Union bank of India, Staff College Bangalore

Disclaimer: This is purely a voluntary effort for dissemination of knowledge and enabling people to
prepare for promotion test. Best efforts have been put to provide the accurate and updated information.
However, the users are requested to refer relevant circulars and policies of our Bank& RBI for further
clarity –

Updated 25.11.2019

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 Union Trade
IC 10038 dated 27.8.2014

Eligibility  All retail traders, wholesale dealers, supermarkets, malls,

departmental stores, dealers in consumer durables, cooperative
stores etc.
 Also service sectors like, restaurants, entertainment etc. who
maintains required stocks/ book debts
 Proprietorship, partnership, LLPs, limited companies
 Firm registered under VAT/sales/shop & establishment act
Purpose  Term loans for acquiring, expansion, additions, repairs, renovation of
premises or infrastructure, Purchase of equipments, computers, OFF,
For purchase of any assets for business
 Working Capital needs of business
Quantum  Rs. 25 crores w/w TL can be maximum Rs.5 crores
Assessment  The working capital limits upto Rs.2 crores can be assessed under
turnover method. Afterwards FBF method is to be utilized
Collateral  Min.75%
Security
Margin  Working Capital:
 Limit upto Rs.10 lakhs: Nil
 Limit more than Rs.10 lakhs: 20%
 Term Loan: 25%
Drawing  Up to Rs.10.00 lakhs: Stock + Book debts (not older than 90 days)
Power  Above Rs.10.00 lakhs: Stock + Book debts (not older than 90 days) –
Calculation Sundry creditors - Margin
Interest  Collateral Security 75% to <125% of loan amount: 0.50% less than the
Master Table A or Master Table B
 Collateral Security ≥125% of loan amount: 1.50% less than the Master
Table A or Master Table B
Rating Model  Separate rating model for Union Trade Scheme:
 Model I – Limits above Rs.2.00 lakhs and up to Rs.50.00 lakhs
 Model II – Above Rs.50.00 lakhs up to Rs.500.00 lakhs

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 Union Trade Plus
IC 1763-2019 dated 14.11.2019
Eligibility  All retail / Whole sale traders, Super markets, Malls, Departmental
Stores, Dealers in Consumer durables, Cooperative stores, etc.
classified as MSE (Service) Enterprises irrespective of constitution
 Should be doing business for at least 1 Financial year
 Credit rating should be CR-1 to CR-4
 CR-5 can be considered by next higher authority
 Sole Banking (however exception can be given to those borrowers
availing credit facilities under Channel Financing / Inventory
funding facility from other bank / FI wherein our bank does not
have tie up arrangement with OEM)
 It is to be ensured in this case that there is clear cut segregation in
our bank financed stock / inventories
 Even Current accounts should not be maintained with other banks
Purpose  Term loans for acquiring, expansion, additions, repairs, renovation
of premises or infrastructure, purchase of equipments, computers,
OFF, for purchase of any assets for business
 Working Capital needs of business
Quantum  Working Capital Limit:
 Minimum: above Rs.10 lakh, Maximum Rs.50 crores
 w/w Term Loan: Maximum Rs.10 crore
 category of branch:
Branch Maximum
Metro/Urban Up to Rs 50.00 crore
Semi Urban/Rural Up to Rs 20.00 crore
Assessment  As per norms prescribed in the loan policy i.e. W. Capital limit up
to Rs.5 crores to MSE sector and Rs.1 crore to Non-MSE sector can
be assessed under turnover method. Beyond these, FBF method is
to be applied.
Collateral  Min.100%
Security  In case of existing TL secured by landed property, the value of
property in excess of 133% of TL o/s may be considered as eligible
collateral under the scheme (Here TL means other than retail
loans)
 1.50 times weightage for clearly defined liquid securities may be
considered for the purpose of pricing only

