Credit Policy - Domestic Branches FY 2024-25 PDF

CREDIT POLICY SECTION IG No. : IC/516/2024 RISK MANAGEMENT WING Date : 15/07/2024 HEAD OFFICE : BENGALURU- Index : Advances 560002 Sub Index : General SUB: CREDIT POLICY - DOMESTIC BRANCHES - FOR FY 2024-25-...

CREDIT POLICY SECTION IG No. : IC/516/2024 RISK MANAGEMENT WING Date : 15/07/2024 HEAD OFFICE : BENGALURU- Index : Advances 560002 Sub Index : General SUB: CREDIT POLICY - DOMESTIC BRANCHES - FOR FY 2024-25- Updated till 30.06.2024 SYNOPSIS  Credit Policy for Domestic branches for the FY 2024-25- Updated till 30.06.2024 Bank has put in place detailed Master Policy on Credit and the same is PM being reviewed annually and the required modifications are brought out in the Policy with the approval of the Board. 4 Further, modifications are effected in line with the regulatory guidelines :4 from RBI / Government directions / Observations under Risk based Supervision, feedback from Circles and Wings and also considering the economic outlook, market dynamics, etc., 03 In line with the directions of Regulatory Authorities, Master Policy on 24 Credit Risk Management for Domestic Branches was bifurcated into 2 policies i.e., (1) Credit Policy for Domestic branches and (2) Credit Risk 20 Management Policy for Domestic branches. The last consolidated Credit Policy updated till 31.03.2024 was conveyed 0/ vide HO Circular No. IC/255/2024 dated 01.04.2024. The additions/modifications to the policy are conveyed by way of HO Circulars /1 from time to time. Further, modifications effected after from 01.04.2024 30 have been conveyed vide the following HO Circulars: IC/198/2024 dated 26.03.2024; IC/326/2024 dated 18.04.2024; IC/350/2024 dated 24.04.2024; IC/441/2024 dated 12.06.2024; 56 IC/428/2024 dated 07.06.2024; 58 For the convenience of the branches/offices, consolidated Credit Policy of the bank for the FY 2024-25- Updated till 30.06.2024 is attached as Annexure to this Circular and the same is covered in two parts: 64 A. Credit Policy B. Policy on Off Balance Sheet Exposure Consolidated policy on Credit Risk Management and the Scheme of delegation of powers for Credit Sanctions for FY 2024-25 are being communicated as separate circulars. Branches shall note that various functional Wings of the bank have already come up with their exclusive policies viz. का रो बा रो से पहले अनुप लेनु / Compliance First, Business Next Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 1) “Retail Lending Policy” by Retail Assets Wing 2) “MSME Policy” by MSME Wing 3) “Agriculture Lending Policy” by Priority Credit Wing 4) “Gold Loan Policy” by Gold Loan Wing 5) “Credit Review and Monitoring Policy” by CA&M Wing 6) “Credit Risk Management Policy pertaining to Overseas Branches” by International Operations Wing Further, “Derivative Policy” which was earlier a part of Master Policy on Credit Risk Management for Domestic Branches is now covered as a part of ‘Integrated Treasury Policy’ issued by Integrated Mid Office, RM Wing. The “Policy on Restructuring of Advances” is being advised separately PM by way of HO Circular. Branches/Offices to note that any further modifications/additions would 4 be advised through Circulars/ LDGMs/ other communications from time :4 to time and the same shall form part of this policy. 03 Branches/offices are requested to go through the revised and updated Credit Policy and Credit Risk Management Policy thoroughly and be guided by the same. All the chapters contained herein cover only the broad policy 24 guidelines and branches/offices shall refer to the related circulars/manuals and other communications issued from time to time for 20 operational / procedural guidelines. Any clarifications on the policy matters, the concerned Section at CO shall 0/ first take up the matter with the Overseeing Executives/ Circle Head and /1 only when the doubts could not be cleared at the Circle level, the same would be taken up with HO. Clarifications/queries from HO to be sought 30 under the signature of Circle Head. Branches should not correspond with HO directly. 56 Branches/offices to take note of the above for compliance. 58 64 UDAY SANKAR MAJUMDER CHIEF GENERAL MANAGER 2 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 CREDIT POLICY PM 2024-25 4 :4 (UPDATED TILL 30.06.2024) 03 24 20 0/ DOMESTIC BRANCHES /1 30 56 58 64 3 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 CREDIT POLICY INDEX Chapter No. Policy/ Chapter Name Page No. PART – A CREDIT POLICY 09 1 POLICY AND STRATEGIES 09 2 OPERATIONAL PROCESSES AND SYSTEMS 104 3 RESTRICTIONS FOR LENDING 180 4 CREDIT DELIVERY 188 5 GENERAL MATTERS 195 POLICY ON PENAL CHARGES IN RUPEE 6 239 LOANS/ADVANCES:DOMESTIC BRANCHES PM FAIR PRACTICES CODE (FPC) FOR 7 251 LENDERS Financial Covenants Monitoring Format 4 Appendix-I 255 (FCMF) :4 Appendix II Detailed Process flow for Monitoring of 03 258 Cross Default and other Financial Covenants Format for sharing credit information at the Appendix-III 259 24 time of transfer of borrowal accounts 20 Appendix-IV Key Facts Statement 264 0/ POLICY ON OFF BALANCE SHEET PART - B 266 EXPOSURE /1 30 56 58 64 4  Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 PART A - CREDIT POLICY INDEX CHAPTER NO. SUBJECT PG No 1 POLICY AND STRATEGIES 09 1.1 General 09 1.2 Target Markets 09 1.2.1 Thrust Areas And Non Thrust Areas 09 1.3 Priority Sector Advances 10 1.3.3 Priority Sector advances –Targets 11 1.3.4 Norms for lending to priority sector 12 1.3.5 Detailed activity-wise norms for classification under Priority Sector 12 1.4 Micro, Small and Medium Enterprises (MSME) 26 PM 1.5 Export Credit 26 Coverage by Export Insurance from Export Credit Guarantee 1.5.1 26 Corporation (ECGC) 4 1.6 Credit Information 28 :4 1.7 Canara Retail Grade 33 Definition of Risk Tiers for retail borrowers and Risk Limit to 03 1.8 34 Near Prime & Sub Prime Borrowers 1.9 Lending to Real Estate Sector 34 24 1.9.1 Non-Commercial Real Estate Sector 35 1.9.2 Definition of CRE exposure 35 20 1.9.3 Assessment of Group Risk 37 1.9.5 Project parameters – Commercial Real Estate 38 0/ 1.9.6 General Guidelines for loans to Commercial Real Estate 41 /1 1.10 Lending to borrowers classified as Capital Market exposure 43 1.10.9 Computation of Exposure 45 30 1.10.10 Components of Capital market exposure 45 1.10.13 Margin on advances against shares/ issue of guarantees 48 56 1.11 Advances against units of Mutual Funds 48 1.12 Lending to NBFCs 49 58 1.12.1 Finance to NBFCs requiring/ not requiring Registration 51 1.12.3 Finance to Residuary Non-Banking Companies (RNBCs) 52 64 1.12.4 Bank finance to Factoring Companies 53 1.12.5 Activities not eligible for Bank credit 53 1.12.6 Prohibition on Bank Finance to NBFCs 53 1.12.7 Stipulation of Asset Coverage Ratio while financing to NBFC 54 1.13 Lending to Public Financial Institution 57 1.14 Securitization Transactions 58 1.15 Lending to Software 58 1.16 Scheme for Financing Producers Of Feature Films 59 5  Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 CHAPTER NO. SUBJECT PG No 1.17 Amended Technology Upgradation Funds Scheme (ATUFS) 59 1.18 Bills Discounting 59 1.18.1 Bills Discounted Under LC (BULC) 60 1.19 Short Term Corporate Loan (STCL) Scheme 61 1.20 Corporate Loan Scheme 62 1.21 Loans/ Advances to Subsidiaries 62 1.22 Consortium advances 63 1.23 Multiple Banking Arrangements (MBA) 63 1.24 Joint