctioned in
future also does not include the purposes under the heads A, C, D and E.

QUANTUM (IC/145/2023)

a) Maximum of three times the gross annual income.

b) Maximum of Rs 1.00 lakh per acre subject to 50% of value of the landed property
mortgaged/proposed to be mortgaged. Out of which at least 15% security in the form of
residential property.
Minimum limit: Rs. 1 lakh
Maximum limit: Rs. 10 lakhs.
 Extending Higher Limit Under Relaxed Norms: Regional Head has to fix a suitable limit per
acre, keeping in view the land value and margin of 50% required for various branches where
the recovery percentage under the scheme is 95%.
The relaxations that can be extended are as under:
a) Maximum of four times the gross annual income
b) Upper ceiling of Rs.12.50 lakhs.
c) Ceiling on Finance per acre of land mortgaged: Rs.1.50 lakh per acre subject to 50% of the
value of landed property mortgaged/proposed to be mortgaged, Out of which at least 15%
security in the form of residential

 Tenability:1 year with annual review.

 Eligible for ATM card: Borrowers will be issued cheque books and / or ATM cards / debit cards
to facilitate easy withdrawals. Issue and operation through ATMs will be as per extant guidelines
of the Bank. ATM Cards / Debit Cards should be issued for individual accounts only. To be
eligible for ATM card - the individual borrowers should be literate i.e. educated enough to
operate ATMs.
 Interest: Interest has to be debited half yearly, September/March. Interest debited is to be
recovered within a maximum period of 90days.
 Agreement-Loan up to 2 Lacs -NF 1086; loans above Rs.2 lacs- NF 1076

Kisan Tatkal
 Only for KCC holders to meet post-harvest expenses/unforeseen exigencies.
 Min. ₹1000/- Maximum ₹50,000/- (max.50% of KCC limit /25% of the estimated annual income
of the agriculturist)
 Repayment 3-5 years half yearly/ Yearly installments

Krishi Mitra Credit Card Scheme (KMCCS) (Product Code 899)

 Tenant farmers, oral lessees, share croppers and farmers who have lands, but do not have land
records. Finance to be extended to only one person of a family & Farmers who own lands with
proper records, taking up additional area under tenancy are not eligible under the scheme.

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 Canara Institute of Bank Management

 Minimum 50% of loan for Crop Cultivation

 Max Loan amount ₹50,000/-Total limit should not exceed 50% of the value of the produce.
 Interest debited half yearly (Mar &Sept) due in 90 days for running a/c.
 Running limit - OD Tenability 1 year
 No processing charges and No inspection charges

Tractor Loans & Farm Machinery Loans:

Farm machinery loans are considered for purchase of tractor, power tiller, trailer and accessories,
combine harvester, grain threshers, sprayers, dusters, ploughs, drills and such other farm
implements and equipment needed for agricultural activity.

Repayment: Principal amount to be repaid in 5-9 years in half yearly/Yearly installments

depending up on the income generation. Interest to be charged half yearly and to be demanded
along with next principal due based on the repayment schedule.

Security: Prime: Hypothecation of assets created out of bank finance

Collateral: Mortgage of landed property. Collateral security comfort should be a min of 100% of
the sanctioned limit.
 In case, the value of the land is not equal to the loan amount, other unencumbered approved
securities for the shortfall, as enumerated in AF Manual should be obtained, so as to reach
100% collateral security as above.
 In case of subsidy schemes sponsored by State /Central Govts., value of subsidy plus mortgage
value should be equal to the loan amount (This is applicable only in case of back ended subsidy
where the subsidy amount is kept as Term Deposit and linked to loan account, in line with HO
Cir 152/2019 dated 22.03.2019)
 Explore the possibility of obtaining immovable securities other than Agricultural Land as
collaterals

Features FM/ Tractor Loan (above 35 HP) Small Tractor Loan (UPTO 35 HP)
Farmers / Group of farmers owning 8 acres Farmers / Group of farmers owning
Eligible irrigated or 16 acres dry land 6 acres irrigated or 12 acres dry
customers Land
DGM-CO-CAC can relax land criteria
Purpose of Financing tractor/ Farm Machinery as per Purchase of brand new small tractor
Loan Scoring matrix. (up to 35HP), accessories and
Tractor usage for 1200-1400 hours. Implements.
Minimum 600 hours in farmers own land. Usage : At least 1000-1200 working
hours including minimum 500 hours
on the farmers own land.
Power Tillers (alone/with trailers)
Eligibility-Farmers owning 3 acres irrigated or 6 acres dry land.
(Criteria can be relaxed depending on merits provided the clearance is obtained from RO Head
for relaxation of land holdings).
Trailers alone (for existing Tractors)
Wherever, trailers alone to be financed, it is to be ensured that the borrower owns the tractor.
If tractor is financed by other banks and loan is outstanding, such cases shall not be considered
for financing trailers. If tractor is financed by other banks and loan is closed, such cases can be
considered for financing trailers subject to (i) The other bank’s lien stands cancelled in RC book.
(ii)Our lien shall be noted for both the existing tractor and trailer to be purchased.
Combine Harvesters
Sanctioning authority: Up to Scale IV headed branches proposals shall be sanctioned by AGM-
RO-CAC and above authorities as per the delegated powers. Branches headed by Scale V and
above authorities, can sanction proposals as per their delegated powers.
Sanctioning Authority to ensure that the harvester can be used efficiently on custom hiring basis
.

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Eligibility: Farmer meeting land criteria along with Non-farming entrepreneurs who are capable
of utilizing combine harvester for undertaking farm work on contract / custom hiring basis and
generating sufficient income are also eligible.

Other Criteria for Farm Machinery Loans.

Joint Borrower: In case of Joint Borrower, they should be from same family only. If borrowers
are from different families, then permission from the RO Head to be sought for sanctioning such
loans. For loans upto and beyond the powers of RO Head CAC, concerned sanctioning Authority
can permit the same (HO cir 120/2017).

A cap of 25 farm machinery loans per branch /year is fixed for branches where the outstanding
Farm Machinery portfolio is less than 50. After reaching the cap of 50 farm machinery loans, the
branches to seek prior clearance from RO Head.

Financing Second Hand Tractors:

 Tractor should not be more than 3 years old.
 Loan shall not be more than 60% of the value of the tractor as per valuation report or sale
consideration whichever is less. Margin shall be atleast 40%
 Repayment: Maximum 5 years in half yearly/yearly installments depending upon income
generation. However, repayment should be fixed within the economic life of the tractor.

Agricultural Loan for Light & Heavy Vehicle ALLHV scheme

Loans can be granted for purchase of brand new vehicles such as two wheelers including cycle,
three wheeler carriages, jeep, van and such other light motor vehicles and heavy vehicles such as
lorries/trucks for supervising agricultural operation/management of farm / estate and for
transportation of agricultural produce/inputs, labour, etc. Cars should not be financed under
ALLHV Scheme.

Cars should not be financed under ALLHV Scheme.

Light Vehicles: For purchase of brand new vehicles such as two wheelers including cycle,
Motorcycle etc for:
 supervising agricultural operation
 management of farm /estate

Medium /Heavy Vehicles: For purchase of brand new vehicles such as two wheelers including
cycle, Motorcycle, new three wheeler carriages, jeep, van and such other light motor vehicles and
heavy vehicles such as lorries/ trucks etc. for supervision of farms and transportation of
agricultural produce/ inputs, labour.

For Heavy vehicles: Agriculturists with minimum 15 acres of perennially irrigated lands. Small
farmers are not eligible for purchase of MCV/HCV

Relaxations : AGM/DM of CO permitted to sanction loans relaxing the acreage norms by ensuring
that there is adequate surplus for repayment.

MARGIN : LHV 10% MCVS/HCVS 25%

Repayment: 5-7 years for MCVs and LCVs: Monthly / Quarterly installments.
3-5 years in other cases : Monthly/Quarterly/Half-Yearly/Yearly installments

Second Hand Vehicle–ALLHV

 The vehicle to be purchased should not be more than 5 years old and should be free from
encumbrance. Margin: 25%

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 Canara Institute of Bank Management

 Valuation report of the vehicle should be obtained from an approved valuer.

 The quantum of loan should not be more than 75% of the value of the vehicle as per valuation
report or purchase consideration whichever is less.
 The loan is to be repaid within 3 years.

Kisan all-purpose term loan

A term loan with an upper cap of ₹20 lakhs, for any farm investment/development purposes.

Security: Above ₹1.60 Lakh (aggregate loan)-Mortgage of Land (It shall be at least 200% of the limit
sanctioned) in addition to the hypothecation of assets created.

Repayment: 9 Years. This may be a ballooning repayment and interest shall be paid along with the
installments.

Loans for Purchase of Agricultural Lands

Eligibility : Small and marginal farmers Share croppers / tenant farmers i.e., those who would own
/cultivating maximum of 5 acres of dry land or 2.5 acres of irrigated land including the land to be
purchased.
Entrepreneurs*with agricultural background are also eligible (*Provided State laws permit purchase
of agriculture lands by such persons) subject to the ceiling.
Applicant should be from an agricultural family or/and an agricultural graduate, seeking to
establish an agriculture enterprise relating to agriculture (including allied activity).

Land Holding: Total Land Holdings after Purchase of Land, should not exceed 2.5 acres irrigated
or 5acres of non-irrigated land.

Margin: Loans upto Rs. 1.60 Lacs: NIL Above Rs. 1.60 Lacs: 20 %

Quantum: A maximum of ₹10 lakhs. Valuation as assessed by the Branch (ii)Guidance value/Circle
rate fixed by the State or (iii) the registration value whichever is lower, plus value of stamp duty,
registration charges for sale /mortgage deed.

Repayment: 7-10 years, half yearly/yearly installment, including a maximum moratorium period
of 24 months.
If the project involves further development of the land, such as long-term orchard development,
the branch to fix the repayment schedule synchronizing with the income generation. DSCR
minimum 1.50 is to be ensured.

Agri clinics & Agribusiness Centres (ACABC):

Agri-Clinics: To provide expert advice and services to farmers on technology, cropping practices,
protection from pests and diseases, market trends, prices of various crops in the markets and also
clinical services for animal health, etc., which would enhance productivity of crops/animals and
increased income to farmers.

Agri-Business Centers: To Provide farm equipment on hire, sale of inputs and other services.

Purpose For Graduates/Post Graduates, Diploma (with at least 50% marks)/ Post Graduate
Diploma holders, Degree/Diploma/Post-Graduate Diploma courses recognized by
UGC having more than 60 percent of the course content in Agriculture and allied
subjects,
 Constitution – individual, joint or partnership firms, Limited companies, etc.

Ceiling on  Rs 20 lacs per graduate with max. Rs 100 lakhs per group of 5 eligible
Project candidates (of whom one can be Accounting/Management graduate)
 At least 10% value of the Total Financial Outlay (TFO) of the project to be in
capital form.
Margin  Up to Rs 5 lacs: Nil and above Rs 5 lacs – 15 to 25%.

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 For ST/SC, Women, NE states and Hilly areas – 50% of above said margin could
be given by NABARD
Security Loan Security
For loan upto a) Hypothecation of assets created out of our finance.
Rs. 5,00,000/- b) Compulsory coverage for credit Guarantee under
CGFMU
For loan above a) Hypothecation of assets created out of our finance.
Rs. 5,00,000/- b) Mortgage of landed property if the same is available
and upto Rs. as a part of prime security. c) If the developments are
10,00,000/- undertaken on the leased land and where legislation
permits mortgage of lease hold rights, mortgage of
leased hold right may be insisted. d) Compulsory
coverage for credit Guarantee under CGFMU
For loan above Hypothecation of assets created out of loan +Mortgage
Rs. of landed property equivalent to loan amount + Co
10,00,000/- obligation/ Guarantor (In deserving cases co-obligation/
guarantor may be waived by the sanctioning authority)
Time limit for completion of the project: Maximum of 6 months period from the date of
disbursement of the first installment of loan, which may be extended by a further period of 6
months

Produce Loan to farmers based on Electronic Negotiable Warehouse Receipts (e-NWRs) issued
by repositories, accredited by Warehousing Development &Regulatory Authority (WDRA)
(686/2022)
 WDRA has launched electronic Negotiable Warehouse Receipt (e-NWR) and licensing two
Repositories namely, M/s CCRL (Commodity Repository Ltd) sponsored by Central Depository
Services Limited (CDSL) and M/s NERL (National E-Repository Limited) sponsored by NCDEX to
issue e-NWR.
 All the registered warehouses are on boarded to Repository System for issuing e-NWR against
the deposits. The depositor can use e-NWR to get loans against underlying commodities from
banks
 Eligibility – 1. Existing /New individual farmers directly engaged in Agriculture and Allied
Activities are eligible for finance under the scheme which also includes:
a) Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e., groups of individual farmers.
b) FPOs/FPC of individual farmers and co-operatives of farmers

2. The above entities must have Repository account with m/s National E-Repository Limited (NeRL)
and/or CDSL Commodity Repository Limited (CCRL), under the WDRA Act.

 Loan Amount- Loan quantum – Need Based limit. However, Loans to Farmers upto Rs.75 lakhs
shall only be considered under the Produce Loan Scheme (Agriculture-Priority).
 Margin-Existing Parties enjoying crop production loan with us & maintaining nil overdue: 15%
of the assessed value of the Stock/Commodity; For Others: 25%
 Rate of Interest- Based on CIC score
RISK CATEGORY Upto 3 months Upto 6 months Upto 12months

Low Risk (CS:1) 3 months MCLR 6 months MCLR 1 Year MCLR + 0.50
+0.25
Normal Risk (CS:2) 3 months MCLR + 0.25 6 months MCLR 1 Year MCLR + 0.75
+0.50

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 Canara Institute of Bank Management

Moderate Risk(CS:3) 3 months MCLR + 0.50 6 months MCLR 1 Year MCLR + 1.00
+0.75
 Duration: Maximum 12 months
 Security Norms
 For Existing borrowers, Loan upto Rs 10 Lakhs and for new borrower, loan upto Rs 5
lakhs
o Pledge of e-Negotiable Warehouse Receipt duly lien marked in NERL/CCRL portal in favour
of Bank, covering stocks of commodities stored in warehouse registered with WDRA.
 For Existing borrower, Loan above Rs. 10.00 lakhs up to Rs. 75.00 lakhs & For New
borrower, Loan above Rs. 5.00 lakhs up to Rs. 75.00 lakhs:
o Pledge of e-Negotiable Warehouse Receipt duly lien marked in NERL/CCRL portal in favour
of Bank, covering stocks of commodities stored in warehouse registered with WDRA.
o Mortgage of landed property at least equivalent to loan amount.
o In case of Partnership /LLP/Private Limited Company/ Limited Company, personal
guarantee of Partners/Directors to be obtained.
o Our Charge to be created in ROC in case of LLP, Private Limited Company and Limited
Company.

CANARA DRONE: (609/2023):

For purchase of Drones with equipment/accessories for Agriculture usages such as spraying
pesticides, fertilizer, anti-locust spraying, mapping of farmlands, etc. under Customer Hiring
activity/Own agriculture purpose, from Drones Manufacturers approved by Director General of
Civil Aviation (DGCA).

Beneficiary:
 Applicant shall be Individual/joint individual farmers / Proprietorship /Partnerships
/Companies /Cooperative societies, FPO's/FPC, etc. involved in custom hiring activity and for
own Agriculture purpose.
 Existing borrowers, who have availed loan from our Bank for purchase of any loan under farm
mechanization for purchase of tractor/harvester/power tillers, etc. and are repaying /repaid
promptly, can be given preference for funding under the scheme
 Applicant shall have satisfactory credit history, rating and reasonable net worth, etc.
 Age of the farmer should be in the range of 25 years to 60 years.

Eligibility:
For own use: The applicant should have at least 6 acres of perennially irrigated land or 12 acres
of rainfed land.

For rental use: Land ownership is not required.

Assessment:
Based on the projected cash flows submitted by the borrower from the activity
 Maximum 75% of unit cost (Including other accessories and equipment) based on quotation
 Maximum of Rs. 12.00 Lakh for purchase of upto 2 drones as per delegation of power under
branch delegation.
 For purchase of more than 2 drones with equipment, AGM/DGM RO-CAC is empowered to
consider the same with a condition that the maximum quantum of finance not to exceed
Rs. 25.00 Lakhs under the scheme
Primary Security: Hypothecation of asset created out of Bank finance.
Collateral Security:
i) For own Agriculture purpose: Collateral security in the form of Mortgage of landed property
equivalent to loan amount OR Term Deposit/Liquid collateral in the range of 50 to 75% of the loan
amount.

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 केनरा बैंक प्रबंधन संस्थान

ii) For Customer hiring activity Loan accounts shall be covered under Agriculture Infrastructure
Fund (AIF) scheme and accounts to be covered under CGTMSE. However, Branches shall explore
possibility of obtaining any collateral security in the form of landed property/ Liquid collateral
and can cover shortfall amount under CGTMSE under Hybrid security model.

Repayment Period: Maximum repayment period of 5 years and interest/installment is to be

serviced monthly including the maximum moratorium period of 6 months.

Interest Subvention: Purchase of Drones is also eligible for interest subventions benefits/CGTMSE
coverage under Agriculture Infrastructure Fund (AIF) scheme

Ministry of Agri and Farmer welfare has also clarified that there is a convergence AIF with SMAM
(Sub-Mission on Agricultural Mechanization) for the availment of financial assistance.

CANARA STREE SHAKTI (IC/162/2024):

Purpose: To finance individual Women SHG members of selected matured well performing DAY
NRLM SHGs to graduate them as Women entrepreneur.

Eligibility: Women Member from matured well performing DAY NRLM SHGs.
(WSHGs more than 2 years old and have accessed at least one dose of Bank loan with timely
repayment).
 Member with minimum 2 year of business record.
 Beneficiaries shall be identified & sourced by NRLM/SRLM.
Quantum of loan: Minimum: Above Rs. 50,000/- Maximum: Rs. 5,00,000/-
2% Interest Subvention for loans up to Rs.1.50 lakh per borrower for maximum period of 3 years,
based on prompt repayments to incentivize good repayment behavior.
Repayment Period:
Term Loan: 5 Years including 3 months’ repayment holiday Working Capital: 12 months tenability

AGRICULTURAL INNOVATION CENTRE (AIC) (573/2023):

 AIC will appraise agriculture term loan on standalone basis for new customers with project
cost above ₹400 lakhs and ₹750 lakhs (project cost) for existing customer.
 All the branches except AF Hi-Tech branches are to be mapped to ACC

Extension Activities:
The extension programs also facilitate knowledge transfer to the farmers from the experts in
various field of agriculture. The revised limits are furnished here below:
Category: I
Type of Programme Revised ceiling (In Rs)
Expert Lecture / Vanamahostava/Training program including
3000/-
Self- employment awareness camps/orientation programs for
promoting SHGs/Awareness camps on SWHS/SHLS
Category: II
Cattle Show/Seminar on agriculture and allied activities/ Animal
10000/-
Health checkup camps/ Agriculture Exhibitions/ Agricultural/
Animal Husbandry Seminar

The limits mentioned above are specific to the particular program and cannot be applied for other
types of programs. Further, a program organised in a village on a particular day cannot be classified
under 2 different categories and reimbursement cannot be claimed under different programs.

A budget of Rs. 2,500/- in respect of rural and semi urban branches has been provided for
conducting a minimum 4 activities per year.

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(एम एस एम ई)
MICRO SMALL MEDIUM ENTERPRISES (MSME)

Micro Small and Medium Enterprises (MSME)

Sector Investment in P&M Total Turnover
a Micro Enterprises Upto Rs.1.00 Cr Upto Rs.5.00 Cr
b Small Enterprises Upto Rs.10.00 Cr Upto Rs.50.00 Cr
c Medium Enterprises Upto Rs.50.00 Cr Upto Rs.250.00 Cr

All the above enterprises are required to register online on the Udyam Registration portal
and
obtain ‘Udyam Registration Certificate’. For PSL purposes Banks shall be guided by the
classification recorded in the Udyam Registration Certificate (URC) (IC/919/2023,
IC/559/2024)

Targets / sub-targets for lending to MSME sector: In terms of the recommendations of the
Prime Minister’s Task Force on MSMEs, banks are advised to achieve:
i) 20 per cent year-on-year growth in credit to micro and small enterprises;
ii) 10 per cent annual growth in the number of micro enterprise accounts and
iii) 60 per cent of total lending to MSE sector as of the corresponding quarter of the previous
year to micro enterprises. (IC/919/2023, IC/559/2024)

Udyam Assist portal (IC/616/2023)

The certificate issued on Udyam Assist Portal (UAP) to Informal Micro Enterprises (IMEs)
shall be treated at par with Udyam Registration Certificate for the purpose of availing
Priority Sector Lending benefits. IMEs with an Udyam Assist Certificate shall be treated as
micro enterprises for the purpose of PSL classification.

**Retail and Wholesale Trade is classified as MSMEs for the limited purpose of Priority
Sector Lending and they would be allowed to be registered on Udyam Registration Portal
for the following NIC Codes and activities mentioned against them(Cir 501/2021)

NIC Code Activity

45 Wholesale and Retail Trade and repair of motor vehicles and motorcycles
46 Wholesale trade except of motor vehicles and motorcycles
47 Retail trade except of motor vehicles and motorcycles

571/2022- All MSME Loans given to SHG should be opened in following product code, 2001-
MSME-SHG OD OCC and 637 – MSME- SHG- Term Loan
Legal Entity Identifier (HO Cir – 368/2021)
The Legal Entity Identifier (LEI) is designed to create a global reference data system that
uniquely identifies every legal entity, in any jurisdiction, the is party to a financial trans-action.
More specifically, LEI is a unique 20-digit code that is assigned to a legal entity.
This 20-character alphanumeric code created using ISO 17442:2012 standard and has the
following structure:
a) Characters 1-4, a four-character prefix assigned by the global Regulatory Oversight
Committee (ROC) Secretariat, unique to each Local Operating Units (LOU). LOU
Identification Number for India is 3358.
b) Characters 5-6, 2 reserved characters–00
c) Characters 7-18,12 characters (alpha-numeric) generated and assigned to an entity by the
Local Operating Units (LOU) according to transparent and sound allocation policies.
d) Characters19-20,2 check digits under ISO17442.

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Timelines stipulated for obtaining LEI by Non Individual Borrowers : (296/2022)
Slabs / Total Exposure LEI to be obtained on or before
Above Rs 25 Crores and less than Rs 50 Crores 30.04.2023
Above Rs 10 Crores up to Rs 25 Crores 30.04.2024
Rs 5 Crores and above up to Rs 10 Crores 30.04.2025

LEI for Cross Border Transaction (HO Cir – 80/2021)

 W.E.F 01.10.2022 LEI is required for undertaking capital or current account transactions of ₹50
Crore and above (per transaction) by resident entities (non-individuals) under FEMA, 1999.

LEI for Large Value NEFT / RTGS (HO Cir – 432/2022)

 LEI code mandatory for all NEFT and RTGS payments of Rs 50 crore & above undertaken by
entities (non-individuals).
 Mandatory to include Sender and Beneficiary LEI code while initiating outward NEFT &
RTGS payments of Rs 50 Crore & above
 Sender & Beneficiary LEI code will be mandatory for processing inward NEFT & RTGS
payments of Rs 50 Crores & above.
 Applicable for both customer transactions and inter-bank transactions
 Governments or their Departments / Ministries are exempted from LEI requirement for
NEFT & RTGS payments
 LEI code & expiry date to be captured in CIM17

CIBIL MSME RANK (CMR) – HO Cir 809/2020, 228/2022 & 254/2022

● Applicable to Existing & New MSME loans with aggregate Loan quantum (Present &
Proposed) of above Rs.10 lakhsuptoRs.10crores
● CMR measures MSMEs on a rank scale of 1 to 10, 1 being the best rank and 10 being the
Worst.
● Wherever two (CIRs) are to be obtained, branches/offices shall obtain one from M/S CIBIL
including CMR and another report from any of the CICs.
● Exemption of applicability of CMR guidelines while restructuring of MSME accounts under
OTR (One Time Restructuring)/other schemes of RBI/Bank.
● In case of loans under Hybrid Security model of CGTMSE, CMR guidelines in terms of
delegation of power linked to security coverage shall be applicable for the quantum of loan
over and above CGTMSE covered amount.
● Exemption of Linking of CMR with availability of security coverage (Prime & Collateral) for
determining Sanctioning Authority in case of CGTMSE covered accounts.
● Delegation of powers for sanctioning MSME loans based on CMR:
DELEGATION OF AUTHORITIES– GUIDELINES FOR EXISTING AND NEW CUSTOMERS
CMR Score Authority Existing Customer New Customer
1 to 5 RSA Fresh/ Renewal/ Renewal with enhancement Fresh Sanction
6 to 10 Respective Renewal is permitted (C) CMR 6 & 7 –RSA –
Sanctioning For Fresh Exposure/Enhancement(FE/E) subject to obtaining
Authority min. 100% by way of
(A)CMR6&7 immovable properties
(RSA)
-no release/substitution of property /approved collaterals/
-Where existing security comfort*<=100% No deposits either
dilution collateral or Prime or
-where security comfort >100% the same not aggregate to the
to fall below 100% post FE/E enhanced/ fresh
(B)CMR8– exposure
-no release/ substitution of property
-Security comfort>=125%

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 Canara Institute of Bank Management

Next Higher In case of Fresh/Enhancement- For CMR 6&7 – If (C) is

Authority For CMR 6&7-In case of variation from (A) not satisfied (Security
(NHA) • By NHA upto DGM-CO-CAC/DGM-SULABH- <100%)
COCAC powers.(In GM Headed Circles) • by NHA upto DGM CO
• DGM-CO-CAC (Circle Head) and & above/cs CAC powers
by RSA • Beyond DGMCO CAC
For CMR8-In case of variation from (B) powers- RSA
• By NHA upto DGM-CO-CAC/DGM-SULABH-CO
CAC powers.(In GM Headed Circles)
• DGM-COC-AC (Circle Head) and & above
a/cs by RSA
• Subject to security comfort>=100%
For CMR9&10-In case of variation from (B)
 By NHA upto DGM CO CAC/DGM-SULABH-
COCAC powers.(In GM Headed Circles)
 DGM CO CAC (Circle Head) and & above
a/cs by RSA Subjectto-
 No release/substitution of property
 Security comfort>=150%
CMR-NA Extant guidelines followed
*Security comfort here is referred to EMT of land and building/approved collaterals/
Bank deposits
##-FRESH Exposures with CMR 8,9 &10-Nottobe considered
Exemption of linking of CMR with availability of security coverage (Prime & Collateral) for
determining SA in case of CGTMSE covered A/c:

CGTMSE Linking of CMR with availability of security coverage (Prime & Collateral) for
Covered A/cs determining Sanctioning Authority in case of CGTMSE (other than Hybrid Security
Model) covered accounts IS EXEMPTED. However following to be noted-
[other than Existing Borrower (for Fresh Exposure/ Enhancement)
Hybrid Model] CMR Scores 6,7&8@ CMR Scores 9 & 10 @
RSA to take decision as per • NHA upto DGM CO CAC/DGM-SULABH-CAC
guidelines in table above, powers.(In GM Headed Circles)
subject to no release/ • DGM CO CAC (Circle Head) and above a/c s by RSA
substitution of property Subject to no release/ substitution of property
CMR Scores 9 & 10 in respect of existing borrower- Only Renewal→ by RSA
New Borrower:
• CMR 6 & 7– RSA
• For CMR 8,9 & 10– Proposal NOT to be considered
CGTMSE CMR guidelines in terms of DOP linked to security coverage shall be applicable for
(HYBRID] the quantum of loan over and above CGTMSE covered amount.

@1) The additional limits granted shall be covered under CGTMSE provided, total CGTMSE
coverage for the account is within the maximum limit stipulated by CGTMSE and conveyed
vide HO Cir 620/2019, the details of which are here under:

How to Calculate exposure for Coverage under CGTMSE (Max Guarantee coverage
Limit):
Type of Credit Facility Exposure to be considered for coverage
Working Capital Sanctioned Amount
Fully disbursed TL O/s as on the date of consideration of fresh
coverage.

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 केनरा बैंक प्रबंधन संस्थान

Partially disbursed TL Entire Sanction amount. In case if bank proposes

to cancel the undrawn portion of sanction amount,
the same has to be updated in CGTMSE Portal.

2) In case the additional limit exceeds the CGTMSE coverage limits mentioned above,
guidelines as applicable for CGTMSE Hybrid security model to be followed w.r.t. DOP
linked to security coverage & CMR.

Security norms for MSME loans as per RBI guidelines:

● Banks are mandated not to accept collateral security
a. in the case of loans upto Rs.10 lakh extended to units in the MSE sector. Banks are also
advised to extend collateral free loans up to Rs.10 lakh to all units financed under the
Prime Minister Employment Generation Program (PMEGP) administered by KVIC. (as per
recommendations working group headed by Shri V K Sharma, ED, RBI)
b. UptoRs.25 lacs in respect of units whose track record and financial position are good as
per Bank records.
c. Up to Rs.500 lacs in respect of Micro & Small Enterprises whose borrowal accounts are
covered under CGMSE (HO Cir 433/2023)
● Now CGMSE cover is available for credit facilities extended to Wholesale Trade,
Educational Institutions, Training Institutes, Training cum incubator centres (227/2022).
● For Retail and Wholesale trade maximum cover under CGTMSE is increased to Rs. 200.00
Lacs. (HO Cir 77/2023)
● CGMSE cover is not available for credit facilities extended to Medium Enterprises, JLG
&SHG.
● In respect of credit facilities extended to Micro & Small Enterprises (MSEs) wherever
collateral security and/or third-party guarantee is not obtained, CGTMSE coverage to be
taken.

Credit Guarantee Funds Scheme (CGS) for Micro and Small enterprises by Credit Guarantee
Fund Trust For Micro And Small Enterprises (CGTMSE) :(236/2020, 288/2020, 227/2022,
433/2023, 895/2023, 905/2023, 37/2024, 175/2024)
● Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme has been
put in place for providing guarantees in respect of credit facilities extended by Lending
Institutions to the borrowers classified as Micro and Small Enterprises (MSEs) as per MSMED
Act 2006.
● Eligible Credit Facilities: Credit facilities (both FB and/or NFB) extended by member lending
institutions to a single eligible borrower eligible borrower in the Micro and Small Enterprises
sector for credit facility Eligible Credit Facilities: The Trust shall cover credit facilities (Fund
based and/or Non-fund based) extended by Member Lending Institution(s) to a single eligible
borrower in the Micro and Small Enterprises sector for credit facility
(i) not exceeding ₹50 lakh (Regional Rural Banks/Financial Institutions);
(ii) not exceeding ₹200 lakh (Small Finance Banks (SFBs)) and Scheduled Urban Co-operative
Banks, State Co-operative Banks and District Central Co-operative Banks)
(iii) not exceeding ₹500 lakh (Scheduled Commercial Banks, select Financial Institutions), by
way of term loan and/or working capital facilities on or after entering into an agreement
with the Trust, without any collateral security and/or third party guarantees or such amount
as may be decided by the Trust from time to time. The cap of ₹500 lakh is set the
maximum guarantee coverage limit (irrespective of the unit activity including Trading) per
borrower based on the outstanding credit facilities and the borrowers can avail incremental
credit facilities (i.e. to the extent of reduction in the outstanding exposure limit) under
Credit Guarantee Scheme of CGTMSE, subject to maximum cap of ₹500 lakh.
● Guarantee coverage will be available only if following are complied as on material date
(date on which annual guarantee fee is payable)
i. Credit facility is standard and regular (not in SMA)
ii. The business or activity of borrower for which credit facility was granted has not

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 Canara Institute of Bank Management
ceased.
iii. The credit facility has not wholly or partly been utilized for adjustment of any debt
deemed bad or doubtful category, without obtaining prior consent from Trust.
● Not Eligible: Any Credit facility in respect of which risks are additionally covered under a
scheme operated / administered by Deposit Insurance and Credit Guarantee Corporation or
the RBI, to the extent they are so covered.
● Not Eligible: Any credit facility where risks are additionally covered by Government or by
any general insurer or any other person or association of persons carrying on the business
of insurance, guarantee or indemnity, to the extent they are so covered.
● Not Eligible: For loans upto Rs.10 lacs to Micro Enterprises, if the said credit facility has
been covered under MUDRA Guarantee Scheme through NCGTC Ltd.
● Not Eligible: For Loans which does not conform to, or is in any way inconsistent with, the
provisions of any law, or with any directives or instructions issued by the Central
Government or the RBI, which may, for the time being, in force.
● Not Eligible: For any loan granted to any borrower, who has availed loan under the
schemes mentioned in clause above, and where the lending institution has invoked the
guarantee provided by the Trust or under the schemes mentioned in clause above, but has
not repaid any portion of the amount due to any default on the part of the borrower in
respect of that credit facility.
● Any credit facility which has been sanctioned by the lending institution against
collateral security and / or third party guarantee other than under Hybrid Security
model MLIs can cover the unsecured part of the collateral security under CGTMSE upto
the extent of Rs.500 lacs.
● Any credit facility which has been sanctioned by the lending institution with the interest
rate above the maximum rate stipulated.

● Extent of Guarantee Coverage (HO Cir 433/2023):

The Trust shall provide Guarantee as under for guarantees approved on or after April 01,
2023 (excluding cases of enhancement in existing Working Capital accounts already
covered under the Guarantee scheme, where guarantee coverage norms applicable for
guarantee approvals done till 31.03.2023, shall apply):
Maximum extent of Guarantee where credit
Category facility is
(including Trading activity)
Upto Above ₹ 5 lakh & Above ₹50 lakh &
₹5 lakh up to ₹ 50 lakh up to ₹ 500 lakh
Micro Enterprises 85% 75%
MSEs located in
a. North East Region (incl. Sikkim) 75%
80%
b. UT of J&K
c. UT of Ladakh
Women entrepreneurs/ MSEs situated in
aspirational districts /ZED Certified MSEs /
85%
SC ST entrepreneurs & Person with Disability
entrepreneurs
All other eligible category of borrowers 75%
In case of renewal / enhancement of existing Working Capital accounts engaged in Trading
activity which is already covered under Guarantee Scheme, the revised extent of coverage
& fee shall be applicable.

The guarantee cover will commence from the guarantee start date and shall run through
the agreed tenure of the term credit in respect of term credit / composite credit. Where
working capital alone is extended to the eligible borrower, the guarantee cover shall be
for a period of 5 years or a block of 5 years, keeping maximum period of guarantee cover
of 10 years or for such period as may be specified by the trust in this behalf.

Note: The extent of guarantee coverage is increased by 5% over and above the applicable
guarantee coverage (i.e. for guarantee coverage of 75%, the coverage would be 80%, for
85%, it would be 90%) for MSEs located in Identified Credit Deficient Districts (ICDDs). The

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 केनरा बैंक प्रबंधन संस्थान
ICDDs would be as per the list issued by RBI from time to time. Presently, 184 districts
have been identified as credit deficient and the list along is furnished in Annexure I of HO
Cir IC/905/2023 for adherence. (IC/905/2023)

Modified AGF Structure – Standard Rate (SR) (HO Cir 433/2023)

Slab Standard Fee Rate after Discount Fee Rate with Risk Premium
Rate (SR)* (-10%) 15% 30% 50% 70%
0-10 lakh 0.37 0.33 0.43 0.48 0.56 0.63
Above 10-50 lakh 0.55 0.50 0.63 0.72 0.83 0.94
Above 50L -1 crore 0.60 0.54 0.69 0.78 0.90 1.02
Above 1-2 crore 1.20 1.08 1.38 1.56 1.80 2.04
Above 2-5 crore 1.35 1.22 1.55 1.76 2.03 2.30
*AGF will be charged on the guaranteed amount for the first year and on the outstanding
amount for the remaining tenure of the credit facility. The standard rate is across all activity
including trading activity.

 Charging of fee on outstanding basis:

i. In case of term loans, AGF would be calculated on outstanding amount as on 31st December
against each guarantee account and for working capital, AGF would be calculated on
present/expected outstanding as provided by MLI.
ii. Online module for updating the outstanding amount in respect of eligible guaranteed loan
accounts is made available between January 01- January 15 every year.
iii. For cases covered under Hybrid Security Model Guarantee fee will be charged on the
guaranteed amount for the first year and on the outstanding amount after netting off
collateral value and unsecured portion, if any, subsequently resulting in lower annual
guarantee fee charged to MSEs.

 Payment of AGF:
(i) Annual Guarantee fee (first time fee) shall be paid to the Trust by the institution availing of
the guarantee within 30 days from the date of first disbursement of credit facility (not
applicable for Working capital) or 30 days from the date of Demand Advice (CGDAN) of
guarantee fee whichever is later or such date as specified by the Trust.
(ii) The Annual Guarantee fee (subsequent to first time fee) at specified rate (as specified
above) on pro-rata basis for the first and last year and in full for the intervening years would be
generated by 1st week of February every year. AGF so demanded would be paid by the MLIs on
or before 30th March each year or any other specified date by CGTMSE, of every year.

 Invocation of guarantee :
NPA marking: As and when accounts covered under CGTMSE becomes NPA, MLI has to mark the
date on which the account has been classified NPA in a particular calendar quarter, by end of
subsequent quarter in the CGTMSE portal, however for ensuring timely NPA marking of all
accounts bank has issued internal guideline to mark all NPA accounts within 15th of subsequent
month to the month in which the account has slipped to NPA.
Other Conditions: The lending institution may invoke the guarantee in respect of credit facility
within a maximum period of 3 years from the NPA date or lock-in period whichever is later,
(however for ensuring timely claim preferment of all accounts, bank has issued internal
guideline (Vide HO Cir.-433/2019) to prefer claim for eligible NPA accounts under CGTMSE
within 180 days of NPA date or expiry of lock-in period whichever is later), if the NPA date is on
or after 15/03/2018.

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 Canara Institute of Bank Management
The lock-in period of 18 months is applicable from either the date of last disbursement of the
loan to the borrower or the guarantee start date in respect of credit facility to the borrower,
whichever is later.
Note: CGTMSE has modified the guidelines with respect to lock-in period and has reduced the
lock-in period from 18 months to 9 months in respect of loans having repayment period upto 36
months and loan amount upto Rs.10 lakhs. (IC/895/2023 dated 22/12/2023)

 Increase in the threshold for waiver of legal action :

 In case of claims lodged on or after March 14, 2018, initiation of legal proceedings as a pre-
condition for invoking of guarantees shall be waived for credit facilities having aggregate
outstanding up to ₹50,000/-.
 In respect of claims lodged on or after October 08, 2021, the threshold for waiver of legal
action has been increased to ₹1,00,000/-
 In respect of claims lodged on or after January 02, 2023, the threshold for waiver of legal
action has been increased to ₹5,00,000/-
 In case of claims lodged on or after 01.04.2023, initiation of legal proceedings as a
precondition for invoking of guarantees shall be waived for credit facilities having aggregate
outstanding upto Rs. 10.00 Lacs. AGM – RO – CAC and above authorities are delegated with
the powers to permit legal action waiver for preferment of claim to CGTMSE.

 Options adopted for claim settlement in respect of legal waiver accounts :

Presently the claims are settled by CGTMSE in 2 installments i.e 75% of eligibility amount as
first instalment and balance 25% of eligibility amount as second instalment after conclusion of
recovery proceedings or when decree gets time barred.

So CGTMSE has offered 2 options for cases where waiver of legal action is permitted by
sanctioning authority. The options are :
Option 1 : Single installment of claim settlement with reduced extent of guarantee by 15% e.g.
in respect of extent of coverage is 75% then max claim will be settled by CGTMSE upto 60%.
This option is not opted by the bank.
Option 2: Existing claim settlement process n two instalments i.e. 75% of eligible amount as
first instalment and balance 25% as second instalment. For legal waiver accounts, second
instalment of claim would be settled after 3 years from the date of settlement of 1st claim or
OTS whichever is earlier. This option is chosen by bank.

 Revival of closed accounts:

If the guaranteed account gets closed due to non-payment of AGF, the guarantee under the
scheme shall not be available and request for revival of accounts/ delayed payment will be
considered subject to the following conditions.
i. Request for revival of account will have to be submitted within next financial year.
ii. Account should be standard and regular as on date of submission of request for revival and
the Trust reserves the right to reject the claim if the account turns NPA within 180 days from
the date of revival of account.
iii. Any fee due by the MLI (current and previous FY) will be demanded along with penal interest
(@ 4% over Bank Rate, per annum) and additional risk premium @15% of standard rate or at
such rates specified by the Trust from time to time, for the period of delay, as per guidelines
of CGTMSE.

 Other guidelines of the Bank to be adhered to while handling MSME loans and advances
under CGTMSE coverage:
1. Obtention of CGTMSE cover may be waived by the respective sanctioning authority subject to
the following:
A. In case of New Borrowers (prospective):
i. The borrower provides primary security or primary and collateral security put together in
the form of vacant land, land and building, Approved Securities to the minimum extent of
125% of the sanctioned limit.

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 केनरा बैंक प्रबंधन संस्थान
ii. Vacant land can be accepted as collateral security to the maximum extent of 25% of the
stipulated security comfort (in terms of value), provided it has clear demarcation and
boundaries with approach roads which is approved by any competent authority/statutory
body approved by government and is SARFAESI compliant.
iii. Approved securities may be in the form of our Bank Deposits, Assignable Life Insurance
policies, National Savings Certificates (NSC), Kisan Vikas Patra (KVP), Equity
shares/debentures /bonds of limited companies approved by the Bank, Bank approved
units of UTI and other mutual funds, central/ state government securities, debt securities,
sovereign gold bonds and any other form of securities approved by the Bank from time to
time
iv. The borrower shall be rated as low, normal or moderate risk based on the latest balance
sheet available.
v. All the accounts of the borrower shall be under standard category.
vi. The above guidelines shall be made applicable only to New Borrowers (prospective).
B. In case of Existing Borrower:
i. The borrower provides primary security or primary and collateral security put together in
the form of land and building to the extent of 75% of the sanctioned limit, in addition to
the security of assets created out of our finance (exposure, if more than one limits are
sanctioned).
ii. Proposals internally rated upto Moderate Risk only may be considered for financing under
CGTMSE (either as exclusive coverage or under Hybrid security model of CGTMSE).
iii. All the accounts of the borrower shall be under standard category. iv. Sanction to be
reviewed and confirmed by the Next Higher Authority at RO/CO in terms of the extant
Credit Review and Monitoring Policy of the Bank.
2. Obtention of “Udyam Registration Number (URN)” has been made mandatory for seeking
guarantee coverage of all loans and advances considered under Credit Guarantee Scheme of
CGTMSE, in respect of all the guarantee applications lodged on or after January 16, 2023.
However, loans extended specifically under PM-SVANidhi scheme and DAF-SDSM Credit
Guarantee Scheme for Subordinate Debt (CGSSD) under credit guarantee coverage of CGTMSE,
is exempted from the aforementioned mandatory stipulation of obtention and updation of
URC details of the beneficiaries in CGTMSE portal. Branches/Offices shall also continue to
obtain and update ‘Udyam Registration Certificate (URC)’ details in CBS (under CIM22
option)/ LAPS for all credit facilities considered to MSMEs (existing and proposed accounts).
3. MSME Units who approach our Bank for the first time seeking credit facility requirement of
above Rs.10 Lakhs which are eligible to be covered under CGTMSE, are to be duly verified
(evaluated) through Due Diligence Services of the empanelled Credit Rating Agencies.
4. Applicable CMR guidelines shall be reckoned while sanctioning loans/advances under Credit
Guarantee coverage of CGTMSE.
5. Revised guidelines under Delegation of Powers applicable to sanction of Branch power
accounts:
CGTMSE Credit Exposure under CGTMSE Availability of Delegation of Powers*
Coverage coverage (where proposed Collateral/ Approved
exposure is considered under Securities
Non-schematic MSME lending)
Exclusively >10 lakhs and Upto Rs. 500 Nil *Next Higher Authority of
covered lakhs the Authority under whose
under powers the proposal
CGTMSE would otherwise fall.
Covered >10 lakhs and Upto Rs. 500 <50% of the credit *Next Higher Authority of
under lakhs exposure the Authority under whose
Hybrid powers the proposal
/Partial would otherwise fall.
Collateral >10 lakhs and Upto Rs. 500 50% or more of the *Respective/ Delegated
Security lakhs credit exposure Sanctioning Authority
Model of >Rs. 500 lakhs Irrespective of the
CGTMSE %age of Collateral/
Approved Securities

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 Canara Institute of Bank Management
available

Special provision for Informal Micro Enterprises (IMEs) under Credit Guarantee Scheme of
CGTMSE (IC/101/2024)
Informal Micro Enterprises (IMEs) are those enterprises which are exempted from GST regime. In
order to facilitate unsecured affordable credit flow to IMEs for their composite requirement,
CGTMSE has introduced this scheme. The eligibility and features/benefits of scheme are as
under:
 The extent of guarantee coverage will be 85%.
 The guarantee coverage will be available where the credit facility is upto Rs.20 lakhs.
 The standard rate of annual guarantee fee for Banks are as under:
Credit facility Standard rate of annual guarantee fee
Upto Rs.10 lakhs 0.37%
Above Rs.10 lakhs & upto Rs.20 lakhs 0.45%
 Creation of primary security is not a pre-requisite for obtaining guarantee.
 For invocation of guarantee, initiation of legal action is not required.
 Guarantee Cover code
MIS Class Code Description
Guarantee- cover 100000139 – SPECIAL PROVISION FOR INFORMAL MICRO ENTERPRISES (IMEs)
 The special provision shall be effective for all guarantees approved on or after 14.02.2024.

Introduction of “Credit Guarantee Scheme for Start-ups (CGSS)”administered by M/s NCGTC

Ltd., to provide guarantee coverage against finance extended by our Bank to eligible start-ups
recognized by DPIIT.- CIR IC/76/2023, IC/532/2024
Salient Feature:
a) The CGSS scheme is managed and operated by M/s NCGTC Limited.
b) Loan/Debt facilities (in the form of Term Loan and/or Working Capital facilities, i.e. fund
based/non-fund based) sanctioned to an eligible Start-Up on or after the date of issuance of this
HO Circular, are eligible for coverage under the scheme.
c) The broad objective of CGSS is to provide guarantee upto a specified limit against credit
instruments extended by Member Institutions (MIs) to finance eligible Start-ups. This scheme
would help provide the much needed collateral free debt funding to Start-ups.
d) The eligibility criteria for an entity to borrow under the Credit Guarantee Scheme for Start-ups
shall be as follows, wherein an entity should be:
i. Startup as recognized by DPIIT as per Gazette Notifications issued from time to time, and
ii. Start-ups that have reached stage of stable revenue stream, as assessed from audited monthly
statements over a 12-month period, amenable to debt financing (for this, a certificate from
tax/GST auditor to be obtained evidencing the same, in the format furnished in Annexure-IV),
iii. The Start-up should not have defaulted to any lending/investing institution and not classified
as Non-Performing Asset as per RBI guidelines, and
iv. Start-up whose eligibility is certified as per the extant guidelines on financing of Start-ups
by our Bank.

Additional Guidelines for sanctioning credit facilities to New customers under Sectors identified
as Stressed Sectors by Bank (IC/587/2024):
For sectors identified as stressed sectors by the Bank, credit facilities to new customers (including
takeover proposals of all kinds) shall be sanctioned only with: a. 100% Collateral coverage in the
form of residential/commercial property/approved securities. or b. Facilities Fully covered by
Central and/or State Govt. /CGTMSE/CGFMU Guarantee. CGM-HO-CAC and above authorities may
permit relaxation in the above guidelines for accounts up-to their delegated powers on a case to
case basis. The guidelines shall not be made applicable for area specific schemes. In case of
existing customers, enhancement/additional limits shall be permitted without any dilution in
collateral coverage ratio. * For the limited purpose of application of these guidelines, customers
not having any existing credit facilities with our Bank shall be treated as new customers.

Modification in Guidelines on Adhoc Credit Facility (IC/587/2024):

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Documentation shall be obtained before the release of ADHOC Credit facility irrespective of the
tenor.

Pradhan Mantri MUDRA Yojana (PMMY)

● PMMY (Pradhan mantra Mudra Yojana) was launched for extending finance to micro
enterprises in manufacturing, trading and service sector
● Loans upto Rs.10lakh sanctioned to the above sectors and overdrafts upto Rs. 10,000.00
granted in PMJDY accounts are to be classified as MUDRA loans.
● Micro Units Development and Refinance Agency Ltd (MUDRA) was launched by the Hon’ble
Prime Minister on April 8, 2015 as a new financial entity for developing and refinancing last
mile financial intermediaries like Banks, NBFCs,
● MFIs etc.;who are in the business of lending to smaller of the micro enterprises
● The Pradhan Mantri MUDRA Yojana was launched to “fund the unfunded” by bringing such
enterprises to the formal financial system and extending affordable credit to them.
● The loans given to nonfarm enterprises under micro enterprises segment up to Rs.10lakh
for income generation activities with effect from 8th April 2015 shall be classified as
MUDRA loans under the Pradhan Mantri MUDRA Yojana (PMMY)and branded accordingly.
● In addition to the above, the overdraft amount of Rs.10,000.00 sanctioned in PMJDY
Savings Bank accounts shall also be classified as MUDRA loans under PMMY.
● Depending upon the loan quantum, the MUDRA loans are to be further categorized into
three groups as under:
Slab Category Category
Loans upto Rs.50000.00 extended to Micro Enterprises SHISHU
Loans from Rs.50001 to Rs.500000.00 KISHORE
LoansfromRs.500001toRs.1000000.00 TARUN

Stand Up India Scheme-CGSSI (144/2016, 314/2016, 208/2017, 241/2020)

● Loan amount Rs.10.00 Lakhs and upto Rs.100 Lakhs inclusive of working capital extended
to a single eligible borrower without obtaining any collateral or third party guarantee.
● Eligible borrower – SC/ST and Women Entrepreneurs, above 18 years of age, setting up
green field enterprises in non-farm sector. In case of non-individual enterprises, minimum
51% of the shareholding and controlling stake should be held by either SC/ST and/or
Women Entrepreneur/s. Green Field Project signifies, the first time venture of the
borrower in the Manufacturing or Services or Trading Sector.
● Extent of Security Coverage: The fund shall provide guarantee cover to the extent of
80% of the amount in default for credit facility above Rs.10 Lakhs and upto Rs.50 Lakhs,
subject to a maximum of Rs.40 Lakhs. For credit facility above Rs.50 lakhs and upto
Rs.100 Lakhs – Rs. 40 Lakhs plus 50% of the balance amount in default above Rs.50
Lakhs subject to overall ceiling of Rs.65 Lakhs.

Credit Guarantee Scheme for Subordinate Debt (CGSSD) 620/2022

The Scheme is named as ‘Distressed Assets Fund – Subordinate Debt for Stressed MSMEs’ and
the credit product for which guarantee would be provided under the Scheme is named as
‘Credit Guarantee Scheme for Subordinate Debt (CGSSD)’.
Eligibility: The scheme is applicable for those MSMEs whose accounts have been standard as on
01.01.2016 and have been in regular operations, either as standard accounts or as NPA accounts
during the financial year 2016-17, 2017-18, 2018-19 and 2019-20 even if they did not remain in
regular operation in FY 2020-21 & FY 2021-22 provided such accounts are viable as per Bank’s
assessment and expected to come out of financial stress by availing this facility.

Special Credit Linked Capital Subsidy Scheme (SCLCSS) 632/2022

This scheme is applicable to the eligible SC/ST Micro and Small Enterprises where term loan has
been sanctioned by the bank on or after the date of notification of the scheme. There is a subsidy
cap of maximum Rs. 25.00 lakh or @ 25% on the absolute value of term loan sanctioned or cost of
plant & machinery and equipment whichever is less. The implementing agency is National Small
Industries Corporation (NSIC), a CPSE under the Ministry of MSME, Govt. of India.

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 Canara Institute of Bank Management
SCLCSS subsidy shall not be applicable for trading activities. NIC codes related to Trading activities
as mentioned below are not eligible for subsidy under the SCLCSS:
45 - Wholesale and retail trade and repair of motor vehicle and motorcycles
46 - Wholesale trade except of motor vehicles and motor cycles
47 - Retail Trade except of Motor Vehicles and motor cycles.
Duration of the Scheme: The Scheme shall remain valid till 31.03.2026 subject to availability of
funds which means that subsidy to PLIs can be disbursed up to 31.03.2026.
The Scheme is valid for MSME units which are stressed, viz. SMA-2 and NPA accounts as on
30.04.2020 who are eligible for restructuring as per RBI guidelines on the books of the Bank.
Personal loan is to be provided to the promoters of the MSME units. The MSME itself may be
Proprietorship, Partnership, Private Limited Company or registered company etc. (in case of
partnership, private limited company etc., only one personal loan account shall be opened in the
name of promoters, subject to maximum quantum of finance).
Quantum: Under this arrangement, promoter(s) of the MSME unit is given credit equal to 50 % of
his/her stake (equity plus debt) or Rs 75 lakh whichever is lower. This personal loan quantum must
not exceed the original debt of the beneficiary.
Duration: The Scheme would be applicable to all credit facilities sanctioned under CGSSD for a
maximum period of 10 years from the guarantee availment date or March 31, 2023 whichever is
earlier, or till an amount of Rs 20,000 crore of guarantee amount is approved.
Margin: Promoter is required to bring in 10% of the sub-debt amount as collateral, upfront.
Guarantee Fee:1.5% per annum on the guaranteed amount on outstanding basis.
Extent of Guarantee coverage:90%, guarantee cover would be uncapped, unconditional and
irrevocable credit guarantee.

Credit Guarantee Fund for Micro Units (CGFMU) (402/2023)

● Guarantee provided by : NCGTC National Credit Guarantee Trustee Company Limited

● Eligible Loans:
1. Pradhan Mantri Mudra Yojana- Shishu (ROI should not exceed 12%), Kishore and
Tarun
2. OD up to Rs. 10,000 in PMJDY accounts
3. Collateral free loans to SHG up to Rs.20Lac, including under NRLM and NULM.
4. Loans to allied agricultural activities up to 10 lac.
 Guarantee fee on outstanding balance:
1. Standard Rate 1% + risk Premium on NPA level and Claim Payout ratio.
2. Fee payable within 16 days from beginning of the year.
3. Standard Rate is 0.5% in 124 aspirational districts.
4. Standard rate for SHG in 1st year 0.25% and in subsequent years 0.50%
 Guarantee Cover:
1. Period of cover is base year + 3years and additional 3 years
2. First 3 % amount of default is bourn by the MLI
3. Out of remaining, 75% cover on amount of default
4. For SHG cover is 75% of amount in default (no first loss)
5. Max cap : 15% of crystallized portfolio.
Amount of default means NPA for 6 months, claim period: 60 days
● NCGTC has developed an online portal for seamless guarantee transaction. The portal is
called System for Undertaking, Re-assurance & Guarantee Endorsement (SURGE).

“PSB Loans in 59 Minutes” to MSME Sectors in Digital Platform –“Contactless Loans”: (HO
CIR 480/2018, 538/2018, 567/2018, 73/2019, 449/2019, 67/2020, 232/2020, 800/2020,
579/2021)
“PSB loans in 59 minutes” is a Digital Platform which enables an MSME Entrepreneur to apply
and Get “In Principle Sanction” for MSME loans from Rs.2 Lacs to Rs.500 Lacs in 59 minutes.

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Our Bank entered into MoU with M/S Online PSB Loans Limited (Formerly known as M/S Capita
World Platform Private Limited) which is a FinTech Company acquired by SIDBI led Consortium
of Banks) as user bank on the digital platform.
It is a Digital Platform put into operation to apply and get “in- Principle Sanction” for MSME,
Retail Loans (Housing, Personal and Vehicle) within 59 minutes without any physical contact
with Bank Branch.
 Borrower Journey through Market Place URL: [Link]
 Borrower Journey through Canara Bank specific URL:
[Link]
 Lenders Journey through URL : [Link]

Salient features:
 Maximum Loan Quantum: Customers/clients having GST and/or ITR shall apply for Fresh
Working Capital/ Working Capital Renewal with/without enhancement, Term Loans.
The Minimum and Maximum loan quantum for providing In-Principle Approvals are
Minimum Loan Quantum Above Rs.2 Lakhs
Maximum Loan Quantum Rs. 500 Lakhs
Eligible Loan Proposals:
● Fresh Term Loan, Working Capital Limits and Renewal of Working Capital Limits
with/without enhancement. The customers/clients who have registered in GST and have
filed ITRs 3/4/4S/5/6 are eligible to apply through this digital platform.
● MUDRA loans (Fresh/Renewal) can also be applied through this platform with/without
GST/ITR.
● Only fund based limits are being processed under the subject platform.
 Collection of Charges: Applicable Processing Charges, Upfront fee, charges for the Credit
Information Reports drawn through the platform & other charges applicable to MSME segment
are to be collected for the proposals flow through this platform (Market place URL as well as
Bank Specific URL also). Bank has revised charges for MSME loan customers for usage of online
platform PSB Loan in 59 minutes. (579/2021)
For Marketplace portal – for MSME Loans 3900/- and for Mudra loans 1300/- for online
proposals and for offline proposals charges are 1950/- & 975/- respectively.
For bank specific URL - Loan upto Rs. 1 Cr - For Fresh MSME Loan - 3550/-, Existing limit with
enhancement - 1950/-, existing limit without enhancement - 650/-
For all types of MSME Loans above Rs. 1 crore – charges are 3900/-
For Mudra Loans – Fresh loan - 1300/-, Renewal with enhancement - 650/-, Only renewals -
300/-
All these charges are inclusive of GST.

Tie-Up with Fin-techs:

(To be read in conjunction with HO Circulars 622/2020 dated 21.08.2020, 630/2021dated
22.09.2021 and all other HO circulars issued in this regard from time to time)
Bank has entered into tie up arrangements with following Fin Tech Companies, to utilize their
services for identifying uncovered/under covered Micro and Small Enterprises (MSE)
beneficiaries, sourcing, post disbursement monitoring, follow up for recovery, with end to end
solution on commission basis.
a. M/s. Atyati Technologies Private Limited: Head quartered in Bangalore, M/s Atyati
Technologies private limited, was incorporated in 2006 with the intent of creating a
technology platform that would enable holistic inclusion. With a mission to enable
outreach, Atyati addresses the needs of customers in diverse sectors. (Tie-up arrangement
with M/s. Atyati Technologies Private Limited terminated as per HO Cir IC/99/2023 dated
14.06.2023)
b. M/s. Basix Sub-K i Transactions Limited: Incorporated in 2010 as a micro-payments and
digital financial services entity with an aim to promote inclusive growth, the Fin-Tech is

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 Canara Institute of Bank Management
promoted by Basix group, well known for pioneering work in financial inclusion across the
country and advisory services across the Globe.
Under the arrangement, the Fin Tech companies will:
i. Source eligible MSE proposals up to and inclusive of Rs.10, 00,000/-(Ten lakhs only), in the
service areas of the designated Circles/Branches.
ii. Obtain application and other required documents.
iii. Conduct KYC, Due Diligence and credit verification check

“MSME SUGAM” is an exclusive MSME product put in place by our Bank under tie-up with the
afore said fin-techs, which envisages credit flow in the form of self-liquidating WCTL and Term
Loans to MSME for financing Working Capital and Asset creation requirements which is to be
repaid as Equated Monthly Instalments (EMIs), extended only through Origination tie-ups at
select Circles/Branches communicated by MSME Wing, HO from time to time.
Product Codes/Scheme Codes to be utilized in CBS for opening of loans under “MSME Sugam”
scheme:
Product Code: 753- For loans under Fin-tech arrangement
Scheme Code:
1). 104700-MSME Sugam (WCTL) under tie up arrangement with M/s. Atyati
2). 104800-MSME Sugam (TL) under tie up arrangement with M/s. Atyati
3). 104900-MSME Sugam (WCTL) under tie up arrangement with M/s. Basix Sub-K
4). 105100-MSME Sugam (TL) under tie up arrangement with M/s. Basix Sub-K

Tie-Up arrangement for loan origination up to Rs.10 Lakhs with Fintech Companies –
Recovering the overdue from irregular accounts and renewal of expired limits. CIR-99/2023
DTD 14/06/2023
 Partnering with Fin techs under Co-Origination Scheme of RBI and Standard Operating Procedure
(SOP) for asset quality maintenance for Loans Originated through Tie-up arrangement with Fin
techs.
 Termination of services of M/s Atyati Technologies Pvt Ltd under Tie-up arrangement for
sourcing MSME loans up to Rs.10 Lakhs.
 Recovery of overdue from irregular accounts and renewal of expired limits sourced under Tie-up
arrangement.
 The details of loans opened under Tie-up arrangements are available in Business Intelligence
(BI) report 251035.

ZED (Zero Defect & Zero Effect): Benefits of the Scheme

● The refurbished ZED Certification envisages promotion of Zero Defect Zero Effect (ZED)
practices amongst MSMEs so as to:
 Encourage and enable MSMEs for manufacturing of quality products using latest
technology, tools & to constantly upgrade their processes for achievement of high
quality and high productivity with the least effect on the environment.
 Develop an Ecosystem for ZED Manufacturing in MSMEs, for enhancing
competitiveness and enabling exports.
 Promote adoption of ZED practices and recognizing the efforts of successful MSMEs
 Encourage MSMEs to achieve higher ZED Certification levels through graded incentives
 Increase public awareness on demanding Zero Defect and Zero Effect products
through the MSME Sustainable (ZED) Certification
 Identify areas to improve upon, thereby assisting the Government in policy decisions
and investment prioritization.
● Presently, all MSMEs engaged in manufacturing sector and complying with the latest
(revised) definition of MSME, conforming to the latest amendment of MSMED Act 2006 and
registered with the UDYAM registration portal (of the Mo MSME) are eligible to apply for
ZED certification and the underlying benefits/incentives in the first phase of its
implementation. However, ZED Certification has not been made mandatory criterion for
MSMEs.

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● MSME Sustainable (ZED) Certification can be attained by eligible MSMEs in THREE Levels
after registering and taking the ZED Pledge:
a). Certification Level 1: BRONZE
b). Certification Level 2: SILVER
c). Certification Level 3: GOLD
● MSMEs will be assessed (desktop verification, remote assessment, onsite assessment, as
applicable) and awarded relevant Certification Level for which they have applied for after
fulfilling the requirements of that Level.
● The assessment process has been created by QCI (Quality Council of India) and the
assessment allocation criteria has been developed by QCI and furnished in the official
website of ZED Certification scheme.
● The financial support, incentives, benefits and other provisions contained in the scheme as
per the ZED guidelines published by the Mo MSME, will be valid till 31.03.2026.
● Incorporating ZED Rating Parameter in MSME Loan applications, NF998:
As per RBI’s requirement, Loan application for MSMEs shall contain the parameter on ZED
Rating. As such, the details regarding of ZED gradation to be incorporated as per the
guidelines.

“Jansamarth Portal” (also known as National Portal):

691/2021,103/2022,458/2022,583/2022
Jansamarth Portal (also known as National Portal), a unique portal has been conceptualized by
the Department of Financial Services (DFS), Ministry of Finance, Government of India with the
twin objectives:
i. Increasing the reach of Public in accessing Credit Linked Govt Schemes by connecting
stakeholders like beneficiaries, financial institutions, Central/State Government Agencies,
& Nodal Agencies on a common platform.
ii. Streamlining the delivery process by creating a unique platform having integrated
architecture vis a vis agencies like UIDAI, CBDT, Credit Bureau, etc. on the one hand and
financial institutions on the other.
In this background, the following Credit linked Govt. MSME schemes have been made eligible
for routing through the Jansamarth Portal:
• Pradhan Mantri Mudra Yojana(PMMY)
• Weavers Mudra
• Stand Up India
• National Urban Livelihood Mission(NULM)

Detailed SOP on procedure for sanctioning of the aforesaid MSME loans through the“
Jansamarth portal” is communicated for implementation by our Branches/Offices vide HO
Circular IC/103/2022 dated 25.02.2022 and further revisions in this regard from time to time.

Bill discounting facility extended to Suppliers/Contractors , for supplying materials/services to

M/s TANGEDCO, M/s TANTRANSCO and M/s TTPS(277/2021, 83/2022, 23/2023, 748/2023)
Bill Discounting facility extended upto 31/12/2023 to following:
a) All Circles PAN India for financing Suppliers/Contractors, for supplying materials/services to M/S
Tamil Nadu Generation and Distribution Corporation (TANGEDCO) and M/S Tamil Nadu Transmission
Corporation Ltd. (TANTRANSCO), subsidiary of TNEB Ltd. (Tamil Nadu Electricity Board).
b) Madurai Circle for financing Suppliers/Contractors, for supplying materials/services to M/s.
Tuticorin Thermal Power Station (TTPS)”

‘Bill Discounting Scheme(BDS) to finance Contractors against their bills pending for payment
with Government of Kerala (GOK)’, supported by Electronic Promissory Note issued by GOK–
Modification in Guidelines (IC/590/2024):
 Tenor of the loan under the subject area specific scheme is increased to maximum of ‘6 months’

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 Canara Institute of Bank Management
from the date of discount.
 50% Concession in applicable processing charges for each transaction with a maximum of
Rs.7500/- is permitted.
 Reduction in rate of interest of internally moderate risk rated accounts is permitted.
 Guidelines on Credit audit, Stock audit and Pre-release audit is introduced.
 Guidelines with respect to Variation/Exception in scheme guidelines is introduced.
 Extension of the subject scheme to ‘Kozhikode’ circle (DP:7593).

Review & Revision of existing Benchmarks for MSME Borrowers under Various Industries
(IC/586/2024):

Parameters Corporate MSME

Fixed Assets Coverage No Change Not less than 1.25. In exceptional cases sanctioning
Ratio authorities not less than DGM-CO-CAC can accept FACR
up-to 1.20.
Internal rate of return No Change At least 4% above estimated weighted average cost of
(post tax) (Applicable to funds. In exceptional cases Sanctioning Authorities not
project cost of 25.00 less than DGM-CO-CAC can accept IRR up-to 3% over and
crore & above) above the estimated weighted average cost of funds.

Modification of existing guidelines under ECLGS 3.0 (Extension) component of the ‘Emergency
Credit Line Guarantee Scheme (ECLGS)’, in line with the updated ECLGS guidelines (/Circular No
: IC/02/2023 dated - 02/01/2023) Modifications under the maximum eligible loan quantum to the
airline companies under the aviation sector has been enhanced to 100% of their total credit
outstanding (both fund based and non-fund based outstanding, net of ECLGS support already
received, if any) as on 29.02.2020 or 31.03.2021 or 31.01.2022, whichever is higher, subject to a
cap of Rs.1,500 Crore per borrower (of which Rs.500 crore to be allowed only subject to
proportionate equity contribution by the promoters/owners) and the borrower meeting all the
other eligibility criteria.

“Weaver’s MUDRA Scheme”- CIR IC/317/2023 & IC/656/2023

Quantum: Individual Handloom Weaver/ Handloom entrepreneur/SHG/JLG – Max Rs. 2.00 Lakhs
Handloom Organization/ Handloom producer companies/ SPV or consortia promoted by
Handloom weavers in mega cluster/ Handloom parks, etc. – Max Rs. 10.00 Lakhs.
Margin: Minimum 20% for WC/TL facilities.
Margin Money Assistance available @20%.
Tenability: Working Capital: 1 year subject to annual renewal.
Term Loan: Max 36 months including repayment holiday of 3 months max.
Interest Subvention: Concessional interest rate of 6% for a period of 3 years for eligible handloom
organizations only subject to interest subvention cap only upto 7% by the GoI.
Security: Primary Security – Assets created out of Bank Finance.
Collateral Security –Invariably be covered under CGFMU/CGTMSE, as applicable.
Guarantee fee will be borne by Government for 3 years.
Scheme Code & Product Code: Scheme Code: 90800,
Product Code WC: 275 OD/OCC, TL: 769 Manufacturing

Delegation of Power for takeover of MSME Loan (upto Rs. 100.00 cr)- IC/539/2024

Risk rating of MSME

Sanctioning authority for take over
loans
without
with enhancement
enhancement

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In case of ELBs headed by AGM:

In case of ELBs Headed With enhancement upto 25% from the
existing level:
by AGM, takeover
Accounts Internally rated MSME Sulabh Head CAC and above authorities
without enhancement
upto Normal Risk (up to upto their delegated powers.
may be permitted by
CNRVI) and externally With enhancement above 25% from the
rated Upto BBB or AGM heading ELBs
existing level:
Equivalent upto
Next Higher Authority/CAC under whose
their delegated
powers the delegation for the takeover with
powers.
enhancement falls. Such delegation starts from
CACs at RO.
without
In all other cases: with enhancement
enhancement
With enhancement upto 25% from the
existing level:
Internally rated up to MSME Sulabh Head CAC and above authorities
MSME Sulabh Head
Normal Risk(up to CNR upto their delegated powers.
CAC
VI) With enhancement above 25% from the
and above authorities
and externally rated Up existing level:
upto their delegated
to BBB or Equivalent Next Higher Authority/CAC under whose
powers.
powers the delegation for the takeover with
enhancement falls. Such delegation starts from
CACs at RO.
without
with enhancement
enhancement
Internally rated upto With enhancement upto 25% from the
Normal Risk (upto CNR existing
VI) and externally rated level:
BB Circle Head (CGM/GM/ DGM-CO-CAC) and
RO Head CAC (DGM /
above
AGM) and above
Authorities upto their delegated powers.
authorities up to their
With enhancement above 25% from the
Internally rated as delegated powers.
existing level:
Moderate Risk (CNR VII
to CNR VIII) and Next Higher Authority/CAC under whose
externally rated upto BB. powers the delegation for the takeover with
enhancement falls. Such delegation starts from
CGM/GM-HO-CAC.
Externally rated B &
No powers
below or High Risk (CNR
IX to XI)
Internally rated up to
Moderate Risk (up to
CNR
VIII) and Externally ED-CAC & above authorities up to their delegated
unrated accounts powers.
(accounts which are
required to be rated
externally as per extant
guidelines)

Delegation of power for Takeover of MSME loans (above Rs. 100 Crore): (IC/539/2024)
Risk rating of MSME loans Sanctioning authority for take over
without enhancement with enhancement
Internally rated up to Moderate RO Head (DGM/AGM) CAC and Circle Head(CGM/GM/DGM-

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 Canara Institute of Bank Management
Risk and externally rated Up to above authorities upto their CO-CAC)and above
BBB or Equivalent delegated powers authorities upto their
delegated powers
Internally rated up to Moderate Circle Head (CGM/GM/DGM- CGM/GM-HO-CAC and
Risk and Externally rated BB CO-CAC) and above above authorities upto
authorities upto their their delegated powers
delegated powers
Externally rated B & below or No powers
High Risk
Internally rated up to Moderate ED-CAC & above authorities up to their delegated powers.
Risk and Externally unrated
accounts (accounts which are
required to be rated externally
as per extant guidelines)

Modification of Risk rating of Small Value Model and Manual Model-557/2023

 Modifications shall be applicable with effect from 10.07.2023.
 Revised internal rating parameters are configured in LAPS and branches are advised to
generate/ evaluate risk rating of the borrower through LAPS Package only.
Following modifications are made in Small and Manual Model:
 Facility Risk Category has been added in the Small Value Model and Manual Model Modules.
Facility Risk category brings all the facility risk related parameters which are already
present in the model under different risk categories.
 The description of the last Grade (SVM8 /MM8) as default grade to be renamed as “Highly
Likely to Default” and introduce a new grade - SVMD and MM-D which is assigned if the
account has become NPA as on rating date.
 Enhancements in number of scorecards under the Small Value Model and Manual Model is as
follows:

Existing Small Value Revised Small Value Model

Model
1. Individuals 1. Individuals- New to Business
2. Non Individuals 2. Individuals- New to Bank
3. Individuals-Existing Borrower
4. Non-Individuals-New to Business
5. Non Individuals- New to Bank
6. Non-Individuals-Existing Borrowers
Existing Manual Model Revised Manual Model
1. New Borrower 1. New to Business
2. Other Borrower 2. New to Bank
3. Existing Borrower

CANARA INTERNAL RATING MODEL [CIRM]

Introduction of Canara Internal Rating Model for exposure above Rs.2.00 cr in place of RAM
Modelw.e.f.01.04.2020.
CIRM has given internal rating & grades for the following type of borrowers’ viz., Manufacturing
Sector, Traders, NBFC’s except Public Financial Institutes &banks, PFI &Bank, Borrowers engaged
in stock/share broking/share trading, Real-estate developers, Service Sector, Infrastructure
projects for Road, Infrastructure projects for power, Infrastructure projects for port & Greenfield
Project apart from road, power & port. CIRM will have 12 rating grades including Default grade.
Other guidelines for risk rating under CIRM with exposure above Rs 2.00 Crores:
● Audited balance Sheet shall be the basis for CIRM Rating.
● If (1) projected sales from expansion/diversification is more than double the existing sales (2)

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 केनरा बैंक प्रबंधन संस्थान
proposed exposure is more than 150% of existing exposure, in such cases not only project
appraisal but al so CIRM rating also to be done by PAG/PAC.
● In case of new business where no audited balance sheet but revenue is available, CIRM rating
shall be done on the basis of PAG/PAC report.
● Where PAG/PAC report is not available, CIRM rating shall be based on Projected Balance
Sheet/Projected Report.
● Where CAG Audit is mandatory (Govt. Sector), CIRM rating can be conducted basis of
Provisional Balance Sheet duly signed by authorised signatory.
The Rate of Interest, Delegation of Powers for credit sanctions w.e.f. 01.04.2020 is to be based
on the CIRM model.

