Long term loan policy of Adarsh Credit Cooperative Society

1. Arpit Gupta, Roll No. 860
B.B.A., LL.B. (Hons.), Semester VI
National Law University, Jodhpur

2. INTRODUCTION
 Established under the Multi-State Cooperative
Societies Act, 2002
 Began operations in 1999; granted the status
of a multi-state cooperative in 2009.
 Registered Office – District Sirohi, Rajasthan
 Corporate Office – Udaipur, Rajasthan

3. LOANS AND ADVANCES

4. EXCERPT FROM BALANCE SHEET
(AS ON MARCH 31, 2013)

5. LOANS AND ADVANCES
As per the Balance Sheet as on Mar. 31, 2013,
the value of ‘long term loans’ is Rs.
3,42,69,851.36, out of a total of approx. Rs. 545
crores
Hence, long term loans are not as popular as
medium term and short term loans

6. BYE-LAWS
Clause 22 – ‘Capital & Funds’
Includes ‘Loans and Deposits’
http://www.adarshcredit.in/English/ByeLaws
(see page 19)

7. BYE LAWS
•Clause 46 – ‘Loans and Advances’
•2 categories:
1. Unsecured Loans – clean overdrafts, loans
against 1 or 2 personal sureties,
purchase/discount of clean bills/cheques
2. Secured Loans – can be against various types
of securities

8. TYPES OF ‘SECURITIES’
Personal security
Collateral security of movable/immovable
property
Any type of ‘dwelling’ – industrial, mercantile,
agricultural, plot of land etc.
Pledge of govt., trustee securities, shares of
approved companies, debentures and FDs
Insurance policies
Warehouse receipts
Gold and silver ornaments

9. DEFINITION OF ‘LONG TERM LOAN’
•Clause 46 (2) of Bye-Laws
•3 types of loans (in terms of lending period):
1. Long term loans - > 5 years
2. Medium term loans – 15 months-5 years
3. Short term loans – up to 15 months

10. SHAREHOLDING REQUIREMENTS FOR LOANS
Clause 47
Unsecured & secured loans – 5% of the
Society’s shares
Cannot exceed 1/5th of the total shareholding
capacity

11. ADARSH HOME LOAN
For purchasing house/flat or a plot and
construction thereon
Maximum repayment period: 240 months
Loan amount = 75% of the agreement value
OR
Income criteria, whichever is lower
Income criteria = Net income/salary *
repayment period * 0.33

12. TYPES OF LONG-TERM
LOANS

13. ADARSH HOME LOAN
Maximum loan amount: Rs. 70 lakhs
Security: Equitable mortgage/registered
mortgage of property
Important documents to be provided (Address
proof, Identity proof, salary details etc)

14. ADARSH VYAPAR LOAN
For SMEs
‘To provide security based finance with reduced
paperwork and simplified procedure’
Both traders and service providers
Borrowing limit: 5 lakhs and above for cash and
term loan up to Rs. 10 lakhs
SECURITY
Cash credit hypothecation of stock/book debts
(Primary)

15. ADARSH VYAPAR LOAN
TERM LOAN SECURITY
Hypothecation of plant and machinery purchased
out of the loan
REPAYMENT
For cash credit: Yearly review
For term loans: 60 months

16. ADARSH VYAPAR LOAN
IMPORTANT DOCUMENTS
Last 3 years audited Balance Sheet
Last 3 years income tax returns
List of creditors
Attested xerox copy of ration card/PAN
card/electricity bill/telephone bill
Stock and book debt statements for last month

17. ADARSH PERSONAL LOAN
Multipurpose loan – finance for medical
expenses, purchase of consumer durables, travel
expenses, repayment of high cost loans
Maximum amount: Rs. 2 lakhs
Repayment period: Up to 60 months
Rate of interest: 6% p.a.
ELIGIBILITY:
10 times of Net Pay, subject to take home salary
of Rs. 7,500/- p.m.

18. ADARSH PERSONAL LOAN
SECURITY
No security up to Rs. 50,000
Rs. 50,000 – Rs. 2 lakhs – 5 % of the loan
amount in the form of FD/LIC Policy etc

19. THANK YOU