Lending Arrangement (JLA) 64 Time frame for issuance of NOC/ pari passu letters and ceding of 1.25 64 charge in respect of consortium/ MBA PM 1.26 Loan Syndication 66 Scheme for financing Indian companies for acquisition of equity in 1.27 67 overseas companies 1.28 Policy on Foreign Currency Loans (FCLs) 68 4 :4 1.28.1 Foreign Currency Loans to Residents (FCLR) 68 1.28.2 Granting of FCLRs for liquidation of existing Rupee Term Loans 68 1.28.3 Granting of FCLRs to NBFCs 03 69 1.29 Secured Overdraft 69 24 1.30 Net Means 69 1.31 Lending to Infrastructure Investment Trusts (InvITs) 70 20 1.32 Inter Bank Participation Certificate (IBPC) 77 1.33 Co-lending of loans by Banks & NBFCs to priority sector 83 0/ 1.34 Digital Lending Framework 84 1.35 Guidelines on Digital Lending 90 /1 1.36 Guidelines on Default Loss Guarantee(DLG) in Digital Lending 98 30 Policy on Partial Credit Enhancement to Corporate Bonds and Bonds 1.37 103 issued by NBFCs and HFCs 56 2 OPERATIONAL PROCESS AND SYSTEMS 104 2.1 Relationship Management Phase 104 58 2.1.1 Credit initiation 104 Segregation of Relationship and Appraisal functions – Core Credit 2.1.2 104 64 Groups 2.1.3 Submission of credit proposals by Large Corporate Branches (LCBs) 104 Submission of credit proposals by Mid Corporate Branches (MCBs) 2.1.4 falling under the sanctioning powers of Head Office and handling of 105 fresh proposals of Rs. 10 Crores and above at MCB Centres Submission of credit proposals by branches falling under the 2.1.5 105 sanctioning powers of Circle Office 2.1.6 Submission of credit proposals of MSME by branches 105 2.1.7 Processing of proposals for enhancement/reduction of limits in 106 6  Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 CHAPTER NO. SUBJECT PG No existing files. 2.1.8 Participation in Bids / Quoting of Rates 106 2.2 Transaction Management Phase 106 2.2.1 Appraisal of Credit Proposals 106 2.2.2 Assessment – Working Capital 116 2.2.3 Lending on the guarantee issued by other banks/ FIs 119 2.3 Liquidity and Current Ratio norms 119 2.4 Compliance to sanction terms and conditions 122 2.5 Fixation of time schedules for Working Capital limits 122 2.6 Loan System for Delivery of Bank Credit (LSDBC) 123 2.7 Computation of Drawing Power 124 PM 2.8 Term Loans & DPGs/ Bills co-acceptance for Capital Goods 125 2.8.2 Term loans to infrastructure projects 125 2.8.3 General guidelines for all medium and long term loans 132 4 2.8.4 Guidelines with regard to conduct of project appraisal 137 :4 2.8.5 Financial/ project benchmark parameters 141 2.8.5.4 Sectoral Policy Guidelines 03 145 Additional Prudential Guidelines for lending to the State-owned 2.8.5.5 147 Power entities, including DISCOMs, GENCOs and TRANSCOs 24 Financial/ project Benchmark parameters for various industries 2.8.5.6 149 (for exposures above Rs.1.00 crore) 20 Takeover of borrowal accounts from other banks/ Financial 2.9 154 Institutions 0/ 2.10 Direct Obtention of Bank statement 173 /1 Sanctioning of any fresh credit facility to Borrowers having settled 2.11 their dues with our Bank/Other banks/NBFCs/FIs as part of 173 30 OTS/Compromise Settlement Fresh facilities to borrowers who had been allowed/agreed to by 2.12 176 56 the Bank for concessions/compromise settlements 3 RESTRICTIONS FOR LENDING 180 58 3.1 Statutory restrictions 180 3.2 Regulatory restrictions 181 64 3.3 Policy guidelines on deviations/ exceptions made 185 4 CREDIT DELIVERY 188 4.1 Time Norms For Disposal Of Loan Applications 188 Process to be followed by the regional office / circle office for 4.2 193 monitoring of the proposals falling under branch power Procedure for monitoring / reviewing of pending proposals at 4.3 193 RO/CO/HO 5 GENERAL MATTERS 195 5.1 Guidelines for sanction of combined credit limits for export and 195 7  Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 CHAPTER NO. SUBJECT PG No domestic activities of borrowers Enabling mechanism for meeting payment obligations by large 5.3 195 corporates to MSMEs 5.4 Revalidation/ cancellation of sanction 196 5.6 Review and Extension of limits 197 5.7 Review cum Holding on Operations 200 5.8 Rejection of credit proposals 202 5.9 Conversion of limits 202 5.10 Credit exposure – Exit Policy 203 5.11 Broad Guidelines on obtaining personal Guarantees 204 5.12 Stipulation of Corporate Guarantee 207 PM 5.13 Unhedged Foreign Currency Exposure of Corporates 207 5.14 Legal Audit of Title Deeds 220 5.15 Guidelines on Opening of Cash Credit/Overdraft facilities 220 5.17 External Credit Rating 222 4 :4 5.18 Monitoring of Cross Default and other Financial Covenants 224 Restrictions on number of layers for Holding Company as per 5.21 Companies Act 2013 03 227 Prudential norms on Income Recognition, Asset Classification and 5.22 228 24 Provisioning pertaining to Advance 5.23 Guidelines on Periodicity & Participation in Consortium meetings 230 20 Certificates/Reports issued by Third Party entities/ Professionals 5.24 232 and submitted by borrowers – Need for independent due-diligence 0/ Foreign Exchange Management (Overseas Investment) - Guidelines 5.25 233 on obtention of No Objection Certificate (NOC) from the lender bank /1 Guidelines on periodical obtention of encumbrance certificate in 30 5.26 234 respect of properties mortgaged to Bank Guidelines on release of movable/immovable property documents 5.27 235 56 on closure of loan account 5.28 Guidelines on issuance of Key Fact Statement 236 58 POLICY ON PENAL CHARGES IN RUPEE LOANS/ADVANCES: 6 239 DOMESTIC BRANCHES 64 7 FAIR PRACTICES CODE (FPC) FOR LENDERS 251 Appendix-I Financial Covenants Monitoring Format (FCMF) 255 Detailed Process flow for Monitoring of Cross Default and other Appendix-II 258 Financial Covenants Format for sharing credit information at the time of transfer of Appendix-III 259 borrowal accounts Appendix-IV Key Facts Statement 264 8 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 PART – A - CREDIT POLICY CHAPTER-1 POLICY AND STRATEGIES 1.1 General Bank primarily takes into account the borrower’s financial strength and debt servicing capacity while approving credit. Collaterals would continue to be a credit risk mitigant. Bank pursues a structured appraisal process with appropriate bench marks to facilitate ascertaining financial strength and debt servicing capacities of the clients. A borrower may be an individual, HUF, Sole Proprietorship, Partnership, Limited Liability Partnership, Limited Company, Co-operative Society or any other types of constituents permissible under law subject to compliance of PM relevant formalities and on fulfilment of Bank's eligibility criteria and other loan specific terms and conditions. Further, HUFs cannot enter into a contract of partnership with another person or 4 persons. No financing shall be provided to partnership firms where one or more of :4 the partners are HUFs. 03 To improve the quality of appraisals, particularly in respect of high value credits, relationship and appraisal functions are segregated. The Bank practices this approach to ensure accelerated response to customers. 24 1.2 Target markets 20 1.2.1 Thrust areas and non-thrust areas 0/ Bank from time to time would identify the potential and productive sectors for /1 lending, based on the performance of different segments, need to develop a strong credit portfolio and demands of the economy. 