CIRM HYBRID MODEL – Modifications (HO cir 81/2023):

In the present CIRM model, the internal risk rating is assessed based on the factors/inputs which
are covered under Industry Risk, Business Risk, Financial Risk & Management Risk. Weightage for
Immovable Prime and / or immovable collateral are outside the purview of CIRM Model.
In view of the above, internal risk rating model – CIRM Hybrid Model for borrowers having exposure
above Rs. 2 Crore to Rs. 5 Crore was introduced, wherein borrower providing sufficient Immovable
Prime and / or immovable collateral would be benefited. Further, all the risk parameters under
this model are objective in nature which is not influenced judgementally by the rating user.
As per latest modification the scope of CIRM Hybrid model is now increased to new threshold ceiling
of Rs. 7.50 Cr is place of earlier Rs. 5.00 Cr.
The CIRM Hybrid model is applicable for the Manufacturing, Trading, Services, Agriculture & allied
activities (wherever balance sheet is available) as under:
 New Borrower (except Greenfield projects) having exposure above 2 Cr to 7.50 Cr (irrespective
of turnover).
 Existing borrower having exposure above 2 Cr to 7.50 Cr (irrespective of turnover).
The risk scoring is in the range of 0 to 11 where score of ‘11’ is low risk & score of ‘0’ is high risk.
Wherever risk parameters, which are ‘Not applicable’ for scoring in such cases, the weight age will
get equally distributed to the remaining applicable risk parameters.

Other modifications as per HO cir 81/2023 :

a. New risk parameter added where borrower has Unhedged Foreign Currency Exposure in the
following modules of CRIM :
 Large Exposure Module
 Large Trade Module
 SME Manufacturing module
 Services Module
 Small Trade Module
 Broker Module
 Real Estate Module
 NBFC Module
 Supervisory Slotting Module
b. Other risk parameters added / modified in the Large Exposure Module, Large Trade Module, SME
Manufacturing Module, Services module and small trade module as under :
 Transaction routed throught bank in FY during rating review
 Business vintage – Banking relationship with us and years of experience in the same line
of business
 Conduct of account –

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 Canara Institute of Bank Management
 Frequency of devolvement of LCs / invocation of BGs
 Inward cheque / ECS dishonour due to insufficient funds
 Average utilized bank limit for ABS year of rating
 SMA status in last one year of firm

EXTERNAL CREDIT RISK RATING (ECAI)- (108/2021, 649/2022):

 Minimum threshold for Obtention of ECAI rating in respect of all exposures increased from
Rs.10 crores to Rs.25 crores.
 Additional interest at 0.25% to be charged in respect of all externally unrated exposures above
Rs.25 crores to Rs 100 Crores and 0.50% in respect of all externally unrated exposures above
Rs.100 Crores.
 External Credit Assessment Institutions (ECAI) Rating will only be applicable for Risk
Weightage and Pricing of Loans & Advances purpose when Press Release (PR) issued by ECAI
contains Bank’s name and the Corresponding Credit Facilities. ECAI rating without above
disclosure will be treated as unrated and will attract risk weights of 100 percent or 150
percent as applicable in terms of extant guidelines on Credit Risk Weighted Assets
Computation.
Bank accepted domestic credit agencies i.e.
1. Credit Analysis &Research Ltd.[CARE]
2. CRISIL Ltd.
3. India Rating Ltd.[Formally Fitch]
4. ICRA Ltd&
5. Brick work Rating India Pvt Ltd
Likewise, International Credit Rating Agencies are FITCH, MOODYS & Standard &Poor.

Revision of interest based on Rating:

In case of CRR downgraded based on latest ABS, the same would be relooked to examine revision in
rate of interest and the matter to be taken up with Respective Sanctioning Authority.
Validity of Internal Credit Risk Rating (Annual Obligor Rating):
Risk rating will be overdue after expiry of 15 months from the month of confirmation ofrating
(or)
18 months from the date of signing the balance sheet by auditors based on which credit risk rating
was assigned, whichever is earlier.
No Credit decision is to be considered when the Rating is in expired status, such as: -
1) Enhancement in limits
2) Changes in any terms and conditions
3) Concession in Interest/Other charges

Cross default & Monitoring of Financial covenants:

● Applicable for Listed Corporate with exposure (FB+NFB) of Rs.50 cr & above and listed MSME
borrowers with exposure of Rs1 Cr from our Bank.
● Default (over dues) by the borrower to any other lender for more than 30 days will be treated
as Cross Default.
● P&L covenants and Balance Sheet covenants for the eligible listed companies to be monitored
on quarterly basis and annual basis respectively to ascertain deviation from the
sanction/accepted levels, if any.
● Deterioration of more than 10% in the actual level, vis-à-vis sanction level /last reviewed
level, will be treated as breach of financial covenants.
● The following authorities are delegated to take Loan related actions in case of cross

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 केनरा बैंक प्रबंधन संस्थान
default/breach of financial covenants/down gradation in Quarterly Risk Rating of the
borrower:

Sanctioning Authority Delegated Authority

Branches/RO power accounts/SME Sulabh attached to RO RO Head CAC
Circle power accounts/SME Sulabh attached to Circle RSA
HO power accounts RSA

Facility Ratings – Modifications (HO Cir 81/2023):

• Part of compliance of regulatory requirement under BASELIII.
● Useful tool in loan approval& sanctioning. It helps to assess credit risk, potential default risk,
level of collateral &realization.
● It was Introduced for corporate loan portfolio with exposure of>Rs.5Cr (FB+NFB), carried out on
annual basis along with Balance sheet rating. Now this minimum threshold has been increased
to Rs. 7.50 Cr.
● A qualifying IRB (Internal Rating Based) approach should have 2 distinct dimensions asunder:
 The risk profile of borrower (Borrower rating)–solely reflects Probability of Default (PD)
 Transaction-specific factors (Facility rating)–solely expresses Loss Given Default(LGD)-Reflects
transactions viz., collateral, seniority, Product type.
● Facility rating assesses the effect of the transaction structure on the economic loss of an
exposure following the default of an obligor and is usually based on above transaction.
● 70% weight has been assigned to LGD & rest 30% to other parameters
● Capital charge calculated basing on parameters viz., PD, LGD & EAD (Exposure at Default),
Effective Maturity.
● Facility Rating is based on AIRB approach. Hence the proposed this Model considered actual
LGD estimates based on the banks default and recoveries data. Banks has studied last 14 years
historical data and estimated their own LGD.
● Lower capital can be maintained for borrower having higher facility rating.
● Authority empowered to confirm CIRM, can confirm Facility rating irrespective of facility risk
grade.
● For centralized circles, initiation/approval/confirmation done at RM Wing, HO.
● For non-centralized circles, above process up to Rs.15 Cr done at RM Section, CO. For
exposure>Rs.15 Crore, it is done by RM Wing, HO.

Other modifications as per HO cir 81/2023 :

a. Following New risk parameter added under assessment of guarantee :
 Loan covered by ECGC.
 Borrower makes receivable arrangement through Escrow accounts under HAM projects.
 Borrower makes receivable arrangement through Escrow accounts under Other than HAM
Project.

Modification in Parameters under Facility Rating Model: (IC/589/2024)

Modified Parameters Action
Advance to PFI / FI (NABARD, EXIM Bank, NaBFID, NHB and SIDBI) Upgrade to FR1
Advance to Central Govt. Entities formed under Act of Parliament
Upgrade 3 Notch
(Ex: NCDC, FCI, NHAI)
Corporate Guarantee – AAA Rated Upgrade 1 Notch
Corporate Guarantee - AA+ or AA or AA- Rated (At least 75% covered) Upgrade 1 Notch
Corporate Guarantee - AA+ or AA or AA- Rated (Less than 75% covered) No Change in Grade
Corporate Guarantee - Others (Below AA- or Unrated) No Change in Grade

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 Canara Institute of Bank Management
Govt. of India Guarantee (At least 75% covered) Upgrade to FR1
Govt. of India Guarantee (Less than 75% covered) Upgrade 2 Notch
State Govt. Guarantee (Fully or partially covered) Upgrade 1 Notch
Loan Covered by ECGC – (At least 50% covered) Upgrade 1 Notch
Borrower makes Receivable Arrangement through Escrow Accounts Upgrade 1 Notch
Borrower makes Receivable Arrangement through Escrow Accounts
Upgrade 1 Notch
under HAM (Only after COD is achieved)
Personal Guarantee / Third Party Guarantee/ No Guarantee No Change in Grade

Canara Bank Proposal Rating: CBPR (12/2020, 619/2020, 671/2020, 755/2023, 13/2024)
● Introduced as part of PSB EASE reforms agenda.
● Applicable for new proposal as well as renewals with enhancement proposal of >=10 crore
[MSME, AGRI [infra & Food Processing] and Corporate accounts].
● It is a pre-sanction exercise with GO/NOGO concept
● NO-GO triggers/events: -NPA with other banks; Severe liquidity strain; Auditors comment in
going concern concept; Parent company default; Severe negative impact due to Government
guidelines; Significant changes in Raw material price making business unviable; Significant
Financials Fraud; External rating downgraded to D; Borrower name in RBI defaulter list
● The EASE reform theme for Responsible Banking suggests risk scoring matrix for corporate &
MSMEs, with risk categorization as CBPR1-5- LR/NR/MR/HR/Very High (NO- GO).
● Not linked to DOP &interest rates. It is in addition to existing ratings
● Restructured accounts/proposals will be excluded from rating as No Go.
● No enhancement can be permitted in No Go accounts.
● RO/CO/Credit Wing can exercise the option of exiting the accounts (both Domestic and
Overseas branches) which are rated as No Go interm so extant guidelines of exit policy of Bank
after obtaining prior permission from the Respective Sanctioning Authority as per existing
delegation of powers.
● Environmental, Social, Governance(ESG) & Climate risk parameters shall be applicable to
Corporate Borrower`s having exposure >= Rs.50 Crore(FB+NFB) under the following categories:
- First time Borrower - New Borrower other than first time Borrower - Existing Borrower - NBFC
Borrower - Borrowers under Infrastructure Projects

Constitution of committees for confirming the ratings:

For operational convenience and fair distribution of accounts, the following committees have
been formed for confirming CBPR(GO/NO-GO).
Executive Committee I - To confirm rating of proposals where proposed exposure is less than
or equal to Rs.100crores
Executive Committee II-To confirm rating of proposals where proposed exposure is above
Rs.100 crores.
Committee for NO-GO Accounts: Once the rating of a proposal is approved as CBPR 5(NoGo) by
Executive Committee I or II at HO, the rating of such proposals shall be reviewed and
confirmed by a CGM/GM level committee at HO.
● Final Scoring card based on Risk Categorization:

Risk Categorization cut offs

Risk Grade CBPR1 CBPR2 CBPR3 CBPR4 CBPR5(NOGO)
Revised Score 0-20 20-35 35-55 55-70 Above70
Degree of Risk Low Normal Medium High Very High (Proposal
associated with should not be
the proposal accepted)
Weightages in Broad Risk categorization

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 केनरा बैंक प्रबंधन संस्थान
● Revision in Risk Parameters Sub parameters and risk mitigants for following borrowers.
Existing borrower; First time borrower; New Borrower other than first time; Borrower
Under schematic lending; Infrastructure projects; Borrower from Overseas operations

Pricing of credit linked to Credit Risk Rating(CRR)

Under the MCLR/RLLR, rates of interest on Loans and Advances are fixed based on Credit Risk rating
of the borrower.
The rates of interest to be fixed based on different categories are as under:
Sl No Category of the Borrowers Pricing based on
1 Exposures above Rs. 25 Crore Grid Methodology
2. Exposure above Rs. 2 Crores & upto Rs.25 Canara Internal Rating model(CIRM Model)
Crores
i) Exposure above Rs. 2 lakhs and upto
Rs.2Crore for loans and advances to MSME Internal Rating (Small Value Model /Manual
3. & other sectors. Model)
ii) Exposures above Rs.2.00 lakhs and upto Rs Scoring Norms
2.00 crores for agriculture & allied activities
4. Exposure upto Rs. 2lakhs ROI as advised by the Bank from Time to
time

AUTOMATION OF EXTERNAL CREDIT RATINGs (ECRs) UPDATION IN CBS (283/2022) -

 Bank had entered into a contract with M/S CRISIL for automatic updation of ECRs feeds
directly in CBS through APIs. ECRs are updated on a daily basis centrally in CBS through
API. This has gone live with effect from 01/01/2022.
 Manual feeding of ECRs under Fast Path BA189 has since been disabled for branch.

Account Aggregators (AA) (545/2022)

Account Aggregator Framework introduced by RBI aims to make financial data more accessible by
creating data intermediaries called Account Aggregator (AA) which will collect and share the user’s
financial information from a range of entities that hold consumer data called Financial Information
Providers (FIP) to a range of entities that are requesting consumer data called Financial Information
Users (FIU) after obtaining the consent from the consumer.
Bank has already on boarded M/s NADL (NeSL Asset Data Limited) as one of the Account Aggregator
as Financial Information Provider (FIP) and Financial Information User (FIU). Department of
Financial Services, Ministry of Finance has advised the PSBs to go live with Minimum 3 Account
Aggregators. Bank has now on boarded FINVU (M/S Cookiejar Technologies Pvt Ltd) and Anumati
(M/S Perfios Account Aggregation Services Pvt Ltd) as Account Aggregators as Financial Information
Provider (FIP) and Financial Information User (FIU).

Consolidated Guidelines on Account Aggregator framework of RBI, for accessing Financial

information Providers(FIP) for hassle-free sharing of Financial Information to Financial
Information Users (FIU) and Standard Operating Procedures (SOP) for utilizing services of
Account Aggregator as a Financial Information User (FIU) in LAPS-CIR-72/2023 DTD 02/02/2023

Our Bank has on boarded the following Account Aggregators:

 NADL (M/s NeSL ASSET DATA LIMITED)
 FINVU (M/s Cookiejar Technologies Pvt Ltd)
 ANUMATI (M/s Perfios Account Aggregation Services Pvt Ltd
 One Money (M/s Fin Sec AA Solutions Pvt Ltd)
 CAMS (M/s CAMSFinServ)

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 Canara Institute of Bank Management
Account Aggregator FIU functionality for existing and Walk-in Customers in LAPS > UTILITY Module >
Account Aggregation Tab.
Availability of BI Reports – 251036 & 251037 for generation of FIU and FIP reports respectively.

INTERNAL RISK RATING OF ACCOUNTS IN MSME SULABHS – MODIFICATION IN GUIDELINES (HO cir.
518/2022):
 Initiation of Internal Risk Rating under CIRM (LAPS) by MSME Sulabh for the MSME accounts
having exposure above Rs. 2.00 Crore and upto Rs. 35.00 Crore.
 Rating initiating official shall be different from the loan processing officer
 Modified guidelines shall be effective from 22.08.2022.
 RM Section, Circle Office shall review and forward the rating to HO.
 Section in Charge, CRRD, RM Wing shall verify the Rating.
 DM/AGM/DGM, RM Wing, Head Office, as the case may be, shall confirm/approve the internal
Risk Rating as per below table:
Exposure Confirming Authority
Upto Moderate Risk High Risk
Upto Rs. 35 Cr. DM/AGM DGM
> Rs. 35 Cr. to 250 Cr. DGM CGM/GM
> Rs. 250 Cr. CGM/GM CGM/GM
For all Accounts where exposure is above Rs. 35.00 Crore
 Internal Risk Rating in CIRM model shall be initiated by CRRD, RM Wing.
 DM/AGM overseeing CRRD, RM Wing shall verify Internal Risk Rating.
 CGM/GM/DGM, RM Wing, Head Office, as the case may be, shall confirm/approve the internal
Risk Rating as per the above table.
 In respect of accounts where ECAI rating assigned / downgraded / migrated / revised to D,
CIRM rating shall be approved/confirmed by DGM/GM, RM Wing as the case may be based on
the exposure. i.e. upto Rs. 35.00 Crore; DGM, CRRD, RM Wing, HO shall be confirming the
rating and above Rs. 35.00 crore CGM/GM, RM Wing, HO shall be confirming the rating.
 In case of First time up gradation of Account from High Risk to Moderate Risk or better, the
Internal Risk Rating shall be approved/ confirmed by DGM/GM/CGM, RM Wing as applicable to
High Risk category only.
 In case of accounts, where down gradation of rating by 2 notches or more, then the CGM/GM,
RMW shall be the confirming authority for such rating.
Format to be utilized for credit appraisal of MSME proposals are as under:
a). NF1042– “Simplified Common Appraisal Memorandum for MSME loans upto Rs.10.00 lakhs” (HO
Circular–817/2021dated 23.12.2021)
b). NF1028– “Simplified Common Appraisal Memorandum for MSME loans above Rs.10.00 lakhs and
upto Rs.1.00 Crore” (HO Circular–847/2020dated 04.11.2020)
c). NF 1029 – “Simplified Common Appraisal Memorandum for MSME loans above Rs. 1.00 Crore to
Rs. 5.00 Crore” (HO Circular – 847/2020 dated 04.11.2020)
d). NF1023 – “Simplified Common Appraisal Memorandum for MSME loans above Rs. 5.00 Crore to
Rs.25.00 Crores” (HO Circular –705/2020 dated 19.09.2020)
e). Above Rs.25.00 Crores-Long Format adopted by the Bank.

Conversion of Limits:
Conversion of limits from Fund Based to Non-Fund Based limits and vice-versa may be
permitted subject to compliance of the following conditions:
a. NFB limits (only Letter of Credit Limits and Advance Payment Guarantee for purchase of raw

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 केनरा बैंक प्रबंधन संस्थान
materials) may be converted into Fund Based limits. Similarly, FB limits may be converted into
NFB limits for purchasing stocks only.
b. Post-conversion, both Fund based limits and NFB limits shall be within the assessed MPBF.
c. Post-shipment to pre-shipment is not permitted (PC to Bills and not otherwise).
d. Secured limits are not to be converted into clean limits.

Formats to be utilized for credit appraisal of MSME proposals are as under:

A. NF 1042 –upto Rs. 10.00 lakh”
B. NF 1028 –above Rs. 10.00 lakhs and upto Rs. 1.00 Crore
C. NF 1029 –above Rs. 1.00 Crore to Rs. 5.00 Crore
D. NF 1023 –above Rs. 5.00 Crore to Rs. 25.00 Crore
E. Above Rs. 25.00 Crore - Long Format adopted by the Bank.

CANARA MSME STAR (Revamped and rechristened CANARA MSME CAP)-IC/283/2023,

IC/615/2023
 Purpose: Business requirement of bothself employed individuals engaged in manufacturing and
services.
 Eligibility: Individuals/Partnership firm, company, traders/ Businessmen/ professionals or self
employed persons/LLPs/ proprietary firms.
 Loan granted against acceptable collateral securities such as land, land & Building in
Metro/Urban/Semi Urban/Rural, Properties allotted by Govt authorities and Approved Financial
Securities
 Nature of Facility: WC- Secured OD &TL
 Loan Quantum: Above 10 Lakhs, Delegation till MC Board as per Annexure to IC/615/2023
 Assessment: TL-80% of Project Cost, WC- 80% of WC GAP subject to following conditions:
TOL:TNW- Up to 5:1 (Manufacturing) and 7:1(Trading)Unsecured Loan considered
as Quassi Equity for considering TNW
 Margin-20% for TL AND WC, 15% for NFB
 Interest: Based on risk rating and collateral security cover and varies from RLLR (Low Risk) to
RLLR+1.30% (Moderate Risk)- Please refer Annexure 1 of circular
 Repayment- WC- Tenable for one year and TL- Upto 10 Years including moratorium
 Upfront Fee: Concession available based on risk rating- Low-50%, Moderate-25% and High-NIL
 Risk Rating- As per extant guidelines
 Product Code- WC-2000, TL- 766 &768, Scheme Code- 65560
Total Security cover – Primary + Collateral- Min 100%, Out of which min 50% by way of
approved securities and remaining by way of Land, Building and vacant land. However vacant
land should not be more than 25%. Primary assets such as Stocks, Book Debts, and Plant&
Machinery will not be considered in calculating security cover.
 CGTMSE cover- Not eligible
 Conditions for Switch over- Permitted subject tocompliance of all terms and conditions of the
scheme, no release and substitution of property and No overdue in existing account.
 Stock Statement/ Inspection- Quarterly
 Stock Audit- Low and Normal- Waived upto Rs. 5.00 Cr and > Rs. 5.00 Cr- Extant Guidelines,
Moderate: Every Year.

CANARA MSME CONTRACTOR- IC/60/2023, IC284/2023, IC/615/2023

 Eligibility- scheme for financing contractors engaged in execution of contract works awarded by
Govt. Agencies or otherwise, and have their operative accounts maintained in our Bank,
registered with the respective Government agencies for receiving the funds towards payment
under the underlying tender/bids document (contract) executed by them.
 Salient Features-
 Both WC assistance-Secured OD,FLC/ILC &BG and TL for purchase of brand new
equipments.
 Quantum- More Than 25 Lakhs, not exceeding 9 times of TNW. Valuation from two

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 Canara Institute of Bank Management
independent valuers for loan above Rs.2.00 Cr.
 Assessment of WC limits:
The assessment of fund based working capital (Secured OD) shall be reckoned lower of the
following:
i. Assessment methods to arrive at lendable FB loan quantum as per Annexure – III of Circular
ii. Turnover/MPBF/Cash Budget Method (as applicable) Assessment of Non- Fund Based working
capital (ILC, FLC, BG) limits – as per extant guidelines (assessment format provided in
Annexure-III to be utilized).
Following conditions to be followed w.r.t. TOL: TNW calculation:
1) TOL:TNW can be permitted upto to 5:1 for manufacturing Units and 7:1 for Trading
Units/Service Units, in case of Working Capital funding (fresh limits/renewal of existing
limits with modification/s in terms and conditions and/or renewal with
enhancement/realignment of limits).
2) Unsecured loans can also be accepted as Quasi equity for reckoning Tangible Net Worth,
in compliance with extant guidelines.
 Margin- WC: NIL, TL: 20%, NFB:20%
 Repayment-WC-12 Months,TL-5/7 Years including moratorium for purposes other than
construction and construction respectively.
 PC and DC charges- Waiver Upto- 50% (Low Risk) and 25%- Normal Risk.
 Product Code- WC-2000 and TL- 768
 Collateral Security
 100% of the proposed exposure under the scheme in the form of Land/Land & Building only
and/or approved financial securities, out of which: a) Approved securities may be accepted
at 100% of the surrender value to the extent available
 Thereafter, a minimum of 50% (or more) of the exposure not secured by way of Approved
Securities in terms of point a), above shall be secured by way of Residential/Commercial
Properties.
 Remaining exposure not backed by Approved Securities and/or Residential/ Commercial
Properties as specified above, if any, can be secured by way of vacant land and/or Industrial
Properties.
 However, vacant Land can be accepted as collateral security upto a maximum of 25% of the
collateral stipulated, provided it has clear demarcation and boundaries with approach roads
and is duly allotted by any government / Statutory body.
 In any case, value of Industrial Land & building and vacant landed properties should not
exceed 50% of the minimum stipulated collateral comfort requirement.
 Submission of stock statement- Quarterly. DP calculation is not mandatory
 Ancillary Business such as Salary and saving accounts, Current Accounts, Debit/Credit Cards,
Retail Loans, POS machine and QR Code.
 Switch over of accounts- a) No release and substitution of existing primary/collateral securities
already charged to our Bank for the facility (acceptable under the subject scheme also) which is
proposed to be switched over under this scheme. b) No overdues at the time of switchover to
this scheme.

CANARA GST SCHEME (HO Cir 383/2019, 428/2019, 618/2021, 799/2021, IC/92/2022 &
IC/543/2022, IC/534/2023)
 Purpose: To provide credit for Working Capital requirement of GST Registered MSME borrowers
(New/Existing) by way of fund based and/or non-fund based exposure (as Sub-Limit of Fund-
based limit under the scheme by way of specified facilities).
 Eligibility: Individual, Proprietary firms, Partnership firms, LLPs, Companies, Traders,
Businessmen, Professionals or self employed persons, The scheme shall be applicable to
customers having/proposed to have sole banking arrangement for working capital
requirements. With GST Return of minimum for the past six months.
 Nature of Facility: Working Capital – Fund Based OR Non-Fund Based as sub-limit
 Loan Quantum: Min>Rs. 10.00 Lakhs, Maximum- NO LIMIT
Upto Rs.10 Crores by respective sanctioning authority.
Above Rs. 10 Crores upto Rs. 20 Crores by GM/SME BUSINESS UNIT CGM-HO-

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 केनरा बैंक प्रबंधन संस्थान
CAC.
Above Rs. 20.00 Cr, ED-CAC and above authorities upto their delegated powers
on case to case basis based on merits.

 Assessment: a) Maximum of 25% of preceding 12 months GST turnover as per GST Returns, with
NIL Margin.
b) In case of non-availability of preceding 12 months annual GST Return, past six months returns
shall be considered to arrive annual turnover (two times of the past six months turnover).
c) Assessment of the WC limit is based on GST return and not based on financial papers.
 Margin-NIL, Current Ratio More than 1
 Interest: Based on risk rating and collateral security cover and varies from RLLR+0.25% (Low
Risk) to RLLR+0.75% (Moderate Risk)
 Repayment- WC- Tenable for one year
 Upfront Fee: 50% of the applicable processing charges.
 Risk Rating- As per extant guidelines
 Product Code- WC-2000, Scheme Code- 95500
 Collateral Security Stipulations: – Collateral Security value shall be minimum 75% of the loan
amount in the form of (i) Mortgage of immovable properties Land/Land & Building/ (ii) Other
Approved Collaterals such as Assignable LI policies, LIC Policy, NSC, Post Office Term Deposits,
Govt. Securities, Kissan Vikas Patras (KVP) and Term Deposits in Our Bank for the proposals to
be considered by the Respective Sanctioning Authorities.
However, Circle Head CAC and above authorities have been empowered to sanction loans under
the scheme to manufacturing units (only) with collateral security comfort of 50% to < 75%.
 CGTMSE cover- Not eligible
 Penal Interest : Penal interest of 0.25% OR 0.50% will be applicable if the passed on turnover is
less than 75% at the time of renewal.
 Conditions for Switch over- Permitted subject to compliance of all terms and conditions of the
scheme, no release and substitution of property and No overdue in existing account.
 Stock Statement/ Inspection- Half Yearly
 Stock Audit- Waived for all accounts including take over accounts also.

Canara Start Up- Cir No. IC/564/2023, 836/2023

 Scheme started by Department of Promotion of Industry and Internal Trade (DPIIT), Ministry
Of Commerce and Industry, Government Of India
 Primarily implemented through Seven Circles- Mumbai, Pune, Bangalore, Delhi,
Ahmadabad, Chennai and Hyderabad
 Objectives- To provide credit for business requirement of MSME units recognised as Start
ups by DPIIT
 Start up- a) Upto a period of 10 years since incorporation if the entity is a Pvt ltd,
Partnership firm including LLP. b) Turnover of the entity has not exceeded Rs. 100.00 Lakhs
since incorporation. c) Entity is working towards innovation, development or improvement
of products, processes or services
 Eligibility: a) Unit should be recognised as Start Up by DPIIT.
b)Valid Udhyam- Registration Certificate.
 Start ups should have sustainable and viable business model and must have support of an
incubator.
 The equity portion of Start-up shall be fully tied-up.
 Start-up should have reached the stage of stable revenue stream.
 Unit should be risk rated upto Moderate Risk only
 Facility can be extended under sole banking arrangement only.
 Facility- WC and TL
 Loan Quantum- Min> Rs. 10.00 Lakhs and Maximum- Rs. 10.00 Cr
 Assessment: WC- As per Projected Turn Over or Cash Flow statement
 TL-Based on Quotations, Overall DSCR-1.25, DER- 4:1
 Repayment- WC- One Year renewable &TL- Maximum- 10 Years including moratorium of 36

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 Canara Institute of Bank Management
months.
 Interest Rate- Based on Risk Rating model adopted for Start ups. For LR- RLLR,NR-
RLLR+0.25% and MR- RLLR+0.50%.
 Security- Hypothecation of primary security- Stocks and Book Debt or assets financed,
Collateral Security- By way of Land and Building for exposure above R s. 2.00 cr. Min
collateral coverage should be LR- 25%, NR- 50%, MR-100%. Below Rs. 2.00 cr may be covered
by CGTMSE/NCGTC.
 Delegation Of Power- Upto Rs. 2.00 cr- GM/CGM CO CAC. Above Rs 2.00 GM/CGM HO CAC.
Any relaxation in security coverage with NHA
 Processing charge-
o Stock Statement- Quarterly submitted and inspection for collateral security is done
in a year

CANARA MSME INN- CIR NUMBER-559/2023, 252/2024

 Nature of Limit: Working Capital (FB & NFB) and / Term loan.
 Applicability: PAN India with initial implementation at Ahmadabad, Agra, Bangalore,
Bhopal, Chandigarh, Chennai, Delhi, Jaipur, Karnal, Kolkata, Lucknow, Madurai,
Mangalore, Manipal , Mumbai, Pune, Ranchi, Trivandrum and Vijayawada Circles.
 Quantum: Minimum - Above Rs. 10.00 Lakhs and Maximum - Rs. 25.00 Crores.
- For Working Capital: Maximum Cap is Rs. 5.00 Crores.
 Eligibility- Every individual/ Non Individual having UDHYAM registration certificate
 Margin- Secured OD- NIL, TL-20% & NFB- 15%
 Repayment- WC- Yearly renewal and TL- Maximum 10 years
 Security- TL- Min 25% coverage by collateral security and for WC by way of 100%. However
Prime (Land & Building) +Collateral security- 100%
 ROI ranges from RLLR (9.25%) to RLLR + 1.00% = 10.25% depending on risk rating of the
borrower and nature of limit/security.
 Some important points
 Third party guarantee shall be permitted subject to clearance from NHA for proposals upto
Circle Head CAC
 Switchover of existing account to the said scheme shall not be permitted.
 Concession in upfront charge available depending on risk grade- Low-50%, Normal- 25%.
 Product code- WC- 2000 &TL-768, Scheme code- 114020

CANARA MSME PHARMA- 571/2023, 252/2024

 Purpose- Applicable for manufacturing of pharmaceutical Industries
 Eligibility- Individuals or non individuals- Proprietors/Partnership/Company/Traders
o MSMES should be registered with UDYAM portal
o Account shall be rated upto moderate/high risk
o CIBIL SME RANK guidelines will be applicable
 Applicability- Ahmedabad, Bhopal, Chandigarh and Karnal Circles.
 Nature of Facility- WC and TL
 Loan quantum- TL-Min- >Rs. 10.00 Lakhs, Maxm- Rs.50.00 cr and WC-Maxm- Rs. 10.00 cr
 Margin- TL-20%, WC-25%, NFB-15%
 Repayment-WC- Tenable for one year and TL- Maximum-10 years including moratorium of
maximum 2 years.
 ROI- Based on risk rating-LR- RLLR,NR-RLLR
 +0.25%=9.50%, MR- RLLR+0.50%=9.75%
 Upfront fees- Concession based on applicable charges- LR-50%, NR-25%
 Security Cover- Primary and Collateral. Collateral cover depends on risk rating, LR-50%, NR-
75% and MR-100%. In case of trader collateral security cover to be at least 100% with at least
50% shall be covered by Residential/commercial/Approved security
CANARA MAHILA VIKAS- Erstwhile Canara MSE Vijeta CIR IC/56/2023, IC/615/2023-
 Enterprise owned by women complying with MSE guidelines. In case of non individuals at

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least 51% is owned by women.
 Min CIC of individuals to be 650 and above
 Quantum: Above 10 Lakhs
 Repayment- TL-Maximum 84 months and WC- one year
 Margin- TL &WC-20%
 ROI- Linked to risk rating. Concession in up front charge is also linked to Risk rating
 Min Security cover- By way of Land/ Land & Building/ Approved securities- Low Risk- 25%,
Normal Risk-50% and High Risk-75%
 Tenanted properties and properties in name of close relatives may also be accepted.

Canara MSME Vahan- CIR 59/2023

 Purpose- To provide credit for financing of new and second hand commercial vehicles of
MSME borrowers. However, used electric vehicles will not be financed
 Minimum CIC score should be 650 or -1 for individuals. For non-individual CIR and CMS
utilization to be considered.
 Quantum- Rs. 50.00 Lakhs for new vehicle
Rs. 25.00 Lakhs for used vehicle-By RSA and above Rs. 25.00 Lakhs- By NHA
 Loan quantum shall be computed “On Road” Price- Ex showroom price+ Insurance+
Registration charges for fully built up vehicles. Cost of body building is included in project
cost. Cost of accessories should not exceed 10% of cost of built up vehicle or Rs. 25000/-
whichever is less.
 Margin-25% on road price for new vehicles 50% for used vehicle
 Security- Hypothecation of vehicle and Collateral security upto 100% above Rs. 10.00 Lakhs
or covered under CGTMSE

Introduction of new scheme “Canara e-GST” through Digital Lending Platform (DLP), for
financing of Fund Based Working Capital Limit upto Rs. 10 Lakhs to GST registered MSMEs based
on GST Turnover (IC/642/2024)
 Purpose- To provide Fund Based Working Capital Finance to GST Registered MSMEs,
who are our Existing to Bank (ETB) customers through digital mode.
 Eligibility- Individual / Proprietorship Firm only with Age 21 to 65 Years,
 GST registered MSME
 Minimum Vintage and current account with us since last 12 months,
 Maximum aggregate exposure with this Limit: 10 Lakhs,
 No overdue on the date of application & not in SMA2/NPA status in last
12 Months)
 Minimum CIC score should be 650 or -1 for Promoters/individuals.
 Quantum- Min 1 lakh, Max 10.00 lakhs (in multiple of 10,000)
 Margin-Stock 25%, Book Debt 30%
 Rate of Interest: WC Limit upto 2 lakhs, RLLR+1.05%,
For 2 lakhs to 10 lakhs, RLLR+1.40% (LR), RLLR+2.25% (NR), RLLR+2.75%
(MR)
 Security- Asset created of bank Finance, CGFMU
 End to End process through digital Mode: It includes all the steps from loan application, ID
Proof & GST verification, Visit recording, Limit Assessment, sanction, documentation, loan
account opening and limit creation.
MSME TEXTILES- 747/2023, 252/2024
 Units engaged in manufacturing of yarn, Manmade fabrics, manufacturing of Jari used in
fabric, Processing of fabric, manufacturing of Sarees, Dress materials, garments, Apparels
etc.
 Applicable- PAN INDIA
 Nature of facility- WC &TL
 Quantum- Above Rs. 10.00 Lakhs,
 Upfront charge- 50% concession on FB/NFB

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 Security-Primary+ Collateral security by at least 75%
 Project Appraisal Charges: Loan above Rs.10 Cr – Flat Rs. 1 Lakh (Upto 10 Cr Not Applicable)
 Validity of Scheme- 31.03.2025 and Scheme code-93500

Automotive Components Manufacture Scheme 252/2024

 Area specific scheme for financing Automotive components manufacturers
 Applicability- Ahmadabad, Chennai, Pune, Chandigarh, Karnal and Ranchi circle
 Eligibility- Individuals/firms/HUF/Companies risk rated upto Moderate risk
 Facility- FB/NFB, Quantum above Rs. 25. Lakhs
 Security coverage- Atleast 75% by way of immovable property in form of Land & Building
 ROI- As per risk rating and security coverage
 Processing charge- 50% concession
 Validity- Upto 31/03/2025

OTHER AREA SPECIFIC SCHEMES IC/252/2024

1. Scheme for financing Ceramic and Vitrified Tile Industries for Ahmedabad Circle, Valid till
31.03.2025
2. Scheme for financing Marble and Granite Industries for Jaipur Circle, Valid till 31.03.2025
3. Bills Discounting Scheme for Contractors for Trivandrum Circle, Valid till 31.03.2025
4. Scheme for financing Arthiyas (Commission Agents) for Chandigarh (Punjab state), Jaipur
and Karnal (Haryana state) Circles, Valid till 31.03.2025
5. Scheme for financing Iron and Steel Industries for Sambalpur region of Bhubaneswar Circle,
Valid till 31.03.2025
6. Mukhya Mantri Udyam Kranti Yojana for Bhopal Circle, Open scheme (No restriction on
validity)
7. West Bengal Bhabishyat Credit Card Scheme (WBBCCS) West Bengal State – Kolkata Circle
W.e.f. the 1st April, 2023 and will remain in force up to 5 years, if not withdrawn /
amended by a further notification by Govt. of West Bengal.

Udyam Assist Platform- CIR 616/2023

 The Ministry of Micro, Small and Medium Enterprises (Mo MSME), Government of India has
launched the Udhyam Assist Platform (UAP) on Jan 11, 2023 to facilitate formalization of
Informal Micro Enterprises (IMEs) through online generation of Udhyam Assist Certificate.
 The Government of India, vide Gazette Notification S.O. 1296(E) dated 20.03.2023, has
specified that the Certificate issued on the UAP to Informal Micro Enterprises (IMEs) shall be
treated at par with Udhyam Registration Certificate for the purpose of availing Priority
Sector Lending (PSL) benefits.
 Vide communication of RBI ref: RBI/2023-24/27 dated 09.05.2023; IMEs with an Udhyam
Assist Certificate shall be treated as Micro Enterprises under MSME for the purpose of
Priority Sector Lending (PSL) classification.
 The turnover of enterprises exempted from filing returns under the provisions of the
Central Goods and Services Tax Act, 2017 shall be the sole criterion to be defined as
Informal Micro Enterprises (IMEs) for the purpose of UAP. Accordingly, Informal Micro
Enterprises (IMEs) are those enterprises that are not covered in the Goods and Services Tax
regime.

Introduction of new functionality in CBS - Second Level Authorization for closure of MSME loan
accounts within 6 months, from the date of opening (IC/498/2024)
Whenever branches are closing the MSME loan accounts opened under below mentioned MSME
products, within 6 months from the date of account opening, for such accounts, Second Level
Authorization is permitted by RO Official/s having CBS template “86”.

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सरकार प्रायोतिि योिनाएँ

GOVERNMENT SPONSORED SCHEMES
1. Prime Minister’s Employment Generation Programme (PMEGP)
(IC/66/2024)
Government of India had in August 2008, approved the introduction of a new credit linked
subsidy programme called Prime Minister's Employment Generation Programme (PMEGP). It
was launched by merging the two schemes that were in operation till 31st March 2008, namely
Prime Minister's Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP)
for generation of employment opportunities through establishment of micro enterprises in
non-farm sector for rural as well as urban areas. PMEGP is in operation since 2008-09 and
has been approved for continuation over the 15th Finance Commission Cycle i.e. from 2021-
22 to 2025-26. PMEGP is a Central Sector Scheme administered by the Ministry of Micro,
Small and Medium Enterprises (MoMSME).

Implementing Agencies:

 National Level: Khadi & Village Industry Commission (KVIC) under Administrative control
of MSME ministry will be the single nodal agency for national level.
 State Level: Through State offices of KVIC, State Khadi and Village Industries Boards
(KVIBs), District Industries Centres (DICs), Coir Board (for coir related activities) and
Banks. Government may also involve other suitable agencies for implementation of the
scheme.

ELIGIBILITY CONDITIONS FOR BENEFICIARIES:

 Any individual, above 18 years of age.
 There will be no income ceiling for assistance for setting up projects under PMEGP.
 For setting up of project costing above Rs.10 lakh in the Manufacturing sector and above
Rs. 5 lakh in the Business /Service sector, the beneficiaries should possess at least VIII
standard pass Educational qualification.
 Assistance under the scheme is available only for new projects sanctioned specifically
under the PMEGP.
 Existing Units (under PMRY, REGP or any other scheme of Government of India or State
Government) and the units that have already availed Government Subsidy under any other
scheme of Government of India or State Government are not eligible.

OTHER ELIGIBILITY CONDITIONS:

 A certified copy of the caste/community certificate or relevant document issued by the
competent authority (If applicable).
 Projects without Capital Expenditure are not eligible for Financing under the Scheme.
 Cost of the land should not be included in the Project cost. Cost of the ready built shed as
well as long lease or rental Work-shed/Workshop can be included in the project cost subject
to restricting such cost of ready built as well as long lease or rental work-shed/workshop
to be included in the project cost calculated for a maximum period of 3 years only.
 PMEGP is applicable to all new viable microenterprises, including Village Industries projects
except activities prohibited by local Government/Authorities keeping in view environment
or socio-economic factors and activities indicated in the negative list of the guidelines.

All new units setup under PMEGP will be mandatorily registered under Udyam Portal before
Physical Verification of the Unit and the adjustment of the Margin Money in the PMEGP
beneficiary loan account. Registration with the KVIC/KVIBs/State DICs under the scheme is
voluntary. Besides, all the PMEGP units will have to be mandatorily registered under Udyam
Portal before adjustment of Margin Money in beneficiary loan account. No registration fee

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 Canara Institute of Bank Management
will be charged from the beneficiaries and the funds available under Backward and Forward
Linkage will be utilized to meet expenses on documentation cost, etc. ( IC/66/2024)

Definition of Family : Only one person from one family is eligible for obtaining financial
assistance for setting up of project under PMEGP. The 'family' includes self and spouse.

Quantum:
Maximum Project cost Rs.50 lakhs for manufacturing sector and Rs.20 lakhs for
service/Business activities. (Including Term loan for Capital Expenditure and Working Capital,
if any) for all categories of eligible borrowers for availing Margin Money Subsidy.
If the total project cost exceeds Rs. 50 lakhs or Rs. 20 Iakhs for Manufacturing and Service/Business
sector respectively, the balance amount (excluding the own contribution) may be provided by
Banks without any Government subsidy.

Nature of Finance:
 Term Loan for Capital Expenditure and Cash Credit for Working Capital.
 Term Loan alone or Composite Loan consisting of Term Loan and Working Capital.
 Projects costing more than Rs.5 lakh, which do not require working capital, need
clearance from the next higher authority.
 For Manufacturing units, Working Capital component should not be more than 40% of the
project cost and for units under Service/Trading sector, the Working Capital shall not be
more than 60% of the project cost. However, for the projects where the Capital Expenditure
reaches the maximum ceiling of the project cost for Manufacturing/Service sector units,
the Bank can consider sanctioning of additional funds over and above Rs. 50 Lakhs and Rs.
20 Lakhs respectively. In such cases, the additional funds over and above Rs.50 lakh/20
Iakh will not be covered for subsidy.
 In case the incurred Capital Expenditure and Working Capital Expenditure (at the end of
the third year from the commencement of production) is less than the sanctioned amount
under the Bank loan (including own contribution), the excess Margin Money(subsidy)
(against the shortfall) shall be refunded to KVIC.
 Cost of the land should not be included in the Project cost. Cost of the ready built shed as
well as long lease or rental Work-shed/Workshop can be included in the project cost subject
to restricting such cost of ready built as well as long lease or rental work-shed/workshop
 to be included in the project cost calculated for a maximum period of 3 years only.

 Project cost will include Capital Expenditure and one cycle of Working Capital. Projects
without Capital Expenditure are not eligible for financing under the Scheme. Projects
costing more than Rs.5 lakh, which do not require working capital, need clearance from
the next higher authority.

 The Bank will sanction 90% of the project cost in case of General Category
beneficiary/institution and 95% in case of special category beneficiary/institution and
disburse full amount suitably for setting up of the project and release total amount of cost
of project in stages, after collecting promoters' contribution (or upfront as the case may
be) as per the guidelines applicable to term loans.
 Working Capital component should be utilized in such a way that at one point of stage it
touches 100% limit of Cash Credit within three years of lock in period of Margin Money and
not less than 75% utilization of the sanctioned limit. If it does not touch aforesaid limit,
proportionate amount of the Margin Money (subsidy) is to be recovered and refunded to
the KVIC at the end of the third year.
 Margin Money (subsidy) will be 'one time assistance', from Government. For any
enhancement of credit limit or for expansion/modernization of the project, Margin Money

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(subsidy) assistance is not available except in case of units selected for upgradation through
2nd loan under this Scheme.

Categories of beneficiaries under PMEGP Beneficiary’s Rate of Subsidy (of

(for setting up of new enterprises) Contribution project cost)
(of project cost)

Area (location of project/unit Urban Rural

General Category 10 % 15 % 25 %
Special Category (including SC, ST, OBC,
Minorities, Women, Ex-Servicemen, Trans-
genders, Differently-abled, NER, 05 % 25% 35%
Aspirational Districts, Hill and Border
areas(as notified by the Government) etc.

MARGIN FROM THE PROMOTERS: Promoter's contribution in General Category should be at least
10% of the project cost and 5% of the project cost in case of special category beneficiary /
institution.

RATE OF INTEREST: As per extant guidelines of the Bank issued from time to time, as applicable
to the type of activity (industry/service).

REPAYMENT: 3 to 7 years with an initial moratorium not exceeding 6 (six) months.

CLASSIFICATION OF THE ADVANCE: Micro, Small & Medium Enterprises (Manufacturing/Services)

or Agriculture (in case of loans granted to finance activities connected with Animal Husbandry or
as indicated in point 4.1) using appropriate classification codes under priority sector.

SECURITY:
 Assets created out of the bank's finance.
 Personal guarantee of the proprietor / promoter.
 Branches/Offices shall not obtain collateral/ third party guarantees, for loans upto Rs.
10 lakhs sanctioned under the scheme. Moreover, Branches/Offices may also consider
PMEGP loans to eligible beneficiaries without mandatorily insisting for collateral securities,
on case to case basis, based on merits. However, such loans shall invariably be covered
under appropriate credit guarantee scheme, as per extant guidelines, to safeguard the
interest of the Bank.

RURAL AREA:
Any area classified as Village as per the revenue record of the State/Union Territory, irrespective
of population.
OR
All the areas, irrespective of their population, falling under Panchayati Raj Institutions will be
accounted under rural areas, whereas areas falling under Municipality to be treated as urban
areas.

Score Card & Risk Assessment

The IAs shall take the final decision to either forward complete/corrected applications directly
to one of the Financing Banks opted by the applicant as per the order of preference for taking
credit decisions or return to applicant based on the scoring criteria as detailed below:

Project Cost Minimum Score for Forwarding to Banks

Up to Rs. 10 Lakhs 50 out of 100

Above Rs.10 Lakhs 60 out of 100

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Note: Irrespective of the score obtained in the scoring sheet, loans under the scheme shall be
considered for borrowers rated upto moderate risk only.

Once the Margin Money (subsidy) is received in the Financing Banks on behalf of the beneficiary,
within 24 hours it should be kept in the Term Deposit Receipt (TDR)/Subsidy Reserve Fund (SRF)
for three years at branch level in the name of the beneficiary. No interest will be paid on the
TDR/SRF, and no interest will be charged on loan disbursed for the corresponding amount of
TDR/SRF. Banks shall ensure to update the TDR/SRF details such as TDR/SRF number and date on
the PMEGP portal. Financing Banks shall upload the details of subsequent loan installments and
rate of interest on the PMEGP portal. The TDR/SRF shall be linked to the loan account of the
borrower using the CBS fast path LNM95, so that no interest will be charged on the loan
disbursed for the corresponding amount of TDR/SRF.

EDP Training Duration:

Offline - EDP training duration should be at least 5 days for projects with project cost up to Rs. 5
Lakhs and 10 days EDP training for project cost above 5 Lakhs.
Online - EDP training duration should be at least 30 Hours for projects with project cost up to Rs.
5 Lakhs and 60 Hours EDP training for project cost above 5 Lakhs.

PHYSICAL VERIFICATION OF PMEGP UNITS:

 100% physical verification with geo-tagging of the actual establishment and working status of
each of the units, set up under PMEGP, including those assisted by other IAs, will be done by
KVIC, through the third-party agencies having expertise in this area, following the prescribed
procedures as per General Financial Rules (GFR) of Government of India. Banks, DICs, KVIBs and
other IAs will coordinate and assist KVIC in ensuring 100 % physical verification. A suitable
mechanism will be devised by KVIC for such physical verification of units. Periodical reports, in
the prescribed format will be submitted by KVIC to the Ministry of MSME.
 The establishment of unit shall be considered after six months from the date of release of first
installment by the Financing Bank. The lock-in period of 3 years shall be considered from the
date of release of 1st disbursement by the financing banks.

Stipulated guidelines for disposal of loan applications:

 Disposal of loan applications under PMEGP scheme to be ensured within the stipulated
timeframes i.e. within 15 days for loan quantum upto Rs. 5 lakhs and 30 days in respect of
loan quantum above Rs. 5 lakhs.
 Applications for credit facilities from SC/ST customers shall not be rejected at branch level
and such rejections shall be done by the Next Higher Authority.
 Whenever applications for loans under Govt. sponsored schemes are rejected by the Branch
Manager for valid reasons, the same has to be recorded in a register maintained to this
effect which shall be examined by the Controlling authorities during their branch visits.
 Rejection of PMEGP proposals should be marked in KVIC (PMEGP e-Portal) by duly
mentioning the appropriate reason.
 Rejection of credit proposals from MSMEs is subject to concurrence of the Next Higher
Authority.

PMEGP 2nd LOAN GUIDELINES

An additional component for expanding/upgrading the existing unit set up under
PMEGP/REGP/MUDRA has been added, wherein the units already setup under
PMEGP/REGP/MUDRA and performing very well in terms of turnover, profit making and loan
repayment will be eligible for availing further financial assistance of up to Rs.1.00 crore for
Manufacturing units, through Banks with uniform subsidy of 15-20% by the Government for all
specified categories as per point no. 3 below. For Service/Trading units the financial assistance
would be up to Rs.25 lakhs only.

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Units would be selected uniformly from all over the country, about 10 from each district based on
the population density, industrial development, availability of traditional skill/raw material etc.

2nd financial assistance under PMEGP has also been approved for continuation over the 15th
Finance Commission cycle i.e., for the period of five years from 2021-22 to 2025-26, in line
with 1st loans under PMEGP.

Quantum and Nature of financial assistance:

2nd Loan for up-gradation of existing PMEGP Units:
Categories of Beneficiary Contribution Rate of Subsidy
Beneficiaries (Project Cost)
All 10% 15%
categories (of proposed expansion (20% in NER and Hill
/up-gradation cost) States)

a) The maximum cost of the project/unit admissible for margin money subsidy under
manufacturing sector for up-gradation is Rs.1.00 Crore, and the maximum subsidy would
be Rs.15 lakhs (Rs.20 lakhs for NER and Hill States).

b) The maximum cost of the project/unit admissible under Service/Trading sector for
upgradation is Rs.25 lakhs, and the maximum subsidy would be Rs. 3.75 lakhs (Rs. 5 lakhs
for NER and Hill States).

c) For all categories, rate of subsidy (of project cost) is 15% (20% in NER and Hill States).
Beneficiary’s contribution will be 10% for all categories.

d) The balance amount (excluding the own contribution) of the total project cost will be
provided by bank as term loan. The applicant can utilize the loan amount for investment
on fixed assets i.e. for construction of building/purchase of required new
machineries/Installation of machinery etc.

e) Under the term loan component (construction of building/industrial shed, machinery &
equipment etc.), the construction of own building may be included and ceiling of
construction should not usually exceed 25% of the total sanctioned project cost.

f) The capital expenditure component including cost of construction should be upto 60% of
the total project cost. The working capital cost would be upto 40%. However, the financing
bank can decide the criteria at the time of sanction of loan based on the nature of the
project.

Documents to be uploaded:
1. Previous ‘loan sanction letter’ issued by the Bank, Proof of ‘Margin Money claims adjusted
against previous loan’ and ‘Bank Certificate for full loan repayment applicable for Term
Loan only, (Working Capital(WC)may be exempted for obtaining the clearance Certificate).
2. Project report for expansion/upgrading the unit.
3. Passport size photograph.
4. IT returns for the last 1 year
5. Annual accounts certified by Charted Accountant for the last 3 years.

DIFFERENTIAL RATE OF INTEREST SCHEME (DRI Scheme)

Maximum Quantum: Rs. 15,000/- (For physically handicapped additional loan of Rs.5000/- for
artificial limbs/Braille typewriter.
Repayment Period:5-7 years fixed based on the income generation of the borrower on
installment or EMI basis.
 Housing Loans under DIR Rs. 20,000/- for SC/STs and Rs. 15,000/- for others
 For EL, as per Model IBA Educational Loan Scheme guidelines.

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Eligibility:
 Annual family income Rs. 18,000/- in Rural and Rs. 24,000/- in Urban and Semi- Urban areas.
 Individual whose land holding does not exceed 1 acre of irrigated and 2.5 acres of un-irrigated
land. No Ceiling for SC/ST engaged in Agriculture and Allied activities.
Target:
 1% of previous years Total Bank Credit.
 2/3rd of DIR loans in Rural & Semi Urban.
 Minimum 40 % to SC/ST beneficiaries.
DRI Scheme is operated through the following institutions:
 Orphanage and Women’s home
 Institutions for physically handicapped.
 State Corporations for SC/ST.
 State Minority Finance/Development Corporation.
Finance under DRI scheme for Solar Home Lighting System (Cir 277/2010)Objective:
 To be classified under Priority sector advances.
 To Purchase / installation of brand new Solar Home Lighting System.
Eligibility Family Income:
 Annual Family income of the borrower from all sources should not exceed Rs.18000/- in rural
areas and Rs.24000/- in Semi urban / Urban areas.
 Eligibility Land holding SC/ST Borrowers: There is no ceiling on land holding but the borrowers
should satisfy the income criteria.
Eligibility Land Holding:
 Other than SC/ST Borrowers: The borrower need not own any land or the size of the land
holding should not exceed one acre in case of irrigated land and 2.5 acres in the case of un-
irrigated land.
Quantum of Loan:
 The loan up to a maximum of Rs. 15000/- per unit.
 No Margin to be insisted.
 The assets purchased out of the bank loan are to be hypothecated to the Bank.
 No co-obligation to be insisted.
Simple interest at 4 % p.a.
 The loan is to be recovered within 60 months with a minimum repayment period of 36months.
Sanctioning Authority: Branch Manager.
For accounts covered under DRI Scheme, reporting under appropriate head in PSR 1 Flashreturn
and in the Annual Statement (STR 13) to be ensured.

Deendayal Antyodaya Yojana (DAY)-National Rural Livelihood Mission- NRLM (IC/333/2024)

Women SHGs and their Federations:

(I) DAY-NRLM promotes affinity-based women Self Help Groups (SHGs). However, only in case of
groups to be formed with persons with disabilities and other special categories like elders and
trans-genders DAY-NRLM may have both men and women in the Self-Help Groups.

(II) Women SHGs under DAY-NRLM consist of 10-20 members. In case of special SHGs i.e. groups
in the difficult areas, groups with disabled persons, and groups formed in remote tribal areas,
this number may be a minimum of 5 members.

(III) Federations of Self Help Groups formed at village, gram panchayat, cluster or higher level
may be registered under appropriate Acts prevailing in their respective states.

Financial Assistance to the SHGs:

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Revolving Fund (RF):

DAY-NRLM, MoRD, will provide Revolving Fund (RF) support as corpus ranging between ₹20,000 to
₹30,000 per SHG to strengthen their institutional and financial management capacity and build a
good credit history within the group.

Capital Subsidy- No capital subsidy would be sanctioned to any SHG under DAY-NRLM.
Community Investment Support Fund (CIF)
CIF will be provided by MoRD to the SHGs promoted under DAY-NRLM in all blocks and will be
routed through the village level/cluster level federations, to be maintained in perpetuity by the
federations. The CIF may be used by the federations to advance loans to the SHGs and/or to
undertake common/collective socio-economic activities.

Lending to SHGs and their individual members:

Eligibility Criteria for SHGs to avail loans:
(I) SHGs should be in active existence for at least 6 months as per their books of accounts (and
not from the date of opening of S/B account).
(II) SHGs should be practicing ‘Panchasutras’ i.e., regular meetings, regular savings, regular inter-
loaning, timely repayment and up-to-date books of accounts.
(III) SHGs should qualify as per grading norms fixed by NABARD. As and when the federations of
the SHGs come into existence, the grading exercise may be done by the federations to support
the banks.
(IV)The existing defunct SHGs are also eligible for credit if these are revived and continue to be
active for a minimum period of three months.

Loan amount:
A DP for the first year: 6 times of the existing corpus or minimum of ₹1.5 lakhs,
whichever is higher.
B DP for the second year: 8 times of the corpus at the time of review/enhancement
or minimum of ₹3 lakhs, whichever is higher
C DP for the third year: Minimum of ₹6 lakh based on the Micro Credit Plan (MCP)
prepared by SHG and appraised by the
federations/support agency and the previous credit
history.
D DP for the fourth year Above ₹6 lakhs, based on the MCP prepared by SHG and
onwards: appraised by the federations/support agency and the
previous credit history.

(iv) In case of Term Loan, banks are advised to sanction loans in doses as mentioned below:
A First dose: 6 times of the existing corpus or minimum of ₹1.5 lakh whichever
is higher
B Second dose 8 times of the existing corpus or minimum of ₹3 lakh whichever is
higher
C Third dose: Minimum of ₹6 lakh based on the MCP prepared by the SHGs and
appraised by the federations/support agency and the previous
credit history.
D Fourth dose Above ₹6 lakh based on the MCP prepared by the SHGs and
onwards: appraised by the federations/support agency and the previous
credit history.

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(Corpus is inclusive of revolving funds, if any, received by the SHG, its own savings, interest
earned by the SHG from on-lending to its members, income from other sources, and funds from
other sources in case of promotion by other institutes/NGOs.)

Credit facilities to SHG members:

(i) In order to facilitate women SHG members to graduate to entrepreneurs, banks may consider
extending loans up to ₹10 lakhs to individual members of select matured well performing
SHGs (SHGs which are more than 2 years old and have accessed at least one dose of bank
loan with timely repayment) as per their lending policy. The individual should be running a
viable economic enterprise. Banks are advised to share data on individual loans to women
SHGs members in a mutually agreed format and periodicity with DAY-NRLM.
(ii) One woman in every SHG under DAY-NRLM may be provided a loan up to ₹1 lakh under the
MUDRA Scheme, if she is otherwise eligible.
(iii) Banks are advised to provide minimum OD facility of ₹5000 to every woman SHG member
having PMJDY account in accordance with the guidelines issued by Indian Banks’ Association
(IBA). Banks may regularly share data on OD limit to women SHGs’ members in a mutually
agreed format and periodicity with DAY-NRLM.

Purpose of Loan and Repayment:

(i) In order to facilitate use of loans for augmenting livelihoods of SHG members, at least 50%
of loans above ₹1 lakh, 75% of loans above ₹4 lakhs and at least 85% of loans above ₹6 lakh
should be used primarily for income generating productive purposes. MCPs prepared by SHGs
would form the basis for determining the purpose and usage of loans.
(ii) Repayment schedule for Term Loans may be as follows:
 The first dose of loan may be repaid in 24-36 months in monthly/quarterly instalments.
 The second dose of loan may be repaid in 36-48 months in monthly/quarterly instalments.
 The third dose of loan may be repaid in 48-60 months based on the cash flow in
monthly/quarterly instalments.
From the fourth dose onwards loans may be repaid between 60-84 months based on the cash
flow in monthly/quarterly installments.
All credit facilities sanctioned under DAY-NRLM would be governed by the asset
classification norms issued by Reserve Bank of India from time to time.

Security and Margin:

(i) For loans to SHGs up to ₹10.00 lakh, no collateral and no margin will be obtained. No lien
should be marked against savings bank accounts of SHGs and no deposits should be insisted
upon while sanctioning loans.
(ii) For loans to SHGs above ₹10 lakh and up to ₹20 lakh, no collateral should be obtained, and
no lien should be marked against savings bank account of SHGs. However, the entire loan
(irrespective of the loan outstanding, even if it subsequently goes below ₹10 lakh) would be
eligible for coverage under Credit Guarantee Fund for Micro Units (CGFMU).
(iii) For loan to SHGs above ₹10 lakh and up to ₹20 lakh, a margin not exceeding 10% of the loan
amount exceeding ₹10 lakh may be obtained as per the bank’s approved loan policy.

Interest Subvention Scheme for Women SHGs:

I. Interest subvention scheme on Credit to Women SHG during the year 2024-25 for all Public
Sector Banks, Private Sector Banks and Small Finance Banks in all districts.
a. The scheme is limited to Women Self Help Groups under DAY-NRLM in rural areas only.
b. For loans up to Rs. 3 lakhs under the scheme, banks will extend credit at a concessional interest
rate of 7% per annum. For outstanding credit balance upto Rs. 3 lakh, banks will be subvented
at a uniform rate of 4.5% per annum during FY 2024-25.

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c. For loans above Rs. 3 lakhs and up to Rs. 5 lakhs under the scheme, banks will extend credit
at interest rate equivalent to their 1 year-MCLR or any other external benchmark based lending
rate or 10% per annum, whichever is lower. For outstanding credit balance above Rs. 3 lakhs
and up to Rs. 5 lakhs, banks will be subvented at a uniform rate of 5% per annum during FY
2024-25.

Women Enterprise Acceleration Fund:

A dedicated ‘Women Enterprise Acceleration Fund’ has been set up under NRLM to catalyse and
make available medium term to long term debt financing to women entrepreneurs to enable them
to invest in viable enterprises. This fund will also incentivize first-time women entrepreneurs to
start their enterprises and also support existing women-owned enterprises to grow and scale-up.

Individual Women-led enterprises would be provided the following benefits under Women
Enterprise Acceleration Fund:

1) Reimbursement of Credit Guarantee fees to lending institutions

The fund will extend support in form of reimbursement of actual credit guarantee fees incurred
by banks/financial institutions for taking credit guarantee cover under Credit Guarantee Fund
Trust for Micro and Small Enterprises (CGTMSE) or Credit Guarantee Fund for Micro Units (CGFMU)
under NCGTC. Actual credit guarantee fees will be reimbursed to banks/ lending institutions for
providing loans to individual women SHG members under DAY-NRLM for loans up to ₹5 Lakh for a
maximum period of 5 years. In case of loan amount exceeding ₹5 lakh, reimbursement of credit
guarantee fees will be done in proportion to the loan amount.

2) Interest Subvention on Prompt Repayment

Women entrepreneurs making prompt repayment of credit to financial institutions will be provided
2% interest subvention to incentivize good repayment behaviour. This will also make credit
affordable to women borrowers and enhance the viability of the enterprises. Under the Women
Enterprise Acceleration Fund, interest subvention will be provided to SHGs on loan outstanding up
to ₹1.5 lakh per borrower. In case of loan outstanding amount exceeding ₹1.5 lakh, interest
subvention will be limited to the ceiling of ₹1.5 lakh only. Interest subvention will be provided to
individual women entrepreneur up to a maximum duration of 3 years.
The above benefits will be provided to an Individual only once.

Guidelines on drawing Credit Information Reports (CIR) for SHGs:

As per the RBI guidelines, defaults by a few members of SHGs and/or their family member to the
financing bank should not ordinarily come in the way of financing SHGs per se by banks, provided
the SHG is not in default.
For sanction limit upto Rs.10 lakh: One CIR of all the office bearers alone shall be drawn and if all
are below high Risk, respective sanction authority as per their delegated powers can extend the
credit facilities to the respective SHG/JLG/MCG. If CIR of any one of the office bearers is High
Risk then prior clearance shall be obtained from next higher authority before release of the loan.

For sanction limit above Rs. 10 lakh: Two CIR of all the office bearers alone shall be drawn and if
all are below high Risk, respective sanction authority as per their delegated powers can extend
the credit facilities to the respective SHG/JLG/MCG. If CIR of any one of the office bearers is High
Risk then prior clearance shall be obtained from next higher authority before release of the loan.

Deendayal Antyodaya Yojana (DAY)-National Urban Livelihoods Mission (NULM):

Self-Employment Programme (SEP): Component 4
 The Government of India, Ministry of Housing and Urban Poverty Alleviation (MoHUPA) has
restructured the existing Swarna Jayanti Shahari Rozgar Yojana (SJSRY) and launched the
National Urban Livelihoods Mission (NULM) w.e.f. September 24, 2013 in all district
headquarters (irrespective of population) and all the cities with population of 1 lakh or more.

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 The Self Employment Program (SEP) of NULM focuses on providing financial assistance through
provision of interest subsidy on loans to support establishment of Individual & Group Enterprises
and Self-Help Groups (SHGs) of urban poor. With a view to improve the livelihood opportunities
for the poor in urban areas, Ministry of Housing and Urban Poverty Alleviation has enhanced the
scope of National Urban Livelihoods Mission. The Mission with enhanced scope was renamed as
“Deendayal Antyodaya Yojana - National Urban Livelihoods Mission (DAY-NULM)”.
RBI has conveyed extension/continuation of the DAY-NULM scheme upto 31.03.2024, or till the
approval of the new scheme, whichever is earlier.

TYPE OF SUBSIDY:
 Interest Subsidy, being interest charged over and above 7% rate of interest, will be available
for the term loans granted under Individual Enterprises (SEP-I) and Group Enterprises (SEP-G)
 Applicable Rate of Interest is to be charged to the account. Difference over 7% to be
claimed as interest subsidy with Urban Local Body (ULB).
 Interest subsidy will be given only in case of timely repayment of loan.
 An additional 3% interest subvention will be provided to all Women SHGs (WSHGs) who repay
their loan in time.
 For Identification of the WSHGs, branches are advised to update in BA020- SHG/JLG/MCG
 Details - Type of Group - Female.
 KYC, Assessment, Processing, Rate of Interest, Margin, Inspection, Insurance, Delegation of
Powers, Security, CGMSE coverage for SEP-I, SEP-G & SHG are as per extant guidelinesof MSME.
 Loans granted under NULM (SEP-I, SEP-G and SHG) are eligible to be covered under appropriate
guarantee cover.
 Loans granted under NULM scheme to be classified as advances to weaker section under
priority sector.

Finance can be extended to individuals for capital expenditure in the form of Term Loan and
Working Capital loans through Cash Credit. Composite Loans can also be extended consisting of
Capital Expenditure and Working Capital components, depending upon individual borrower’s
requirement.

Interest Subvention under DAY-NULM: Identification of eligible accounts by the Ministry by way
of uploading Master Data in PAiSA, Web Portal of MoHUA (Portal for Affordable Credit And
Interest Subsidy Amount) Effective From January,2019 Onwards

Selection Of beneficiaries:
Selection Of beneficiaries in the town would be done as per following guidelines:
Women beneficiary 30%
SCs & STs At least to the extent of the proportion of their strength in the
city/town population
Differently abled 5%
Minority Community 15%

Educational Qualifications: For both components (Individual Enterprises - SEP-I and Group
Enterprises -SEP-G), no minimum educational qualification is required for prospective
beneficiaries under this component. In addition to skill training of the beneficiaries, the ULB will
also arrange to conduct Entrepreneurship Development Programme for 3-7 days for individual and
group entrepreneurs.

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Project Cost:
The Maximum Project Cost for individual micro-enterprises cases is Rs.2,00,000/- (Rupees Two
Lakhs) and the Maximum Project Cost for a group enterprise is Rs. 2 Lakh per member or Rs. 10
Lakh, whichever is lower.
 No collateral required. Only the assets created would be hypothecated / mortgaged /pledged
to banks for advancing loans.
Margin: For loan upto Rs.50000 Nil,
For loan above Rs.50000 Minimum 5 % and maximum 10 %
The group enterprises (SEP-G) should have minimum of Three (3) major (above 18) members with
a minimum of 70% of the members from urban poor families. More than one person from the same
family should not be made a member of a group.

Repayment– 5 years inclusive of maximum moratorium of 6 months for Individuals and forgroups
repayment schedule ranges between 5-7 years after initial moratorium of 6 months.

Under SEP-G, Loan can be extended either as a single loan to the group functioning as oneborrowing
unit or each member of the group can be provided individual loans upto 2 lakhs and an overall cap
of 10 lakhs based on the principal of joint liability of the group.
Lending to SHGs :
 Opening of savings bank account of Self Help Groups (whether registered or unregistered)which
are engaged in promoting habit of savings among their members as a starting point.
Thereafter, the SHGs may be sanctioned Savings Linked Loans (varying from a saving to loan
ratio of 1:1 to 1:4) after due assessment of grading.

 However, in case of matured SHGs, loans may be given beyond the limit of four timesthe
savings as per the discretion of the bank.

 SHGs can avail either Term loan or a Cash Credit Limit loan or both based on their needs. In
case of need, additional loan can be sanctioned even though the previous loan is outstanding.

Prompt Repayment from SHGs: For Cash Credit limit to SHGs-

 Outstanding balance shall not have remained in excess of the sanctioned limit / drawing power
continuously for more than 30 days. There shall be regular credits and debits in the account.
In any case there shall be at least one customer induced credit during the month which shall
be sufficient to cover the interest debited during the month.

For Term loan to SHGs- a term loan account where all of the interest payments and /or
installments of principal were paid within 30 days of the due date during the entire tenureof the
loans would be considered as an account having prompt payment.

PM Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi) scheme (IC/491/2023):

Guidelines communicated by Ministry of Housing and Urban Affairs (MoHUA), Government of

India.
Guidelines
Parameters

Purpose To provide working capital loans upto Rs. 50,000/- to all street vendors
engaged in vending activities in urban areas.

1st Tranche 2nd Tranche 3rd Tranche

Loan Amount Upto Rs. Upto Rs. 20,000/- with Upto Rs. 50,000/- with

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10,000/- Minimum Rs. 15,000/- Minimum Rs. 30,000/-

Loan Tenor Upto 12 Months Upto 18 Months Upto 36 Months

After Closure of the Borrower shall be eligible for
Eligibility Criteria To all street 1st loan, Borrower availing 3rd Tranche loan of
vendors engaged shall be eligible for Rs. 50,000/- subject to
in vending the 2nd loan. (The successful repayment of the
activities in loans, which are 2nd tranche loans.
urban areas. settled by CGTMSE,
are not eligible for However, the facility under
the 2nd loan) 3rd tranche shall
be available after
completion of minimum
repayment period of 6
months under 2nd tranche
loans.

Margin Nil Nil Nil

Security Loans extended under the scheme are unsecured and guaranteed by
CGTMSE without payment of any guarantee fee.

Credit Guarantee CGTMSE Coverage available upto 31.03.2028

Udyam Not Mandatory, As per HO Cir. IC/789/2022 dated 30.12.2022

Registration
Certificate

Interest Rate RLLR + 1.05% = 10.30% (Presently RLLR – 9.25%)

Interest Subsidy @ 7% upto March 31, 2028

Product Code Product Code for all PM SVANidhi Loans- 711
Scheme Codes: 1st Tranche : 113720 , 2nd Tranche : 104600 , 3rd
& Scheme Code Tranche : 111200

ATMA – NIRBHAR BHARAT ABHIYAN SCHEMES (IC/190/2023)

Agricultural Schemes Covered under Atmanirbhar Bharat Abhiyan are:

1. AIF (Agricultural Infrastructure Fund Scheme)
2. AHIDF (Animal Husbandry Infrastructure Fund Scheme)
3. PMFME (Prime Minister’s Micro Food Processing Enterprises)
4. CBG (Compressed Bio Gas)
5. PM KUSUM (Prime Minister’s Kisan Urja Suraksha evam Uttham Mahabhiyan)

Central Sector Scheme Agricultural Infrastructure Fund (A I F):

Purpose To mobilize a medium - long term debt finances facility for investment
in viable projects for post-harvest management Infrastructure and
community farming assets through incentives and financial support in
order to improve agriculture infrastructure in the country.
Period Of The period of the scheme has been extended for 13 years i.e from 2020-
Implementation 21 to 2032-33.

