UCO Two – wheeler scheme

The salient features of UCO Two – wheeler scheme (Non-Priority Sector):

1.       Eligibility:

Salaried Borrower: Employees with minimum service of 1 year against regular vacancy in the following sectors and drawing salary from UCO Bank branches or arranging to remit EMIs under irrevocable salary tie-up arrangement.

Eligible borrowers employed in:

 A. reputed public sector;

B. private institutions/organizations (excluding employees of Private Ltd. Cos., Partnership and Proprietorship units).

c. Pensioners, more particularly Defence Pensioners, who have served under short service commission / noncommission category and fulfilling the age and income criterion of Rs.8,000/- p.m. as prescribed for salaried class, shall be treated as ‘deemed salaried class’ for the purpose of determining eligibility under this scheme.       

Zonal Head shall have the authority, in deserving cases, to allow loans to salaried-borrowers, with no salary tie-up, up to Rs. 0.60 lacs only, on the strength of PDCs.

Employees on contractual service condition / job hopping history and / or unstable income shall not be entitled to finance under the scheme if the loan is not backed by full liquid collateral securities.

Non-salaried Borrower: The following categories of borrowers, with stable income as per income criteria fixed under the scheme, shall be eligible for finance:

a. Self-employed,

b. Professionals,

c. Businessmen,

d. Agriculturists (with minimum 5 acres of irrigated land in own/joint name/s)

Barring agriculturists, all other non-salaried class of borrowers shall have to provide minimum 40% liquid collateral security, in addition to minimum 10% margin.

Acceptable forms of liquid collateral securities are as per point No. 13 here under.

2.       Age

Salaried Borrower: 21 to 55 years

Non Salaried Borrower: 21 to 60 years

3.       Income Criteria

Salaried Borrower: Minimum gross salary of Rs.8, 000/- p.m.

Non Salaried Borrower:  Minimum income of Rs.1lac p.a. as per Income Tax Returns / Assessment Order in the preceding year. OR, Minimum income of Rs.1.5 lacs p.a. for purchase of feature-rich vehicles. In case of agriculturists, self declaration of income to the satisfaction of the Sanctioning Authority is required.

Note:  Ø While determining loan eligibility minimum take-home income of 40% p.m., after taking into account the EMI of the new loan, should be ensured for both class of borrowers.

Ø For salaried class of borrowers, availability of 40% take-home pay shall be ascertained in relation to salary of the applicant for last six months.

Ø Yearly income of the non-salaried borrowers is to be divided by 12 to arrive at monthly income.

Ø No loan shall be considered in favour of joint borrowers.

Branches may consider proposals from the following categories of borrowers only against 100% liquid collateral securities:

Ø Borrowers on contractual employment / frequent job-hopping history and / or unstable income;

Ø Employees of Pvt. Ltd. Cos., Partnership and Proprietorship concerns

4.       Minimum Margin :

10% of the total cost on road; margin amount should be deposited upfront. Cost of vehicle shall include comprehensive insurance premium and road tax for the first year together with cost of accessories.

5.       Amount of loan for purchase of new two-wheeler

Maximum Rs.0.60 lac or 90% of the cost of the new two-wheeler of well known brand, whichever is less. However, in deserving cases, Zonal Heads may authorize processing of loans up to Rs.1 lac (Rs. one lac only) (maximum) for purchase of feature-rich two-wheelers subject to compliance of the other terms and conditions:

Ø Salary tie-up is a must for loans above Rs. 0.60 lacs in favour of salaried class borrowers;

Ø Minimum income of Rs.1.5 lacs p.a. for non-salaried class of borrowers.

Financing pre-used Two-wheeler is strictly prohibited.

6.       Repayment

 Maximum 48 EMIs commencing from one month after disbursement. In case of salaried borrowers EMIs should be fixed in such a way that the loan is fully repaid 6 months before the date of retirement.

7.       Guarantee

Salaried Borrower: ( Compulsory Guarantee:)  Personal guarantee of spouse or nominee of PF/Gratuity of the borrower is compulsory.

