Loan Against Deposits

• Permitted as per NHB guidelines
• Loans can be granted by the branch on its deposits.
• Up to 75% of the deposit amount including interest accrued (in case of cumulative deposits) can be given as a loan. The minimum amount of the loan should be Rs. 10,000/-
• Loan can be extended only after completion of 3 months from the date of deposit. (i.e., after completing locking period).
• ROI charged is 2% above the rate offered on the deposits. Ex: If the deposit is placed at 6.5%, the ROI applicable for LOD is 8.5%.
• Interest on LOD is debited /compounded /charged on the same frequency as that applicable to the deposit offered as security for the loan.
• Periodical payment of interest on fixed deposit shall be adjusted to the LOD account on a prorated basis.
• Additional LOD can be granted on the same deposit, and the branch to ensure that the outstanding balance of the existing LOD with interest and Additional LOD amount is not crossing 75% of the Deposit Amount with interest.
• If the LOD is pre-closed before the maturity of the Deposit, the branch has to hand over the Original Deposit Receipt to the depositor, duly cancelling the LOD details mentioned on the deposit receipt.
• If LOD is not closed till the date of maturity, Maturity proceeds will be adjusted to Loan Outstanding with Interest accrued and balance will be made available for Renewal/Repay.