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Beneficiaries Primary Agricultural Credit Societies (PACS), Marketing Cooperative

Societies, Farmer Producers Organizations (FPOs), Farmers, SHGs, JLGs,
Multi-Purpose Cooperative Societies, Agri- entrepreneurs, Start-ups,
Central/State Agencies or Local Body sponsored Public, private
Partnership Projects, State Agencies, Agricultural Produce Market
Committees (Mandis ), National & State Federations of Cooperatives,
Federations of FPOs (Farmer Producer Organizations) and Federations of
Self Help Groups (SHGs). APMCs operating regulated markets for
agriculture and allied sector produce including fisheries also be eligible.
Eligible Projects The scheme will facilitate setting up and modernization of key elements
of the value chain including:
(A) Post Harvest Management Projects like:
(B) Community farming assets including:
Quantum No minimum or maximum loan limit stipulated.
However, the interest subvention and credit guarantee cover benefits
are restricted to loans up to Rs.2.00 Cr only for a maximum of 7 years.
Classification Up to Rs.100 Crore in Banking System:
Priority Sector – Agriculture Ancillary Activities.
Above Rs.100 Crore in Banking System:
Non-Priority Sector.
Security For loans upto Rs. 2.00 Crores For Loans above Rs. 2.00 Crores
1. Hypothecation of assests 1. Hypothecation of assets
created out of bank finance. created out of bank finance.
2. Mortgage of landed property 2. Mortgage of landed property
(Primary Security) with Post development security
3. All eligible loans sanctioned value of minimum 125% of the
under the subject scheme will limit as per extant guidelines.
have Credit Guarantee Cover 3. If the sanctioning authority
under CGTMSE for loans up to Rs. feels that there is need for
2.00 Crores. The cost for this additional collaterals depending
coverage will be borne by the on risk factors, the same may be
Government. insisted.
4. CGTMSE under Hybrid model is
available
Interest
Subvention ubvention is restricted to a limit of Rs. 2.00 Crores for a maximum
period of 7 years.
Repayment Maximum repayment period up to 7 years (half yearly / yearly
instalments) including moratorium of 6 months to 2 years. Wherever the
repayment period is beyond 7 years, as per the requirement of the
Project, the benefit of 3% p.a interest subvention and refund of CGTMSE
fees will be available upto a maximum period of 7 years.

Animal Husbandry Infrastructure Development Fund (AHIDF):

Purpose 1. To provide financial support to infrastructure investments in dairy,
meat processing and animal feed plants.
2. To fulfil the objective of protein enriched quality food requirement of
the growing population of the country and prevent malnutrition.
3. To promote exports and increase the export contribution in the milk
and meat sector.

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4. To make available quality concentrated animals feed to the cattle,

buffalo, sheep, goat, pig and poultry to provide balanced ration at
affordable prices to provide financial support to infrastructure
investments in dairy, meat processing and animal feed plants.
Beneficiaries • Farmers Producer Organization (FPO)
• Private Companies
• Individual entrepreneurs
• Section 8 companies
• Micro, Small and Medium Enterprises
Nature Of Limit Term Loan
Activities Eligible • 1. Dairy Processing: Value added dairy product manufacturing:
• 2. Meat Processing and Value addition of facilities:
• 3. Eligible Entity can also avail benefit for establishment of Animal
Feed Manufacturing and Strengthening of existing units/plant
Margin Micro & Small units: 10%;
Medium Enterprises:15%
Others: 25%
Quantum Of Loan As per scheme guidelines no minimum or maximum loan ceiling is
stipulated.
Security Accounts falling under For all Other Category
MSME Definition
1. Hypothecation of Loan Security to be Stipulated
movable assets Quantum
created out of our Up to Rs. Hypothecation of Assets
finance. 1.60 created out of our finance
2. Wherever immovable Lakhs
assets are created the
same has to be Above Rs 1. Hypothecation of Assets
mortgaged. 1.60 created out of our finance.
3. In addition to the lakhs 2. Mortgage of landed property
above credit with Post development
guarantee cover is security value of minimum
available upto 25% of 125% of the limit as per
the credit facility extant guidelines.
under Credit 3. 3. However, if the
Guarantee Fund Sanctioning Authority feels
Scheme for Animal that there is need for
Husbandry and additional collaterals
Dairying (CGSAHD). depending on risk factors,
the same may be insisted.
Repayment The maximum repayment should not exceed 10 years from the date of first
disbursement inclusive of moratorium of 2 years on repayment of principal.
However the benefit of interest subvention will be available upto a
maximum of 8 years.
Repayment Repayment holiday of 2 years on principal amount.
Holiday
Availability Of Credit Guarantee will be provided only for those projects which are viable
Credit and are covered under MSME defined ceilings and the guarantee coverage
Guarantee would be up to 25% of the credit facility available to the EE.
Coverage

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PRIME MINISTER’S FORMALISATION OF MICRO FOOD PROCESSING ENTERPRISES (PM-FME):

Purpose Support to individual Micro Enterprises for both existing or new micro food
processing enterprises for expansion/upgradation of existing micro food
processing enterprises or setting up of new micro food processing
enterprises. Support to group category for setting up of common
infrastructure.
Eligibility UNDER INDIVIDUAL CATEGORY:

 Individual micro food processing units would be provided credit-linked

capital subsidy @35% of the eligible project cost with a maximum
ceiling of Rs.10.00 lakh per unit. Eligible project cost comprises cost of
plant & machinery and technical civil work, but excludes cost of
land/rental or lease work shed. However, technical civil work should
not be more than 30% of the eligible project cost.

 Organizations such as Individual entrepreneurs/ proprietorship Firms/

Partnership Firm/ Farmer Producer Organization(FPOs)/
NGOs/Cooperatives/ SHGs/ Pvt. Ltd. Companies, who have established
or propose to establish micro food processing unit, would be eligible
for financial assistance under the Scheme.

 The individual applicant should be above 18 years of age. No minimum

educational qualification of the applicant is required.

UNDER GROUP CATEGORY:

 For Common Infrastructure:

 Organizations such as Farmer Producer Organizations(FPOs)/Farmer

Producer Companies (FPCs)/Cooperatives/SHGs and its
Federation/Govt. Agencies, who have established or propose to
establish food processing line along with common infrastructure/Value
chain /incubation centers would be eligible for financial assistance
support under this component of the scheme. Proposal for both ODOP
or non-ODOP are eligible for assistance, however ODOP proposals would
be preferred.

 Substantial capacity of common infrastructure as well as processing

line assisted under the scheme should be available for use by other
units and public on hiring basis

 The applicant organization would be provided credit-linked capital

subsidy @ 35% of the eligible project with a maximum ceiling of Rs. 3
Crores. Eligible project cost comprises cost of plant & machinery and
technical civil works, but excludes cost of land/rental or lease work-
shed. However, technical civil work should not be more than 30% of the
eligible project cost.

 Total eligible project cost should not exceed Rs. 10 crores. There will
be no pre-condition of minimum turnover and experience of the
applicant organization.
Margin Beneficiary contribution should be minimum of 10% of the project cost
Quantum Maximum 90% of the project cost

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Classification
• Up to Rs.100 Crore in Banking System: Priority Sector – Agriculture
Ancillary Activities.

• Above Rs.100 Crore in Banking System: Non-Priority Sector.

Security Up to Rs.2 Crore:
• Hypothecation of assets created out of Bank finance.
• Wherever immovable assets are created the same has to be
mortgaged.
• CGTMSE coverage.
Above Rs. 2.00 Crore:
• Hypothecation of Assets created out of our finance.
• Mortgage of landed property with Post development security value of
minimum 125% of the loan amount.
• However, if the sanctioning authority feels that there is need for
additional collaterals depending on risk factors, the same may be
insisted.
Subsidy 35% of the project cost with maximum upto Rs. 10.00 Lakhs For Group
category, the applicant organization would be provided credit linked
capital subsidy @35% of the eligible project cost with a maximum ceiling
of Rs.3 crores
Subvention The beneficiaries under PMFME Scheme seeking credit linked subsidy
would be able to avail additional benefit of interest subvention @ 3% on
the interest rate being charged by the bank apart from the 35% subsidy
being provided under PMFME Scheme due to convergence with Agriculture
Infrastructure Fund (AIF).
Repayment Maximum of 10 years including moratorium period. Maximum moratorium
of 24 months based on requirement

COMPRESSED BIO GAS PLANT SCHEME (C B G):

Purpose For setting up of Compressed Bio-Gas (CBG) plants.

Target Group & Entrepreneurs who have been awarded Letter of Intents (LOIs) by Oil &
Eligibility Gas Marketing Companies (OMCs) for supply of Compressed Bio Gas under
SATAT Scheme.
from OMCs is a pre-condition for processing the loan.
Nature Of Term Loan, Working Capital
Facility
Quantum Of Up to Rs.100 Crores
Loan
Margin Term Loan: 15-25% of Project Cost.
Project cost shall include all components including margin money for
Working Capital as per Bank guidelines on financing Term Loan / Project
loans.
Working Capital: 15-25%
Eligible Rating Moderate risk and better.
Financing The CBG projects shall be financed through branches with capacity to
Branches handle such loans as decided by RO/CO.
Appraisal/Project All proposals will have to be necessarily appraised by Agriculture
Preparation Innovation Center (AIC), Priority Credit Wing, for viability /feasibility.
Security 1. Hypothecation of Assets created out of our finance.

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2. Post development security (Prime Security) value of minimum 133% of

the limit, including the mortgage of land where the CBG plant is
established. Exclusive charge on entire project assets including
immovable assets, movable assets, cash flow, Commercial Agreement
and Escrow Accounts.
3. Tripartite agreement between Bank, LOI holder and Oil & Gas Marketing
Companies (OMC) to be insisted for receipt of sale proceeds to Escrow
account with our Bank.
4. Commercial agreement executed by Oil & gas marketing companies
with LOI holders which contains escrow account clause. No additional
collateral to be insisted. Escrow Agreement shall be executed between
LoI holder (CBG Plant) & Lender. Lending Bank Branch has to forward
the copy of the Escrow agreement to OMCs and has to obtain the
acknowledgement from OMCs.
5. If Commercial agreement is not available collateral value of minimum
50% of sanctioned limit to be obtained.
Repayment Term loan repayable in 10-15 years.
Period
Moratorium As per appraisal report of AIC, PC Wing
Classification Priority Sector – Agriculture Infrastructure
Capital Subsidy The Ministry of New and Renewable Energy (MNRE) has notified Central
Financial Assistance (CFA) of Rs. 4 Crores per 4,800 kg of CBG per day
generated from 12,000 cubic meters of biogas per day, with a maximum
of Rs.10 Crore per project.
• The entire CFA will be released to the developer’s loan account in the
lending financial institution/banks for the purpose of offsetting the
loan amount only after successful commissioning of the project, after
achievement of Commercial Operation Date (COD).
• Capital Subsidy received for the Project, if any, should get credited to
the Term loan account.

PRADHAN MANTRI KISAN URJA SURAKHSHA EVAM UTTHAM MAHABHIYAN SCHEME - PM-KUSUM(
IC/106/24, IC/457/24)

Parameters Scheme guidelines

Purpose A. Setting up of Decentralized Ground/ Stilt Mounted Grid Connected Solar or
other Renewable Energy based Power Plants (REPP
B. Installation of Stand-alone Solar Agriculture Pumps.
C. Installation of New Solarised Grid Connected Agriculture Pumps including
Feeder Level Solarization.
Beneficiaries: Component A:

 Individual farmers/ group of farmers/ cooperatives/ panchayats/

Farmer Producer Organizations (FPO)/Water User associations (WUA).
The beneficiaries are termed as Renewable Power Generator (RPG).

Component B & Component C - Individual Pump Solarization (IPS) / Feeder

Level Solarisation (FLS):
All Individual farmers are eligible.

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However, priority to be given to small and marginal farmers who are using Micro
irrigation systems.
Cooperatives / Panchayats/ Water User Associations (WUA)/ Farmer Producer
Organizations (FPO)/ Primary Agriculture Credit Societies (PACS) or cluster
based irrigation systems are also eligible.
Eligibility Component A & Component C (FLS):

-station to avoid
transmission loss.
have a Power Purchase Agreement (PPA) with DISCOMs which is
valid up to 25 years from Commercial Operation Date (COD) of the project.

form of Bank Guarantee along with Expression of Interest (EoI).

Agriculture land is selected, the solar plants are installed in stilt fashion with
adequate spacing without affecting the farming activity.
ay compensation to DISCOMs on any shortfall in power
generation after commissioning of the plant.

per MW except REPP developed at own land.

nce from State Government & other local
bodies for setting up the Renewable Energy based Power Plant (REPP).

the technical know-how on the plant by the vendors.

Component B & Component C (IPS):

by solar pumps in off-grid areas, where grid supply is not available.

scheme except in dark zone areas.

For example, 3 HP pump capacity cannot have solar capacity of more than 3
Kw.
will be
limited to pump of 7.5 HP.
-Eastern region (NER); Hilly region
(Jammu & Kashmir, Ladakh, Uttarakhand and Himachal Pradesh) and Islands
(Andaman & Nicobar, Lakshadweep), the CFA will be available for pump
capacity up to 15 HP, however the CFA for pumps up to 15 HP will be restricted
to 10% of total installations.
-grid area, the stand alone Solar
Agriculture Pumps can be connected to the grid to feed surplus power at the
rate decided by the respective State.
– with State share and without State
share.
Nature of Term Loan
Facility
Quantum of
loan 70% of project cost enumerated in DPR.

Component B & Component C:

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With state Share:

1. 30% of project cost enumerated in DPR.
2. 10% of project cost enumerated in DPR for Himalayan, Island & NE States.
Without state Share:
1. 60% of project cost enumerated in DPR.
2. 40% of project cost enumerated in DPR for Himalayan, Island & NE States.
*In case the State Government provides subsidy, Loan amount will reduce
accordingly
Component C –Feeder level solarisation( IC/457/24)
70% of project cost.
50% of project cost enumerated in DPR for Himalayan & NE States
Margin Component A: Margin is 30% of project cost.

beneficiary share will reduce accordingly.

Component C –Feeder level solarisation( IC/457/24)

Minimum 10% of Project Cost.

 Margin may be considered upto 30%wherever CFA sanctioned is less than

30%, subject to project viability.

 Margin may be considered upto 50% wherever CFA sanctioned is less

than 50%, subject to project viability. (For Himalayan & NE States)
Security Up to Rs.1.60 Lakhs:
Hypothecation of assets created out of Bank finance.
Above Rs.1.60 Lakhs:
Hypothecation of Assets created out of our finance.
Mortgage of landed property with Post development security value of minimum 125%
of the loan amount.
Collateral Security to be taken wherever RoI concession is sought.
Tri-partite agreement to be executed between DISCOMS, Borrower and Bank for
receipt of sale proceeds of power produced to Escrow Account with our Bank.
Wherever Tri-partite agreement is not executed between DISCOMS, Borrower and
Bank for receipt of sale proceeds of power produced to Escrow Account, in addition to
the prime security minimum collateral of 50% of sanctioned limit to be obtained.
Repayment Component A & Component C (FLS): 15 years including repayment holiday upto
Period 24 months.

Component B & Component C (IPS) :Within 10 years including repayment

Holiday upto 24 months. Interest during moratorium to be paid along with
future installments and Repayable in monthly/ Quarterly/ Half-yearly/ Yearly
installments depending on income generation.
Subsidy Component A: Nil.

With State Share:

Subsidy)

Subsidy for Himalayan, Island & NE State).

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 Canara Institute of Bank Management

Without State Share:

States).

al farmers in the North-Eastern region (NER); Hilly region

(Jammu & Kashmir, Ladakh, Uttarakhand and Himachal Pradesh) and Islands
(Andaman & Nicobar, Lakshadweep), the CFA will be available for pump
capacity up to 15 HP, however the CFA for pumps up to 15 HP will be restricted
to 10% of total installations.

(upfront), 60% (on submission of UC & SoE) & 10% (on acceptance of project
completion report).

Component C (FLS):
to 30%

CFA up to 100% of the total eligible CFA will be released to the RESCO developer
through DISCOM on successful operation and performance of the solar plant.
assets of the solar power plant prior to
completion of PPA period, the first charge shall be towards recovery of
proportionate CFA granted to the project by MNRE

“PM VISHWAKARMA SCHEME” (Cir 701/2023, 142/2024, 596/2024)

 The Ministry of MSME, Government of India has introduced a new Central Sector scheme,
called ‘PM Vishwakarma Scheme’, which is fully funded by Government of India.
 The goal of ‘PM Vishwakarma Scheme’ is to offer holistic end-to-end support to the
Vishwakarmas, the artisans and craftspeople to enable them to move up the value chain in
their respective trades. The Scheme came into effect from 17th September, 2023.
 The scheme will be initially implemented for five years upto 2027-28, if not withdrawn
/amended by a further notification.
 Minimum age of the beneficiary should be 18 years on the date of registration.
 An artisan or craftsperson working with hands and tools and engaged in one of the below
family-based traditional trades, in unorganized sector on self-employment basis, shall be
eligible for registration/loan.
 Following trades are initially covered under the scheme: (i) Carpenter (Suthar); (ii) Boat
Maker; (iii) Armourer; (iv) Blacksmith (Lohar); (v) Hammer and Tool Kit Maker; (vi)
Locksmith; (vii) Goldsmith (Sonar); (viii) Potter (Kumhaar); (ix) Sculptor (Moortikar, stone
carver), Stone breaker; (x) Cobbler(Charmkar)/ Shoesmith/Footwear artisan; (xi) Mason
(Rajmistri); (xii) Basket/Mat/Broom Maker/Coir Weaver; (xiii) Doll & Toy Maker
(Traditional); (xiv) Barber (Naai); (xv) Garland maker (Malakaar); (xvi) Washerman (Dhobi);
(xvii) Tailor (Darzi); and (xviii) Fishing Net Maker.
Particulars First Tranche Second Tranche
Nature of the Loan Working Capital Demand Loan
Quantum of Loan Up to Rs.1.00 Lakh Up to Rs.2.00 Lakh
Rate of Interest Gross Rate Of Interest -13.00% p.a.
Interest Subvention from Government- 8.00% p.a.
Net Rate Of Interest -5.00% p.a

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Repayment Period 18 months 30 months

Margin Nil
Moratorium Nil Nil
Security Nature of Security Details: Primary Security- Assets created out of Bank
Finance Collateral Security; Guarantee Coverage:• The loans extended
under the scheme will be guaranteed by the Guarantee coverage from
CGTMSE. No Annual Guarantee Fee will be charged for the guarantee
coverage.
PC, DC, Inspection, Prepayment, foreclosure - Nil
 Under the PM Vishwakarma scheme guidelines, there is no separate requirement for
obtaining / insistence on stock/equipment insurance in PMV loans.
 Minimum Credit score has not been prescribed.
 The prerequisite / essential requirement to obtain loan under the scheme is that the
beneficiary should not have any NPAs/ default.
 Banks must make a credit decision (i.e sanction/ reject-ton) within 14 working days of
receiving a PM Vishwakarma loan application.
 SIDBI has confirmed that only those applications are being forwarded to Banks for sanction
of credit support wherein PM Vishwakarma portal has received confirmation from Ministry
of Skill Development and Entrepreneurship (MSDE) that the basic skill training has been
completed by the PMV beneficiary.
 Further as per PM Vishwakarma scheme guidelines, there is no need to obtain physical PMV
certificate, id card or proof of training from the applicant for processing of loan.

**************

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खुदरा उधार
RETAIL LENDING
GENERAL GUIDELINES:

 Employees of our Bank are not eligible for any loans (except RBI Housing Finance, Canara
Site, Canara Mortgage, Canara Home Loan Secure) under Retail Lending schemes, unless
otherwise specified in the relevant schemes.
 Other bank employees can be given RL loans with NOC from their employers.
 In respect of Canara Vehicle Loans to business concerns like proprietary concerns,
partnership firms, Corporates etc., enjoying credit facilities, loan can be considered by the
RSA as per the scheme notwithstanding that their other credit facilities fall under the
sanctioning powers of a higher authority.
 Whenever, branch sanctions Retail Loans exceeding 25 numbers in a month in any one
Retail Scheme (Excluding loans granted under Tie-up arrangements) authorization from the
Circle Head is necessary.
 All mortgage-based Retail Loans to be mandatorily sanctioned at RAHs or forwarded through
RAHs. In case of Branches not attached to RAHs, these loans are to be sanctioned at
Branches up to their delegated powers.
 Waiver of Salary credit /mandate in respect of Canara Vehicle (two wheelers) and Housing
loans may be permitted by DM/AGM RAH or DM/AGM-RO-CAC or DM/AGM COCAC in respect
of proposals falling up-to their powers. Sanctioning Authorities starting from DGM-RO-CAC
and onwards are delegated with powers to permit the above relaxations, up to their
delegated powers subject to the following conditions:
1. Sanctioning authority should obtain the pass sheet of the salary account of the
prospective borrower for the past six months, verify the salary credits and satisfy about the
conduct of the account.
2. The post-dated cheques/NACH-ECS Mandate accepted are of the salary credit account
only.
3. Proof as regards employment & confirmation in the service.
4. All the existing procedural guidelines pertaining to obtention of post-dated
cheques/NACH-ECS mandate to be followed.
 Canara Rent & Canara Mortgage proposals up-to Rs.7.50 Crore falling under HO powers shall
be processed by Retail Assets Wing at HO.
 Branch in Charge can sanction loans under the packages permitted by CO/HO as per terms
of package without referring to delegated powers under the specific scheme permitted and
also without referring to the NPA level under the scheme.
 Aggregation of liabilities/limits NOT to be done for deciding the sanctioning Authority in
case of sanction of Loans under same RL Scheme. However, aggregation of liabilities should
be done for deciding sanctioning authority for Second/subsequent loans under the same RL
scheme.
 Further, in case of Housing Loan, aggregation of liabilities/limits of all variants of Housing
Loans of the party will be done for deciding sanctioning authority irrespective of the fact
that whether the Housing Loans belong to Non HL-CRE category (i.e. upto two Housing units
per family) or HL-CRE category (i.e., 3rd & subsequent Housing unit).
 All proposals in respect of Retail Lending Schemes of close relatives of our employees shall
be sanctioned by scale IV and above authorities.
 Loans/ advances to close relatives of the employees of the Bank including the firms in

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which those relatives are interested (except those granted against term deposits with the
Bank) are to be sanctioned only by Scale-IV and above authorities depending on the type/
quantum of limits and their respective delegated sanctioning powers. Renewal without
enhancement can be sanctioned by respective sanctioning authorities, if on previous
occasion; sanction was accorded by next higher authority. Such Renewal with enhancement
in the limit shall be subject to clearance from the next higher authority.
 If loans/ advances are to be sanctioned to a close relative of the sanctioning authority,
then, only the next higher authority shall consider such proposals.
 All new Retail term loans customers sanctioned on or after October 1, 2024, including fresh
loans to existing customers, shall be provided with Key Fact Statement (KFS) to help them
take an informed view before executing the loan contract. The Key Fact Statement shall be
valid for period of at least three working days for loans having tenor of seven days or more,
and a validity period of one working day for loans having tenor of less than seven days.
 The Canara Retail Grade (CRG) shall be applicable for the Retail Lending schemes,
which are listed in HO Cir 825/2021 & IC/106/2023 dt.14.02.2023[Canara Retail Grade
(CRG) Model – Modification in guidelines]
 Mapping of CIC Risk Grade to Canara Retail Grade: The existing guidelines on
generation of Credit Information Reports from Credit Information Companies shall
remain unchanged. The delegation of powers and Rate of Interest for Retail Lending
schemes shall be linked to Canara Retail Grade (CRG) as under:

CIC Risk CIBIL/CRIF/Equifax/ Canara Retail Score (revised Risk Grade

Grade Experian Grade NF 990) Definition
CS:1 750 and above CRG –Prime* >95 Low Risk-I*
CRG- 1 > 80 ≤ 95 Low Risk-II
CS:2 749-700 CRG – 2 >70 ≤ 80 Normal Risk
CS:3 699-650 CRG – 3 >60 ≤ 70 Moderate Risk
CS:4 Below 650 CRG – 4 ≤60 High Risk
*CRG Prime is applicable to Housing Loans and Canara Vehicle 4-wheeler loans for arriving at
ROI.

Delegation of powers under Retail Loans (based on the Canara Rating Grade)
Delegation of powers for sanctioning of loans under consumer segment – Retail Loans
Canara Retail Grade Risk Grade Definition Sanctioning authority
CRG – 1 Low Risk Respective sanctioning authority,
CRG – 2 Normal Risk including authority at ROs/COs/HO
CRG – 3 Moderate Risk
CRG – 4 High Risk RO Head-CAC and above authorities,
subject to ensuring suitable risk
mitigants are in place.
However, in respect of Housing Loans
Respective Sanctioning Authority can
sanction High Risk(CRG4) proposals
subject to the following:
a) The credit score of CIC/s of
applicant/s should be 600 and above.
b) Gross income (cash accruals)/Monthly
salary of the applicant/s should be
minimum of Rs.12.00 lakh p.a. or Rs.1.00
lakh per month respectively.

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 Canara Institute of Bank Management

Policy on take-over of retail loans (62/14, 302/14, 128/17, 555/19,143/20,162/20, 167/20)

 Applicability: All individual Loans extended for non-business purposes by other banks/ FIs
with similar terms and conditions of our schemes viz. Housing Loans, Canara Rent, Canara
Mortgage.
 Prior to take over, the account should have satisfactory conduct with the transferring bank
for a minimum period of 1 year. The credit history of last one year should indicate
satisfactory repayment of the loan promptly on due dates for a minimum period of 6
months, or, alternatively, the minimum Risk Grade of the borrower shall be CRG-3.
 The account should not have appeared in SMA-2 during last 18 months as per CRILC report
(wherever applicable). In case where CRILC is not applicable, the same shall be ascertained
through CIR reports.
 All Housing loans and Canara Mortgage loans given to individuals can be taken over
irrespective of period run, provided, the account should not have appeared in or SMA-2
during last 18 months as per CRILC report (wherever applicable). In case where CRILC is not
applicable, the same shall be ascertained through CIR reports.
 Loans where projects are not completed and not fully disbursed shall not be taken over.

 Repayment: Repayment period should be restricted to the residual tenor of the loan at the
transferor bank except in respect of Lease Discounting proposals where extended
repayment period may be permitted. [HO CIR 366/2022].
 Review of sanctions under Retail Loans (374/2023)
Delegation of Powers due to NPA Levels

Branches having NPA levels of more than 5% under any Retail Lending Schemes, have NO
powers to sanction the loans under these schemes. These proposals have to be sanctioned by
RO HEAD CAC and above Authorities up to their respective Delegated Powers. However, Circle
Heads are authorized to permit select Branches/RAHs to sanction Retail Loans despite their
NPA under Retail Loans being more than 5% by analyzing details of overdues /NPAs, steps
initiated in reduction of overdues /NPAs and justification for the same.

Embargo on NPA Level of Branch: Loan can be sanctioned by the respective sanctioning
authority without referring to embargo on NPA levels of the Branch under TWO wheeler loan
Scheme. [as per HO Cir No.962/2020 24.12.2020]

CANARA VEHICLE

Four Wheelers: Income Criteria-: Salaried individuals (with or without salary tie-up) should
have a minimum gross salary of Rs.3.00 lakh p.a. (for Salaried borrower) & Gross annual income
(Cash accruals) of Rs.3.00 lakh p.a. as per latest ITR/ITAO subject to 3 years Gross Average
Annual Income of not less than Rs.2.50 lakh. (for Non-Salaried borrower).

NTH 25% or 12000/- pm whichever is higher.

CGM/GM-CO-CAC & above can relaxed NTH to 20% / 12,000/- pm whichever is higher
Pensioners: NTH for Pensioners should be 50%
Spouse income/rental income/income from investment and conveyance allowances can be added
to salary subject to documentary evidence (Cir 75/2021).

MARGIN-Four Wheeler Loans - MARGIN FOR NEW VEHICLES: (for both Existing & New Customers)
(Cir 843/2020) In respect of new vehicles only, following margin on total value - inclusive of in-
voice value, life tax, registration charges, insurance premium and other accessories (upto
Rs.25000/-):

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S No 4- Wheeler Loan amount for new Central/State All others

vehicle Government/ Autonomous customers
bodies /PSUs employees
1 Upto Rs.10.00 lakhs 10% 10%
2 > Rs.10.00 lakhs upto Rs.25.00 lakh 10% 15%
3 Above Rs.25.00 lakhs 20% 20%

Pre-owned (4 wheeler):
• Loan under this scheme can be considered for purchase of second hand / used vehicles also
which are not older than THREE years. In such cases, the minimum margin and quantum of
finance to be granted for purchase of the second hand vehicles will be the least of the
following:

maintaining a minimum margin of 50%).

Sanctioning Authority:
• Rs 15 lacs after maintaining a minimum margin of 40%-RSA
• >Rs 15 lac to 30 lacs (margin 50%)- RO HEAD CAC & ABOVE
• >Rs 30 lac to 50 lacs (margin 50%)- CO HEAD CAC & ABOVE
• Vehicles not older than 1 month from the date of purchase / first registration (registered
within one month) can be treated as new vehicle. Borrower should be the first transferee.

REPAYMENT- New Vehicle-Upto84 EMI, Old Vehicle-Upto future life available or 60 months
whichever is less

Two Wheeler: Income Criteria-Salaried Individuals: Min Gross Salary Rs.1.75 lakhs p.a. and
NTH 35%, On merits selectively RSA may relax NTH upto 25%.

Other Than Salaried Individuals- Min annual income Rs2.00 lacs as per ITR

Quantum of Loan:

FOR SALARIED- Existing Customer- 85%, New Customer- 80% of the of the total value inclusive
of invoice value, Life Tax, registration charges, insurance premium and other accessories OR in
both cases 50% of their annual net income in the immediate previous year, whichever is less.

Other than Salaried Individual:

Existing Customer- 75%; New Customer- 65% of the total value inclusive of invoice value, Life
Tax, registration charges, insurance premium and other accessories.
Margin –FOR SALARIED- 15 % (existing customers), 20% (new customers)
Other than Salaried Individual: 25% (Existing Customers), 35% (New Customers)
Repayment : 60 Months.
QUANTUM: In case of two wheelers - Sanction of loan based on Minimum Value of the vehicle:
Category of Branch Min. Invoice value of the vehicle (considered for sanction)
Metro/Urban Branches Rs.1.00 lac and above
Semi Urban/Rural Branches No Minimum Limit
CANARA VEHICLE LOAN TO AGRICULTURIST (CIR 20/2015)

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 Canara Institute of Bank Management

Eligibility: Land owning- irrigated > 5 acre, dry lands> 10 acres, where farmer is engaged in
allied activities (dairy, poultry, etc) land is not sufficient than gross income- Min 4.00 Lacs.
They should be our existing customers and should have satisfactory dealings with us for the
last two years. In case of new Branches that have not completed two years from the date of
their opening and in case of new customers. Regional-Head-CAC can permit the loans
selectively.

INCOME PROOF & NET TAKE HOME (NTH):

 Loans upto Rs.10 Lacs- latest ITR for ascertaining the gross annual income is desirable
where agricultural income is also declared. In case of non-availability of ITR, Income
Certificate issued by the Tahsildar/Mandal Revenue Officer/District Revenue Authorities or
any competent authority (Permitted by the State Govt. to issue such certificates) may be
accepted as proof of income for reckoning the eligibility/NTH. AEOs and AEO promotee
managers, can provide income certificate.

 When loan amount is above Rs. 10 Lacs- However, in case of loans above Rs.10 Lakh, ITR is
to be compulsorily insisted upon, where agricultural income is also declared. If the same is
not available, prior clearance from RO Head–CAC (for sanctions below RO-Head CAC) is to
be obtained for sanction of loans by respective sanctioning authority. In case of RO-Head-
CAC and above sanctions, respective sanctioning authority can permit the same.

 Net Take Home (NTH)-40%, minimum of Rs.1.50 lacs/-p.a. CGM/GM-CO-CAC & above
authorities are empowered to permit relaxation in NTH from 40% to 25% with a minimum of
Rs.1,00,000/-p.a. selectively.

REPAYMENT: New vehicle –Max 84 months. For Second Hand Vehicles-future life of vehicle as
specified by a qualified automobile Engineer or 60 months whichever is less.

“CANARA GREEN WHEELS” - SCHEME TO FINANCE ELECTRIC FOUR WHEELER VEHICLES:

(375/2022)
The Electric Vehicles are not only cost-effective, they also have tax benefit under section 80EEB
up to Rs.1.50 lakh.
PRODUCT CODES 603 (GENERAL) & 636 (AGRI)
Scheme Code: 111000 Canara Green Wheels (4-Wheeler), 111100 Canara Green Wheels (4
Wheeler)- Agriculturist
Purpose: Purchase of New Electrical Four Wheeler for personal /non-commercial purpose.
Classification: Non-Priority sector
Income criteria: Minimum income of Rs.3.00 lakhs p.a. as per the latest income of Salaried/ Non-
salaried class; Agriculturist: Net Annual Income of applicant and/or co-applicant together should
be a minimum of Rs.4.00 lakhs.
Eligibility: All Individual borrowers/professionals/reputed firms/companies & agriculturists.
Margin: Up to Rs.25.00 lakh - 15% ; Above Rs.25.00 lakh - 25%
Security: Hypothecation of the Vehicle proposed to be purchased.

REPAYMENT: Maximum 84 EMIs

Rate of Interest: As per Cir No 432/2023
CRG Rate of Interest
Up to 15 lakhs >15 Lakhs
CRG PRIME 9.15 8.80
RLLR+CRP (0.00)-0.10# RLLR+CRP(0.00)-0.45#
CRG 1 9.25 8.90
RLLR+CRP (0.00)-0.00# RLLR+CRP (0.00)-0.35#
CRG 2 9.40 9.05

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RLLR+CRP (0.15)-0.00# RLLR+CRP (0.15)-0.35#

CRG 3 9.80 9.45
RLLR+CRP (0.55)-0.00# RLLR+CRP (0.55)-0.35
CRG 4 11.95 11.50
RLLR+CRP (2.70)-0.00# RLLR+CRP (2.70)-0.45#
Present RLLR is 9.25%.
#Applicable Concession in RLLR

Introduction of tie-up arrangement with Corporate Vehicle Direct Selling Agents (CVDSA) to
route Canara Vehicle (4-Wheeler-all variants) loan leads/business in Metro/Urban Centres to
our Bank (605/2024):
 M/s. Giranar Software Private Limited (GSPL) (Business Name: CarDekho) is empaneled under
the tie-up arrangement as Corporate Direct Selling Agent (C-VDSA) to route Canara Vehicle
(4-Wheeler) loan leads/business w.e.f.22.08.2024.
 The Service Fee/Commission payable to empaneled Corporate Vehicle DSAs is under:
 1.30% of disbursed loan amount with a maximum of Rs 1,00,000/- for each disbursed
proposal.
 The above payment to be permitted by Circle Head.
 Commission will be paid after the loan disbursement.
 For every case referred by Corporate Vehicle DSA, Commission/fee will be paid only to one
entity either Corporate Vehicle DSA or empaneled vehicle dealers/sales executive and the
same shall be handled operationally by respective RAH.

Tie-up arrangement with reputed used-car-marketing companies / firms (online/offline) as

channel partners: (627/2024)
Empanelment:
i. Circle Head-CAC is empowered to empanel the Channel partners. The empanelment shall be
for an initial period of 1 year with half yearly review. Subsequently, the same may be renewed
for further 2 years and there on yearly review the performance by the same authority.
ii. Circle Head is empowered to de-panel the Channel partner at any point of time based on the
performance or complaint.
iii. If empanelment of partner is for pan India basis, GM RLFP Wing, Head Office will be
empowered to empanel on recommendations of the initiating Circle.
Eligibility: Firms having officially Valid Document involved in such business activity as ‘Trading in
Used Cars / Vehicles’ can be on boarded. The firm should be operating in the business for at least
1 year.
Commission: Commission shall be the same as is given to the Seizure Agents for bringing
prospective buyers for seized vehicles as under - 5% of sale value or contractual liability
whichever is less subject to maximum of Rs.50000/- (including GST).

CANARA BUDGET:

PURPOSE: To meet any personal/domestic needs of the proposed borrower and not for
speculative purpose.
ELIGIBILITY: All confirmed employees of: a. Central/State Government. b. Reputed PSUs/Joint
Stock Companies. c. Reputed Corporates/Public Limited Companies/Private Institutions. d.
Lecturers/Asst. Professors/Professors of Colleges/ Research Institutes and Universities/ Govt.
school Teachers / Reputed Private School teachers. e. IT/BT Companies.
OTHER CONDITIONS:
1) The applicant should maintain his/her salary account with the branch along with an

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undertaking letter from the employer not to shift the salary account to other bank/s without
obtaining prior clearance from the advancing branch.
2) In case of new relationships, minimum 3 months’ salary should have been received regularly
and credited to the Salary account of the party.
3) Minimum Net Take Home Salary (NTH) of borrower should not be less than 25% OR Rs.10,000
p.m. whichever is higher after meeting proposed loan installments for all packages and
individual loans.
4) CGM/GM-HO-CAC and above authorities are empowered to permit relaxation in NTH to 20% or
Rs.10,000/- whichever is higher, after meeting the proposed loan instalment, VERY
SELECTIVELY of both individual cases and also in Special Packages upto their delegated
powers, subject to maintenance of salary account or registration of salary mandate.
5) No loan should be granted to any individual customer/employee with only Salary recovery
mandate (unless a package is permitted for the group).
6) Normally, the borrower should not have availed any other clean credit facility from other
banks. However, the applicant may be granted loan under this scheme even if there are other
clean loans outstanding, provided, the total of all clean loans outstanding at any point of time
does not exceed the total eligible quantum under this scheme.
7) If any secured limit has been availed, the details thereof to be called for before extending the
loan under the scheme, in order to make a careful assessment about the repayment capacity
of the applicant.
8) Obtention of few PDCs are to be ensured as recovery Mechanism wherever applicable.

SANCTIONING AUTHORITY & QUANTUM OF LOAN (TERM LOAN):

Sanctioning Authority / CAC Sanctioning Powers

Branches headed by Scale I 6 months gross salary subject to maximum of Rs 2.00 lakhs
1. Branches headed by Scale II 6 months gross salary subject to maximum of Rs 3.00 lakhs
2. Credit Managers in VLBs/ ELBs
1. Branches headed by Scale III 6 months gross salary subject to maximum of Rs 4.00lakhs
2. Senior Manager in ELB / VLB
Chief Manager VLB/ ELB/ 10 months gross salary subject to maximum of Rs 5.00lakhs
DM-RO-CAC/ DM-CO-CAC
AGM of ELB 10 months gross salary subject to maximum of Rs 6.00lakhs
AGM-RO-CAC/ AGM-CO-CAC 10 months gross salary subject to maximum of Rs 7.00lakhs
DGM Branch/ DGM-RO-CAC 12 months gross salary subject to maximum of Rs 8.00lakhs
DGM-CO-CAC 15 months gross salary subject to maximum of Rs 9.00lakhs
CGM/GM-CO-CAC 15months gross salary subject to maximum of Rs 15.00lakhs
CGM/GM-HO-CAC Above 15 months gross salary and above Rs.15.00 lakh

Note: Gross salary as per Salary Certificate of the previous month. Branches to ensure that salary
components reflected in the salary certificate are of regular nature

Branches having NPA levels of more than 5% under Canara Budget portfolio have No powers to
sanction the loans under these schemes. The proposals have to be sanctioned by RO Head-CAC
and above Authorities up to their respective Delegated Powers. However, Circle Head is
authorized to permit select Branches to sanction Canara Budget Loans despite their NPA being
more than 5% by analyzing details of overdues / NPAs, steps initiated in reduction of overdues /
NPAs and justification for the same.

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Two special schemes under Canara Budget have been formulated as under:
a. Canara Budget-Prime (with & without salary tie-up): To all the confirmed employees of
Central Government/State Government/ Personnel from Defence and Paramilitary Forces / PSUs
& Autonomous Bodies of Central & State Govt.

b. Canara Budget-Delight(with salary tie-up only): To all the confirmed employees of Reputed
Corporates/MNCs/ Public & Private Ltd. Companies/Private Institutions/ Universities, Reputed
Schools, Reputed Colleges, Reputed Hospitals & IT BT Companies.

Branches have to obtain an undertaking letter from borrower & co-obligant, if opting for the
Tenor elongation, at the time of opening the loan account and the same should be effected in the
CBS system wherever applicable. In this regard, a suitable clause has been incorporated in
Revised Agreement (i.e. Take Deliver letter to DPN – NF 991). This revised NF 991 is available in
LAPS also.

Particulars Canara Budget-Prime (with & Canara Budget-Delight (with salary

without salary tie-up) tie-up only)
Eligibility: All the confirmed employees of: All the confirmed employees of:
Central Government/State Reputed Corporates /MNCs / Public
Government / Personnel from & Private Ltd. Companies/Private
Defence and Paramilitary Forces / Institutions / Universities, Reputed
PSUs & Autonomous Bodies of Schools, Reputed Colleges, Reputed
Central & State Govt. Hospitals & IT BT Companies.

Service Criteria: Minimum 1 year of service & Minimum 1 year of service &
confirmed in the service. confirmed in the service.
Purpose: To meet any personal/domestic needs of the proposed borrower and not for
speculative purpose.

Quantam & Sanctionin Quantum CRG Sanctionin Quantum CRG

Delegation g Authority g Authority
Respective 25 Up to Respective 25 Up to
Branch Months’ Moderat Branch Months’ Moderat
Head gross e e Risk Head gross e e Risk
Salary, (CRG-3) Salary, (CRG-3)
subject subject
to a to a
maximu maximu
m of Rs. m of Rs.
20.00 15.00
Lakh. Lakh.
RO Head 25 Up to RO Head 25 Up to
CAC Months’ High Risk CAC Months’ Moderat
gross (CRG-4) gross e e Risk
Salary, Salary, (CRG-3)
subject subject
to a to a
maximu maximu
m of Rs. m of Rs.
30.00 20.00
Lakh Lakh
CGM-HO Above 25 Up to CGM- Above 25 Up to
CAC & Months’ High Risk HOCAC & Months’ Moderat
above gross (CRG-4) above gross e e Risk
authorities Salary authorities Salary (CRG-3)
and and
above above
Rs. 30.00 Rs. 20.00

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 Canara Institute of Bank Management

Lakh. Lakh.
NTH Minimum Net Take Home Salary (NTH) of borrower should not be less than
25% or Rs. 10,000/- p.m. whichever is higher after meeting instalments of
all existing loans and proposed loan.
Repayment Repayable in 84 equated monthly instalments
Security (Co- Co-obligation of spouse/legal heir of the borrower. Wherever spouse/legal
obligation) heir of the borrower is not available, suitable Co obligation good for the
loan amount and acceptable to the bank should be obtained irrespective of
quantum of loan. However, as far as possible, cross/mutual co-obligation to
be avoided.
Processing Charges 100% Waived
Second/Subsequen Respective Sanctioning Authority can permit Second/subsequent loan during
t Loan: the currency of the existing loan, subject to the following:
i. Within the overall ceiling fixed as per income of the borrower,
subject to NTH.
ii. Shall be sanctioned only after completion of two years from the
date of the disbursement of the First Loan under this scheme.
iii. The first loan shall be closed either from the borrower’s own source
or from the proceeds of the Second Loan.
iv. Wherever, existing loan is closed out of the proceeds of the
second/subsequent loan, the same shall be clearly mentioned in the
sanction.
v. At any point of time, only one loan shall be outstanding under the
scheme.
vi. The existing loan shall be standard and nil over dues to be ensured
while sanctioning subsequent loan.

OVERDRAFT FACILITY: Overdraft (clean) facility up to a maximum of Rs. 3.00 lakhs (subject to
renewal once in 2 years) may be extended to the Top Executives in the cadre of Secretary,
Additional/Joint Secretaries and above in Central Governments/Secretaries to State Government
and Top Executives of big Corporate/public sector undertakings such as Chairman/MD/ED or
equivalent post only. Interest shall be serviced periodically. In case of OD to Top Executives as
indicated above, branch may, at their discretion, waive opening of SB accounts / salary credit /
letter of undertaking from the borrower. However, a salary certificate/slip, showing the
deductions, may be obtained and held on record.

SPECIAL PACKAGE UNDER RETAIL LENDING SCHEMES TO THE EMPLOYEES OF INDIA’S PREMIER
EDUCATIONAL INSTITUTIONS / COLLEGES AND CENTRAL UNIVERSITIES COMING UNDER MoE &
MOHFW AND WHICHARE ELIGIBLE TO BE FINANCED BY HIGHER EDUCATION FINANCING AGENCY
(HEFA) – ON ALL INDIA BASIS. Valid from 01.04.2024 to 31.03.2025 (254/2024)
 Financing under Canara Green Wheels (Vehicle Loans-Four wheeler) has been introduced under
this package.
 100% waiver in the applicable processing charges for Housing Loans, Canara Vehicle Loans
(Four wheeler & Two wheeler), Canara Green Wheels and Canara Budget Loans.
 Respective Branches can sanction higher quantum of loan up to 30 months’ gross salary subject
to a maximum of Rs. 25.00 Lakh under Canara Budget Scheme with Risk gradation up to
“Moderate Risk (CRG-3)”.
Housing Loans: Eligibility: Confirmed employees with 1 year of regular service.
Canara Vehicle (Four Wheeler): Quantum:90% of the total value irrespective of the loan
amount. For old/used vehicles as per the scheme norms.
Canara Vehicle (Two Wheeler): Quantum: 85% of the total value for the existing as well new
customer OR To the extent of 50% of their annual net income in the immediate previous year,
whichever is less, by duly maintaining the required NTH.
Canara Budget (Quantum): Higher quantum of loan up to 30 months’ gross salary subject to a

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maximum of Rs. 25.00 Lakh to the confirmed employees.

Concessional Rate of interest:

Housing Loan:
Risk Grade Permitted ROI
CRG: Prime RLLR-0.95%
CRG:1 RLLR-0.95%
CRG:2 RLLR-0.85%
CRG:3 RLLR-0.75%
The above concession is irrespective of category of borrower (i.e. Women/others) and loan
amount. *For 3rd unit 0.25%, 4th and subsequent unit 0.50% extra ROI to be charged, for the
proposals falling under HL-CRE.

Canara Vehicle –Four wheeler:

Risk Grade Permitted ROI
CRG: Prime RLLR-0.65%
CRG:1 RLLR-0.65%
CRG:2 RLLR-0.50%
CRG:3 RLLR-0.35%

The above concession is irrespective of the category of the borrowers (i.e. Women / Others) and
category of the vehicle.

Canara Vehicle – Two wheeler:

Risk Grade Permitted ROI
Women Others
CRG: Prime RLLR + 1.85 RLLR + 1.90
CRG:1 RLLR + 1.85 RLLR + 1.90
CRG:2 RLLR + 2.00 RLLR + 2.05
CRG:3 RLLR + 5.00 RLLR + 5.05
CRG:4 RLLR + 7.00 RLLR + 7.00

Canara Budget:
With salary tie-up:
Risk Grade Permitted ROI
CRG:1 RLLR+1.35%
CRG:2 RLLR+1.45%
CRG:3 RLLR+1.55%

Without salary tie-up:

Risk Grade Permitted ROI
CRG:1 RLLR+1.55%
CRG:2 RLLR+1.65%
CRG:3 RLLR+1.80%
The above concession in Rate of Interest shall be applicable only to the new loans opened and
till the loan completes 3 years from the date of the first disbursement.
Special Package with various concessions under Housing Loans & Vehicle Loans to the
Employees, Doctors & Professors of M/s Manipal Education & Medical Group and all its
affiliates (MEMG) – ON ALL INDIA BASIS (337/2024):
 The Special Package is valid up to 31.03.2025.

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 100% waiver in the applicable processing charges for Housing Loans, Canara Vehicle Loans
(Four wheelers including Green Wheels).
 Permitted absorption of legal, valuation & vetting charges in respect of Housing Loans.
 Housing Loans - Relaxation in Eligibility Criteria: Higher loan quantum towards purchase of plot
up to 70% as against 60% of total sanctioned loan quantum, in respect of composite Housing
Loans.
 Canara Vehicle (Four Wheeler including Green Wheels) – Relaxation in Margin: 95% of the
invoice value, inclusive of life tax, registration charges, insurance premium and other
accessories (up to Rs. 25,000/-), with 5% margin irrespective of the loan amount & type of
vehicle.
 CONCESSIONAL RATE OF INTEREST
Housing Loan (All Variants):
Risk Grade Permitted ROI
CRG: Prime RLLR-0.95%
CRG:1 RLLR-0.95%
CRG:2 RLLR-0.85%
CRG:3 RLLR-0.75%
CRG:4 RLLR-0.50%

The above concession is irrespective of category of borrower (i.e. Women/others) and loan
amount.
*For 3rd unit & 4th unit 10 bps extra and 5th & subsequent unit 50 bps extra for the proposals
falling under HL-CRE.
Canara Vehicle (Including Canara Green Wheels Vehicle) – Four wheeler
Risk Grade Permitted ROI
CRG: Prime RLLR-0.65%
CRG:1 RLLR-0.65%
CRG:2 RLLR-0.60%
CRG:3 RLLR-0.55%

The above concession is irrespective of the category of the borrowers (i.e. Women / Others) and
category of the vehicle.

Special Package under Retail Lending Schemes to the Confirmed Employees and Doctors of
M/s Narayana Health Ltd. Group and all its subsidiaries – ON ALL INDIA BASIS (385/2024)
 The Special Package is valid up to 31.03.2025.
 100% waiver in the applicable processing charges for Housing Loans, Canara Vehicle Loans
(Four wheelers including Green Wheels) & Canara Budget Loans.
 Higher loan quantum towards purchase of plot up to 70% as against 60% of total sanctioned
loan quantum, in respect of composite Housing Loans.
 Canara Vehicle (Four Wheeler including Green Wheels) – Relaxation in Margin: 5% margin
irrespective of the loan amount & type of vehicle. (For old/used vehicles as per the scheme
norms)
 Concessional ROI under Housing Loans, Vehicle Loans (Four Wheelers) & Canara Budget Loans.
Special Package under Housing Loans to the beneficiaries of Central Government Employees
Welfare Housing Organization (CGEWHO) – ON ALL INDIA BASIS (657/2024)
 The Special Package is valid up to 31.03.2025.
 100% waiver in the applicable processing charges for Housing Loans.
 Permitted absorption of legal, valuation & vetting charges in respect of Housing Loans.
 Concession in ROI under Housing Loans as below:
CRG Prime & CRG 1: RLLR - 0.95%
CRG 2: RLLR – 0.85%
CRG 3: RLLR – 0.75%
The above concession is irrespective of category of borrower (i.e. Women/others) and loan

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amount, involving a maximum interest concession of 125 bps.

SPECIAL PACKAGE UNDER RETAIL LENDING SCHEMES TO THE CONFIRMED EMPLOYEES OF

NATIONAL COUNCIL OF SCIENCE MUSEUMS (NCSM) – ON ALL INDIA BASIS (654/2024)
 The Special Package is valid up to 31.03.2025.
 Concessional ROI under Housing Loans, Vehicle Loans (Four Wheelers) & Canara Budget Loans
as below
Housing Loan:
CRG Prime & CRG 1: RLLR - 0.90%
CRG 2: RLLR – 0.85%
The above concession is irrespective of category of borrower (i.e. Women/others) and loan
amount, involving a maximum interest concession of 45 bps.
Canara Vehicle – 4 wheeler:
CRG Prime & CRG 1: RLLR - 0.65%
CRG 2: RLLR – 0.50%
The above concession is irrespective of category of borrower (i.e Women/others) and loan
amount, involving maximum interest concession of 80 bps.
Canara Budget – with salary tie-up:
CRG Prime & CRG 1: RLLR + 1.35%
CRG 2: RLLR + 1.45%
The above concession is involving a maximum interest concession of 25 bps.

CANARA MORTGAGE (613/2022 , 288/2023)

 Eligibility: Individual Customers only, No loans under the scheme to Companies/
Firms/Business establishments /Trusts/HUFs.

 Quantum:
a. 50% on the value of the property proposed to be offered as security as per the valuation
report given by the panel valuer of the Bank.
OR
b. Rs. 750 lakh
OR

c. (i)Salaried class: Low/Normal CRG grade - 96 times last drawn monthly gross salary
(Regular income to be ascertained by verifying previous 6 months’ salary slips).

Non- Salaried class: Low/Normal CRG grade - 8 times of cash accruals (Average of the last three
preceding years annual cash accruals) i.e. the financial years immediately preceding the
current financial year during which the customer desires to avail loan.

Under this category (Salaried /Non-Salaried), Sanctioning Authority has to ensure that the party
is having adequate income to meet the repayment obligation with availability of minimum NTH
of 35% or Rs.30,000/- whichever is higher after meeting the existing and proposed EMIs.

(ii) Salaried class: Medium/High CRG grade - 84 times last drawn monthly gross salary (Regular
income to be ascertained by verifying previous 6 months’ salary slips).

Non- Salaried class: Medium/High CRG grade - 7 times of cash accruals (Average of the last
three preceding years annual cash accruals) i.e. the financial years immediately preceding the
current financial year during which the customer desires to avail loan.

Under this category (Salaried / Non-Salaried), Sanctioning Authority has to ensure that the
party is having adequate income to meet the repayment obligation with availability of
minimum NTH of 30% or Rs.25,000/- whichever is higher after meeting the existing and
proposed EMIs.

Whichever is less.

 MARGIN: 50% No deviation in margin to be permitted up to GM / CGM / HO CAC.

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 Rate of Interest is linked to the percentage of the Security

CRG score Band CRG Applicable Applicable Applicable

Scoring % spread where spread where spread where
Security is equal Security is Security is
to 200% >200%=300% >300%
RLLR +1.15 RLLR +1.05
CRG:1 >80 RLLR +1.25
RLLR +1.40 RLLR +1.30
CRG:2 >70 ≤ 80 RLLR +1.50
RLLR +1.95 RLLR +1.85
CRG:3 >60 ≤ 70 RLLR +2.05
RLLR +3.45 RLLR +3.35
CRG:4 ≤60 RLLR +3.55

 REPAYMENT:
 Upto 120 months (10 years) by Respective Sanctioning Authority.
 Upto 144 months (12 years) by Next Higher Authority on case to case basis.
 Upto 180 months (15 years) by Circle Head CO-CAC on case to case basis.

 Delegation of Power
Sanctioning Authority/ CACs Sanctioning Powers
Head of RAH 200
AGM-RO-CAC/ AGM-CO-CAC 300
DGM–RO-CAC / DGM-CO-CAC 400
GM-CO-CAC 500
CGM–CO-CAC 600
CGM/GM-HO-CA 750*
*Canara Mortgage proposal up to Rs.750 lacs falling under HO powers shall be processed by
Retail Assets Wing and beyond Rs.750 lacs shall be processed by the respective Corporate
Credit Wings at HO

CANARA RENT
● Eligibility:- Scheme is for financing against rent receivables. Loan to Owners of premises
wherever land & building is given on lease to PSUs / Reputed Corporate etc.
● Margin- 25%
● Quantum:- Maximum – 75% of the net rent receivable for the unexpired period of lease, net
of TDS and advance rent taken and other applicable taxes if any.
ED-CAC may permit loan up to 85% of the gross rental receivables less TDS and advance rent
taken in respect of proposals falling up to their powers. CAC of the Board may permit loan up
to 85% of the gross rental receivables less TDS and advance rent taken in respect of proposals
falling under their sanctioning powers as also that of MC.
● THE METHOD TO COMPUTE THE LOAN QUANTUM IS AS UNDER:
i) Gross rent receivables (i.e. total rent receivables for the unexpired lease period)
ii) Less : Applicable TDS on gross rent receivables , Applicable taxes like property tax, good &
service tax (GST) etc . if any and Advance rent taken.
iii) Net rent receivables (gross rent receivables minus TDS, other taxes and advance rent taken
i.e. (i) - (ii)
iv) Less : Applicable margin on net rent receivables (iii)
v) Eligible Loan Quantum=Net rent receivables - Applicable margin i.e., (iii)-(iv)
● GST to be deducted unless otherwise lessee brings it on record that they will pay over &

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above rent.
● For Corporate Borrowers- Computation of Loan Quantum:
● In case of property (premises leased to our Bank/other Nationalized
banks/PSUs/Central/State /semi Govt Undertakings / Reputed Corporates /MNCs the unexpired
period of lease (Certain and/or Option period) or upto 15 yrs whichever is less shall be
considered irrespective of ratings but taking into a/c the following
a) In respect of urban/metro areas, EMT of property leased out should be 133% of loan besides
ensuring receivables
b) In respect of rural/ semi urban EMT of property shall cover 150% of loan besides ensuring
receivables

Repayment period:
● Unexpired lease period (Max 120 months) by respective sanctioning Authority.
● Longer repayment period upto144 months or unexpired lease period for Navratna, PSUs,
AAA rated reputed company may be permitted by CGM/GM HO CAC and above authorities.

● For CORPORATE BORROWERS- In respect of loans granted against Rent receivables from
Navarathna Companies, PSUs, AAA rated reputed Companies, Our Bank, Insurance
Companies Longer repayment period i.e., upto 180 months OR unexpired lease period
considered for limit eligibility whichever is earlier, may be permitted by Circle Head- CAC
and above authorities upto their delegated powers. Repayment can be by way of EMI/
Ballooning/structured installment.

● Security: EMT of atleast 100% value of property. Exceptional case - EMT can be waived for
loans upto Rs.2 lacs

● In case EMT of property against the rentals of which loan is proposed is not possible for any
reasons, security by way of mortgage of an alternate property having a value of not less
than 150% of the loan amount can be obtained subject to the following: “Where a third
party property is proposed to be taken as collateral security by way of EMT for an advance,
branches shall stipulate / obtain the personal guarantee of the owner/s of such property.
Further, such a proposed guarantor should also open an account with the branch concerned
if he / she does not already have one. Bank’s normal procedure for opening a new account
should be scrupulously followed by the branch and particularly, the introducer of the
account shall be one other than the borrower himself / herself.” In very deserving cases,
based on merits, the sanctioning authority may permit acceptance of such alternative
property with value not less than 130% of the loan amount.

● The loan under this scheme may be granted in rural/semi urban places, where the property
(premises) is leased out to our Bank/other Nationalized Banks/PSUs/Reputed
corporate/MNCs and Central/State/Semi Govt. undertakings.

Canara HEAL (280/2024, 415/2024):

Introduction of Digital Emergency Healthcare Term Loan Product under Retail Loans- “Canara
HEAL” Healthcare (Emergency Healthcare STP) -A special scheme for funding the shortfall of
hospital expenditure while settling the claims of self and/or dependents through TPAs to both
Existing & New customers by way of Straight-through-Processing (STP) Healthcare loan.

Eligibility:
 Customer should have a valid Health Insurance Policy.
 Our associated Third Party Administrator (TPAs) should be under contract with Health
Insurance Companies to manage & administer Health Insurance Policies.

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 Customer should be resident Indian aged between 21-55 years

 Existing: Salaried & Non-Salaried Customers
 New: Only Salaried Class Customers
 Customer shall have CIC Score of 700 & above
 Customer should not have slipped to SMA/NPA category in last 12 months, if already availed
any credit facility
 For Salaried customer, Minimum salary credit shall be Rs. 50,000.00 per month. In the last 6
months at least 4 times monthly salary shall have been credited in the savings bank subject to
mandatory salary credit in the savings bank during 2 preceding months from date of loan
application. Minimum Debit turnover in the savings account should be Rs 0.75 lakh & above in
last 6 months.
 For Non-Salaried & Customers maintaining Minimum Average SB Balance of Rs 50,000/- during
the last 6 months: Minimum Credit turnover in savings account should be Rs 1.00 lakh.
Minimum Debit turnover in the savings account should be Rs 0.75 lakh & above in last 6
months.
 Customer should not have slipped to SMA/NPA category in last 12 months, if already availed
any credit facility
 Only ‘INDIVIDUAL’ and Joint Accounts with relationship ‘SOW’ are only eligible.
 Minors, Joint account holders with other than ‘SOW’ relationship, dormant/in-operative ac
counts, staff accounts, pensioners, NRE accounts certain pneumonic codes etc are not eligible
under said scheme
 The existing customer should have more than 6 months relationship with our bank for.

For Existing customer having the salary account with other Bank eligibility shall be as below:

 During the last 6-months, the customer shall maintain Minimum Average SB Balance of Rs
50,000/- in savings account of our bank & having minimum credit turnover of Rs. 1.00 lakh &
Debit turnover of Rs. 0.75 lakhs

(or)

 The customer shall satisfy the eligibility criteria as applicable to New Customers and STP
journey as applicable to new customer shall be carried out along with uploading of applicable
documents excluding the VCIP Savings Bank account opening.

Loan Quantum & NTH:

Existing Customers:
Minimum of Rs 0.25 Lakh & Maximum of Rs 5.00 Lakh
OR
For Salaried Customer: Six times of the average of last 3 months salary credited in the salary
account AND
For Non-Salaried Customer: Six times of the average SB balance maintained
OR
Wherever the customer has already availed Canara budget or salary overdraft then the
differential eligible amount
OR
Shortfall of hospital expenditure while settling the claims through TPAs , whichever is lower.
New Customers:
Minimum of Rs 0.25 Lakh & Maximum of Rs 5.00 Lakh

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OR
Six times of the average of last 3 months net salary credited in the salary account
OR
Shortfall of hospital expenditure while settling the claims through TPAs , whichever is lower.

Minimum Net Take Home Salary (NTH) of borrower should not be less than Rs. 10,000/- p.m.
after meeting instalments of all existing loans and proposed loan

Repayment: Repayable in 36 EMIs including 2-months moratorium

Margin & Pre-payment Charges: Nil
Processing Charges: 100% Waived till 31.03.2025.
Product Code: 3017- CANARA HEAL- HEALTHCARE (EMERGENCY HEALTHCARE STP)

CANARA READY CASH (279/2024):

 Introduction of New pre-approved personal loan product- “Canara Ready Cash” upto Rs 10.00
Lakh to existing customers (Canara SB Premium Payroll Customers) of our Bank through
Straight-through-Pro cessing (STP) Mode under Digital Lending Platform.
 Existing SB Premium Payroll customers can avail financial assistance under this scheme 24*7
through End-to-End Digital Process.
 Borrowers having CIC score of 700 & above are eligible.
 The minimum salary credit during the last 6-months shall be Rs. 50,000/- per month.
 Loan Quantum: The loan quantum shall be 10 times of average of last 6 months’ net salary
credited with a Minimum of Rs. 50,000/- & upto Maximum of Rs 10.00 Lakh within the overall
eligibility under Canara Budget scheme norms
 NTH: Minimum Net Take Home Salary (NTH) of borrower should not be less than 25% or Rs.
10,000/ p.m. whichever is higher after meeting instalments of all existing loans and proposed
loan.
 Repayment: To be repaid in 60 EMIs
 Security (Co-obligation): Waived
 Margin & Pre-payment Charges: Nil
 Processing Charges: 0.50% of the loan Amount-Minimum of Rs 500/- and Maximum of Rs
2,500/-
 Product Code: 3018- DIGI PAL Pre Approved Personal loan STP

 Floating Rate of Interest: RLLR + 1.70%

CANARA ROOFTOP SOLAR (CRTS) – PM SURYA GHAR YOJANA (PMSGY):

 Introduction of two new loan products for installation of On-Grid Residential Rooftop Solar
System under Retail Segment i.e., Canara Rooftop Solar (CRTS) – PM Surya Ghar Yojana
(PMSGY) upto 3kW and Canara Rooftop Solar (CRTS) – PM Surya Ghar Yojana (PMSGY) above
3kW to 10kW.
 The nature of term loan to be sanctioned for installation of Roof Top Solar On-Grid
Photovoltaic (PV) System (Residential) shall be on standalone basis.
 Eligibility: All individuals i.e Resident Indian Citizens & Non-Resident Indians (NRI) [Persons of
Indian Origin (PIOs) & Overseas Citizenship of India (OCI)] are eligible under subject scheme.
Salaried/Non-Salaried and Professionals Class who are credit worthy including ex-employees &
our employees. Minimum entry age 18 years & Maximum entry Age 75 years. Wherever the age
of the applicant is beyond 65 years the loan shall be sanctioned along with the co-obligation of
legal heir aged below 60 years.
 CIC Score 680 & above and (-1 to 99 in case of borrower having no credit history) are eligible
and CIC Score below 680 are not eligible.

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 CRG is not be applicable under the scheme, hence CRG need not to be arrived.
 Loan Quantum Maximum upto Rs.2.00 lakh (including subsidy) up to 3kW and Maximum upto
Rs.6.00 lakh (including subsidy) above 3kW to 10kW.
 Disbursement of the sanctioned loan amount shall be disbursed in 2-tranches as below: Upfront
disbursement 70% of the project cost (Including margin money of 10%). Remaining 30% within
30 days of satisfactory installation and post installation verification by the bank.(562/2024)
 Margin: Minimum 10% of total project cost shall be contributed by the Borrower.
 No minimum Annual Income & NTH criteria for up to 3kW. Above 3kW Rs. 3.00 Lakh Minimum
Annual Income & NTH: Applicant should have minimum monthly net take home income of 25%
of their gross income OR Rs. 10,000/- whichever is higher after meeting the existing loan
instalments along with the proposed loan.
 Repayment: Repayment period can be fixed in consultation with the borrowers subject to
maximum period of 10 years. However, repayment shall be fixed in such a manner that the
Borrower age shall not exceed 75 years by the end of the repayment tenor. Wherever Co-
obligation is applicable, the repayment norms are to be considered based on the age of the
Co-obligant. Repayment holiday - 6 months from the date of 1st disbursement on case-to-case
basis as per requirement.
 All applications shall be routed through JanSamarth Portal Only. Next Higher Authority shall be
the authority to reject the proposals received under the Jansamarth Portal.
 Respective Branch Head is empowered for sanctioning loans under above facility. For our
Employees/Ex-Employees: RO Head. However, DM-RO-CAC shall be the authority to reject any
proposals received under the Scheme.
 Subsidy: Rs. 30,000/- per kW shall be provided up to 2kW rooftop systems, and additional
subsidy of Rs. 18,000/- per kW shall be provided for above 2 kW & upto 3kW Systems. For
Systems above 3kW subsidy capped at Rs. 78,000/-
 Classification: Priority

CANARA CASH:
Purpose- a) Loans / advances to individuals against approved shares / debentures / bonds /
approved units of mutual funds. b) To meet investment / domestic / personal requirement. It
should be ensured that loan should not be utilized for speculative purposes.
Lending against prime security of shares and debentures is restricted to designated branches
only.

● Eligibility- Existing and new Customer

● Employees are not eligible. Spouse of employee may be granted loan by next higher
authority

● Substitution of securities should not be permitted for more than 10 occasions.

● Quantum- Maximum loan is Rs.20 lakhs wherever demat accounts are maintained at our DPs.

● Canara Cash for debt oriented Mutual Funds: Rs.10 lacs only with 25% margin

● Margin- On approved shares/ debentures /bonds Shares & Debentures- 50% of market value
PSU Bonds-30% of market value On approved units of UTI / Canara Robeco 50% of NAV/
repurchase price or the market value, whichever is lower.

● Repayment: As far as possible, for better monitoring, the facility should be by way of single
transaction loan only, repayable in less than 60 months. Repayment can be fixed by way of
EMI also. However, there is no bar / embargo for granting OD facility under this scheme.

● Processing Charges: 0.1% with min. Rs.100 and max. Rs.250/-. Rs.100/- for each occasion

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for substitution of shares.

● Rate of Interest : (As advised by HO time to time.)

● Security-shares, Security of the shares / debentures / bonds and units of UTI and Canara
Robeco as per the approved list circulated from time to time Substitution of securities
should not be permitted for more than 10 occasions.
2nd loan during currency of the existing loan based on creditworthiness and repaying
capacity by NHA at CO.

CANARA SITE:
Purpose: To finance a borrower to purchase residential / housing sites.

 Purchase of Residential Sites from State Development/Town Planning Development Authorities

or from any other body constituted by the Government for distribution of sites.
 Purchase of Residential Sites from statutory authorities of Central/ State Governments, local
authorities either exclusively or in partnership with private sector entities provided such sites
/ layouts are duly approved by the statutory authority of the State Government and where
registrations can be effected.
 The land / plots of Government Development Authorities land such as DDA, HUDA etc., directly
from authorities or under second sale. Further, the plots in the colonies approved by Govt.
Authorities along with approved maps and RERA approved projects.
 To takeover accounts from other banks subject to fulfilment of any of the above existing
purposes. Takeover norms as applicable in respect of Retail Loans under Housing Loan and
subsequent guidelines if any to be complied.
 However, as per the Housing Loan take over norms, loans where projects are not completed
shall not to be taken over. In respect of Site Loan, as the loan is given for purchase of Site,
obtain only undertaking letter from the borrower for construction of the house within the
stipulated time (i.e., as stipulated by the development authorities while allotting the sites).

Eligibility:

● Maximum entry age limit : less than 60 Years

Salaried Class: Confirmed in the service & NTH shall be 40%. (selectively 25% by respective
SA). Salary certificate for the past 6 months should be obtained and verified.

NON-SALARIED CLASS:
 Businessmen and professionals and self-employed like Doctors, Chartered Accountants,
Architects, Engineers and others who are in the business or profession for minimum period of 3
years and whose net annual income is Rs.1 lac or more as evidenced by the latest ITR.
 To submit Balance Sheet or other documentary evidence along with the application form.
 It shall be ensured that the net annual income is adequate to cover the loan installments.
● Minimum net take home pay shall be 40% after meeting the proposed loan instalment
selectively; this can be reduced up to 25% by the respective sanctioning authority

● NRIs are also eligible for loans under the scheme.

● Employees of our Bank are also eligible for loan under the subject scheme on the same
terms and conditions as applicable to customers and provided minimum net take home
salary of 40% is maintained (no relaxation is permissible).

Loan Quantum: 3 years gross salary / gross annual income OR 75% of the cost of the
site/guideline value (Whichever is less).

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Margin: A minimum margin of 25% shall be stipulated / maintained on the Project Cost consisting
of site cost as shown in the allotment letter plus development charges, if any, not exceeding 10%
of the site cost supported by documentary evidence.
Repayment:
 Loan to be repaid in a maximum period of 10 years OR upto 65 years of age at the time of
closure OR maximum period permitted by the allotment agency for construction, whichever
is earlier.
 One month repayment holiday is permissible.
 In case of part payment of site amount, the repayment to commence after three months
from the date of first disbursement of the loan.
 Repayment to be ensured by way of ECS Registration/PDCs/debit to salary or Business
account etc. (The repayment to be ensured by any of the two modes).

Security: EMT of the house site proposed to be purchased. Sanctioning authority may waive Co-
obligation/guarantee.
An undertaking should be obtained from the borrower for construction of the house within the
stipulated time (as stipulated by the development authorities while allotting the sites)
Nature Of Loan: Term loan - secured.

CANARA PENSION

● Purpose: To meet the cost of medical expenses and other genuine personal needs of the
pensioners/Family Pensioners.

● Eligibility: The following types of pensioners who are drawing their pension through our
branches are eligible for financial assistance under the scheme:
i) All Central Government pensioners (viz., Central, Civil, Railways, Defence, Armed Forces,
Defence Civilians and Freedom Fighters etc.)
ii) All State Government pensioners.
iii) Pensioners of all Government Department Undertakings.
iv) Pensioners of all Public Sector Undertakings / Corporate pensioners.
v) Family pensioners of all the above categories.
vi) Pensioners and Family Pensioners of the Bank

Margin- Nil
● Security:
1. In case of Loan to Pensioners
Co-obligation of the spouse (wherever there is a provision for family pension) or any other
person/pensioner good for the amount, if necessary, may be stipulated by the sanctioning
authority.
2. In case of Loan to Family pensioner:
Third party guarantee / co-obligation good for the amount should be obtained invariably.

● QUANTUM, NTH & REPAYMENT PERIOD

a) In respect of Retired Employees of our Bank/Family Pensioners of Retired Employees of

our Bank: 20 months’ pension amount or Rs.10,00,000/- whichever is less, subject to
maintenance of NTH of 25% of Gross after deducting the proposed EMI.

● Repayment Period:
● i) To be repaid in 72 EMIs if the pensioner is below the age of 65 years.
● ii) To be repaid in 60 EMIs if the pensioner is above the age of 65 years

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● b) For General Public Pensioners/Family pensioners:

Age at the time of Max Loan Amt (24 Repayment Age at the time of
Loan sanction months Pension or Rs.) Period full Repayment
Below 60 years 15.00lakhs 84months Upto 67 years
60-70years 10.00lakhs 60months Upto 75 years
70-75years 5.00 lakhs 36 months Upto 78 years
● Loan amount is subject to NTH of 40% of gross salary after deducting the existing and
proposed EMI.
● Delegation of power- Branch in – charge, Credit Managers and Senior Managers in VLBs and
ELBs, other than branch heads can also sanction.
● Rating sheet – Not Required as per Ho Cir 825/2021.
Canara Pension Scheme for Retired Employees of our Bank/Family Pensioners of Retired
Employees of our Bank.

