Criss Financial Limited Collateral Policy PDF

CRISS FINANCIAL LIMITED Collateral Policy Version 1.0 March 2024 Statement of Confidentiality: This document is confidential in nature and contains information that is pr...

CRISS FINANCIAL LIMITED Collateral Policy Version 1.0 March 2024 Statement of Confidentiality: This document is confidential in nature and contains information that is proprietary and confidential to Criss Financial Limited (CFL) which shall not be disclosed outside CFL, transmitted, or duplicated, used in whole or in part for any purpose other than its intended purpose.  Document Control Title Collateral Policy Circular No Prepared By Date Prepared Dinesh Danappanavar – DVP N/A 15th Mar, 2024 Product & Org Excellence Version No Reviewed By Date Reviewed Divaker Jha- Head-Product & 1.0 Org Excellence Pre-Version No Issuing Department Last Issue Date N/A Product & Organizational Excellence N/A Effective Date Approved By Date Approved Approving Authority Approving Authority Sr No Name Designation Signature 1 Sushanta Tripathy Chief Business Officer 2 Amit Saxena DVP – Legal 3 Ch Lakshmi Kanth Head- Credit Underwriting 4 Ramsetty Venugopal Head- Operations 5 Kiran Kancherla Head-Risk Management Company Secretary & Chief 6 Dinesh Mourya Compliance Officer 7 Naga S Reddy Vice President – Technology 8 Subrahmanyam Murari AVP – Finance PREFACE: This collateral policy serves the fundamental purpose of setting forth guidelines for the legal verification and management of collateral assets within Criss Financial Limited ("the Company"). The policy is designed to mitigate credit risk effectively and promote responsible lending practices across our operations. SCOPE: This policy applies to all loans offered by Criss Financial Ltd where collateral is required as security for the loan. Prior to accepting a property as collateral, it is imperative to verify its legality and value. Land laws vary across states, and each city formulates its regulations based on state and national guidelines, underscoring the importance of local knowledge. During the legal verification process, a lawyer examines the ownership documents, verifies official records, visits the registrar's office for information, and ensures the property possesses a clear title. Criss Financial Ltd offers financial support to customers across various states. Having collateral policies specific to each state is essential. These state-specific policies ensure legal adherence, account for market differences, effectively manage risks, and address the distinct regulatory and operational challenges present in different geographical areas. Below are the types of collaterals which can be accepted with specific conditions and verification. Madya Pradesh Original Transferrable Patta / Ownership Certificate (Un-Registered Document) Issuing Authority Gram panchayat Patta belongs to the period before June 2018 where the property situated in Abadi area. Mandate Documents 1) NOC from Gram Panchayat - Permission to Mortgage. 2) Electricity bill / Latest housing tax/tax extract. Optional Documents 1) Possession Certificate (if any). 2) Chain Documents (if applicable). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) Verification to be done by Legal Vendor. 2) The authenticity of the Patta document should be verified by the RCU Vendor. If the RCU vendor is not able to verify the same, the internal credit & branch manager-jointly should verify it and document the proof in the file. Original Patta/Tehsil Patta in the name of original owner. (Un-Registered Document) Issuing Authority Tahsildar Mandate Documents Electricity bill / Latest housing tax/tax extract Optional Documents 1) Chain Documents (if any). 2) Intimation/ No objection Certificate (NOC) to Mortgage to Society (as per availability). 3) Mutation certificate (if any). Page 3 of 14 Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) Verification to be done by Legal Vendor. 2) Tehsildar Patta must be transferable. Non-Transferable Patta shall not be considered. 3) The authenticity of the Patta document should be verified by the RCU Vendor. If the RCU vendor is not able to verify the same, the internal credit & branch manager jointly- should verify it and document the proof in the file. Original Adhikar Abhilekh / Drone Survey Document or Patta (Un-Registered Document) Issuing Authority Properties cover under the Swamitva Yojna scheme by GOI. Mandate Documents 1) Ownership Certificate or Abadi khasra of Letter from Panchayat Sachiv on letter head. 2) Co-ownership deed to be executed or provided. Optional Documents 1) Electricity bill / Latest housing tax/tax extract. 