30 Thrust areas include Agriculture sector, Industrial Sectors, MSME sector, Export segment, Other segments in Priority Sectors, and other sectors, which have growth 56 potentials as identified by the Bank from time to time. Bank recognizes that inadequate infrastructure facilities are hampering the pace of economic growth of 58 the country. Hence, funding well-structured infrastructure project initiatives in various sectors is a thrust area for the Bank. 64 The Non-thrust areas of lending include Commercial Real Estate, NBFCs other than HFCs, Capital Market, industries/sectors which do not have growth potentials based on the Bank’s evaluation of industries/sectors taking into account the prevailing economic scenario, performance, concentration of exposure, outlook etc. The Bank shall also review / revise the thrust and non-thrust areas for lending based on the performance of the sectors from time to time and based on specific developments, which come to its notice. 9 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 The exposure to various sectors above would be monitored on an ongoing basis to evaluate the level of adherence and the need to readjust any of the stipulation on prudence and business objectives. 1.2.2 Definition of Startup As per notification of Ministry of Commerce and Industry, Government of India dated 19.02.2019, an entity shall be considered as a Startup: i. Upto a period of ten years from the date of incorporation/registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India. PM ii. Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded Rs. 100 crore. iii. Entity is working towards innovation, development or improvement of products 4 or processes or services, or if it is a scalable business model with a high potential :4 of employment generation or wealth creation. 03 Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’. 24 1.3 PRIORITY SECTOR ADVANCES 20 1.3.1 PRIORITY SECTOR ADVANCES Certain vital sectors of the economy are declared as priority sectors by the 0/ Government/RBI from time to time in order to ensure that the credit flows in an increasing measure to these sectors. Bank will continue to monitor its plans for /1 enhancing credit to all the segments of this Sector and to remain in line with the 30 mandated targets. The categories under priority sector are as follows: 56 1. Agriculture 2. Micro, Small and Medium Enterprises 58 3. Export Credit 4. Education 64 5. Housing 6. Social Infrastructure 7. Renewable Energy 8. Others 1.3.2 To address the needs of specific categories/ group of segments in the above mentioned broad categories, Bank has developed various loan schemes. Bank shall continue to devise appropriate schemes and attention shall be paid to monitor progress of lending under these schemes to reach the levels targeted annually. 10 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 1.3.3 Priority sector advances – Targets Categories Mandated level Total Priority 40 percent of ANBC* or CEOBE Exposure** whichever is Sector higher. Total agriculture 18 percent of ANBC or CEOBE, whichever is higher. Within the 18 percent target for agriculture, a target of 10 percent of ANBC or CEOBE, whichever is higher is prescribed for Small and Marginal Farmers, to be achieved in a phased manner as under: Financial Year Small and Marginal Farmer’s target 2020-21 8% PM 2021-22 9% 2022-23 9.50% 2023-24 10% 4 :4 Micro Enterprises 7.5 percent of ANBC or CEOBE, whichever is higher Weaker Sections 03 12 percent of ANBC or CEOBE, whichever is higher, to be achieved in a phased manner as under: 24 Weaker Sections Financial Year target 20 2020-21 10% 2021-22 11% 0/ 2022-23 11.50% 2023-24 12% /1 30 * Adjusted Net Bank Credit (ANBC) ** Credit equivalent of Off-Balance Sheet Exposures (CEOBE exposure) 56 The computation of Adjusted Net Bank Credit (ANBC) is detailed in Agriculture Lending Policy of the Bank. 58 The overall lending to Non-Corporate Farmers (NCFs) should not fall below the system-wide average of the last three years’ achievement which will be separately 64 notified every year. The applicable target for lending to the non-corporate farmers for FY 2024-25 will be 13.78% of ANBC or CEOBE whichever is higher. All efforts should be made by banks to increase the Farm Credit (as per para 1.3.5.1 – Farm Credit – Part A) higher than the NCF target. The computation of priority sector targets / sub-targets achievement will be based on the ANBC or CEOBE, whichever is higher, as on the corresponding date of the preceding year. To ensure continuous flow of credit to priority sector, Bank shall monitor the achievement on quarterly basis. 11 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 1.3.4 Norms for lending to priority sector The Bank shall adhere to the norms of lending such as eligibility, viability, quantum of finance, margin, security norms and rates of interest etc., based on the guidelines evolved in this regard from time to time. 1.3.5 Detailed activity wise norms for classification under Priority Sector 1.3.5.1 Agriculture: Lending to Agriculture include the following: Farm credit A. Farm Credit - Individual farmers Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups (JLGs) i.e. groups of individual farmers, provided banks maintain disaggregated data of such loans] and Proprietorship firms of farmers, directly engaged in Agriculture and Allied Activities, viz., PM dairy, fishery, animal husbandry, poultry, bee-keeping and sericulture. This will include: 4 i) Crop loans including loans for traditional/non-traditional :4 plantations, horticulture and allied activities. 03 ii) Medium and long-term loans to farmers for agriculture and allied activities (e.g. purchase of agricultural implements and machinery and developmental loans for allied activities). 24 iii) Loans to farmers for pre and post-harvest activities, viz., 20 spraying, harvesting, grading and transporting of their own farm produce. 0/ iv) Loans against pledge/hypothecation of agricultural produce /1 (including warehouse receipts) for a period not exceeding 12 months subject to a limit up to Rs. 75 lakh against NWRs/ 30 eNWRs and up to Rs. 50 lakh against warehouse receipts other than NWRs/eNWRs. 56 v) Loans to distressed farmers indebted to non-institutional lenders. 58 vi) Loans under the Kisan Credit Card Scheme. 64 vii) Loans to small and marginal farmers for purchase of land for agricultural purposes. viii) Loans to farmers for installation of stand-alone Solar Agriculture Pumps and for solarisation of grid connected Agriculture Pumps. ix) Loans to farmers for installation of solar power plants on barren/fallow land or in stilt fashion on agriculture land owned by farmer. 12 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 B. Farm Credit - Loans to Corporate farmers, Farmers' Producer Organizations (FPOs)/(FPC) Companies of Individual Farmers, Partnership firms and Co-operatives of farmers engaged in Agriculture and Allied Activities (a) Loans for the following activities will be subject to an aggregate limit of Rs. 2 crore per borrowing entity: i) Crop loans to farmers which will include traditional/non- traditional plantations and horticulture and loans for allied activities. ii) Medium and long-term loans for agriculture and allied activities (e.g. purchase of agricultural implements and machinery and developmental loans for allied activities). PM iii) Loans for pre and post-harvest activities, viz., spraying, harvesting, grading and transporting of their own farm 4 produce. :4 (b) Loans up to Rs. 75 lakh against pledge/hypothecation of 03 agricultural produce (including warehouse receipts) for a period not exceeding 12 months against NWRs/eNWRs and up to Rs. 50 lakh against warehouse receipts other than 24 NWRs/eNWRs. 