Synopsis

On
Loan Sanction, Documentation and Disbursement of Credit

1. Sanction Authority:
▪ Approved delegation given by the Board or MD
▪ Branch Managers, HO Executives, MD & Board
▪ Delegation authority is to separate from the marketing/relationship management
▪ Credit committee to review the large loan proposals and recommend for approval
▪ Credit proposal not commensurate with Credit Policy to be referred to Board for approval
▪ Executives assigned with delegation must have knowledge, work experience and/or training to
analyze financial statement, cash flow and credit risks
▪ Any breaches of lending authority need to be reported to MD and Head of ICCD
Examples, Branch Delegation:
▪ SOD (FO): Up to 90% of FO value & 3% above interest rate, <VP to SEVP, Tk.100 lac to Tk.200 lac
▪ Bank Guarantee :100% margin, VP to SEVP, Tk.50 lac to Tk.75 lac
▪ LC Sight: VP to SEVP, Tk.15 lac to Tk.300 lac, margin 20 % to 100%
▪ LC Usance: VP to SEVP, Tk. 10 lac to Tk.50 lac, margin 20% to 100%
Examples, Head Office Delegation:
▪ Credit proposals other than BM’s delegation to be referred to CRMD
▪ Credit proposal not commensurate with Credit Policy to be referred to the Board
▪ Large loan (i.e. 10% or above of bank’s total capital) to be referred to the Board
▪ Tk.50 lac & above (funded) and Tk.100 lac & above (funded non funded) to be referred to the
Board, if for Bank Director or his/her sole proprietorship firms or partnership firms or any private or
public limited company where he/she is acting as a director and to his/her spouse, father, mother,
son, daughter, brother, sister. BB’s prior approval is required.
2. Documentation:
▪ Obtaining appropriate documents
▪ Filling in documents properly, if standard format exists
▪ Tying the documents, if standard format not exists
▪ Signing the documents along with thumb impressions by the borrower/authorized person(s)
▪ Signature verifying by the authorized Branch official
▪ Witnessing
▪ Proper stamping
▪ Registering with the concerned authority (e.g. Sub-Registry Office, RJSC & F etc.)
i) General documents irrespective of legal status, type of security & nature of credit:
▪ Accepted Sanction Advice
▪ DP Note : Revenue stamp Tk.100
▪ Letter of Authority: Adhesive Stamp Tk. 300
▪ Letter of Arrangement :No stamp
▪ Letter of Disbursement :No stamp
▪ Letter of Undertaking: Non judicial stamp Tk.300
▪ Letter of Guarantee: Adhesive Stamp Tk. 300
▪ Letter of Revival: Non judicial or Adhesive stamp: Tk.300
▪ Letter of Indemnity : Non judicial or Adhesive stamp: Tk.300
▪ Term Loan Agreement: Non judicial stamp: Tk.300
▪ Letter of Trust Receipt: Adhesive Stamp Tk. 300
▪ Up to date CIB Report
▪ NID in all cases (individual, proprietor, all partners, all directors)
▪ Photograph(s) in all cases (individual, proprietor, all partners, all directors)