2) Chain Documents (if any). 3) NOC to mortgage from concerned authority (if applicable). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions The authenticity of the patta document or Adhikar Abhilekh or Drone Survey Document should be verified by the RCU Vendor. If the RCU vendor is not able to verify the same, the internal credit & branch manager jointly should verify it and document the proof in the file. Lease Deed (Registered Document) Issuing Authority Any Govt. Authority / Revenue Departments. Mandate Documents 1) Allotment Letter/ownership certificate. 2) Mutation Certificate. 3) NOC to Mortgage from competent authority OR Letter of Intimation to Mortgage by the Company to the competent authority. Optional Documents Electricity bill / Latest housing tax/tax extract. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Any Registered Document (Freehold - Registered Document) Issuing Authority Any Govt. Authority / Revenue Departments. Mandate Documents Mutation or Ownership Certificate Optional Documents 1) Original Registered Sale Deed/Gift Deed/Partition Deed/etc. (If executed). 2) Electricity bill / Latest housing tax/tax extract. 3) Chain documents. Type of Mortgage Equitable / Registered Mortgage to be executed. Page 4 of 14  Conditions Verification to be done by Legal Vendor. Khasra / Mutation (Un-Registered Document) Issuing Authority Revenue Department/Municipal/Development Authority. Mandate Documents 1) All registered documents executed in last 13 years (chain documents). 2) Agriculture land book Jama bandi, (No Hypothecation on the land). 3) Diversion Receipt (B1 & B2). 4) Co-ownership deed to be executed or provided. Optional Documents Latest House/Property Tax receipt and Utility Bills. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Pramana Patra (Un-Registered Document) Issuing Authority Panchayat Sachiv. Mandate Documents 1) Co-ownership deed to be executed or provided. 2) Anyone - House Tax Receipt / Register / E-bill. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) Pramana Patra to be verified through RCU Agency. If RCU is unable to verify, BCM & BM should jointly verify and submit the report in prescribed format 2) BCM & BM to try to document a copy of Panchayat records where ownership rights are mentioned. 3) Maximum loan amount will be Rs.4 Lacs. Other conditions: 1) If there is no established 13-year title chain for an Unregistered Patta, such collateral will be considered Imperfect Collateral according to the Micro LAP Policy of the Company. The necessary preconditions must be met in such cases. 2) In case property acquired through Original Adhikar Abhilekh / Drone Survey Document or Patta, the borrower must execute the co-ownership deed and RM in favour of CFL. 3) In case of unregistered Patta, the Technical team to verify and confirm the Boundaries in its report. 4) Habitation and access to the Property placed for Collateral should be verified and confirmed by the Technical/Credit team. 5) Tracing of the title through revenue or non-registered document, execution of co-ownership deed / gift deed / any other title document is must and followed by RM to be executed in favour of CFL. 6) The authenticity of the Patta document should be verified by the RCU Vendor. If the RCU vendor is not able to verify the same, the internal credit/branch manager should verify it and document the proof in the file. 7) If any Certificate like Possession / Ownership / Mutation given by Panchayat sarpanch or Sachiv needs to be verified by the RCU agency to check the authenticity of the document. 8) Any document is laminated needs to be approved by internal Legal (Regional / HO). 9) Any page missing in original registered document should be approved by NCM basis on the availability of the Certified Copy of the document. Page 5 of 14 10) If complete link document or Registered Document is missing, needs to be approved by Legal (DVP). 11) If the borrower's primary document is the Praman Patra issued by Panchayat officials and they do not possess collateral documents such as drone survey or any Patta document, those collaterals are not allowed for funding. Page 6 of 14  Rajasthan Lease cum Sale agreement OR any Title Document (Registered Document) Issuing Authority Development Authorities & Rajasthan Housing Board Properties Mandate Documents 1) Allotment Letter if issued by authority. 2) Intimation to Mortgage from CFL internal team via courier. Optional Documents 1) Possession Certificate (if any). 2) Chain Documents (if applicable) 3) House tax paid receipt (if available). 4) Mutation Certificate OR Conveyance Deed OR Perpetual deed for RHB (if any). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Society Patta (Un-Registered Document) Issuing Authority Housing Society Mandate Documents 1) Site Plan allotted by Co-operative Societies. 2) Electricity bill / Latest housing tax/tax extract (anyone is required). 3) Possession letter OR need to verify with Society by internal team or RCU / Legal Vendor. Optional Documents 1) Allotment letter (if any). 2) Land Money Receipt (if any). 3) Intimation/ No objection Certificate (NOC) to Mortgage to Society (as per availability). 4) Chain Documents (if any). 5) Mutation certificate. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) Verification to be done by Legal Vendor along with status of the society authority records. 2) If a society is delisted, blacklisted, liquidated, or not registered, approval from the internal Legal (HO atleast DVP level)) should be sought based on recommendations from RBH / RCH and above. The recommendation email should include the possession and other supporting documents of the borrower. 3) If we have a conversion order (90A, 90B) from the authority, we can proceed without the RM and instead go ahead with the EM. In such cases, society ownership documents are available, but authority ownership documents are not. However, we have the layout plan, which should be verified by an advocate and mentioned in the legal opinion. Page 7 of 14  4) If Land Money Receipt not available, it should be approved by Legal (HO atleast DVP level.). Patta issued by Panchayat under the stamp of Sarpanch/Gramsewak/Secretary with site plan (Registered / Un- Registered Document) Issuing Authority Gram Panchayat Mandate Documents If Patta is Registered : RTM / RLM vetting for these properties are mandate. Site Plan. If Patta is Un-Registered: Property under the possession of the borrower minimum of 3 years should be provided. Optional Documents 1) Electricity bill / Latest housing tax/tax extract (if any). 2) Chain documents (if any). 3) Property should be identified by vendor / internal team through online verification or Bhunaksha. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) Verification to be done by Legal Vendor. 2) Authenticity of the Patta document to be verified by RCU vendor. 3) If Patta is Un-Registered RM supposed to be executed. Jamabandi minimum of 3 years (Un-Registered Document) Issuing Authority Revenue Authority Mandate Documents Any Registered Sale Deed/Gift Deed/Partition Deed to be executed or to be provided. Optional Documents Electricity bill / Latest housing tax/tax extract (if any). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) Donor of the gift deed should be joined as co-borrower or supposed to provide the KYC documents in case not able to join the loan structure and same should be approved by RCM. 2) If donor is not existence, need to provide the death certificate. Other conditions: 1) If a society is delisted, blacklisted, liquidated, or not registered, approval from the internal Legal (HO atleast DVP level)) should be sought based on recommendations from RBH / RCH and above. The recommendation email should include the possession and other supporting documents of the borrower. 2) Equitable Mortgage is mandatory for all the cases but Registered Mortgage can be executed in favour of CFL only upon case to case basis or as per the suggestion of the Legal Vendor. 3) If there is no established 13-year title chain for an Unregistered Patta, such collateral will be considered Imperfect Collateral according to the Micro LAP Policy of the Company. The necessary preconditions must be met in such cases. 4) In case of unregistered Patta, the Technical vendor to verify and confirm the Boundaries in its report. Page 8 of 14 5) In all circumstances, it is desired to have search of records for the period of 13 years to establish the Title in confirmation with report of Legal Vendor. 6) If any Certificate like Possession / Ownership / Mutation given by Panchyat sarpanch or Sachiv needs to be verified by the RCU agency to check the authenticity of the document. 7) Any document is laminated needs to be approved by Legal (Regional / HO). 8) Any page missing in original registered document should be approved by CH/NCM basis on the availability of the Certified Copy of the document. 9) If complete link document or Registered Document is missing, needs to be approved by internal Legal (HO atleast DVP level) Page 9 of 14  Karnataka Hakku Patra OR e-Swathu document mentioned the Govt. Grants like (Rural Ashraya Housing Scheme, Ambedkar Housing Scheme, Ashraya - Housing for Special Occupational Groups – Approved Groups, Urban Ashraya Housing Scheme, Indira Gandhi Aawas yojana) etc. (Registered / Unregistered Document) Issuing Authority Gram Panchayat / Any Govt. Authority Mandate Documents 1) Conveyance deed (if executed by the authority). 