20 (c) Loans up to Rs. 5 Crore per borrowing entity to FPOs/FPCs undertaking farming with assured marketing of their produce 0/ at a pre-determined price. /1 Agriculture Loans for agriculture infrastructure will be subject to an aggregate 30 Infrastructure sanctioned limit of Rs.100 crore per borrower from the banking system. 56 i) Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold storage 58 units/ cold storage chains designed to store agriculture produce/products, irrespective of their location. 64 ii) Soil conservation and watershed development. iii) Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi composting. iv) Loans for construction of oil extraction/ processing units for production of bio-fuels, their storage and distribution infrastructure along with loans to entrepreneurs for setting up Compressed Bio Gas (CBG) plants. 13 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 Ancillary (a) Following loans under ancillary services will be subject to activities limits prescribed as under: i) Loans up to Rs.5 crore to co-operative societies of farmers for purchase of the produce of members. ii) Loans up to Rs. 50 crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that are engaged in agriculture and allied services. iii) Loans for Food and Agro-processing up to an aggregate sanctioned limit of Rs.100 crore per borrower from the banking system. (b) Outstanding deposits under RIDF and other eligible funds with PM NABARD on account of priority sector shortfall. (c) The eligible activities under ancillary services and food processing is given below: 4 :4 Ancillary activities: i) Loans for setting up of Agri-clinics and Agri-business Centres. 03 ii) Loans to Custom Service Units managed by individuals, institutions or organizations who maintain a fleet of tractors, 24 bulldozers, well-boring equipment, threshers, combines, etc., and undertake farm work for farmers on contract basis. 20 iii) Bank loans to Primary Agricultural Credit Societies (PACS), 0/ Farmers’ Service Societies (FSS) and Large-sized Adivasi Multi- Purpose Societies (LAMPS) for on-lending to agriculture. /1 iv) Loans sanctioned by banks to MFIs for on-lending to 30 agriculture sector as per the conditions specified in paragraph 1.3.5.8 xi. 56 v) Loans sanctioned by banks to registered NBFCs (other than MFI) as per conditions specified in Para 1.3.5.8 xii. 58 Indicative list of Permissible Activities under Food Processing 64 Sector as shared by Ministry of Food Processing Industries (MoFPI): 1. Cleaning, Air Cooling (Field Heat Removal), Sorting, Grading/Sizing, Packaging, Warehousing, Distribution of Fruits & Vegetables etc. 2. Transportation including in refrigerated van/Cold Chain infrastructure system Packaging and storage including techniques like Silo, Hermetic storage; pest management. 14 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 3. Storage at low temperature/Cold Storage/Modified/ Controlled Atmosphere packaging, Refrigeration/Chilling etc. 4. Primary and/or Minimal Processing of F&V: - Blanching (Vegetables), Peeling, Cutting, Storage, Distribution at Low temperature, vacuum packing etc. 5. Sun Drying and Mechanical Drying: - Solar Drying, Hot air drying, Dehydration, hybrid drying, fluidized bed drying, refractive window drying, drum drying, radio frequency drying, Lyophilisation (Freeze Drying), Vacuum Drying, Spray Drying, De-hydro-freezing etc. 6. Preservation through various methods; both traditional and modern. PM 7. Frozen Products: Individually Quick Frozen (10F) of Fruit, Vegetables, Meat, Fish, Sea Foods etc. 8. Milk and Milk products processing, including their 4 transportation, packaging and storage. :4 9. Canning of Fruit, Vegetables including Mushrooms, Meat, Fish, 10. 03 crustaceans, molluscs, other Sea Foods etc. Milling Grains, Legumes & Pulses, Preparation of their by- products such as Bran Oil, Cattle Feed/Poultry feed etc. 24 11. Processing of F&V into different products such as juices, concentrates, sauces, jam, jellies, marmalades, Chips, Flakes, 20 Powders etc. 12. Processing of Grains & Pulses, Fish, Meat, Poultry, Sea Foods, 0/ Egg etc. into their different products including extruded, /1 popped, puffed and flaked products and their packaging and storage including fumigation, Smoking etc. 30 13. Oil seed Extraction- Rendering, Pressing, Hydrogenation, Refining with Extraction, Filling/packaging etc. 56 14. Spices, Seasoning and Condiments - Grinding, Crushing, Milling, Sieving, Mixing, Blending, Roasting, Packaging, Storage, 58 Distribution. 15. Production of fermented Products and Alcoholic- Wines, 64 Vinegar, Milk products, Prebiotics, Probiotics etc. 16. Production of beverages - Juices, RTS, Nectar, Squash, Cordial, Syrups/Sherbets, Soups, Carbonated Beverages etc. 17. Production of Cocoa, Coffee, Chicory and Tea Products; including Cocoa Butter, Cocoa Powder, Chocolates, wafers etc. 18. Production of Bakery and Confectionary Products - Biscuits, Bread, Cakes, Cookies, Toffee etc. 19. Production of Jaggery, Sugar, Khandasari etc from Sugarcane, Beet, Palm etc. 15 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 20. Production of apiary products (honey processing; both natural and artificial honey). 21. Production of Starch and Starch Products - Sago, Tapioca, Corn, Noodles, Macroni, Vermicelli etc, 22. Slaughtering of animals/ruminants/birds etc. and their processing. 23. Nuts Processing; coconut-based product processing such as water, nuts etc. 24. Processing of other products such as Instant Mixes, Ready to Eat (RTE) retort-based products, ready to cook and Beverages etc. 25. Nutraceutical products/functional foods/fortified food/ PM enriched food preparation. 26. Production of Organic food products. 27. Processing of algal and fungal products (eg Spirulina, 4 Mushrooms etc), including packing and enhancement of shelf :4 life. 28. Processing plantation crops, packaging, storage and 03 enhancement of shelf life. 29. Production of food grade packaging material such as laminates, 24 tetra packs, bottles, tin containers etc. Small and For the purpose of computation of achievement of the sub-target, 20 Marginal Small and Marginal Farmers will include the following: Farmers 0/ i) Farmers with landholding of up to 1 hectare (Marginal (SMFs) Farmers). /1 ii) Farmers with a landholding of more than 1 hectare and up to 2 30 hectares (Small Farmers). iii) Landless agricultural labourers, tenant farmers, oral lessees 56 and share-croppers whose share of landholding is within the limits prescribed for SMFs. 58 iv) Loans to Self Help Groups (SHGs) or Joint Liability Groups (JLGs), i.e. groups of individual SMFs directly engaged in 64 Agriculture and Allied Activities, provided banks maintain disaggregated data of such loans. v) Loans up to Rs. 2 lakh to individuals solely engaged in Allied activities without any accompanying land holding criteria. vi) Loans to FPOs/FPC of individual farmers and co-operatives of farmers directly engaged in Agriculture and Allied Activities where the land-holding share of SMFs is not less than 75 per cent, subject to loan limits prescribed in para B of Farm Credit. 