LONG TERM LOAN POLICY OF PUNJAB AND MAHARASTRA BANK

INTRODUCTION

• Punjab & Maharashtra Co-operative Bank, one of the leading Multi-State Scheduled Urban Co-operative Bank presently operates from the States of Maharashtra, Delhi, Karnataka and Goa.

•  The Bank stands among top 10 co-operative banks of the country.

• The Bank started its operations on 13th February,1984 in a humble room at Sion as single branch Bank. 

• The Bank was conferred with Scheduled status by Reserve Bank of India in the year 2000.It is the Youngest Bank to achieve the ‘Scheduled Bank’ status.

What is long term Loan?

• Term loans are the standard commercial loan, often used to pay for a major investment in the business or an acquisition. The loans often have fixed interest rates, with monthly or quarterly repayment schedules and a set maturity date.Bankers tend to classify term loans into two categories: intermediate- and long-term loans.Intermediate-term loans usually run less than three years, and are generally repaid in monthly installments (sometimes with balloon payments) from a business's cash flow.

• Whereas, Long-term loans can run for as long as 10 or 20 years and include additional requirements such as collateral and limits on the amount of additional financial commitments the business may take on.

TYPES OF LONG TERM LOAN SECHEME

• Home loan

• Mortgage loan

• Business loan

• Personal loan

• Education loan

Home loan

Purpose

• Purchase of residential accommodation like flats, bungalows, row houses, etc.

• Construction of flat / house, bungalows, etc.

• Addition / alteration to the existing residential accommodation.

Loan amount

• Maximum upto Rs.70 Lakh per beneficiary of a dwelling unit.

Eligibility amount lowest of the following:

• 75% of Agreement value+ Stamp Duty + Registration Fees or

• 80% of market value or

• Amount as per income eligibility

Home loan

Period

• Ranging from 5 years to 2o years

Rate Of Interest

• Floating rate of interest is 11.5% and fixed rate of interest is 13%

Pre-payment Charges

• For Housling Loan at FLOATING Rate of Interest - No Pre-payment Penalty on Foreclosure

• For Housing Loan at FIXED rate of interest:

For Foreclosure through own sources: -No pre –payment Penalty. For Foreclosure through takeover:- Pre-payment Penalty @2% of outstanding Loan amount if prepaid within 2 years of disbursement

GuaranteeCo-Applicant or co-owners can stand as Guarantor.

Mortgage Loan

Purpose

• Some times, the borrowers need finance instantaneously and banks take time to process the loan and disburse the loan after documentation. In order to overcome this difficulty, the Bank lends money against the immovable property in the form of Mortgage Loan.

Period of Loan

• For salaried person / proprietor -10 years  For others - 7 years

Margin

50% of the value assessed by Bank's approved Architect / Valuer.

Security

Mortgage of immovable property

Guarantee

One solvent third party guarantee for loan amount above Rs. 3.00 Lakhs

Business loans

Purpose

• Term loans for purchase of factory /industrial gala/ Shop, plant & machinery, equipment, furniture & fixtures etc, working capital in form of cash credit and non funded facilities in form of Bank guarantees and Letters of Credit.

Applicant

• Proprietary concerns, Registered Partnership firms, Companies

Rate of Interest

• 14.00% to 17.00% p.a. (Based on rating)

Repayment period

• Loan on demand/ maximum upto to 7* year

Margin

• Minimum - 25%

Personal loan

Purpose

• The Bank offers Personal Loan for various purposes such as meeting medical expenses, renovation of residential accommodation, traveling, marriage etc.

Loan amount

• The Maximum Loan Amount of loan is restricted to Rs. 5,00,000/- only.

Period of loan

• Loan may be repaid in 36/48/60 Equated Monthly Installments (EMI).

Guarantee

• Personal guarantee of two solvent third parties.

Education loan

Education loan is granted for higher studies in colleges in India and abroad in any educational field in college affiliated with recognized universities, medical colleges, technical institutions, pharmaceutical colleges, Information Technology etc, so that students from poor & middle classes as well as brilliant and needy students can take advantages of the scheme. [The scheme will not cover any correspondence course].

Applicant

• Student is minor, Parents / Guardian will be applicant/s.In case student is above 18 years of age, he/she will be the applicant for the loan. The parents will be co-applicants.

Education loan (Contd.)

• Loan amount:

Repayment period:

If course period is less than 3 years: 60 months (Inclusive of total moratorium period)

If course period is more than 3 years: 84 months ( Inclusive of total moratorium period)

Minimum Maximum

Inland Rs. 10,000 Rs. 10,00,000

Foreign Land Rs. 50,000 Rs. 20,00,000

Education loan (Contd.)

Moratorium period

• Course period +6 months (No moratorium period for loan amount below Rs. 1.00 Lakh

Security

• No Collateral Security For Loan upto Rs.5.00 Lakh *

Guarantor

• Two Guarantors

• In case of inland education loan if 100% Collateral Security is offered in the form of Immovable Property or Liquid Security then, No Guarantor required

Graphical representation of loans advanced by Punjab and Maharashtra bank

2009 2010 2011 2012 20130

50

100

150

200

250

300

350

159 173201 186

335

Long Term Loans ( Rs. In Crores)

Thank you!!