KCC

VERTICAL : RISK MANAGEMENT
CIRCULAR No. HO/ RMD/ 41 /2019-20/302 DATE: 11.07.2019
TO: ALL BRANCHES / OFFICES

REVISION IN :
1. SERVICE CHARGES PERTAINING TO LOAN AND ADVANCES
2. DELEGATED POWERS TO ALLOW CONCESSION IN SERVICE CHARGES PERTAINING TO LOAN AND ADVANCES
1. BACKGROUND
1.1. The comprehensive review in service charges pertaining to loan and advances was last approved by the Board of Directors in
the meeting dated 16.12.2017 vide Agenda item No. A-03 and circulated vide Circular No. HO/RMD/86/2017-18/801 dated
01.01.2018.
1.2. Prepayment/ Foreclosure Charges for Loan & Advances to Micro & Small Enterprises was approved by the Board of Directors
in the meeting dated 16.03.2018 vide Agenda item No. A-45 and circulated vide Circular No. HO/RMD/106/2017-18/1073
dated 28.03.2018.
1.3. Conducting of Techno-Economic Viability (TEV) study was approved by the Board of Directors in the meeting dated
19.02.2019 vide Agenda item No. A-12 and circulated vide Circular No. HO/RMD/126/2018-19/927 dated 02.03.2019.
1.4. Based on the feedback received from field functionaries, revision in service charges pertaining to loan and advances was
approved by the Board of Directors vide Agenda Item No. A-16 in the meeting dated 29.06.2019.
Revised Service Charges pertaining to Loan and Advances Page 1

2. CHANGES / MODIFICATIONS IN THE SERVICE CHARGES PERTAINING TO LOAN AND ADVANCES
Major highlights of modification in service charges are as under:
2.1 Modification in Existing Guidelines
A. Processing Fee/Upfront Fee :
 Nil Charges up to `5.00 Lac
 For Loan above `5.00 to `10.00 Lac :Introduction of Unified Process Fee
 For Loan above ` 5.00 crore: Charges linked to internal rating of the borrower
 Second Review of the account: 150% of Normal charges
B. Inspection Charges:
 Loan upto `10.00 Lac: Nil
C. Inland Letter of Credit:
 Rationalization of LC Usance and Commitment Charges by merging various slabs into one slab based on internal
rating of the borrower.
D. Bank Guarantee Commission;
 Additional pricing of 0.25% is to be charged to those borrowers where BG is issued for longer period and the
borrower requests for recovery of commission on annual/Quarterly basis.
E. Documentation Charges:
 Nil Charges up to `10.00 Lac
 Above `25.00 Lac: @0.10% of Loan amount subject to minimum of `5000/- and Maximum `50,000/-
2.2 Introduction of New Charge: Mortgage creation charge
2.3 Introduction of LOYALTY BONUS TO PRIVILEGED BORROWER :
 Loyalty Bonus in shape of 25% concession in applicable service charges by respective sanctioning authority
to privileged borrower.
 The Changes / modification in schedule of service charges pertaining to Loan and Advances is enclosed as
Annexure I and shall be effective from 01.08.2019.
 The updated schedule of service charges pertaining to Loan and Advances is enclosed as Annexure II.
 The updated Delegated Powers for allowing concession in Service Charges pertaining to Loan and Advances is
enclosed as Annexure III.

3. ACTION TO BE TAKEN BY BRANCHES / CLUSTERS / CIRCLE OFFICES
3.1 The revised schedule of service charges pertaining to Loan and Advances shall be effective from 01.08.2019.
3.2 A notice about the availability of the service charges tariff schedule at the Branch shall be displayed on the Notice Board of
the Branch as per the requirements of Banking Codes and Standards Board of India (BCSBI).
3.3 A new head i.e Commission Recd.- Unified Process Fee (XXXX0043440002) , for recovery of Unified process Fee is
available in Finacle. Recovery of Unified Process Fee will be credited to this account.
3.4 All the service charges are exclusive of all taxes (eg. goods and service tax etc.). Accordingly, all taxes, as applicable, at
prevailing rates are to be charged additionally.
 DIT / OLS shall incorporate necessary system level changes to incorporate the above guidelines in OLS/ Finacle.
 All officials are advised to take note of the above for meticulous compliance.
 The Principal and the Faculty at Human Resource Development Institute should sensitize the participants in various training
programmes conducted at the respective Human Resource Development Institute about the above.
 The Concurrent Auditor should verify the ‘Privileged Borrower’ in their report.
 All inspecting officials from the Inspection and Control Department at Corporate Office as well as from the CO (I & C) should verify
the compliance of the above during their visits to Branches / Clusters/ Circle Offices.
Amit Srivastava
General Manager
Risk Management
Enclosures
Annexure - I Changes / Modification in Service Charges pertaining to Loan and Advances
Annexure - II Updated Schedule of Service Charges Pertaining to Loan and Advances
Annexure - III Delegated Powers for Allowing Concession in Service Charges Pertaining to Loan and Advances
Signed Copy of Circular

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VERTICAL : RISK MANAGEMENT

CIRCULAR No. HO/ RMD/ 41 /2019-20/302 DATE: 11.07.2019

TO: ALL BRANCHES / OFFICES

Revised Service Charges pertaining to Loan and Advances Page 1

Revised Service Charges pertaining to Loan and Advances Page 2

Revised Service Charges pertaining to Loan and Advances Page 3

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