16 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 Lending by i) Bank credit extended to registered NBFC-MFIs and other MFIs banks to (Societies, Trusts etc.) which are members of RBI recognised NBFCs and SRO for the sector, for on-lending to individuals and also to MFIs for on- members of SHGs / JLGs will be eligible for categorization as lending in priority sector advance under respective categories of agriculture agriculture subject to conditions specified in para 1.3.5.8 xi. ii) Bank credit to registered NBFCs (other than MFIs) towards on- lending for ‘Term lending’ component under agriculture will be allowed up to Rs.10 lakh per borrower subject to conditions specified in para 1.3.5.8 xii and xiv. 1.3.5.2 Micro, Small and Medium enterprises (MSMEs) PM The definition of MSMEs will be as per Government of India (GoI), Gazette Notification S.O. 2119 (E) dated June 26, 2020 read with circular RBI/2020-2021/10 FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 read with FIDD.MSME & NFS. BC. No.4 / 4 06.02.31/2020-21 dated July 2, 2020, August 21, 2020 respectively on ‘Credit flow to :4 Micro, Small and Medium Enterprises Sector’ and updated from time to time. 03 Manufacturing / Service Sector Enterprises Investment in plant and machinery or Equipment 24 Does not exceed Rs.1 Crore and Turnover does not Micro Enterprises exceed Rs.5 Crores 20 Does not exceed Rs.10 Crore and Turnover does not Small Enterprises exceed Rs.50 Crores 0/ Does not exceed Rs.50 Crore and Turnover does not Medium Enterprises /1 exceed Rs.250 Crores 30 Further, such MSMEs should be engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries 56 (Development and Regulation) Act, 1951 or engaged in providing or rendering of any service or services. All bank loans to MSMEs conforming to the above guidelines 58 qualify for classification under priority sector lending. Khadi and Village Industries Sector (KVI) 64 All loans to units in the KVI sector will be eligible for classification under the sub-target of 7.5 percent prescribed for Micro Enterprises under priority sector. Factoring Transactions (i) ‘With Recourse’ Factoring transactions by banks which carry out the business of factoring departmentally, wherever the ‘assignor’ is a Micro, Small or Medium Enterprise, would be eligible for classification under MSME category on the reporting dates. 17 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 (ii) In terms of paragraph 9 of RBI Circular DBR. No. FSD.BC.32/24.01.007/2015- 16 dated July 30, 2015 on ‘Provision of Factoring Services by Banks - Review’, inter- alia, the borrower’s bank shall obtain from the borrower, periodical certificates regarding factored receivables to avoid double financing/ counting. Further, the ‘factors’ must intimate the limits sanctioned to the borrower and details of debts factored to the banks concerned, taking responsibility to avoid double financing. (iii) Factoring transactions pertaining to MSMEs taking place through the Trade Receivables Discounting System (TReDS) shall also be eligible for classification under priority sector. Other Finance to MSMEs i) Loans up to Rs. 50 Crore to Start-ups, as per definition of Ministry of Commerce PM and Industry, Govt. of India that confirm to the definition of MSME. ii) Loans to entities involved in assisting the decentralized sector in the supply of inputs and marketing of outputs of artisans, village and cottage industries. 4 iii) Loans to co-operatives of producers in the decentralized sector viz. artisans, :4 village and cottage industries. 03 iv) Loans sanctioned by banks to NBFC MFIs and other MFIs (Societies, Trusts etc.) which are members of RBI recognised SRO for the sector for on-lending to MSME sector as per the conditions specified in para 1.3.5.8 xi. 24 v) Loans sanctioned by banks to registered NBFCs (other than MFIs) for on-lending to Micro & Small Enterprises as per conditions specified in para 1.3.5.8 xii. 20 vi) Credit outstanding under General Credit Cards (including Artisan Credit Card, 0/ Laghu Udyami Card, Swarojgar Credit Card and Weaver’s Card etc. in existence and catering to the non-farm entrepreneurial credit needs of individuals). /1 vii) Overdraft to Pradhan Mantri Jan-Dhan Yojana (PMJDY) account holders as per 30 limits and conditions prescribed by Department of Financial Services, Ministry of Finance from time to time, will qualify as achievement of the target for lending to Micro Enterprises. 56 viii) Outstanding deposits with SIDBI and MUDRA Ltd. on account of priority sector shortfall. 58 1.3.5.3 Export Credit 64 The Export Credit extended as per the details below would be classified as priority sector. i) Export credit under agriculture and MSME sectors are allowed to be classified as PSL in the respective categories viz. agriculture and MSME. ii) Export Credit (other than in agriculture and MSME) will be allowed to be classified as priority sector if Incremental export credit over corresponding date of the preceding year, up to 2 per cent of ANBC or CEOBE, whichever is higher, subject to a sanctioned limit of Rs. 40 crore per borrower. 18 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 iii) Export credit includes pre-shipment and post shipment export credit (excluding off-balance sheet items) as defined in Master Circular on Rupee/Foreign Currency Export Credit and Customer Service to Exporters issued by Department of Regulation, RBI vide DBR No. DIR. BC. 14/04.02.002/2015-16 dated July 1, 2015 and updated from time to time. 1.3.5.4 Education: Loans to individuals for educational purposes, including vocational courses, not exceeding Rs. 20 lakh will be considered as eligible for Priority Sector classification. Loans currently classified as priority sector will continue till maturity. 1.3.5.5 Housing: PM 1.3.5.5.1 Bank loans to Housing sector as per limits prescribed below are eligible for priority sector classification: 4 i) Loans to individuals up to Rs. 35 lakh in metropolitan centres (with :4 population of ten lakh and above) and loans up to Rs. 25 lakh in other 03 centres for purchase/construction of a dwelling unit per family provided the overall cost of the dwelling unit in the metropolitan centre and at other centres does not exceed Rs.45 lakh and Rs.30 lakh respectively. 24 ii) Housing loans to banks’ own employees will not be eligible for 20 classification under the priority sector. iii) Since Housing loans which are backed by long term bonds are exempted 0/ from ANBC, banks should not classify such loans under priority sector. /1 1.3.5.5.2 Loans up to Rs. 10 lakh in metropolitan centres and up to Rs. 6 lakh in other 30 centres for repairs to damaged dwelling units conforming to the overall cost of the dwelling unit as prescribed in para 1.3.5.5.1. 56 1.3.5.5.3 Bank loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers subject to dwelling 58 units with carpet area of not more than 60 sq.m. 64 1.3.5.5.4 Bank loans for affordable housing projects using at least 50% of FAR/FSI for dwelling units with carpet area of not more than 60 sq.m. 1.3.5.5.5 Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the purpose of purchase/ construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of Rs. 20 lakh per borrower, subject to Para 1.3.5.8 (xiii) and (xiv). 