Non-Salaried Borrower:

a)Compulsory Guarantee: Personal guarantee of the spouse of the married borrower, or Personal guarantee of the mother / surviving parent in case of unmarried borrower, or where spouse guarantee is not available for obvious reasons.

b) Additional Guarantee: By one more guarantor having income equal to that of the borrower or having means at least equal to the loan amount.

8. Waiver of Guarantee:  i) Guarantee requirements for both categories of borrowers may be   waived if the loan is covered in full by Liquid Collateral Security in the name of the borrower / third party.

ii) Additional guarantee stipulation for non-salaried borrowers as per 7(b) may be waived if 50% of the loan amount is covered by Liquid Collateral Security, in case of non-salaried borrower.

Eligible liquid collaterals under UCO Two-wheeler scheme shall be as per serial no. 13 mentioned below.

9.       Undertaking :

Salaried Borrower: For salaried borrowers EMIs are to be recovered and remitted by employer under salary tie-up arrangement. Standard irrevocable authorization and undertaking to be obtained from the borrower and employer respectively. In specially approved accounts (maximum Rs. 0.60 lac) by the Zonal Manager where recovery of EMI at source is not possible, post dated cheques (PDCs) for all installments are to be obtained upfront.

Non Salaried Borrower: 48 post dated cheques (PDCs) are to be obtained before disbursement of the loan.

1. PDCs should invariably be on the salaried account of the borrower (may be with other bank) for salaried borrowers.

2. Outstation cheques shall not be accepted as PDCs.

As already stated, Zonal Head shall have the authority to:

1. Allow loans to salaried-borrowers, on the merit of each case, up to Rs. 0.60 lacs, with no salary tie-up arrangement.

2. Provide pre-sanction clearance permitting processing of proposals up to Rs. 1 lac for purchase of high-value vehicles.

However, accounts backed by 100% liquid collateral securities shall not be subjected to salary tie-up and / or pre-sanction clearance by Zonal Manager.

10.      Rate Of Interest: 12.25% (fixed)

Concessional Interest Rate shall be allowed by the Sanctioning Authority only in the following manner:

a) Accounts backed by full liquid collateral securities: 1% in ROI

b) Accounts backed by 50% liquid collateral securities:  0.50% in ROI.

11. Penal Interest:  Penal interest @2% p.a. on the defaulted installment, as per extant guidelines.

12. Primary Security: Hypothecation of new two-wheeler of reputed brand.

  Bank’s charge must be registered with RTA.

13. Collateral Security:  Lien / Pledge / Assignment of Instruments, as the case may be, of liquid collateral security, if any, offered / stipulated by sanctioning authority. Eligible collaterals under UCO Two-wheeler scheme, for all purposes including waiver of guarantee and concessional rate of interest, shall be in the form of:

(a)FDR/s with UCO Bank,

(b)NSC,

(c)KVP,

(d)LIC (in own name).

*Only Surrender Value of LIC policy shall be taken into account.

14. Processing Charge: 1%; minimum Rs.500/-.

15. Pre-payment Charge: No pre-payment charges.

16. Insurance: Comprehensive insurance with requisite Bank clause, preferably through Bank’s Channel Partner. Borrowers may be persuaded to have life cover though the same is not mandatory.

17. Disbursement: Before issuing Draft / Pay Order / Magic Cheque, branch should obtain document/s evidencing placement of the order by the borrower to the dealer for purchase of the vehicle. The Draft / Pay Order / Magic Cheque issued towards cost of the vehicle should be sent directly to the dealer by Registered Post.

18. Lending Powers: Branch Heads of identified branches, irrespective of their scales:

(a) For loans up to Rs. 0.60 lac;

(b) For loans above Rs.0.60 lac and up to Rs.1 lac – presanction clearance from Zonal Manager – a must.

Proposals will be processed at respective branches till compatibility with LAPS software is established

19. Precautionary measures in selection of borrower:

1. Adequate precaution is to be taken in verification of identity and credit worthiness of the applicant by strict adherence to prescribed KYC norms.