2) Allotment Letter / Ownership Certificate. Optional Documents 1) Possession Certificate (if any). 2) Katha Certificate / Extract / Tax Paid receipts / Extract. 3) Electricity bill / Utility Bills on any of the family member's name. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions 1) If any charge on the property which is reflecting in e-swathu, need to collect NOC from the respective Gram Panchayat that availed loan is non-repayable and collateral can be mortgageable. 2) If charge in favor of Bank / Financial institution reflecting in EC, need to close prior to CFL loan disbursement. Namuna 3 or Form 3 (Unregistered Document) Issuing Authority Town Municipal Corporation / Tahsil Mandate Documents 1) Mutation Registrar Extract for 13 years. 2) Latest housing tax Receipt or tax extract. Optional Documents 1) Family Members Certificate (Notarised self-declared family tree shall be obtained). 2) Katha Extract. 3) Chain Documents (if available). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. e-Katha, Form 9, 11A or 11B, Katha Certificate or A-Katha (Unregistered Document-Certified Copy, Online Generated document) Issuing Authority Village Panchyat / BBMP Mandate Documents Demand Register / Extract / Certificate from Panchyat about 13 years ownership Optional Documents 1) RTC’s/Pahani & EC on Sy.No (if applicable). 2) Family Members Certificate (Notarised self-declared family tree shall be obtained). 3) Chain Documents (if applicable). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Page 10 of 14  Any Document / Conveyance Deed (Registered Document) Issuing Authority Any Govt. Authority / Revenue Departments Mandate Documents 1) Mutation or Ownership Certificate. 2) Original Registered Sale Deed/Gift Deed/Partition Deed/etc. (If executed). Optional Documents 1) Electricity bill / Latest housing tax/tax extract. 2) Chain documents. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Other conditions: 1) Equitable Mortgage is mandatory for all the cases but RM can be executed in favour of CFL only upon case to case basis or as per the suggestion of the Legal Vendor. 2) If there is no established 13-year title chain for an Unregistered Patta, such collateral will be considered Imperfect Collateral according to the Micro LAP Policy of the Company. The necessary preconditions must be met in such cases. 3) Title Documents without Schedule of Property is not acceptable primarily. It can be considered along with rectification deed (Post including schedule of property). 4) Habitation and access to the Property placed for Collateral should be verified and confirmed by the Technical/Credit team. 5) Any document is laminated needs to be approved by internal Legal (Regional / DVP). 6) Any page missing in original registered document should be approved by CH/NCM basis on the availability of the Certified Copy of the document. 7) If complete link document or Registered Document is missing, needs to be approved by internal Legal (HO atleast DVP level) Page 11 of 14  Tamilnadu Patta / A Register / UDR (Updating Data Registry) Patta / Form 4 or Manaivari Thoraiya Patta or Natham Patta / HSD (Housing Scheme Development) Patta (Unregistered Document) Issuing Authority Tahshildar / Panchayat / Any Govt. Authority / Boards. Mandate Documents VAO (Village Adminstrative Officer) Certificate for confirming the area & Boundaries. Optional Documents 1) Chitta / Adangal for 13 years (if any). 2) Land Conversion Order (if any). 3) Village Map / FMB Sketch (If any). 4) Tax Paid receipts / Extract. 5) Chain Documents. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Patta / A Register / UDR (Updating Data Registry) Patta / Form 4 or Manaivari Thoraiya Patta or Natham Patta / HSD (Housing Scheme Development) Patta (Unregistered Document) Issuing Authority Tahsildar / Panchayat / Any Govt. Authority / Boards. Mandate Documents VAO (Village Administrative Officer) Certificate for confirming the area & Boundaries. Optional Documents 1) Chitta / Adangal for 13 years (if any). 2) Land Conversion Order (if any). 3) Village Map / FMB Sketch (If any). 4) Tax Paid receipts / Extract. 5) Chain Documents. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Any Registered Document Issuing Authority Any Govt. Authority / Revenue Departments. Mandate Documents 1) Original Registered Sale Deed/Gift Deed/Partition Deed/etc. (If executed). 2) Mutation or Ownership Certificate. Optional Documents 1) Allotment Letter in favour of Original Owner/ Possession Certificate (If any). 