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Margin  WC & TL: 20%
Drawing  Stock up to 4 months + Debtors up to 90 days less creditors
Power
Calculation
Submission of  Up to Rs.1 crore: on quarterly basis
Stock & B.  Above Rs.1 crore: on monthly basis
debt
Statement
Interest Very Attractive Rate of Interest (Please refer latest circular)
ROI: different for exposure > Rs.25 crore:
 With rating up to BBB (0.50% over and above ROI
mentioned in above table)
 With rating of BB and unrated (0.90% over and above ROI
mentioned in above table)
 For TL, credit risk premium is to be added
Rating Model  Credit rating model as applicable for Union Trade Scheme:
 Model I – Limits above Rs.2.00 lakh and up to Rs.50.00 lakh
 Model II – Above Rs.50.00 lakh
Migration  Existing WC limits permitted for migration under UT Plus at the
time of next renewal. Finacle menu for changing the scheme code
is HACXFRSC
Miscellaneous  Contact Point Verification, wherever CPV agency is empanelled by
the Bank, is mandatory for coverage under the scheme.
 Down gradation of credit rating to CR-5 & below will result in
withdrawal of preferential ROI available under this scheme and
applicable rate as per Union Trade scheme will be recovered.
 For non compliance of other eligibility norms of this scheme:
sanctioning authority may permit continuation of preferential ROI
as per the scheme for period not exceeding 3 months for
rectification of non – compliance.
 SLCC may permit deviation in current ratio up to 1
 WCDL limit may be fixed at 6 times of average monthly turnover on
our Bank’s POS, repayable in 12 monthly installments at
concessional ROI @ MCLR+0.50%, within the overall limits
sanctioned.

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 Union Trade-GST
IC 995-2017 dated 13.10.2017

Eligibility  All units classified as MSME (Manufacturing/Service)

Enterprises irrespective of constitution
 Valid registration under GST Act which can be either:
 Provisional Registration (Form GSTREG-25) or
 Final Registration (Form GSTREG-06)
 Valid GST Returns certified by CA
 There are two kind of returns:
 1. GSTR-1 (Regular): it is submitted on monthly basis
 2. GSTR-4 (Composition): it is submitted on quarterly basis
 In case of GSTR-1, it should have been filed for last 3
months
 In case of GSTR-4, it should have been filed for at least one
quarter
 Credit rating should be CR- 1 to CR-5
 Sole Banking
 Even Current accounts should not be maintained with other
banks. Current a/c with other banks, if any, to be closed
within 3 months of sanction of credit facility.
Purpose  Working Capital needs of business (No Term Loan)
Quantum  Working Capital Limit (FB+NFB):
 Minimum: >Rs.10 lakhs, Maximum Rs.2 crores
 No Term Loan permitted under the scheme
Assessment  Basis of assessment will be turnover specified in GSTR
Returns
 No CMA should be insisted upon
 In case of GSTR-1: returns for minimum 3 consecutive
months and in case of GSTR-4: returns for minimum 1
quarter are required.
 Based upon the average turnover (as per GSTR-1 / GSTR-4)
annual projected turnover for next 12 months is to be
arrived at
 The maximum quantum of working capital limit assessed will
be 30% of the projected acceptable turnover.
 Once account is running under GST regime for more than 1
year, the projected turnover for assessment will be average

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 of GSTR-9 (Annual Return).
Collateral  Min.100%
Security  In case of existing TL secured by landed property, the value
of property
 in excess of 133% of TL o/s or
 margin stipulated at the time of sanctioning of the term
loan
 whichever is higher
 may be considered as eligible collateral under the scheme
 However, in case of mortgage loan such excess shall be
considered over 200% of loan outstanding.
 Open land can’t be accepted
 Land having proper boundary can be accepted
Margin  20%
Drawing Power  Stock up to 3 months + Debtors up to 90 days less creditors
Calculation
Submission of  on quarterly basis
Stock & B.
debt
Statement
Interest Concessional ROI linked with credit rating. This is the same ROI
which is for Union Trade Plus scheme with collateral 100% and
above to <150%.
Rating Model  UBI model:
 Model I – Limits above Rs.2.00 lakhs and up to Rs.10.00
lakhs
 Model II – Above Rs.10.00 lakhs up to Rs.100.00 lakhs
 Model II – Above Rs.100.00 lakhs up to Rs.500.00 lakhs
Migration  Existing borrowers permitted for migration under this
scheme. Finacle menu for changing the scheme code is
ACXFRSC
Miscellaneous  Down gradation of credit rating to CR-6 & below will result
in withdrawal of preferential ROI available under this
scheme and applicable rate as per Union Trade scheme or as
per relevant MSME scheme will be recovered.
 SLCC may permit deviation in current ratio upto 1
 Deviation in current ratio beyond 1:1 can be considered by
RLCC1
 TOL/TNW up to 5:1 (including quasi equity) is permitted
under the scheme (it’s not a deviation)

