Vehicle Loan

VEHICLE LOAN

Rules for Issue of Vehicle Loans

Rule No.1

These rules are called the rules for granting of Vehicle Loan to individuals, firms, HUF, Companies, Trust and Cooperative Societies.
(amended vide RCS Circular letter No.Credit/CA-2/Vehicle Loan/14924  dated 11.10.07)

Rule No.2

Purpose of loan is to provide financial assistance to purchase new vehicles for business and personal use.
(amended vide RCS Circular letter No.Credit/CA-2/Vehicle Loan/14924  dated 11.10.07)

Rule No.3

The maximum amount that can be sanctioned under the scheme is limited to Rs.10.00 lac or 80% of value of the vehicle whichever is less.
(amended vide RCS Circular letter No.Credit/CA-2/Vehicle Loan/14924  dated 11.10.07)

Rule No.4

The cost of the vehicle shall be paid directly by the Bank to the suppliers or authorized dealers on receipt of intimation from the dealer and instructions from the applicant.

Rule No.5

The application for loans should be made in the form prescribed by the Bank.

Rule No.6

Wherever sanctioning authority is satisfied, loans upto 60% of the cost of vehicle shall be granted against the comprehensive insurance and lien in the registration certificate. In case loan is above 60% of the cost of vehicle (subject to 80% of the cost as stipulated in the rules), two good sureties shall also be taken in addition to the insurance and lien in registration certificate in case of buses and trucks for commercial use.
(amended vide RCS Circular letter No.Credit/CA-2/G-3/-351  dated 30.04.1998)

Rule No.7

Rate of interest shall be charged as fixed by the bank from time to time with quarterly rests.
(amended vide RCS Circular letter No.Credit/CA-2/Vehicle Loan/14924  dated 11.10.07)

Rule No.8

Penal interest at the rate of 2% p.a. shall be charged for the defaulted amount and for defaulted period.

Rule No.9

The vehicle should be comprehensively insured for the full value covering all risks and the policy should be in the joint names of borrower and the bank with agreed bank clause.
(amended vide RCS Circular letter No.Credit/CA-2/Vehicle Loan/14924  dated 11.10.07)

Rule No.10

The charge of the bank on the vehicle in the form of registration should be registered with the registering authority within 90 days of purchase of vehicle, failing which additional interest at the rate of 3% shall be charged.
(amended vide RCS Circular letter No.Credit/CA-2/Vehicle Loan/14924  dated 11.10.07)

Rule No.11

The repayment of loan should be in the form of monthly installments to be repaid within 5 years. However farmers may opt for half-yearly installments due on 30th June and 31st December. One month moratorium period shall be allowed under the scheme.

Rule No.12

The Bank reserves the right to proceed against the borrower and sureties in the event of default in the repayment of loan installment/s.

Rule No.13

The borrower should agree to produce the vehicle for periodical inspection to ensure that it is maintained in satisfactory condition.

Rule No.14

The borrower should agree to be bound by arbitration provisions in the Punjab Cooperative Societies Act 1961 and the Rules framed thereunder.

Rule No.15

The borrower should give an undertaking stating that all the terms and conditions stipulated by the Bank while sanctioning the loan and those conditions that may be stipulated in future by the bank are acceptable to him.