The document summarizes the long term loan policy of Punjab and Maharashtra Bank. It discusses the types of long term loans offered which include home loans, mortgage loans, business loans, personal loans, and education loans. For each loan type, it provides details on eligibility, loan amount, interest rates, repayment periods, required collateral and guarantees. It concludes with a graphical representation showing the growth in long term loans advanced by the bank from 2009 to 2013.

1. LONG TERM LOAN POLICY OF
PUNJAB AND MAHARASTRA BANK

2. INTRODUCTION
• Punjab & Maharashtra Co-operative Bank, one of the leading Multi-State Scheduled
Urban Co-operative Bank presently operates from the States of Maharashtra, Delhi,
Karnataka and Goa.
• The Bank stands among top 10 co-operative banks of the country.
• The Bank started its operations on 13th February,1984 in a humble room at Sion as
single branch Bank.
• The Bank was conferred with Scheduled status by Reserve Bank of India in the
year 2000.It is the Youngest Bank to achieve the ‘Scheduled Bank’ status.

3. What is long term Loan?
• Term loans are the standard commercial loan, often used to pay for a major investment in
the business or an acquisition. The loans often have fixed interest rates, with monthly or
quarterly repayment schedules and a set maturity date.
Bankers tend to classify term loans into two categories: intermediate- and long-term loans.
Intermediate-term loans usually run less than three years, and are generally repaid in
monthly installments (sometimes with balloon payments) from a business's cash flow.
• Whereas, Long-term loans can run for as long as 10 or 20 years and include additional
requirements such as collateral and limits on the amount of additional financial
commitments the business may take on.

4. TYPES OF LONG TERM LOAN
SECHEME
• Home loan
• Mortgage loan
• Business loan
• Personal loan
• Education loan

5. Home loan
Purpose
• Purchase of residential accommodation like flats, bungalows, row houses, etc.
• Construction of flat / house, bungalows, etc.
• Addition / alteration to the existing residential accommodation.
Loan amount
• Maximum upto Rs.70 Lakh per beneficiary of a dwelling unit.
Eligibility amount lowest of the following:
• 75% of Agreement value+ Stamp Duty + Registration Fees or
• 80% of market value or
• Amount as per income eligibility

6. Home loan
Period
• Ranging from 5 years to 2o years
Rate Of Interest
• Floating rate of interest is 11.5% and fixed rate of interest is 13%
Pre-payment Charges
• For Housling Loan at FLOATING Rate of Interest - No Pre-payment Penalty on Foreclosure
• For Housing Loan at FIXED rate of interest:
For Foreclosure through own sources: -No pre –payment Penalty. For Foreclosure through takeover:- Pre-
payment Penalty @2% of outstanding Loan amount if prepaid within 2 years of disbursement
Guarantee
Co-Applicant or co-owners can stand as Guarantor.

7. Mortgage Loan
Purpose
• Some times, the borrowers need finance instantaneously and banks take time to process the loan and
disburse the loan after documentation. In order to overcome this difficulty, the Bank lends money against
the immovable property in the form of Mortgage Loan.
Period of Loan
• For salaried person / proprietor -10 years For others - 7 years
Margin
50% of the value assessed by Bank's approved Architect / Valuer.
Security
Mortgage of immovable property
Guarantee
One solvent third party guarantee for loan amount above Rs. 3.00 Lakhs

8. Business loans
Purpose
• Term loans for purchase of factory /industrial gala/ Shop, plant & machinery, equipment, furniture &
fixtures etc, working capital in form of cash credit and non funded facilities in form of Bank guarantees and
Letters of Credit.
Applicant
• Proprietary concerns, Registered Partnership firms, Companies
Rate of Interest
• 14.00% to 17.00% p.a. (Based on rating)
Repayment period
• Loan on demand/ maximum upto to 7* year
Margin
• Minimum - 25%

9. Personal loan
Purpose
• The Bank offers Personal Loan for various purposes such as meeting medical expenses,
renovation of residential accommodation, traveling, marriage etc.
Loan amount
• The Maximum Loan Amount of loan is restricted to Rs. 5,00,000/- only.
Period of loan
• Loan may be repaid in 36/48/60 Equated Monthly Installments (EMI).
Guarantee
• Personal guarantee of two solvent third parties.

10. Education loan
Education loan is granted for higher studies in colleges in India and abroad in any
educational field in college affiliated with recognized universities, medical colleges,
technical institutions, pharmaceutical colleges, Information Technology etc, so that
students from poor & middle classes as well as brilliant and needy students can take
advantages of the scheme. [The scheme will not cover any correspondence course].
Applicant
• Student is minor, Parents / Guardian will be applicant/s.
In case student is above 18 years of age, he/she will be the applicant for the loan.
The parents will be co-applicants.

11. Education loan (Contd.)
• Loan amount:
Repayment period:
If course period is less than 3 years: 60 months (Inclusive of total moratorium period)
If course period is more than 3 years: 84 months ( Inclusive of total moratorium
period)
Minimum Maximum
Inland Rs. 10,000 Rs. 10,00,000
Foreign Land Rs. 50,000 Rs. 20,00,000

12. Education loan (Contd.)
Moratorium period
• Course period +6 months (No moratorium period for loan amount below Rs. 1.00
Lakh
Security
• No Collateral Security For Loan upto Rs.5.00 Lakh *
Guarantor
• Two Guarantors
• In case of inland education loan if 100% Collateral Security is offered in the form of
Immovable Property or Liquid Security then, No Guarantor required

13. Graphical representation of loans advanced by
Punjab and Maharashtra bank
0
50
100
150
200
250
300
350
2009 2010 2011 2012 2013
159
173
201
186
335
Long Term Loans ( Rs. In Crores)

14. Thank you!!