Quantum & NTH

● Component I: In respect of Retired Employees of our Bank/Family Pensioners of Retired
Employees of our Bank, 20 months’ pension amount or Rs.10,00,000/- whichever is less,
subject to NTH of 25% of gross after deducting the proposed EMI.
● Component II: To make payment of premium of IBA Group Mediclaim Insurance Policy for
Retired Employees of our Bank/Family Pensioners of Retired Employees of our Bank who
have opted for and are covered under the scheme can be financed upto Annual Premium
payable amount for the year.
● Under both component maximum finance should not exceed Rs.10 lacs or 20 months’
pension amount. (717/2016, 551/2017, 526/2018, 9/2024)

Computation:
Maximum loan amount of the pensioner/ family pensioner to remit the Annual Premium of the IBA
Group Mediclaim Insurance policy under Component II shall be Annual Premium payable for the
year.
The loan amount disbursed for the payment of premium of IBA Group Mediclaim Insurance
Policy to be sent as IBA to HOSA Section, Head Office after obtaining consent letter from
borrower.
However, the maximum loan liability at the time of sanction and disbursement of loan under
both the component shall not exceed 20 months pension amount or Rs. 10,00,000/- (whichever
is lower).

Repayment-

● Component I is repayable in 72 months for pensioners below the age of 65 years; and 60
months for pensioners who are above the age of 65 years
● Component II is repayable in 10 equated monthly installment

HOUSING LOAN:

Purpose of the loan:

Loan shall be considered for

a. Purchase of a ready built house / flat
b. Construction of house / flat.
c. Purchase of a site and construction of a house thereon. However, loan for the purchase of only

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site shall not be considered. Further, in case of composite Housing loans, utilization of loan
amount for purchase of plot is restricted to 60% of eligible/sanctioned loan amount under all
Housing Loan variants.
d. Housing Loan can be sanctioned upto Rs.15.00 Lakh to Repairs/Renovations subject to
completion of three years from the commencement of the repayment date of the housing loan.
e. Under Expansion, Upgradation and Creation of Additional amenities housing loan can be
sanctioned under two components:
Component-1: For expansion of existing unit, upgradation & creation of additional amenities for
financing upto 75% of the project cost complying all other guidelines as applicable to regular
housing loans.
Component-2: While sanctioning Housing Loans, Branches/Offices can include the cost of
furnishing (by way of fixed furnishing, immovable attachments/ enhancements) in the total
project cost with maximum upto 15% of the loan or Rs.50 lakh whichever is lower subject to other
conditions.
Further, while sanctioning Housing Loans, Branches/Offices can include the cost of furnishing (by
way of fixed furnishing, immovable attachments/ enhancements) in the total project cost and
loan component shall be maximum up to 25% of the housing loan or Rs.50 lakh whichever is lower
subject to the following:
i. Minimum Gross Income of the applicant/s shall be Rs.12.00 lakh p.a.
ii. The total project cost of the House shall be Rs.100 lacs (excluding Component-II) and above.
f. For acquiring second house/flat where the borrower is already having a house/flat with or
without loan.

ELIGIBILITY:
Any salaried individual with 2 years aggregated regular and continuous service with a minimum
completed service of 6 months in the current organization/company. Further, Respective
Sanctioning Authority can permit 6 months break in service subject to the following:
i. Customer shall be employed in the Current (present) Company/ Organization for a minimum
period of 6 months.
ii. Minimum monthly Gross Salary in the present employment shall be Rs.1.25 lakh & Net Salary
ofRs.1.00 lac to be ensured.
iii. Minimum NTH of 30% or Rs.40000/- whichever is higher to be ensured.
The relaxation in aggregated, regular and continuous service up to one year, subject to minimum
completed service of 6 months in the current organization/company can be permitted by the
following delegated authorities:
1. Proposals below RO-Head-CAC: RO-Head-CAC.
2. Proposals under RO-Head-CAC and above Authorities: Respective Sanctioning Authority up to
their delegated powers.
Any individual engaged in business & self-employed persons like, doctors, chartered accountants,
architects and others. Such applicants should have been in the business for a minimum period of 3
years. Details of business/ profession should be indicated in the application. Restriction of
minimum Business may be waived selectively by the following authorities:

RAH Head/ RO HEAD- CAC/ AGM-CO-CAC up to their delegated powers and above sanctioning
authorities up to their delegated powers can reduce Minimum years of Business with a cap of
Minimum ONE year.
The above relaxation is applicable to reduce minimum years of business only (not for ITR/ITAO
purpose).
● Agriculture income may be considered for both salaried and non-salaried individuals if it is
supported by land records and income is reported in income tax return though not taxed.
Land records to be verified and correctness to be ensured.
Entry and Exit age of the Borrower:
Where entry and exit age of the Borrower/s or Co-borrower/s at the time of availing the
Housing loan, for the following cases:

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Case I: In case of entry age of the main borrower is less than 60 years and the loan is repayable
within 75 years of age, the loan may be permitted by the Respective Sanctioning Authority up
to their delegated powers.
Case II: Where entry age of the Borrower/s is 60 years & above and up to 70 years at the time of
availing the loan and repayable within 75 years, respective delegated authority shall sanction
housing loan jointly with Spouse or legal heir or close relative (in the absence of spouse or legal
heir) subject to complying of required NTH and repayment capacity of the borrower amongst
other housing loan scheme guidelines.
Wherever, NTH and repayment capacity of the borrower is not sufficient or for the purpose of
arriving loan quantum the income of earning spouse/legal heir/ close relative can be considered
subject to the following:
The loan shall be availed jointly with earning spouse/earning legal heirs only.
In case of non-existence of earning Legal heir/s, earning Close Relative/s shall join the loan as
joint borrower/s.
Sanctioning Authority has to ensure overall *repayment capacity of borrower/s along with
individual *repayment capacity of Legal heir/s or Close relative/s.
*i.e., minimum NTH of 25% or Rs.10000/-p.m. whichever is higher.
Case III: If the entry age is up to and beyond 70 years and Exit age is beyond 75 years, the loan
shall be availed jointly with Spouse or legal heirs subject to complying of required NTH,
repayment capacity and all other housing loan scheme guidelines. Such proposals shall be
permitted by RAH Head and above authorities up to their delegated powers subject to the
following:
a) The loan has to be availed jointly with earning spouse/earning Legal heir only.
b) In case of non-existence of earning Legal heir/s, earning Close Relative/s to join the loan as
joint borrower/s.
In both the cases i.e., a & b, Sanctioning Authority to ensure adequate repayment capacity [i.e.,
minimum NTH of 25% or Rs.10,000/-p.m. whichever is higher] of Legal heir/s or Close relative/s,
irrespective of Borrower/s NTH.
In addition to the above, overall NTH of 40% or Rs.20,000/- p.m. whichever is higher & the
same may be further permitted up to 25% with a minimum of Rs.20,000/- p.m. by RAH Head &
above authorities up to their delegated powers selectively on case to case basis.
Case IV: REPAYMENT PERIOD & NTH (earning youngest borrower/legal heir who is joining the
loan as Joint borrower): The repayment period in respect of Housing Loans, can be decided
based on the age of the earning youngest borrower /legal heir who is joining the loan as joint
borrower, provided he/she has sufficient income to service the EMI with maximum repayment
period up to 30 years. Further, NTH for the youngest borrower/legal heir whose age is below 60
years, respective sanctioning authority to ensure minimum NTH of 25% or Rs.10000/-p.m.
whichever is higher. However, the exit age of the youngest borrower should not exceed 75
years. The respective sanctioning authority can sanction by duly ensuring the repayment as
mentioned above.

Quantum of Loan:
Maximum Loan quantum considered for:
A. Salaried class: 72 times last drawn monthly gross salary (Regular income to be ascertained
by verifying previous 6 months’ salary slips). For non- Salaried class: 6 times of annual gross
income (Average of three preceding years annual Income) i.e. the financial years immediately
preceding the current financial year during which the customer desires to avail housing loan.
The above is subject to producing of documentary evidence regarding the Salary slips/annual
income (If abnormal increase is observed, during concluded financial year, as per ITR/ITAO,
sanctioning authority should ensure the authenticity and sustainability of the income) to be
permitted by the respective sanctioning authority up to their delegated powers.

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B. Salaried class: 84 times of last drawn monthly gross salary (Regular income to be
ascertained by verifying previous 6 months’ salary slips). For non- Salaried class: Up to 7 times
of annual gross income (Average of three preceding year’s annual income) In both the above
cases the same may be considered very selectively, sanctioned by RAH Head/ RO HEAD RO-CAC
and above authorities up to their delegated powers, subject to the following:
i) These stipulations are permitted only to Risk Grade- LOW & NORMAL customers/ borrowers.
ii) 25% NTH or Rs.20000/- whichever is higher should be maintained after meeting the existing &
proposed loan EMIs.
C. Salaried class: 96 times of last drawn monthly gross salary (Regular income to be
ascertained by verifying previous 6 months’ salary slips). For non- Salaried class: Higher
quantum up to 8 times of annual gross income (Average of three preceding year’s annual
income. In both the above cases the same may be considered very selectively, sanctioned only
to customers/ borrowers having Risk Grade LOW by CO HEAD CO-CAC and above authorities up
to their delegated powers, subject to the following: i) 30% Net Take Home or Rs.20,000/-
whichever is higher should be maintained after meeting the existing & proposed loan EMIs. ii)
Customers who are purchasing property / Residential units viz., ready built house / flat,
Construction of house, Purchase of a site and construction of a house thereon from Metro and
Urban CENTERS ONLY as most of Higher Cost of residential properties are coming from
surroundings (URBAN) of Metro centres having nearby vicinity.
● Sanction of Housing Loan extended for purchase of house/flat which is more than 20 years
old may be permitted by CM of Branch/RAH Head and above authorities in respect of
proposals falling up to their delegated sanctioning powers. If the proposal falls within the
delegation of DM of RAH where the proposal is being processed at RAH or CM of the Branch
from where the proposal is originated or Scale-IV or Overseeing executive of respective
Regional Offices / Circle Offices have to inspect the house property and certify the
acceptability.
● The House Flat of above 40 years shall be permitted by CO Head CAC and above authorities
upto their delegated powers.
● The residual life of the property must be 10 years more than 10 years repayment end date in
all the cases.
NET TAKE HOME: Minimum percentage of Net Income/NTH to 25% (after meeting the
instalment for the proposed Housing Loan) at the time of availing the loan subject to the
condition that the minimum amount of Net Income/NTH quantum shall be stipulated at
Rs.10,000/- & Rs.20000/- respectively (based on the age criteria & quantum of loan) after
meeting instalment for the proposed HL and existing repayment commitments in all cases.
In case entry age of the Borrower/s is 60 years & above and up to 70 years at the time of
availing the loan and repayable within 75 years, in exceptional cases, with overall NTH of
40% or Rs.10,000/- p.m. whichever is higher & the same may be further relaxed up to 25%
with a minimum of Rs.10,000/- p.m. by RAH Head & above authorities up to their delegated
powers selectively on case to case basis.
If entry age is up to 70 and Exit age beyond 75 years & If the entry age is beyond 70 years
and Exit age beyond 75 years, in exceptional cases overall NTH of 40% or Rs.20,000/- p.m.
whichever is higher & the same may be further permitted up to 25% with a minimum of
Rs.20,000/- p.m. by RAH Head & above authorities up to their delegated powers selectively
on case to case basis.
Repayment: Upto 30 years & Age of borrower up to 75 years.

In the case of borrowers opting for 30 years repayment, it shall be ensured that the entire loan
with up to date interest is repaid within a maximum period of 30 years or the youngest
borrower attaining the age of 75 years whichever is earlier.

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Repayment Holiday ( All Variants )

● In the case of purchase of ready built house/flat: The repayment should commence within
TWO MONTHS from the date of first disbursement.
● In case of purchase of Site & Construction of House thereof AND OR only construction of
House in the existing Site: The Repayment should commence within 2 months after
completion of House OR 24 months from the date of first disbursement whichever is earlier.
● In case of purchase of flat under construction: The Repayment should start within 2 MONTHS
of completion of construction OR 36 MONTHS from the date of first disbursement, whichever
is earlier.
If any genuine reason is there for delay in completion of construction:
a. In case of purchase of Site & Construction of House thereof AND OR only construction of House
in the existing Site: Circle Head CO CAC can extend additional repayment holiday of 12 months
(beyond permissible holiday period of 24 months).
b. In case of purchase of flat under construction: CGM/GM-HO-CAC can extend additional
repayment holiday of 12 months (beyond permissible holiday period of 36 months).
Security: EMT of Land and House/ Flat to be constructed or purchased. The residual life of the
building should be at least 10 years more than the repayment period end date.
● Loan for repairs/renovation/expansion – 75% of the project cost – maximum of Rs.15 Lacs in
all areas.
● Composite Housing Loan (purchase of plot and construction thereon) : restricted to 60% of
total loan amount towards purchase of plot in all variants of Housing Loan.
● The above ceiling on maximum quantum is not applicable to loans where the project involves
expansion of existing unit, upgradation and creation of additional amenities.
Margin –Housing Loan:
Housing Loan Quantum In case of new house/ Flat or In case of Old House/ Flat
Old House/ Flat up to 10 >10 Years Old ( Irrespective
years Old of Loan)
Up to Rs.30.00 lakhs 10%
Above Rs.30.00 lakhs
20% 25%
& Up to Rs75.00 lakhs
Above Rs75.00 lakhs 25%

In case of Repairs and Renovations: Uniform Margin of 25% on Project Cost Irrespective of the
Housing Loan amount. (572/2019)

The margin is stipulated on the total project cost. In case of Housing Loans where Project
Cost is upto Rs.10.00 Lakh, stamp duty, registration Charges and other Documentation charges
can be included in the Project Cost for the purpose of stipulating Margin as well as for LTV
Ratio.
In cases where project cost exceeds Rs.10.00 Lakhs, maximum loan amount shall have
calculated on the lower of the following values subject to compliance of LTV Ratio and margin.
i) Value mentioned in agreement for sale plus GST shall be added as part of Project Cost for
assessing the loan amount. However Stamp duty, Registration Charges and other documentation
charges, which are not realizable in nature shall not be included in project cost for arriving at
the loan eligibility & ii) Current Market Value as per the latest Valuation report.

Disbursement:-For construction of house/flat- in stages as per estimates and after inspection

of the property in 3 stages (Completion of foundation, roofing & completion of the house) and

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ensuring security coverage ratio is maintained at every stage.

Photographs of each stage countersigned by officials who have inspected with date & seal is
mandatory.

The work completion certificate issued by builder to be countersigned by the architect at each
stage.

Security: Mortgage of house/flat

Claims Secured By Residential Property:

Housing Loan Scheme for Agriculturists (Cir 552/2013, 563/2014,706/2014,365/2022)

Target group: Agriculturists, Dairy and Allied activity Farmers, Planters & Horticulturists. All
agriculturists owning and cultivating agricultural lands of more than 5 acres (Irrigated lands) /
10 acres of Dry lands in their name/s, subject to the following:
They should be our existing customers and should have satisfactory dealings with us for the last
two years. b) Their past dealings should be satisfactory.

For considering Housing Loans to agriculturists engaged in Dairy farming, Poultry farming,
Plantation Crops and Horticultural produce, the minimum land holding levels need not be
applied. These categories of borrowers can be financed provided their minimum gross annual
income is Rs.5.00 Lakh.
● In case of eligible applicants who are not having dealings with us for the last 2 years and in
case of applications from new branches, RAH Head (for mapped branches)/ RO-Head-CAC
(for not mapped branches) and above authorities, depending on merits, can selectively relax
this condition subject to ensuring that applicant has satisfactory track record with his
present Banker and required evidence to that effect is obtained. Original income certificate
issued by the Tehsildar/Mandal Revenue authorities or any competent authority should be
obtained.
● Repayment Capacity: HL is subject to 25% - 40% of Net Income after proposed installment
as applicable to general Housing Loan.
● Commitments under Agricultural Term Loans, Working Capital interest (KCC / KOD) etc shall
be considered to arrive at Net Income.
● Repayment Period: Entire loan together with interest including repayment holiday if any,
shall be repaid in equated monthly /Quarterly/halfyearly / yearly max period 30 Years.
However, it should be ensured that the entire loan is cleared before the borrower /
youngest of the borrowers attains the age of 75 years.
● Repayment Holiday- As per our General Housing loan.
The moratorium period shall not exceed 3 harvesting seasons in case of half yearly Installments
and 2 harvesting seasons in case of yearly installments. However, the repayment to start from
the immediate harvesting season during which the completion of House /Flat take place.
● In case of repairs and renovation: Uniform Margin of 25% on Project cost irrespective of
Housing Loan amount. (572/19)

Canara Home Loan Plus (Cir 365/2022, 482/2022.283/2023)

● Eligibility: Individuals aged between 18 and 75 years, who have already availed Housing
Loans with satisfactory repayment of the loan promptly for irrespective of the period of run
with our Bank are eligible subject to fulfilling the following conditions:
i. Availability of EMT to be ensured.
ii. Project Completion Certificate should be obtained

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iii. Occupancy certificate should be obtained

iv. After Completion of Repayment Holiday Period (if any)
v. Sanctions to be made by the respective Sanctioning Authority upto their delegated powers
selectively on case to case basis duly ensuring that there is no dilution in LTV and NTH
norms.
● Purpose - To meet domestic needs/medical expenses/Educational expenses of children/
dependents / unforeseen contingencies etc. but not for speculative purposes
● Type of Loan- Term Loan facility
● Quantum –
For Salaried Class:
24 months’ gross salary subject to a maximum of Rs.50.00 lakhs.
However, loan quantum shall be arrived at in such a way that the combined liability of the
borrower under Housing Loan and the proposed “Canara Home Loan Plus” shall be complying
(within the) the LTV norms as applicable to Housing Loan prevailing as on the sanction date of
Canara Home Loan Plus. - NTH shall not be less than 25% of gross salary at the time of sanction
of Home Loan Plus after deducting EMI towards both the existing Loans and also loan under the
proposed “Canara Home Loan Plus
For Non-Salaried Class: Two times of 3 years average gross income of the applicant subject to
a maximum of Rs.50.00 lakhs
However, loan quantum shall be arrived at in such a way that the combined liability of the
borrower under Housing Loan and the proposed “Canara Home Loan Plus” shall be complying
(within the) the LTV norms as applicable to Housing Loan prevailing as on the sanction date of
Canara Home Loan Plus. -NTH shall not be less than 30% of gross income at the time of sanction
of Home Loan Plus after deducting EMI towards the existing Loans and also loan under the
proposed “Canara Home Loan Plus”.
● Repayment period – To be repaid in 180 EMIs or left over repayment period for the existing
Housing Loan whichever is less
● Sanctioning Authority: Same authority who has sanctioned HL upto Circle head CAC power
accounts. In case HL permitted by HO, Home loan plus can be sanctioned by Circle Head
CAC.
● Wherever loans are availed under OD facility prior to 07.02.2020: Branches /RAHs to
adhere strict guidelines as issued under HO Cir No. 845/2020 dated 04.11.2020.
At the time of renewal, the existing Canara Home Loan Plus-OD facility will be charged with an
additional 0.50% ROI as per their respective CICs.
OR

The existing Canara Home Loan Plus-OD accounts (Sanctioned prior to guidelines of HO Cir. No.
66/2020 dt.07.02.2020) may be converted to Term Loan after excluding period run under
existing OD facility, by the respective Sanctioning Authority. Conversion of Term Loan from the
date of expiry of OD facility.
OR
during the tenure of OD facility, to be considered as per the customer’s request/ option duly
fulfilling the existing scheme guidelines under Canara Home Loan plus-Term Loan.
● In case of takeover of TOP up loan along with Housing Loan:
Takeover of top-up loan along with Housing Loan to be considered under Canara Home Loan
Plus scheme subject to period of the Housing Loan run at Banks/FIs, by fulfilling the following
conditions:

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i. If it is within 3 years period, registered sale deed Value to be considered for the purpose of
reckoning LTV for takeover of Outstanding Loan liability.

ii. In case, 3 to 5 years period, increase with a cap of 25% of registered sale deed value or
realizable value of fresh valuation, whichever is less to be considered.

iii. In case of above 5 years period, existing guidelines shall continue ie., realizable value of
fresh valuation will be considered to arrive LTV. Any takeover loan, there should not be any
deviation in sanction – Terms & conditions. All other sanction terms and conditions should be
complied.

Swarna Loan:

PARTICULARS SCHEME SCHEME SCHEME

Name of the SWARNA LOAN SWARNA OVERDRAFT SWARNA-EXPRESS
Scheme
Repayment To be repaid Secured Term loan with Bullet
within 12 months Overdraft Repayment-6months Term
as bullet payment tenable for 2
along with interest years with annual
review
Loan Minimum Amount:Rs5000/-,Maximum:[Link],the overall
amount/ maximum limit under non priority gold loans per customer is fixed at Rs. 35
Quantum Lakhs. (Cumulative of all three schemes viz. Swarna loan, Swarna OD &
Swarna Express is Rs 35 Lakhs.)
The overall limit that can be sanctioned to a customer under all the Gold
Loan Schemes is Rs. 105 Lakh
Security Against the pledge of gold ornaments/jewellery which are duly apprised by
the jewel appraiser appointed by the Bank. The loan is to be granted only
against ornaments, specially minted Gold Coins sold by Banks and not
against gold coin, bullion etc. Total weight of specially minted gold coins
(sold by the Banks) should not exceed 50 grams per customer. Units of gold
Exchange Traded Funds (ETF) and gold Mutual funds are backed by
bullion/primary gold and as such, restriction as applicable to finance
against gold bullion shall apply to advances against Gold ETF and Gold
Mutual Funds also.
Scale of 65% of the appraised
70% of the appraised 70% of the appraised
finance value
value. value.

Rate of As advised by H.O. from time to time

interest
Product Code 608 265 952
1006 – Swarna Loan
Schedule code : 3001
Bullet repayment
(RLLR- Swarna-Express-
Bullet-Repayment)
75% of the appraised value (To maintain LTV ratio of 75% during the entire loan period). If LTV
ratio goes beyond 75% and required margin is not maintained at any time during the currency of
the loan, Branches have to recover the excess loan amount or to classify the loan as NPA as per
prudential norms.

NEW RETAIL GOLD LOAN SCHEME – SWARNA MONTHLY INTEREST: (575/2024)

The detailed scheme guidelines on “Swarna – Monthly Interest” are as under:

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Nature of facility Single Transaction Limit

Classification Non-Priority
Purpose To meet personal needs (non-speculative
purposes).
Quantum of Finance  Minimum Amount: Rs.5000.00
 Maximum: Rs.35.00 Lakh
Rate of Advance Rate of Advance shall be maximum 75% of the
Appraised Value of Gold.
LTV Loan to Value (LTV) ratio shall not exceed 75%
during the tenure of loan.
Rate of interest As applicable to Retail Gold Loans
Repayment Interest charged to be serviced as and when
due at monthly intervals. Principal is to be
repaid within 12 months from the date of
sanction or as bullet payment on maturity.
Consolidated Processing Charges 0.60% of the Loan amount with a minimum of
Rs.500.00 and maximum of Rs.6000.00.
(Presently, waived till 30.09.2024)
Product Code 3027

CANARA JEEVAN -REVERSE MORTGAGE LOAN FOR SENIOR CITIZENS (Cir 20/2008,
175/08, 9/2009, 171/09, 109/20, 166/20,365/2022)
 Reverse Mortgage – to help Senior citizens to convert their dwelling house property into
liquid cash flows to meet their living expenses
 Objective: To meet the financial needs of Senior citizens owning self-occupied residential
property. No loan against ancestral property since legal issues involved.
 Eligibility:
 a) Owners of residential house/flat, who are residents of India. b) Owner of the property
should be above 60 years of age. c) The loan shall be in the joint names of the borrower and
his spouse irrespective of the title of the property. d) In such cases at least one of them should
be above 60 years of age and the spouse/joint borrower should be more than 55 years of age.
e) In case of jointly owned properties the joint owner who is aged above 60 years shall be the
first borrower. f) The property should be self-acquired and self-occupied as permanent primary
residence. No loans against ancestral property to be given. g) The residential property should
be free from any encumbrances. h) The residual life of the property should be atleast 20
years. i) In case of flats the age of the flat should not be more than 10 years. j) Commercial
property will not be eligible for reverse mortgage loan
 Quantum of loan: Minimum loan quantum Rs.5 lakhs and maximum Rs.50 lakhs for
independent houses, for flat Rs.25 lakhs.
In case of House-
Age of borrower Loan as proportion of Assessed Value of Property*
(*Loan amount including interest till maturity)
60-65 70%
66-70 70%
71-75 80%
Above 75 Years 90%

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In respect of flats:
Age of Borrower Loan as per proportion of Assessed Value of Property

(Loan amount including interest till maturity.)

Age of the flat
Less than 2 Years 2-5 Years 5-10 Years
60-65 Years 60% 55% 45%
66-70 Years 65% 60% 50%
71-75 Years 70% 65% 55%
Above 75 Years 75% 70% 60%

The Equity to Value Ratio- EVR should not at any time during the tenor of the loan fall-
below 10%.
 Payment(Disbursement): Monthly/Quarterly instalments. One time lumpsum payment, not
more than 20% of the eligible loan amount.
 Payment Period: 15 years
 Valuation of Property: To be done once in 3 years.
 EC to be obtained before disbursement and once in three years.
 Repayment Of Loan: Only when the last surviving borrower dies or when they like to sell
the property. Entire outstanding liability including accumulated interest to be met by
proceeds received out of sale of property. Surplus to be paid to the heirs.
 Sanctioning Authority: Circle Head-CO-CAC.
 Inspection of Property: Once in 6 months.
 Right of Rescission: after completion of documentation etc. 3 business days given to senior
citizen to cancel the transaction ie the RIGHT OF RESCISSION.
 If the loan amount is disbursed, the entire loan amount will need to be repaid by the
borrower within this three-day period without interest.

Canara Home Loan Secure:

(150/2019, 109/20, 66/20, 166/20,365/2022, 604/2023)
 Purpose: For funding the one-time insurance premium payable to M/s Canara HSBC OBC Life
Insurance Company Limited for availing their Group secure life insurance term plan to cover
risk under life and Total Permanent Disability for existing as well as new home loan
borrowers.
 Eligibility:- All Canara home loan borrowers are eligible to opt for life insurance cover. This
option will be available to existing housing loan borrowers as well as to the new borrowers.
 Quantum:- Equivalent to the one time premium of life insurance to cover under Group
secure plan of CHOICe. Loan term-min 2- years -max 15 years ( Max tenor of HL whichever is
less)
 Surrender Value:- 60%XSingle Premium X [Unexpired Term/Cover Term] X [Reduced Sum
Insured/ Initial Sum Assured]

CANARA KUTEER - HOUSING PRODUCT (CIR 142/2020,365/2022,604/2023)

PURPOSE: For acquiring a residential site and constructing a house thereon. Acquisition and
purchase of new or old dwelling units. Construction of house on already owned Site / plot.

Eligibility: Individual house hold Income in Rural, Urban, Metro areas and members of Self Help
Groups i. Up to ₹1,00,000/- p.a. ii. Above ₹1,00,000/- & up to ₹3,00,000/- p.a

Quantum of Loan:
Maximum quantum of Loan

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i. For Household income of Up to ₹1,00,000/- p.a : - ₹ 5,00,000/-

ii. For Household income of above ₹ 1,00,000/- & up to ₹ 3,00,000/- p.a : - ₹ 10,00,000/-
Components of Project Cost:
a) Cost of Land/Flat or Construction Cost
b) Cost of Installing Solar Lighting System
c) Cost of ASTRA Smokeless Choola.
If loan is covered under Govt. sponsored Scheme, subsidy will be a part of the project cost.

Repayment:
Not exceeding 30 years or 75 years of age of the borrower whichever is earlier

Security: Mortgage of Residential site/Property.

NTH-Shall not fall below 60% of Gross annual income (Cutback not exceeding 40% of Gross
annual income)

HL NP CRE (Commercial Real Estate): Product 627

COMMERCIAL REAL ESTATE – RESIDENTIAL HOUSING (CRE-RH) A SEPARATE SUB-SECTOR VIZ.,

CRE-RESIDENTIAL HOUSING (CRE-RH) CARVED OUT OF COMMERCIAL REAL ESTATE SECTOR
● Aggregation of liabilities/limits to be done for deciding the sanctioning authority in case of
sanction of second/subsequent loan under the same Retail Lending scheme. Further, in case of
Housing Loan, aggregation of liabilities/limits of all variants of Housing loans of the party will
be done irrespective of the fact that whether the Housing loans belong to Non-HL-CRE
category (i.e. up to two Housing units) or HL-CRE category (i.e., 3rd & subsequent Housing
units).
● Regarding stipulation of Rate of Interest: While sanctioning second/subsequent loan under
any Retail Lending Scheme, liabilities of existing loans under same Retail Lending scheme
should not be aggregated with the limit of fresh loan under that Retail Lending scheme for the
purpose of deciding interest rate applicable to fresh loans.
All other guidelines to be adhered as per Housing loan viz., Eligibility, Quantum, Margin etc.,
● Exposures which should be classified as CRE.
The housing loans extended in cases where houses are rented out need to be treated
differently. As per Basel II Framework, loans secured by a single or small number of
condominium or co-operative residential housing units in a single building or complex also fall
within the scope of the residential mortgage category and national supervisors may set limits
on the maximum number of housing units per exposure. Therefore, such loans need not
necessarily be classified as CRE Exposures. However, if the total number of such units is more
than two, the exposure for the third unit onwards may be treated as CRE Exposure as the
borrower may be renting these housing units and the rental income would be the primary
source of repayment.
● Commercial Real Estate – Residential Housing (CRE-RH): A separate sub-sector viz.,
Commercial Real Estate – Residential Housing (CRE-RH) has been carved out from Commercial
Real Estate sector.
Loans to builders/ developers for residential housing projects (except for captive
consumption) under CRE segment. Such projects shall ordinarily not include non-residential
commercial real estate.
Integrated housing projects comprising of some commercial space (e.g. shopping complex,
school etc.) can also be classified under CRERH, provided that the commercial area in the
residential housing project does not exceed 10% of the total Floor Space Index (FSI) of the
project.
However, the following will not be classified under CRE-RH, but will be classified as CRE:
In cases where the FSI of the commercial area in the pre-dominantly residential

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complexexceeds the ceiling of 10%.

EDUCATIONAL LOAN: (653/2021, 458/2022, 604/2023)

IBA MODEL EL SCHEME FOR INLAND AND ABROAD STUDIES (EL-VIDYA SAGAR SCHEME)
Purpose: The scheme aims at providing financial assistance on reasonable terms to the poor and
needy meritorious students to pursue higher education including professional/technical courses in
India and abroad.

Eligibility: Student with Indian Nationality.

Education Loans can be extended to Non-Resident Indians (NRIs), OCI/PIO Category for pursuing
studies in India only

For job oriented courses.

Educational Loan is given for an individual and not for family as a unit. No service Area norms.

Employed Persons also eligible, Management quota student eligible.

Wherever student is directly getting admission to the College without undergoing any selection
process, (i.e., Entrance Tests/scoring in eligibility tests/merit based selection process) then
educational loan can be considered if the Student has scored minimum marks (cut off) in the
previous qualifying examination as under:
a) For General Merit students - 60%
b) For SC/ST students - 50%
c) For Girl Students - 50%
 Quantum:
Need based finance subject to repaying capacity of the parents / students with required
margin.

The eligible expenses considered for education loan should be based on the fee structure as
approved by the State Government or a Govt approved Regulatory Body for merit seats in Govt
Colleges / Private Self Financing Colleges, Coop. Societies and Colleges run by Universities, as the
case may be.

Caution deposit, building fund / refundable deposit supported by Institution i.e. these expenses
could be considered subject to the condition that the amount does not exceed 10% of the total
tuition fees for the entire course.
Purchase of books/ equipment/ instruments/ uniforms, Purchase of computer at reasonable cost,
if required for completion of the course, any other expense required to complete the course - like
academic and maintenance fees, study tours, project work, thesis, exchange programme etc., (It
is likely that expenditure above may not be available in the schedule of fees and charges
prescribed by the college authorities). Therefore, a realistic assessment may be made of the
requirement under these heads. However, such expenses may be capped maximum at 20% of the
total tuition fees payable for completion of the course.

Maximum cap of 20% on expenses other than tuition fee may be relaxed on case-to-case basis and
clearance for the same shall be obtained from CGM/GM-HO-CAC as a pre disbursement condition
based on the recommendation from Circle.

In case of courses where student has secured free seats i.e. no tuition fee is required to be
paid by student, sanctioning authority/ branches may consider reasonable amount of living
Expenses /other expenses while sanctioning such loans.

 Margin: Upto 4 lakhs: NIL. Above 4 lakhs – studies in India: 5% Abroad: 15%.

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 SECURITY:-
 VIDYA SAGAR IBA MODEL EDUCATIONAL LOAN SCHEME

Loans upto Rs 7.50 Lac:

 No Security.
 Assignment of future income of the student.
 Loan jointly granted to the parent / guardian and the student.
 All Education Loans up to Rs.7.50 lakh are to be sanctioned without stipulation of any security
i.e. without obtaining any collateral security or third-party guarantee, duly ensuring that all such
loans are covered under CGFSEL (HO Cir 12/2016, 578/2020). As per the scheme guidelines of
Credit Guarantee Fund Scheme For Education Loans (CGFSEL) w.e.f. 16.09.2015 Education Loans
up to a limit of Rs 7.50 lakh sanctioned without obtaining security are covered under the
guarantee scheme.

Above Rs.7.50 Lac

 Assignment of future income of the student
 Loan jointly granted to the parent /guardian and the student.
 Tangible collateral security to cover atleast 100% of the loan amount with stipulated margin
for the type of security.

 SECURITY NORMS FOR MANAGEMENT QUOTA:

Upto Rs. 4 lakhs
 Assignment of future income of the student
 Loan jointly granted to the parent /guardian and the student.
 Tangible collateral security to cover at least 50% of the loan amount with stipulated margin for
the type of security

Above Rs.4 lakhs:

 Assignment of future income of the student
 Loan jointly granted to the parent /guardian and the student.
 Tangible collateral security to cover at least 100% of the loan amount with stipulated margin
for the type of security

 SECURITY NORMS FOR EDUCATION LOANS TO EMPLOYED PERSONS :

Education loans can be granted to employed persons provided the applicants do not get salary
during the period of study.
SECURITY :

Loans up to Rs 4.00 Lac

● No Security.
● Assignment of future income of the student.
● Loan to be granted to the student only.

Loans Above Rs.4.00 Lac

● Assignment of future income of the student.
● Loan to be granted to the student only.
● Tangible collateral security to cover at least 100% of the loan amount with stipulated margin
for the type of security
In addition to the above the following to be ensured:
i. NOC for continuation of study shall be obtained from the present employers.
ii. Loans to be considered for those courses which would help professional advancement of
the applicant.

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iii. Loans can also be granted for pursuing MBA/ICWA/CA/IFCAI courses/CIMA (London) only
through correspondence, for employed persons.
iv. Suitable repayment schedule to be fixed depending on the income level of the applicant
without giving repayment holiday for either interest/principal.

 VIDYA TURANT
● Assignment of future income of the student.
● No Security (Ref HO Cir IC/772/2022 DT.21.12.2022)
● Branches have no powers to sanction Education Loans and the following authorities shall have
the powers to sanction the education loans: -Sanctioning Powers of Education Loan to Branches
stands withdrawn. -All secured education loans shall be sanctioned by RAH Head & above
authorities up to their respective delegated powers*. -All unsecured Education Loans including
Vidya Turant shall be sanctioned by Senior Manager (Scale-III) posted at RAH / RAH Head &
above authorities as per their respective delegated powers *Respective Delegated Powers
refers the maximum delegated powers to Senior Manager (Scale III) posted at RAH / RAH Head
to sanction Education Loans shall be in line with sanctioning powers delegated to Branch-in-
charge of Large branch & CM/AGM for Term Loans (presently 30 lakhs,125 lakhs & 250 lakhs
respectively) subject to scheme guidelines.

● Interest Concession: reduction of 0.50% on the applicable ROI on the loans extended to girl
students.

● Concession of 0.5 % in ROI if interest is serviced during study period/repayment holiday. In

case full interest is not cleared by the borrower before the debit of next month’s interest,
then, the 0.5% concession shall not be extended for the current month and normal applicable
rate shall be charged. If 3 instalments of interest are irregular, concession will not be
extended.

● Repayment period- Maximum 15 years (Excluding study period & moratorium period),
repayment to be started after one year after completion of course. Extension of time for
completion of course max 2 years (if reasons beyond student control, SA at his discretion).

● Simple interest applicable during moratorium period. If borrower submit written request for
extension of moratorium period before expiry of original moratorium period, sanctioning
authority may extend moratorium period for a maximum period of one year from the date of
expiry of original moratorium period and during such moratorium period also, the simple
interest to be charged.

 In case the student discontinues the course midway, appropriate repayment schedule will be
worked out by the Sanctioning Authority in consultation with the student/parent.

 Branches/offices may allow up to three spells of moratorium (not exceeding six months at a
time) during the life cycle of the loan, taking into account spells of unemployment/
underemployment, without treating the exercise as restructuring, subject to appropriate
inclusion of the same in terms and conditions of the loan sanction procedure. This may be
extended only to standard accounts. However, a higher provisioning of 5% during the said
additional moratorium period and one year thereafter, is to be maintained. (184/2017)

 Service area norms not applicable as per RBI guidelines. Students may submit their loan
applications either at the bank branches near to the residence of parents or bank branches
near to the Educational institution.

 Rented House: Persons staying in a rented house for a minimum period of 2 years in a place
without owning a house in the present place of stay may also be treated as a permanent
resident of the place.

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 Age Limit: There is no specific restriction with regard to the age of the student to be
eligible for Education loan

 Disposal of El Loan application: With in a period of 15 days to 1 month. Not to exceed

Priority Sector application disposal norms.

 Processing Charges: Loan Amount upto Rs.7.50 Lakh- Nil

Loan Amount above Rs.7.50 Lakh- 0.50 % of the loan amount with Minimum of Rs.1000 and
Maximum of Rs.10000-/
No processing charges for the Educational loan sanctioned under Vidya Turant Scheme and ward
of the employees/ex-employees wherever employees/ ex- employees are joint borrower in the
loan
100% waiver of processing charges, if any shall be permitted by CGM/GM-HO-CAC.
 A referral fee of Rs 118/- has to be paid to NSDL for any loan sanctioned and disbursed,
through NSDL – Vidyalakshmi Portal. The referral fee will be debited centrally from HO by the
way of GEFU as and when the demand raised by M/S NSDL.

“VIDYA TURANT” ( CIR 197/2022, 365/2022, 482/2022, 772/2022,725/2023)

An Instant Education Loan Sanction Facility for the Students Pursuing Higher Studies in Select
IIMs / IITs / NITs / IISC / ISBs &other premier institutes in India.

Co Borrowership of parent /Guardian:- Compulsory in all cases, but can be waived if the
student is major and studying in select IIMs, ISB & management Institutes as per cir 305/19 in
following cases-Availing loan from designated Branch and additional interest rate to be charge
@ 0.50%, Mandatory Life cover under Vidya suraksha Yojna (premium may be included in EL
project cost)
Other Than IIMs, ISBs selected institutes as per cir305/2019, 772/2022- joint borrowership
can be obtained within 3 months from the date of First Disbursement with undertaking and link
letter
Processing charge :- Nil
Should be covered under CSIS scheme if eligible
Increase in the maximum eligible limit under Group A, B & C institutions.

Category Max limit eligible (Revised) Total No. of Institutions

Group-A
Rs 50 lacs (ISB) 2
Institutions
Group-B
Rs 40 lacs (IIM) 68
Institutions
Group-C
Rs 30 lacs (IIT/NIT) 146
Institutions
TOTAL 216
Repayment: Up to 15 years excluding moratorium period, irrespective of loan amount
Repayment holiday : Course period plus one year.
Margin: Nil margin upto loan amount permitted institution wise in the scheme.
Upfront fee/processing charges: Nil, No Prepayment penalty
Concession of 0.5% to Girl Students will NOT be available under Vidya Turant Scheme.

Rate of Interest Concession to 85 Top Premier Institutions under Vidya Turant Scheme
(659/2024, 672/2024): Applicable ROI shall be (RLLR-0.65%).

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New Education Loan Scheme for pursuing master’s degree in abroad from select top ranking
universities of world. (442/2022)
 Eligibility: Student of Indian National holding valid passport.
 Student (Indian National only with valid passport) should have secured admission from the
selected Universities/Institutions.
 Minimum Competitive exam score: SAT-1250 & above, ACT-26 & above, GRE-300 & above,
GMAT-650 & above
 Course Eligible-Master degree under STEM (Science, Technical, Engineering and
Management) Course.
 Expenses considered- 100% finance on Tuition fees, Living Expenses, Passage money,
Medical Insurance, GIC, Travel Expenses.
 Quantum: above 7.5 lakhs
 Processing Changes: Collateral upto 100% & above- 0.50% max Rs 10,000
 Collateral less than 100%- 0.50% max Rs 20,000

Collateral Security Eligible loan ROI Delegation of

Coverage quantum Powers
100% & above Min 7.50 Lakhs to no RLLR+1.60% RAH Head
max cap.
75% & above (less Min 7.50 Lakhs to RLLR+1.85% Circle head –CAC
than 100%) Rs.100 Lakhs.
50% & above (less Min 7.50 Lakhs to RLLR+2.10% CGM/GM-HO-CAC
than 75%) Rs.100 Lakhs

SUBSIDY SCHEMES FOR EDUCATION LOANS:

CENTRAL SECTOR SCHEME OF INTEREST SUBSIDY (CSIS) FOR EDUCATION LOANS (274/2010,
727/2020, 548/2022,421/2023,324/2024 ):
Nodal Ministry- Ministry of Education, Nodal Bank-Canara Bank.

Eligibility: EWS (economically weaker section) who’s annual gross parental/family income
upper limit of Rs.4.50 Lacs per year (from all sources). Loan/limit upto up to Rs.7.50 lacs is
eligible for subsidy during moratorium period (course + 1yr). For loans sanctioned after
01.04.2018 (727/2020). For loan sanctioned before 01.04.2018- upto Rs. 10 lacs. if the loan
sanctioned is more than subsidy loan limit, interest subsidy would be available only upto
subsidy loan limit amount. Not eligible to those students who discontinue the course
midstream, or who are expelled from the institutions on disciplinary or academic grounds
The revised scheme which is applicable from financial year 2022 – 23 onward is:
Under the revised Scheme, entire interest accrued for loan amount up to Rs. 10.00 Lakhs
during the Moratorium period i.e. Course period plus one year is subsidized for the eligible
education loan accounts.
provided for a maximum amount of Rs. 10 lakhs (Even
sanctioned loan amount in excess of Rs. 10 lakhs would qualify for interest subsidy up to
Rs. 10 lakhs only).

Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas
Studies for Other Backward Classes (OBCs) & Economically Backward Classes (EBCs)
(ACSISOBCEBC)-(356/2024):
Nodal ministry- the Ministry of Social Justice & Empowerment, GOI, in collaboration with NBCFDC
(NATIONAL BACKWARD CLASSES FINANCE & DEVELOPMENT CORPORATION).
Target group for subsidy is non-creamy layer OBC students & EBC (Economically backward
classes). Here EBCs are those communities/castes, who are not included in SC/ST/OBC categories
and income is as per specified norms. Modifications effected in parental annual income limit for
EBCs in respect of Loans sanctioned/to be sanctioned from 01.07.2020 to 31.03. 2021. Other

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Backward Classes (OBC) & Economically Backward Classes (EBC)-Rs.8.00 lakhs p.a. The Scheme is
applicable only for higher studies abroad and restricted to students enrolled for course at
Masters, [Link] and Ph.D. level. Eligible students can avail benefits of this subsidy only once,
either for Masters, M. Phil or Ph.D. levels.
Loan limit up to which subsidy is eligible is Rs.20 Lakhs
CIR 441/2022 As per the Scheme Guidelines, the students enrolled for Post Graduate Courses, M
PHIL & Ph.D. only are eligible.

Category Income criteria from 01.04.2021 (per annum)

Other Backward Classes (OBC) Rs.8.00 lakhs
Economically Backward Classes (EBC) Rs.5.00 lakhs
Interest accrued during the moratorium period (on disbursed Principle or Rs.20.00 lakhs
whichever is less) has to be claimed for subsidy.

Extension of Concession in Rate of Interest & Waiver/Absorption of various charges under all
Housing Loan Variants (excluding Housing Loan to Agriculturists & NRIs) for switchover of
borrowal accounts from other Bank/FIs exclusively for Canara SB Premium Payroll package
(Gold, Diamond & Platinum Variant) customers till 31.12.2024 (614/2024):
 The delegation for permitting Concession in Rate of Interest as per Canara Retail Grade under
all Housing Loan Variants (excluding Housing Loan to Agriculturists NRIs) for switchover of
borrowal accounts from other Bank/FIs for customers canvassed under Canara SB Premium
Payroll package (Gold, Diamond & Platinum Variant) as under:
 Circle Head-CO-CAC & above authorities - In case applicable ROI at our Bank is higher than
prevailing ROI at other Bank/FIs
 Respective Sanctioning Authority as per takeover guidelines - In case applicable ROI at our
Bank is lower than prevailing ROI at other Bank/FIs
 Waiver of processing charges and Absorption of Valuation & LSR Charges under all Housing Loan
Variants (excluding Housing Loan to Agriculturists & NRIs) for switchover of borrowal accounts
from other Bank/FIs for customers canvassed under Canara SB Premium Payroll package (Gold,
Diamond & Platinum Variant) extended till 31.12.2024.

Extension of Retail Loan Festival till 31.12.2024 (615/2024):

 Waiver of 100% Processing Charges on Housing Loans (All variants including takeover of Housing
Loan Accounts) & Vehicle Loans sanctioned during the period (01.09.2024 to 31.12.2024) and
disbursed on or before 15.01.2025.
 Waiver of 50% of processing charges under Education Loan sanctioned during the
period(01.09.2024 to 31.12.2024) and disbursed on or before 15.01.2025.
 Waiver of 100% Processing Charges shall also be extended/applicable to the Housing Loan &
Vehicle loan proposals sourced by Direct Selling Agents (DSAs) sanctioned during the Retail
Loan festival period.
 Continuation of concession in RLLR under Housing loans (all variants) & Canara Vehicle loans
(Four Wheelers including Canara Green Wheels & Agriculturists) as per Canara Retail Grade till
31.12.2024.
 Under Canara Budget Prime & Delight schemes, 50% of applicable processing charges
(Applicable charges are 0.50% of Loan Amount, Minimum of Rs 1000/-+GST and Maximum of Rs
5000/-+GST) shall be collected till 31.12.2024.
 Waiver of 50% of processing charges under Education Loan sanctioned during the period
(01.09.2024 to 31.12.2024) and disbursed on or before 15.01.2025 is delegated to
Respective Sanctioning Authority. (620/2024)

***************

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विदे शी विविमय
FOREIGN EXCHANGE

FOREIGN EXCHANGE:

As per FEMA, the foreign exchange means foreign currency and includes,
(a) deposits, credits and balances payable in any foreign currency,
(b) drafts, travellers' cheques, letters of credit or bills of exchange, expressed or drawn in" Indian
currency but payable in any foreign currency,
(c) drafts, travellers cheques, letters of credit or bills of exchange drawn by banks, institutions or
persons outside India, but payable in Indian currency:

Definition of Currency as per FEMA 1999:

"Currency" includes all currency notes, postal notes, postal orders, money orders, cheques, drafts,
travellers cheques, letters of credit, bills of exchange and promissory notes, credit cards, debit
cards, ATM cards or any other instrument which can be used to create a financial lability or such
instruments, as may be notified by RBI.

Categories of Forex Transactions:

Transactions can be classified in two categories: (i) Capital Account and (ii) Current account.

Capital Account Transactions:

Capital account transaction is a transaction which alters the assets or liabilities (including
contingent liabilities), outside India of persons resident in India or assets or liabilities in India of
persons resident outside India and include:

a. investment in foreign securities.

b. raising foreign currency loans in India and abroad.
c. transfer of immovable property outside India.
d. issuing guarantees in favour of a resident outside India.
e. taking out an insurance policy from an insurance company outside India.
f. sale and purchase of forex derivatives in India and abroad and commodity derivatives abroad
by an Indian resident.
g. maintenance of foreign currency accounts in India and abroad by an Indian resident.
h. export, import & holding of currency/ currency notes, loans & overdrafts/ borrowing from a
person residing outside India.
i. loans and overdrafts to a person residing outside India and remittances outside India of capital
assets of an Indian resident.
j. investment in issue of security by a body or an entity in India and investment by way of
contribution to the capital of a firm or a proprietorship concern or an association of persons
in India.
k. Acquisition and transfer of immovable property in India.
l. issuing guarantee in favour of or on behalf of an Indian resident.
m. deposits between an Indian resident and a person residing outside India.
n. maintenance of foreign currency a/cs in India and remittance outside India of capital assets
in India of a person residing outside India.

Current Account Transactions

These transactions are those that are not capital account transactions and include:
(a) payments due in connection with foreign trade, other current business, services, and short-
term banking and credit facilities in the ordinary course of business.
(b) payments due as interest on loans and as net income from investments.
(c) remittances for living expenses of parents, spouse and children residing abroad, and
(d) expenses in connection with foreign travel, education and medical care of parents, spouse
and children.

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 केिरा बैंक प्रबंधि संस्थाि

There are four categories of these transactions:

a. Prohibited List (Schedule I) which include transactions with a person resident in Nepal and
Bhutan and Schedule I transactions i.e., remittance of earnings from lottery/racing etc..
commission on exports under the rupee state credit route or exports against equity in a joint
venture abroad etc.
b. Restricted List -Schedule II transactions, requiring government approvals.
c. Permissible List -Schedule III transactions where ADs can allow remittance up to the
prescribed limits and RBI permission requirement will be for remittance exceeding the limit
d. all other current account transactions for which the ADs can allow remittance without
monetary limit. The exporters and importers can get most of their transactions through the
ADs and there will be fewer cases for permission from RBI.

CONVERTIBILITY OF CURRENCY:
A currency is considered to be convertible if its holder can convert it, at any time, into gold or
any other generally acceptable foreign currency at a predetermined fixed rate, without any
restriction from the monetary authority. The currency is convertible both for payment as current
transactions and capital transactions. The market forces determine the buying and selling prices
for generally acceptable foreign currencies. Presently there are around 17 currencies under this
category.

Current account convertibility

Full convertibility on current accounts was introduced by RBI on 19.08.94 by accepting the IMF
Article VIII which makes it mandatory on a member to have no inward or outward restrictions on
current account and trade related transactions.

Capital Account Convertibility

There are number of restrictions on capital account transactions. SS Tarapore Committee in its
report (1997) had recommended a no. of relaxations that can be allowed for such transactions,
many of which have already been implemented.

EXCHANGE CONTROL REGULATIONS

Exchange control was first introduced in India on Sept 3, 1939. Subsequently it was brought under
Foreign Exchange Regulation Act, 1973. At present it is regulated through FEMA 1999.

FOREIGN EXCHANGE MANAGEMENT ACT (FEMA)

The Foreign Exchange Management Act 1999 (FEMA) was enacted on December 02, 1999 to replace
Foreign Exchange Regulation Act (FERA) 1973. The Act came into effect since June 01, 2000 and
extends to the entire country, all branches, offices, agencies outside India those owned or
controlled by a person residing in India.
Objective of FEMA:
(i) Facilitating external trade and payments and
(ii) for promoting the orderly development and maintenance of foreign exchange market in India.

AUTHORISED PERSONS (APS):

All transactions can be carried by residents and non-residents through Aps. An AP may be a dealer
(Authorised Dealer of Category I, II or Category III) or a money-changer. It may be an off-shore
banking unit or any other person appointed under the Act. RBI issues licences to authorised
person. It can revoke the authorisation if the person fails to comply with the conditions.

Classification of Persons Authorised to deal in Foreign Exchange

1. AD Category-I (comprising Commercial, State & Urban Coop Banks): All current and capital
account transactions according to RBI directions issued from time-to-time.
2. AD Category-II (Upgraded FFMCs, Coop Banks, RRBs, systematically important non- deposit
taking Investment and Credit company and others): Specified non-trade related current account
transactions. All the activities permitted to Full Fledged Money Changers. Any other activity as
decided by RBI.

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 Canara Institute of Bank Management

3. AD Category-III (Select Financial and other Institutions): Transactions incidental to the forex
activities undertaken by these institutions like NABARD, SIDBI, CCIL, etc.
4. Full Fledged Money Changers (FFMCs): (comprising Dept. of Posts, Urban Co-op. Banks and
other FFMCs)

TYPES OF PERSONS:
Definition of Residents, Non-Residents, NRIs and OCBs:

Persons Resident in India:

In terms of definition given under Section 2 (v)(i) of Foreign Exchange Management Act [FEMA]
1999, a person resident in India means,
(I) A person residing in India for more than one hundred and eighty two days during the
course of the preceding financial year but does not include:
i. A person who has gone out of India or who stays outside India, in either case -
a) for or on taking up employment outside India, or
b) for carrying on outside India a business or vocation outside India, or
c) for any other purpose, in such circumstances as would indicate his intention to stay outside
India for an uncertain period;

ii. A person who has come to or stay in India, in either case, otherwise than -
a) for or on taking up employment in India, or
b) for carrying on in India a business or vocation in India or
c) for any other purpose, in such circumstances as would indicate his intention to stay in
India for an uncertain period.

The following persons are also termed as ‘Resident in India’ as per the above definition:
[1] Foreign citizens who stay in India for employment, business, etc., or in circumstances
indicating an indefinite period of stay.
[2] Foreign citizens who come and stay in India with their spouses, if spouses are residents in India.
[3] Indian citizens who proceed abroad for business visits for short duration, training, medical
treatment etc., will continue to be treated as residents in India even during their
temporary absence from India.
(II) any person or body corporate registered or incorporated in India.
(III) an office, branch or agency in India owned or controlled by a person resident outside
India.
(IV) an office, branch or agency outside India owned or controlled by a person resident in
India.

I. NRIs generally fall under the following broad categories:

a) NRI is a person resident outside India who is a citizen of [Link] Indian citizen who has
gone out of India /who stays outside India for the purpose of employment or carrying on
business or vocation outside India or any other circumstances which indicate intention to
stay outside India for an uncertain period is considered as NRI. Student going abroad for
studies are treated as Non-resident.
b) Indian citizens working abroad on assignments with foreign Governments/ Government Agencies
or International/regional agencies like UNO, [including its affiliates] World Bank, [IBRD] IMF,
etc.,
c) Officials of the Central and State Governments and Public Sector undertakings deputed abroad
on temporary assignments or posted to their offices [including diplomatic missions] abroad.
d) Indians who have settled abroad on immigration

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Persons of Indian Origin [Foreign Nationals of Indian Origin] :

i. ‘Person of Indian Origin’ [PIO] means a person resident outside India who is a citizen of any
country other than Bangladesh or Pakistan or such other country as may be specified by the
central government, satisfying the following conditions:
a) Who was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955
(57 of 1955); or
b) Who belonged to a territory that became part of India after the 15th day of August, 1947; or
c) Who is a child or a grandchild or a great grandchild of a citizen of India or of a person referred
to in clause (a) or (b); or
d) Who is a spouse of foreign origin of a citizen of India or spouse of foreign origin of a person
referred to in clause (a) or (b) or (c)
ii. OCI (Overseas Citizens of India)
In terms of Gazette Notification of Ministry of Home Affairs, Government of India, on and from
9th January, 2015 all the existing Persons of Indian Origin Cardholders Registered as such shall
be deemed to be Overseas Citizens of India (OCI) Cardholders. Overseas Citizen of India is defined
as under:

a Any person of full age and capacity other than who is or had been a citizen of Pakistan; and
Bangladesh: -
1. Who is citizen of another country, but was a citizen of India at the time of or at any time
after, the commencement of the Constitution; or
2. Who is citizen of another country, but was eligible to become a citizen of India at the time
of the commencement of the Constitution; or
3. Who is a citizen of another country, but belonged to a territory that became part of India after
15th day of August, 1947; or who is a child or a grandchild or a great grandchild of such a citizen;
or
4. A person who is a child of a person mentioned in (i); or
5. A person who is a minor child and whose both parents are citizens of India or one of the
parents is a citizen of India; or
6. Spouse of foreign origin of a citizen of India or spouse of foreign origin of an Overseas Citizen
of India Cardholder registered and subsisted for a continuous period of not less than two years
immediately preceding the presentation of the application for OCI Card.

Overseas Corporate Bodies [OCBs]:

Owned by NRIs include overseas companies, partnership firms, societies and other corporate
bodies which are owned directly or indirectly to the extent of at least 60% by individuals of Indian
nationality or origin residing outside India [NRIs], as also overseas trusts in which at least 60% of
the beneficial interest is irrevocably held by such persons [NRIs].
Note: At present the Government of India does not recognize OCBs as an “eligible class of investor”
under various routes/schemes.

REMITTANCE:

LIBERALISED REMITTANCE SCHEME (LRS) FOR RESIDENT INDIVIDUALS (IC/521/2024):

Eligibility: All resident individuals including minors and non-individuals are eligible.
 Remittances can be consolidated for family members where individual family members
complying the terms.
 PAN is mandatory to make remittances.
 The Scheme is not available to corporates, partnership firms, HUF, Trusts, etc (IC/521/2024)
Forex can be purchased from authorised person which include AD -1 Banks, AD -2

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 Canara Institute of Bank Management

And full Fledged Money Changers.

Capital Accounts transactions: Remittances up to USD 250,000 per financial year can be allowed
for permissible capital account transactions as under:
a. opening of foreign currency account abroad;
b. purchase of property abroad;
c. making investment abroad;
d. setting up Wholly owned subsidiaries and Joint Ventures abroad;
e. loans including in Indian Rupees to Non-resident Indians relatives defined in Companies Act,
2013.

Current account transactions: All facilities (including private/business visits) for remittances
have been subsumed under overall limit of USD 250,000/FY.

Facilities for individuals:

Individuals can avail of forex facility within overall limit, for following.
1. Private visits to a country (except Nepal & Bhutan)
2. Gift or donation.
3. Going abroad for employment or emigration.
4. Maintenance of close relatives abroad
5. Travel for business, or attending a conference or specialized training or for meeting medical
expenses, or check-up abroad, or for accompanying as attendant to a patient going for medical
treatment/ check-up.
6. Expenses for medical treatment abroad
7. Studies abroad. RBI, vide its AP (DIR) Series Circular No.06 dated 22.06.2023, has permitted
remittances by resident individuals under purpose ‘studies abroad’ as mentioned in Schedule
III of Foreign Exchange Management (Current Account Transactions) Rules, 2000 for payment of
fees to foreign universities or foreign institutions in IFSCs for pursuing courses mentioned in the
aforementioned gazette notification, under LRS.
8. Any other current account transaction

Exception: For emigration, medical treatment and studies abroad, the individual may avail of
exchange facility in excess of LRS limit if required by a country of emigration, medical institute
offering treatment or the university, respectively.

Facilities for persons other than individual - The following remittances shall require RBI
approval:
(i) Donations exceeding one per cent of their foreign exchange earnings during the previous three
financial years or USD 5,000,000, whichever is less, for-
(a) creation of Chairs in reputed educational institutes,
(b) contribution to funds (not being an investment fund) promoted by educational institutes; and
(c) contribution to a technical institution or body or association in the field of activity of the
donor Company.
(ii) Commission, per transaction, to agents abroad for sale of residential flats or commercial
plots in India exceeding USD 25,000 or five percent of the inward remittance whichever is more.
(iii) Remittances exceeding USD 10,000,000 per project for any consultancy services in respect
of infrastructure projects and USD 1,000,000 per project, for other consultancy services procured
from outside India.
Explanation: -For the purposes of this sub-paragraph, the expression “infrastructure” shall mean
as defined in explanation to para 1(iv)(A)(a) of Schedule I of FEMA Notification 3/2000-RB, dated
the May 3, 2000.
(iv) Remittances exceeding five per cent of investment brought into India or USD 100,000
whichever is higher, by an entity in India by way of reimbursement of pre-incorporation
expenses."
Loan facility: Banks should not extend any loan to facilitate remittances for capital a/c
transactions.
Remittances not covered under the scheme:

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 केिरा बैंक प्रबंधि संस्थाि

a. Remittance specifically prohibited under Schedule-1 (purchase of lottery/sweep stakes,

tickets, proscribed magazines etc.) or item restricted under Schedule II of FEMA (Current
A/c Transactions) Rules, 2000.
b. Remittances to countries identified by the Financial Action Task Force (FATF) as "non-co-
operative countries and territories" as available on FATF website (updated list of countries
identified by Financial Action Task Force (FATF) as high risk jurisdictions, branches/offices
may refer to the circular issued in this regard from time to time, latest circular being
IC/126/2024 dated 27.02.2024).

JURISDICTIONS UNDER INCREASED MONITORING (Grey List): The FATF identifies jurisdictions
with weak measures to combat money laundering and terrorist financing(AML/CFT).

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION (Black List): High-risk jurisdictions
have significant strategic deficiencies in their regimes to counter money laundering, terrorist
financing, and financing of proliferation. For all countries identified as high-risk, the FATF calls
on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious
cases, countries are called upon to apply counter-measures to protect the international financial
system from the ongoing ML, TF and PF risks emanating from the country. This list is often
externally referred to as the ‘Black list’. Countries listed under this category are: 1. Democratic
People’s Republic of Korea (DPRK) 2. Iran and 3. Myanmar

c. Remittances to individuals and entities identified as posing significant risk of committing

acts of terrorism as advised separately by RBI to the banks.

Rules related to release / remittance of foreign exchange by residents

AD banks can release forex to residents in India as per Rules u/s Sec 5 of FEMA. Forex cannot be
released for Schedule I transactions. For Schedule Il transactions. Govt. permission is required.
For Schedule III transactions, forex can be released up to specified limit by AD banks under LRS.

Ceilings on release of amount by ADS without RBI approval are given above, under LRS.
Nepal & Bhutan - Forex for any kind of travel to or for any transaction with persons resident in
Nepal and Bhutan cannot be released. Any amount of Indian currency can be used. Highest
denomination of currency note can be Rs.100 (Up to Rs.25000 highest denominations is Rs.500).

Other countries: Form of foreign currency –

1. Coins, currency notes and traveller's cheques. Currency notes/coins can be up to US$ 3000.
The balance can be traveller's cheque or banker's draft. (commemorative coins max 2)
2. For Iraq and Libya currency notes and coins can be obtained up to US$ 5000 or its
equivalent.
3. For Iran, Russian Federation, and other Republics of Commonwealth of Independent
Countries, no ceiling.

Mode of purchase: In cash up to Rs. 50,000/-. Above this, payment by way of a crossed
cheque/banker's cheque/pay order/demand draft/ debit card/credit card only.

Surrender of unused forex: Currency notes and travellers' cheques within 180 days of return.

Retention of unused forex: US$ 2,000 or its equivalent. There is no restriction on residents for
holding foreign currency coins.

Use of International Credit Card (ICC): Use of the ICCS/ATMs/ Debit Cards can be made for
personal payments and for travel abroad for various purposes, only up to specified limits. Ceiling
of USD 250,000 as specified under LRS is not applicable to use of an International Credit Card (ICC)
by Resident Individuals for making payment towards expenses, while on a visit outside India, as
hitherto. (IC/577/2023)

Export-Import of Indian currency by Residents or non-residents: Any person resident in India,

may take outside India, up to Rs. 25000 each to or from any country other than Nepal or Bhutan

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 Canara Institute of Bank Management

Import of Foreign exchange from abroad: Any amount subject to declaration on CDF.

Mandatory CDF: Where total amount exceeds US$ 10,000 (or its equivalent) and/or value of
foreign currency notes exceeds US$ 5,000, declaration should be made to the Customs Authorities
through Currency Declaration Form (CDF), on arrival in India.

Application form for LRS: Form A2 cum LRS Declaration is required to all remittance. A2 to be
preserved by banks for one year for verification by Auditors. Quoting of PAN is a mandatory for
all remittances. In case the remittance by the resident individual is for investment and/or opening
Foreign Currency Account (FCA), other than Overseas Direct Investment, under LRS, the
designated branch shall also ensure to obtain Declaration under Foreign Exchange Management
(Realisation, repatriation and surrender of foreign exchange) Regulations, 2015.

Reporting: W.e.f. 12.04.18, daily reporting of LRS transactions is required, to RBI at XBRL site, so
that data is accessible to all banks.

TCS on LRS w.e.f. 1.10.20: Where amount of remittance exceeds Rs.7 lac in a FY, tax collection
at source shall be @ 5% of such amount (10% for non-PAN). This rate has been increased to 20%
under Union Budget 2023.

Remittance to International Financial Services Centres (IFSCs) in India under the Liberalised
Remittance Scheme (LRS):
Resident Individuals are permitted to make remittances under LRS to IFSCs set up under the
International Financial Services Centres Authority Act, 2019. Accordingly, Branches/Offices may
allow resident individuals to make remittances under LRS to IFSCs in India, subject to the following
conditions:
i. The remittance shall be made only for making investments in IFSCs in securities, other than
those issued by entities/companies resident (outside IFSC) in India.
ii. Resident Individuals may also open a Foreign Currency Account (FCA) in IFSCs, for making the
above permissible investments under LRS. The condition of repatriation of any funds lying idle in
the account shall be governed by the provisions of LRS.
iii. Resident Individuals shall not settle any domestic transactions with other residents through
these FCAs held in IFSC.
iv. Remittance may be made to foreign universities or foreign institutions in IFSCs by resident
individuals under purpose ‘studies abroad’ as mentioned in Schedule III of Foreign Exchange
Management (Current Account Transactions) Rules, 2000 for payment of fees for pursuing courses
in Financial Management, FinTech, Science, Technology, Engineering and Mathematics, as notified
by Government of India from time to time .

LRS - MODIFIED GUIDELINES (521/2024)

Branches/Offices, while effecting outward remittances (on behalf of resident individuals for travel
abroad) from the accounts of travel agents/ tour operators, shall submit the following along with
Form A2 to GTPC.
1. Annexure – 1 (b) - Request for effecting outward remittance by the tour operator/agent on
behalf of resident individual for travel abroad.
2. Details of the resident individuals (on whose behalf the remittance is being effected) travelling
abroad, if made available by the tour operator, in excel format as per Annexure - I (c).
GTPC to ensure without fail that each traveller’s utilization under LRS, including the proposed
remittance, is within the permissible limit by accessing the CIMS-FRBS (Centralised Information
Management System- Fraud Remittance and Borrower Status) portal of RBI before effecting
remittances (IC/521/2024).

RELEASE OF FOREIGN EXCHANGE FOR MISCELLANEOUS REMITTANCES (522/2024):

Branches/Offices shall obtain Form A2 in physical or digital form for all cross-border remittances
irrespective of the value of transaction

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 केिरा बैंक प्रबंधि संस्थाि

REPORTING OF REMITTANCE UNDER LRS:

Bank is required to furnish the transaction wise information under LRS on a daily (T+1)
basis i.e., by the close of business of the next working day. Systems & Procedures Section,
Integrated Treasury Wing, shall submit the consolidated LRS data through Centralised Information
Management System (CIMS) (URL: [Link] Monthly reporting has been
discontinued. (633/2024)

SOP for Liberalised Remittance Scheme (LRS) Limit Check & Tax Collection At Source (TCS) on
Loading/Re-Loading of ITPC: Our Bank is issuing International Travel Prepaid Card (ITPC) in three
(3) currencies namely USD, AUD & EUR and all activities Issuance, Loading, reloading, cancellation
etc. are performed by authorized branches through MasterCard Integrated (MI) agent portal.
Loading/reloading of ITPC attracts TCS if loading/reloading limit breaches the specified limit as
per guidelines issued by ETT Section, Financial Management Wing.(624/2024)

FOREIGN EXCHANGE MANAGEMENT (MANNER OF RECEIPT AND PAYMENT) REGULATIONS, 2023:

It replaces the regulation of 2016. No person resident in India shall make or receive payment from
a person resident outside India provided that the Reserve Bank may, on an application made to it,
permit a person resident in India to make or receive payment under the Act. Here manner of
receipt and payment has been categorized as trade and non-Trade Transactions. Further ,
Transactions to Nepal/Bhutan , ACU(Asian Clearing Union) countries and other countries has been
specified.(IC/46/2024)

CCIL’S FX-RETAIL TRADING PLATFORM:(581/2024):

The platform provides for an anonymous and order driven dealing for the Retail Customers wherein
they can place orders and trade in the USD/INR currency pair. The Customers have to go through
a registration process for availing the retail platform by visiting [Link]
Platform enables the customers to book contracts in Cash (same day settlement), Tom (next day
settlement), Spot (T+2 day settlement), and Forward Instruments up to a period of 13 months for
standard tenors (start of month, middle of month and end of month). Size of a single transaction
is not allowed to exceed $5 million. The spread/tick size of the Retail market would be same as
that of Interbank market of FX-CLEAR platform. Currently, the tick size is quarter paise (0.0025).
The customers can trade in 4 instruments in USD on the platform namely:
(a) Outright Cash
(b) Outright Tom
(c) Outright Spot
(d) Forward

In the event of Client account becoming NPA/ defaulting in delivery of underlying transaction for
more than 3 times during the validity of limit / non-payment of Transaction /any other
charges/exchange loss on position reversal by the bank shall render the party ineligible to transact
with us in FX-Retail Trading platform. All limits shall be revoked in FX-Retail Trading platform.

Quantum: Individual: Maximum USD 50000 ( US Dollar Fifty thousand only).

Others: Average of preceding three financial years’ Foreign Business Turnover (FBT) or 125% of the
preceding F.Y. FBT, whichever is higher.

Margin: For Individual/non-credit limit party, margin of 5% in the form of term Deposit/ hold
balance in CASA till validity of limit is mandatory.

INCREASED VIGILANCE AND COMPLIANCE MEASURES TO PREVENT THE MISUSE OF BANKING

CHANNELS IN FACILITATING UNAUTHORIZED FOREX TRADING (IC/425/2024):
Customers to deal in forex only with ‘Authorized Persons’ and on ‘authorized ETPs’ (Electronic
Trading Platform).

AUTHORISED PERSON: Section 3 (a) of the Foreign Exchange Management Act (FEMA), 1999, in
terms of which, no person shall deal in or transfer any foreign exchange or foreign security to any

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 Canara Institute of Bank Management

person not being an ‘Authorised Person’, unless under general or special permission of the Reserve
Bank.

AUTHORIZED ETPS: Para 3 (1) of the Electronic Trading Platforms (Reserve Bank) Directions, 2018
dated 05.10.2018, in terms of which, no entity shall operate an Electronic Trading Platform (ETP)
without obtaining prior authorisation of the Reserve Bank.

ALERT LIST: ‘Alert List’ issued by the Reserve Bank containing names of entities which are neither
authorised to deal in forex under FEMA, 1999 nor authorised to operate ETP for forex transactions
under the Electronic Trading Platforms (Reserve Bank) Directions, 2018.

FEDAI RULES (IC/349/2024):

Foreign Exchange Dealers’ Association of India (FEDAI) revised the rules which became effective
from 01 April 2019. General Guidelines:

The member banks can determine their own charges for forex transactions. Banks to display their
card rates and threshold amount for card rates for FCs on website and/or their B Category
branches.

1. Hours of business:
The normal market hours for on shore deliverable FCY/INR transactions in Interbank forex market
as well as client transactions in India would be as prescribed by the Reserve Bank of India from
time to time for inter-bank transactions. (IC/349/2024)

Authorised dealers may undertake customer (persons resident in India and persons resident outside
India) and inter-bank transactions on all business days beyond normal market hours.
For forex business, Saturday will not be treated as a Business day. Known holiday is one which is
known at least 3 business days before the date. Suddenly declared holiday is a holiday that is not
a known holiday.
Example: Days 1, 2, 3 and 4 are all Business days. If day 4 is declared as a holiday on or after day
1, it will be a suddenly declared holiday. If day 4 is declared as a holiday prior to day 1, it would
be a known holiday.

2. EXPORT TRANSACTIONS:
Post shipment Credit
Crystallisation: ADs to crystalize FC liability at TT selling rate, into INR liability, for non-payment
of bills of exchange on the due date. Interest for overdue period shall be recovered on the date
of crystallisation and then till date of recovery of the crystallized amount.

Normal Transit Period (NTP): Concept of normal transit period and notional due date are linked
to interest rate on export bills and to arrive at due date of the bill/export credit. NTP comprises
of the average period normally involved from the date of negotiation/ purchase/discount till the
receipt of bill proceeds. NTP is not to be confused with the time taken for the arrival of the goods
at the destination.
NTP for different transactions:
a) Fixed Due Date - For export usance bills, where actual due date is known, NTP is not applicable.
b) Bill drawn on DP/At Sight Basis and not under Letter of Credit (LC)
(i) Bill in Foreign Currencies - 25 days
(ii)Bills in Rupees not under Letter of Credit - 20 days

3. IMPORT TRANSACTIONS
Application of exchange rate
Crystallisation of Import Bill under LC: Unpaid FC import bills drawn under LC shall be crystallised
as per stated policy of the bank.

