PART - II - FEATURES OF 'OVERDRAFT FACILITY' IN CURRENT ACCOUNTS

1.

Nature of Facility

• ‘Overdraft Facility’ in the Current Accounts (Both ‘UCO Care Current Account’ and ‘UCO Basic Current Account’)
• Loan against liquid collateral securities may be sanctioned as Demand Loans / Overdraft.  
• However, these loans should be adjusted from the maturity proceeds of the securities assigned/transferred, upon maturity, if the loans remain outstanding.

2.

Purpose

• To meet business demands or for meeting contingency needs of personal nature or exigencies like unclear effects in passing of cheques lodged in clearing against liquid collaterals namely Banks own Fixed Deposits, Recurring Deposits, LIC Policies and India Post Kissan Vikas Patra and National Savings Certificate.

3.

Eligible Collateral Securities

• Fixed Deposits & Recurring Deposits issued by UCO Bank.
• Policies issued by Life Insurance Corporation and
• National Savings Certificate, Kissan Vikas Patra issued by India Post.

4.

Eligibility

• Immediate grant of ‘Overdraft Limit’ against UCO Banks Fixed Deposits & Recurring Deposits. However, against India Post National Savings Certificate (NSC)/Kissan Vikas Patra (KVP) and Life Insurance Corporation-Policies – Grant of Overdraft Limit after 3 months of satisfactory operation of Current Account.
• Any borrower(s) who are otherwise eligible to borrow and hold financial securities referred to above provided such securities can be assigned to the Bank or transferred in the name of the Bank.
• The securities should be in the name of the person requiring finance there-against in case of joint borrowers, the securities may be in the name of any one of the joint borrowers.

5.

Quantum of Loan

• Upto 90% of Face Value of Bank’s Fixed Deposit and Recurring Deposit, India Post Kissan Vikas Patra and National Savings Certificate and Surrender Value of LIC Policies.

6.

Maximum Amount

• 90% value of Liquid Collaterals.

7.

Rate of Interest

• When Overdraft facility is availed against Banks own Term Deposits, applicable ROI will be 2% over the Term Deposit rate.
• When Overdraft facility is availed against Surrender Value of  LIC Policies / India Post NSCs and KVPs, applicable ROI will be Base Rate  plus 2 %.

8.

Processing Charges

• No processing charges to be levied on availment of Overdraft Facility.

9.

Renewal of Overdraft Facility

• After completion of each block of 11 months or
• At maturity of liquid collaterals -whichever is earlier. 

10.

Documentation

• A-38, A-39 and D-48  (Application Forms)
• A-1/A-2, A3 and A-47  (Documents)
• A-4 (to be stamped) for India Post NSCs/KVPs.
• A-58 for Life Insurance Corporation Policies.
• Original Fixed Deposit Receipt, RD Passbook, NSC, KVP, LIC Policies are to be kept duly discharged or assigned.

11.

Precautions in granting ‘Overdraft Facility’ under ‘UCO Care Current Account Scheme’

AND

• The liquid collateral securities to be pledged /assigned /lien /transferred in name of UCO Bank properly by the party.
• Policy /NSC /KVP should be perused to see it is freely assignable & contains no special conditions or restrictions for assignment.
• NSC/ KVP of India Post :-
  • Due   Certification   along   with   receipts   of   the   fee paid   for registering transfer issued by concerned Post Office should be kept on record.
  • To be pledged by way of delivery with a letter of intent by the Account-holder.
• Policy of Life Insurance Corporation :-
  • Policy should be perused to see that it is freely assignable and contains no special conditions or restrictions for assignment.
  • Surrender value of the Policy should be ascertained from Life Insurance Corporation.
  • Age of the assured has to be admitted by Life Insurance Corporation.
  • Last premium receipt/letter from Life Insurance Corporation confirming that no premiums are outstanding.
  • Notice of assignment as per prescribed format should be obtained in duplicate from the assignor(s).
  • Registration of assignment should be made in Life Insurance Corporation by sending policy and notice of assignment.