2. Credit worthiness of the applicant should be properly assessed to determine borrower’s repaying capacity throughout the entire tenure of the loan.

3. Original Pass Book / Statement of Account should be checked with reasonable care and accuracy to assess suitability of the borrower with reference to borrowers past credit behavior.

4. Duly attested photo copy of the Pass Book / Statement of Account should be retained for future record and inspection.

5. Other credit obligations of the borrower should be ascertained by discreet enquiries during personal interview with the borrower.

6. Employer’s undertakings shall be subjected to proper scrutiny to make sure that employer’s undertaking carries the signature by authorized official of the organization.

7. Borrowers on contractual income / frequent job hopping history and / or unstable income shall not be eligible for finance if the exposure is not backed by full liquid collateral security.

8. CIBIL data base, where available, should be accessed to assess credit history of the applicant.

20. End use verification:  As already stated, before issuance of Draft/Pay Order or crediting loan amount to CA/CC account (where applicable), branch should obtain document/s evidencing placement of the order by the borrower to the dealer for purchase of the vehicle.

Branches should arrange for physical inspection of the vehicle and related documents immediately after sanction of the loan. Records for such verification should be preserved in the loan file.

Further, verification from RTA website may be conducted once in a year.

21. Extension of the scheme to the members of staff: The issue of extension of the scheme for the members of staff of the Bank is being referred to Head Office, Personnel Services Department for consideration. Till a concurrence is received from them, no member of staff will be finance under the scheme.

FORMS & DOCUMENTATION:

UCO Shopper Loan Application Forms are to be used with suitable amendment.

A-36 (Revised), A-26A Guarantor's Statement, Letter of Guarantee in A21A (wherever required), A38, A39, A4, A58 (as per nature of collateral security offered), PSVR – I & II, in respect of Borrower and Guarantor/s, if any.

MIS:

Branches/Offices are advised to insert additional one row in the ‘Monthly Statement of Retail Advances’ format for reporting of advances under the scheme.

UCO Two-Wheeler Scheme – Extension of the facility to the members of staff (Officers&Award staff) of our Bank.

According to Circular No. CHO/PMG/45/2010-11 Dated: 23.02.2011 the facility of this scheme is extended to the members of staff (Officers & Award staff) also, with the following terms & conditions, in addition to what have been prescribed under the scheme:

1. All fulltime confirmed staff members with a minimum of 1 year of completed service will be eligible. (This condition will apply in lieu of ‘Eligibility Criteria’ prescribed under UCO Two Wheeler Scheme).

2. Eligible member of staff will maintain 40% take home pay after all deductions including deduction of the instalment of the proposed loan throughout the currency of the loan. (This condition will apply in lieu of ‘Income Criteria’ prescribed under UCO Two Wheeler Scheme). Further, there would be no provision for clubbing of income of spouse or children.

3. Two-Wheeler Loan shall have security coverage of lien on P.F., Gratuity and all other terminal benefits of the staff member.

4. The staff-member, who has outstanding balance in the staff conveyance loan a/c for Two-Wheeler, may be considered for loan under UCO Two- Wheeler Scheme, provided the amount of recovery in respect of the proposed loan as well as all other loans and statutory deductions leave at least 40% of the salary as his/her net take home pay.

5. Other terms and conditions including rates of interest as amended/revised from time to time for general public under UCO Two-Wheeler scheme will apply to the members of staff also.

Sanctioning Authority

For Officers and Award staff working at branches or at offices under the jurisdiction of a Zonal Office – respective Zonal Head. However in cases of VL/EL branches, the Branch Head in SMGS-IV or SMGS-V would be the Sanctioning Authority for the Officers and Award staff working under him/her.

For Award staff and Officers upto SMGS-IV working in Head Office – Asstt. General Manager (H R Management)

For officers in SMGS-V working in Head Office & Zonal Heads in SMGS-V – Dy. General Manager (H R Management)

For Dy. General Managers working in Head Office & Zonal Heads in TEG-VI – General Manager (H R Management)

For General Managers & Field General Managers – Executive Director/ Chairman & Managing Director.