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ii) Documents as per legal status of borrower:
Proprietorship Concern:
▪ Up to date Trade License
▪ Personal Net Worth Statement of the proprietor
Partnership Firm:
▪ Up to date Trade License
▪ To be registered with RJSC &F
▪ Personal Net Worth Statement of the partners
▪ Up to date partnership resolution for availing loan evidencing signing power
Limited Company:
▪ Up to date Trade License
▪ Certificate of Incorporation
▪ MOA and Articles of Association
▪ Up to date Form XII certified by RJSC regarding particulars of directors
▪ Undertaking of the company not to amend or alter MOA without bank’s approval
▪ Bank’s approval regarding inclusion or exclusion of director(s) in MOA
▪ Certified copy of charge creation certificate from RJSC
▪ Deed of mortgage and hypothecation for creation of charge on fixed & floating assets (existing &
future) with RJSC
▪ Modification of charge with RJSC through Form xix, if credit limit is enhanced
▪ Schedule X regarding number of shares of each director
▪ Personal net worth statement of the directors
▪ Up to date TIN certificate
▪ Last 3 years audited Balance Sheet
iii) Documents as per type of security:
Mortgage of landed property:
▪ Original Title deed of the property
▪ Certified copy of Purchased Deed along with SRO Token in absence of original
▪ Registered Partition Deed among co-owners
▪ Certified Registered Mortgage Deed along with SRO Token
▪ Registered IGPA favoring the bank to sell the property
▪ Bia Deeds of the mortgage property
▪ Certified Mutation Khatian along with Mutation Proposal, DCR & up to date Khajna Receipt
▪ Record of Rights (CS, SA, RS, BS, City Jorip khatian)
▪ Up to date Municipal Tax Payment Receipt, if Municipal area
▪ Up to date Union Parisad (UP) Tax Payment Receipt, if UP area
▪ Approved Plan along with approval letter from the concerned authority, if there is any construction
▪ Original Lease Deed (in case of lease hold property)
▪ Allotment Letter favoring lessee (in case of lease hold property)
▪ Approval Letter for Mutation from the concerned authority (in case of lease hold property)
▪ NOC from the concerned authority for mortgage
▪ NEC along with fee paid receipt
▪ Board Resolution of the mortgagor company duly supported by MOA (when one company gives
mortgage for the loan of another company)
▪ Photographs of the mortgaged property
▪ Location Map & Mouza Map
▪ Survey Report from bank’s enlisted Surveyor(s)
▪ Physical Visit Report by Branch Officials
▪ Bank’s Legal Advisor’s (BLA) opinion regarding acceptability of the property as collateral security

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 ▪ BLA’s Satisfaction Certificate regarding completion of mortgage formalities appropriately

Corporate Guarantees:
▪ Corporate Guarantee of the Guarantor Company on non judicial stamp
▪ Board Resolution of the Guarantor Company to give corporate guarantee supported by its MOA
Hypothecation of Stock:
▪ Letter of Hypothecation
▪ IGPA to sell the hypothecated goods
▪ Letter of Disclaimer from the owner of rented warehouse, if needed
Hypothecation of Pledge:
▪ Letter of Pledge
▪ IGPA to sell the pledged goods
▪ Letter of Disclaimer from the owner of rented warehouse, if needed
Lien of Financial Instrument like FDR etc:
▪ Instrument duly discharged
▪ Letter of Lien by the owner of the instrument (1st party or 3rd party)
▪ Letter of Consent for encashment of the instrument by the owner (1st party or 3rd party)
▪ Confirmation of lien marking by the instrument issuing bank
▪ Re-confirmation of lien marking by HO/Zonal Office of the instrument issuing bank
iv)Documents as per nature of credit:
Term Loan:
▪ Term Loan Agreement
▪ Letter of Installment
▪ Insurance Policy Cover Note
Cash Credit (Hypo):
▪ Letter of Continuity
▪ Periodical Stock Report
▪ Insurance Policy Cover Note
Cash Credit (Pledge):
▪ Letter of Continuity
▪ Periodical Stock Report
▪ Insurance Policy Cover Note
Lease Finance:
▪ Lease Agreement
▪ Quotation accepted by borrower
▪ BRTA Registration Slip (in case of Motor Vehicle)
▪ Insurance Policy Cover Note

3. Disbursement:
▪ Branch will approach for limit loading
▪ Branch will confirm regarding completion of documentation through DCL.
▪ Branch will provide BLA’s Satisfaction Certificate, Property Genuineness Certificate, Up to date
Khajna Receipt and valid insurance policy, if applicable
▪ CAD will execute limit loading.
▪ Branch will open loan account and CAD/NITS will authorize loan account.
▪ Branch will disburse loan after account authorization by CAD/NITS

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