Over Draft is a credit arrangement with the bank, allowing a person with a current account to use borrowed money up to an agreed limit when nothing is left in the account. An overdraft is a facility granted to customers whereby they can overdraw their current account up to an agreed limit. They can at any time deposit money into the account to reduce the outstanding balance or can draw out money whenever the customers need it, as long as it does not exceed the limit. Interest is calculated on the daily outstanding balance and is normally charged at the end of each month.

Purpose

To meet the credit / working capital needs of trade, manufacturing, commercial activity, other general business, as also for their bonafide requirements

Eligibility

All A-class or D Class member entrepreneurs who are otherwise eligible for sanction of working capital/Term loan for eligible activities or doing Small Scale Industrial units & Tiny units, Small business, Professionals & Self employed persons, Retail traders having 2 years satisfactorily conducted account and New accounts where adequate collateral security is available.

Security

The OD accounts are fully secured advances and sanctioned on the basis of: 

Mortgage of immovable properties OR 

Hypothecation of plant and machinery, stock of goodsFD receipt etc.Normally, 

the OD is sanctioned against the security collateral immovable property such as land and building. The sanctioning amount will be limited up to 40% of the valuation of the collaterals.

If the OD is sanctioning on the basis of security of mortgage of immovable properties the following documents must be produced and retained in the Bank:

The original document of the propertyBack documents of the property or its duly attested copies

Possession certificate of the property.

Encumbrance certificate of the property for the last preceding 15 years without any breaks

Revenue Tax receipts of the property

Purchase certificate issued by the revenue authorities (if found necessary)

Copy of the identity card as per the KYC norms

Location mapIncome proof, 

local body/municipal licence,tin no.

If the OD is availing based on the hypothecation of the plant and machinery, the following conditions have to be fulfilled.

OD facility under the above category will be paid at the maximum of 50% of the value of goods, mercantile, raw materials, furniture and fittings etc.

The valuation will be on cost price.The Manager should visit the business site and satisfy himself / herself the stock and their cost based on documents.

A detailed list of items to be pledged or hypothecated with the bank should be collected and a hypothecation agreement must be obtained.

The machinery /stock should be insured for the cost price in the joint name of the bank and the borrower.

The stock of goods hypothecated should not be of perishable nature and machinery, tools and equipments should not be out dated.

Procedure

Submit application with necessary documents and security.After verification the Branch will submit the application to HO with their recommendation.After getting legal opinion HO will sanction the loan and issue orders.

Charges and other costs

The charges levied are forms, insurance, notice, legal fee, valuation charge and miscellaneous charges. Please visit the page of service charges in this sitePeriodUpto 12 months

Eligible amount

Maximum Rs. 50,00,000/-percentage of share linking is 2.5 %

Repayment

The OD is a running accounts facility where deposits and withdrawals are permitted. Interest will be payable only to the amount withdrawn from the account.Customers are free to repay part amount of loan and/or accrued interest thereon at anytime. At the end of every month, Interest is calculated on daily balance outstanding.

Rate of interestTo see the interest rate please visit the page of Interest rate in this site. The overdue interest rate is 3% .