Housing Loan policy | TSCAB
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Loans, Savings

Housing Loan policy

Purpose

Providing loans for house construction or purchase of independent house/flat to individuals (other than NRIs) either single or jointly, along with the spouse or son or unmarried daughter. The prospective borrower should be a customer of the Bank by opening an SB or Current A/C in the Branch nearest to his residence duly complying with KYC norms.

Area of operation

All the Areas coming under HMDA limits & Nagar Panchayats.

Age of building

Not more than 25 years old for Flat/Apartment.

Not more than 35 years old for independent house.

Maximum loan

a) Quantum

b) Computation of Value of House or Flat.

i) Ready built house

ii)New construction

75% of the market value of the House/Flat or 75% of amount indicated in the agreement of sale entered into with the vendor, whichever is less, subject to a maximum of Rs.30.00 lakhs for construction/ purchase of building/flat.

The land and building valuation as per market value estimated by empanelled approved valuers.

In case of new construction land value is taken as per SRA certificate and building value will be as per estimates furnished by the applicant and verified and approved by empanelled approved valuer.

Eligibility criteria/ EMI Ceiling.

a) Employees

EMI for the Housing loan should be limited in such a way that including EMIs of any other current loans of the borrower should not exceed 66.66% of the net income (i.e atleast 33.33% of Net Income as take home income).

Rental income and agricultural income can be included as declared in I.T. returns. Minimum 3 years regular service in organizations of good standing as are acceptable to the Bank (as per list approved from time to time) for this purpose.

* For Staff members minimum period of service is 2 years.

CIBIL score of the Borrower should be recorded and minimum score should be 700. The Managing Director may relax CIBIL score on case to case basis depending upon merits of the case. For first time loan takers CIBIL score is not considered.

b) Self Employed/ Professional/ Businessmen

Must be IT assessee. Left over income after all EMIs (including the pursuing loan) should be not less than 1/3rd of the gross income as per last 3-years IT returns.

Repayment

On monthly EMI basis.

Maximum 20 years or attainment of 65 years of age whichever is earlier.

In case of ready built house/flat, repayment starts immediately from the succeeding month after disbursement.

In case of construction, the repayment will start after 18 months, if so opted by applicant or completion of construction of house/flat whichever is earlier.

Rate of interest

Fixed Rate of interest at 9.50% p.a. subject to annual review and revision.

Legal scrutiny Legal scrutiny will be done by approved Panel Advocates to be decided by the Bank.

Sanction of loan by

DGM(CLPC)

Upto Rs.20.00 lakhs.

GM (Bkg)

Above Rs.20.00 lakhs to Rs.30.00 lakhs.

Security

Equitable mortgage, at the cost of borrower to be notified to the concerned SRA so that Bank’s claim is reflected in EC (Registered Memorandum of Deposit of Title Deeds).

Insurance

  1. Insurance of building financed for a minimum of 100% for full loan period/amount or for total value of the house whichever is higher against risks like fire, terrorist attacks, earthquake, floods etc.,

  2. Life Insurance of the main borrower equal to loan.

  3. Insurance premium will be debited to the borrower’s loan account.

Fee

Processing fee:

1% of the loan amount, subject to a maximum of Rs.10,000/- (+) Service tax as applicable.

*Staff will be given 50% of concession in Processing fee.

Borrower also to bear cost of stamping on memorandum of deposit of title deeds plus notification charges and E.C. Charges, as per rules in force.

Advocate fee: Rs.2,500/-

Valuer’s fee: Rs.2,500/-

Prepayment charges:

No foreclosure or take over Charges

Others
  1. 2% penal interest on defaulted installments.

  2. Borrower to bear all legal charges, in case of legal action.

PREOCESSING ETC.

Admission of loan applications – Common

The following documents to be furnished along with application at Branch level:

  1. Residence Proof and KYC.

  2. Xerox copies of Title Deeds and Link documents for 13 years such as vendors sale deed etc.

  3. Original Encumbrance Certificate for the last 13 years.

  4. Original extract from the basic value register of the Sub-Registrar of Assurances indicating the value of site/building/flat.

  5. Building plan approved by the concerned authority i.e., Municipality, etc. (certified copy).

  6. Proof of age certificate for non-employed persons (SSC certificate or Medical certificate (Xerox copy).

  7. Salary certificate and Service Certificate for salaried persons. Form-16 In Case of Non-Assessee Employees.

  8. 3 years I.T. Returns for self-employed and employees.