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 Union High Pride
IC 00857-2017 dated 30.05.2017

Eligibility  MSME Units

 Manufacturing or Service activity (Traders not covered)
 Credit Rating: UBC-1 to 3 (External Rating: not below BBB, wherever
applicable)
 Unit engaged in business activity for minimum 1 financial year and IT
returns submitted thereof.
 Units established by close relatives or group concern of our existing
concerns (promoter of existing unit financed by the Bank) with
satisfactory dealing, even established for less than 1 yr will be
eligible.
 Sole Banking Arrangements for credit limit upto Rs.5 crores.
Facility  Working Capital & Term Loan
Quantum  Above Rs.1 crore up to Rs.25 crores
Collateral  Minimum 50%
Security  Below 50% will be treated as deviation and ZLCC can permit
collateral coverage up to minimum 20%
 If any existing TL secured by landed property, the value of property
in excess of 133% of total o/s in TL may be considered as eligible
collateral
 However, in case of mortgage loan such excess shall be considered
for 200% of the loan o/s.
Margin  20%
Interest  1% less than the applicable ROI for MSME
 1.25% less than the applicable ROI for MSME on compliance of any of
the following conditions:
 External rating of BBB and above
 100% and above collateral coverage
Others  Non Compliance of Eligibility Conditions:
 Subsequent down gradation of credit rating from UBC-3 or
equivalent will result in withdrawal of prescribed rate available
under the scheme.
 For any other non compliance subsequently: Sanctioning Authority
may permit continuation of preferential rate under the scheme for
period not exceeding 3 months for rectification of non-
compliance.

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  Standby limit as per norms under SME Plus scheme permitted within
overall exposure ceiling of Rs.25 crores.
 However, collateral coverage to be maintained for standby limit
also.
 Scheme Code: WC: CCPRD, TL: TLU21
 Migration of existing accounts: WC facility at the time of next
renewal may switch over but TL not permitted.
Deviation  RLCC-I and above can permit:
in Scheme  Internal credit rating of CR-4 subject to minimum collateral
coverage of 100%.
 Timeline for obtaining external credit rating not exceeding 3
months

Union Progress
Ref IC 553 – 2016 dated 05.08.2016 and modification vide circular No IC 00775-
2017 dated 23.02.2017

Eligibility  All type of micro and small enterprises engaged in manufacturing

and service sector.
 All business units irrespective of the constitution belonging to
micro and small category.
 Unit should have all statutory approvals/ NOC from respective
departments.
 Credit rating of the borrower should not be below CR-4 for
takeover and CR-5 in case of new connections.
 All new and existing eligible proposals of micro and small
enterprises except not eligible for CGTMSE coverage.
Purpose  To meet business related needs including purchase/ construction
of business premises including cyber case, machinery including
gensets, equipments, vehicles and working capital requirements
Nature of  Term Loan and/ or Working capital (FB+NFB)
facility
Quantum  Maximum limits up to Rs. 1.00 crore can be sanctioned based on
requirements to be assessed as per the lending methods suggested
in loan policy.
Margin  10% for credit limits up to Rs. 10 Lakhs
 15% for credit limits above Rs. 10 Lakhs

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Interest  As per interest rate for Micro and small units
Processing  Processing charges-
& other  Up to Rs. 10 Lakhs – Nil
charges  Above Rs. 10 Lakhs- Rs. 1000.00 flat + GST for Micro units and 50%
of applicable rate for small units.
 Documentation and Inspection Charges-
 Flat Rs. 500.00 plus actual stamp duty
Security  Prime- All assets created out of bank finance shall be charged in
favour of the bank by way of hypothecation/mortgage.
 Collateral- All eligible cases CGTMSE shall be covered under
CGTMSE and annual guarantee fee to be payable to credit
guarantee trust to be fully absorbed by the bank for micro units
only.
 Where CGTMSE cover is not available such as educational
institutions, SHG/JLGs, collateral security to the extent of
minimum 60% of total credit facility or primary security coverage
of minimum 125% of total credit facility considering the value of
land and building only.
 However, no collateral for exposure up to Rs.10 lakh
Repayment  Term loan to be repaid within a maximum period of 84 months
including moratorium.
 Working Capital- 12 months subject to renewal as per extant
guidelines of the bank.
Union  In existing MSE accounts with satisfactory dealing of Minimum 3
Laghu years, FB WC limit up to Rs.10 lakhs can be sanctioned up to 3
Udyami years and a separate card to be issued.
Credit  Request for enhancement in limit could be considered at the time
Card of annual review within the ceiling of RS.10 lakhs.
(ULUCC)
Rupay Card  Rupay card may be issued by earmarking sanctioned WC limit to
individual borrowers and the proprietor of the proprietorship firm
for business activity:
a) Up to Rs.10 lakhs: 20% of sanctioned limit subject to minimum
of RS.5000/- and maximum of RS.50000/-.
b) Above Rs. 10 lakhs: 5% of the sanctioned limit subject to
maximum of RS.1.00 lakh.