1.3.5.5.6 Outstanding deposits with NHB on account of priority sector shortfall. 19 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 1.3.5.6 Social infrastructure Bank loans to social infrastructure sector as per limits prescribed below are eligible for priority sector classification. Bank loans up to a limit of Rs. 5 crore per borrower for setting up schools, drinking water facilities and sanitation facilities including construction/ refurbishment of household toilets and water improvements at household level, etc. and loans up to a limit of Rs. 10 crore per borrower for building health care facilities including under ‘Ayushman Bharat’ in Tier II to Tier VI centres. Bank credit to Micro Finance Institutions (MFIs) extended for on-lending to individuals and also to members of SHGs/JLGs for water and sanitation facilities will be eligible for categorization as priority sector under ‘Social PM Infrastructure’, subject to the criteria laid down in paragraph 1.3.5.8 xi. 1.3.5.7 Renewable Energy 4 Bank loans up to a limit of Rs. 30 Crore to borrowers for purposes like solar :4 based power generators, biomass-based power generators, wind mills, micro- hydel plants and for non-conventional energy based public utilities, viz., street 03 lighting systems and remote village electrification etc., are eligible for Priority Sector Classification. For individual households, the loan limit is Rs. 10 Lakh 24 per borrower. 1.3.5.8 Others 20 i. Loans provided directly by banks to individuals and individual members of 0/ SHG/JLG satisfying the criteria as prescribed in Master Direction on Regulatory Framework for Microfinance Loans Directions, dated March 14, /1 2022. 30 ii. Loans not exceeding Rs. 2.00 lakh provided directly by banks to SHG/JLG for activities other than agriculture or MSME, viz., loans for meeting social needs, construction or repair of house, construction of toilets or any viable 56 common activity started by the SHGs. 58 iii. Loans to distressed persons [other than distressed farmers indebted to non-institutional lenders] not exceeding Rs.1 lakh per borrower to prepay 64 their debt to non-institutional lenders. iv. Loans sanctioned to State Sponsored Organisations for Scheduled Castes/ Scheduled Tribes for the specific purpose of purchase and supply of inputs and/or the marketing of the outputs of the beneficiaries of these organisations. v. Loans up to Rs.50 crore to Start-ups, as per definition of Ministry of Commerce and Industry, Govt. of India that are engaged in activities other than Agriculture or MSME. 20 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 vi. Advance to weaker Section: i)Priority sector loans to the following borrowers will be considered as lending under Weaker Sections category: i. Small and Marginal Farmers ii. Artisans, village and cottage industries where individual credit limits do not exceed ₹1 lakh iii. Beneficiaries under Government Sponsored Schemes such as National Rural Livelihood Mission (NRLM), National Urban Livelihood Mission (NULM) and Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS) iv. Scheduled Castes and Scheduled Tribes PM v. Beneficiaries of Differential Rate of Interest (DRI) scheme vi. Self Help Groups 4 vii. Distressed farmers indebted to non-institutional lenders :4 viii. Distressed persons other than farmers, with loan amount not exceeding ₹1 lakh per borrower to prepay their debt to non- institutional lenders 03 ix. Individual women beneficiaries up to ₹1 lakh per borrower 24 x. Persons with disabilities xi. Minority communities as may be notified by Government of 20 India from time to time. 0/ ii)Overdraft availed by PMJDY account holders as per limits and conditions prescribed by Department of Financial Services, Ministry of Finance from /1 time to time may be classified under Weaker Sections. 30 iii)In States, where one of the minority communities notified is, in fact, in majority, item (xi) will cover only the other notified minorities. These 56 States/ Union Territories are Punjab, Meghalaya, Mizoram, Nagaland, Lakshadweep and Jammu & Kashmir. 58 vii. Investments by banks in securitisation notes: Investments by banks in ‘securitisation notes’, representing loans to 64 various categories of priority sector, except 'others' category, are eligible for classification under respective categories of priority sector depending on the underlying assets provided: i) The assets are originated by banks and financial institutions and are eligible to be classified as priority sector advances prior to securitisation and fulfill the Reserve Bank of India guidelines on ‘Securitisation of Standard Assets’ issued vide Master Directions DOR.STR.REC.53/21.04.177/2021-22 dated September 24, 2021 and updated from time to time. 21 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 ii) The all-inclusive interest charged to the ultimate borrower by the originating entity should not exceed the investing bank’s MCLR + 10% or EBLR + 14%. iii) The investments in securitisation notes originated by MFIs, which comply with the guidelines as per para xi below are exempted from this interest cap as there are separate caps on margin and interest rate for MFIs. iv) Investment by banks in securitisation notes with loans against gold jewellery originated by NBFCs as underlying, are not eligible for priority sector status. viii. Transfer of Assets through Direct Assignment / Outright purchase: Assignment/outright purchase of pool of assets by banks representing PM loans under various categories of priority sector, except the ‘others’ category, will be eligible for classification under respective categories of priority sector provided: 4 i) The assets are originated by banks and financial institutions which are :4 eligible to be classified as priority sector advances prior to the purchase 03 and fulfill the Reserve Bank of India guidelines on ‘Transfer of Loan Exposures’ issued vide Master Directions DOR.STR.REC.51/21.04.048/2021-22 dated September 24, 2021 and 24 updated from time to time. 20 ii) The all-inclusive interest charged to the ultimate borrower by the originating entity should not exceed the investing bank’s MCLR + 10% 0/ or EBLR + 14%. iii) The Assignments/Outright purchases of eligible priority sector loans /1 from MFIs, which comply with the guidelines as per para xi below are 30 exempted from this interest rate cap as there are separate caps on margin and interest rate for MFIs. 56 iv) When the bank undertakes outright purchase of loan assets (eligible to be classified under priority sector) from banks/ financial institutions, 58 they must report the outstanding amount actually disbursed to priority sector borrowers and not the premium embedded amount paid to the 64 seller. v) Loans against gold jewellery acquired by banks from NBFCs are not eligible for priority sector status. ix. Inter Bank Participation Certificates (IBPCs): i) IBPCs bought by banks, on a risk sharing basis, are eligible for classification under respective categories of priority sector, provided the underlying assets are eligible to be categorized under the respective categories of priority sector and the banks fulfil the Reserve Bank of 22 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 India