4. CLEAN INSTRUMENTS
Outward Remittance It shall be at TT selling rate on that date or at the Fx contract rate.

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Inward Remittance - Compensation for delayed payment : ADs shall pay or send intimation, to
beneficiary in two business days from the date of receipt of credit advice / NOSTRO statement.
For delay, bank shall pay to beneficiary, interest @2% over savings bank interest rate. Bank shall
also pay compensation for adverse movement of exchange rate, if any.

Transfer of funds between Vostro Accounts with two banks:

Bank carrying out interbank Vostro transfer by domestic wire transfer should undertake to send
form A3 separately. Time limit of 5 business days for receipt of A3 at beneficiary Bank’s end. If
not received must lodge a claim with the remitting back within 15 days from the date of transfer
of funds. Remitting bank to pay beneficiary bank penalty at the rate of Rs.1000/- per day for the
period in excess of 5 days from the date of transfer.

FOREIGN EXCHANGE CONTRACTS:

Exchange Contract shall be for definite amount and period.
If the fixed date of delivery or last date of option of delivery is “known Holiday" ⇒ preceding
business day and if its “Suddenly Declared Holiday" ⇒ Next succeeding Business day.

Place of Delivery ⇒ All Contract shall be understood to Read " To be delivered and paid for at the
Bank " and " at the named place "

EARLY DELIVERY, EXTENSION AND CANCELLATION OF FOREIGN EXCHANGE CONTRACTS:

On the request of the customer, unless stated Contrary in the FEMA1999, Bank has option to
Accept, give early delivery or extend the Contract. It is the responsibility of the customer to effect
delivery or request the bank for extension/ Cancellation as the case may be, on or before maturity
date of the Contract. In the absence of any instructions from the customer, a contract which has
matured shall be cancelled by the bank (GTPC) within the period of not exceeding three business
day after the maturity date.

BUSINESS THROUGH INTERMEDIARIES:

Exchange brokers, multi Bank portals (M BP), electronic order matching system (EOMS), are some
of the commonly used intermediaries in foreign exchange market. While such intermediaries were
earlier accredited by FEDAI, from 5th October 2018 FEDAI continue to be a crediting agency for
exchange brokers voice only. Electronic trading platform require to obtain authorization from RBI.

INTERBANK SETTLEMENT:
Interest for Delayed Delivery:
In the event of late delivery of any currency including INR Seller Bank has to pay 2% over and above
benchmark (Alternate Reference Overnight) Rates of that particular currency.

Time limit for Claim of Delay:

Within 15 business days from the due date of the Contract, Buyer Bank has to Claim the Delay. If
the Buyer Bank has failed to claim this interest within 15 business days of the due date, interest
will be payable by Seller Bank for the maximum of 60 days only.

EXCHANGE RATES:
Exchange rate is the rate at which one currency is converted into another currency (price of one
currency, is quoted in terms of another). It is important to understand that in exchange rate
system, the currencies are just like commodities having varying prices.

Different Types of Currency Rates:

Fixed- It is a system under the gold standard where the rate of exchange tends to stabilise around
the mint par value. As the gold standard does not exist, the fixed rates refer to maintenance of
external value at a predetermined level. It is fixed by Central Banking authority. It prevents
speculation.
Flexible-The rate is a fixed rate but is adjusted in line with the market conditions.

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Floating- The rates are determined by the conditions of demand for and supply of the foreign
exchange in the market. The rates fluctuate freely in the line with the demand and supply without
any restrictions on buying and selling. Under this rate no par value is declared.
Direct-When foreign currency unit is fixed (say $) and Indian rupees are variable (1$ = Rs.43.90
and change to Rs.44). Direct rates are quoted wef 1.8.93. When FC appreciates it is beneficial to
the exporter and when FC depreciates it is beneficial to the importer

Indirect- When foreign currency is variable and Indian rupee is kept as fixed unit [Rs.100 2.20 $
or 2.30 $).

Buying-When bank delivers rupees and gets foreign exchange (say in case of purchase of export
bill or encashment of foreign currency travellers' cheques or receipt of remittance from abroad,

Selling-When bank delivers foreign currency and gets Indian rupees (say in case of payment of
import bill or issue of foreign currency travellers' cheques or sending of remittance abroad.

Spot (rate for next 2 working days )- Cash rate or ready rate or value today = Same day
settlement: TOM= T+1 i.e. rate today and deal completion by next day
TT= T+2 (settlement within next 2 days).

Forward rate- It is for deal today and delivery after rate spot period say 1,2,3,4,6,12 months
afterwards. It can be at a premium or at a discount. If foreign currency will be available at a
higher rate (i.e. for more rupees), it is premium. If available at a lower rate (say for lesser rupees),
it is discount.

Rules for purchase and sale

For Direct rate: Buy low sell hig: For Indirect rates: Buy high sell low,

INTER-BANK RATES:
In the inter-bank market, the rates are quoted both for buying and selling like this (82.20/40).
The quoting bank indicates that it is ready to buy dollar at Rs.82.20 and sell at Rs.82.40. The
thumb rule for the bank is "by low and sell high". This indicates the said bank would pay lesser
amount of rupees when dollars are purchased and take more rupees, while selling the same.

BID AND OFFER RATES:

The quoting bank in the above example is giving option to buy one dollar at Rs.82.20, which is
called bidding for dollar. The bank is ready to sell a dollar for Rs.82.40, which is called the offered
rate. These are quoted as I US $ 82.20/40.

CARD RATES:
Card rates are calculated at the beginning of each day, based on the current rates in the inter-
bank market and cross rates in the international market. The rates are quoted by the authorized
dealers to the clients for various currencies for different transactions i.e. buying and selling of
cheques, drafts etc. From spot rates and forward margins in various currencies, the banks are able
to calculate the rates which are conveyed to branches.

SPOT & FORWARD TRANSACTIONS: In a contract, the actual payment in rupees and receipt in say
US $ may take place on the same day, two days later or a month later.

Value date-While quoting the rates, the banks take into account the time factor i.e. how much is
going to be taken to get the purchased currency credited to the NOSTRO account abroad. This
date is known as value date. There are 3 time frames for this i.c. cash value, tom value and spot
value.

Cash Value-When the payment is rupees and receipt in US $ place on the same day, it is called a
cash transaction or value today. It carries least risk.

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Tom value and spot value- When the payment is rupees and receipt in US $ takes place after
some time (due to time involved in administration of the transaction) it may be tom rate (where
deal is settled on the immediately succeeding working day) and spot transaction when it is settled
within next 2 working days.
Forward transaction
When the payment is rupees and receipt in US $ takes place on some pre-determined future day.
(after the spot period), it is called a forward transaction. A forward contract for delivery two
months means the of currencies shall be completed after two months from date of contract.

FORWARD CONTRACT POLICY MODIFICATIONS: IC/297/2024

RBI has revised the directions governing foreign exchange risk management facilities vide A. P.
(DIR Series) Circular No. 13 dated 05.01.2024.  All forward contracts booked on or after
03.05.2024 shall be governed by revised guidelines.

REVISED DEFINITIONS:
‘Anticipated exposure’ means currency risk arising on account of current or capital account
transactions permissible under the FEMA, 1999 or any rules or regulations made thereunder, that
are proposed to be entered into in future.
‘Contracted exposure’ means currency risk arising on account of current or capital account
transactions permissible under the FEMA, 1999 or any rules or regulations made thereunder, that
have been entered into.
The term ‘exposure’ shall not include exposures arising from foreign exchange derivative and
foreign currency interest rate derivative transactions undertaken for purposes other than hedging.
‘Hedging’ means the activity of undertaking a foreign exchange derivative / foreign currency
interest rate derivative transaction to offset the impact of an anticipated or a contracted
exposure.
‘User’ shall mean any person as defined in the Section 2(u) of the FEMA, 1999 (42 of 1999), whether
resident in India or resident outside India, other than an Authorised Dealer
‘Over-the-counter (OTC) derivative’ means a derivative (deliverable or non-deliverable) other
than those which are traded on Recognised Stock Exchanges and shall include those traded on
electronic trading platforms (ETPs)
Currency risk’ means the potential for loss on account of movement in exchange rates of INR
against a foreign currency or on account of movement in exchange rates of one foreign currency
against another or on account of movement of interest rate applicable to a foreign currency.
‘Foreign exchange forward’ means an OTC foreign exchange derivative contract involving the
exchange of two currencies on a specified date in the future (more than two business days later)
at a rate agreed on the date of the contract.

NEW DEFINITIONS :
 Novation of Forward Contracts (Purpose) - Novation may be used for management of counter-
party exposure and counter-party credit risk, to deal with events such as winding-up of
business/lines of business by banks and mergers/acquisitions.
 Novation of Forward Contracts Mechanism :
 Under novation, a tripartite agreement is signed between the three parties - Transferor,
Remaining Party and Transferee.
 The novation should result in transfer of counterparty credit risk and market risk arising from
the derivative contract from Transferor to Transferee.
 The DGM-CAC Integrated Treasury Wing is empowered to decide the novation charge/fee
between Transferor and Transferee for the transfer of the trade and approve the tripartite
agreement to be executed by the concerned Branch/Office.

For the purpose of offering derivative contracts, Customers shall be classified either as a RETAIL
USER or as a NON-RETAIL USER :

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 Canara Institute of Bank Management

 Any user who is not eligible to be classified as non-retail user shall be classified as RETAIL
USER
 Any user who is otherwise eligible to be classified as a non-retail user shall have the option to
get classified as a retail user.
 Any user who is otherwise eligible to be classified as a retail user shall have the option to get
classified as a non-retail user subject to the condition that the user makes a request in this
regard and the Sanctioning Authority is satisfied that the user has the risk management
capabilities suitable for classification as a non-retail user.

PURPOSE :
 Branches/Offices shall offer deliverable foreign exchange forward contracts involving INR to
users for the purpose of hedging only. Branches/Offices may offer deliverable foreign
exchange forward contracts not involving INR to users without any restriction in terms of
purpose.

Credit Conversion Factor (CCF): CCF as per latest RBI norms, according to the residual maturity
of Forward Contract is as below:
 1 year or less 2.00% Over 1 year to 5 years 10.00%
 Over 5 years 15.00%

Branches/Offices shall permit users to take position up to USD 100 million equivalent of notional
value (outstanding at any point of time), across all Authorised Dealers, for hedging contracted
exposure without the requirement to establish the existence of underlying exposure.
(Documentation Simplification)

Users are not required to establish the existence of underlying exposure, they must ensure the
existence of a valid underlying contracted exposure which has not been hedged using any other
derivative contract and should be in a position to establish the same, if required. However, this
limit shall be subject to evaluation from credit angle.

Premium or discount on forward transactions:

The forward rate of a currency is normally either costlier or cheaper than its spot rate. The
difference between these two, is called forward margin or swap points. When the forward margin
is at premium the forward rate will be higher/costlier than the spot rate. Similarly, if the forward
margin is at a discount, the forward rate shall be lower or cheaper than the spot rate.
Under a direct quotation, the premium is added to the spot rate for reaching the forward rate and
discount is deducted from the spot rate to arrive at the forward rate.
Factors that affect the exchange rate: (a) rate of interest prevailing at home centre and the
concerned foreign currency centre, (b) demand and supply position of the foreign currency, (c)
speculation about spot rates and exchange control regulations, generally determine the rate.

Value Dating: In foreign exchange transactions the exchange of currencies take place on the same
day so that none of the parties suffer loss. The transactions, as such, are undertaken on the
principle of value compensated (value compensee).

SWAP: It is a transaction where the bank purchases or sells the foreign currency simultaneously,
for different maturities, say purchase of spot and sale of forward or vice-versa OR purchase of two
month forward and sale of three month forward. (which is called forward to forward swap).
Compared to ordinary deals, in a swap deal, the difference between the buying and selling rates
is ignored and buying and selling is done at the same rate.

ARBITRAGE: A foreign currency is generally quoted at different rates in different market. The
banks may purchase and sell foreign currency in different markets to take advantages of rate
differentials. Such transactions are called arbitrage operation.

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Correspondent Bank Accounts: For undertaking foreign exchange dealings, banks in India
maintain accounts with banks outside India and some foreign banks also maintain accounts with
banks in India. These accounts may can be NOSTRO, VOSTRO or LORO Accounts.

NOSTRO Account: NOSTRO (in Italian) is an account maintained by a (say Canara Bank) with a
bank abroad (say Bank of America, New York), in the currency of that country. It is referred to as
OUR ACCOUNTWITH YOU. All transactions in forex (such as issue of bank draft, collection of bills
abroad) are routed through NOSTRO accounts.

VOSTRO Account: VOSTRO (in Italian) is a local currency account maintained in a local bank (say
Canara Bank) for a foreign bank (say Bank of America, New York). It is called YOUR ACCOUNT WITH
US. But it is NOSTRO account for Bank of America. It is important to understand that the effect of
all credits to VOSTRO accounts amounts to remittance of foreign currency from India to the
country of the bank maintaining the VOSTRO account and debits to VOSTRO account mean inflow
of foreign exchange from the country concerned into India. Hence, debiting or crediting a VOSTRO,
rules and regulations governing remittance of foreign exchange into and from India, must be taken
care of. For settling the international trade in INR , Special Rupee Vostro Account(SRVA) has
been introduced. SOP for settling the trade under SRVA has been communicated through
IC/95/2024. Presently, 3 Overseas Banks are maintaining their Special Rupee Vostro Accounts with
us.(IC/113/2024).

CURRENT ACCOUNT - MODIFICATION OF FIELD FOR “INTERNATIONAL TRADE SETTLEMENT INR

– EXPORT AND IMPORT TRANSACTIONS” AS EXEMPTED CATEGORY (IC/476/2024)
RBI vide their Circular No. RBI/2024-2025/43 FED Circular No 11 dated June 11, 2024 has informed
that to provide operational flexibility, the facility of opening an additional special Current Account
by the AD Category – I Banks (Maintaining Special Rupee Vostro Account in terms IC/865/2023
dated 06/12/2023 referred above) for its constituents may be extended for settlement of their
export as well as import transactions.

Modification of field for “International Trade Settlement INR – Export and Import
Transactions” as Exempted Category in Current Account (IC/476/2024): Accordingly,
modification is incorporated in dropdown in CBS Fast path CHM45 for selection of the exempted
categories. Branches / Offices shall comply with the guidelines with immediate effect.

LORO Account: (called THEIR ACCOUNT WITH THEM) If a bank in India (say Canara Bank) has an
account with Bank of America, New York and another Indian bank say, SBI wants to refer to that
account while corresponding with Bank of America, New York, it would refer the said account as
Loro account. Currency Account Examples

MIRROR Account: The account of a foreign bank, as maintained in the books of a bank in India is
called Mirror or Shadow account. It is the copy of the entries in NOSTRO Account. In this account,
the bank in India not only records entries in forex but in Indian rupees too, for each transaction.
While the foreign bank, at the time of making purchase of foreign currency, credits the NOSTRO
account and debits it when making sale, in the mirror account, the purchase shall be debited and
sale will be credited. The mirror account is just like a cash book maintained by a firm for a bank
account where any deposit by the firm is debited in bank account in the books of the firm and
credited by the bank in the account of the firm, in its books and vice versa.

FORWARD Contracts: Forward contract is a contract which affords adequate protection to an

exporter or an importer against exchange risk. Under these contracts, a banker and customer
enter into an agreement to buy or sell a fixed amount of foreign currency on a future specified
date at a pre-determined rate of exchange. Exporter, for instance sells foreign exchange of
specified amount and currency at a specified future date which assures him definite payment and
the banker agrees to buy the same amount and currency at a pre determined rate, which assures
him definite availability of forex.

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RESERVE BANK OF INDIA (MARGIN FOR DERIVATIVE CONTRACTS) DIRECTIONS, 2024: Bank may
subject to terms and conditions specified by the Reserve Bank, post and collect margin, in India
and outside India, for a permitted derivative contract with a person resident outside India, another
authorised dealer, overseas branches and International Financial Services Centre Banking Units,
and receive and pay interest on such margin.(IC/454/2024)

GUIDELINES ON HEDGING OF COMMODITY PRICE RISK AND FREIGHT RISK IN OVERSEAS MARKETS
(IC/353/2024) :
Hedging of Commodity Price Risk and Freight Risk in Overseas Markets is governed by Regulation
6 and 6A of the Foreign Exchange Management (Foreign Exchange Derivative Contracts)
Regulations, 2000. With a view to providing flexibility to resident entities (other than individuals)
to hedge their exposures to gold price risk efficiently, RBI permitted resident entities to access
recognised exchanges in the IFSC. Now, RBI, in its Statement on Developmental and Regulatory
Policies dated 08.02.2024, decided to also allow resident entities to hedge the price of gold in the
over the counter (OTC) segment in the IFSC.

Branches shall ensure that separate account is maintained for routing above transactions.
Branches shall obtain an annual certificate from the statutory auditors of the entity confirming
that the hedge transactions and the margin remittances are in line with the exposure of the entity
at the end of each financial year before 31st October every year in case accounting year ends at
31st March or within 7 months from the closing date of annual accounts in case accounting year
ending is other than 31st March or within a fortnight of adoption of accounts of the customer
whichever is earlier.

ACCOUNTS : IC/437/2024

DEPOSIT ACCOUNTS OF NON-RESIDENT

NRO NRE FCNR (B) SNRR(IC/74/2024)
NRI/PIO Having
1. Who can open NRI / PIO NRI / PIO NRI / PIO
business interest in India
All
2. Currency of A/c Indian Rupees Indian Rupee convertible Indian Rupee
currencies
credits received should
Local or Funds Funds from Funds from be permissible credits
3. Source of funds
from abroad abroad abroad to SNRR account as
per FEMA guidelines
4. Accounts SB / CA / RD / TD SB /CA/RD/TD Only TDs CA
Min. / Max. As per domestic Min 1 yr Min 1 yr Max 7 Years
5.
period term deposits Max 10 yrs Max 5 yrs

with another non-

Joint A/c with resident only arises if
Permitted (F or Permitted
6. a) close relatives Permitted (F or S) they own the business
S) (F or S)
b) Non-residents Permitted jointly.
Permitted Permitted

7. Nomination Permitted Permitted Permitted Permitted

Repatriation Freely Freely Eligible for
8. Non-Repatriable *
Principal/Interest Reptriable Repatriation Repatriation
No exemptions Exempted from Exempted from allapplicable taxes in
9. Tax Benefits
(TDS applicable) all taxes taxes India
Term Deposit – The SNRR account shall
10. Interest Rate a) Banks are free to determine
Overnight carry the nomenclature

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interest rates on both SB & TD of

Alternative of the specific business
maturity of 1 year & above under Reference Rate for which it is in
NRE A/C. for the operation, as follows:
b) Banks are free to determine their respective 1. Generic Business
interest rate on SB under NRO A/C. currency/ Swap Purpose
c) Interest rates on NRE and NRO + 250 bps for > 2. Foreign Investment in
deposits cannot be higher than 1 year but < 3 India,
domestic rupee deposits. years & 350 bps 3. Export
for 3 – 5 years 4. Import
5. Trade Credit
6. ECB
7. IFSC Units.

Note :“CANARA PLATINA NRE/NRO”(IC/130/2024):

 Existing NRE/NRO Power Plus has been revamped as Canara Platina NRE/NRO.
 NRE SB – 1621 NRO SB -1622
 Minimum Monthly CASA Average Balance of Rs.1.00 lakhs.
 Personal Accident Insurance Coverage of Rs.10.00 lakhs.
 Air Accident Insurance Coverage of Rs.100.00 lakhs.
 Preferential exchange margin of 5 paise on inward remittance (USD/INR).
 Attractive features like reduction in service charges and concession in processing charges of
retail loans, DD issuance, cancellation, stop payment, ECS mandate, Cheque return charges,
Locker Rent etc.
 Accounts will be opened at CPH Ernakulam.

FOREIGN CURRENCY ACCOUNTS OF RESIDENT:

RFC RFC(D) EEFC

ACCOUNT Resident in India who was Resident Individual Exporter of Goods

HOLDER earlier NRI(At least 1 and services
Year Stay Abroad) and
became resident on or
after 18.04.1992
CURRENCY OF 1. US Dollar [USD], 1. US Dollar [USD], 1. US Dollar [USD],
ACCOUNT 2. Pound Sterling [GBP], 2. Sterling Pound 2. Pound Sterling
3. Euro [EUR], [GBP] [GBP],
4. Australian Dollar 3. Euro [EUR] 3. Euro [EUR],
(AUD) 4. Australian Dollar
5. Canadian Dollar (CAD) (AUD)
5. Canadian Dollar
(CAD)
TYPE OF SB,CA,TD(maximum CA CA
ACCOUNT period of 3 years)
INTEREST Advised by Integrated No Interest Payable No Interest Payable
Treasury Wing, Mumbai
from time to time
CREDITS 1. Funds held in foreign Foreign exchange 1. Payments towards
currency accounts of acquired in the form exports received in
the account holder of currency notes and freely convertible
with banks abroad bank notes: currencies
2. Income such as 1. While on a visit to 2. Professional
dividend, interest, any place outside earnings
profit, rent, etc. India 3. Interest earned
earned on account 2. From any person not 4. eligible inward
resident in India remittances

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 Canara Institute of Bank Management

holder's eligible assets

3. Honorarium or gift 5. Payments received
held Abroad. 4. Unspent amount for the purpose of
3. Sale proceeds of
5. Foreign exchange counter trade
eligible assets earnings 6. Re-credit of
4. Pension or any other 6. Others like unutilised foreign
monetary benefits disinvestment currency earlier
received from abroad. proceeds, proceeds withdrawn from
5. gift / inheritance from of life insurance the account
a person who is policy 7. Other Business
resident outside India related payments
6. Any other amount Like Funds
specifically permitted received from
by RBI foreign Tourist ,
supply of goods to
units in SEZ etc
CONVERSION If the deposit remains 100% of foreign 100% of foreign
inoperative for a period exchange earnings exchange earnings
of three years, after during a calendar during a calendar
giving a three month month shall get month shall get
notice converted to Rupee converted to Rupee
balances on or before balances on or before
close of business of close of business of
next month next month
 Branches shall seek prior clearance from forex dealing room, Integrated Treasury Wing,
Mumbai through email before accepting/ renewing any FCNR (B)/RFC deposit of USD 1 million
& above. (636/2024)
 Senior Citizens, Employees/Ex-employees/ Ex-employee senior citizens are not eligible for
preferential interest rate for FCNR (B) and RFC Deposits. (636/2024)
 Publication of ‘Annualized Interest Yield’ details along with interest rates on FCNR (B)
 deposits for effective marketing and canvassing of FCNR(B) deposits (636/2024)

Diamond Dollar Account (DDA): Firms and companies dealing in purchase / sale of rough or cut
and polished diamonds etc. with a track record of at least 2 years in import/export of diamonds,
gold jewellery etc. and having an average annual turnover of Rs. 3 crores or above during the
preceding 3 licensing years (April to March) can transact their business through DDA.

They can open maximum 5 Diamond Dollar Accounts (only in US Dollars) as current account, with
their banks. Banks to inform RBI on monthly basis within 10 days. Permissible credits and debits
relate to FC export loans, realization of export proceeds, import payments.

Following are the new accounting opening form launched vide Cir no IC/148/2024:
NF1845: NRI account opening form for SB, TD, RD, Re-KYC and account conversion.
NF1067: Self-declaration form by returning NRI
NF1068: Account opening forms for Foreign Tourists.
NF1069: Request letter for updation of personal details
NF1070: Simplified new TD account opening form creation for fully KYC complied accounts.
NF1071: Declaration form for NRI customer to provide document mentioning Current Overseas
Address within three months for account opening.
NF1072: Closure/premature closure of term deposit request form.

FOREIGN EXCHANGE MANAGEMENT (DEPOSIT) REGULATIONS, 2016:

Person resident outside India can now open, hold and maintain an interest-bearing account in
Indian Rupees and / or foreign currency for the purpose of posting and collecting margin in India,
for a permitted derivative contract entered into by such person in terms of Foreign Exchange
Management (Margin for Derivative Contracts) Regulations, 2020,(IC/437/2024)

IMPORTS

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Import trade is regulated by the DGFT. Import of Goods and Services into India is allowed in terms
of Section 5 of FEMA 1999. AD-1 banks are to ensure that the imports are in conformity with the
Foreign Trade Policy and Foreign Exchange Management (Current Account Transactions) Rules,
2000 framed by Govt of India and the directions issued by RBI under FEMA 1999, from time to time.

General Guidelines for imports Import Licences: AD-1 banks can open LC on the basis of Exchange
Control copy of licence and allow remittances for import (except for goods included in the negative
list which require licence).

Obligation of Purchaser of Foreign Exchange FC payment is made for import of goods, banks are
to ensure that the importer furnishes evidence of import viz., Exchange Control copy of the Bill
of Entry, Postal Appraisal Form or Customs Assessment Certificate, etc.

Time Limit for Settlement of usance Import Payments: Normal imports maximum 6 months from
the date of shipment. Deferred payment arrangements including suppliers and buyers credit (up
to a period of less than 5 years):

Operational Guidelines for Imports

Advance Remittance for Import of Goods
a. If the amount exceeds USD 200,000 - an unconditional, irrevocable standby LC or a guarantee
from an international bank outside India or a guarantee of an AD-I bank in India, if such a
guarantee is issued against the counter-guarantee of an international bank of repute situated
outside India.
b. Where the importer (other than a PSU) is unable to obtain bank guarantee from overseas
suppliers, the requirement of the bank guarantee may not be insisted upon for advance
remittances up to USD 5,000,000.
c. PSU not in a position to obtain a guarantee from an international bank of repute is to obtain a
specific waiver for the bank guarantee from the Ministry of Finance for amount exceeding USD
100,000,
d. Advance Remittance for Import of Rough Diamonds without any limit and without bank
guarantee or standby LC, by an importer (other than PSU), for import of rough diamonds into
India from specified mining companies.
e. Advance Remittance for Import of Aircrafts/Helicopters and other Aviation Related purchases
without obtaining a bank guarantee or a standby LC, up to USD 50 million.
f. Advance Remittance for import of Gold and Silver by Qualified jewellers (notified by
International Financial Services Centres Authority (IFSCA) through IIBX is eleven days. valid
Tariff Rate Quota (TRQ) holders under India-United Arab Emirates (UAE) Comprehensive
Economic Partnership Agreement (CEPA) have been permitted to import Gold under specific
ITC (HS) Code through India International Bullion Exchange IFSC Ltd. (IIBX) against the TRQ.
(IC/15/2024 & IC/326/2024)
g. In a recent Modification ,Tariff Rate Quota Holders (TRQ Holders) under India-UAE CEPA, along
with Qualified Jewellers as notified by International Financial Services Centres and Nominated
banks and nominated agencies, as notified by DGFT, are permitted to import gold on
consignment basis (684/2024)
h. Advance Remittance for the import of services : AD-I bank may allow advance remittance Where
the amount of advance exceeds USD 500,000 or its equivalent, a guarantee from a bank of
international repute situated outside India, or a guarantee from an AD-I bank in India, if such
a guarantee is issued against the counter-guarantee of a bank of international repute situated
outside India, should be obtained from the overseas beneficiary.

Payment can be made to 3rd parties named by importer in the import invoice, up to USD 100000,
subject to compliance of certain conditions.

Interest on Import Bills: AD-I bank may allow payment of interest on usance bills or overdue
interest for a period of less than 3 years from the date of shipment at the rate prescribed for trade
credit.

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Receipt of Import Bills/Documents: AD-1 bank can make remittances where import bills have
been received directly by the importers from the overseas supplier, in the following cases: (i)
value of import bill does not exceed USD 300,000. (ii) received by wholly-owned Indian subsidiaries
of foreign companies from their principals. (iii) received by Status Holder Exporters. (iv) received
by all limited companies.

Receipt of import documents by the AD-I bank directly from overseas supplier : Bank may receive
bills directly from the overseas supplier if bank is fully satisfied about the financial standing/status
and track record of the importer customer.

Documentary Credit (Letter of Credit):

Letters of Credits (LCs, also known as Documentary Credits) are governed by provisions of Uniform
Customs and Practice of Documentary Credits (UCPDC) set by International Chamber of Commerce
(ICC), Paris. Presently the Uniform Customs and Practice for Documentary Credits, 2007 Revision,
ICC publication 600 is operative from 3rd July, 2007 which is referred as UCP 600. Other relevant
Rules of International Chamber of Commerce (ICC), are as follows:
i. e-UCP - Supplement to UCP 600 for Electronic Presentation.
ii. URR 725 - Uniform Rules for Bank-to-Bank Reimbursements under Documentary Credits.
iii. DOCDEX Rules - Documentary Credit Dispute Resolution Expertise (ICC 577).
iv. ISBP - International Standard Banking Practice.

As per UCP 600 a Documentary Credit: is an irrevocable arrangement, thereby constitutes definite
undertaking of the issuing bank to honour a complying presentation. As per this definition, all the
Documentary Credits are considered to be irrevocable. The concept of revocable documentary
credit has been removed. This definition includes three concepts.
i. The presentation of documents must comply with the terms and conditions of the
documentary credit.
ii. The presentation of documents must comply with the rules containing UCP 600 that are
applicable to the transactions i.e. those that have not been modified or excluded by the
terms & conditions of documentary credit.
iii. The presentation of documents must comply with International Standard Banking Practice.
(ISBP).

Letter of Credit (LC) may be broadly defined as a set of instructions of a buyer (applicant)
conveyed by his banker (issuing bank) to the seller (beneficiary), through another bank (ad- vising
bank) in the seller’s country whereby the issuing bank undertakes to pay to the seller a certain
sum of money mentioned therein upon submission of stipulated documents within a specified
period of time. An LC may provide for payment either at sight or at usance.

LC mechanism:
It is a widely used device to finance international trade as it safeguards the interest of both the
importer (buyer) and the overseas supplier (seller). The importer knows that the negotiating bank
will not affect payment to the seller unless and until the latter tenders the documents strictly in
accordance with the Credit terms (terms of the LC). The seller is assured of getting payment as
long as he presents the documents as per LC terms to the negotiating bank.

Parties to a Documentary Credit at a glance.

Applicant / Buyer on whose behalf the credit is issued (IMPORTER)

Beneficiary/ Seller in whose favour a credit is issued – (EXPORTER)

Issuing/Opening The Bank that issues a credit on behalf of an applicant or on its own
Bank behalf
Advising Bank The Bank authorized by the opening Bank, to advise the LC to the
Beneficiary. It is liable for ensuring the genuineness of LC.

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Confirming Bank The Bank authorized by the Issuing Bank to confirm the LC. By
confirmation, this Bank adds it guarantee and undertakes to negotiate
the documents as per the terms of LC.
Negotiating Bank The bank (either nominated bank with which credit is available or any
bank in the case of a credit available with any bank) which purchases
drafts and/or documents under a complying presentation by advancing
or agreeing to advance funds to beneficiary on or before the banking
day on which reimbursement is due from the nominated Bank.
Reimbursing Bank The bank who will reimburse the claim made by
Nominated/Negotiating Bank by debiting the Nostro Account of LC
opening Bank as per the authority issued by LC Opening Bank.
Nominated Bank The LC opening Bank nominates and authorizes the Bank in seller’s
country to honour or negotiate the documents.

PARTIES TO LC:

1. Applicant:
The UCP 600 Article 2 defines the Applicant as the party on whose request a Credit is issued. As
per Foreign Exchange Regulations, the applicant must be KYC compliant regular clients,
satisfactory dealings and should be participating in the Trade and the Letter of Credit is to be
issued at the request of the applicant on the basis of orders/contract exchanged between buyer
and seller.
The applicant should provide details for issuing the Credit to the issuing bank and as per Article
37 (d) UCP 600, and he shall be bound by & liable to indemnify the bank against all obligations
and responsibilities imposed by foreign laws and usages.

2. Beneficiary:
The UCP 600 Article 2 defines the Beneficiary as the party in whose favour the Documentary Credit
is issued.
 Beneficiary of the LC (the seller of goods) receives the payment from the issuing Bank or
confirming bank on presentation of documents stipulated in LC complying the terms and conditions
of the Credit.
 Status reports/OPL should be called for in case of all parties except Government/ Semi
Govt. Departments and public sector undertakings, from their bankers and LCs should be opened
only if such reports are satisfactory.
In a recent communication through Circular number IC/05/2024 areement with the following 5
OPL service providers for a further period of one year from 01.01.2024 to 31.12.2024 has
been renewed:
Sr No Name of the OPL Service Provider Risk Categorization/ Rating/
Indicator/ Grade/ Subject
Status
1 M/s. Mira Inform Private Limited Up to Medium
2 M/s. Dun and Bradstreet Information Up to Moderate
Services India Private Limited
3 M/s. MNS Credit Management Group Up to Satisfactory
Private Limited
4 M/s. CRIF Solutions Private Limited Up to Average
5 M/s. Rubix Data Sciences Private Limited Up to Rx5

Note: wherever, for newly established entity, clear risk rating due to insufficient data/information
is not provided, same should be treated as high risk.
3. Issuing Bank:
Issues the Letter of Credit at the request of the applicant in favour of the beneficiary and
undertake to pay at sight, if the Credit is available by sight payment or incur a deferred payment

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undertaking and pay at maturity, if the Credit is available by deferred payment or accept bill of
exchange (draft) drawn by the beneficiary and pay at maturity, if the Credit is available by
acceptance, provided the stipulated documents complying the terms and conditions of the Credit
are presented to the nominated bank or to the issuing bank. Articles 7, 14 & 16 of UCP 600 deals
with obligations of issuing bank.

4. Advising Bank:
Advising Bank is the Bank that advises the Credit at the request of the issuing Bank. Generally, the
issuing bank utilizes the services of the advising bank in the seller’s country, for advising the LC
to the Beneficiary without any undertaking to honour or negotiate.

5. Confirming Bank:
Is one which steps in to the shoes of the issuing bank and takes over the responsibility of honouring
the claim under the Letter of Credit by adding the confirmation. When the confirmation is added
to a Letter of Credit, it constitutes a definite, equitable undertaking on the part of confirming
bank in addition to the undertaking of the issuing bank.

As per Sub article (a) of Article 8 of UCP 600 the confirming bank undertake to honour the
presentation that complies with the terms and conditions of the Documentary Credit when the
documents are presented to any other nominated bank or the confirming bank.
If the Documentary Credit is available with the confirming bank by negotiation, the confirming
bank, that negotiates does so on a without recourse basis.

6. Nominated Bank:
The LC opening bank nominates and authorizes the bank in seller’s country to honour or negotiate
the documents submitted by the Beneficiary.
Nominating a bank to honour or negotiate does not obligate that bank to receive or examine
document or to honour or negotiate, unless the nominated bank is the confirming bank or expressly
communicates its agreement to honour or negotiate the documents to the beneficiary.

7. Reimbursing Bank:
The bank who will reimburse the claim made by Nominated / negotiating Bank by debiting the
Nostro Account of LC opening Bank as per the authority issued by LC opening bank.
If the Documentary Credit indicates that reimbursement is to be obtained from the reimbursement
bank, it must indicate, if the reimbursement is subject to the ICC Rule for bank to bank
reimbursements.
If the Credit does not state that reimbursement subject to the ICC Rule for bank to bank
reimbursement, the sub article (b) of Article 13 of UCP 600 will apply to the reimbursement Sub
article (c) of Article 13 of UCP 600 states that an issuing bank is not relieved of any of its obligations
to provide reimbursement if reimbursement is not made by reimbursing bank on first demand.

Types of Documentary Credits:

1. Revocable LC:
A revocable LC may be amended or cancelled at any time without prior notification to the
beneficiary. However, issuing bank is bound to reimburse the negotiating bank for negotiations
made prior to its receipt of advice of amendment or revocation of the LC. Such Revocable letter
of credit is very rarely used. As per Article 3 of UCP 600, Credit is “irrevocable” even if there is
no indication to that effect.
2. Irrevocable LC:
Irrevocable LC is a firm undertaking on the part of the issuing bank and cannot be can- celled or
amended without the consent of the parties to the letter of credit, particularly the beneficiary.
The issuing bank irrevocably commits itself to pay to the beneficiary upon presentation of specified
documents provided the terms and conditions of the credit are complied with. An irrevocable
credit offers complete protection to the beneficiary. He can be confident that the issuing bank
will honour its commitment so long as he fulfils his part of the contract. As per Article 3 of UCP
600 the Credit is irrevocable even if there is no indication to that effect.

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3. Confirmed Irrevocable LC:

 The advising bank that is not a confirming bank advises Credit to beneficiary without any
undertaking to honour or negotiate on its part. In case, any bank agrees to negotiate the
documents drawn under an irrevocable LC, it retains the right of recourse to the beneficiary
(seller) in the event it does not receive due reimbursement for its negotiation for any reason.
 Sometimes the seller abroad may not be aware of the standing of the LC opening bank; and
hence may ask for the credit to be guaranteed for payment by a bank in his own country against
presentation of documents, without recourse.
 In such circumstances the opening bank requests the advising bank or some other
correspondent bank to ‘add its confirmation’ to the Credit. When the confirmation is added to a
Credit by confirming bank at a specific request of issuing bank, it constitutes a definite, equitable
undertaking on the part of confirming bank in addition to the undertaking of the issuing bank.
 In short Confirmed Credit is a Credit to which another bank (the bank other than the issuing
bank) has added its confirmation.

4. Revolving Credit:
 It is a credit where, under the terms and conditions of the credit the amount is revived or
reinstated without requiring specific amendment to the credit. Revolving Credit is that “after a
drawing is made, the Credit reverts to its original amount for re-use by Beneficiary”. There are
two types of Revolving Credits.
 In the first type of Revolving Credit, Credit gets reinstated immediately after a drawing is
made.
 In the second type of Revolving Credit, the Credit reverts to original amount only after it
is confirmed by the issuing Bank.

5. Transferable LC:
A credit which can be transferred by the original beneficiary in favour of a second beneficiary
beneficiaries.
 Transferable Documentary Credit is one that can be transferred at the request of the
original beneficiary to one or more second beneficiary. Such Credits can be transferred only if it
is specifically stated as “transferable” in the Credit.
 Normally used when the seller or beneficiary may not be the actual producer or
manufacturer of the goods. The nominated bank or a bank specifically authorised by the
Documentary Credit to transfer the Documentary Credit, is under no obligation to transfer a Credit
except to the extent and in the manner expressly consented by the bank.
 A Transferred Credit cannot be transferred at the request of second beneficiary to any
subsequent beneficiary. The first beneficiary is not considered to be a subsequent beneficiary;
hence second beneficiary can transfer LC back to first beneficiary of the LC.
6. Back to Back LC:
Where the seller is not a manufacturer or producer of the goods, he may request his bank to open
a letter of credit in favour of his supplier on the strength of the LC already received in his favour.

7. Red Clause LC:

A Letter of Credit incorporating a clause enabling the beneficiary to avail advance (before
effecting shipment) to the extent stated in the clause is called ‘Red Clause LC’ for purchasing raw
materials, processing and packing of goods to be exported.
8. Green Clause LC:
It is an extended version of Red Clause Credit; in the sense that it not only provides for advance
towards purchase, processing and packing, but also for warehousing & insurance charges at port
where the goods are stored pending availability of ships / shipping space.

9. Payment Credit:
Payment Credit LCs is paid on sight basis on presentation of requisite documents to the designated
paying bank. In many countries, because sight drafts attract stamp duty, the beneficiary may not
call upon to draw a draft. In such cases, Credit issuing bank will pro- vide reimbursement
instructions in the Credit itself and the negotiating bank can claim reimbursement simultaneously
while forwarding the documents to the issuing bank.

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10. Deferred Payment Credit:

It is a Usance Credit where payment will be made by the designated bank on respective due dates
as per the terms of the Credit without drawing of the Drafts. Under Differed Payment Credit, no
draft will be called upon but Credit must specify the maturity at which the payment is to be made
and how to arrive at the maturity.

11. Acceptance Credit:

It is similar to Deferred Payment Credit, except for the fact that in this Credit, drawing of the
usance Draft is a must and the designated bank will accept the Draft and honour the same by
making the payment on due date.

12. Negotiation Credit:

Such Credit may be sight or usance. In Negotiation Credit the nomination can be restricted to a
specific bank or it may allow free negotiation, in which case it is called as “freely negotiable
credit” whereby, any bank who is willing to negotiate can do so.

13. Instalment Credit:

Instalment Credit calls for full value of goods to be shipped but stipulate that the shipment be
made in a specific quantity in a stated period or intervals. If the shipment schedules are not
adhered to and any instalment is not drawn or shipped within the period allowed for that
instalment, the Credit ceases to be available for that and any subsequent instalment.

14. Transit Credit:

In a normal credit, the Credit issuing bank would be from the country of the buyer (applicant) and
the credit will be advised to the beneficiary in another country through a local bank (i.e. a bank
in the beneficiary’s country).
However, in Transit Credit, the services of a bank in a third country (i.e. neither the buyer’s
country nor seller’s country) would be utilised.

INTERNATIONAL COMMERCIAL TERMS (INCOTERMS) 2020 (w.e.f 01.01.2020):

INCO terms are a series of international sales terms, published by International Chamber of
Commerce (ICC) and widely used in international commercial transactions.

11 INCO TERMS:
1. EXW- Ex-works: Delivery complete when seller places goods at buyer's named place.
2. FCA- Free Carrier: Delivery complete when seller delivers goods to carrier named by buyer.
3. FAS-Free alongside ship (at Port) : Delivery complete when seller delivers alongside a vessel,
named by buyer
4. FOB- Free on board (Port - on vessel): Delivery complete when seller places goods on ship
named by buyer,
5. CFR- Cost & Freight (Port on vessel):FOB + seller makes payment of freight till destination
port
6. CIF- Cost, insurance & Freight (Port-on vessel): CFR + seller make payment of insurance till
destination port
7. CPT- Carriage paid to (some place): Seller delivers to carrier or at agreed place and pays cost
of freight.
8. CIP- Carriage insurance paid to (some place): CPT+ seller makes payment of insurance for
place named by buyer.
9. DAP- Delivered at place (some place): Seller completes the delivery when ready for unloading
at place named by buyer and are at disposal of the buyer
[Link]- Delivered at place unloaded (earlier DAT): Seller completes the delivery, by unloading
at a place and place the goods at disposal of the buyer.
[Link]- Delivered duty paid: Seller completes delivery by placing the goods at buyer's disposal,
cleared for imports, ready for unloading, at destination and taxes/duties and clearance
completed for import and export both.

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MERCHANTING TRADE TRANSACTION- trade means that, goods acquired shall not enter the
Domestic Tariff Area. AD banks can allow specific processing/ value- addition, transformation of
goods. Conditions are:
a) The entire transaction is to be routed through the same AD bank.
b) The entire MTT shall be completed within an overall period of nine months from date of
shipment. There shall not be any outlay of forex beyond four months.
c) Short-term credit by way of suppliers' credit or buyers' credit may be extended. Letter of
Undertaking (LoU) Letter of Comfort (LOC) shall not be issued for supplier's/ buyer's credit.
d) Payment for import leg may be allowed out of the balances in EEFC account of merchant trader.
e) Merchanting traders can make advance payment for import leg. An advance payment for an
import leg beyond USD 500,000/- per transaction, shall be made against Bank Guarantee / an
unconditional, irrevocable standby LC from an international bank of repute.
f) LC to the supplier for the import leg is permitted against confirmed export order, keeping in
view the foreign exchange outlay of four months and completion of the MTT within nine months.
g) AD bank shall ensure one-to-one matching for each MTT and report defaults in any leg to the
concerned Regional Office of RBI, on half yearly basis, within 15 days from close of half year.
h) Merchant traders with outstanding of 5% or more of their annual export earnings shall be liable
for caution listing.

TRADE CREDIT:
Trade Credits (TC) refer to the credits extended by the overseas supplier, bank, financial
institution and other permitted recognised lenders for maturity, as prescribed in this framework,
for imports of capital/non-capital goods permissible under the Foreign Trade Policy of the
Government of India. Depending on the source of finance, such TCs include suppliers’ credit and
buyers’ credit from recognised lenders:

A) SUPPLIER’S CREDIT-Credit extended by the overseas suppliers to the importer in India for
selling their goods is known as Supplier’s Credit under which the supplier will ship the goods
allowing the importer to make payment later in one or more instalments. Under Supplier’s credit,
the supplier carries the risk till he receives payment from the importer.

B) BUYER’S CREDIT – In this arrangement the buyer importer raises a loan from a bank in the
exporter’s country under the export credit scheme in force.

Period of TC: The period of TC, reckoned from the date of shipment, shall be up to
Three Years: for import of capital goods.
One Year or the operating cycle whichever is less: for Non capital Goods
Three Years: For shipyards / shipbuilders, the period of TC for import of non-capital goods can be
up to(Source : MOI , Import updated till 31-03-2023)

Amount under automatic route: Up to USD 150 million or equivalent per import transaction for
oil/gas refining & marketing, airline and shipping companies. For others, up to USD 50 million or
equivalent per import transaction.

EXTERNAL COMMERCIAL BORROWING(IC/161/2024):

External Commercial Borrowings are commercial loans raised by eligible resident entities from
recognised non-resident entities and should conform to parameters such as minimum maturity,
permitted and non-permitted end-uses, maximum all-in cost ceiling, etc.

Recognised lenders: lender should be from FATF or IOSCO(International Organisation of securities

commission) compliant country

Eligible borrowers:
All entities eligible to receive FDI. Further, the following entities are also eligible to raise ECB:
i. Port Trusts;
ii. Units in SEZ;
iii. SIDBI; and
iv. EXIM Bank of India.
v. Registered MFI entities

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Two routes to raise ECB :(a) Automatic Routes (Cases Examined by AD-I) (b) Approval route
(Referred by Bank and examined by RBI)
Form ECB and Loan Registration Number (LRN): Any draw-down in respect of an ECB should
happen only after obtaining the LRN from the Reserve Bank. To obtain the LRN, borrowers are
required to submit duly certified Form ECB.

Monthly Reporting of actual transactions: The borrowers are required to report actual ECB
transactions through Form ECB 2 Return through the AD Category I bank on monthly basis so as to
reach DSIM, in both physical and electronic form (email: ecb2return@[Link]), within seven
working days from the close of month to which it relates.

Late Submission Fees: Delay in submission of Form ECB or ECB2 , if otherwise in order, by paying
LSF at rate [7500 +(0.025% × A ×n)]. Here A is amount involved and n is number of days.

Note : Subject to compliance with the conditions in regard to raising of External Commercial
Borrowings (ECB) or raising of resources through American Depository Receipts (ADRs) or Global
Depository Receipts (GDRs) or through direct listing of equity shares of companies incorporated in
India on International Exchanges, the funds so raised may, pending their utilisation or repatriation
to India, be held in foreign currency accounts with a bank outside India(IC/391/2024)

EXPORTS:
Export trade is regulated by DGFT under Govt. of India, which announces policies and procedures
for exports from India. AD-I banks conduct export transactions in conformity with the Foreign
Trade Policy, the Rules framed by the Govt. of India and the directions issued by RBI.

Manner of receipt of export proceeds:

(i) The amount can be received through AD Banks in the of(a) Bank draft, pay order, banker's
or personal cheques (b) Foreign currency notes/travellers' cheques from the buyer during his visit
to India.
(c) Payment out of funds held in the FCNR/NRE account maintained by the buyer
(d) International Credit Cards of the buyer (e) Wef Jan 01, 2009, Asian Clearing Union participants
can settle their transactions in ACU Dollar or in ACU Euro (equivalent in value to one US Dollar and
one Euro, respectively). Payment can be received from 3rd parties named by exporters in EGF,
subject to compliance of certain conditions (RBI-Nov 08, 2013).

(ii) Time limits for realisation and repatriation of export proceeds:

a. Units in SEZs, Status Holders, 100% Export Oriented Units and Units in EHTPs/STPs/BTPs:
max 9 months
b. Exported to a warehouse established outside India: Max 15 months from the date of
shipment of goods; and
c. Other cases: Max 9 months.

Offices and Immovable Property for Overseas Offices: For setting up of the office, AD-I banks
may allow remittances towards initial expenses up to 15% of the average annual sales/income or
turnover during the last 2 financial years or up to 25% of the net worth, whichever is higher. For
recurring expenses, remittances up to 10% of the average annual sales/income or turnover during
the last 2 financial years may be sent. Advance Payments against Exports:

The exporter shall ensure that –

i) the shipment of goods is made within one year (ADs can allow period above one year also w.e.f.
21.2.12 if refund during the last 3 years is not more than 10% of advance payments received);

ii) the rate of interest payable on the advance payment does not exceed Benchmark
Rate/Alternate Reference Rate (ARR) + 100 basis points. (ADS to send quarterly report to RBI,
within 21 days, for delay in utilization of advance payments)

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Long Term Export Advance: RBI allowed AD banks to permit exporters, having a minimum of 3
years' satisfactory track record, to receive long term export advance up to a maximum tenor of
10 years execution of long term supply contracts for export of goods. The rate of interest does not
exceed Benchmark Rate/ARR plus 200 basis points. Receipt of advance of USD 100 million or more
should be immediately reported RBI. Where AD banks issue bank guarantee (BG) / Stand by Letter
of Credit (SBLC) for export performance, BG / SBLC may be issued for a term not exceeding 2
years at a time and further rollover of not more than 2 years at a time may be allowed subject to
satisfaction with relative export performance as per the contract.

Part Drawings /Undrawn Balances: Where it is the practice to leave a small part of the invoice
(maximum of 10% of the full export value) undrawn for payment after adjustment to differences
in weight, quality, etc. to be ascertained after arrival AD-I banks may negotiate the bills.

Opening Hiring of Ware houses abroad: Banks may grant permission for opening / hiring
warehouses abroad if export outstanding does not exceed 5% of exports made during the previous
financial year and applicant has a minimum export turnover of USD 100,000/- during the last
financial year.

Operational Guidelines for banks Delay in submission of shipping documents: If documents are
presented after the prescribed. period of 21days, banks may handle them without approval of RBI
if satisfied with the reasons.

Export Bills Register: Banks should maintain Export Bills Register. Details of EDF /SOFTEX date of
payment, the form number, due date fortnightly period of R Supplementary Return with which
the ENC statement covering the transaction was sent to RBI, should be available. Bill numbers are
given on a financial year.

Branch to expedite the delivery of the export bills with BI Report- 193502- Export Bills Covering
Schedule Date wise (IC/127/2024). The service contract with M/S DHL EXPRESS INDIA PRIVATE
LIMITED for international courier service, which was communicated through Circular no
IC/04/2024 is renewed till 31st December 2024. In addition to Courier charge banks service charges
is Rs 100 + GST flat PER BILL. In case of loss of documents the liability of Courier Company is
limited to the extent of USD 100 ONLY and not to the extent of loss suffered by the party
consequent to loss of the document.

Follow-up of Overdue Bills: Where bills remain outstanding, beyond the due date and the
exporter fails to arrange proceeds within 12 months or extension of time, matter should be
reported to RBI. The copies of GR Forms should, be held. by banks until the full proceeds are
realised.

Reduction in Invoice Value due to Prepayment of Usance Bills: Banks may allow cash discount
to the extent of amount of proportionate interest on the unexpired period of usance. Reduction
in Invoice Value in other cases:

(i) In case of a bill negotiated or sent for collection, if amount is to be reduced, banks may allow
reduction, if it does not exceed 25% of invoice value.

(ii) For exporters in the export business for more than 3 years, reduction can be without any
percentage ceiling (subject to the conditions that the export outstandings do not exceed 5% of the
average annual export realisation during the preceding 3 financial years).

Change of buyer/consignee: Prior RBI approval is not required if goods are to be transferred to a
different buyer due to default by original buyer if reduction in value, if any, does not exceed 25%
of the invoice value and realisation of export proceeds is not delayed beyond 12 months. Extension
of time and Self write-off by the exporters: For export proceeds due within the prescribed period
during a financial year, exporters can write off (including reduction in invoice value) outstanding
export dues and extend the prescribed period of realisation beyond 12 months or further, if the

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aggregate value of such export bills written-off (including value reduction). and bills extended for
realisation does not exceed 5% (10% in case of Status holder Exporters) of the export proceeds
realised during the previous calendar year. Within a month from the close of the financial year,
exporters should submit a statement of export proceeds due, realised and not realised to the AD-
I banks concerned.

Extension of Time: AD- I banks can extend the period of realisation of export proceeds beyond 12
months from the date of export, up to a period of 6 months, at a time. For extension beyond one
year, the total outstanding of the exporter does not exceed USD one million or 10% of the average
export realisations during the preceding 3 financial years, whichever is higher.

REFERENCE TO THE RESERVE BANK: Any reference to the Reserve Bank should first be made to
the Regional Office of the Foreign Exchange Department situated in the jurisdiction where the
applicant person resides, or the firm / company functions, unless otherwise indicated. If, for any
particular reason, they desire to deal with a different office of the Foreign Exchange Department,
they may approach the Regional Office of its jurisdiction for necessary approval. Such references
should be routed through the Compliance Head of the AD bank. (683/2024)

INVOICING, PAYMENT AND SETTLEMENT: All export contracts and invoices shall be
denominated either in freely convertible currency or Indian rupees but export proceeds shall be
realised in freely convertible currency however Invoicing, payment and settlement of exports and
imports is also permissible in INR subject to compliances as under RBI's A.P.(DIR Series) Circular
No.10 dated 11.07.2022. Accordingly, settlement of trade transactions in INR shall take place
through the Special Rupee Vostro Accounts opened by AD banks in India as permitted under
Regulation 7(1) of Foreign Exchange Management (Deposit) Regulations, 2016. Contracts (for which
payments are received through Asian Clearing Union (ACU) shall be denominated in ACU Dollar.
However, participants in the ACU may settle their transactions in ACU Dollar or in ACU Euro as per
RBI Notifications (683/2024)

Write off by AD Category - I banks (683/2024):

The limits prescribed for write-offs of unrealised export bills are as under:

Particulars Limit Limit(%) in relation to

Self-write-off by an exporter (Other than the 5% Total export proceeds realised
Status Holder Exporter during the calendar year preceding
Self-write-off by Status Holder Exporter 10% the year in which the write-off is
Write-off by AD Category-1 Bank 10% being done

EXPORT CREDIT:
Export credit can be Rupee credit or foreign currency credit.

Rupee Pre-shipment Credit/Packing Credit

'Pre-shipment Packing Credit' means a loan or advance provided by a bank to an exporter for
financing the purchase, processing, manufacturing or packing of goods prior to shipment working
capital expenses towards rendering of services on the basis of export order from an overseas buyer.

Period: (1) The period can be decided by the banks on the basis of time required for procuring.
manufacturing or processing and shipping the relative goods/rendering of services.

(ii) If advances are not adjusted by submission of export documents within 360 days from the date
of advance, it will cease to qualify for rate of interest on export credit from date of advance.
Disbursement: Each packing credit is to be maintained as separate account for monitoring the
period and end-use of funds.

Liquidation of Packing Credit: The packing credit is to be liquidated out of proceeds of bills drawn
for the exported commodities on its purchase, discount etc. (conversion of pre- shipment credit
into post-shipment credit). It can also be repaid / prepaid out of balances in EEFC A/c as also from

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rupee resources of the exporter to the extent exports have actually taken place. Individual pre-
shipment credit should not go beyond 360 days from the date of advance. Facility should not be
granted to sub-suppliers.
Post-Shipment Rupee Export Credit 'Post-shipment Credit' advance is granted to an exporter of
goods / services from India, from the date of extending credit after shipment of goods/ rendering
of services to the date of realisation of export proceeds. It can mainly take the form of -
(a) Export bills purchased/discounted/negotiated. (b) Advances against bills for collection. (c)
Advances against duty drawback receivable from Government.

Liquidation of Post-shipment Credit: It is to be liquidated by the proceeds of export bills received

from abroad for goods exported services / rendered. It can be out of balances in EEFC A/c as or
from proceeds of other unfinanced (collection) bills.

Period (i) In the case of demand bills, the period of advance shall be the Normal Transit Period
(NTP) as specified by FEDAI. (ii) In case of usance bills, credit can be granted for a maximum
duration of 9 months from date of shipment inclusive of Normal Transit Period (NTP) and grace
period, if any. (iii) 'Normal transit period' means the average period involved from the date of
negotiation / purchase / discount till the receipt of bill proceeds in the Nostro account of the
bank concerned, as prescribed by FEDAI (presently 25 days).

It is not to be confused with the time taken for the arrival of goods at overseas destination.

Advances against Undrawn Balances: Export Bills: Banks can grant advances against undrawn
balances at concessional rate of interest for a maximum period of 90 days only provided such
remittances are received within 180 days after the expiry of NTP. For the period beyond 90 days,
the rate of interest specified for the category 'ECNOS'(Export Credit not otherwise specified ) at
post-shipment stage may be charged.

Advances against Retention Money: Banks can grant advances against retention money for
supplies portion of the contract. Where the retention money is payable within a period of one year
from the date of shipment, banks should charge prescribed concessive rate of interest up to a
maximum period of 90 days.

Where the retention money is payable after at period of one year from the date of shipment, the
banks can decide the rate of interest.
Export on Consignment Basis: Export on consignment basis should be at par with exports on
outright sale basis on cash terms in matters regarding the rate of interest to be charged by banks
on post-shipment credit.
Export of Goods for Exhibition and Sale: Banks may provide finance to exporters against goods sent
for exhibition and sale abroad in the normal course in the first instance, and after the sale is
completed, allow the benefit of the concessive rate of interest on such advances, at pre-shipment
stage and the post-shipment stage, up to the stipulated periods, by way of a rebate.
Post-shipment Credit on Deferred Payment Terms: Credit can be extended for a period exceeding
one year, in respect of export of capital and producer goods as specified by RBI.

Liquidation of Post-Shipment Export Credit RBI decided that to reduce the cost to exporters (i.e.
interest cost on overdue export bills), exporters with overdue export bills may also extinguish
their overdue post shipment. rupee export credit from their rupee resources. However, the
corresponding GR form will remain outstanding and the amount will be shown outstanding in XOS
statement. The exporter's liability for realisation would continue till the export bill is realized.

Advances against Duty Drawback Claims Banks may grant post-shipment advances to exporters
against duty drawback entitlements and covered by ECGC guarantee, as provisionally certified by
Customs Authorities pending final sanction and payment. It can also be made available to exporters
against export promotion copy of the shipping bill containing the EGM Number issued by the
Customs Department. These advances are eligible for concessional rate of interest and refinance
from RBI up to a maximum period of 90 days from the date of advance.

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Interest Equalisation Scheme:

The rupee export credit interest rate subvention scheme was formulated by the GOI to alleviate
the exporters concerns for which operational instructions are issued by the RBI based on advice
from the Ministry of Finance, GOI. Interest subvention subsequently replaced by INTEREST
EQUALISATION SCHEME on Pre and post Shipment Rupees Export Credit.

Government has also advised the following modifications to the scheme:

Average interest rate: With effect from FY 2023-24, the banks which have priced the loans
covered under this scheme at an average interest rate of greater than Repo Rate + 4% prior to
subvention would be subject to certain restrictions under the scheme. (IC/144/2024)

Further, the Government has advised the following modifications/clarifications to the scheme:
a. The aforesaid extension is applicable only for MSME Manufacturer exporters.
b. The annual net subvention amount is capped at Rs. 10 Cr per Importer Exporter Code (IEC) for
a given financial year, accordingly a cap of Rs. 5 Cr per IEC for MSME Manufacturer exporters
is imposed till 30/09/2024, for the financial year starting from 01/04/2024.
c. It is further advised that for Manufacturer Exporters and Merchant Exporters under the non-
MSME category, the cap shall be Rs.2.50 Cr per IEC till 30/06/ 2024, as per the Government’s
Trade Notice No.17/2024-25 dated 17/09/2024 IC/665/2024

Gold Card Scheme for Exporters:

With the objective of simplifying the access to bank credit by exporters, RBI worked out the
Scheme that envisages certain additional benefits based on the record of performance. The major
features of the scheme are as under:

Eligibility criteria for issue of gold cards: All credit worthy exporters (including in the small and
medium sector) with good track record in the opinion of the concerned bank, are eligible.

Exporters whose accounts have been classified as Standard continuously for a period of 3 years
and there are no irregularities/adverse features in the conduct of account, are to be treated good
track record, for the purpose of the scheme.

Exporters that are black listed by ECGC or included in RBI's defaulters/caution list or that are
making losses for the past 3 years are not eligible.

Credit limit fixation for issue of gold card:

Taking into account the anticipated export turnover and track record of the exporter, the banks
can determine need-based finance with a liberal approach. A stand-by limit of not less than 20%
of the assessed limit may be additionally made available to facilitate urgent credit needs for
executing sudden order.

Gold Card holders would be given preference in the matter of granting of packing credit in foreign
currency. Banks will consider granting term loans in foreign currency in deserving cases out of
their FCNR (B), RFC etc. funds.

Time frame for disposal of the applications: Fresh proposals: 25 days, renewals: 15 days and ad
hoc limits: 7 days.

Norms for inventory: For unanticipated export orders, norms may be relaxed, taking into account
the size and nature of the export order. Rate of interest: Banks to provide best rates possible. The
concessional rate on rupee export credit, may be extended for a maximum period up to 365days.

ECGC guarantee: These exporters may be exempted from obtaining ECGC guarantee under Packing
Credit Guarantee-Sectoral scheme, at discretion of the bank. ECGC classify Country into three
category 1. Open Cover Category 2. Restricted Cover Category I and 3. Restricted Cover Category
II. Risk classification by ECGC are as under:

ECGC Classification Risk Category

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A1 Insignificant
A2 Low Risk
B1 Moderately Low Risk
B2 Moderate Risk
C1 Moderately High Risk
C2 High Risk
D Very High Risk
Latest classification has been communicated through Cir number IC/595/2024

EXPORT DATA PROCESSING AND MONITORING SYSTEMS (EDPMS):

Under FEMA 1999, exporters are to realize and repatriate the full value of exports. Export
procedure ensures that export documents enter the Indian banking channel and the proceeds are
realized and repatriated to India within the stipulated time.

RBI launched comprehensive integrated computerized Export Data Processing and Monitoring
System (EDPMS) on February 28, 2014, for effective monitoring and follow-up of the exports
transactions. The shipping data with the Customs is the base for all subsequent export follow-up
processes.

The data validated at Custom Authorities level is mirrored in dedicated RBI server and is shared
among the stake holders/agencies involved, including ADs to monitor both receipt of export
documents and repatriation of export proceeds using banking channels. ADs flag incremental Data/
information in the master database under proper user/ access rights. The updated position is
available / accessible to each stake holder, bill actual realization of the proceeds, on real time
basis.

SIMPLIFIED PROCEDURES FOR HANDLING E-COMMERCE EXPORTS(649/2024): To handle large

number of e-commerce EDPMS entries the following are introduced:
1. Reconciliation of Export Data Processing and Monitoring System (EDPMS) entries related to e-
commerce exports using simplified procedures. CGM/ GM/ DGM overseeing EDPMS Section,
Integrated Treasury Wing shall be the authority for sanctioning this facility subject to the
exporter satisfies the following conditions :
 Exporter customer’s account is satisfactorily operated for six months and the customer’s
account is fully compliant with extant KYC/AML guidelines issued by Reserve Bank.
 The subject Exporter, their promoter/director and any of their transactions are not under
investigation by agencies like, Enforcement Directorate, Directorate of Revenue
Intelligence, Central Bureau of Investigation, etc.
 Exporter is not appearing in the caution list of RBI.
 The maximum value of Courier Shipping Bills (CSBs) that can be handled under simplified
procedures is capped at INR 1 Lakh.
2. Bulk Upload Facility in the Flex cube Corporate (FCC) module for handling e-commerce export
transactions.
3. Rationalization of service charges for handling all e-commerce export transactions.

INTEREST ON EXPORT CREDIT

A ceiling rate was prescribed by RBI linked to BPLRs up to Jun 30, 2010. RBI decided to deregulate
the interest rates on pre-shipment rupee export credit and post-shipment rupee export credit.
Accordingly, the Banks are free to decide the lending rate on export credit at or above the MCLR
wef 1.4.2016. Bank has adopted STRLLR (Short Term Repo Linked Lending Rate) as benchmark
rate for Rupee Export Credit sanctioned on or after 10.07.2023. Spread over STRLLR linked
to risk rating of the borrower. ED CAC and above authorities shall be the delegated authorities
for permitting concession in applicable spread on STRLLR for Rupee Export Credit(Refer
IC/551/2023).

ECNOS For Export Credit Not Otherwise Specified (ECNOS) in the Interest Rate structure, banks
are free to decide the rate of interest. Banks should not charge penal interest in respect of ECNOS.

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Interest Rates on Export Credit in Foreign Currency Banks can fix their own rates of interest
with reference to ruling USD – SOFR Term Rate (Secured Overnight Financing Rate), GBP –
SONIA Term Rate (Sterling Overnite Interbank Average Rate), EUR – EURIBOR (Euro Interbank
Offer Rate).

DEEMED EXPORTS
Deemed Exports refer to those transactions in which goods supplied do not leave the country and
payment for such supplies is received either in Indian rupees or in free foreign exchange. These
are considered equal to exports for providing incentives and other facilities. In these transactions,
the FOR value instead of FOB value, is taken into account and date of supply is taken as date of
export. These are also covered by banks under Whole Turnover Packing Credit Guarantee and
Whole Turnover Post-shipment Guarantee scheme of ECGC. For example supply of goods to units
functioning in Special Economic Zones, or sales to foreign tourists of items in India or supplies to
foreign shipping companies.

EXPORT DECLARATIONS
Exporters have to declare, before the Customs authority, full export value of the goods and affirm
that the full value will be received within the prescribed period in the prescribed manner for all
exports. Declaration is made in duplicate by the exporter and submits the same to Customs along
with Cargo. After certifying the quantity for shipment, this duplicate is returned to exporters for
submitting to AD at the time of negotiation. In case of software export, the declaration is before
the Designated Official of Ministry of Information Technology in triplicate.

EXPORT DECLARATION FORMS

Form Use
Export of goods is made (1) by post
Export Declaration Form (EDF)
or (2) otherwise. Prepared in
duplicate. Submitted to Customs
In case of export of computer
SOFTEX form
software in non-physically form.

Caution-listing of exporters- The exporters are caution listed if any shipping bill against them
remains open for more than 2 years (from date of shipment) in EDPMS. If bills are realised and
closed or extension for realisation is granted, the exporter is de-caution listed. Banks are advised
by RBI whenever exporters are cautioned.

VARIOUS KINDS OF BILL OF LADING:

 Received for shipment Bill of lading: It is an acknowledgment that the goods have been
received by the ship owners for shipment. It is not considered safe document for negotiation.
 On-board Bill of lading: It acknowledges that the goods have been put on board of the
shipment. This is considered safe for negotiation purpose.
 Short form bill of lading: Where the terms and conditions of carriage are not printed on the
bill of lading and a reference to another document containing terms and conditions is made on
the bill.
 Long form bill of lading: Where all terms and conditions of carriage are given on the document
itself.
 Clean bill of lading: Which bears no superimposed clause or notation that expressly declares
the defective condition of goods or packaging. This is considered safe for negotiation purpose.
 Claused bill of lading: Which bears superimposed cause or notation that expressly declares the
defective condition of goods or packaging. Ship owner can disclaim his liability on loss to goods
in case of such BL. Hence it is not considered safe.
 Through Bill of lading: That covers the entire voyage covering several modes of transport.
There is no guarantee of the carriers for safe carriage of goods.
 Straight bill of lading: BL that is issued directly in the name of the consignee, where the goods
will be delivered to the consignee.
 Chartered party bill of lading: Issued to a Chartered who has hired the space in the vessel.

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STAR EXPORT HOUSE CATEGORIES:

As per Foreign Trade Policy 2023, the Status Holders are business leaders who excelled in
international trade.

Criteria for recognition: Export performance (based on FOB value of export earnings in free forex)
during current and previous three financial years. For deemed export, FOR value of exports
(Rupees converted to US$ at exchange rate notified by CBIC, as on 1st April of each Financial
Year), is taken into account. The category-wise threshold limits are as under:

Category FOB value in USD ++

One Star Export House USD 3 million

Two Star Export House USD 15 million
Three Star Export House USD 50 million
Four Star Export house USD 200 million
Five Star Export House USD 800 million
++ For deemed exporters, FOR to be taken as converted in to USD at rate applicable as on Apr 01.

INVESTMENT:
Investment can be of two types first is Investment in India by Person residing outside India and
second is Investment outside India by person residing in India. Some recent development
regarding Investment are given as under:

INVESTMENT IN INDIA:
FOREIGN EXCHANGE MANAGEMENT (NON-DEBT INSTRUMENTS) RULES, 2019: This regulation
deals with the permission or restriction on investment in Non -Debt Instruments by person resident
outside India (It includes FDI and FPI). In a recent amendment communicated by IC/208/2024 &
IC/357/2024, IC/623/2024 following provisions have been added:

1. A permissible holder may purchase or sell equity shares of a public Indian company which is
listed or to be listed on an International Exchange under Direct Listing of Equity Shares of
Companies Incorporated in India on International Exchanges Scheme as specified in Schedule
XI.

2. Entry route for the various activities under the amended rules are as follows:
a. Upto 74% under Automatic route: Satellites-Manufacturing & Operation, Satellite Data
Products and Ground Segment & User Segment. Beyond 74% these activities are under
government route.
b. Upto 49% under Automatic route: Launch Vehicles and associated systems or sub-systems,
Creation of Spaceports for launching and receiving Spacecraft. Beyond 49% these activities
are under government route.
c. Upto 100% under Automatic route: Manufacturing of components and systems/ sub-systems
for satellites, Ground Segment and User Segment

3. Definition of UNIT has been explained as beneficial interest of an investor in an investment

vehicle. unit shall include unit that has been partly paid up, which is permitted under the
regulations framed by the Securities and Exchange Board of India, in consultation with
Government of India.

4. The valuation certificate issued by a Chartered Accountant or a SEBI registered Merchant

Banker or a practicing Cost Accountant, for application of pricing guidelines, must not be
more than ninety days old as on the date of the investment; Provided the above shall not
apply in case where the price is determined in accordance with SEBI guidelines.
5. Through IC/390/2024 RBI notification has been communicated about the aspects of mode of
payment, remittance of sale proceeds as well as reporting requirements regarding the

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investment in the equity shares of the public Indian company listed on an international
exchange.

a. MODE OF PAYMENT :The proceeds of purchase / subscription of equity shares of an Indian

company listed on an International Exchange shall either be remitted to a bank account in
India or deposited in a foreign currency account of the Indian company held in accordance
with the Foreign Exchange Management (Foreign currency accounts by a person resident in
India) Regulations, 2015, as amended from time to time.

b. REMITTANCE OF SALE PROCEEDS: The sale proceeds (net of taxes) of the equity shares may
be remitted outside India or may be credited to the bank account of the permissible holder
maintained in accordance with the Foreign Exchange Management (Deposit) Regulations,
2016.

c. REPORTING: The Authorised Dealer Category I banks shall report to the Reserve Bank in
Form LEC (FII) the purchase / transfer of equity instruments by FPIs on the stock exchanges
in India.

The Investee Indian Company through an Authorised Dealer Category I bank shall report to the
Reserve Bank in Form LEC (FII) the purchase / subscription of equity shares (where such
purchase / subscription is classified as Foreign Portfolio Investment under the rules) by
permissible holder, other than transfers between permissible holders, on an International
Exchange."

RBI has decided to regularise the issuances of partly paid units by Alternative Investment Funds
to persons resident outside India prior to the said amendment through compounding under
Foreign Exchange Management Act, 1999(IC/419/2024)

FOREIGN EXCHANGE MANAGEMENT (DEBT INSTRUMENTS) REGULATIONS, 2019- This regulation

deals with the permission or restriction on investment in Debt Instruments by person resident
outside India .
 In a recent amendment communicated by Cir IC/02/2024 Persons resident outside India that
maintain a rupee account in terms of regulation 7(1) of Foreign Exchange Management
(Deposit) Regulations, 2016 may purchase or sell dated Government Securities/treasury bills,
as per terms and conditions specified by the Reserve Bank.