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Union Nari shakti
Refer IC 10096 dated 10.11.2014

Highlights  A new scheme exclusively for financing women entrepreneurs

 Processing charges waived
 Rate of interest and other charges reduced substantially
 Margin requirement reduced to 5 %
 Collateral coverage reduced to 15 %
 All eligible cases to be mandatorily to be covered under CGTMSE
scheme
Objectives  To extend a helping hand to women entrepreneurs and to tap
vast potential
 To cover all service and manufacturing activities under MSE -
women entrepreneurs
 To increase the advance portfolio under MSE and achieve the
target under Prime Minister Task Force
 All Accounts under this scheme shall be opened with scheme code
CCUNS for CC limit and TLP09 for TL in Finacle.
Scope  All women owned and managed Micro and Small enterprises
engaged in manufacture or production, processing or preservation
of goods or enterprises engaged in providing or rendering of
services.
Eligibility  Enterprises eligible to be classified under Micro and Small
enterprises as per investment criterion outlined in MSMED Act
2006
 Enterprises should be owned and managed by women
entrepreneurs. In case of partnership firm/ Company, majority of
partners/Directors should be women
 Proprietary, partnership, limited companies etc are eligible
 Units should have in place all necessary approvals/ NOC from
respective authorities
 Credit rating as per loan policy
 All new as well as exiting accounts can be covered under this
scheme – Sole banking
Purpose  CC(H) limits to meet working capital requirements
 Term loan for purchases /construction /renovation of
factory/office/shop/godown or purchase of plant & machineries
or other equipments

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ROI  Concessional ROI depending upon Credit Rating and classification
into Micro and Small sector.
Exposure  Minimum Rs 2.00 lakhs, Maximum Rs 100.00 lakhs
Margin  For credit limits up to Rs 10 lakhs – 5 %
 For credit limits above Rs 10 lakhs – 15 %
Processing  Nil
Charges
Collateral  In case of exposure up to Rs 10 lakhs no collateral security to be
Security obtained
 All eligible cases of CGTMSE to be mandatorily covered under
CGTMSE
 Where the CGTMSE cover is not available–minimum collateral is as
under:
 Working capital - 25 % of loan value acceptable to Bank
 Term loan - 15 % of loan value acceptable to Bank
 Composite loan - 15 % of loan value acceptable to Bank
 Personal guarantee of directors, proprietor, partners of the
company/firm and of all mortgagors of collateral security

Union Liqui Property

(IC No. 478-2016 dated 06.06.2016)

Eligibility  All business enterprises engaged in business activity for

minimum last 2 years irrespective of constitution other than
individuals and HUF.
 Units should have all necessary statutory approvals / NOCs
from respective authorities.
Purpose  To meet WC requirement
 For shoring up of NWC
 For purchase /construction /renovation of factory /office
/shop /godown
 For purchase of plant and machinery/equipment
 Financing repayment of high cost debts
Quantum  Minimum Rs. 0.10 crore
 Maximum Rs. 10.00 crores
Assessment  Term Loan: not exceeding 5 times of average net annual
income of last 3 years based on IT returns along with