guidelines on IBPCs issued vide RBI circular DBOD.No.BP.BC.57/62-88 dated December 31, 1988 and updated from time to time. ii) IBPCs bought by banks on risk sharing basis relating to ‘Export Credit’ as per para 1.3.5.3, shall be classified from purchasing bank’s perspective for priority sector categorization. However, in such a scenario, the issuing bank shall certify that the underlying asset is ‘Export Credit’, in addition to the due diligence required to be undertaken by the issuing and the purchasing bank as per guidelines in this regard. x. Priority Sector Lending Certificate (PSLCs): The outstanding PSLCs bought by banks will be eligible for classification PM under respective categories of priority sector provided the underlying assets originated by banks are eligible to be classified as priority sector advances and fulfil the Reserve Bank of India guidelines on Priority Sector 4 Lending Certificates issued vide Circular FIDD.CO.Plan.BC.23/ :4 04.09.001/2015-16 dated April 7, 2016. SFBs shall further be guided by the terms and conditions specified in Para 1.9 of DBR circular No. 03 DBR.NBD.26/16.13.218/2016-17 dated October 6, 2016 on credit risk transfer and portfolio sales/purchases. 24 xi. Bank loans to MFIs (NBFC-MFIs, Societies, Trusts, etc.,) for on-lending 20 Bank credit to registered NBFC-MFIs and other MFIs (Societies, Trusts 0/ etc.) which are members of RBI recognized SRO for the sector, for on- lending to individuals and also to members of SHGs / JLGs will be eligible /1 for categorisation as priority sector advance under respective categories 30 viz., Agriculture, Micro, Small and Medium Enterprises, Social Infrastructure and 'Others', provided the MFIs adhere to the conditions 56 prescribed in Chapter II (xx) and Chapter VIII of Master Directions DNBR PD.007 and Chapter II (xx) and Chapter IX of Master Directions DNBR 58 PD.008/03.10.119/2016-17 dated September 1, 2016, as updated from time to time. 64 xii. Bank loans to NBFC (Other than MFIs) for on-lending In order to boost credit to the needy segment of borrowers, it has been decided that bank credit to registered NBFCs (other than MFIs) for on- lending will be eligible for classification as priority sector under respective categories subject to the following conditions:  Agriculture: On-lending by NBFCs for ‘Term lending’ component under Agriculture will be allowed up to Rs.10 lakh per borrower. 23 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024  Micro & Small enterprises: On-lending by NBFC will be allowed up to Rs.20 lakh per borrower. xiii. Bank loans to HFCs for on-lending Bank credit to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the purpose of purchase/construction/ reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to an aggregate loan limit of Rs.20 lakh per borrower. Banks should maintain necessary borrower-wise details of the underlying portfolio. xiv. Cap on On-lending PM Bank credit to NBFCs (including HFCs) for on-lending as applicable in para xii and xiii above, will be allowed up to an overall limit of five percent of individual bank’s total priority sector lending. Banks shall compute the 4 eligible portfolio under on-lending mechanism by averaging across four :4 quarters, to determine adherence to the prescribed cap. xv. Co-lending by Banks and NBFCs to priority sector: 03 All Scheduled Commercial Banks are permitted to co-lend with all registered Non-Banking Financial Companies (including Housing Finance 24 Companies) for lending to the priority sector. Detailed guidelines, in this 20 regard, have been issued vide RBI circular FIDD.CO.Plan.BC.No.8/ 04.09.01/2020-21 dated November 5, 2020. 0/ There are two methods of co-lending of loans by Banks and NBFCs to /1 priority sector. Under Method-I, there is an irrevocable commitment on the part of the Bank to take into books its share of individual loans as 30 originated by the NBFC and under Method-II, Bank retains the right to exercise its discretion regarding taking into books the loans originated by 56 NBFC. 58 Based on RBI directions, Bank’s policy guidelines with regard to Co- Lending by Banks and NBFCs (including HFCs) to Priority Sector are 64 enumerated in LDGM 24/2020 dated 10.12.2020 and LDGM 2/2021 dated 24.02.2021. xvi. COVID19 measures for PSL i)In terms of the press release 2019-2020/2237 dated April 17, 2020 notifying the Targeted Long-Term Repo Operations (TLTRO 2.0) scheme, banks were allowed to exclude the face value of such securities kept in the HTM category from computation of adjusted net bank credit (ANBC) for the purpose of determining priority sector targets/sub- 24 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 targets. This exemption is only applicable to the funds availed under TLTRO 2.0. ii)In terms of press release 2019-2020/2276 dated April 27, 2020, the face value of securities acquired under the SLF-MF and kept in the HTM category will not be reckoned for computation of adjusted net bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets. iii)In terms of press release 2019-2020/2294 dated April 30, 2020, the regulatory benefits announced under the SLF-MF scheme will be extended to all banks, irrespective of whether they avail funding from the Reserve Bank or deploy their own resources under the above- mentioned scheme and the same can be reckoned for computation of PM adjusted net bank credit (ANBC) for the purpose of determining priority sector targets/sub-targets. iv)In terms of press release 2021-2022/177 dated May 7, 2021, an on-tap 4 liquidity window of Rs.50,000 crore with tenors of up to three years at :4 the repo rate till March 31, 2022 has been opened to boost provision of 03 immediate liquidity for ramping up COVID-related healthcare infrastructure and services in the country. Banks are expected to create a COVID loan book under the scheme. These loans will continue to be 24 classified under priority sector till repayment or maturity, whichever is earlier. Banks may deliver these loans to borrowers directly or through 20 intermediary financial entities regulated by the RBI. Banks desirous of deploying their own resources without availing funds from the RBI 0/ under the scheme for lending to the specified segments mentioned /1 above will also be eligible for the incentives stipulated as above. 30 v)In terms of press release 2021-2022/323 dated June 4, 2021, a separate Liquidity window of Rs.15,000 crore with tenors of up to three years at the repo rate till March 31, 2022 has been opened for certain 56 contact-intensive sectors i.e., hotels and restaurants; tourism-travel 58 agents, tour operators and adventure/heritage facilities; aviation ancillary services-ground handling and supply chain; and other services 64 that include private bus operators, car repair services, rent-a-car service providers, event/conference organisers, spa clinics, and beauty parlours/saloons. Banks are expected to create a separate COVID loan book under the scheme. Banks desirous of deploying their own resources without availing funds from the RBI under the scheme for lending to the specified segments mentioned above will also be eligible for this incentive. 