2) Chitta/Adangal (If suggested by the Legal Vendor). 3) Tax Paid Receipts / Extract. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Page 12 of 14  Allotment Letter (Registered Document) Issuing Authority The Housing Boards. Mandate Documents 1) Tax Paid receipts / Extract. 2) Original Registered Sale Deed/Gift Deed/Partition Deed/etc. (If executed). Optional Documents 1) NOC to Mortgage the property from Housing Board (if any). 2) Payment receipts of the contribution to housing boards (if any). 3) Electricity bill / Utility Bills. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. ROR / Mutation Register Extract (Un-Registered Document) Issuing Authority Revenue Department. Mandate Documents Gift Deed or any title deed to be executed. Optional Documents Latest House/Property Tax receipt and Utility Bills. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions Verification to be done by Legal Vendor. Other conditions: 1) Equitable Mortgage is mandatory for all the cases but Registered Mortgage can be executed in favour of CFL only upon case to case basis or as per the suggestion of the Legal Vendor. 2) Condition Pattas not allowed (Govt allotted Pattas) – Govt allots the patta to the customer for specific period, ie, 10 years. During this period, customer cannot do any transaction., Once this lien period gets over, customer can do the transaction or obtain loans. 3) If there is no established 13-year title chain for an Unregistered Patta, such collateral will be considered Imperfect Collateral according to the Micro LAP Policy. The necessary preconditions must be met in such cases. 4) In case of unregistered Patta, the Technical team to verify and confirm the Boundaries in its report. 5) Habitation and access to the Property placed for Collateral should be verified and confirmed by the Technical/Credit team. 6) Any document is laminated needs to be approved by Legal (Regional / HO). However current deed /patta should not be laminated. 7) Any page missing in original registered document should be approved by CH/NCM basis on the availability of the Certified Copy of the document. 8) If complete link document or Registered Document is missing, needs to be approved by internal Legal (HO atleast DVP level) Page 13 of 14  Andhra Pradesh Allotment Letter (Registered Document) Issuing Authority Any Govt. Authority / Revenue Departments. Mandate Documents 1) Original Registered Sale Deed/Gift Deed/Partition Deed/ Conveyance Deed etc. 2) Latest property tax paid receipt. Optional Documents 1) Possession Certificate (if any). 2) Electricity bill / tax extract. 3) Chain documents (if any). Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions RM to be executed if 13 years title not established. Any Registered Document (Sale Deed/ Partition deed / gift deed / AGPA cum sale agreement) Issuing Authority Any Govt. Authority / Revenue Departments. Mandate Documents 1) All registered documents executed in last 13 years (chain documents). 2) Latest property tax paid receipt. Optional Documents Tax Extract or Utility Bills. Type of Mortgage Equitable / Registered Mortgage to be executed. Conditions RM to be executed if 13 years title not established. Other conditions: 1) Equitable Mortgage is mandatory for all the casese but Registered Mortgage can be executed in favour of CFL only upon case to case basis or as per the suggestion of the Legal Vendor. 2) If there is no established 13-year title chain for an Unregistered Patta, such collateral will be considered Imperfect Collateral according to the Micro LAP Policy of the Company. The necessary preconditions must be met in such cases. 3) In case of unregistered Patta, the Technical team to verify and confirm the Boundaries in its report. 4) Habitation and access to the Property placed for Collateral should be verified and confirmed by the Technical/Credit team. 5) Any document is laminated needs to be approved by Legal (Regional / HO). 6) Any page missing in original registered document should be approved by CH/NCM basis on the availability of the Certified Copy of the document. 7) If complete link document or Registered Document is missing, needs to be approved by internal Legal (HO atleast DVP level). Periodic Review and Revision: This policy underscores commitment to prudent lending practices and ensures the long-term sustainability of lending operations across diverse geographical markets. This policy is subject to review and updates as deemed necessary. The types of the properties mentioned above are not exhaustive and are subject to change from time to time by way of change in law/rules/regulations. Page 14 of 14