  9. Three photos of the applicant.

  10. Rental agreements, if any, for proof of income.

  11. Property tax paid receipt in original, where applicable.

  12. Latest statement of Bank account for 6 months.

  13. Collection of processing charges.

  14. Original receipt for the payments already made to the builder/vendor.

  15. Location sketch.

  16. ID proof (copy) – Voter ID /Driving Licence/Aadhaar Ration Card/ Passport/ Pan Card/ ID card issued by employer.

Specific

Construction of house/Flat

  1. Detailed estimates from an Architect. (Original)

  1. Copy of approved lay out plan in respect of ventures/newly developed colonies.

Purchase of flat/ house

  1. Original stamped agreement of sale executed between the applicant and the builder/vendor (sometimes the agreement of sale is a tripartite agreement executed jointly by the land owner, builder and applicant for the undivided share of the land and flat) OR Original stamped agreement of construction along with registered Sale Deed for the undivided share of land.

  1. Original allotment letter from the builder and copy of the bye-law of the society/association of flat owners.

In case of allotment by Housing Board/ Urban Development Agencies (additional)

    1. Original allotment letter.

    2. Demand notice issued for payment of amount, original

    3. Receipts of payments already made in original.

    4. No objection certificate issued by the concerned agency to mortgage the property.

In case of salaried class:
  1. Latest Salary slips with details of deductions for the last 3 months.

  2. Service Certificate from the employer including undertaking to deduct and pay monthly installments, from salary, wherever possible.

In case of self-employed class:
      1. Balance Sheet and Profit and Loss Accounts of the business/ business address proof copy, profession along with copies of individual income tax returns for the last 3 years, certified by a Chartered Accountant.

      2. A note giving information on the nature of business/ profession, form of organisation run by him in original.

      3. Copies of Licences/ Registration Certificate issued by Govt. and other competent authorities to undertake business/ practise profession.

Legal Scrutiny

Bank will have panel of Advocates in terms of RBI circular given in this regard. The copies of the documents related to the property being acquired through the loan will be first sent to the Advocate for his legal opinion. Advocate is also responsible for SRO search of the documents to decide about the genuineness of the documents.

Physical Verification and Legal Scrutiny of Property:

One officer of CLPC will conduct physical verification and Legal Scrutiny of the property, purpose of loan, income of the applicant, cross check KYC and SRA search report given by panel advocate and also study the economic viability, and give recommendation.

Share Capital (refundable)

Applicant – Rs.100.00

Co-applicant – Rs.100.00 for each co-applicant/guarantor

to be collected and nominal membership application taken on prescribed application form.

Documentation

i) After sanction of loan by the competent authority, the applicant will be advised to submit original title deed documents to the CLPC.

ii) One designated officer of CLPC will get execution of loan agreement by the applicant.

iii) Ensure insurance coverage of the house for a minimum of 100% of loan amount or value of the house, whichever is higher, and life policy on the life of borrower(s)/ for loan amount duly assigned to the Bank.

Disbursement of loan:

  1. After completion of documentation such as execution of loan agreements, equitable mortgage etc., sanctioning authority will pass orders for release of sanctioned loan amount.

  2. Loan amount will be disbursed directly to the vendor in case of direct purchase of ready built flat/house. For own construction of House/Flat loan will be disbursed by Credit to SB A/c or Current Account of loanee at the concerned Branch. For flats/houses being constructed by builder/vendor, the loan instalments will be paid directly to builder/vendor.

  3. The first instalment will be released only after investment/expenditure of borrower’s own contribution of 25%, after verification by Manager.

  4. In the case of construction of house/flat, the loan amount will be released in instalments as per the terms and conditions of the purchase agreement and as specified in the sanction order. In such cases, before releasing subsequent instalments, verification and certification regarding utilization of amount already released will be done by one designated officer of CLPC.

  5. The designated officer of CLPC/ Branch Manager concerned will get registered title deeds, ensure deposit of title deeds, notify equitable mortgage to the concerned SRA and take EC with bank’s interest recorded.

Documents to be obtained after release of loan amount:

  1. Registered sale deed, in case the house/flat, executed in party’s favour, along with agreement of depositing of the Title deeds with the Bank, under equitable mortgage.

  2. Insurance policies duly assigned in favour of the Bank.

  3. Notification of Equitable Mortgage and obtain EC with Bank’s interest recorded.

Custody of documents

One of the designated Managers of CLPC and AGM(CLPC) shall keep the documents like Title deeds, Loan agreement, Equitable mortgage papers, ECs, etc., under joint custody.

Review

Aspects like security, possession, latest valuation, repaying capacity etc., shall be reviewed every 5 years.