25 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 1.4 Micro, Small and Medium Enterprises (MSME) The policy for financing Micro, Small and Medium Enterprises is communicated separately with by MSME Wing. 1.5 Export Credit Exports play a very important role in a developing economy like ours and it is given utmost importance in the successive Foreign Trade Policies. Bank will continue its policy of encouraging adequate finance to exporters and pursue according faster decisions and responses. The following specific measures are in place in this regard:  Gold Card Scheme for exporters  Running Account facility PM  Specified time norms for disposal of proposals  Financing in select Foreign currency 4  Adherence to Exchange Control Regulations and Foreign Trade Policy :4 Export finances are broadly provided as Pre shipment finance and Post shipment finance. 03 Bank can classify Incremental export credit over corresponding date of the preceding year, up to 2 percent of ANBC or Credit Equivalent Amount of Off- 24 Balance Sheet Exposure, whichever is higher, subject to a sanctioned limit of Rs.40 crores per borrower. 20 1.5.1 Coverage by Export Credit Insurance from Export Credit Guarantee 0/ Corporation (ECGC) /1 (i) Pre-shipment Credit 30 Bank has subscribed to Export Credit Insurance for Banks -ECIB (WTPC), which covers all packing credit advances granted by the Bank excluding advances 56 granted to Government Companies (any company in which not less than 50% of the paid up share capital is held by the Central or any State Government or partly 58 by the Central Govt and partly by one or more State Govt and includes a company which is a subsidiary of a Govt company). ECIB covers the risk of in of the 64 exporters and protracted default by the exporter to pay the amounts due to the Bank. Bank may absorb the premium under ECIB (WT-PC) of ECGC selectively on a case to case basis, depending upon the value of the account based on cost-benefit analysis. Such permissions shall be obtained from CGM/GM-HO-CAC and above authorities for the accounts upto their delegated powers. In case of MC power accounts, CAC of the Board may permit. 26 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 (ii) Post-shipment credit Post-shipment credit under Export Credit is covered under Post-Shipment Credit under Export Credit Insurance for Banks (Whole Turnover Post Shipment) [ECIB. (WT-PS)] of ECGC w.e.f 01.07.2012. The premium in respect of ECIB (WT-PS) is borne by the Bank and not to be recovered from exporters. (iii) In addition to Whole Turnover Post Shipment Guarantee (ECIB-WTPS), individual Buyer-wise Policy to be obtained by the exporter client. However, bank may consider waiver on selective basis, purely on merits, subject to compliance of the following risk mitigants and as per delegation for waiver for post shipment policy detailed below: PM a) The exporter borrower is a well-established concern whose dealings/track record have been satisfactory with the branch at least for the past three years and there are no instances of misuse of facilities like availing 4 multiple facilities against the same order/s / LCs, return of bills due to :4 non-acceptance / non-payment, return of goods for poor quality etc. 03 b) Corporate should be rated upto BBB or better by an approved external rating agency or internally rated Low Risk & Normal Risk. In respect of MSME accounts rated upto BBB or better or equivalent by an external rating agency 24 or internally rated low, normal and moderate risk. 20 c) In case of Consortium, the bank shall fall in line with consortium decision. 0/ d) Wherever both internal as well as external rating is available, in such cases, /1 external rating shall be considered. However, external rating should be the latest one and should not be more than 12 months old. 30 e) No Defaults or frustration of the export orders had take place on previous occasions. 56 f) There are no overdue GRs in respect of the exporter and if there are such 58 GRs, they are very minimal (i.e., maximum of 5%) vis-à-vis their export turnover. Also, prompt steps are taken to clear such pending GRs. 64 g) The country of repatriation is not a listed country according to ECGC. h) Besides the above, the value of the approved collaterals if any, offered by the exporter may also be factored in as a risk mitigant. i) Obtention of Buyer Credit Information Reports from reputed Credit Information Agencies, directly or through ECGC. j) The OPL/s and the track record on the drawee/s of the exporter client is/are satisfactory. 27 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 k) Earlier bills drawn on drawees are not returned for non-acceptance/ non- payment. l) Overseas buyer should not be on the ECGC’s Buyers’ Specific Approval List maintained by ECGC. The country of shipment / repatriation is not a listed country according to ECGC. Care should be taken at the pre shipment stage itself so as to avoid ECGC’s objection at later stage. m) In case of bills on Cash Against Delivery (CAD) waiver of buyerwise policy may be permitted subject to despatch of shipping documents through overseas branches/correspondent banks and in such cases, no direct despatch of documents is permitted. n) In case of Gems, Jewellery & Diamond sector or any other sector for which whole turnover is suspended/excluded by ECGC, the exposure shall be PM covered under ECIB (INPC) & ECIB (INPS). In addition, exporter client shall obtain Buyer wise Policy. However, wherever the limits are covered under ECIB (WTPS) and/or Individual ECIB (INPS), based on merits of the case, 4 waiver may be permitted by Circle Head (CAC), if collateral of 40% of Post :4 shipment limits by way of Land & Building or other liquid securities are obtained. 03 Bank shall follow the guidelines issued by ECGC from time to time. 24 1.5.2 Guidelines on import of Gold and Silver by Qualified Jewellers Bank has framed guidelines on permitting advance remittance for Import of Gold 20 and Silver by resident Qualified Jewellers through India International Bullion Exchange (IIBX) or any other exchange approved by IFSCA and DGFT, 0/ Government of India as per the import policy conditions notified by DGFT. /1 The detailed guidelines on Import of gold by qualified jewellers are furnished in FX/19/2023 dated 21.04.2023. 30 The detailed guidelines on Import of silver by qualified jewellers are furnished in 56 IC/15/2024 dated 04.01.2024. 58 The detailed guidelines on Import of gold by Valid Tariff Rate Quota Holders under India-UAE CEPA are furnished in HO Cir. IC/326/2024 dated 18.04.2024. 64 1.6 Credit Information: 1.6.1 Credit Information Companies Bank has been using the services of “Credit Information Companies” for drawing of Credit Information Reports (CIRs) under Consumer and Commercial segments and also submitting the data to them. Under the present regulation, the information is shared with following Companies: (i) M/s. TransUnion CIBIL Limited (ii) M/s. Experian Credit Information Company India Private Ltd. (ECICI) 28 Credit Policy -Domestic Branches for FY 2024-25-Updated till 30.06.2024 (iii) M/s. Equifax Credit Information Services Private Ltd. (ECIS) (iv) M/s. CRIF High Mark Credit Information Services Pvt. Ltd. (CHMCIS) 1.6.2 Credit Information Report (CIR) CIRs supplement the credit appraisal process, in which evaluation of credit histories of the applicant is one among the significant inputs. The system of drawing CIRs during appraisal of credit proposals also facilitates identification of serial defaulters