1.These regulations apply to personal facilities viz. loans, overdrafts, car loans and credit cards extended to individuals which are repayable from salary, end of service indemnity and/ or other verifiable regular income from a well defined source.
2.It should be ensured that the borrowers’ salary and end of service benefits are properly ascertained from the employer. If the facility is partly or fully given against other income, it should be from a well defined source and its full details should be obtained.
3.In case of borrowers with heavy personal commitments and lower disposable income or uncertain employment/ job prospects, banks may not allow facilities upto the upper limit of 20 times salary and/ or the total income, repayable within 48 months despite meeting the specified criteria.
4.For sound loan decisions, banks should have clear policy guidelines on issues which have direct bearing on the quality of risk and repayment of the loan.
5.If a customer avails for a lower amount than his eligibility or there is significant increase in his income level in subsequent months due to promotion etc, banks may reassess his eligibility after proper verification. In such a case, either existing loan is enhanced or a new loan is set up (without disturbing the existing loan).
6.If other income is main or supplementary source of repayment, it should be ensured that such income is from a known regular source, the borrower has produced documentary evidence of such income.
7.Besides personal facilities against salary and other income as above, banks may extend loans and overdrafts against lien over fixed deposits held with them.