 The limit for FPI investment in government securities (g-secs), State Government Securities
(SGSs) and corporate bonds shall remain unchanged at 6%, 2% and 15% respectively, of the
outstanding stocks of securities for FY 2024-25. Aggregate limit of the notional amount of CDS
sold by FPIs shall be 5% of the outstanding stock of corporate bonds.(IC/381/2024)

 THIRD AMENDMENT to this regulation Deals with Investment in Sovereign Green Bonds. It says
"Person’s resident outside India that maintain a securities account with a depository in IFSC
in India may purchase or sell Sovereign Green Bonds issued by the Government of India, as per
terms and conditions specified by the Reserve Bank. The sale / maturity proceeds (net of
taxes, as applicable) of instruments held by persons resident outside India may be remitted
outside India."(IC/622/2024)

‘FULLY ACCESSIBLE ROUTE’ FOR INVESTMENT BY NON-RESIDENTS IN GOVERNMENT SECURITIES

(IC/567/2024):

RBI has decided to exclude all new securities of 14-year and 30-year tenors from the Fully
Accessible Route (FAR). Consequently, future issuances of Government Securities in these tenors
shall not be available for investment under the FAR.

Existing stocks of Government Securities in 14-year and 30-year tenors already included as
‘specified securities’ under the FAR shall, however, continue to be available under the Fully
Accessible Route for investments by non-residents in the secondary market.

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INVESTMENT OUTSIDE INDIA

FOREIGN EXCHANGE MANAGEMENT (OVERSEAS INVESTMENT) DIRECTIONS, 2022 - INVESTMENTS

IN OVERSEAS FUNDS (IC/573/2024):
"Overseas Direct Investment (ODI)" means (i) acquisition of any unlisted equity capital or
subscription as a part of the Memorandum of Association of a foreign entity, or (ii) investment in
10% or more of the paid-up equity capital of a listed foreign entity, or (iii) investment with control
where investment is less than 10% of the paid-up equity capital of a listed foreign entity.

"Overseas Portfolio Investment (OPI)" means investment, other than ODI, in foreign securities.
 OPI by a person resident in India in the listed equity capital of a listed entity, even after its
delisting, shall continue to be treated as OPI until any further investment is made in the
entity, i.e., any further investment made in the equity capital of the foreign entity after its
delisting shall be made as ODI.

 RBI eases norms for Overseas Portfolio Investments (OPI). The investment (including sponsor
contribution) in units or any other instrument (by whatever name called) issued by an
investment fund overseas, duly regulated by the regulator for the financial sector in the host
jurisdiction, shall be treated as OPI. Accordingly, in jurisdictions other than IFSCs, listed
Indian companies and resident individuals may make such investment. Whereas in IFSCs
(International Financial Service Centre), an unlisted Indian entity also may make such OPI in
units or any other instrument (by whatever name called) issued by an investment fund or
vehicle, in terms of schedule V of the OI Rules subject to limits, as applicable. (449/2024)

Form FC: The person intending to make any financial commitment shall fill up the Form FC as
provided in the "Master Direction

APPROVAL FROM RBI: Financial commitment by an Indian entity, exceeding USD 1 (one) billion
(or its equivalent) in a financial year shall require prior approval of the Reserve Bank even when
the total financial commitment of the Indian entity is within the eligible limit under the automatic
route

ODI IN STARTUPS: Any ODI in startups in accordance with rule 19(2) of OI Rules shall not be made
out of funds borrowed from others.

Overseas investment by a person resident in India, other than an Indian entity or a resident
individual: Mutual Funds (MFs) and Venture Capital Funds (VCFs) / Alternative Investment Funds
(AIFs) registered with SEBI may, in accordance with paragraph 2 of schedule IV of OI Rules, invest
overseas in securities as stipulated by SEBI within an overall cap of USD 7 billion and USD 1.5
billion, respectively

ACQUISITION OR TRANSFER OF IMMOVABLE PROPERTY

Any acquisition or transfer of immovable property outside India shall be governed by the
provisions contained in rule 21 of OI Rules. The following is further provided:
An AD bank may allow an Indian entity having an overseas office to acquire immovable property
outside India for the business and residential purposes of its staff, provided total remittances do
not exceed the following limits as laid down for initial and recurring expenses, respectively:
a. 15 per cent of the average annual sales / income or turnover of the Indian entity during the
last two financial years or up to 25 per cent of the net worth, whichever is higher;
b. 10 per cent of the average annual sales / income or turnover during last two financial years.

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बेसल एवं जोखिम प्रबंधन

BASEL & RISK MANAGEMENT
Basel III reforms are the response of Basel Committee on Banking Supervision (BCBS) to improve
the banking sector’s ability to absorb shocks arising from financial and economic stress, whatever
the source, thus reducing the risk of spill over from the financial sector to the real economy.
It has its origins in the financial market turmoil after failure of Breton Woods’s system of managed
exchange rates in1973.
It had resulted into large foreign currency losses to many banks world over .In response to this
during Pittsburgh summit in September 2009,the G20 leaders committed to strengthen the
regulatory system for banks and other financial firms and also act together to raise capital
standards, to implement strong international compensation standards aimed at ending practices
that lead to excessive risk-taking, to improve the over-the-counter derivatives market and to
create more powerful tools to hold large global firms to account for the risks they take.
For all these reforms, the leaders set for themselves strict and precise timetables. Consequently,
the Basel Committee on Banking Supervision (BCBS) released comprehensive reform package
entitled “Basel III: A global regulatory frame work for more resilient banks and banking systems”
(known as Basel III capital regulations) in December 2010.
Basel III reforms strengthen the bank-level i.e. micro prudential regulation, with the intention to
raise the resilience of individual banking institutions in periods of stress. Besides, the reforms have
a macro prudential focus also, addressing system wide risks, which can build up across the banking
sector, as well as the pro-cyclical amplification of these risks overtime.
These new global regulatory and supervisory standards mainly seek to raise the quality and level
of capital to ensure banks are better able to absorb losses on both a going concern and a gone
concern basis, increase the Risk Coverage of the Capital Framework, introduce leverage ratio to
serve as a backs top to the risk- based capital measure, raise the standards for the Supervisory
Review Process (Pillar 2) and public disclosures (Pillar 3) etc.
The macro prudential aspects of Basel III are largely enshrined in the capital buffers. Both the
buffers i.e. the Capital Conservation Buffer and The Counter cyclical Buffer are intended to
protect the Banking Sector from periods of excess Credit Growth.
Reserve Bank issued Guidelines based on the Basel III reforms on Capital Regulation on May 2,
2012,to the extent applicable to Banks operating in India.
The Basel III capital regulations were implemented in India with effect from April 1, 2013
and have been fully implemented as on October 1, 2021. Banks have to comply with the
regulatory limits and minima as prescribed under Basel III capital regulations, on an
ongoing basis.
Approach to Implementation and Effective Date
BCBS has so far recommended the capital measures three times, which are called:
 BASEL-I :1988 (implemented in India in 1993)
 BASEL-II :2006 (implemented in India in 2008)
 BASEL-III :2010(implemented in India in2013)
Three Pillars of Basel
The Basel III capital regulations continue to be based on following three-mutually reinforcing
Pillars for computation of CRAR:
1. Minimum Capital Requirement
2. Supervisory Review of capital adequacy
3. Market Discipline
Keeping in view the Reserve Bank’s goal to have consistency and harmony with international
standards, it was decided in 2007 that all commercial banks in India (excluding Local Area Banks
and Regional Rural Banks) should adopt Standardized Approach for credit risk, Basic Indicator
Approach for operational risk by March 2009 and banks should continue to apply the Standardized
Duration Approach (SDA) for computing capital requirement for market risks.
Composition of Regulatory Capital:
General:
Banks are required to maintain a minimum Pillar 1 Capital to Risk-weighted Assets Ratio (CRAR) of
9% on an on-going basis (other than Capital Conservation Buffer and Counter cyclical Capital Buffer
etc.).

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The Reserve Bank will take into account the relevant risk factors and the Internal Capital Adequacy
Assessments of each Bank to ensure that the capital held by a bank is commensurate with the
bank’s overall risk profile.
This would include, among others, the effectiveness of the bank’s Risk Management Systems in
identifying, assessing / measuring, monitoring and managing various risks including interest rate
risk in the banking book, liquidity risk, concentration risk and residual risk.
Accordingly, the Reserve Bank will consider prescribing a Higher Level of Minimum Capital Ratio
for each Bank under the Pillar 2 framework on the basis of their respective risk profiles and their
risk management systems.
Further, in terms of the Pillar 2 requirements, banks are expected to operate at a level well above
the minimum requirement.
A bank should compute Basel III capital ratios in the following manner: +
(a) Common Equity Tier 1 capital ratio:
Common Equity Tier 1 Capital
Credit Risk RWA* + Market Risk RWA + Operational Risk RWA

(b) Tier 1 capital ratio :

Eligible Tier 1 Capital
Credit Risk RWA* + Market Risk RWA + Operational Risk RWA

(c) Total Capital (CRAR#) :

Eligible Total Capital
Credit Risk RWA* + Market Risk RWA + Operational Risk RWA
* RWA = Risk Weighted Assets;
# Capital to Risk Weighted Asset Ratio

Elements of Regulatory Capital and the Criteria for their Inclusion in the Definition of
Regulatory Capital:
Components of Capital
Total regulatory capital will consist of the sum of the following categories:
i) Tier 1 Capital (going-concern capital)
a) Common Equity Tier 1
b) Additional Tier 1
ii) Tier 2 Capital (gone-concern capital)
From Regulatory Capital perspective,
a) Going-concern capital is the capital which can absorb losses without triggering bankruptcy
of the bank.
b) Gone-concern capital is the capital which will absorb losses only in a situation of
liquidation of the bank.
Limits and Minimal
i. As a matter of prudence, it has been decided that Scheduled Commercial Banks (excluding
LABs and RRBs) operating in India shall maintain a minimum total capital (MTC) of 9% of
total risk weighted assets (RWAs) i.e. capital to risk weighted assets (CRAR). This will be
further divided into different components
ii. Common Equity Tier 1 (CET1) capital must be at least 5.5% of Risk-Weighted Assets (RWAs)
i.e. for Credit Risk + Market Risk + Operational Risk on an ongoing basis.
iii. Tier 1 capital must be at least 7% of RWAs on an ongoing basis. Thus, within the minimum
Tier 1 capital, Additional Tier 1 capital can be admitted maximum at 1.5% of RWAs.
iv. Total Capital (Tier 1 Capital plus Tier 2 Capital) must be at least 9% of RWAs on an ongoing
basis. Thus, within the minimum CRAR of 9%, Tier 2 capital can be admitted maximum up
to 2%.
v. If a bank has complied with the minimum Common Equity Tier 1 and Tier 1 capital ratios,
then the excess Additional Tier 1 capital can be admitted for compliance with the minimum
CRAR of 9% of RWAs.
vi. In addition to the minimum Common Equity Tier 1 capital of 5.5% of RWAs, Banks are also
required to maintain a capital conservation buffer (CCB) of 2.5% of RWAs in the form of
Common Equity Tier 1 capital.

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Thus, with full implementation of capital ratios and CCB the capital requirements are summarized
as below:

Regulatory Capital As% of RWA

i Minimum Common Equity Tier 1 ratio 5.5
ii Capital conservation buffer (Comprised of Common Equity) 2.5
iii Minimum Common Equity Tier 1 ratio plus capital conservation buffer 8.0
[(i)+(ii)]
iv AdditionalTier1Capital 1.5
v MinimumTier1 capital ratio [(i) +(iv)] 7.0
vi Tier 2 Capital 2.0
vii Minimum Total Capital Ratio (MTC) [(v)+(vi)] 9.0
viii Minimum Total Capital Ratio plus capital conservation buffer [(vii)+(ii)] 11.5

However, Bank will maintain a capital buffer of 1% above the Minimum Regulatory Requirements as
internal capital for Pillar II risks.
Elements of Common Equity Tier I Capital:
1. Common shares (paid up equity) issued by the bank which meet the criteria for
classification as common shares for regulatory purpose.
2. Stock surplus (share premium) resulting from the issue of common shares
3. Statutory reserves
4. Capital reserves representing surplus arising out of sale proceeds of assets.
5. Other disclosed free reserves, if any
6. Balance in P & L account at the end of the previous fin year.
7. Current year profits can be reckoned on quarterly basis provided incremental NPA pro-
vision at end of any of 4 quarters of previous Financial year have not deviated more than
25% from average of 4 qtrs.
8. Banks may, at their discretion, reckon foreign currency translation reserve arising
due to translation of financial statements of their foreign operations in terms of
Accounting Standard (AS) 11 as CET1 capital at a discount of 25 per cent subject to
meeting the conditions
9. While calculating capital adequacy at the consolidated level, common shares issued
by consolidated subsidiaries of the bank and held by third parties (i.e., minority
interest) which meet the criteria for inclusion in Common Equity Tier 1 capital
10. Revaluation reserves arising out of change in the carrying amount of a bank’s property
consequent upon its revaluation may, at the d is creation of banks, be reckoned as CET1
capital at a discount of 55%, instead of Tier2 capital, subject to certain conditions.
Deduction:
Regulatory adjustment/deductions to be made from total of 1 to 8
Elements of Additional Tier I Capital:
1. Perpetual Non-Cumulative Preference Shares (PNCPS), which comply with the regulatory
requirements.
2. Stock Surplus (share Premium) resulting from the issue of instruments included in additional
Tier I capital.
3. Debt Capital instruments eligible for inclusion in Additional Tier I capital, which comply with
the regulatory requirements.
4. Any other type of instruments generally notified by RBI from time to time for inclusion
in Additional Tier1.

[Link] calculating capital adequacy at the consolidated level, Additional Tier 1

instruments issued by consolidated subsidiaries of the bank and held by third parties
which meet the criteria for inclusion in Additional Tier 1 capital
Deduction:
Regulatory adjustments/deductions to be made from total of 1 to 4
Elements of Tier 2 Capital:
1. General Provisions and Loss Reserves:
General provisions on standard assets, floating Provisions, Provisions held for Country

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Exposures, Investment Reserve account, excess provisions which arise on account of sale of
NPAs and ‘Counter Cyclical Provisioning Buffer’ up to max of 1.25 % of total credit RWA under
Standardized approach.
Under IRB (Internal Rating Based) approach where the total expected loss is less than total
eligible provision than the difference may be recognize the difference as Tier II up to a max
of 0.6 % of credit RWAs calculated under IRB approach.
1. Debt Capital Instruments issued by Bank.
2. Preference share capital instruments (PCPS/RNCPS/RCPS) issued by banks;
3. Stock surplus (share Premium) resulting from the issue of instruments in Tier 2 capital.
4. Any other type of instrument notified by RBI.
5. While calculating capital adequacy at the consolidated level, Tier 2 capital
instruments issued by consolidated subsidiaries of the bank and held by third parties
which meet the criteria for inclusion in Tier 2 capital
6. Any other type of instrument generally notified by the Reserve Bank from time to
time for inclusion in Tier 2 capital
7. Less: Regulatory adjustments / deductions applied in the calculation of Tier 2
capital [i.e., to be deducted from the sum of items (i) to (vii)].
Approaches for computation of risk:

Credit Risk Standard Approach,

Foundation Internal Rating Based approach,
Advanced Internal Rating based Approach.
Market Risk Standard Approach (comprising maturity method &duration method),
Internal Models approach
Operational Risk Basic Indicator Approach,
Standard Approach,
Advanced Measurement Approach

Capital Charge for Credit Risk

Under The Standardized Approach (TSA), the rating assigned by the eligible External Credit Rating
Agencies will largely support the measure of credit risk.
The Reserve Bank has identified the external credit rating agencies that meet the eligibility
criteria specified under the revised Framework.
Banks may rely upon the ratings assigned by the external credit rating agencies chosen by the
Reserve Bank for assigning risk weights for capital adequacy purposes as per the mapping furnished
in these guidelines.
External Credit Assessment Institutions accepted by the Bank:
Bank shall accept the ratings assigned by the following External Credit Assessment Institutions
(ECAIs) for the purpose of Risk weighting of Exposures.
Domestic Credit Rating Agencies:
● Credit Analysis and Research Ltd. (CARE)
● Credit Rating Information Services of India Limited (CRISIL)
● India Ratings Ltd (Formerly Fitch Ratings India Pvt Ltd. [FITCH])
● Investment Information and Credit Rating Agency Ltd. (ICRA)
● Acuite Ratings and Research Ltd (formerly SMERA)
● INFOMERICS Valuation and Ratings Pvt Ltd (INFOMERICS)

International (Global) Credit Rating Agencies:

● Fitch Ratings Ltd. (FITCH)
● Moody’s Investor Services Ltd. (MOODY’S)

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● Standard & Poor Rating Agencies Ltd. (S&P)

Scope of application of External Ratings:

● Rating given only by the recognized and acceptable ECAIs (domestic and international) will be
reckoned for assigning risk weights for credit exposure to facilitate capital computation under
the Standardized Approach as per the below:
● To be eligible for Risk Weighting purposes, the rating shall be in force and confirmed
from the monthly bulletin of the rating agency concerned.
● The ECAI should have reviewed the Rating at least once during the previous 15 months as on
the day it is reckoned for capital adequacy purpose.
● Unsolicited Ratings are not permitted for non-sovereign exposures. Rating should be considered
only if it is of solicited nature i.e. made at the request of the counterparty/ borrower
constituent and accepted by the counterparty or borrower.
● If there are two ratings accorded by ECAIs that map into different risk weights, the
higher of the two risk weights should be applied.
● If an exposure has three or more ratings accorded by ECAIs with different risk weights, the
ratings corresponding to the two lowest risk weights should be referred to and the higher of
those two risk weights should be applied i.e. the second lowest risk weight.
● Cash credit exposures tend to be generally rolled over and also tend to be drawn on an average
for a major portion of the sanctioned limits. Hence, even though they may be sanctioned for
period of one year or less, these exposures should be reckoned as long term exposures and
accordingly the long term ratings accorded by the ECAIs will be relevant.
● Similarly, Banks may use long term ratings of counterparty as a proxy for an unrated short term
exposure on the same counterparty subject to strict compliance with the requirements for use
of multiple rating assessments and applicability of issue rating to issuer.
● Rating assigned to one particular entity within a corporate group cannot be used to risk weight
other entities within the same group.
Important Risk Weighted Assets
Assets/Claim Risk Weight
Fund/non-fund based loan/claim of 0%
i. Central Govt. or
ii. State Govt. or
iii. Loans guaranteed by Central Govt.
i. Loans guaranteed by State Govt. 20%
ii. Claims on ECGC
Claims on
i. RBI,
ii. DICGC, 0%
iii. Credit Guarantee Fund Trust for MSE, CRGFTLIH and CGFMU.

Claims on Foreign Sovereigns/ Foreign Central Banks

S&P India Ratings AAA to AA A BBB BB to B Below B Unrated

Moody’s Ratings Aaa to A A Baa Ba to B Below B Unrated

Risk Weight 0% 20% 50% 100% 150% 100%

Claims on Foreign Public Sector Enterprises
S&P India Ratings AAA to AA A BBB to BB Below BB Unrated

Moody’s Ratings Aaa to Aa A Baa to Ba Below Ba Unrated

Risk Weight 20% 50% 100% 150% 100%

Claims on Public Sector Enterprises (PSEs)(as per CRM Policy – 520/2024):

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Claims on domestic PSEs will be risk weighted in a manner similar to claims on ‘corporates’ and
the risk weights will be as under:

Long term claims :

Domestic Rating AAA AA A BBB BB & Unrated

Agencies below
Risk Weight 20% 30% 50% 100% 150% 100%

Short term claims :

Domestic Rating A1+ A1 A2 A3 A4 & D Unrated

Agencies
Risk Weight 20% 30% 50% 100% 150% 100%

Claims on Corporates:
Claim on Corporates will include all fund based and non fund based exposure other than those
which qualify for inclusion under ‘sovereign’, ‘bank’, ‘regulatory retail’, ‘residential mortgage’,
‘Non Performing Assets’, ‘Exposure to Asset Financing Companies (AFC) and NBFC -Infrastructure
Finance Companies (NBFCIFCs)’, ‘other specified category’ addressed separately.

Claims on Corporates shall be risk weighted as per the ratings assigned by the rating agencies
registered with SEBI and accredited by the RBI. The following table indicates the risk weight
applicable to claim on corporates.
Long term claims :

Domestic Rating AAA AA A BBB BB & Unrated

Agencies below
Risk Weight 20% 30% 50% 100% 150% 100%

Short term claims :

Domestic Rating A1+ A1 A2 A3 A4 & D Unrated

Agencies
Risk Weight 20% 30% 50% 100% 150% 100%

Claims on NBFCs:
Long term claims :

Domestic Rating AAA AA A BBB BB & Unrated

Agencies below
Risk weight for 20% 30% 50% 100% 150% 100%
HFCs (%)
Risk weight for 20% 30% 50% 100% 150% 100%
NBFCPriority
Sector (%)
Risk weight for 45% 55% 75% 100% 150% 100%
NBFCOthers (%)
Risk weight for 100% 100% 100% 100% 100% 100%
CIC (%)

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Short term claims :

Domestic Rating A1+ A1 A2 A3 A4 & D Unrated

Agencies
Risk weight for 20% 30% 50% 100% 150% 100%
HFCs (%)
Risk weight for 20% 30% 50% 100% 150% 100%
NBFCPriority
Sector (%)
Risk weight for 45% 55% 75% 100% 150% 100%
NBFCOthers (%)
Risk weight for 100% 100% 100% 100% 100% 100%
CIC (%)

Claims on Bank for International Settlement, International Monetary Fund and 20%
Multi-lateral Development Banks (like :BIS, IMF, MDB etc.) :
Regulatory Retail Loans including education loans (excluding housing loans). 75%
Regulatory Retail loan means
i. Maximum amount Rs.7.5 Cr. (increased from 5 Cr wef from 12.10.2020)
ii. Maximum loan to single party 0.2% of overall retail loans portfolio or
iii. Annual turnover for small business less than Rs.50Cr.)
Claims Secured by Residential Property:
Lending to individuals meant for acquiring residential property which are fully secured
by mortgages on the residential property that is or will be occupied by the borrower, or
that is rented, shall be risk weighted as indicated as per Table below, based on Board
approved valuation policy.

Loan to Value (LTV) ratios, risk weights and provisioning for individual housing loans sanctioned
upto 06.06.2017 shall be as under: (As per Retail Lending Policy – 49/2024)
Amount LTV Ratio % Risk Weight % Standard Asset
Provisioning (%)
Upto Rs. 30 Lakhs Less than or equal to 80 35 0.40

>80 or < than or equal 50

to 90

>Rs.30 lakh and Upto 75 35

upto Rs.75 lakhs > 75 & upto 80 50
Above Rs.75 Lakhs upto 75 75

Loan to Value (LTV) ratios, risk weights and provisioning for individual housing loans sanctioned
on or after 07.06.2017 and upto 15.10.2020 shall be as under:
Amount LTV Ratio % Risk Weight % Standard Asset
Provisioning (%)
Upto Rs. 30 Lakhs Less than or equal to 80 35 0.25

>80 or < than or equal 50

to 90

>Rs.30 lakh and Less than or equal to 80 35

upto Rs.75 lakhs
Above Rs.75 Lakhs Less than or equal to 75 50

Loan to Value (LTV) ratios, risk weights and provisioning for individual housing loans sanctioned

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on or after 16.10.2020 and upto 31.03.2023 shall be as under (The same was given as special
measure vide HO Cir 265/2022 which discontinued vide HO Cir 414/2023):

LTV Ratio % Risk Weight % Standard Asset

Provisioning (%)
Less than or equal to 80 35 0.25
>80 or < than or equal to 90 50

Loan to Value (LTV) ratios, Risk Weights and Provisioning for Individual Housing loans sanctioned
on or after 01.04.2023 shall be as under (CRM policy HO Cir 520/2024):

Amount LTV Ratio % Risk Weight % Standard Asset

Provisioning (%)
Upto Rs. 30 Lakhs Less than or equal to 80 35 0.25

>80 or < than or equal 50

to 90

>Rs.30 lakh and Less than or equal to 80 35

upto Rs.75 lakhs
Above Rs.75 Lakhs Less than or equal to 75 50

LTV ratio should be computed as a percentage with total outstanding in the account (viz.
Principal + accrued interest + other charges pertaining to the loan without any netting) in the
numerator and the realizable value of the residential property mortgaged to the Bank as
denominator.

Claims classified as commercial Real Estate Exposure

Category LTV Risk Weight % Standard Asset
Ratio % Provisioning (%)
CRE-Residential Housing( RH) NA 75 0.75
Commercial Real Estate (CRE) NA 100 1.00

Capital Market exposure including Loan to individuals against Shares, Credit 125%
cards, Personal loans, Consumer loans
Unsecured portion of NPA 150%
Where provision is less than 20 %
(It is 100% if provision is at least 20 % and 50% if provision is at least 50%)
Claims on Venture Capital Funds 150%
Staff Loans secured by mortgages or charge on superannuation benefits 20%
Other Staff Loans (being part of regulatory retail) 75%
Consumer credit including personal loan (outstanding as well new) but excluding 125%
housing loan, education loan, vehicle loan & loans secured by gold and gold
jewellery credit card receivables
Credit Card Receivables 150%
Vehicle Loans 100%
Loans Secured by Gold / Gold Jewellery 125%
Claim on N B F C -ND-SIs 100%
(Non Deposit taking Systemically Important NBFCs)

Increase the risk weights on such exposures of SCBs by 25 percentage points (over and above the
risk weight associated with the given external rating) in all cases where the extant risk weight as
per external rating of NBFCs is below 100%.(HO Cir 852/2023)
For this purpose, loans to HFCs, and loans to NBFCs which are eligible for classification as priority
sector in terms of the extant instructions shall be excluded.(HO Cir 852/2023)
All top-up loans extended by REs against movable assets which are inherently depreciating in

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nature, such as vehicles, shall be treated as unsecured loans for credit appraisal, prudential
limits and exposure purposes. (HO Cir 852/2023)

Non-Performing Assets (NPAs)-The unsecured portion of NPA (other than residential mortgage
loans) net of specific provisions (including partial write offs) will be risk weighted as follows:

Si No Specific Provision as % to O/s NPA Risk Weight (%)

1 Less than 20% 150
2 At least 20% 100
3 At least 50% 50

Basel recognized securities which are considered for risk mitigation:

o Cash Margin,
o Bank Deposit
o Gold jewellers,
o NSC &KVP (Face Value),
o Insurance Policies(Surrender Value),
o State Govt. Securities (Face Value), Central Govt. Securities(Face Value)
● Units of Mutual Funds(NAV) subject to Price for the units is publicly quoted daily and the
daily NAV is available in public domain, and Mutual fund is limited to investing in the
instruments.
Basel recognized Guarantees:
The guarantees offered by the following entities are recognized under Basel norms:
1. Guaranteed by Central Government
2. Guaranteed by State Government
3. Guaranteed by Scheduled Banks
4. Guaranteed by CGTMSE
5. Guaranteed by ECGC
6. Guaranteed by CRGFTLIH (Credit Risk Guarantee Fund Trust for Low Income Housing)
7. Guaranteed by CGFSEL (Credit Guarantee Fund Scheme for Education Loans)
8. Guaranteed by CGFMU
9. Guaranteed by Credit Guarantee Fund Scheme for Skill Development (CGFSSD)
10. Guarantee to cover NBFC MFI by NCGTC.

Capital for Credit Risk for Off-balance sheet items:

● In case of Non-Fund based Exposures, the credit equivalent amount of Non- Fund based
exposure is determined by multiplying the contracted amount of non-fund based exposure by
the relevant credit conversion factor (CCF).
● The credit conversion factor for Guarantees is dependent on the nature of guarantees Credit
conversion factors are as below:

Type of Guarantee Credit Conversion Factor CCF

Financial guarantees, deferred payment guarantees and 100%
Advance Payment Guarantees
Bid Bond Guarantees and Performance guarantees 50%

Capital Charge for Market Risk:

Market Risk: Chance of losses in portfolio market value from market price movements.
Two approaches for computing market risk
a) Standardized Measurement Approach – Comprising of Maturity method and Duration
method,
b) Internal models approach – comprising Value at Risk (VaR) The
Capital requirement for Market risk is in term of
1. Specific Risk–
The risk of an adverse movement in the price of an individual security owing to factors related to
the individual issuer.

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2. General Market Risk–

The risk of a broad market movement unrelated to any specific securities.
Capital Charge for Operational Risk
Operational risk is defined as the risk of loss resulting from inadequate or failed internal
processes, people and systems or from external events. This definition includes legal risk,
but excludes strategic and reputational risk. Legal risk includes, but is not limited to,
exposure to fines, penalties, or punitive damages resulting from supervisory actions, as well
as private settlements. There are three different approaches for computing capital charge–
● Basic Indicator Approach or BIA,
● The Standardized approach or TSA and
● Advanced measurement approach or AMA.
● Under BIA, B a n k s must hold capital equal to the average of the previous 3 Years of affixed
percentage i.e 15 % of positive annual gross income.
● If annual gross income is negative or zero for any year, it should be excluded.
● Bank intends to move towards Advanced Measurement Approach (AMA)for computation of
Capital for Operational Risk, as per guidelines of RBI.
● Under AMA, the process of measuring Operational Risk Management Framework (ORMF) and
Risk Management System (ORMS) and ensure its continuous appropriateness.
● Tracking /capturing of internal loss event data is an essential pre-requisite for developing and
functioning of Operational Risk Framework and Management System. In this regard, Bank has
procured SAS-EGRC (Statistical Analysis System-Enterprise Governance Risk and Compliance).

PILLAR–II: SUPERVISORY REVIEW PROCESS

The objective is to ensure that banks have adequate capital to support the risks in their business.
In terms of RBI guidelines on New Capital Adequacy Framework (NCAF), Banks are required to have
a Board approved document on ICAAP (Internal Capital Adequacy Assessment Process).
The ICAAP is a process for assessing the overall capital adequacy of the Bank in relation to their risk
profile and a strategy for maintaining the capital levels.
Pillar II of BASEL II & BASEL III framework covers Supervisory Review & Evaluation process(SREP)
which envisages the establishment of suitable Risk Management Systems in banks and their review
by Supervisory Authority i.e. RBI.
The objective of the SREP by RBI is to ensure that banks have adequate capital to support all the
risks in their business as also to encourage them to develop and use better risk management
techniques for monitoring and managing their risks. This requires a well-defined internal
assessment process within Banks through which Banks has to assure the RBI that adequate capital
is held towards the various risks to which Banks are exposed.
PILLAR III-: Market Discipline
The purpose of market discipline is to complement Pillar1and Pillar2.
It encourages Market Discipline by developing a set of disclosure requirements, which will allow
market participants to assess key pieces of information on the scope of application, capital risk
exposures risk assessment processes and hence, the capital adequacy of the institution.

Capital Conservation Buffer

The Capital Conservation Buffer (CCB) is designed to ensure that banks build up capital buffers
during normal times (i.e. outside periods of stress) which can be drawn down as losses are incurred
during a stressed period. The requirement is based on simple capital conservation rules designed
to avoid breaches of minimum capital requirements.
Counter Cyclical Capital Buffer
The aim of the Counter cyclical Capital Buffer (CCCB) regime is twofold.
Firstly, it requires banks to build up a buffer of capital in good times which may be used to maintain
flow of credit to the real sector in difficult times.
Secondly, it achieves the broader macro-prudential goal of restricting the banking sector from
indiscriminate lending in the periods of excess credit growth that have often been associated with
the building up of system-wide risk.

Liquidity Coverage ratio (LCR)

BASEL Committee designed―
Liquidity Coverage Ratio (LCR): to strengthen the global liquidity regulations with the goal of

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promoting a more resilient banking sector.

LCR = Stock Of High Quality Liquid Assets (HQLA)

Total Net Cash Outflows over the Next 30 Calendar Days

The LCR requirement would be binding on banks from January 1,2015;with a View to provide a
transition time for banks, the requirement would be minimum 60% for the calendar year 2015 i.e.
with effect from January1, 2015, and rise in equal steps to reach the minimum required level of
100 % on January 1, 2019.
The assets allowed as the Level 1 High Quality Liquid Assets (HQLAs) for the purpose of computing
the LCR of banks, inter alia, include Government securities in excess of the minimum SLR
requirement, and within the mandatory SLR requirement, Government securities to the extent
allowed by RBI, under Marginal Standing Facility (MSF) [presently 2 per cent of the bank’s NDTL]
and under Facility to Avail Liquidity for Liquidity Coverage Ratio (FALLCR) [presently 13 percent
of the bank’s NDTL].
Hence the total carve-out from SLR available to banks would be15 percent of their NDTL.
For this purpose, banks should continue to value such reckoned government securities within the
mandatory SLR requirement at an amount no greater than their current market value (irrespective
of the category of holding the security, i.e., HTM, AFS or HFT).
The total net cash outflows is defined as the total expected cash outflows (minus) the total
expected cash inflows for the subsequent 30 calendar days.
Cash outflows and inflows are calculated by multiplying the outstanding balances of various
categories on and off-balance sheet items by the rates at which they are expected to run off and
flow-in respectively.
As most of the deposits of the Bank can be re-called by the depositors at any point of time all term
deposits (irrespective of maturity) including demand deposits (no maturity) forms part of expected
cash outflows in the next 30 days while inflows are restricted to only from maturing advances
(excluding CCOD) in the next 30 days.

Net Stable Funding Ratio(NSFR): The NSFR is defined as Available Stable Funding relative to the
amount of required stable funding.
Available stable funding is defined as the portion of capital and liabilities expected to be reliable
over the time horizon considered by the NSFR, which extends to one year.
The amounts of available and required stable funding specified in the standard are calibrated to
reflect the presumed degree of stability of liabilities and liquidity of assets.
Available stable funding (ASF):
The amount of ASF is measured based on the broad characteristics of the relative stability of a
banks funding sources, including the contractual maturity of its liabilities and the differences in
the propensity of different types of funding providers to withdraw their funding.
The amount of ASF is calculated by first assigning the carrying value of bank’s capital and liabilities
and multiplied by respective ASF factor, and the total ASF is the sum of the weighted amounts.
Required stable funding (RSF):
The RSF factors assigned to various types of assets are intended to approximate the amount of a
particular asset that would have to be funded, either because it will be rolled over, or because it
could not be monetized through sale or used as collateral in a secured borrowing transaction over
the course of one year without significant expense. Such amounts are expected to be supported
by stable funding.
The amount of RSF is calculated by first assigning the carrying value of bank’s assets and multiplied
by its associated RSF factor, and the total RSF is the sum of the weighted amounts added to the
amount of OBS activity (or potential liquidity exposure) multiplied by its associated RSF factor.

***************

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तववेकपूणण मानदं ड और आखि वर्गीकरण

PRUDENTIAL NORMS ON ASSETS CLASSIFICATION
Performing asset – Standard asset:
● Assets which do not disclose any problem and do not carry more than normal risk and also
generates income for the Bank are Performing Assets.
● Interest and installment of principal remain overdue for a period of less than 90 days and less
in respect of Term Loan.
● The account is not out of order in respect of OD/OCC.
● Over dues under Bills are less than 90 days and less whether purchased/discounted.
● In case of Agricultural advances where the repayment is based on the crop income,
interest/installment of principal, the over dues are within two crop seasons in case of short
duration crops and one crop season in case of long duration crops.

Non-Performing Asset (NPA):

● In line with the international practices on prudential norms for banks, an asset is defined as
non-performing when it ceases to generate income for the bank.
● Substandard Assets, Doubtful Asset and Loss Assets are NPAs.
● Non-performing Assets shall be loan or advance where
 Interest and/or installment of principal remain overdue for a period of more than 90 days
in respect of term loan.
 The account remains “out of order” in respect of an OD/OCC.
 The bill remains overdue for a period of more than 90 days in the case of bills purchased
and discounted.
 In case of advance granted for agricultural purposes where the repayment is based on the
crop income, interest and /or installment of principal remains overdue for two crop seasons
(in case of short duration crops) and for one crop season (in case of long duration crops).
 Any amount to be received remains overdue for a period of more than 90 days in respect of
other accounts.
 In respect of a borrower having more than one facility with a bank, all the facilities granted by
the bank will have to be treated as NPA and not the particular facility or part thereof which has
become irregular/NPA.

● Substandard Asset: In respect of loan accounts if any amount is overdue for a period of more
than 90 days from the due date, the account should be classified as Sub-standard asset. With
effect from March 31, 2005, a sub-standard asset would be one, which has remained NPA for
a period less than or equal to 12 months.
● Doubtful Asset: An asset would be classified as doubtful if it has remained in the sub-standard
category continuously for 12 months, if the erosion in the value of securities is more than 50%
of the value assessed by the bank, and where the value of the securities is more than 20% of
the outstanding liability, the account is straight away classified as doubtful category.
● Loss Asset: A loss asset is one where the loss has been identified by the Bank or internal or
external auditors & the amount has not been written off wholly.
Credit Card Accounts : i) In credit card accounts, the amount spent is billed to the card users
through a monthly statement with a definite due date for repayment. Banks give an option to the
card users to pay either the full amount or a fraction of it, i.e., minimum amount due, on the due
date and roll-over the balance amount to the subsequent months’ billing cycle.
(ii) A credit card account will be treated as non-performing asset if the minimum amount due, as
mentioned in the statement, is not paid fully within 90 days from the payment due date mentioned
in the statement.
(iii) Banks shall report a credit card account as ‘past due’ to credit information companies (CICs) or
levy penal charges, viz. late payment charges, etc., if any, only when a credit card account remains
‘past due’ for more than three days. The number of ‘days past due’ and late payment charges shall,
however, be computed from the payment due date mentioned in the credit card statement.

Norms for agricultural advances:

● A loan granted for short duration crops will be treated as NPA if the installment of principal or

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interest thereon remains overdue for two crop seasons.

● A loan granted for long duration crops will be treated as NPA if the installment of principal or
interest thereon remains overdue for one crop season.

Guidelines on running accounts:

● ‘Overdue’: Overdue is the unpaid amount due to the bank under any credit facility on
due date.
● Out of order accounts: Treated as out of order account if the outstanding balance remains
continuously for 90 days in excess of the sanctioned limit/ drawing power. In cases where
liability is less than sanctioned limit/ drawing power, if there are no credits continuously for
90 days as on the date of Balance Sheet, credits are not enough to cover the interest debited
during the same period.

Prudential norms on all resolution plans including those undertaken under IBC (Cir 598/2024):
 Asset Classification:
a. In case of restructuring, the accounts classified as 'standard' shall be immediately downgraded
as non- performing asset (NPA) i.e. substandard to begin with.
b. The NPAs, upon restructuring, would continue to have the same asset classification as prior to
restructuring.
In both cases, the asset classification shall continue to be governed by the ageing criteria as
defined for Sub-standard, Doubtful and Loss.

 Conditions for upgrade:

a. For MSME accounts where aggregate exposure of lender is less than Rs. 25 Cr :

An account may be considered for upgradation to Standard only if it demonstrates satisfactory

performance during the Specified Period. Specified period means a period of one year from the
commencement of the first payment of interest or principal, whichever is later on the credit
facility with longest period of moratorium under the terms of restructuring package.

“Satisfactory performance” means no payment (interest and/or principal) shall remain overdue
for a period of more than 30 days. In case of CC / OD account, satisfactory performance means
that the outstanding in the account shall not be more than the sanctioned limit of DP, whichever
is lower, for a period of more than 30 days.

b. For all other accounts not included in para a :

Standard accounts classified as NPA and NPA accounts retained in the same category on
restructuring by the lenders may be upgraded only when all the outstanding loan / facilities in
the account demonstrate satisfactory performance during the period from the date of
implementation of RP up to the date by which at least 10 per cent of the sum of outstanding
principal debt as per the RP and interest capitalisation sanctioned as part of the restructuring,
if any, is repaid (Monitoring Period).

Provided that the account cannot be upgraded before one year from the commencement of the
first payment of interest or principal (whichever is later) on the credit facility with longest period
of moratorium under the terms of RP.

Additionally, for accounts where the agg 100 crores and above at the time of implementation of
RP, to qualify for an upgrade, in addition to demonstration of satisfactory performance, the
credit facilities of the borrower shall also be rated as investment grade20 (BBB- or better), at
the time of upgrade

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While accounts with aggregate exposure of Rs. 500 crores and above shall require two ratings,
those below Rs. 500 crores shall require one rating. If the ratings are obtained from more than
the required number of CRAs, all such ratings shall be investment grade for the account to qualify
for an upgrade.

If the borrower fails to demonstrate satisfactory performance during the monitoring period, asset
classification upgrade shall be subject to implementation of a fresh restructuring/ change in
ownership under Parts B1 and B2 of this Master Circular or under IBC. Lenders shall make an
additional provision of 15% for such accounts at the end of the Review Period. Provisions held on
restructured assets may be reversed when the accounts are upgraded to standard category.

Any default by the borrower in any of the credit facilities with any of the lenders (including any
lender where the borrower is not in “Specified Period” subsequent to upgrade in asset
classification as above but before the end of the specified period, will require a fresh RP to be
implemented within the above timelines as any default would entail. However, lenders shall
make an additional provision of 15% for such accounts at the end of the Review Period. This
additional provision, along with other additional provisions, may be reversed as per the norms
laid down at Paragraph 11.5 of this Master Circular.

“Specified period” means the period from the date of implementation of RP, up to the date by
which at least 20 per cent of the sum of outstanding principal debt as per the RP and interest
capitalisation sanctioned as part of the restructuring, if any, is repaid.

INCOME RECOGNITION:
 Income from NPA assets is to be recognized only when it is actually received. However, interest
on advances against term deposits, NSC, IVPs, KVPs, and Life policies may be taken into income
account on the due date provided adequate margin is available in the accounts.
 On an account (incl. bills purchased and discounted and Government guaranteed accounts)
turning NPA, banks should reverse the interest already charged and not collected by debiting
Profit and Loss account, and stop further application of interest. Likewise fees, commission and
similar income in respect of past periods, if uncollected, need to be reversed.
 Interest realized on NPAs may be taken to income account provided the credits in the accounts
towards interest are not out of fresh/ additional credit facilities sanctioned to the borrower
concerned.
 Banks may continue to record such accrued interest, but not realized, in a Memorandum account
in their books which should not be taken into account for computing Gross Advances.

Provisioning: As per the guidelines of Reserve Bank of India, provision is to be made

based on the Asset Classification as under:

Standard Assets

Category of Standard Advances Provision

Direct Advances to Agriculture & MSE (Micro & Small sectors),Individual Housing 0.25%
Loan
Commercial Real Estate 1.00%
Commercial Real Estate Residential Housing 0.75%
Teaser Rate Housing Loan – till one year from date on which rates are reset at 2.00%
higher rates if a/c remains standard.
The provisioning on these assets would revert to 0.40 per cent after 1 year from
the date on which the rates are reset at higher rates if the accounts remain
‘standard’(As per RBI Master Circular on Prudential Exposure and IRAC Norms dtd

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02.04.2024).

All other Loans and Advances (Including Medium Enterprises) 0.40%

Restructured accounts under standard category (restructured after June 1, 2013) 5.00%

Restructured account under Resolution Framework 2.0 10%

All other loans and advances not included above 0.40%

A high level of unhedged foreign currency exposures of the entities can increase the probability of
default in times of high currency volatility. Hence, banks are required to estimate the riskiness of
unhedged position of their borrowers and make incremental provisions on their exposures to such
entities (As per RBI Master Circular on Prudential Exposure and IRAC Norms dtd 02.04.2024).:

Likely Loss / EBID (%) Incremental Provisioning Requirement on

the total credit exposures over and
above extant standard asset provisioning
Up to 15 per cent 0
More than 15 per cent and up to 30 per cent 20 bps
More than 30 per cent and up to 50 per cent 40 bps
More than 50 per cent and up to 75 per cent 60 bps

More than 75 per cent 80 bps

Sub-Standard Assets
A general provision of 15% on total outstanding should be made without making any allowance for
DICGS/ECGC guarantee cover and securities available.
● The Sub Standard unsecured exposures would attract provision of 25% on the outstanding
balance.
● Accounts classified as “Standard Assets” should be immediately re-classified as Sub Standard
Assets upon restructuring. Any additional finance may be treated as “Standard Asset” during
the specified period under the approved restructuring package.
● In case of Public Private Partnership (PPP) Projects, the debts due to lenders may be
considered as secured to the extent assured by the project authority in terms of Model
Concession Agreements (MCAs) published by Planning Commission and adopted by various
Ministries and State Governments for their respective PPP Projects as they provide adequate
comfort to the lenders regarding security of their debt.

Doubtful Assets: Provisioning:

● Doubtful upto 12 months (DA1): Deficit+25% of security.
● Doubtful more than 12 months upto 3 years (DA2): Deficit+40% of security.
● Doubtful more than 3 years (Secured/Unsecured): 100%.
● Loss Assets: 100% provision
All fraud cases reported under Loans and Advances should be classified as Doubtful or Loss
Assets depending upon the availability/enforceability of security and to be provided fully

In respect of accounts where there are potential threats for recovery on account of
erosion in the value of security or non-availability of security and existence of other
factors such as frauds committed by borrowers it will not be prudent that such accounts
should go through various stages of asset classification. In cases of such serious credit
impairment, the asset should be straightaway classified as doubtful or loss asset as
appropriate.

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Consortium Arrangement :

Asset classification of accounts under consortium is to be based on the record of recovery of the
individual member banks and other aspects having a bearing on the recoverability of the advances.
Where the remittances by the borrower under consortium lending arrangements are pooled with one
bank and/or where the bank receiving remittances is not parting with the share of other member
banks, the account will be treated as not serviced in the books of the other member banks and
therefore, be treated as NPA.

Projects under implementation (Classification of NPA):

 An infrastructure project loan would be classified as NPA before the date of commencement of
commercial operations (DCCO) as per record of recovery (90 days) unless it is restructured and
eligible for classification as standard asset.
 An infrastructure project would be classified as NPA if it fails to commence commercial
operations within 2 years from the original DCCO.
 If a project loan classified as standard asset is restructured any time during the period up to
two years from the original date of DCCO, it can be retained as a standard asset if the fresh
DCCO is fixed and the account continues to be serviced as per the restructured terms subject
to the application for restructuring should be received before the expiry of period of two years
from the original DCCO and when the account is still standard as per record of recovery.
 Delay in infrastructure projects involving court cases and projects in other than court cases,
extension of DCCO up to another 2 years (beyond the existing extended period of 2 years i.e.
total extension of 4 years) and up to another 1 year (beyond the existing extended period of 2
years i.e. total extension of 3 years) respectively is considered for treating them as NPA.
 A loan for a non-infrastructure project will be classified as NPA during any time before
commencement of commercial operations as per record of recovery (90 days overdue).
 If the non-infrastructure project fails to commence commercial operations within 6 months from
the original DCCO, it is to be treated as NPA, etc.

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ऋणसमीक्षा एवं निगरािी िीनि

CREDIT REVIEW &MONITORING POLICY

CREDIT REVIEW

Loan Sanctions made by each sanctioning authority at Branch shall be placed before the next
higher authority, not below Scale IV/Review Committee at Circle/RO, within the stipulated time
frame and as per the detailed procedural guidelines stipulated in this regard. Such sanctions
include fresh sanctions, renewals and/or enhancements. In addition, Adhoc /ST limits, holding
on operation made by each sanctioning authority shall be placed before the reviewing authority.

The said higher authority shall review these sanctions with particular reference to the below
mentioned aspects:

 Exercise of credit sanctioning powers within the scheme of delegation of sanctioning powers
and other guidelines.
 Adherence to internal loan policies, procedures and applicable laws/regulations.
 Assessment of quality of the loan asset.
 Precaution taken/ advised to safeguard the interest of the Bank.
 Nature and adequacy of loan covenants.

A system of tracking the sanctions by various authorities at Circles/RO shall be in place as being
done in respect of branch sanctions for ensuring review of all those sanctions made by various
authorities in Circles/ROs. Confirmation in this regard shall be furnished to CA&M Wing at HO.

Coverage (All Fresh Sanctions, Renewal, Adhoc, Enhancement, Hodling on

Operations):

All Sanctions to be reported in monthly register as follows:

 NB 140 PRR20D- All sanctions in respect of Agriculture loans

 NB 179 - All sanctions in respect of Retail Loans
 NB 117 PRR20C– All sanctions under Government sponsored Schemes
 NB 139 PRR20A- All sanctions other than Retail & Agriculture loans

All sanctions up to Rs.5.00 lakhs (FB+NFB), and in case of SHGs (sanction up to Rs.6.00
lakhs)review will be carried out on consolidated basis by ROs based on monthly registers
submitted by branches.

Review of the above monthly registers in respect of sanctions made by Branch/SME Sulabh will
be done by next higher authority at RO/CO.

For all sanctions above Rs.5.00 Lakhs (Rs.6.00 lakhs in case of SHGs), loan application, sanction
Processing note and Sanction memorandum are to be individually sent for review to the next
higher authority.

All Retail loans sanctioned by Manager/ Sr. Manager of RAH/RAH-in-charge shall be reviewed by
next higher individual authority at RO through online pre- disbursement review of loan sanction
and approval of loan document for retail loans under LAPS except for all other personal loans* up
to Rs. 5.00 lakh.

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*Other Personal Loans – sanctioned at RAH i.e., Canara Mortgage, Canara Rent, Canara Site,
Canara Jeevan, Canara Home Loan Plus, Canara Home Loan Secure. The Post Sanction Review
should be carried out for all the above exempted loans as applicable to other loans & advances.

All Wing Head sanctions of IO Wing to be submitted to CA&M Wing on a day to day basis for
review.

Branches/Offices to submit the following sanctions also to the next higher authority for
review.

1. Second extension of tenability of limits.

2. Restructuring/ rephasement of account.
3. Modification/ substitution/dilution of security.
4. Reduction in Margin.
5. Waiver of Personal Guarantee/ Corporate Guarantee.
6. Any other modification affecting the credit decision/proposal.

Following loans need not be reported for review to the next higher authority:

1. All Gold Loans

2. All Loans/Advances sanctioned to Employees
3. All VSLs/OD against the security of deposits with banks and approved securities like
NSCs/KVP/Life Insurance policies.
4. Recall of Advances/Initiation of SARFAESI Action/Marking the account for recovery.
5. Fixing of Reserve price for sale of assets charged to the Bank in case of NPA accounts.
6. First Extension of tenability of limits.
7. Any other proposals not affecting the credit decision.

Review and extension of limits:

As per RBI regulatory guidelines, an account where the regular/ adhoc credit limits have not
been reviewed/ renewed within 180 days from the due date/ date of adhoc sanction, the IRAC
norms shall be applicable. Hence, renewal of regular limits has to done well before the expiry of
original/extended tenability.
Review & Extension of Tenability of limits should always be followed by regular Renewal of
Limits. In case Review & Extension of limit is permitted, the limits shall be renewed before the
expiry of the extended tenability.
Borrowers rated as other than High Risk, Review and extension of tenability may be permitted
only twice for a maximum period of six months inclusive of second extension.
Review and extension on a single occasion shall not exceed 3 months. At the time of first review
& extension, a thorough review shall be carried out. The second review & extension, if any, shall
be treated as a sanction and accordingly the process shall require review by the higher
authority.
Borrowers rated High Risk, in exceptional cases, review & extension of tenability of limits can be
permitted only once and for a period not exceeding 2 months. Review/Extension shall be done
and a copy to be forwarded to the CA&M Wing, HO for review.

Time Frame for Submission Of Review:In case of branch sanction up to cut off limit of Rs.5
lacs (FB+NFB) and Rs.6.00 lakhs to SHGs, monthly sanction registers for all sanctions (including

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RAH/MSME Sulabh/RO/CO)are to be reported for review to the Next Higher Authority before 7th
of the succeeding month.

For sanctions made by GM-CO-CAC/ Circle Head CAC/ GM/CGM-HO-CAC, submission for review is
to be done on fortnightly basis within 7 days from closure of the fortnight.

Timelines for completion of sanction review:

Review process at various levels shall be completed within 30 days from the closure of
fortnight/month of sanction as applicable and observations are to be communicated to
Concerned Circle/RO/LCB under copy to user wing/Section

Closure of review remarks, if any, shall be completed within next 30 days by the branch. If the
remarks of the reviewing authority are not closed within stipulated time frame as mentioned
above, the same shall be reported to Circle in respect of sanction below Circle Head CAC. In
respect of Circle Head CAC and HO power accounts, the same shall be reported to CAM Wing, HO
immediately. CAM Wing to follow up for the logical conclusion of the observations.

PRE RELEASE AUDIT:

Failure in proper post sanction compliance of pre-disbursement conditions and monitoring of

advances has often facilitated the borrowers to divert the funds for purposes other than for
which loans were sanctioned. The existing system of obtaining ‘Enforceability Certificate’ from
panel advocate (other than the advocate who had given LSR) in relation to mortgage
transactions will continue.

Eligibility for Pre Release audit:

 All types of credit facilities with credit exposure of Rs.3 crore and above (FB+NFB/Clean
Limits) to new as well as existing borrowers excluding Retail Lending Loans.
 All Types of Retail Lending facilities of Rs.5 crore and above which are backed by mortgage
(prime/collateral) shall be covered under this guidelines in which case Pre disbursement
review not applicable.
 All renewals with enhancement (Pre-release Audit is to be carried out when the aggregate
sanctioned limit crosses Rs.3 crore).
 Adhoc credit limits/Additional credit facilities sanctioned for a specified period and for
which documentation is obtained in case of parties who are enjoying limits of above Rs.3
crore and who are otherwise subjected to pre-release audit. Also in borrowal accounts
where regular limits and the Adhoc limits put together crosses Rs.3 crore.
 Consortium accounts where disbursement is to be made based on individual documentation.
 Restructured accounts other than under MSME OTR Scheme (Provided additional exposure
considered as part of Restructuring).

Loans excluded from the preview of Pre Release audit:

 VSL/OD facility against deposits and other approved securities.

 Staff loans.
 Renewal of existing limits without any enhancement and without modifications in pre-
disbursement conditions related to security and documentation.
 Temporary over limits (i.e. temporary over-drawings).
 Borrowal accounts which are under Syndicated loan arrangements, where the Lenders‟
agent/Facility agent are holding the role and responsibility for ensuring Pre execution/Pre
disbursement compliances, and where LLCs appointed certify the enforceability of

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documents and legal compliances.

 Consortium/JLA accounts where joint documentation is executed.
 Restructured accounts under MSME OTR Scheme.
 Retail Loans where pre disbursement review of loan sanctions and approval of loan
documents for Retail Loans under LAPS for RAH sanctions is applicable, Pre-release audit
need not to be conducted. However, if mortgage is involved and exposure (FB+NFB) is Rs.5 Cr
and above, Pre-release audit to be conducted and enforceability certificate as per guidelines
to be obtained from a panel advocate other than the Advocate who had given the LSR.

Enforceability Certificate: To be obtained from Panel Advocate (other than who had
given LSR): Branches before disbursement have to obtain all sets of relevant mortgage
documents/Title deeds (as listed in LSR), mortgage/EMT documents/Registered as applicable to
sanction. On execution of the same, documents to be got approved from the panel advocate
(other than the advocate who had given LSR) and shall submit “Enforceability Certificate’.
However, Enforceability Certificate need not be obtained for loans sanctioned under GECL
(Guaranteed Emergency Credit Line) covered under Emergency Credit Line Guarantee Scheme
(ECLGS).

Remuneration to Panel Advocate conducting Legal Audit/Legal Enforceability Certificate:

Remuneration with minimum of Rs.1000/- per mortgage and maximum of Rs.10000/- plus
applicable GST for each borrowal account to be absorbed in General Charges.

General Guidelines:
 Sanction memorandum/sanction communication conveyed to the borrowers shall invariably
stipulate a clause that disbursement of sanctioned limit is subject to completion of pre-
release audit.
 Branches/Circles shall coordinate with the identified official/Advocate and complete the
Pre-Release Audit within 48 hours from obtention of documentation and ensure that
disbursement is not pending for want of completion of Pre-Release Audit. In case of MSMEs,
disbursement has to be made within 48 hours as per our commitment to BCSBI.
 In case of branches overseas, pre-release audit shall be conducted by an official other than
the official who is dealing with the proposal/ sanctioning authority in the branch. MD & CEO
of the Bank may order pre-release audit by deputing an official from India, wherever it is
felt necessary.
 The audit report shall ensure pre-disbursement compliance of sanction terms. In case of non-
compliance, the branch shall comply with sanction terms prior to disbursement or take up
with the respective sanctioning authority for decision on releasing funds pending compliance
duly justifying the need as well as time line for compliance.
 Wherever, the sanctioning authority has permitted time for compliance of some of the
sanction terms and conditions in the sanction letter, verification of compliance of such
aspects shall be done during the Credit Audit/ Concurrent Audit/ Regular Inspection.
 No authority is empowered to permit waiver of Pre Release Audit.
 The process of pre-release audit is deemed to be completed on submission of the report to
the disbursing branch. The follow up of confirmation of compliance of pre-release audit
remarks and confirming the same in NF482 shall be ensured by the credit sanctioning
sections at RO/CO/HO.
 Post sanction scrutiny of loan papers by Legal Section shall continue as hitherto for limits of
Rs.1 crore and above.

CREDIT AUDIT:

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Credit audit examines compliance to post sanction processes/ procedures of all fresh
sanctions, enhancements/ additional exposures exceeding cut off limit of Rs.3.00
crores and above (FB+NFB) as per laid down policy, procedure and guidelines. The
system is aimed at improving quality of credit portfolio and inter alia includes review
of post sanction process and compliance status of large loans, pick up early warning
signals and suggests remedial measures, etc.
Coverage of Credit Audit:

All fresh sanctions, enhancements/additional exposures within:

a) Combined Limit (Working Capital (FB+NFB) +Term Loan) - Within 3-6 months from date of 1st
disbursement.
b) Term Loan- Within 3-6 months from the date of 1st disbursement.
c) Circle to allocate and conduct credit audit in respect of accounts with limits less than Rs.3
crores in about 5% of the accounts on randomly selected basis.

In respect of term loans, credit audit shall be conducted upon release of limit for the
first time. In respect of accounts where additional facilities are permitted frequently,
conducting of credit audit to be restricted to a maximum of 2 times in a financial year
preferably with a gap of 6 months between 2 audits.
Following shall not be brought under the purview of Credit Audit:
a. Renewal of limits without any enhancement or reduction in limits.
b. Limits permitted for temporary period up to 3months.
c. Limits fully secured by deposits /NSCs/IVPs/LIC policies.
d. NFB facilities with 100% cash margin.
e. Sanctions of RAH, in which on line pre disbursement review of loan sanction and approval of
loan document under CLAPS by RO.
f. Accounts coming under the purview of Special Review Section, Circle Office /IBC Monitoring
Section, SAM Wing, HO.
g. Accounts under NCLT, which are under rehabilitation/recovery process with separate review
mechanism in place.
h. Accounts restructured under MSME OTR scheme without any additional exposure.

The Credit Audit is conducted by External Auditors/Internal Auditors.

 CRM Section at CO shall allot the audit task to external auditors in such a way that the audit
is carried out within 3 to 6 months from the date of first disbursement.
 In case of Limits/Loans of aggregate exposure below Rs.5 crore, Circle can allot the credit
audit to internal auditors or external auditors.
 The internal Auditors so identified by Circle Office for the credit audit shall be of Scale
III/IV/V, with adequate experience and skill in credit related matters.
 For exposure of Rs.5 crore and above, the audit shall be allotted to the empanelled External
Auditors.
 Maximum fees payable to external auditor is Rs.6000/-, which can be paid by the branch,
upon getting the report. Out of pocket expenses may be permitted in line with the
guidelines prescribed for statutory auditors

Closure of Credit Audit Reports:

Closure of Credit Audit Reports shall be permitted by the respective authorities at Circle
Office/Head Office as mentioned below:

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RM&CRM Section, after compliance of all the observations, will place closure note to respective
reviewing authority for closure of Credit Audit Report with their observations /recommendation.
 The timeline for closure of credit audit report remarks is 3 months from the date of the
credit audit report.
 However, in the case of credit audit reports which cannot be closed within a period of 3
months from the date of the reports, for the reasons that are beyond the control of
borrower/branch, such credit audit reports are to be classified as overdue credit audit
reports.

LEGAL AUDIT:

RBI has observed that large numbers of frauds were perpetrated on account of submission of
forged documents by the borrowers which had been certified by professionals, i.e. Valuers/
Advocates/ Chartered Accountants. Hence, RBI has advised, that banks shall subject the title
deeds and other documents in respect of all credit exposures of 5 Crore and above to periodic
legal audit and re-verification of title deeds with relevant authorities (Panel lawyer) as part of
regular audit exercise till the loan stands fully repaid.

Subsequent Legal Audits shall be conducted after a gap of 3 years from the date of first Pre
disbursement Legal Audit. This shall coincide with succeeding RBIA due as per existing
guidelines.

STOCK AUDIT:
Annual Stock & Receivable Audit should be got compulsorily done in respect of all borrowal
accounts enjoying Fund Based &Non Fund Based (NFB) working capital limits of Rs.1 Crore &
above for Moderate, High, Unrated accounts and Rs.5 Crore and above for Low Risk and Normal
risk accounts from our Bank/Banking system. All NFB limits, which are being used for Working
Capital Funding like Letter of Credit (LC), Standby Letter of Credit (SBLC), Bank Guarantees for
purchase of goods and/ or for mobilization of Advances are to be included within threshold limit
for stock audit, but Capex LCs, Bid Bond Guarantees etc. need not be included in NFB limits for
the purpose of conducting stock audit.
In respect of NPA accounts, before recommending for entrustment of stock audit/valuation of
assets, Branch/Offices shall ensure availability of the stock/charged assets, the need for
valuation etc. and Branch shall seek instruction from the Circle Office regarding the need for
conducting valuation.
Whenever an account gets classified as NPA, a normal cooling period of one quarter shall be
provided for up gradation/rectification of default. In case the account continues to be NPA even
after cooling period, Stock Audit shall be undertaken within a maximum period of 6 months of
account turning NPA and subsequent valuation/stock audit shall be as prescribed above till Stock
Audit Reports show substantial depletion in value of Stock/Book Debts.
Coverage & Periodicity:

RISK CATEGORY RISK CATEGORY RISK CATEGORY

(CIRM Rating)

CNR-I to CNR- V(Minimal Risk and Rs. 5 Crore and above Once in a Year
LowRisk) & CNR-VI(Normal Risk)

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 Canara Institute of Bank Management

CNR-VII to CNR-XI(Moderate & Rs. 1 Crore and above Once in a Year

HighRisk) and CNR-D(Default)

Un Rated(Internally) Rs. 1 Crore and above Accounts classified as:

Standard Assets -Once in ayear
Substandard and Doubtful
assets – Once in 2 Years

Rs.5 Crore and above Classified as Doubtful –Stock

Audit has to be gotdone once in a
year
In case of Non Standard Assets guidelines as applicable to NPA shall be adhered to.

Stock audit to be carried out for takeover of working capital limits, as a pre-release condition.

Migration of Rating and Stock Audit:

Wherever the ratings of the accounts are downgraded from Low risk/Normal to, moderate or
high risk as the case may be immediate valuation within a period of 3 months of such down
gradation shall be undertaken (subject to condition stipulated in (i) & (ii) below)
(i) If the current valuation report is not older than 6 months, then fresh valuation need not be
insisted, where the rating of the accounts are downgraded to moderate or high risk as the case
may be.
(ii) However, if the account is downgraded by two notches, then stock audit is to be carried out
as per extant guidelines, i.e., within a period of 3 months of such down gradation irrespective of
the condition stipulated under (i) above.

Applicability in Case of Consortium Accounts / Joint Lending Arrangement (JLA) /Any other
joint Mechanism for Lending

(i) In respect of consortium advances/ JLA, where we are the leader, the stock audit shall be
conducted as per extant bank guidelines and in cases where we are not the leader, we may take
up the matter with the Lead Bank for getting the stock audit of the borrowal account.
(ii) Wherever a consortium has specifically waived valuation of the charged current assets, our
Bank, as a member of the said consortium may fall in line with the same subject to
concurrence/approval by sanctioning Authority.
(iii) In case any other member bank, designated or otherwise, gets the current assets valuation
done, the Bank may accept the same report and separate valuation by our Bank need not be
insisted upon.
(iv) Stock Audit report to be discussed in the consortium and recorded in the minutes.

Applicability in Case of Multiple Banking Arrangement:

In the case of borrowal accounts under MBA, stock audit of the current assets should be got done
as per the guidelines. However, where any other bank under MBA has got the stock audit of
current assets done, in such cases, our Bank may accept the report submitted by the panel
valuers of the other bank as submitted to the said bank. However, the report should not be older
than 6 months. The subsequent Stock audit should meet the periodicity stipulations of our Bank.

Time schedule:
Maximum time taken for stock audit varies from 2-6 weeks, except in case of non-cooperation by
borrowers, where it may take some time.

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SPECIAL MENTION ACCOUNTS (SMA)

Lenders shall identify incipient stress in loan accounts, immediately on default, by classifying
stressed assets as Special Mention Accounts (SMA) as per the following categories

Basis for classification – Principal or interest payment

SMA Sub-categories or any other amount wholly or partly overdue
between

SMA 0 1-30 days

SMA 1 31-60 days
SMA 2 61-90 days
In the case of revolving credit facilities like cash credit, the SMA sub-categories will be as follows

Basis for classification – Outstanding balance remains

SMA Sub-categories continuously in excess of the sanctioned limit or
drawing power, whichever is lower, for a period of:
SMA 0 NA
SMA 1 31-60 days
SMA 2 61-90 days

“Default” means non-payment of debt when whole or any part or instalment of the amount of
debt has become due and payable and is not repaid by the debtor or the corporate debtor, as the
case may be.

For revolving facilities like cash credit, default would also mean, without prejudice to the
above, the outstanding balance remaining continuously in excess of the sanctioned limit or
drawing power, whichever is lower, for more than 30 days.

MONITORING OF SMA:

To have effective monitoring and follow-up SMA is classified as follows,

Basis for classification

Sub Categories
SMA-A All borrowers with aggregate Exposure of less than Rs.5 Lakhs
All borrowers with aggregate Exposure of Rs.5 Lakhs to less than
SMA-B Rs. 25 Lakhs
All borrowers with aggregate Exposure of Rs.25 Lakhs to less
SMA-C than Rs.100 Lakhs
All borrowers with aggregate Exposure of Rs. 100 Lakhs to less
SMA-D than Rs. 500 Lakhs
SMA-E All borrowers with aggregate Exposure of Rs.500 Lakhs and more
SMA –NF All borrowers with delinquency due to non-financial reasons
SMA– STAFF All Staff accounts with overdues

SMA –VSL All VSL accounts with overdues -BI report 131001A
# As per existing guidelines, Delinquency in Agriculture Crop Loans, due to Non- Financial
reasons, Delinquency in Staff accounts and Value Security Loan are not covered in SMA (for
reporting to CRILC);

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 Canara Institute of Bank Management

All SMA-A, B, C, D & E categories include all accounts with overdue except crop loans & where
delinquency is due to non-financial reasons such as Dormancy, Non- submission of Stock
Statement, Expired limits etc.

The levels of monitoring /Review of SMA accounts are as under:

Authority Follow up
Branch Head All SMA accounts
RO Head All SMA account of Rs.25 lacs and above (Limit/ Outstanding)
All SMA account of Rs.100 lacs and above (Limit/
CO Head
Outstanding)
HO GM/CGMs- Credit
All SMA account of Rs.500 lacs and above (Limit/
Wings
Outstanding)

Other Executive in RO All SMA account of less than Rs.25 lacs (Limit/ Outstanding)

HO CA&M Wing All SMA account of Rs.500 lacs and above (Limit/ Outstanding)

REPORTING TO CRILC:
Central Repository of Information on Large Credits (CRILC)-Main Report on all borrower entities
having aggregate exposure of Rs 5 crore and above is to be submitted on a Monthly basis as
against the existing quarterly submission with effect from 01.04.2018. SMA status of the
borrower is reported in the monthly report.
In addition, the Bank have to report to CRILC, all borrower entities in default with aggregate
exposure of Rs.5 crore and above, on a weekly basis, at the close of business every Friday or
the preceding working day if Friday happens to be a holiday.
Borrowers with default of one day and more (including NPA) are reported along with the default
date as “Defaulting Borrowers”.
The borrowers who have defaulted during the week (Saturday to Friday) are reported as
“Defaulting Borrowers” along with the date of default.
The borrowers who have repaid all the dues during the week are reported as “Out of Default” to
RBI CRILC along with date of moving out of default.
The borrowers who have defaulted and cleared all the dues within the week is also to be
reported as “Defaulting borrowers” and “Out of Default” along with default date and date of
moving out of default.
The due date for submitting the Return on Default borrowers to RBI CRILC should be within the
following Wednesday.

LARGE CREDIT MONITORING PACKAGE (LCM): Credit Monitoring is an integral part of

lending activity. In banks, a few large accounts contribute to the major portion of assets.
Proactively monitoring these large accounts is imperative. A repository of documents which can
be stored in its digital form and to ensure complete elimination of physical movement of papers
is required.

LCM is a SAS based web portal that would enable the branches and admin unit officials to
monitor and review the large borrowal accounts on a periodical basis and take pro-active
measures.

Large Credit Monitoring package (LCM) is applicable for Sanctioned Limit (both Fund based &Non
Fund based) of Rs.1 Crore and above. Data updation is required to be done on monthly basis.

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Uploading wherever applicable should be done in PDF format only. Pillar wise submission is
applicable. Data will be extracted from CBS and no data will flow from LCM into CBS.

Indicators: The Indicators in LCM are broadly classified into 8 PILLARS.

CREDIT REVIEW & MONITORING FORMAT (CRMF): For effective post sanction
review/monitoring system, CMF and CMF cum MTR are merged as CRMF (Credit Review &
Monitoring Format). To focus on review of the conduct of the account, compliance to terms and
conditions, irregularities observed and steps taken/to be taken to rectify to protect the interest
of the bank.

Coverage:
 Applicable for all borrowers having exposure (FB+NFB Limits) of Rs.3 Cr and above in case of
Low, Normal and Moderate Risk Rated Accounts. In case of High Risk accounts borrowers
having exposure (FB+NFB Limits) of above Rs.1 Cr.
 Applicable for all Working Capital Limits, Term Loans and Non Fund Based limits including
LHV, TL, Premises Loan, DPG, Bill Co- acceptance limits, whether sanctioned exclusively or
along with working capital limits with the following exclusions.
i. All credit exposure below Rs.3crore other than High Risk Rated Accounts.
ii. High Risk Rated Account- Rs. 1 Cr and below.
iii. Loans and advances to employees of the Bank.
iv. Non-fund based limits covered with full cash margin.
v. Advances against our own deposits with the Bank.
vi. Advances to clearing & forwarding agents to whom only C&F and storage limits are
sanctioned.
vii. Loans under retail lending schemes of the Bank including Education Loans except Canara
trade loan scheme.
viii. NPA accounts marked for recovery.

Periodicity:
 CRMF of all eligible accounts shall be submitted quarterly basis in case of Low, Normal and
Moderate Risk rated accounts and High Risk rated accounts.
 CRMF shall be submitted quarterly ie.30th June, 30th September, 31st December and 31st
March and to be submitted within 10 days from due date.
 Exclusive single transaction limits (Fund based or Non fund based) sanctioned/outstanding
for not more than one year, Short term loans/limits with tenability less than one year in
cases where the borrower is not enjoying any other credit limit/s. CRMF to be submitted
every quarter till the closure of the limits.
 If sanctions/renewals/enhancements/additional limits (excluding adhoc/temporary over
limits) are permitted during the months of June, September, December & March then CRMF
need not be submitted at the end of the respective quarters. In all other cases, CRMF to be
submitted at the end of each quarter.
 In respect of Standalone Term Loan sanctioned below Circle Head CAC, existing CRMF will
continue to be applicable.
 In respect of standalone TL/DPG/Co-acceptance under Circle Head CAC & above power
accounts which are covered by Annual Term Loan Review; CRMF is not applicable for that
quarter where annual review of term loan is undertaken.

CMO/Officer shall prepare the CRMF report invariably for each borrowal account duly filling all
the fields with relevant data in CRMF package in SAS based portal.

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 Canara Institute of Bank Management

The entire process should be completed within 10 days, as the case may be, from the end of the
quarter. Branches/LCBs are required to submit CRMF for respective quarter in format through
LCM module by marking to concern reviewing authorities.

AGENCIES FOR SPECIALIZED MONITORING (ASM):

 ASM guidelines are applicable to all the entities including NBFCs with aggregate Bank
exposure under FB and NFB facilities (sanctions/renewal) of Rs.250.00 crore and above in the
Banking system under Consortium /Multiple Banking/Sole Banking.
 Guidelines are applicable to all Standard, Standard Restructured and NPA Restructured
accounts. These guidelines are applicable to Projects under implementation also.
 ASMs from the IBA list, empanelled LIEs/Stock Auditors with more than 10 years’ experience
shall be empanelled as per our Bank’s guidelines by empanelment committee of ASMs.
 Stock Audit shall be exempted for the accounts covered under monitoring by Agencies for
Specialised Monitoring (ASM).

