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How To Process Loan Policy

This document outlines the rules for salary advances and loans at a company. It specifies the following key points: 1. Staff under probation are not eligible for loans. Staff can receive advances up to 50% of their current month's salary between the 10th and 25th of the month. 2. Staff with 6 months of service can receive loans, with loan amounts and repayment periods varying based on staff grade and length of service. 3. Special loans are available for weddings and medical emergencies, with wedding loans up to 2.5 times salary and medical loans decided on a case by case basis. 4. Loans require approval from heads of verticals or HR and interest is charged

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136 views

How To Process Loan Policy

This document outlines the rules for salary advances and loans at a company. It specifies the following key points: 1. Staff under probation are not eligible for loans. Staff can receive advances up to 50% of their current month's salary between the 10th and 25th of the month. 2. Staff with 6 months of service can receive loans, with loan amounts and repayment periods varying based on staff grade and length of service. 3. Special loans are available for weddings and medical emergencies, with wedding loans up to 2.5 times salary and medical loans decided on a case by case basis. 4. Loans require approval from heads of verticals or HR and interest is charged

Uploaded by

Gretta Fernandes
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Rules for Salary Advances / Loan

Any Staff requiring Loans/Advances against salary would be granted as same


on the following terms : -

1. No staff under probation period would be eligible for any loan/advance against
salary.
2. Any staff-requiring advance against current month salary would be granted
advance salary upto 50% of his/her salary earned during the current month till
date.
3. Advance against current month salary can be given only between 10 th to 25th
dates of the month.
4. Staff having completed minimum Six months of service, except emergency cases
like hospitalization, natural calamity, etc. would be eligible for loan against
salary.

Grade of staff Length of Max limit of Max recoverable


Service Loans, (as a multiple of Period
(EMI) month’s salary)

Sub –Staff >1 Yr upto 1.5 Times 6 Months


Junior Executives 1 - 2 Yrs upto 3 Times 12 Months
2 Yrs & above upto 4 Times 15 Months

Senior Executives >1 Yr upto 1.5 Times 6 Months


(Manager & 1- 2 Yrs. upto to 2 Times 9 Months
Above) 3 & Above upto to 3 Times 12 Months

5. (Special Loans) – Wedding Loan: A staff who has completed his probation period
would be eligible for wedding loan for self & dependents upto a maximum limit
of 2.5 times of his salary which is deductible in max. 10 monthly installments.
6. Medical Emergency Loan: Will have no prescribed limit but decided on a case to
case basis by the management. In such case, the timing for disbursement of loan
would be crucial and in exceptional cases, the disbursement can take place
without completion of documents.
7. Sanctioning Authority: Any advance against salary within the norms as above
shall be granted by the respective Verticals Head at Branches & by HR Head at
HO.
8. No loan will be granted unless the previous loan installments are over, except
medical emergencies.
9. For Branches: Loans will be granted by HO on recommendation from Verticals
Heads.
10. Interest will be charged @ 12% pa for all loans.
11. Security of Loan: Applicant has to give an undertaking along with a Blank
Cheque against the sanctioned loan. If the applicant fails in repayment of the
loan, The Company has full right to enchase the cheque.
12. In addition to the above, Company may ask the Employee to give an application
form for the Loan Amount and a written Declaration, giving right to the
Company to recover the outstanding Loan amount at the time of cessation of
his/her employment, by adjusting their dues including Gratuity.
13. The Company reserves its right to withdraw or discontinue or modify the above
scheme at any time, at its sole discretion and that the above scheme does not
create any right whatsoever for the employee.
14. Procedure: Employee must submit application in the prescribed Form to HR
Manager who will get himself satisfied that loan applied for is genuine reason
and application Form is properly filled up. HOD’s recommendation is essential
for further processing of loan application by HR Dept. for approval of Sr. V.P./
CEO/MD
15. Maximum No. of Installments: The thumb rule about maximum permissible
installment is that the number of installment should be restricted in such a
manner that entire loan is recovered within the same financial year.
16. Any deviation to the policy must be approved by the management.

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