Periodicity:
 The system of post sanction monitoring shall be undertaken in all eligible accounts on a
quarterly basis after the closure of each quarter. In accounts under Stress or under
Restructuring, monthly monitoring may be stipulated, if deemed necessary.
 The ASM will complete the assignment within a period of 1-3 weeks from the end of each
quarter and a detailed report along with specific view / comments should be submitted
within 7 days thereafter.
Fees: In respect of accounts under Sole Banking and where we are the Leaders under
Consortium/MBA, Professional fees shall be fixed at max. upto Rs.5.00 lakhs per annum for
accounts with total exposure upto Rs.500.00 crores and max. upto Rs.8.00 lakhs per annum for
accounts with total exposure above Rs.500.00 crores. Applicable GST shall be paid over& above
the fee payable to ASM.

ANNUAL REVIEW OF TERM LOAN:

 Annual Review of Term Loan shall be applicable to all standalone Term Loans (without any
FB/NFB WC Limits) sanctioned by Circle Head CAC and above authorities for all
Standard/Standard Restructured/NPA accounts not marked for recovery accounts.
 In case of borrowers enjoying both WC & TLs, review of TLs shall be done at the time of
renewal/review of WC Limits.
 Annual review of Term Loan shall be carried out and placed to the Sanctioning Authority by
the respective Credit Wing/Credit Department on completion of one year from the date of
disbursement/previous annual review. However, one time review by CA&M Wing will be done
after 6 months from the date of first disbursement in all the standalone term loans which are
under the ambit of ARTL (Annual review of term loan) and not covered under CRMF (Credit
Review & Monitoring Format).

 Applicability of one time review by CA&M Wing can be summarized as all standalone TLs by
Circle Head CAC and above authorities which are not covered under CRMF. Hence, the
following exposures with Sanctions by Circle head CAC and above authorities are eligible for
one time review by CA&M Wing.
 High Risk Less than 1 Cr
 Low, Normal, moderate: Less than Rs.3.00 Cr
 Retail standalone term loans above Rs.5.00 Cr
 All Retail Loans up to Rs.5.00 crore sanctioned by Circle Head CAC and above authorities are
exempted from the applicability of Annual Review of Term Loan.

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 Any additional Term loan limits sanctioned, annual review of existing term loan shall also be
covered in the note to the sanctioning authority. Next annual review shall fall due on
completion of one year.

CERSAI:

The Central Registry of Securitisation Asset Reconstruction and Security Interest of India
(CERSAI) is set up under section 20 of the Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The objective of setting up
CERSAI is to create a public database about encumbrances created on properties to secure loans
and advances given by the banks and financial institutions, as also transactions of securitisation
or asset reconstruction undertaken pursuant to the provisions of the SARFAESI Act.

At present the portal provides facility to file security interest in:

 Immovable property by mortgage by deposit of title deeds.
 Immovable property by mortgage other than mortgage by deposit of title deeds.
 Hypothecation of plant and machinery, stocks, debt including book debt or receivables,
whether existing or future.
 Intangible assets, being knowhow, patent, copyright, trade mark, licence, franchise or any
other business or commercial right of similar nature.
 Any “under-construction” residential or commercial building or a part thereof by an
agreement or instrument other than by mortgage.
While sanctioning of loans search Report in CERSAI to be obtained mandatorily before
processing/sanction of Loan against Equitable mortgages.

Charges payable under CERSAI:

Fee Chargeable for Loan/Limit
Sl NO Type of Transaction Amount
Up to Rs.10 Lakh Above Rs.10 Lakh
Addition of security
1 Rs.250 + GST @18% Rs.500 + GST @18%
Interest
Modification of Security
2 Rs.100 + GST @18% Rs.150 +GST @18%
Interest
3 Online search NIL(To be Absorbed by the Bank)
Satisfaction of Security
4
Interest NIL
 The entire process of CERSAI registration and updating of CERSAI Security ID in CBS Fast path
BAM73 is to be completed on the same day of registration. Whenever new accounts are
opened, CERSAI Registration to be done compulsorily on the same day of account opening,
wherever applicable.
 Branches/Offices to note that Registration/filing of charges with CERSAI to be completed
immediately on sanction and disbursement.

CREDIT MONITORING OFFICERS AT BRANCHES:

 Branches shall nominate Credit Monitoring Officer (CMO) for the purpose of monitoring
accounts with credit exposure of Rs.50.00 lakh and above and other purposes.
 The CMO's shall attend to the functions of monitoring accounts with total exposure (FB+NFB)
of Rs.50.00 lakh and above and other functions assigned to them and shall provide precious
and timely information on conduct of accounts at branch level.

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 The duties of the CMOs include preparation of CRMF (Credit Review & Monitoring Format),
watching the operations in the accounts, scrutinize the OCC stock statements, book debts
statements for verifying calculation of drawing power, submission of CRMF to the concerned
reviewing authority, carry out Risk Rating under manual model, preparation of SMA
statement, assist the branch in charge in follow up of SMA accounts , follow up receipt of
Stock Audit/Credit Audit reports and attend to the observations thereof for rectification,
reporting of accounts under Red Flag Accounts (RFA), data updation in LCM Module etc.

QUICK MORTALITY ACCOUNTS:

All Loan Accounts of borrowers where the aggregate liability is Rs.15.00 lakhs and above,
becoming NPAs within a period of 12 months from the date of FIRST DISBURSEMENT in respect
of loans/limits sanctioned to the concerned borrowers for the first time shall be henceforth
defined as suffering QUICK MORTALITY.
 The existing system of conducting Investigation is to be continued for all the Quick Mortality
Loan accounts where the aggregate liability is Rs15.00 lakhs and above as per the above
definition.
 Waiver of Investigation in respect of closed or upgraded Quick Mortality Accounts is now
delegated to the respective Circle Heads on a case to case basis where staff involvement is
not apparent.
 Branches shall submit the statement of accounts which suffered quick mortality every
quarter as at the end of March, June, September and December within 7 days from the due
date of the return.
 COs shall consolidate the statement for the Circle as a whole and submit the same to CRM
Section at CA&M Wing HO within 15days from the due date.

OTHER MONITORING TOOLS

STOCK STATEMENT AND MSOD:
 Stock Statement is a periodical statement declaring details of goods stocked in godown or
business premises to accomplish business sales. It must be collected by Bank or Financial
Institution as a documentary evidence from its customer who has taken business loan. To
ensure business is running, lending institution should physically verify and record the Stock
Statement data in their accounts and make sure both data (Stock Statement data and
physically verified stocks) must be tallied within the period of submission.
 MSOD details shall be obtained from Industrial borrowers enjoying working capital limits
ofRs.10 lacs and above apart from stock statement.
 Stock statement cum MSOD is not only for arriving at DP but shall also be used for monitoring
the working capital availed by the party i.e., actual production/sales vis-à-vis the targets,
reasons for shortfall, if any, understanding the working capital cycle of the party, party’s
efficiency in inventory management, extent of primary security available for the liability
outstanding, financial discipline exercised by the party, etc.

QOS/HOS:
 Applicable for Industrial borrowers, merchant exporters, traders etc., enjoying Working
Capital limits of Rs.5 crores and above from the banking system. The data under QOS/HOS
gives information on the operational results of the borrower enterprise, utilization of funds,
liquidity position and can be used as an important monitoring tool.
 Where we are members in a consortium, the system prevailing with the leader bank may be
followed duly appraising the Sanctioning Authority.
 QOS and HOS shall be submitted within the due dates prescribed i.e., QOS within 6 weeks
from the closure of the relevant quarter (14th May, 14th August, 14th November and

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14thFebruary) and HOS within 8 weeks from the closure of the half year (31st May and
30thNovember).

PROJECT IMPLEMENTATION PROGRESS REPORT (PIPR):

 Project Implementation Progress Report (PIPR) (where the credit facility relating to
acquisition of capital assets is Rs.50 lacs and above) shall be obtained on a quarterly basis.
 The PIPR during the implementation period duly certified by Chartered
Accountant/Chartered Engineer shall be obtained and reviewed. The PIPR, among others,
indicates the Long term sources raised up to the end of the reporting quarter and the
amount proposed to be raised during the ensuing quarter.

LENDERS INDEPENDENT ENGINEER (LIE):

 The Lenders’ Independent Engineers (LIE) provide professional engineering consultancy
services in project finance. They are engaged in infrastructure projects as well as non-
infrastructure projects for evaluation of the projects. The monitoring of the project to
ensure timely completion and also proper utilisation of the funds are carried out by the LIEs.
 LIE’s services shall be engaged for non-infrastructure projects with the project cost of more
than Rs.50 crore. Chartered Engineers may also be engaged at the discretion of sanctioning
authority, depending on the size of the project.

MONITORING OF CROSS DEFAULT AND OTHER FINANCIALCOVENANTS:

 Applicable for Listed Corporate with Exposure (FB+NFB) of Rs.50.00 Cr &above and listed
MSME Borrowers with exposure of Rs.1.00 Crore from our Bank.
 Cross default can be defined as default with one lender that may trigger default with
another lender. It can also be defined as that default in particular debt of a borrower at
parent level, which would trigger a default in group/subsidiaries, vice versa. This provision is
to monitor the financial discipline among the group.
 Cross default includes not only default in repayment of dues; it also covers breach of various
financial covenants stipulated. Default (Overdue) by the borrower to any other lender for
more than 30 days will be treated as Cross default.
 The Cross default will be monitored for eligible borrowers on quarterly basis from the CRILC
reports for accounts above CRILC threshold and from CIC reports for other accounts.

LEGAL ENTITY IDENTIFIER (LEI) FOR BORROWER ENTITIES:

 In order to improve the risk management in the Bank and overcome the problem of
estimating exposure arising out of counterparty risk, the RBI has stipulated that the entities
having exposure of Rs.5.00 crore and above from the Banking system to obtain the 20digit
LEI Code from “Legal Entity Identifier of India Ltd.” or any other entity authorized for the
purpose as per the regulation.
 Further, Bank has stipulated guidelines to obtain LEI code for borrowers with exposure above
Rs.5 Crores.
 The LEI is a unique identifier consisting of a 20 character alpha-numeric code, which allows
for the identification of legally independent entities across global financial markets. The
Global LEI system is move towards the creation of a global legal entity identifier which
uniquely identifies parties to financial transactions. The Global LEI system is therefore an
international initiative and is not just limited to the India.

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एन पी ए, वसूली, ववविक पहलु

NPA, RECOVERY AND LEGAL ASPECTS
Methods of recovery of NPA:
1. Minimizing accretion of fresh NPAs

2. Upgradation of existing NPAs

a. Recovering the overdue amount.
b. Restructuring / re-phasing of accounts wherever possible as per extant guidelines
c. Implementation of rehabilitation/restructuring package permitted by NCLT and ensures
recovery as permitted.
3. Enforcement of Securities as per the provisions of SARFAESI Act.
4. Enforcement of Securities as per the terms of Loan Documents
5. Recovery through non- legal methods –
a. Settlement through compromise
b. Invoking claim with ECGC /CGTMSE
c. Sale of NPAs to Asset Reconstruction Companies
d. Sale of NPAs to Banks / FIs / NBFCs
6. Recovery through Legal Methods: Legal Action through Courts / DRTs etc. is the last resort
adopted for recovery of dues. Before initiating legal action, steps must be taken to dispose of the
movable securities/ exercise right of set off against the deposits available.

There are several committees set up specifically for the purpose of effecting Recovery.

Recovery Committee at HO: (IC/544/2024)

Constitution Quorum Purpose
CGM/GM of: Quorum shall be three● OTS/Write off proposals involving
a. Recovery, Legal & members other than sacrifice falling under the powers of
Fraud Prevention RL&FP Wing and/or SAM GM-HO-CAC/ CGM-HO-CAC/ED-CAC /
Wing CAC of the Board / Management
Wing.
b. Stressed Assets Committee of the Board.
Management Wing CGM/GM of RL&FP Wing
Committee will meet as and when
c. Financial shall be the Chairman of required to look into proposals relating
Management Wing the Recovery Committee to:
d. Risk Management and in his /her absence, a. OTS / Write off
Wing CGM/GM of SAM Wing b. Reserve Price Fixation for Sale of
e. General shall be the chairman of Assets to ARCs/Securitization
Administration Companies (SCs) etc.
the Recovery Committee.
Wing c. Purchase of Non-Banking Assets by
f. Operations Wing Convenor for RC shall be
the Bank
g. Credit DM/AGM of RL&FP Wing.
d. Release of Guarantors/s/Co-
Administration and obligant/s with or without release of
Monitoring Wing security
h. Resources Wing
e. Release of Security with or without
release of Guarantors/s/Co-
obligant/s

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f. Entrusting cases to Forensic

Auditors.

The Recovery Committee at CO:

Constitution Purpose/Functions
Circle-Head – Chairman.  Review the NPA position, slippages, Recovery performance,
Executive overseeing Credit- and progress in SARFAESI Action etc. of the Circle and
Member. identified branches in addition to review and follow up of
Executive overseeing Recovery – special watch accounts. The Committee shall also review the
Member. performance of Assets Recovery Management
Executive overseeing Credit Review (ARM)/Stressed Assets Management (SAM) branches.
-Member.
 The Committee shall also review the monthly report
Executive in charge of ARMB * -
submitted by the concerned monitoring Sections /Cells at CO
Member
about the slippages to NPA, revival measures, position of
*(wherever applicable).
Special Watch List (SWL) accounts, etc.
Any other executive as decided by
the  The Committee shall review individually the accounts with
Circle-Head (Chairman). liability above Rs.10.00 lacs slipped to NPA subsequent to
last review.

The Recovery Committee at RO:

Constitution Purpose/Functions

Regional Office -Head –  Review the NPA position, slippages, Recovery performance, and
Chairman progress in SARFAESI Action etc. of the Region and identified
Executive overseeing Credit - branches in addition to review and follow up of Special watch
Member accounts. The Committee shall also review the monthly report
Executive overseeing Recovery - submitted by the concerned monitoring Sections /Cells at RO
Member about the slippages to NPA, revival measures, position of Special
Executive overseeing Credit Watch List (SWL)/Special Mention Accounts (SMA) etc.
Review - Member
 The Committee shall review individually the accounts with
Any other executive as decided liability above Rs.2.00 lacs slipped to NPA subsequent to last
by the RO-Head (Chairman) review.

If, Executive overseeing Credit  While reviewing the accounts, the Committee shall take into
is not available, Section in- consideration all aspects like reasons for the account becoming
charge of Credit may be taken NPA, viability of the unit, chances of revival, upgradation, staff
into the Committee. lapses if any, etc. The Committee shall also look into the aspects
of rehabilitation/ revival / restructure of account and convey its
decision to Branches immediately.

Periodicity of the Meeting at CO & RO: Once in a month and case of need to meet more than once
in a month.
Review of Accounts:
While reviewing the accounts, the Committees at CO & RO shall take into consideration all aspects
like reasons for the account becoming NPA, viability of the unit, chances of revival, upgradation,
staff lapses if any, etc. The Committee shall also look into the aspects of rehabilitation/ revival /
restructure of account and convey its decision to Branches immediately.

Reporting System: The Recovery Committee at Regional Office shall submit the proceedings of the
meeting to Circle Office and the Recovery Committee at Circle Office shall submit the proceedings
of the meeting to Recovery, Legal & Fraud Prevention Wing/SAM Wing, HO for information / review

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 Canara Institute of Bank Management

within 7 days of conducting the meeting.

Guidelines for Follow up of NPA Accounts:

Any seeming chances of revival/restructuring, specific note may be placed before the respective
sanctioning authority and decision be conveyed to branches for further implementation. In all other
cases, the NF 606/607/CR Files of NPA accounts as the case may be should be transferred to
Recovery Sections as per the cut off limit for follow up, review and monitoring of recovery steps
including enforcement of securities under SARFAESI etc, which can be initiated by obtaining
permission from the appropriate authority.

Branches shall arrange to issue SARFAESI Notice within “THREE DAYS” of account becoming NPA.

Generation of CICs immediately after account slipping to NPA to trace any other loans in other
Banks / FIs and securities mortgaged to them.

Simultaneously, the concerned Credit Section/ Monitoring Cell shall study on the viability of the unit,
chances of revival/ rehabilitation/restructuring/ up gradation of accounts, staff lapses if any etc.,
and to decide the future course of action in each account within 60 days of account becoming NPA.

Notwithstanding the time period of 60 days, in respect of NPA accounts where proposal for
restructuring/rehabilitation under internal restructuring/NCLT is under progress/implementation, in
such cases the Credit Sections/Wings shall take decision to transfer the CR files of NPA accounts
within 30 days of receipt of orders of the competent authority regarding failure of re-
structuring/revival / de-listing of the account or a failure of Resolution Plan. Further extension in
time, if any may be permitted by Circle Head. However, all steps to be completed within 90 days.

Branches should submit NF 606/ NF 607 recommending to initiation of recovery/ legal action like suit
filing, waiver of suit filing, SARFAESI Action, staff accountability etc., and transfer of CR files to
Recovery Section, within 90 days of account becoming NPA to the concerned authority as per
Delegation of Power mentioned in the Recovery Policy. The permission should be granted within 30
days of NF 606/607 submitted by the branches. After getting the permission from competent
authority, Branch shall file recovery suit before DRT/ Civil Court.

Wherever, Securities (immovable properties) are insufficient to cover contractual dues, Branches
shall at the time filing DRT Case, engage detective agency in all the cases where Book Liability is
Rs.50.00 lacs and above to identify other assets of the borrowers/ guarantors and note to file
Attachment Before Judgement (ABJ) before DRT / Civil Court. This would avoid the NPA borrowers/
guarantors alienating the assets that are not charged to the Bank and would help the Bank in recovery
of its dues.

Sanctioning Authority while permitting transfer of files to Recovery Section shall also look into the
staff lapses, if any, as per policy on Staff Accountability.

In case of action under SARFAESI, only the Circle Head CAC and above authority (as per Delegation
of Powers for filing suit) can defer the action considering the justifiable reason, only under deserving
cases.

Wherever branches/RO/Circles consider for continuation of NPA Accounts for nursing on account of
prospects of likely revival/ recovery, they may take decision for allowing operations in the accounts
by permitting Holding on Operations, as per guidelines provided in the Credit Policy. All such accounts
under nursing shall continue to be followed up by respective Credit Sections till permitted to be
transferred to respective Recovery Sections for Recovery Action.
Within 90 days from the date of NPA, Credit files are to be transferred to Recovery Sections at
RO/CO/HO. During this pendency period any proposal for substitution /release of security / renewal
of NFB limit like BG are to be handled by Recovery Section by getting respective credit files from
Credit Sections & seek permission from Competent Authority.

Branches may use the facility of Bank’s Call Centres viz., “Call Canara” and “Recovery Call Centre”
for upgradation of NPA Accounts and also getting total resolution of NPA Accounts, by using the data

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sent by these Call Centres to respective ROs/ COs at periodical intervals.

New flags (check box) have been introduced for marking/feeding the above actions in CBS system
(BA 159) and generating a "New NPA Action Report" for further follow up by Credit Sections,
Credit Monitoring Sections and Recovery Sections at RO/CO/HO simultaneously for follow up/
monitoring and further reporting to Top-Management.
As per the amended provisions of Recovery of Debts and Bankruptcy Act, 1993 the secured creditors
are presently having a priority over all other debts and government dues (Crown debts) including
revenues, taxes, cesses and rates due to the Central Government, State Government or local
authority.

Similarly, where the security interest created in favour of the Bank has been duly registered with
CERSAI in tune with provisions of the SARFAESI Act, 2002, the debts due to the Bank shall be paid in
priority over all other debts and all revenues, taxes, cesses, and other rates payable to the Central
Government or State Government or local authority.
Settlement formula for compromise:
Compromise settlement is one of the most important strategies adopted by the Bank for recovery of
impaired assets (NPAs), It is cost effective, time saving and result oriented. The eligible accounts for
compromise are generally the NPA accounts, where recovery/ legal action has been initiated.

Cut-off date: Cut-off date is the date on which the account was classified as NPA. However, in
exceptional cases, the date of sickness or date of closure of unit or first date of incurring cash loss
can be taken as cut-off date with justifiable reasons.

1. Settlement Formula for Non-Wilful Defaulters:

Settlement to be done based on the following Matrix System:
System of awarding points and arriving at settlement amount:

Minimum settlement amount to be

Particulars Points recovered linked to 1 YEAR MCLR Prevailing
on 01.04.2024

Attempt should be made to recover full

Realizable Value of security is amount. However, where the parties are paying
sufficient to cover the contractual/ 8 less than the contractual / decretal dues under
decretal dues. OTS, at least Book Liability + Simple interest at
MCLR + 1.50% p.a. should be recovered.

Realizable Value of security + net

worth (put together) of the At least Book Liability + Simple interest at MCLR
borrowers/ guarantor/s/ co- 6 - 0.50% p.a. should be recovered.
obligant/s is sufficient to cover the
contractual/ decretal dues
Realizable Value of security + net Recover the maximum amount possible,
worth (put together) of the keeping in view the Realizable Value of
borrowers/ guarantor/s/ co- 4 securities/assets of borrower/s/ guarantor/s/
obligant/s is not sufficient to cover co-obligant/s and the time taken for realization
the contractual/ decretal dues of the same.

Simple interest as above to be calculated from the date of stoppage of interest or cessation of interest
on the account becoming NPA, till the end of the quarter immediately prior to the date of submission
of the proposal.

Awarding negative points under special circumstances while negotiating for OTS in case of non wilful
defaulters only:

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 Canara Institute of Bank Management

Minimum and Maximum of 2 negative points can be awarded for any borrower, depending on the
following conditions prevailing at the time of negotiation of OTS. However, under any circumstances,
the minimum marks including negative marks shall not be less than 4:

(i) Death of borrower i.e., Individual/ proprietor/ Key person of the firm and the Unit is closed due
to death of key person/ borrower.
(ii) Marketability and realizability of the property is difficult where there are litigations, disputed
property, property is land locked, agricultural land (i.e., sale is difficult).
(iii) Natural calamity leading to distress thereby affecting business/ activity of the borrower and
where Government has not declared any relief measures.
(iv) e-Auction at fixed reserve price has failed at least once on the basis of physical possession for
want of bidders.

In exceptional cases, where parties are paying less than the amount due to the Bank arrived at as
above, such proposal should be placed to next higher authority with substantial reasons. However,
in respect of proposals falling under the powers of H.O. authorities normal delegated powers apply.

Settlement formula for Wilful defaulters:

As per RBI guidelines, stringent measures are to be initiated against the Wilful Defaulters like legal
/ criminal proceedings, debarring the entrepreneurs / promoters from institutional finance from
Banks / FIs, etc. for floating new ventures for a period of 5 years from the date of removal of their
names from the list of willful defaulters published/ disseminated by RBI/CICs.
Hence, Wilful Defaulters, in general, shall be excluded from the purview of compromise policy
guidelines for the purpose of negotiated settlement.

However, where recovery expediency calls for settlement of dues of Wilful Defaulters, proposals in
respect of such accounts shall be entertained and decided by as per the delegated powers as per the
following parameters:

Minimum settlement amount to be

Particulars Points recovered linked to 1 YEAR MCLR
Prevailing on 01.04.2024
Attempt should be made to recover full
Realizable Value of security is sufficient
Amount or At least:
to cover the contractual 8
Book Liability + Simple interest at (MCLR
/ decretal dues.
+2.50%) p.a. should be recovered
Realizable Value of security + net worth
(put together) of the borrowers/ At least Book Liability + Simple interest at
6
guarantor/s/ co-obligant/s is sufficient MCLR + 1.50% p.a. should be recovered.
to cover the contractual/ decretal dues
Realizable Value of security + net worth Recover the maximum amount possible,
(put together) of the borrowers/ keeping in view the Realizable Value of
guarantor/s/ co- 4 securities/assets of borrower/s/
obligant/s is not sufficient to cover the guarantor/s/ co-obligant/s and the time
contractual/ decretal dues taken for realization of the same.
Delegated authority for release of Guarantor /s/ Co-obligant/s with or without release of
security/ies:

Basis Delegated authority

Other than HO Monitored accounts (Non- wilful defaulters only) Circle Head –CO-CAC

HO Monitored accounts (Non-wilful defaulters only) GM/CGM-HO-CAC

For wilful defaulters/accounts where fraud is reported MC of the Board

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irrespective of accounts / amount

For arriving of amount to be paid by Guarantor /s/ Co-obligant/s:

Minimum amount to be recovered
Particulars Points linked to 1 YEAR MCLR Prevailing on
01.04.2024
Attempt should be made to recover
Realizable Value of security in the name of the full amount or at least:
guarantor/ co-obligant is sufficient to cover the 8 Book Liability + Simple interest at
contractual/ decretal dues. (MCLR + 1.50%) p.a. should be
recovered.
Realizable Value of security in the name of the
guarantor/ co-obligant + net worth of the At least Book Liability + Simple
guarantor/ co- obligant (put together) is 6 interest at (MCLR - 0.50% p.a.) should
sufficient to cover the contractual/ decretal be recovered.
dues
Recover the maximum amount
Realizable Value of security in the name of the
possible, keeping in view the
guarantor/ co-obligant + net worth of the
Realizable Value of securities/ assets
guarantor/ co-obligant (put together) is not 4
of guarantor / co-obligant and the
sufficient to cover the contractual/ decretal
time taken for realization of the
dues
same.
Any deviation to above, the proposal shall be placed before the next higher authority. In respect
of HO monitored accounts for release of guarantor/co-obligant with or without release of
security/ies the same shall be referred to CGM/GM-HO-CAC.

Release of security alone without release of personal liability:

Delegated Authority:
Basis Delegated authority

Other than HO Monitored accounts (Non-wilful defaulters only) Circle Head –CO-CAC

HO Monitored accounts (Non-wilful defaulters only) GM/CGM-HO-CAC

For wilful defaulters/ accounts where fraud is reported irrespective MC of the Board
of accounts/ amount

However, the authorities permitting the release of securities as above should take an overall view
about the valuation of the properties to be released and those properties which will remain with the
Bank, the marketability of the remaining properties etc.

Any deviation to the above shall be placed before the next higher authority. However, in respect of
HO monitored accounts for release of security alone without release of personal liability the same
shall be referred to GM/CGM-HO-CAC.
SETTLEMENT OF DUES / INDIRECT DUES OF EX-EMPLOYEES:
The compromise policy guidelines, as applicable to Customers for settlement of dues, shall be applied
for settlement of the dues of ex-employees provided such loans / credit facilities were granted to
them after they cease to be in the services of the Bank (on account of superannuation, voluntary /
compulsory retirement / SVRS / discharge, dismissal) on the terms and conditions as applicable to
general customers. These guidelines are applicable even where their co-obligation / personal
guarantee were obtained after their cessation from the services of the Bank.
However, in respect of loans sanctioned to/availed by and / or guarantee/ co-obligation furnished
by the employee during his/her service in the Bank; the sanctioning authority shall be as per the
delegated powers. While submitting the proposal in respect of ex-employees, the details of terminal

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benefits and the loss caused by the ex-employee are to be incorporated in the OTS proposal.
However, if information is not available with the Branch, the same can be obtained from H R M
Section of Circle Office/ Wing.
CAC of the Board is the only Delegated authority for the settlement of dues/indirect dues of Ex-
employees.
SETTLEMENT FORMULA FOR COMPROMISE IN RESPECT OF AGRICULTURAL LOANS WITH
AGGREGATE/ COMBINED SANCTIONED LIMITS UP TO ₹ 50.00 LAKHS (628/2024)

Coverage: -
NPA accounts which are more than 12 months old from the date of NPA under Agriculture loans and
advances with limits/Combined limits sanctioned up to 50.00 Lakhs. Repeatedly Restructured
accounts under Substandard category upto combined sanctioned limits of Rs. 5 Lakhs are also eligible
after completion of 6 months from the date of slipping into NPA.
The settlement Formula is as below:

Loan sanctioned up to ₹5 Lakh (DF1, DF2, DF3, Original Loan amount disbursed less recoveries
LOSS and Repeatedly restructured substandard made in the account including all Debt waiver/
accounts after 6 months of slipping into NPA) relief
Loan sanctioned above ₹ 5.00 Lakhs ₹ 25.00 Loan sanctioned above ₹ 25.00 Lakhs to ₹
Lakhs 50.00 Lakhs
DF1: Original loan amount disbursed plus simple DF1: Original loan amount disbursed plus simple
ROI @ 6% p.a. from date of disbursement till ROI @ 7% p.a. from date of disbursement till
previous quarter & other expenses less previous quarter & other expenses less
recoveries made in the account including Debt recoveries made in the account including Debt
waiver/ relief waiver/ relief
DF2: Original loan amount disbursed plus simple DF2: Original loan amount disbursed plus simple
ROI @ 4% p. a from date of disbursement till ROI @ 5% p.a. from date of disbursement till
previous quarter & other expenses less previous quarter & other expenses less
recoveries made in the account including Debt recoveries made in the account including Debt
waiver/ relief waiver/ relief
DF3: Original loan amount disbursed plus simple DF3: Original loan amount disbursed plus simple
ROI @ 3% p. a from date of disbursement till ROI @ 4% p.a. from date of disbursement till
previous quarter & Other expenses less previous quarter & Other expenses less
recoveries made in the account including Debt recoveries made in the account including Debt
waiver/ relief waiver/ relief
Loss: Original Loan amount disbursed less Loss: Original Loan amount disbursed less
recoveries made in the account (including relief recoveries made in the account including Debt
under ADW & DR scheme) waiver/ relief

** Repeatedly restructured NPA accounts are NPA accounts where restructuring has been done at
least two times prior to NPA.
Note: The value of Agriculture Land need not be considered for arriving at settlement.
Sacrifice means write off + waiver of unapplied interest depending on the asset classification.
The scheme will not cover Gold Loans, ALVSLs, Tractor loans and agriculture accounts which are
secured by immovable/movable security (like House/ Flat / residential site, tractors, tillers, etc),
which are eligible under SARFAESI ACT and securities like deposits, Insurance Policies, KVPs, NSCs,
etc. However, such accounts may be settled as per normal Loan Recovery Policy.
GRANTING FRESH NEED BASED FINANCE BY WAY OF KCCS TO BORROWERS BELONGING TO WEAKER
SECTION WHO HAVE SETTLED THEIR LOANS UNDER ABOVE FORMULA:
 Fresh KCCS facility as per scale of finance can be considered to non-willful defaulters who have

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 केनरा बैंक प्रबंिन संस्थान
settled their NPA liability under the above formula subject to such fresh finance not exceeding
the original sanctioned amount of OTS settled accounts. This finance may be considered by
respective sanctioning authority to the borrowers, undertaking agricultural activities, those
belonging to weaker section for undertaking gainful activities.
 Borrower should have settled and fully paid the earlier agriculture loans as per above formula.
 Need based fresh loans can be extended after 7 days from the date of clearance of dues under
the OTS schemes.
 Fresh finance may be granted to the extent of the original sanctioned amount of OTS settled
accounts or Scale of finance whichever is less

Calculation of unapplied interest for internal purpose:

i. In respect of all NPA accounts except decreed accounts, the amount of unapplied interest is
calculated as under:
Sub-standard assets: At One Year MCLR prevailing on 01.04.2024 plus 1.25% or contractual rate
on reducing balance including penal rate (whichever is lower) on simple basis

Doubtful assets: At One Year MCLR prevailing on 01.04.2024 minus 1.50% or contractual rate on
reducing balance including penal rate (whichever is lower) on simple basis

Loss assets: At One Year MCLR prevailing on 01.04.2024 minus 3.50% or contractual rate on
reducing balance including penal rate (whichever is lower) on simple basis from the date of stop-
page of interest or cessation of interest on the account becoming NPA, till the end of the
quarter immediately prior to the date of submission of the OTS proposal.

ii. In respect of decreed accounts, the rate as above applied upto the date of filing of suit and at
the rates awarded by the Court from the date of suit or above rates (as per the classification of
account as on date of proposal) on simple basis whichever is less.
iii. Sacrifice under the Policy Guidelines is defined as under:
The difference between the dues calculated as defined under (i) / (ii) above (including book
liability) and the OTS amount offered constitutes sacrifice for the purpose of settlement.
iv. Wherever borrower paid the amount after account becoming NPA and / or account is recalled and
the amount so paid is appropriated towards interest, such amount to be considered as recovery
towards Unapplied Interest at the time of considering OTS.

Time Limit for Payment of Compromise Amount:

I. Endeavour should be made to collect the OTS amount within the shortest possible period.
II. The payment tenure for OTS will be as under:
a. Branch/ RO Sanctions – Max 3 Months.
b. CO sanctions – Max 6 Months.
c. HO Sanctions – Max up to 18 Months
d. In respect of Branch / RO / CO sanctions, proposals for a longer payment tenure of OTS beyond
stipulated terms as above and within the overall cap of 18 months shall be placed before CGM/GM-
HO-CAC.
III. In all cases, collecting maximum amount as down payment may be explored.
IV. In cases where parties have approached for OTS as a response to Bank’s SARFAESI action Bank is
examining and sanctioning OTS, thereby putting SARFAESI action on hold. In order to ensure that the
proposed OTS materializes as per schedule, it is advised that while negotiating for OTS, Branches /
ROs / COs / HO should fix payment of OTS amount in instalments, though not equal, within the
permitted time frame.

Charging of Interest on Compromise amount:

 The compromise amount shall carry interest at One Year MCLR (prevailing on 01.04.2024) plus
1.50% (Simple) from the due date of OTS sanction or first installment due (if OTS permitted in
installments) till the date of final payment.

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 Wherever parties seek time for payment of compromise amount for genuine reasons, then at the
time of sanction, Bank may at its discretion permit time upto 3 months from the date of
communicating the orders, without charging interest on the OTS amount.
 However, in exceptional cases / DGM CO CAC (DGM headed Circle) /GM-CO-CAC/CGMCO-CAC may
permit proposals seeking time upto six months with or without interest on the OTS amount based
on merits of the case.
 Further, in exceptional cases, the appropriate authority permitting the proposal at HO shall have
the powers to waive interest on compromise amount depending on merits of the case.
General guidelines:

● Compromise proposals shall be forwarded to the sanctioning authorities in the prescribed format,
in simplified format as per HO Circular No.115/2003 dated 22.05.2003 where total sacrifice, write
off amount in each account does not exceed Rs.50,000/- or in NF 724 if exceeds Rs.50,000/-
● The value of security should be as per the valuation report given by approved valuer which
should not be more than one year old as on the date of the compromise/ OTS proposal.
However, in selective cases, CGM/GM-HO-CAC and above authorities can relax this condition
taking an overall view of the value of securities. If there is appreciation in value of the
property, in such cases valuation has to be done before submission of Compromise / OTS
proposal.

● In respect of loans where the value of individual mortgaged security is more than Rs.5.00 Cr,
fresh valuation reports from two empanelled valuers are to be obtained for such properties.
Higher of the two valuations is to be considered for further action in the matter.

● Besides the above, in respect of securities of immovable properties which were valued at more
than Rs.2.00 Cr at the time of last sanction /renewal and the reduction in the present value is
more than 30 % of the same, in such cases, to ascertain the exact valuation, 2 valuation reports
should be obtained and analysed for reduction in the value before placing to the competent
authority for fixing RP or for accepting OTS proposal. Irrespective of above, the Sanctioning
Authority may seek fresh valuation report in any case, before fixing RP/considering OTS.
● As per RBI guidelines, while entering into OTS, it is to be ensured that the OTS amount is not less
than the Net Present Value (NPV) of the estimated cash flows associated with the realizable value
of the available securities net of the cost of realization.

OTS of CGFMU covered/claim settled accounts:

Since Final Claim of each portfolio will be settled by NCGTC during 5th FY of the portfolio and refund
is applicable only in case total recovery exceeds the First Loss absorbed by the Bank and to be
refunded on claim settled ratio (50% OR 75%), OTS in respect of CGFMU Covered/Claim Settled
Accounts shall be permitted by the competent authority as per Extant guidelines & Recovery
Policy of the Bank subject to the following criteria:
a. Before Final Claim Settlement (5th FY of Portfolio), OTS shall be permitted at 100% of the Book
Liability of each account.
b. After Final Claim Settlement (5th FY of Portfolio), OTS shall be permitted as per Extant Guidelines
of Loan Recovery Policy. However, the portfolio the claim amount parked at H.O level, shall not
be considered while arriving at OTS amount.

RIGHT OF RECOMPENSE:
 The guidelines of RBI lay emphasis on the early detection of sickness and prompt remedial action
in respect of sick and weak units by extending adequate and intensive relief measures to
rehabilitate them. Accordingly, our Bank has laid down a policy on rehabilitation /restructuring
of sick / weak unit.

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 While rehabilitating /restructuring Sick Industrial Company (SIC) / Weak unit / Sick SSI /Sick
SME / Accounts, after ensuring commercial, financial viability and technical feasibility, Bank
extends reliefs and concessions as per the laid down norms / guidelines to such units so as to
bring them back to normal health. Bank provides concessions / reliefs to such units during the
package implementation period also and can recoup whole / a part of the sacrificed amount by
way of Right of Recompense (RoR).
 In order to give effect to the above, an enabling clause be incorporated in all restructuring
proposals / rehabilitation (agreement) providing for recovering the sacrifice amount either in
part or in whole and also mode of recovery.

WAIVER OF LEGAL ACTION

● Every endeavor shall be made to recover the dues in the ordinary course. However, where
securities are not available to realize our dues or borrowers are not having any assets or means
to repay the dues or chances of recovery in the normal course / by compromise are remote and
initiating legal action for recovery is not prudent, in such exceptional situations, Bank may
consider waiver of legal action as a last resort.
● By waiving legal action, bank loses only its right of recovery through legal process. However, it
does not vitiate its right of appropriation of the amount received in the ordinary course of business
or other recovery measures. Hence, recovery steps in the normal course should be continued even
after waiver of legal action.
● Threshold for waiver of legal action while invoking guarantee under CGTMSE has been increased
to Rs. 10,00,000/- per claim based on the aggregate outstanding amount considered eligible for
claim settlement by CGTMSE.

REVIEW OF COMPROMISE / OTS

Writing off/ waiver of Review Report to be placed as under Periodicity

unapplied interest
permitted by

Branch-in-charge Next Higher Authority DM/AGM/DGM/GM

(RO/CO) Review Committee as the case
may be As and when OTS is
done (Within one
DM RO CAC (Other Than RO Next Higher Authority- AGM/DGM-RO month)
Head) (Recovery) Review Committee, through the Credit
Review & Monitoring Section of RO.

DM RO Head CAC DGM (Overseeing CRM matters) CO CRC Monthly

AGM CAC at RO/CO (RO Next higher authority at RO (DGM – RO Monthly

headed by DGM) Head) DGM Review Committee at CO

DGM CAC at RO/CO GM/CGM Review Committee at CO Monthly

GM/CGM CAC at (CO) GM/CGM Review Committee at HO* Monthly

GM/CGM CAC at HO ED -HO Review Committee* Monthly

ED CAC MC of the Board** Quarterly

CAC of the Board MC of the Board** Quarterly

* Placed By CAM Wing HO

** Placed By RL&FP/ SAM Wing HO as the case may be

THE POLICY OF THE BANK FOR WRITE OFF / PRUDENTIAL WRITE OFF:
Write Off:

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 Canara Institute of Bank Management

After exhausting all avenues of recovery, Bank may consider writing off such dues after proper
sanction from the appropriate authorities with the following conditions:

a) Accounts recommended should have completed 5 years or more from the date of advance and
continuing as NPA for a minimum period of 3 years and classified as loss assets on 31st March
preceding year.
b) Determining the sanctioning authority shall be based on Book Liability as on date of write off.
The delegation of powers for full write off & waiver of unapplied interest is as under:
Delegated authority Write off & waiver put together
RO Head CAC Upto Rs. 10000
Circle Head CAC Upto Rs. 25000
GM/CGM HO CAC Upto Rs 300 lakhs
ED CAC >Rs 300 lakhs upto Rs 400 lakhs
CAC of the Board >Rs 400 lakhs upto Rs 1200 lakhs
MC of the Board >Rs 1200 lakhs

Where borrower approaches for One Time Settlement (OTS) of dues which has already been fully
written off in books of the Bank and account is closed:

Delegation of powers for settlement of such proposals:

Basis Sanctioning authority
All OTS proposals 1. Authority one level higher than the authority who has last
sanctioned/renewed the credit facilities.
2. In case original credit facilities permitted by Management Committee of
the Board, such proposals shall be placed before the Board of Directors.
[Link] official who was part of sanctioning the loan (as individual or part of
a committee) shall not be part of approving the proposal for compromise
settlement of the same loan account, in any capacity. In such cases, the
member who was part of the sanctioning authority should be replaced by
another member. If the Chairman of the committee himself was the part
of the sanctioning credit exposure then the compromise settlement
proposal shall be placed to the Next Higher Authority.
This shall change the status from “Written Off” to “Post Write off Settled” in CIC Reports.

Wherever borrower wants to close the account, which has already been written off in books of
the Bank by way of settlement / full write off, with a purpose that their CIC status to be improved
from OTS settled / Written off to ‘Post Write off Closed’, borrower shall pay sacrificed amount
plus interest at contractual rate till the date.
RBI on Prudential Write Off:
The guidelines of prudential write off are detailed in RBI’s Master Circular on Prudential Norms and
on Income Recognition which are as under:

In terms of Section 43(D) of the Income Tax Act, 1961, Income by way of interest in relation to such
RBI prescribed categories of bad and doubtful debts shall be chargeable to tax in the previous year
in which it is credited to the Bank’s profit and loss account or received, whichever is earlier.

The Bank should either make full provision as per the guidelines or write- off such advances and claim
such tax benefits as are applicable, by evolving appropriate methodology in consultation with the
Auditors/ tax consultants. Recoveries made in such accounts should be offered for tax purposes as
per the rules.

Bank shall make full or partial technical write off of Doubtful and Loss assets and Bank shall not show

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the remaining part of the loan as Standard Asset in case of Partial Write Off.

Procedure for Technical Write Off and Write Back

Types of NPA Accounts to be considered for Technical Write Off (TWO):

a) Accounts classified as Doubtful Assets more than 3 years (D3) and Loss Assets which have remained
as NPAs continuously for at least 2 years.

b) Any other NPA account where bank has made 100% provision as at previous quarter can also be
technically written off provided the account has remained as NPA for a minimum period of one year.

c) Accounts declared as fraud, willful defaulter (which are fully provided) satisfying above conditions
can also be technically written-off, if the competent authority, so decides.

Types of NPA Accounts not to be considered for TWO:

a. Accounts guaranteed by CGTMSE/ECGC/NCGTC shall not be considered for TWO till both the claims
are preferred/settled.

b. Accounts covered under the portfolio guaranteed by CGFMU shall not be considered for TWO till
the stipulated lock in period for that portfolio is completed.

c. MSME Wing, HO shall furnish data on CGTMSE / CGFMU / NCGTC guaranteed accounts periodically
& Mid corporate Credit Wing, H O shall furnish data on ECGC guaranteed accounts. Such data shall
be furnished to NPAM Section, RL FP Wing, HO.

GRANTING OF FRESH CREDIT FACILITIES TO OTS BENEFICIARIES: (125/2024)

Minimum Cooling Period for sanctioning any fresh credit facility to Borrowers having settled their
dues with our Bank/Other banks/NBFCs/FIs under Consumer/Commercial Segment linked to level of
sacrifice amount as part of OTS/Compromise Settlement
Sacrifice Amount (as % of Book liability in our Bank and Minimum Cooling Period
outstanding in case of Other banks/FIs/NBFCs)
Up-to 10% 24 Months
Above 10% and up-to 25% 36 Months
Above 25% 60 Months

 Loans to agriculture & allied activities for those belonging to weaker section including Gold
loan for agriculture purpose shall be kept outside the purview
 Gold loans to other than agriculture purpose to be kept out of the purview of additional
cooling period over and above 24 Months- RSA can sanction upto the delegated powers after
24 months
 ED-CAC and above authorities may waive the condition of additional cooling period over and
above 24 Months.
 Written off accounts/credit card receivables with write-off amount up-to Rs. 10000.00
reported as non-wilful default in CICs may be ignored after a cooling period of 24 Months from
the date of settlement/write off.

Financing non wilful defaulters – Commercial Segments:

 Can be permitted on a selective basis and based on the merits of the individual case duly
ensuring the technical feasibility, economic viability and bankability after a minimum cooling
period as mentioned above.
 CGM/GM-HO-CAC and above authorities up-to their delegated powers.
 In respect of non-wilful defaulters under Agriculture, RO Head CAC and above authorities are
permitted to sanction fresh need based finance.
 If the Borrower(s), after OTS/ Compromise settlement, agrees to clear all their outstanding
dues including principal, interest, charges, penal charges etc. as on date of OTS/Compromise

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 Canara Institute of Bank Management

settlement, fresh facilities to the Borrower(s) may be financed by next higher authority not
below Circle Head CAC without making any reference to the OTS settlement date and cooling
period.
 In case a borrower having technically written off account has paid up-to date interest,
principal and charges without any sacrifice on the part of the bank, fresh credit facilities may
be permitted by Next Higher Authority not below the rank of RO Head CAC & above
authorities. Cooling period shall not be applicable in such cases.
Financing non wilful defaulters – Consumer segment (Defaulters in other banks/FIs):
 In case the credit history indicates the status as ‘Written off’/ ‘settled’, then same shall be
placed to Circle Head CAC (CGM/GM/DGM) & above authorities up-to their delegated powers.
 However, if the Report is having status as ‘Written Off’ / ‘Settled account’ which are more
than 3 years old, fresh credit facilities may be sanctioned by the respective delegated
authority as per the extant guidelines, subject to cooling period guidelines.
 In case the credit history indicates the status as ‘Overdue’, then the respective sanctioning
authority as per Risk Grade shall take a suitable credit decision.
 Fresh loans may be considered as far as possible in joint names viz., along with the spouse or
along with the eldest members in the family (in the absence of spouse) to ensure family
responsibility subject to compliance of minimum cooling period under the policy.

Financing non wilful defaulters – Consumer segment (Defaulters in our bank)

 In respect of borrowers to whom concessions/ compromise settlements have been allowed /
agreed to by the Bank, no further direct / indirect finance shall be made to such borrowers
except under the circumstances as stated in the following paragraphs,
 Package / relief extended as per RBI parameters to sick units under tiny/ decentralized sector
should not be treated as concession. Similarly, interest concession extended in the normal
circumstances taking into account the business prospects shall not be considered as write off
/ sacrifice for the purpose
 Need based fresh finance up to Rs.50000/- may be considered by the respective sanctioning
authority to the borrowers who are non-wilful defaulters, undertaking agricultural and allied
activities, those belonging to weaker section for undertaking all gainful activities and have
repaid at least 10% of the principal amount of the previous loan before permitting concession/
compromise and only after 3 months from the date of clearance of the dues under OTS.
 In respect of Gold Loans for agriculture purpose, respective sanctioning authority can permit
gold loans up-to Rs. 1.00 lakh after a minimum cooling period of 3 months from the date of
clearance of the dues completely under OTS/ Compromise settlement. Further, after 6
months from the date of clearance of the dues completely under OTS/ Compromise
settlement, Respective Sanctioning Authority can permit Gold loans as per their delegated
powers.
 In respect of Gold Loans other than for agriculture purposes, Respective Sanctioning Authority
can permit gold loans up-to their delegated powers after a minimum cooling period of 24
months from the date of clearance of the dues completely under OTS/Compromise settlement
 Need based fresh finance may be considered by RO Head CAC & above authorities up-to their
delegated powers to Non Wilful defaulters after a minimum cooling period as stipulated
above, from the date of clearance of the dues under OTS/ Compromise settlement.

POLICY FOR APPROPRIATION OF RECOVERY IN NPA ACCOUNTS:

(HO Cir No IC/146/2022 dated 26.03.2022)

1. In terms of the Appropriation Policy for Recovery in NPA Accounts, the recovery shall get
appropriated as below:

a. Recovery in NPA accounts in case of One Time Settlement (OTS) / National Company Law
Tribunal (NCLT) / Technically Written Off (TWO) & Accounts covered by Government
Guarantees such as CGTMSE / ECGC / GECL / CGFMU and Subsidy if any, shall be appropriated
in the order of Principal, Charges and Interest.

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 केनरा बैंक प्रबंिन संस्थान
b. Recovery in NPA accounts other than those mentioned under point no.1. (a) above shall be
appropriated in the order of Charges, Interest and Principal.

2. a. Auto Change of sequence in CBS will happen upon recalling the account under appropriate
option as below by the branch users as:

I. One Time Settlement (OTS)

II. Accounts which are settled by way of NCLT Resolution
III. Accounts covered by Government Guarantees such as CGTMSE/ECGC/GECL/CGFMU and Subsidy
if any.
IV. Accounts which are prudentially written off or Technically Written Off (TWO) at HO level –
(Executed by NPA Management Section, RL & FP Wing, HO)
b. For all other NPA Accounts not marked by branches under above four categories, the
appropriation sequence shall be uniform as defined for NPA`s at product level inspite of Recalling
/ Marked for Recovery.

3. Exceptions to Functionality provided under Point No. 2 furnished above:

a. Recovery in suit filed/ decreed accounts shall be appropriated in the manner as per specific
directives from the Court/ DRT, in case the same is other than the one mentioned under point
no. 2.a. (i), (ii), (iii) & (iv) above.

b. In Select Cases, powers may be vested with the Credit Approval Committee /Management
Committee of the Board to decide on appropriation sequence other than what is suggested under
point no. 2.b. (i), (ii), (iii) & (iv) above in case of OTS sanctions permitted by various authorities
at H.O.

WILFUL DEFAULTERS:
“Wilful Default” would be deemed to have occurred if any of the following events is noted:

1. The unit has defaulted in meeting its payment/repayment obligations to the lender when it has
the capacity to honour the said obligations.

2. The unit has defaulted in meeting its payment/repayment obligations to the lender and has not
utilized the finance from the lender for specific purposes for which finance was availed of but
has diverted or Siphoned-off the funds for other purposes.

3. The unit has defaulted in meeting its payment/repayment obligations to the lender and has
siphoned off the funds so that the funds have neither been utilized for the specific purposes for
which finance was availed of, nor are the funds available with the unit in the form of other
assets.

4. The unit has defaulted in meeting its payment/repayment obligations to the lender and has also
disposed off or removed the movable fixed assets or immovable property given by him for the
purpose of securing a term loan without the knowledge of the bank/lender.

5. Any account if declared credit fraud on account of any of the above events or other reasons then
such accounts should also be examined from Wilful angle simultaneously and should be
recommended.

Diversion and siphoning of funds:

The terms "diversion of funds" and "siphoning of funds" should construe to mean the following:

Diversion of funds, referred to at point 2 above, would be construed to include any one of the
undernoted occurrences:

(a) Utilization of short-term working capital funds for long-term purposes not in conformity with the

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 Canara Institute of Bank Management

terms of sanction;

(b) Deploying borrowed funds for purposes / activities or creation of assets other than those for which
the loan was sanctioned;

(c) Transferring funds to the subsidiaries / Group companies or other corporates by whatever
modalities;

(d) Routing of funds through any bank other than the lender bank or members of consortium without
prior permission of the lender;

(e) Investment in other companies by way of acquiring equities / debt instruments without approval
of lenders;

(f) Shortfall in deployment of funds vis-a-vis the amounts disbursed / drawn and the difference not
being accounted for.
Cut-off limits:

While the penal measures indicated as under would normally be attracted by all the borrowers
identified as wilful defaulter or the promoters involved in diversion / siphoning of funds, keeping in
view the present limit of Rs.25 lakh fixed by the Central Vigilance Commission for reporting of cases
of wilful default by the banks / FIs to RBI, any wilful defaulter with an outstanding balance of Rs.25
lakh or more, would attract the penal measures stipulated as under. This limit of Rs. 25 lakh may
also be applied for the purpose of taking cognizance of the instances of ‘siphoning’ / ‘diversion’ of
funds.

Reporting to RBI / Credit Information Companies:

● Bank has been furnishing the data on Wilful Defaulters (non-suit filed accounts) of Rs. 25 lakhs
and above for the quarter ending June 30, 2014 and September 30, 2014 to RBI in the existing
format.
● In terms of Credit Information Companies (Regulation) Act, 2005, bank will be furnishing the
aforementioned data in respect of Wilful Defaulters (non-suit filed accounts) of Rs.25 lakhs and
above for the quarter ending December 31, 2014 to CICs and not to RBI. Thereafter, bank will
continue to furnish data in respect of Wilful Defaulters to CICs on a monthly or a more frequent
basis. This would enable such information to be available to the banks / FIs on a near real time
basis.
Criminal Action against Wilful Defaulters:

The Grievance Redressal Committee (GRC) is empowered to permit to initiate criminal proceedings
based on the facts of individual case. After obtaining the permission from the Grievance Redressal
Committee, circle shall initiate criminal proceedings by lodging com- plaint with the Police/CBI as
under:
Quantum of Liability Complaint to be lodged with
Borrowers classified as Wilful Defaulters by GRC
Senior officer of the State CID/Economic
with liability of Rs.25 lacs and above upto Rs.3.00
Offences Wing of the State concerned.
crs
Borrowers classified as Wilful Defaulters by GRC
with liability of Rs.3.00 Crs and above upto CBI (Economic Offences Wing)
Rs.25.00 crs

Borrowers classified as Wilful Defaulters by GRC

CBI Banking Security and Fraud Cell unit
with liability involving more than Rs.25.00 Crs

NON- CO OPERATIVE BORROWER (NCB):

A Non-Cooperative Borrower is one who does not engage constructively with his lender by defaulting

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in timely repayment of dues while having ability to pay, thwarting lenders’ efforts for recovery of
their dues by not providing necessary information sought, denying access to assets
financed/collateral securities, obstructing sale of securities etc.
In classifying/declassifying a borrower as non-cooperative, the following need to be com- plied and
reporting information on such borrowers to Central Repository of Information on Large Credits
(CRILC):
 Borrowers having aggregate fund-based & non-fund based facilities of Rs.50 million (Rs.5 Crs).
 NCB in case of a company will include besides the company, its promoters & directors (excluding
directors nominated by Government & independent directors and the lending institutions).
 NCB in case of Business Enterprises (other than Companies) will include persons who are in-
charge and responsible for management of the affairs of the business enterprise.

REPORTING:

Bank should report information on their non- cooperative borrowers to Central Repository of
Information on Large Credits(CRILC) under CRILC Main returns every quarter within 21 days from
the close of the relevant quarter as advised by RBI vide Circular.

PUBLICATION OF PHOTOGRAPHS OF WILFUL DEFAULTERS:

Our Board of Directors permitted the Policy for Publication of Photographs and details of Wilful
Defaulters and names of the guarantors in newspapers, the guidelines for publication of photographs
of willful defaulters is as under:

1. The policy for publication is restricted to “willful defaulters” with a liability of above Rupees
Twenty Five Lacs and be considered only in “exceptional circumstances.”
2. Permission of DGM of the Circle shall be obtained before publication.
3. Before the publication of photographs, it shall be ensured that loan is recalled and the same is
classified as NPA.
4. A Registered notice with acknowledgement due is to be served on the defaulters and guarantors
giving details of loan liability and indicating Bank’s decision to publish photograph, unless they
regularize / settle the account within the stipulated time.
5. Reasonable time of 30 days shall be given to the defaulters/ guarantors to regularize / settle
their liability before publication.
6. Publication shall not be effected before expiry of 30 days from the date of receipt of the above
said notice by the defaulter.
7. In case defaulter is a Company, photographs of directors on whom Bank has a right of recourse
i.e. directors who extended personal guarantee, only be published.
8. Publication of photographs shall not be made in the following cases:
i. Farmers in distress;
ii. Persons/ units affected by natural calamities;
iii. Accounts which are eligible for restructuring.
9. Publication shall not be made if defaulter is making part payment within the stipulated time of
30 days and his request for a reasonable time to remit the balance amount is acceptable to the
Bank.
POLICY ON RECOVERY AGENTS:
Recovery Agents are classified into following two categories:
1. Retired Government employees/ retired employees of Public Sector Undertakings including retired
employees of our Bank for recovery of our dues through persuasive method;
2. Recovery Agents for Seizure of vehicles, tractors etc (other than retired employees & SARFAESI
Agents)

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 Canara Institute of Bank Management

GM/CGM CO CAC are empowered to empanel Recovery Agents.

Recovery Agent has to undergo, training conducted by IIBF or their affiliated institutes or our STC,
Bangalore as follows:
For retired employees of Public Sector Banks For other retired employees of
Government/PSUs
Retired employees of Public Sector Banks Recovery Agents have to undergo, 100/50 hours
including Canara Bank are exempted from the training conducted by IIBF or their affiliated
stipulation of 100/50 hours of training institutes including our STC, Bangalore and
conducted by IIBF. obtain certificate to that effect.
After obtaining permission from the Circle Head CAC for empanelment of Recovery Agents, Circle has
to execute an agreement with Recovery Agents as per Format prescribed for Retired Government
employees/ retired employees of PSUs including our Bank and for other than retired govt.
employees.
If Recovery Agent has not executed agreement with the Circle within 6 months from the date of
permission for empanelment, the said permission granted by Circle Office shall stand cancelled.
As per Outsourcing Policy of the Bank, to cover the risk in engaging Recovery Agent, Recovery Agent
has to give a Bank guarantee or EMD or deposit or approved security as below
 Rs.1.00 Lac in case of other than retired employees (either for seizing the vehicles/tractors,
etc. or for assisting the Bank for recovery under persuasive method or both).
 Rs. 50,000/- in case of retired government employees/ retired employees of PSUs including
our Bank.
 Recovery Agent has to deposit above said Security Amount with the Circle where he/she/it
has executed the Agreement and the Recovery Agent need not deposit Security Amount with
other Circles of the same State
The CGM/GM – RL&FP Wing, HO shall be empowered to empanel such recovery agents on pan India
basis, based on the recommendations received through any of the Circle offices.
They have to give a Bank guarantee or EMD or deposit or approved security for an amount equivalent
to Rs.5.00 lakhs. Any reduction in this Security Deposit may be permitted by ED-CAC upto a maximum
of 50%.
Entrustment of works to the Recovery Agents
No of Accounts to be allotted to Recovery Agents:
For individual Recovery Agents: Maximum 100 accounts per agent.
For non-individual recovery Agents (Firms): Maximum 100 accounts per staff. (per certified
employee)
Circle Head may permit upto a maximum of 200 per agent.
The RO Head, is delegated with the power to entrust Recovery/Seizure Agent NPA accounts under
doubtful, loss and written off category with book liability up to Rs. 50.00 Lakhs per account. However,
in case of NPAs under Vehicle and Tractor loans, entrustment can be done even before completion
of 6 months.
Beyond Rs.50 Lakhs the entrustment of such cases to Recovery/Seizure Agent shall be done by Circle
Head
Payment of fee to the Recovery Agents:
PART-A: MAXIMUM FEES PAYABLE TO RECOVERY AGENTS IN CASE OF RECOVERY OF DUES –
Sub-standard Accounts: 2% of amount recovered
Doubtful Accounts: 5% of amount recovered

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Loss Accounts/Bad Debts W/O: 10% of amount recovered
Note- Subject to a maximum of Rs. 5.00 Lakhs.
In case of Loss accounts/Bad Debts (Written off) accounts the incentive or fee may be extended to
any panel advocate/ Chartered Accountant in respect of the accounts which are not allotted to our
empanelled recovery agents.
PART-B: MAXIMUM FEES PAYABLE TO RECOVERY AGENTS IN CASE OF SETTLEMENT OF ACCOUNT BY
WAY OF COMPROMISE:
50 % of the amount mentioned in part – A above.
In exceptional cases, where RO/PCBs for valid reasons, recommend for payment of higher fee than
what is prescribed in the fee schedule, on account of the complexity of the work involved, permission
of the Circle Head, shall be obtained on case to case basis upto a maximum of Rs. 1,00,000/-
BUSINESS CORRESPONDENTS AS RECOVERY AGENTS

At present Bank has appointed the following 4 Corporate BCs for discharging Banking Services under
Financial Inclusion programme of our Bank.
1.M/s Sanjivani Vikas Foundation Bihar, 2. M/s Vision India Software Exports P Ltd, 3. M/s
Gram Tarang Inclusive Development Services P Ltd & 4. M/s AISECT Ltd for providing HYBRID OPEX
MODEL (KIOSK & MOBILE)

The above business correspondents in turn have engaged BCAs for implementing the BC module in
our bank. BCAs are presently working at Rural and Semi-urban areas and have location advantage. A
separate agreement between BANK and BCs as per Recovery Policy of the Bank in consultation with
Legal Section, HO is to be entered into for engaging BCA as recovery Agent.

To engage BCAs as Recovery Agents, the BCAs are to undergo training as RDA as below;
a. For BCAs 10th Standard passed and under Graduates 100 Hrs.

b. Graduation and above 50 Hrs.

BCAs as Recovery Agents are not authorized to collect CASH towards recovery of dues and cannot
be entrusted with seizure of assets, Vehicles etc.

Circle Office will inform branches about the names of the BCAs to whom branches can entrust work
of recovery as Recovery Agents.

Branches to entrust the recovery to BCAs only after obtaining permission from the Circle and Circle
Head is only empowered to permit the Branches for engaging the services of BCA as per the recovery
policy.

The list of authorized BCs for Recovery will be informed by RL & FP Wing, HO to each Circle and the
Circle Head shall permit the branches to entrust Recovery work only to those authorized BCs.

EMPANELMENT OF RESOLUTION AGENTS

Resolution Agents will provide various legally permissible activities resulting into recovery.
Accordingly, in tune with the guidelines issued by RBI, with regard to eligibility, empanelment,
entrustment of work, fee schedule for various activities, the details are mentioned below.

The following agencies shall be eligible for empanelment as Resolution Agents

 Non-Banking Financial Companies with good track records
 Govt. approved auctioneers
 Reputed Management Consultants (Inland and Foreign)
 Accounting Firms (Inland and Foreign)
 Firms with experience in impaired Asset Management / Business recovery Services.
 Merchant Banks (Inland and Foreign)
 Companies / firms set up by reputed corporations / NBFCs for the purpose.

Nature of activities to be performed by Resolution Agencies:

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 Canara Institute of Bank Management

1. Security Enforcement services in compliance with the provisions of SARFAESI Act 2002
2. Act as an agent to the Authorized Officer in taking possession of movable and immovable
properties in full compliance with the procedure laid down under the rules of SARFAESI Act .
3. Follow up with the Borrower(s) / Guarantor(s) for recovery of Bank’s dues.
4. Assist the Authorized officer in preparation of Panchnama / inventory of the properties, etc
as per guidelines prescribed.
5. Arrange on behalf of Authorized Officer for storage / maintenance / preservation and locking
up arrangements as appropriate of the movable / fixed / immovable assets so taken over.
6. Arrange for security, insurance and / or any other action required to ensure safety of the
Assets taken over.
7. Arrange for sending notice to the debtors of the borrowers, follow up for recovery of dues.
8. Arrange for valuation of properties as per laid down procedures.
9. Arrange for sale of the properties through any one of the modes prescribed like public Auction,
sale through private treaty after exhausting all the avenues for sale through public auction
10. Assist the Authorized Officer for receipt of sale proceeds, issue of sale certificates and all
other necessary formalities prescribed under the provisions of SARFAESI Act.
11. Arrange buyers for assets / properties hypothecated / mortgaged to the bank.
12. Collecting details of personal properties of borrower / guarantor.
13. Eliciting agreeable compromise / OTS in consultation with the branch for at least the bench
mark value determined for the account.
14. Working out M&A, take out financing, restructuring, rehabilitation, divestment etc.
15. Any other legally permissible activities that may facilitate recovery.
16. Obtaining the assistance of DM / CMM for taking physical possession of securities.
17. Assisting the bank for sale of assets acquired through auction or otherwise.

Doubtful and Loss Accounts with Book Liability exceeding Rs.50.00 lakhs shall qualify for entrustment
to Resolution Agents for Recovery.
The panel of Resolution Agents shall remain valid for a period of three years or till the time the
revised / updated list is prepared and placed on record, preferably once in two years.
Circle Head is authorized to de-empanel Resolution Agents.

Guideline on payment of Fees:

Category of accounts Fee Payable
1. Doubtful assets outstanding with less than or 5 % of the recovery amount / book liability
equal to 5 years old NPA accounts whichever is less subject to maximum of
Rs.12.00 lakhs.
2. Doubtful assets outstanding with greater than 5 % of the recovery amount / book liability
5 years old NPA accounts whichever is less subject to maximum of
Rs.15.00 lakhs
3. Loss assets/ Written off accounts 7 % of the recovery amount / book liability
whichever is less subject to maximum of
Rs.20.00 lakhs

Circle office shall be the competent authority to determine the payment of fees to the Resolution
Agents
Resolution Agents have to give a Bank guarantee or EMD or deposit or approved security for an amount
equivalent to Rs.5.00 lakhs.

SARFAESI Act 2002

Eligibility:
1. The Account should be NPA as per RBI guidelines.
2. There should be security interest created in favour of the Bank.
3. Amount claimable from the borrower (including the accrued interest) should be not less than Rs
1 Lakh.

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4. The amount due should be more than 20 % of the Principal Amount and interest thereon.
5. The security interest must have been registered under CERSAI.
6. Recovery action under SARFAESI Act to be initiated in Agriculture Loans where securities are
eligible for SARFAESI Action. i.e. Tea / Coffee estates etc.
Securities exempted from proceeding under the SARFAESI Act
● A lien on any goods, money or security given by or under the Indian Contract Act, 1872 (9 of1872)
or the Sale of Goods Act, 1930 (3 of 1930) or any other law for the time being in force;
● A pledge of movables within the meaning of Section 172 of the Indian Contract Act, 1872.
● Creation of any security in any aircraft as defined in clause (1) of Section 2 of the Aircraft Act,
1934 (24 of 1934);
● Creation of security interest in any vessel as defined in clause (55) of Section 3 of the Merchant
Shipping Act, 1958 (44 of 1958);
● Any rights of unpaid seller under Section 47 of the Sale of Goods Act, 1930 (3 of 1930);
● Any properties not liable to attachment (excluding the properties specifically charged with the
debt recoverable under this Act) or sale under the first proviso to sub-section (1) of Section 60
of the Code of Civil Procedure, 1908 (5 of 1908);
● Any security interest for securing repayment of any financial asset not exceeding one lakh rupees.
● Any security interest created in agricultural land. Recovery action under SARFAESI Act to be
initiated in Agriculture Loans where securities are eligible for SARFAESI Action. i.e. Tea /Coffee
estates etc.
● Any case in which the amount due is less than twenty per cent of the principal amount and
interest thereon.
As per provisions bank can take possession, Sell or lease secured assets and also take over the
management of business.

Bank may also recover money payable by 3rd parties to the borrowers.

Notice can be delivered by regd. post, speed post, email, fax or courier. In case of fax or email,
confirmatory copy shall be sent through registered post.

For consortium account, consent of creditors not less than 60% in value. BIFR cases can be recalled
back with consent of 60% of creditors (by value)

Action can be initiated under SARFAESI action DRT pending cases.

The Assistant General Manager/Divisional Manager overseeing Recovery & Legal Section at RO
(hereinafter referred as “Nodal Officer”) shall be “Authorized Officer” for SARFAESI action at
respective RO. They will be responsible for initiating, monitoring and follow-up of SARFAESI Action
till the sale of secured asset/s. (Cir 421/2024)

The Authorized Officer may utilize the service of SARFAESI Agents empanelled for SARFAESI in taking
possession of the immovable properties. In the case of Doubtful and Loss accounts with book liability
exceeding Rs. 50 Lacs the Authorized Officer may utilize the service of Resolution Agents
empanelled with the Bank in taking possession of the immovable properties.

In order to proceed under SARFAESI Act, it is now mandatory to register charge under CERSAI. After
registration of security interest with Central Registry, Banks will have priority overall other debts,
revenues, taxes, cesses and other rates payable to the central government or state government or
local authority.

The Enforcement action under SARFAESI is as follows: Issue 13(2) demand notice for 60 days to clear

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the liability. Borrower’s objection to demand notice, if any, should be replied within 15 days.
The Nodal Officer shall take Symbolic Possession (Annexure-II) immediately after completion of 60
Days from the date of service of Demand Notice / Paper publication of demand notice.
Possession notice to be published in two leading newspapers within 7 (seven) days of taking
possession.
The Nodal Officer shall entrust the account to empanelled Seizure Agent / Advocate for filing
application under Section 14 of the SARFAESI Act before DM/CMM/CJM praying assistance for
obtaining physical/actual Possession of the securities.

The District Magistrates shall pass suitable orders in an application for assistance for taking possession
of the secured assets, under new Sec. 14, within 30 days.

The Nodal Officer shall ensure fixation of reserve price of mortgaged properties within 3 working
days of taking possession and Sale Notice (Annexure-III) is issued/published within 3 working days
from the date of fixing reserve price and affixing the same on secured assets.
30 Days’ notice for sale of immovable/movable assets should be given to the borrower and mortgagor,
a copy of the sale notices to be marked to the guarantors also.
NOTE: the borrower has a right to file an appeal in the DRT within a period of 45 days from the date
of possession of secured assets.

The right of the mortgagor to claim back his property is available only till the date of publication of
sale notice.

Banks will not be able to take possession of the secured assets unless the secured assets are registered
with the Central Registry.

Publication in 2 newspapers (one regional and one national): TWICE, i.e. first time, within 7 days
after taking possession and second time: publication of 30 days sale notice.

In case of appeal by party against DRT decree, he has to deposit 50% of the amount of debt due
or debt determined by DRT whichever is less, and appeal to DRAT within 30 days. DRAT can
reduce the amount to not less than 25% of debt due or decreed.

Sale shall be confirmed only if the offered price is more than the Reserve price.

Sale is confirmed by bank on receipt of 25% of the amount (inclusive of EMD) immediately and balance
payable in 15 days. Maximum tenure permitted is 3 months, if request for extension is sought within
the 15 days selectively for deposit of remaining bid amount in excess of 25%.

Rights of Creditor: To take possession, takeover management, appoint manager, recovery of money
receivable from third parties.

The property shall be sold either by inviting tenders or by holding public auction or by obtaining
quotations or by private treaty. At least one attempt should be made to sell the property through
public auction/auction by inviting tenders if assessed value is up to Rs.100 lakhs and at least two
attempts should be made to sell the property through public auction/auction by inviting tenders, if
assessed value is above Rs.100 lakhs before opting for sale through private treaty.

Wherever the value of the individual mortgaged/hypothecated security is more than Rs.5 Cr,
valuations from two different SARFAESI Panel Valuers to be obtained for fixing Reserve Price. Higher
of the two valuations is to be considered for further action in the matter.

Besides the above, in respect of securities of immovable properties which were valued at more than
Rs.2.00 Cr at the time of last sanction /renewal and the reduction in the present value is more than
30 % of the same, in such cases, to ascertain the exact valuation, 2 valuation reports should be
obtained and analysed for reduction in the value before placing to the competent authority for fixing
RP or for accepting OTS proposal. Irrespective of above, the Sanctioning Authority may seek fresh
valuation report in any case, before fixing RP/considering OTS.

Delegation to fix Reserve Price for the properties put for auction:

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The Reserve Price shall be fixed for the First Instance depending upon the market condition. Reserve
price should not be less than Guideline value (GLR) in case if GLR is more than the realizable value
of the security. In other cases wherever the GLR is less than the realizable Value of security, in all
such cases reserve price to be fixed at a value not less than Realizable Value.

a. In case the GLR is more than the realizable value, for the first instance:

i. The RP to be fixed at or above GLR by the RO Head CAC for branches under RO and for branches
directly reporting to CO by DGM-CO-CAC.

ii. In the event of failure of auction held for the first time at GLR, next Reserve price fixation at or
above Realizable Value of security and subsequent reductions shall be as per guidelines mentioned
below.

b. In other cases wherever the GLR is less than the Realizable Value of security, delegation to fix RP
at or above Realizable Value by the authorities as below

Particulars At 1st instance

Credit Sanction by RP fixation at or above RV

Loans sanctioned by branches and various

authorities upto RO Head-CAC (For Branches RO Head CAC
coming under ROs)

For Branches coming directly under Circle Office DGM / GM /CGM CO CAC

Loans & Advances sanctioned by CACs at Circle

DGM / GM /CGM CO CAC
Office

Loans & Advances sanctioned by CACs at Head

CGM/GM-HO-CAC
Office
 The reduction in RP at each occasion may be upto 10% per occasion. RP can be reduced by a
maximum upto 20% of RV by respective sanctioning authority as above, irrespective of
number of occasions (subject to a maximum reduction upto 20% of RV)
 The next higher authority can permit the reduction in RP above 20% and upto 30% of the RV
(i.e. further reduction upto 10%).
 Any reduction in RP at or above 30% of RV shall be permitted by CGM/GM-HO-CAC.
 CGM/GM-HO-CAC shall have full powers to fix RP

Subsequent valuation:
Wherever the valuation (obtained from SARFAESI Valuer in case of SARFAESI eligible accounts) is more
than one-year-old, branches/offices should obtain fresh valuation before going for subsequent
auction. RP to be fixed considering the following:
a. Variation in Realizable Value between new and immediate previous valuation to be analysed and
recorded in all cases for fixing RP.
b. In case there is an upward variation in realizable value from the last valuation, respective
sanctioning authority may also consider fixing the RP lower than the RP explored before, (RP on which
auction failed) in duly justifying the reason. Further, if RP is fixed at a price more than the RP already
explored then the RP fixing authority has to also justify the reason for fixing a higher RP.
c. Downward variation in Realizable Value between new and immediate previous valuation is less
than 20%, Reserve Price shall be fixed as table above. Further, if there is more than 20% downward
variation then Reserve Price shall be fixed by the Next Higher Authority.

Fee payable to SARFAESI AGENTS

The services of SARFAESI agents empanelled under SARFAESI can be utilized for expediting orders of
the DM/ CMM Courts, for taking actual possession of secured assets and for safekeeping/watch and
ward etc., in case where the same is felt necessary.

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 Canara Institute of Bank Management

The Fee payable to SARFAESI AGENTS is as under:

Pre inspection/Pre Seizure Activities (Movable or immovable: Min Rs.2500/- and Max Rs.5000/-
(depending upon the work/distance of traveling involved).

For obtaining orders from Magistrate (District Magistrate/Chief Metropolitan Magistrate / Chief
Judicial Magistrate) in case of need and to assist Authorized Officer for taking possession: 0.25% of
the value of the Movable/Immovable property Market Value) as per the valuation by panel valuer or
the Liability outstanding in the Bank's books of account, whichever is less with a minimum of
Rs.10000/- and upto a maximum of Rs.30,000/-

Assistance in taking possession of movable/ immovable properties: MOV: Rs 25,000/ + actual expenses
incurred for shifting. For immovable Rs 50,000/-. For Symbolic possession, if their services are
utilized then consolidated sum of Rs.5000/- will be paid.
Aggregate amount so payable to the SARFAESI AGENTS for his assistance to the Authorised Officer in
taking possession of the secured asset, including any extra ordinary expenses, shall not exceed
Rs.5,00,000/- or 2% of the Reserve Price fixed for the property whichever is less.

An additional incentive of 0.25 % or Rs.1,00,000/- whichever is less may be permitted for recovery
made within 6 months from the date of entrustment of the case. Additional incentive is over and
above the limit of Rs.5,00,000/-.

The Bills submitted by the SARFAESI Agents shall be processed and paid within 10 days.
The payment of the above fees to SARFAESI Agents shall be made by Regional Office centrally as per
the Delegation of Powers for Revenue Expenditure and Circle Office should make Payment centrally
for Branches reporting to Circle Office.

Any person including a SARFAESI Agent / Recovery Agents/ Real Estate Agent/ Broker/ Panel
Advocate/ Panel valuer/ Ex-Employee of Canara Bank, who brings a successful bidder (Sale through
SARFAESI or DRT) shall be entitled to 1 % of realized value of the property or contractual liability
whichever is less, with minimum of Rs.10000/- upto a maximum of Rs. 3,00,000/- (including GST).
Upon issue of sale certificate and the same may be paid from GC - Payment to Recovery Agent-
RCM420020333 as per the Delegation of Powers for Revenue Expenditure. The person who is bringing
the prospective bidder has to submit letter with signature of the Bidder prior to submission of Bid to
the R&L Section Circle Office through the concerned Authorized Officer.

Step Up incentive: To encourage performance of recovery, apart from 1% or Rs. 3 lakh whichever is
less following additional step-up incentive may be paid to persons / agents on bringing successful
bidders for different properties as below:
a. If brought successful bidder for 2 properties in a calendar month – 10% of the above eligible
amount.
b. If brought successful bidder for 3 properties in a calendar month – 15% of the above eligible
amount.
c. If brought successful bidder for 4 properties in a calendar month – 20% of the above eligible amount.
Above incentive shall be paid subject to the maximum of 4 properties in a calendar month (1st date
to last date of month).

LOK Adalat (LDGMs 60/91 and 35/92 &Cir No. 267/01)

Lok Adalat is a legal authority constituted under Legal Services Authorities Act to encourage
settlement of disputes in a conciliatory manner without going to Courts and arriving at a workable
settlement amicably. Lok Adalat is an ongoing process, there is no cut-off date for such reference.

The advantages of referring pending suits are that if no settlement is arrived at, the par- ties can
still continue with the existing suit in the Court.

Also, in taking the matter before Lok Adalat is advantageous from the point of view that no Court
fee as well as Advocate fee is involved in Lok Adalats.

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 केनरा बैंक प्रबंिन संस्थान
Amount: uptoRs.20 lakhs.

Above Rs.20 lakhs, DRT Lok Adalat.

Created under Legal Service Authority Act, 1987

No appeal against decision as the decree is consent decree.

Repayment: Preferably down payment. Maximum permissible:1 to 3 years.

Permanent Lok Adalats are established under Section 22 B (1) of the Legal Services Authorities Act
which are empowered to entertain the matters of civil and criminal in nature, provided, the value of
such civil matter falls within Rs.1 crore and the criminal dispute is compoundable in nature.

The award of Lok Adalat is deemed to be a decree of a Civil Court or an order of any other Court.
Every award made by Lok Adalat shall be final and binding on all the parties to the dispute and no
appeal can be made to any Court against the award.
If there is a default in complying with the orders of Lok-Adalat, then the order scan be executed
through ordinary Civil Court or any other appropriate forum having jurisdiction.

Debt Recovery Tribunal (Cir no.7/95,198/95,55/2013,691/16)

Constituted under recommendation of Narasimhan Committee in 1991 Created under Recovery of
debts Due to Banks and Financial Institutions Act, 1993. Cases can be filed by only Banks and Financial
Institutions.

Cases of Rs.20 lacs and above (Central Govt. can reduce it to Rs.1lac).

The defendant shall, within a period of thirty days from the date of service of summons, present a
written statement of this defense.

Disposal of case by DRT: Within 180 days, By DRAT also disposal in 180 days.
DRT headed by Presiding officer (Qualified to be a Dis. Judge and appointed by central govt. for five
years, max age 65 years), Assisted by Registrar and Recovery Officer.

DRAT headed by Chairperson (Qualified to be high court judge, age maximum 67 years)

On receipt of applications, DRT issues summons within 30 days to defendants and within 30 days’
party can file written statement of his defense. This period can be extended by another 15 days by
the PO in exceptional cases. For non-compliance of order, the borrower can be detained in prison
upto 3 months.

DRT is expected to dispose of the application within 2 hearings. DRAT is expected to dispose of the
appeal within 6 months from the date of receipt of appeal.

The deposit amount of debt due on filing appeal is 50 % and the amount can be further reduced to
not less than 25%.

The Act applies to whole of India except J & K.

After claim is upheld, Recovery certificate is issued. Recovery Officer has powers such as attachment
etc.

Appeal to DRT against orders of Recovery Officer within 30 days and appeal against Registrar within
15 days.

Fee Schedule of DRT:

Upto Rs.10 lacs: Rs.12000,

above Rs.10 lac for each Rs.1 lac= Rs.1000 (in addition to Rs.12000), Maximum: Rs.1.5 lacs

Fee schedule of DRAT:

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 Canara Institute of Bank Management

Less than Rs.10 lacs: Rs.12000,

Rs.10 lacs & above and below Rs.30 lacs: Rs.20000,

Rs.30 lacs & above: Rs.30000

Fee: 1% of the Claim amount with a minimum of Rs.12,500/- and a maximum of Rs.50,000(Rs.30000/-
other areas) to Advocates who are appearing before DRTs in Metro Cities of Delhi, Mumbai, Chennai,
Kolkata and Bangalore. The maximum amount of professional fees payable to the Advocates by Circles
have been enhanced to Rs.30,000/- irrespective of the fee schedule prevailing as per the Civil Rules
of Practice for that particular region (other than Metro Cities of Delhi, Mumbai, Chennai, Kolkata and
Bangalore). (Cir418/2013)

Limiting period of review of DRAT order is thirty days now (earlier 60 days). Under DRAT’ Presiding
Officer’ is substituted by ‘Chairperson’ word.

Insolvency and Bankruptcy Code 2016: (142/2018, 550/2018,207/2022)

The Corporate insolvency resolution process under the IBC 2016 can be triggered in the event a
Corporate Person commits a default of Rs. 1,00,00,000.00 (Rupees One Crore) or more in respect of
a debt”.

The Corporate insolvency resolution process can be initiated by filing an application before the NCLT
either:
i. By the Financial creditors (FC), being creditors to whom financial debts are owed; (“Financial
Creditors” - our Bank falls under the definition of FC);
ii. By the Operational creditors (OC), being creditors to whom operational debt is owed
(“Operational Creditors”); or
iii. By the Corporate itself.

Application for insolvency resolution should be filed before National Company Law Tribunal (NCLT)
functioning at the place where the registered office of the company is situated. Insolvency resolution
process, primarily involves a credible plan for repayment of dues of all creditors more particularly,
operational creditors and the plan should also include management of affairs of the borrower. In a
way, resolution plan involves debt restructuring of the company. An acceptable resolution plan should
be approved within 180 days from the date of admission of person for insolvency resolution. This
period can be extended by NCLT by maximum 90 days by concurrence of 66% of creditors. Further,
the corporate insolvency resolution process shall mandatorily be completed within a period of 330
days from the insolvency commencement date, including any extension granted as above and the
time taken in legal proceedings in relation to such resolution process of the corporate debtor.

Presently application fee for filing an application under IBC by bank is Rs.25000.

Within 14days of filing of application for insolvency resolution process, NCLT will pass or- der
admitting the application and ascertaining the existence of a default and correctness of the
application. If the application Is defective, then 7 days’ time is given for rectification and there after
within 7days’ order will be passed by NCLT.

Corporate insolvency will commence from the date of admission of the application (Insolvency
commencement date). NCLT upon admission will pass an order declaring Moratorium on legal
proceedings and transfer of assets by company. This moratorium will be there for the approval of
resolution plan or for liquidation of the company is ordered whichever is earlier subject to maximum
lime limit of 180 days extendable by another 90 days.

Moratorium means the following legal cases will stop and cannot be proceeded further namely; Action
under SARFAESI if pending cannot be continued. If not initiated, then the same has to be deferred;

Case before DRT will stop. If the DRT case is pending then its further proceedings will be kept in
abeyance;

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Any further lending or creating of security after the notice of case before NCLT will also be subject
to the decision of NCLT.

NCLT will appoint the Interim Resolution Professional (IRP) recommended by the applicant (Bank)
immediately and after admission here-after RP will take over the management affairs of the company
from Board of Directors.

At the time of recommending IRP, it should be ensured that he does not suffer from dis-qualifications
prescribed under code.

NCLT will issue a public announcement of the initiation of insolvency resolution process and call for
submission of claims.
ONE TIME SETTLEMENT SCHEMES
I. SPECIAL ONE TIME SETTLEMENT (OTS) SCHEME FOR NPAS UNDER AGRICULTURE SECTOR WITH
SINGLE OR COMBINED SANCTIONED LIMITS UP TO RS.1.60 LAKHS WHERE NO COLLATERAL
SECURITY IS AVAILABLE
 NPA accounts under Agriculture sector with single or combined sanctioned limits up to Rs.1.60
Lakhs where no Collateral Security is available are eligible under the scheme.
 The account should have been sanctioned on or before 31.03.2022.
 NPA accounts classified as Sub-Standard Assets (Only RRSA-minimum two times restructured)
which are more than 3 months old, Doubtful and Loss Assets, as on date of OTS settlement,
where no Collateral Security is available.
 Sub-Standard Assets other than RRSA are not eligible under the scheme.
 In case of borrowers having more than one loan account, the aggregate sanctioned limit should
be equal to or less than Rs.1.60 Lakhs, subject to the conditions vide para (a) as above.
 Proposals in respect of accounts involving fraud and /or Wilful Defaulters cannot be settled
under this scheme. However, the same can be examined / considered under Loan Recovery
Policy and sanctioning Authority shall be Management Committee of the Board only.
 The scheme will not cover Gold Loans, ALVSLs, Tractor loans and agriculture accounts which
are secured by immovable/movable security (like agriculture land/House/ Flat / residential
site, tractors, tillers, etc), and securities like deposits, Insurance Policies, KVPs, NSCs, etc.
 In case of Agriculture Loan Accounts, which are restructured on account of natural calamity
and multiple restructuring (minimum two times restructured), etc., it is observed that the
principal and up-to-date interest is closed by opening fresh term loans (converted term loan)
under Product code 847/838/854 in CBS. Since this is considered as continuation of earlier
crop loan in terms of said circulars, the date of first sanction and amount of the KCC / Short
Term Loan may be reckoned as “Sanction Date and Amount” for settling under Special OTS
Scheme.
 In case, where enhancement has been sanctioned, which exceeds Rs. 1.60 lakhs, the same
cannot be considered. On the other hand with enhancement if it is within Rs.1.60 lakhs, the
same shall be considered under the scheme.
 The scheme shall be valid from 01.04.2024 till 31.03.2025

SETTLEMENT FORMULA:

S No Asset Classification Settlement Formula

1 Substandard Assets (RRSA Original Sanctioned amount + 5% simple interest

NPA Accounts Only)

2 D1 50% of Book Liability as on date of settlement

3 D2 35% of Book Liability as on date of settlement

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 Canara Institute of Bank Management

4 D3 and Loss assets 25% of Book Liability as on date of settlement

II. Special Scheme for Settlement of NPAs in Micro, Small and Medium Enterprises (MSME) Sector
with Book liability of Rs.200.00 lacs and below
COVERAGE:
1. The Scheme will cover NPAs classified as Doubtful & Loss assets in MSME sector, as on 31.03.2024
with book liability of Rs.200.00 lacs and below as on the date of settlement.
2. The Scheme will also cover NPAs classified as Sub-Standard under Micro and Small Enterprises
(MSE) Sector as on 30.09.2023 with book liability of Rs.200.00 lacs and below as on the date of
settlement, categorised as “SICK/NON-VIABLE” for restructuring or rehabilitation.
3. The Scheme will cover all eligible accounts where action has been initiated under SARFAESI Act,
cases pending before Courts/DRTs subject to obtaining consent decree in such cases and also
decreed accounts.
4. Where immovable property/ies is/are available as security, such securities are to be brought for
auction at least once, to ensure price discovery.
5. The Scheme will not cover those accounts eligible and covered under CGTMSE. However, the
Scheme will cover those accounts where CGTMSE cover is not available or where the claim under
CGTMSE is rejected.
6. The Scheme will not, however, cover cases of willful default, fraud and malfeasance.
7. However, such proposals may be examined in terms of Loan Recovery Policy and placed before
the Management Committee of the Board.
8. Accounts already closed / settled are not eligible.
9. In respect of group concerns, other accounts of the party have to be settled simultaneously.
10. The Scheme shall be valid from 01.04.2024 till 31.03.2025.

SETTLEMENT FORMULA:
For Sub-Standard NPAs under Micro and Small Enterprises (MSE) Sector: (NPAs under MSE
categorized as “SICK/NON-VIABLE” for restructuring or rehabilitation

Asset Security/Net-worth Total book Total book Total book liability

classification liability upto liability above aboveRs.100.00 lacs
Rs.10.00 lacs Rs.10.00 lacs upto Rs. 200.00 lacs
upto Rs.100.00
lacs
Settlement Formula (Minimum Recoverable Amount)
Sub-Standard (i) Where realizable 90% of Book 95% of Book 100% of Book
value of security Liability as on Liability as on Liability as on date
alone is sufficient to date of date of of settlement.
cover the total dues. settlement. settlement.
(ii)Where the 80% of the book 85% of the Book 90% of the Book
realizable value of liability as on Liability as on liability as on date of
security + net-worth date of date of settlement.
put together is settlement. settlement.
sufficient to cover the
total dues.

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 केनरा बैंक प्रबंिन संस्थान
(iii) Where the 65% of the Book 80% of the Book 85% of the Book
realizable value of Liability as on Liability as on Liability as on the
security + net worth the date of the date of date of settlement.
put together is not settlement. settlement.
sufficient to cover the
total dues.

For Doubtful Assets under MSME Sector

Asset Security/ Net-worth Total book Total book liability Total book liability
classification liability upto above Rs. 10 Lacs above Rs.100.00
Rs 10 Lacs. uptoRs.100 Lacs Lacs upto Rs.200.00
Lacs

Settlement Formula (Minimum Recoverable Amount)

Doubtful (i) Where realizable 85% of book 90% of Book 95% of Book Liability
Assets value of security alone liability as on Liability as on date as on date of
is sufficient to cover date of of settlement. settlement.
the total dues. settlement.
(ii)Where the 65% of book 75% of the Book 80% of the Book
realizable value of liability as on Liability as on date Liability as on date
Security + net-worth date of of settlement. of settlement.
put together is settlement.
sufficient to cover the
total dues.
(iii) Where realizable 55% of the 70% of the Book 75% of the Book
value of security + Book Liability Liability as on date Liability as on date
networth put together as on date of of settlement. of settlement.
is not sufficient to settlement.
cover the total dues.

For Loss Asset under MSME Sector:

Asset Total book liability uptoRs.10.00 Total book liability Total book liability
classification lacs above Rs.10.00 lacs above Rs.100.00 lacs
upto Rs. 100.00 lacs upto Rs. 200.00 lacs

Settlement Formula (Minimum Recoverable Amount)

Loss Assets 30% of the Book Liability as on 45% of the Book 50% of the Book
date of settlement – for accounts Liability as on date of Liability as on date of
with liability upto Rs.1.00 lac. settlement settlement
35% of the Book Liability as on
date of settlement for accounts
above Rs.1.00 lac and upto
Rs.10.00 lacs.

Note: In all the cases, the net worth shall be arrived at by taking into account only tangible movables
and unencumbered immovable / attached (ABJ) properties of the borrower/ guarantors.

[Link] OTS SCHEME FOR SETTLEMENT OF SMALL VALUE NPAs UPTO Rs.25 LAKHS (275/2024)

ELIGIBILITY:

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 Canara Institute of Bank Management

 The Scheme shall cover all Doubtful and Loss Assets of a borrower which are outstanding for
more than one year as NPA having Book Liability of Rs.25 lakh & below as on the date of NPA and
Total loan/limits sanctioned is not above Rs.25 lakh (inclusive of all limits).

 The scheme shall cover suit filed accounts, decreed accounts, revenue recovery-initiated
accounts, accounts wherein action under SARFAESI Act is initiated, non-suit filed accounts, LAW
accounts, including CANCARD dues having Book Liability of Rs.25 lakh & below as on the date of
NPA.
 This Scheme shall not cover Gold Loans, Housing Loans, Canara Mortgage and Canara Rent loans.
However, these Loans can be considered under Loan Recovery Policy.
 Proposals in respect of accounts involving fraud and /or Wilful Defaulters cannot be settled under
this scheme. However, the same can be examined under Loan Recovery Policy and sanctioning
Authority shall be MC of the Board only
 Canara Budget and other salaried accounts can be covered under the Scheme provided there is
no scope / chances of recovery through salary mandate OR the borrower is unemployed for long.
 In respect of loan sanctioned to / availed by and / or guarantee / co-obligation furnished by the
employee during his / her service in the Bank shall be excluded under the Scheme.

SETTLEMENT FORMULA:

DOUBTFUL ASSETS:
Asset Book Liability upto Book Liability Book Liability Book Liability above
Class Rs. 25000.00 above 25000 upto above Rs. 5.00 Rs. 10.00 Lacs upto
Rs. 5.00 Lacs Lacs upto Rs. Rs. 25.00 Lacs
10.00 Lacs
DA 1 60% of BL as on 80% of BL as on date 85% of BL as on 90% of BL as on date of
date of settlement of settlement date of settlement settlement
DA-2 & 3 50% of BL as on 70% of BL as on date 75% of BL as on 80% of BL as on date of
date of settlement of settlement date of settlement settlement
DA -4 45% of BL as on 60% of BL as on date 65% of BL as on 70% of BL as on date of
date of settlement of settlement date of settlement settlement

In respect of vehicle loans, where the realizable value of security is less than the stipulated amount,
the minimum amount shall be realizable value of securities.

LOSS ASSETS:
Outstanding Book Liability as on date of Settlement formula
NPA (Book liability as on the date of settlement)
Up to Rs.25000.00 Maximum possible amount without any stipulation
for minimum amount.
Above Rs.25000.00 up to Rs.2.00 Lacs At least 25% of Book Liability
Above Rs.2.00 Lacs up to Rs.5.00 Lacs At least 45% of Book Liability
Above Rs.5.00 Lacs up to Rs.10.00 Lacs At least 55% of Book Liability
Above Rs.10.00 lacs up to Rs.25.00 lacs At least 65% of Book Liability

IV. ONE TIME SETTLEMENT SCHEME FOR EDUCATIONAL LOANS WITH SANCTIONED LIMIT UPTO
Rs.7.50 lacs
ELIGIBILITY:

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 केनरा बैंक प्रबंिन संस्थान
1) Educational Loans (ELs) sanctioned upto a limit of Rs.7.50 lacs where security is not available.
2) ELs which are under doubtful and loss categories as on date of settlement.

3) ELs disbursed before 31.12.2016 is only eligible. However, in respect of short duration courses
(upto 2 years), EL disbursed before 31.12.2019 can be considered.
4) Cases of Fraud & Malfeasance, Willful default are not eligible.
5) ELs on standalone basis can be considered for settlement under the scheme irrespective of other
liabilities of the borrower/guarantor.
6) The Scheme shall not be applicable to loans granted to employees/ex-employees who
availed/extended guarantee during the tenure of employment.
7) EL-NPAs where student borrower is earning income more than Rs.25000/- per month is not
eligible for settlement under the scheme.
8) The scheme will not cover those accounts eligible and covered under CGFSEL/CGFSSD.
SETTEMENT FORMULA:

1. Restructured Accounts

Conditions Compromise Amount

Accounts having Book liability = Less/Greater 70 % of Book Liability as on date of settlement

than 100 % upto 150% of limit sanctioned
Accounts having Book liability = Greater than 55 % of Book Liability as on date of settlement
150% upto 200% of limit sanctioned
Accounts having Book liability = Greater than 45 % of Book Liability as on date of settlement
200% upto 250% of limit sanctioned

Accounts having Book liability = Greater than 35 % of Book Liability as on date of settlement
250% of limit sanctioned
Where borrower (student) is dead 25 % of Book Liability as on date of settlement

2. Non-Restructured Accounts:

Conditions Compromise Amount

Where combined net worth of all parties is above 95 % of Book Liability as on date of
Rs. 25.00 lacs. settlement.
Where combined net worth is above Rs.10.00 lacs 90 % of Book Liability as on date of
upto Rs. 25.00 lacs. settlement.

Where combined net worth is above Rs.5.00 lacs 85 % of Book Liability as on date of
upto Rs. 10.00 lacs. settlement.
Where combined net worth is < Rs. 5.00 lacs. 80 % of Book Liability as on date of
settlement.
Where borrower (student) is dead irrespective of 50 % of Book Liability as on date of
combined Net worth. settlement.

V. ONE TIME SETTLEMENT (OTS) SCHEME FOR TRACTOR LOANS & OTHER FARM MECHANISATION
LOANS (ALFM) UNDER AGRICULTURE
ELIGIBILITY:
1. NPAs under TRACTOR LOANS & OTHER FARM MECHANISATION LOANS (ALFM).
2. Loans should have been disbursed on or before 31.03.2019.
3. Land holding not to exceed 16 acres.
4. Original loan granted not to exceed Rs.10.00 lacs.
5. Loans under Tractor Loans and other Farm Mechanisation loans (ALFM) on stand- alone basis can

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be considered for settlement under the scheme irrespective of other liabilities of the
borrower/guarantor.
6. Proposals in respect of accounts involving fraud and /or Wilful Defaulters cannot be settled under
this scheme. However, the same can be examined / considered under Loan Recovery Policy and
sanctioning Authority shall be MC of the Board only.
7. In respect of loan sanctioned to / availed by and / or guarantee / co-obligation furnished by the
employee during his / her service in the Bank shall be excluded under the Scheme.

Settlement formula:
In respect of Loans disbursed Compromise Amount
Upto 31.03.2016 Base Amount
From 01.04.2016 to 31.03.2019 Base Amount +interest @ One Year MCLR(prevailing as at
01.04.2024)-5.50% (simple)

Base Amount= (Amount disbursed) + (expenses) – (recoveries made) – (amount of relief under ADW&DR
Scheme)
Interest: Interest is to be calculated on the amount disbursed from the date of disbursement on
reducing balance.

VI. “Online One Time Settlement” (e OTS) for NPA accounts classified as loss assets, Book Liability
from Rs. 25001 but contractual Liability upto Rs. 2.00 Lakh

 All accounts having Book Liability more than Rs. 25000 but contractual Liability upto Rs. 2.00
lakh classified as Loss Assets are eligible.
 Online settlement shall cover suit filed accounts, decreed accounts, revenue recovery
initiated accounts, non-suit filed accounts, Legal Action Waiver permitted accounts, including
CANCARD dues.
 This settlement shall not cover Gold Loans, Education Loans, Housing Loans, Canara Mortgage
and Canara Rent loans etc.
 This settlement shall not cover loans where any form of securities is available and recovery
action under SARFAESI Act could be initiated.
 The scheme will not cover those accounts eligible and covered under CGFSEL / CGFSSD /
CGTMSE / CGFMU / GECL etc. Accounts involving fraud and /or Wilful Defaulters cannot be
settled online.
 Canara Budget and other salaried accounts can be covered under the settlement.
 Staff Accounts are not eligible to settle under this channel. Further, accounts where Retired
Employees of our Bank had availed loans / given guarantee / Co-obligation while in service
are also not eligible.
SETTEMENT FORMULA:

Out Standing Book Liability as on the date of Settlement Formula taken for the proposed
NPA Online OTS Package
Book Liability more than Rs 25001 upto Rs 2.00
At least 25% of the Book Liability
Lakhs

Responsibilities of Recovery Agents (223/2023, 574/2022)

Recovery agents have been deviating from the extant instructions governing the outsourcing of
financial services. In view of concerns arising from the activities of these agents, it is advised that
the branches / Offices shall strictly ensure that agents do not resort to intimidation or harassment
of any kind, either verbal or physical, against any person in their debt collection efforts, including
acts intended to humiliate publicly or intrude upon the privacy of the debtors' family members,
referees and friends, sending inappropriate messages either on mobile or through social media,
making threatening and/ or anonymous calls, persistently calling the borrower and/ or calling the
borrower before 8:00 a.m. and after 7:00 p.m. for recovery of overdue loans, making false and

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 केनरा बैंक प्रबंिन संस्थान
misleading representations etc.
If Recovery Agent is also engaged for assisting the Bank for sale of the asset by identifying the buyer,
Bank may pay Recovery Agents up to 5% subject to a maximum of Rs. 50,000 of net sale price or
liability whichever is less
The Borrower having any grievance/complaint against any Recovery Agent / Agency may bring the
same to the notice of the in-charge of the Branch at the first instance. If the grievance/ complaint
is not redressed to the satisfaction of the Borrower, he can file a written complaint to the Grievance
Redressal Cells at Circle Office within whose jurisdiction the Branch or the Office of the Bank is
located not later than thirty days from the date of cause of action.
On receipt of the written complaint, the in-charge of the Grievance Redressal Cell/s shall, as
expeditiously as possible, and in any case not later than 21 days from the date of receipt of the
complaint, initiate appropriate steps for redressal of the complaint unless the nature of complaint is
such that it requires verification of voluminous facts and figures.
EMPANELMENT OF DETECTIVE / INVESTIGATING AGENCIES
The empanelment of Detective / Investigating Agencies shall be done at Circle level and such
empanelment will be decided by the committee being constituted for this purpose where in the Circle
Head will be the chair person and the Executives overseeing the Credit Monitoring Section and
Recovery and Legal Section will be the committee members.
Empanelment shall be done by inviting application from the eligible firms / companies which are
having experience in the similar line of activities. An application in the prescribed format as per HO
Circular 753/2016 need to be submitted by the interested Firms / Companies along with proof of
experience and other documents to the respective Circles.
The empanelment of Detective / Investigating agencies shall be done to utilize their services for
recovery in high value NPA accounts where the Book Liability involved is more thanRs.50.00 lakhs and
their services will be utilized for certain specific activities.
In some exceptional circumstances where the services of the Detective / Investigating Agencies are
required to be utilized even for those particular NPA accounts where the Book Liability is less than
Rs.50.00 Lakhs, the Circle Head may decide upon utilizing the services of the Detective / Investigating
agencies depending on the merits of the each individual cases.
The empanelled Detective / Investigating Agencies will be in the approved panel of the Bank for
three years subject to satisfactory performance. Their performance shall be reviewed by the Circle
head once in a year based on the feedback received. The Bank reserves its rights to depanel any
agency without assigning any reasons at any time.
Fee to be paid
1 Minimum fee per person of borrowing unit / Company (Proprietor / Partners / Director /Guarantor,
etc.) Rs.5000/-
2 On receipt of information about whereabouts of the missing / absconding borrower /guarantor /
Co borrower / director etc. subject to production of satisfactory documentary proof/evidence
Rs.10000/- per person subject to maximum fee of Rs.30000/- under this category, per account
3 For locating properties other than details of which are available in Bank’s records, which may lead
to attachment of the same along-with the satisfactory documentary proof. (All the properties in one
title deed to be considered as one property). All agricultural properties in one district to be
considered as one property for the purpose of payment of fee Rs.25000/- for each property traced.
4) For providing any other information such as other firms/companies where borrower is involved,
which may be helpful for recovery of Bank’s dues subject to production of satisfactory documentary
proof / evidence Rs.5000/- per information subject to maximum of Rs.20000/-.
5 Payment of out of pocket expenses - Reasonable amount not exceeding 50% of the fee prescribed
subject to production of satisfactory proof for having incurred such OPE. The estimation for such OPE
shall be given by the agencies at the time of accepting the assignment. Payment to be permitted by
Circle Head only.
6 Payment of any other fees- In deserving cases, based on the work involved, if the Circle feels, as a
special case higher fee is to be paid as OPE, the same may be referred to GM/CGM, RL&FP Wing, HO,
Bangalore for approval / decision.
***************

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कर्मचारियोों को अग्रिर्
ADVANCES TO EMPLOYEES

CLEAN DPN / OD FACILITY: (32/2013, 210/2017, 478/2017, 15/2019, 24/2019, 625/2020,

798/2020, 60/2021, 126/2022, 458/2023, 537/2024)
 All employees including probationers are eligible.
 A new module for end-to-end staff loan initiation and processing is now available in the
HRMS module under CANNET (Intranet mode). Staff can apply for Staff DPN and Staff OD
(fresh applications) through this digitalized system.
 The loan shall not be extended to the employee against whom action is pending for major
misconduct.
Quantum of Loan:
Confirmed employees: One & a half month’s gross salary for every completed year of service with a
maximum of 15 months’ gross salary or the following amount whichever is lower. For ex-service men,
the eligibility is 1.5 times of gross salary plus 1.5 times of monthly pension received from GOI (If
credited to our bank) for every completed year of service including service in armed forces or the
following amount whichever is lower.

Cadre Total Limit OD limit permitted of the total

limit
Officers Scale IV to VII Rs.12.00 lakh Rs. 4.00 lakh
Scale I to III Rs.10.00 lakh Rs. 2.00 lakh
Workmen Rs.6.00 lakh Rs. 1.00 lakh
Sub-staff/PTEs Rs.3.00 lakh Rs. 0.50 lakh

Employees under probation: (Either as DPN or OD)

Officers/Managers Rs. 1.00 lakh

Clerk/Sub-staff Rs. 0.50 lakh

 Repayment: Clean DPN is repayable in 120 EMI. Wherever the service of employee is less
than 10 years, at the option of employee repayment can be restricted to remaining period
of service at the time of sanction, else may be fixed for 10 years by obtaining an
undertaking letter from employee to clear the outstanding liability out of terminal
benefits on cessation of services from the Bank.
 Tenability of Clean OD is 2 years.
 The NTH should be not less than 25% of the Gross emoluments after reduction of proposed
EMI for DPN or Notional interest per month for OD. While calculating monthly NTH at the
time of sanctioning/ renewing of all loans / advances to the employees, Notional Monthly
Interest of Clean OD Limits, shall be considered.
 If an employee closes DPN loan and seeks further DPN at a later date again, it can be
permitted. The stipulation of one-year gap between the availment of fresh DPN after
closing the previous DPN is withdrawn.(394/2024)
 Sanctioning / Renewing Authority: RO HEAD, However, sanctioning authority cannot
sanction his/her own loan and such proposals have to be placed before the Next Individual
Higher Authority.
 ROI: 7.45 % p.a., compounded monthly. (625/2020)
 Reporting: Branches should report out of order accounts to the HRM/HOSA Section as at

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the last day of every month.

 Other Conditions:
i) In case, employee has secured OD at the time of applying for Clean OD, the same can
be continued subject to the condition that Standing Instruction for recovery of
interest, as and when due, in respect of secured OD from the salary credit account is
obtained and effected in CBS.
ii) Employee can have any number of DPN accounts at any given point of time.
iii) The total limit under DPN/Clean OD put together should not exceed the eligible limit
at any point of time.
 General Conditions:
i) The overdraft account under this scheme should be maintained at the salary paying
branch only. On transfer of the employee, the overdraft account should be transferred
to the transferee place at a branch where he/ she draws his / her salary.
ii) It will be mandatory for the employees to get their salary credited only to the clean
OD account.
iii) In respect of employees who are placed under suspension, this facility should not be
extended afresh.
iv) The employees are eligible for enhancement in the existing limit on account of annual
increment/CAIIB increment, elevation to next cadre or revision in the salary on
account of wage settlement from the effective date of such promotion or settlement
prospectively, only at the time of next renewal of OD Account, subject to maintenance
of 25% net take home salary.

CAR LOAN (FOUR-WHEELER) SCHEME TO OFFICER EMPLOYEES: (479/2017, 325/2019, 132/2020,

441/2020, 530/2020, 798/2020, 824/2020, 81/2021, 717/2022, 458/2023)
 Loan under this scheme can be granted to confirmed officers for purchase of brand-new
Passenger motor car or used passenger motor car- of not more than 5 years old (either
diesel, petrol, CNG, LPG, Solar, Battery driven/ Hybrid etc.) (824/2020).
 Promotee scale I Officers during their probationary period, shall be eligible to avail
entitled loan quantum as applicable to a confirmed officer. (717/2022)
 A differently abled (Divyangjan) Officer employee will be eligible for car loan for
purchase of special motor car for physically handicapped persons provided the Officer is
confirmed in the services of the Bank. (HO Cir 530/2020)
 The net take home salary should not be less than 30% of gross salary.
 Enhancement in Eligible loan quantum of Car Loan Scheme to employees as per HO Cir
458/2023.
(Rs. In Lakhs)
Employee Cadre Category of Vehicle
Petrol/Diesel/CNG/LPG Solar/ Battery driven/Hybrid
Sub-Staff 10.00 12.00
Clerk 12.00 12.00
Scale I 15.00 17.00
Scale II 15.00 17.00
Scale III 15.00 17.00
Scale IV 18.00 20.00
Scale V 18.00 20.00
Scale VI 21.00 23.00

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 Canara Institute of Bank Management

Scale VII 21.00 23.00

Scale VIII 21.00 23.00

 The life Tax of the vehicle, registration charges, insurance premium and other accessories
is Rs. 25,000 shall be reckoned to determine the quantum of the loan. (HO Cir 458/2023)
 Interest: 6 % p.a. (simple) (HO Cir 441/2020)
 Sanctioning Authority: RO Head
 Repayment: 180 monthly installments (120 months towards principal & 60 months towards
interest).
 This revised repayment period shall be applicable to new loans (i.e. loan granted after
16.10.2015) and the repayment period for existing loans shall be continued as hitherto.
 In case of used cars, the repayment is restricted to the residual period i.e. the period up
to which RC is valid or within the period for which the motor car is likely to be roadworthy
as per certificate provided by the qualified automobile engineer.
 However, at the time of retirement (including voluntary retirement), the loan can be
continued at the option of the employee for a further period of 10 years (120 months)
subject to the conditions that the total repayment period shall not exceed 180 months
or the period opted by the officer.
 The above provision shall be applicable for existing loans also where repayment period
of 200 months is fixed.
 Continuation of limits/liabilities under car loan may be for a period of 10 years from the
date of cessation of the service or the ex-employee attaining the age of 70 years
whichever is earlier. However, it should be within the maximum period permitted under
the scheme.
 The enhanced period for continuation of limits/liabilities from 5 years to 10 years shall
also be applicable to the existing accounts where continuation is already permitted for
only 5 years.
 Vehicle Loan under Canara Vehicle Loan Scheme can be extended to employees also to
purchase vehicles or meet the differential cost for the vehicle over and above the eligible
entitlement under the Employees’ Vehicle Scheme. All terms and conditions as applicable
to customers under Canara Vehicle loan scheme shall be adhered wherever employees
avail the said facility. (458/2023).
Sanctioning authority shall be as applicable under the Employees’ Vehicle Loan Scheme.

CAR LOAN (FOUR- WHEELER) SCHEME TO WORKMEN EMPLOYEES: (479/2017, 325/2019,

132/2020, 441/2020, 798/2020, 824/2020,30/2021, 458/2023)
 Loan under this scheme can be granted for purchase of brand-new passenger motor car
or used passenger motor car- of not more than 5 years old (either diesel, petrol, LNG,
LPG, Solar, Battery driven/ Hybrid etc.) (824/2020).
 Workmen employees who have put in minimum of 3 years of service are eligible
irrespective of basic pay (30/2021).
 Physically handicapped workmen employees will be eligible for car loan for purchase of
special motor car for physically handicapped persons on par with other workmen
employees.
 The net take home salary should not be less than 30% of gross salary.(30/2021)
 The maximum quantum for new vehicles is 95% of the cost of car which includes
insurance, registration and taxes subject to a maximum of Rs.10,00,000 & Rs. 12,00,000
for Petrol/Diesel/CNG/LPG and Solar/Battery Driven/Hybrid cars respectively.

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(458/2023)
 Sanctioning Authority: RO Head.
 Interest: 6% p.a.(simple) (HO Cir 441/2020)
 Entire loan along with the interest should be repaid in not more than 180 monthly
installments (120 months towards principal liability & 60 months towards interest).
 Continuation of limits/liabilities under car loan may be for a period of 10 years (120
months) from the date of cessation of the service or the ex-employee a attaining the age
of 70 years whichever is earlier. However, the total repayment period shall be within
maximum period permitted in the scheme, including the extended period of 10 years as
above.
 The enhanced period for continuation of limits/liabilities from 5 years to 10 years shall
also be applicable to the existing accounts where continuation is already permitted for 5
years only.
 Authority to permit continuation of the loan - DGM of the Circle
TWO-WHEELER LOAN SCHEME TO OFFICERS AND WORKMEN EMPLOYEES (479/2017, 441/2020,
530/2020, 30/2021)
 Loan can be granted for purchase of brand new vehicles (excluding bicycles and mopeds)
or used vehicles (excluding bicycles and mopeds) of not more than 5 years old. In case of
purchase of used vehicles, the age of the vehicle will be reckoned from the date of
original registration of the vehicle.
 All confirmed officers/ workmen are eligible.
 The quantum of loan for new 2-wheeler: Rs 200000/- or 90% of the cost of the vehicle
whichever is less.
 The quantum of loan for used 2- wheeler: Rs 50,000/- or 80% of the cost of the vehicle.
 The life tax of the vehicle, registration charges and insurance premium shall be reckoned
to determine the quantum of the loan in respect of two-wheeler loans.
 The net take home salary: 30% of his/her gross salary. (HO Cir 530/2020)
 Interest: 6 % p.a. (Simple) (HO Cir 441/2020)
 The entire loan along with interest is to be cleared in 84 monthly installments (66 months
towards principal liability & 18 months towards interest) or before the employee ceases
to be in the services of the Bank, whichever is earlier.
 Additional vehicle loan for purchase of two-wheeler to Officer/workmen employees is
withdrawn with immediate effect (30/2021).
 Sanctioning Authority: Branch–in-Charge.

SPECIAL VEHICLE LOAN (MOI on Advances to Employees (other than Housing Loan) updated till
31.03.2020)
 For purchase of brand new two-wheeler during the probationary period who are in the
pay-roll with staff number.
 Quantum of the loan Rs 1 lakh or 90% of the cost of the vehicle whichever is less
(142/2016). The life tax, registration charges and insurance premium can also be
reckoned to determine the quantum of loan.
 Rate of interest: One Year MCLR + 0.25%.
 Repayment period: 84 EMIs Max.
 Probationary Officers/clerkson confirmation in the services of Bank may opt for
conversion of loan under this scheme to staff LHV scheme. On conversion of the loan, the
installments can be re-casted so as to adjust the loan to be repaid in remaining
installments in the ratio 5:2.

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 Canara Institute of Bank Management

 Stipulation to note lien on caution deposit obtained from Probationary Officers (POs) as
additional security to the loan for the purchase of brand new Two-Wheeler is waived.
 Margin: 10%
 Sanctioning Authority: Branch–in-Charge.

LOANS FOR PURCHASE OF CONVEYANCE TO AEOs:

 Confirmed AEOs are eligible except for AEOs working in administrative units.
 90% of the cost of vehicle including life tax, registration charges and insurance premium.
 For use of the vehicle for official purpose.
 No loan under the scheme if vehicle is provided by Bank.
 All other terms and conditions as applicable to Officer’s Vehicle loan.

SCHEME FOR REIMBURSEMENT OF ADVANCE AMOUNT PAID TO THE DEALER/MANUFACTURERS FOR

VEHICLES:
 Branches can reimburse the advance money paid by the employee to the dealer/
manufacturer where the entire cost of the vehicle is required to be paid in advance.
 The reimbursement is subject to compliance of the following:
o Amount should have been from his / her own sources/ private borrowings.
o No reimbursement to the extent borrowed from NRI.
o Payment should have been made through the Bank/ branch.
o Reimbursement is to be made only against delivery of vehicle.
 The scheme is available only for the reimbursement of the full cost of the vehicle subject
to margin stipulation/ eligible amount etc.

EMPLOYEES HOUSING LOAN SCHEME (MOI on Housing Loan to Employees updated till 31.03.2020
and HO Cir 587/2018, 99/2019, 325/2019, 132/2020, 358/2020, 378/2020, 880/2020, 467/2022,
717/2022, 458/2023 &472/2023)
 ELIGIBILITY: All officer and workmen employees who have completed 2 years of
continuous service are eligible to avail the loan.
 The Employee can acquire any number of house/flats during his/her service within the
entitlement under Employee’ Housing Loan Scheme. However, at any point of time, the
employee either in his/her name or along with his/her spouse should not own more than
two house/flats including the house/flat proposed to be acquired by availing loan under
EHL.(HO Cir 462/2023
 In case of freehold House property, EHL will be sanctioned to employees to acquire/own
a house property either in his/her name or in the name of spouse or jointly in the name
of spouse/Minor children/Major children (Son/Daughter) subject to condition that the
spouse / major children shall join in creating mortgage and loan documentation. (HO Cir
462/2023)
 In case of the ownership of the Leasehold House Property, EHL for construction of house
on leasehold property shall be permitted where property is either in his/her name or in
the name of spouse or jointly in the name of spouse/Minor children/Major children
(Son/Daughter) and leasehold right with a minimum unexpired period of not less than 90
years subject to the condition that the spouse/major children shall join in creating
mortgage and loan documentation.
Income: Income* of spouse / major children be taken into account at the time of sanctioning an EHL
to determine the quantum of loan and repayment capacity(NTH), subject to their joining as co-
borrowers and fulfilling the eligibility norms. (*Income includes interest on investments / deposits,
rental income / salary income / professional / business income of self/ spouse/major children, with
adequate proof). Loan Agreement to be obtained from borrowers when income of Co-borrowers is

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 केनिा बैंक प्रबोंधन सोंस्थान

considered for arriving at loan quantum, repayment capacity, etc., duly modified.

Cadre EHL
Executives Sc-VIII Rs. 190.00 Lakhs
Executives Sc-VI & VII Rs. 165.00 Lakhs
Executives Sc-IV & V Rs. 150.00 Lakhs
Officers Scale III, II & I Rs. 120.00 Lakhs
Clerical Staff Rs. 75.00 Lakhs
Sub-ordinate Staff Rs. 50.00 Lakhs
Quantum for repairs & renovation:
Quantum of loan for undertaking repairs/ renovations/ maintenance of existing house/flat
(Within the overall entitlement) - 20% of the Employees’ Housing loan entitlement

Cadre EHL
Sub staff Rs 10.00 Lakhs
Clerk Rs 15.00 Lakhs
Scale I, II & III Rs 24.00 Lakhs
Scale IV &V Rs 30.00 Lakhs
Scale VI &VII Rs 33.00 Lakhs
Scale VIII Rs 38.00 Lakhs
Boards of Directors of the Bank have now permitted inclusion of the following also, in the project
cost while arriving at Housing Loan quantum under Employees’ Housing Loan (99/2019).
 Insurance premium on loan protection scheme
 Applicable GST and other taxes, if any
 An employee can either avail the loan protection insurance from CHOICE or any other
insurance company approved by IRDA. The above insurance is in addition to the fire
insurance enumerated in the Housing Loan Manual.
 Value mentioned in agreement for sale plus GST and also the premium on loan protection
scheme shall be added as part of Project Cost for assessing the loan amount under EHL.
 Margin - 10% of the project cost.
 Rate of Interest – (HO Cir. 394/2024) w.e.f.01.06.2024

Loan amount ROI (Simple)

Up to Rs.40.00 Lakhs 5.50% p.a.
Above Rs.40.00 Lakhs 6% p.a.

* ROI is applicable on the aggregate principle amount outstanding under all EHLs of the
employee (including existing EHLs, if any) (426/2024)
 Sanctioning Authority: RO HEAD (HO Cir 458/2023)
 Repayment -To be repaid in 360 months (Principal in 270 months & Interest in 90 months).
HL limits/liabilities is permitted to be continued on same terms and conditions as EHL for
a period up to 15 years from the date of retirement (including voluntary retirement) or
the ex-employee attaining age of 75 years whichever is earlier. The monthly net take
home salary after taking into account the proposed EHL repayment installments shall not
be less than 30% of the monthly gross salary. The repayment tenor (including continuation
of repayment after retirement) shall not exceed the repayment tenor stipulated as per
sanction terms. These provisions are applicable in case of permission accorded on or after

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 Canara Institute of Bank Management

30.04.2015 for continuation of limit /liabilities of Housing Loan.

 Eligible amount for purchase of plot in case of proposals for purchase of site and
construction of house thereon - 60% of the loan sanctioned for purchase of plot is
stipulated if the loan is sanctioned for purchase of a plot and construction of house
thereon.(151/2016)
 Repayment period for repairs/ maintenance/ renovation/ enlargement of existing
dwelling unit is maximum 10 years (Principal – 84 months and Interest – 36 months).
 Maximum Repayment period can be 30 years or the period up to employee attaining 75
years of age whichever is lower. Repayment of Principal and interest shall be stipulated
in 3:1 ratio.(Principal – 270 months and Interest –90 months)
 The restriction stipulated on the availability of minimum residual service is removed and
all the employees, irrespective of the residual service, may be permitted to avail EHL for
house/ flat which is under construction. In such cases, repayment holiday period of
maximum 12 months may be considered.
 Repayment for the EHL shall be reckoned considering the permanent source of income
i.e., Pension. The income earned from the investments may also be considered for
arriving at total income/NTH. Besides, the retiring employee shall give an undertaking to
maintain the minimum required NTH during the pendency of the loan liability.
 The condition of maintenance of margin of 40% on the original project cost while
permitting continuation of EHL of the employees from the date of retirement including
VRS has been waived. (Cir 59/2014)
 The services rendered by the ex-serviceman employee in the Armed Forces to be
considered for arriving at the eligibility criteria in respect of all loan schemes for
employees, including the Housing Loan scheme. The pension of Ex-serviceman employee,
received from Government of India, shall be considered for the purpose of calculating
Net Take Home (NTH) for all the loans under employees’ loan schemes. (35/2018)
 Repayment Holiday Period: Site + Construction – 18 months, Construction by Government
Agency – 36 months, Ready Built House – Next Month, Ready built house with modifications
– 12 months.
 In case of delay in completion of construction due to genuine reasons, the following
authorities are delegated to permit additional repayment holiday: (717/2022)
 a. In case of purchase of Site & Construction of House thereon AND / OR only
construction of House in the existing Site: Circle Head, can extend additional repayment
holiday of 12 months (beyond permissible holiday period of 18 months), but within the
original sanctioned tenor of loan.
 b. In case of purchase of flat under construction: Circle Head, can extend additional
repayment holiday of 12 months (beyond permissible holiday period of 12 months), but
within the original sanctioned tenor of loan.
 In exceptional circumstances, repayment holiday for Completion of construction of House
(purchase of site & construction) & purchase of flat under construction may be permitted
upto 5 years which should also be within the original sanctioned period. For any extension
with respect to holiday period upto 5 years, penal interest need not be charged. If the
repayment holiday exceeds 5 years and there is no progress in construction, the benefits
of Employees Housing Loan shall be withdrawn by treating the outstanding as Unsecured
Advances. If the employee disposes off the property (vacant land) and opts to close the
loan after 5 years, clean rate of interest shall be collected ab-initio. (717/2022)
 Penal interest –Additional 2% is charged on delayed installment payment for overdue
period.
 Income of spouse and children to be considered for continuation of EHL after retirement
of the employee, provided at the time of sanction, their income was considered while
arriving at the quantum of EHL at the time of sanction.
 EMT in respect of purchase of flats or individual houses shall be put through only after
the registration process is completed.

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 1. Timeline for completion of EMT for House/flats Maximum Repayment Holiday of 12

months may be permitted in respect of flats under construction where tripartite
agreement has been executed for completion of flats. EMT can be put through only
after execution of sale deed. In such cases the Circle Head can permit extension of
the time period of six months from date of Sale deed for putting through the EMT.
After completion of permitted extension of time period for creation of EMT (including
6 months’ time extended by Circle Head), penalty at 2% p.a. on the outstanding loan
amount shall be levied till completion of EMT.
 2. For delay in construction of projects:
 A. Wherever EMT is not put through for delay in construction of project (as per the
agreed time line) and RERA has approved for extension of time line for completion
of project. In such cases the extended time line can be accepted where instalments
are paid regularly (after completion of repayment holiday) & TPA is executed with
the below mentioned conditions:
 I. Time line for creation of EMT can be extended up to RERA extended period.
No penal interest is to be levied.
 II. Repayment holiday period will not be extended beyond the sanction norms.
 B. In other cases viz.,
 I. Wherever, employee is not creating EMT, even lapse of 6 months from the date
of execution of Sale Deed.
 II. Instalments are paid regularly but Sale Deed is not executed even after getting
physical possession, occupancy certificate.
 III. Stalled projects which are approved under RERA & Pre RERA regime projects.
In the above cases, Penalty at 2% p.a. on the outstanding amount shall be levied
till completion of EMT.
 In case of multi-storey apartments, one-time parking space charges may be included as
part of total project cost, subject to maximum cap of Rs. 6 lakhs irrespective of project
cost. The amount to be released only after completion of the flat/or as agreed upon with
the builder. (717/2022)
 Contribution of Corpus Fund & Maintenance Fund (payable/ paid in the case of acquiring
of a flat) will NOT form part of the total project cost and hence should not be reckoned
for computation of eligible quantum of loan.
 Generally, loan disbursement up to 3 years is permitted in the case of construction of
flats. This may be continued up to 5 years, if the agreement so stipulates or as per the
agreement, maximum being 5 years. (132/2020)

ADDITIONAL HOUSING LOAN (AHL):

 Employees who have already availed EHL/AHL previously may avail the balance eligible
amount (i.e., differential between the limit already sanctioned to the employee under
EHL and the revised limits) as AHL (Additional Housing Loan) for the following purposes:
 Repairs/ renovations/ enlargement of the existing unit. However, the quantum ceiling
under this head will be advised separately.
 Purchase/ construction of 2nd housing unit
 Takeover of institutional liability as per the existing norms.
 Conversion of Housing Loans availed under Supplemental Housing Loan (SHL) along with
EHL and / or Housing Finance Scheme of the Bank.
 Clear outside borrowings from institutional and personal sources taken for the purpose of
completing the house construction or for meeting the differential cost for acquiring
subject to the condition that the employee should have made prior declaration in this
regard and proper documentary proof (complying with any statutory requirements) is
submitted.
 Processing Charges: Nil (370/2019)

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 AHL (Additional Housing Loan) can be permitted to employees who have availed EHL prior
to 01.04.2020 on the same property (i.e. property either in the name of self
/spouse/minor children) for renovation / repairs / additional construction etc.
(771/2022)

“CANARA KAVACH” FOR EMPLOYEES (HO CIR 468/2023):

 New loan scheme for employees’ “CANARA KAVACH” to provide financial protection
coverage against the liabilities availed under various Employee Schemes.
 Eligibility – All employees who have availed loans from our Bank under Employee Loan
Scheme.
 Nature of Finance – Term Loan – Clean Loan
 Margin – Nil
 Quantum –
(Rs. In Lakhs)
Scale Maximum Loan quantum
Workman 3.50
Scale I 4.50
Scale II 5.00
Scale III 5.50
Scale IV 6.00
Scale V 7.00
Scale VI 8.50
Scale VII 9.00
Scale VIII 9.00
 Net Take Home Salary – Waiver of stipulation of minimum NTH shall be applicable for
availing the loan under “Canara Kavach” scheme by the employee for the first time.
Further, the EMI under this loan availed for the first time need not be considered to arrive
the NTH for any other loans sanctioned to the employee.
 NTH of 25% shall be stipulated for second loan onwards availed under “Canara Kavach”
scheme.
 ROI – 7% p.a. compounded monthly
 Repayment – Loan shall be repaid in 10 years in 120 EMIs.
 Security – Not Applicable as it is clean loan
 Sanctioning Authority – RO Head
LOAN FOR INSTALLATION OF ROOF TOP SOLAR POWER PLANTS (RESIDENTIAL) AS A PART OF
EMPLOYEES’ HOUSING LOAN SCHEME WITHIN THE OVERALL ENTITLEMENT (694/2022)
 Scheme is for purchase & installation of Roof Top Solar Power Plant in the residential
property.
 While arriving at the EHL loan quantum, the cost for purchasing & installing of Roof Top
Solar Power Plant shall be included as one of the components of project cost.
 Employees who has already availed the EHL and wishes to purchase & install Roof Top
Solar Power Plant, can avail this facility under loan quantum for ‘Repairs and Renovation’.
 In case of Apartments, Roof right/s permission shall be available for installation of Roof
Top Solar Power Plants.
 Eligibility: All employees eligible for EHL scheme.
 Loan Quantum: The maximum loan that can be availed by an employee under the scheme
is Rs 2.50 lakhs or project cost excluding subsidy (if provided/available) & margin,
whichever is lower.
 Margin: 10% of the project cost after excluding subsidy.

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 NTH, Rate of Interest, Repayment period, Sanctioning Authority will be same as applicable
to Employees’ Housing Loan scheme.

HOUSING LOAN SCHEME TO RETIRED EMPLOYEES OF THE BANK (CIR 358/2015, 601/2019,
358/2020, 378/2020, 770/2022)
 Eligibility: All retired employees who have not availed EHL or Housing Loan from our Bank
/ or any other bank during their active service and do not own a house but retired on
superannuation.
 Employees, who ceased to be in the services of the Bank due to Voluntary Retirement,
CRS, termination, and resignation etc., are not eligible.
 At the time of availing the loan under the scheme, the retired employees shall be aged
above 60 years and up to 65 years.
 The loan shall be availed in the name of the retired employee and spouse and/or one or
more major children.
 The property shall be in the name of the retired employee and/or in the name of the
spouse or jointly with one or more major children.
 Coverage: Purchase of a ready built house/ flat, Construction of house/ flat or Purchase
of site and construction of a house thereon. However, loan for the purpose of purchase
of only site shall not be considered. Further, 40% of the loan sanctioned for purchase of
plot is stipulated if the loan is sanctioned for purchase of a plot and construction of house
thereon.
 Quantum: Officers (Scale–I and above): Rs.30 Lacs, Clerical staff – Rs.18 Lacs, Sub Staff –
Rs.12 Lacs.
 This is subject to maintenance NTH pension (After the proposed HL installment and after
providing for TDS, if any) of 25% or Rs 5,000/-, whichever is higher. If earning member
viz., son / daughter is joint owner of property / joint borrower of loan, the income of
such joint borrower may be reckoned for the purpose of Net Take Home Pay.
 ROI: 7.5 % Simple w.e.f.15.05.2020
 Security: EMT of House property being financed. Personal Guarantee of all the legal heirs
shall be available if loan is in the name of the employee exclusively. This may not be
insisted if one or more of the legal heirs are joint borrowers to the loan.
 Repayment period: Maximum 15 years including repayment holiday of 1 to 18 months
depending upon the purpose of loan or the borrower attains age of 75 years, whichever
is earlier. Recovery to be effected through Standing Instructions / PDCs / ECS mandates.
 Principal liability is to be paid in 124 monthly installments towards Principal liability and
interest liability is to be paid in 56 monthly installments. If repayment holiday is
permitted, number of installments towards principal liability shall be reduced to the
extent of permitted repayment holiday.
 Processing Charges: Nil
 Sanctioning Authority: DGM of Circle Office under whose jurisdiction the house property
is situated.
 Margin: As applicable to General HL to customers.
 Under unforeseen circumstances of demise of the retired employee, the joint borrower/
legal heir shall be given the option to continue or clear the loan which was availed by an
employee before their retirement.
 In case legal heir/joint borrower opts for continuation of Housing Loan, the same may be
permitted as per the original sanction terms or till the notional age of 75 years of the
deceased retired employee, whichever is earlier.(601/2019)
 All other scheme guidelines including and continuation of the housing loan liability on the
existing terms and conditions the concessional ROI shall continue on continuation of
Housing Loan by legal heir/joint borrower also.

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 Canara Institute of Bank Management

 NF 1048 - Supplemental Housing Loan Agreement to be obtained where continuation of

EHL liability is permitted after cessation from services by adding spouse and/or major
children of the borrower as co-borrower/s where they were not added as co-borrower/s
at the time of availing the EHL.(770/2022)

NON REPAYABLE WITHDRAWAL (NRW) FROM SPF FOR HOUSING PURPOSES:

 Eligibility: Should have completed 10 years of service or due for retirement within the
next 10 years.
 Quantum: 50% of the total contribution.
 Purpose: To meet expenditure on building a house/ Flat or purchase of a house/ flat or
site for a house.
Purposes for which NRW is not permitted:
 Repair/ renovation/ additional construction of the house/ flat.
 Joint property.
 Clearance of the HL or any liability on the property.
 Reimbursement of expenses already incurred towards purchase of site/ house/ flat or
construction of house/ flat.
 Construction of compound wall/ digging of well, septic tank, stair case, fencing etc.
 Escalation cost.

PAYMENT OF EARNEST MONEY DEPOSIT (EMD) IN RESPECT OF ALLOTTMENT OF SITES/ FLATS:

 Available to an employee only thrice during the entire service.
 Repayment: 60 EMIs
 In the form of DPN only one at a time for maximum 3 times.
 Maximum amount – Full deposit amount or 1/5th of eligible HL.

AGRICULTURAL ADVANCES TO EMLPOYEES: Loans can be granted for

 Development purpose.
 Cultivation of crops.
 Purchase of Tractor/ Power Tiller/ Bullock & Cart etc.
 No loan to pursue allied activities like Poultry, Dairy etc.
 Only confirmed employees are eligible.
 Landed property should have been inherited and not acquired.
 The landed property which the employee including Ex-service man owns should have been
granted/ assigned/ allotted by the government to employee prior to joining the bank.
 The cultivation should be carried on either by hired labour or by employee’s family members.
 Sanctioning Authority – Branch In-charge (In case of Small/Medium/Large Branch)
(Cir. 352/2022)

EL TO CLOSE RELATIVE OF EMPLOYEES:

 Can be granted to children / close relatives.
 Employees are not eligible for EL to pursue higher education.
 Up to scale III branch in charges, no powers to sanction loan to employee’s minor children and
their close relatives.
 Loans to close relatives of executives (Scale IV & above) shall be sanctioned by NHA and not by
themselves.
 Officer can stand as Co-obligant/ Guarantor only if they are dependent on the officer after
obtaining permission from competent authority.

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 The stipulation of 50% NTH of gross salary is not applicable if officer/ workmen employee in the
case of ELs sanctioned to the children of the employees.
 Wherever EMT of existing HL is stipulated as security for EL, additional EMT to be put through. If
notional limit in EMT is sufficient to cover the EL limit including the existing liability, link letter
can be obtained.
 Charges as applicable to the customers to be collected for capability certificate issued to
employees of the bank wherever such employees request for the purpose of sponsoring their
wards for higher studies abroad.
 Rate of interest: Education loan to the wards of employees, wherever employee is joint borrower
& education loan is availed during employee’s active service in our bank: NIL Credit Risk Premium
over RLLR which shall be continued even after superannuation or VRS of the employee. (717/2020)
 If EL is availed after the superannuation, applicable ROI has to be charged in such cases as per
the scheme guidelines.

DISCOUNTING OF CHEQUES:
 Facility is available only to confirmed employees of the Bank.
 At par up to 1 month’s gross salary of the employee.
 Cheque should be in favor of the employee individually or jointly with spouse or employee’s self
cheques.
 Cheques cannot be discounted beyond one month ‘s gross salary to our employees without the
prior permission of General Manager, Corporate Credit Wing, HO.
 Can be extended only by the branch where salary is credited.
 If dishonor of cheque for want of funds occurred on three occasions, the cheque discounting
facility should be withdrawn.
 Branches can purchase FC instrument at a time up to USD 500 or its equivalent in other currencies
without linking to salary limit.

CANARA PENSION LOAN SCHEME :( 717/2016, 551/2017,526/2018,66/2020, 787/2020)

 Retired Employees of our Bank/Family Pensioners of Retired Employees of our Bank.
 This scheme is not applicable to ex-serviceman employees who are in the service of the Bank.
 20 months’ pension amount or Rs.10,00,000/- whichever is less, subject to maintenance of NTH
of 25% of Gross after deducting the proposed EMI.

QUANTUM OF LOAN:
A. Component -1:
20 months’ pension amount OR Rs.10,00,000/- whichever is lower, subject to maintenance of
minimum NTH of 25% of Gross pension credited to the account after deducting the existing and
proposed EMI of both components. (66/2020)

AND/OR
B. Component -2:
Scheme norms of Canara Pension Loan Scheme to Retired Employees of our Bank & their Family
pensioners who have opted for the IBA Group Mediclaim Insurance Policy.
Computation of Loan Quantum: Maximum loan eligibility of the pensioner/Family pensioner to remit
the Annual Premium of the IBA Group Mediclaim Insurance Policy shall be.
i) The amount of Annual Premium payable for the year. OR
ii) Maximum, eligible loan amount as per Canara Pension Loan Scheme OR
iii) Rs.90,000/-
Whichever is lower out of the above three.

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 Canara Institute of Bank Management

Reimbursement facility can be availed within the Financial Year under this scheme for availment of
the IBA Group Mediclaim Insurance Policy, if eligible
However, the maximum loan liability at the time of sanction and disbursement of loan under both
the component shall not exceed 20 months pension amount or Rs.1000000/- (Whichever is lower).
SECURITY:
a) Loan to Pensioner: Co-obligation of the spouse (wherever there is a provision for
family pension) or any other person/pensioner good for the amount, to be stipulated
by the sanctioning authority.
b) Loan to Family pensioner: Third party guarantee / co-obligation good for the amount
should be obtained invariably.
REPAYMENT:
A) Component 1:
i) To be repaid in 72 equated monthly installments (EMIs) if the pensioner is below the
age of 65 years at the time of sanction.
ii) To be repaid in 60 equated monthly installments (EMIs) if the pensioner is above the
age of 65 years at the time of sanction.
B) Component 2:
10 Equated Monthly Installments irrespective of the age of the pensioner.

LOAN AGAINST TERM DEPOSITS OF OUR BANK:

 Loan extended in the form of OD or VSL.
 To be eligible for concessional rate, the deposit should be earning interest at preferential rate.
 Margin – 5% up to Rs. 3 lacs and beyond Rs 3.00 lacs as applicable to normal customers.
 Sanctioning Authority – Branch in Charge subject to Delegation of Power.
 Loans/Advances against our term deposits applicable to employees, employees with any of
his/her close relatives, retired employee who are eligible for preferential ROI:

0.25% above the interest paid on deposit

(i) For loans / advances up to Rs.1 lakh
at the time of acceptance of deposit.
(ii) Loans / advances above Rs.1 lakh up to 0.50% above the interest paid on deposit
Rs.5 lakhs at the time of acceptance of deposit
(iii) For loans / advances above Rs.5 lakhs 1% above the interest paid on the
up to Rs.10 lakhs deposits
(iv) For loans / advances above Rs.10 lakhs As applicable to customers
 In respect of advances to Societies/ Association against deposit where all the members are
employees of our Bank only and ROI to be charged is as under:
 Up to Rs 1 lac – ROI on deposit + 0.25%, >Rs 1 lac up to Rs 5 lacs - ROI on deposit + 0.50%, >Rs 5
lac up to Rs 10 lacs - ROI on deposit + 1.00% and >Rs 10 lacs –As applicable to customers.

ADVANCES AGAINST DEPOSIT RECEIPTS ISSUED BY CANFIN HOMES LTD:

 Not under branch powers.
 Proposals are to be submitted to Circle Office for sanction.
 Lien of our bank to be noted before disbursement of loan.
 Margin – 25%
 ROI – 1% above the deposit rate.
 Repayment - Within 24 months.

LOAN AGAINST APPROVED SECURITIES TO STAFF:

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Life Insurance Policy• Policy to be assigned in favor of Bank.

• Pvt. Companies registered with IRDA are also eligible
• Margin 5% on latest Surrender Value
Postal Life Insurance• All terms & conditions as applicable to LIC policy equally
Policy applicable.
• For assignment/cancellation of assigned policy should be sent to
the Post Master General of the Circle under whose jurisdiction the
concerned branch PO is situated.
National Savings • Margin- 20%
•
Certificate/Kisan Vikas No Loan against accrued interest.
Patra • Margin can be relaxed to 10% considering unexpired maturity
period by an authority not below the rank of DM/CM.
• Repayment period- Max 48 months or maturity date whichever is
earlier.
Shares/ Debentures/ • If appears in Banks approved list and quoted stocks.
Bonds of Joint Stock• In Dematerialized form
Companies • No Loan against Canara bank shares
• Approved list of Companies whose shares and debentures can be
accepted as security will be informed by CP Section, Risk
Management Wing HO.
• Margin- Min 50%
• Substitution of Shares/Debentures permitted only twice during a
Calendar year.
Mutual Fund • Approved securities if listed/traded in stock exchanges.
• Should have completed min. lock in period.
Loan amount to be linked to NAV (Net Asset Value) or MV (Market
Value.)
Margin-25%
Government Promissory
• Min. Margin -5% on the Market Value to be maintained.
Notes
10.5% National Deposit
• Margin- 20%
Receipts

FESTIVAL ADVANCE TO EMPLOYEES (Cir. 31/2011, 392/2016, 186/2020, 34/2021, 356/2023)

 To confirmed employees only to celebrate National/ Local festivals.
 The salient feature of festival advance facility to all the Employees/ Officers/ Executives after
revision is as under:
Quantum of Festival One month’s net Salary of Previous month
Advance
Periodicity Once in a calendar year
Repayment 10/12 equal Monthly
instalments
Net Take Home Salary 25% of net salary after deducting the monthly
instalment of Festival Advance
Rate of Interest 0%

The salient features of the facility is as under:

• All confirmed Employees are eligible for Festival Advance.
• In case of promotion from clerical cadre to Officer Cadre and sub-ordinate cadre employees
to clerical cadre, such employees are eligible for Festival Advance facility even during the
period of probation.
• The Festival Advance shall be applied and approved in HRMS package only.
• As per terms of EASE 7.0 Reforms, auto approval of Festival Advance amount is enabled. On

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 Canara Institute of Bank Management

submission of application by the employee through HRMS package, the amount of Festival
Advance is credited through STP to the salary account of the employee, whereby eliminating
the need for manual processing and approvals.
• Once Festival Advance is availed, any additional advance on account of fitment on
promotion, increment, restoration of increment, salary revision is not permitted during that
calendar year.
• Staff members who are retiring during the year may avail Festival Advance repayable in
12/10 instalments. However, the outstanding balance at the time of superannuation/
cessation of service shall be recovered out of terminal benefit payable to the employee.
• Employees marked as chronic leave takers in HRMS package are not eligible for Festival
Advance till their salary is regularized.
• Suspended employee during the period of suspension is not eligible to avail Festival
Advance.
• Employees on sabbatical leave are not eligible for Festival Advance.
• Festival Advance shall be availed not earlier than 15 days from the date on which the festival
falls.

“CANARA GOLD” - New Gold loan scheme for employees (Cir 715/2024):
Purpose / Objective: Loans to employee (Non-Priority) against the security of gold ornaments can
be granted for purposes such as meeting medical expenses and other unforeseen commitment/
contingencies (other than speculative purpose) etc.
Eligibility: All confirmed employees who are in service of our bank at the time of loan sanction.
Quantum of Loan: (Rs. In lakhs)
Scale Minimum Loan Maximum loan
Sub-Staff 1.00
Clerk 1.50
Scale I 2.00
Scale II 2.50
Scale III 3.00
Rs.25000/-
Scale IV 4.00
Scale V 4.00
Scale VI 5.00
Scale VII 5.00
Scale VIII 5.00
Loan to Value: If LTV ratio goes beyond 75% and required margin is not maintained at any time during
the currency of the loan, Branches have to recover the excess loan amount or to classify the loan as
NPA as per prudential norms. Value and lending rate per gram of Jewellery shall be as provided by
Gold Loan Wing from time to time.
ROI: RLLR
Repayment: The entire loan is to be repaid within 12 months from the date of sanction as bullet
payment along with interest. Interest will be accrued to the account at monthly rests compounded,
but will become due for payment along with principal only at maturity.
Security: Against the pledge of gold ornaments / Jewellery which are duly apprised by the jewel
appraiser appointed by the Bank. The loan is to be granted only against ornaments owned by staff
members. No loan shall be permitted against gold coin, bullion etc.
Sanctioning Authority: RO HEAD (FOR RO HEAD – NHA)
Net Take Home Salary: 25% (Notional EMI to be considered while arriving NTH)

*****************

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 अस्वीकरि खंड / DISCLAIMER CLAUSE
यह संकलन हमारे कममचाररय ं के कामकाजी ज्ञान क समृद्ध करने के दृष्टिक ण से तैयार ष्टकया
गया है और अद्यतन और सही जानकारी प्रदान करने के ष्टलए हर संभव प्रयास ष्टकया गया है ।
सीआईबीएम, मष्टणपाल, ष्टवषयवस्‍तु में ष्टकसी भी त्रुष्टि या चूक के ष्टलए क ई ष्टजम्मेदारी या दाष्टयत्व
नहीं लेता है , और इस सामग्री में ष्टनष्टहत जानकारी ष्टवष्टभन्न स्र त ं से "जैसा है " आधार पर प्रदान
की गई है ।
अष्टधक जानकारी के ष्टलए, इस पुस्तक के उपय गकताम ओं क भा रर बैंक पररपत्र ,ं आईबीए
ष्टदशा-ष्टनदे श ,ं सरकारी अष्टधसूचनाओं, बैं क द्वारा जारी पररपत्र ं आष्टद का भी संदभम लेने की
सलाह दी जाती है ।
सामग्री क समृद्ध करने के ष्टलए यष्टद क ई सुझाव ह त ष्टनम्‍न ई-मेल पर भेजा जा सकता है :

hostcrp@[Link]

This compilation is prepared from the point of view of enriching the

working knowledge of our employees and every effort has been made
to provide updated and correct information.
CIBM, Manipal assumes no responsibility or liability for any errors or
omissions in the contents, and the information contained in this
material, is provided on an “as is” basis from various sources.
For more information, the users of this book are advised to also refer
RBI Circulars, IBA Guidelines, Govt. Notifications, Circulars issued by
the Bank etc.
Any suggestions for enriching the material may be sent by email to:
hostcrp@[Link]
 NEVER
DREAM FOR
SUCCESS,
BUT WORK FOR IT