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 depreciation or 50% of the fair market value of the landed
property offered as security whichever is lower.
 Overdraft: not exceeding 20% of the annual turnover based
on last audited balance sheet. Cash budget method for limit
above Rs.5.00 crore or 50% of fair market value of the
property offered as security.
 Both term loan and WC limits should not exceed 50% of the
market value of the property mortgaged.
Note:
 Audited BS is must
 20% of turnover based upon last audited BS is to be
calculated
 Exp: Based upon FBF limit eligibility comes to Rs.100 lakhs
but based upon sales of Rs.3 crores for last year, 20% comes
to Rs.60 lakhs: Then 60 lakhs can be given under Union Liqui
and remaining 40 lakh can be given under CC(H).
 If we want to give Rs.100 lakhs under Union Liqui only, then
it’s a deviation; sanction the proposal and take approval for
deviation from ZLCC before release of limit.
Financial  CR: not below 1.00
benchmark  TOL/TNW: not exceeding 6:1
 DER: Not exceeding 4:1
 Average DSCR not below 1.50:1 with minimum DSCR of
1.20:1
Security  EM of residential/commercial/industrial property located at
metro/urban/semi urban only enforceable under SARFASIA.
 Open plots may be accepted by delegated authority of ZLCC
and above.
 Agricultural land should not be accepted.
 In case of leased property (from development authorities),
the unexpired lease period should be at least 5 years longer
than the repayment period and necessary permission/NOC to
be obtained from the development authority.
Repayment  Term loan in maximum 120 months inclusive of moratorium
period not exceeding 6 months
 The loan repayment must end at least 5 years before the
end of the residual life of the property.
 Ratio of repayment period (excluding moratorium) to

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 number of times of income considered for TL assessment:
Min 2:1
Example:
 Average annual income Rs.10 lakh; if TL is given 5 times of
Rs.10 lakhs then repayment must be minimum 10 years (10
yrs is the max repayment permitted under this scheme,
beyond it will be deviation).
 For maintaining this 2:1 in this case we can’t give any
moratorium. If we give 6 months moratorium, then
repayment period will come down to 9.5 years with which
ratio will come to 1.90:1. Therefore, in this case either
don’t give any moratorium or extend the repayment period.
Extending repayment period will be a deviation to be
approved by ZLCC. First sanction the proposal and then take
approval for deviation.
 If customer wants 4 times of income only, then repayment
period should be minimum 8 years and it can be even 10
years also (including moratorium, if any)
Deviations  Deviations in assessment, margin, repayment period, etc
can be permitted by RLCC, ZLCC, CAC

Union Rent
IC 1764-2019 dated 14-11-2019
Eligibility a) Landlords of our Branch/Offices premises (Including
residential flat/houses leased to our Bank.)
b) Owner of property (Commercial/Residential) who have
rented the same to Public Sector Banks, Public Sector
Undertakings, Post Office & Government Departments.
c) Owner of property (Commercial /residential) who have
rented the same to other reputed
companies/MNCs/Institutions/ Private Sector Banks etc.
d) The property leased out should not have any litigation
regarding the title and it should be owned by the
borrower.
e) The loan is not permissible in case where lessor and lessee
belong to the same group. However, in cases where there
are multiple offices/units in a single building and of which

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 few unit(s) are leased out to firm(s) under the same group
and remaining other unit(s) to other eligible lessees,
financing under the scheme shall be permitted. In such
cases the proportionate rentals from sister concern(s)
should be excluded while arriving at eligible loan amount.
Purpose  Loan can be sanctioned for short to medium term needs or
for any other requirements
Quantum  Maximum limit per party that can be sanctioned under the
scheme should be calculated considering net rent amount
available to the Bank up to maximum 120 months subject
to:

a. 75% of the net rental income for residual/effective lease

period i.e. Gross Rentals less (Advance rent received +
property tax + TDS + Other statutory dues of lessor)
OR
b. 75% of the value of property
OR
c. Loan that can be recovered / repaid from applicable rent
receivables (Refer to Point on repayment)
whichever is less

[ Securitization of lease rentals and repayment thereof beyond

the unexpired lease period upto 120 months ( up to 180
months , applicable in case of point ‘e’ mentioned earlier
under eligibility.]
 Wherever the automatic extension clause in the lease
agreement is available, the securitization of lease rental up
to 120 months ( up to 180 months, applicable in case of
point ‘e’ mentioned earlier under eligibility) can be
considered although the original lease agreement is for
shorter period subject to evaluation of the factors as given
below:
- The lessee is a reputed corporate / PSU entity.
- Financial of lessee are satisfactory.
- The lease agreement provides option for further extension
of lease.
- If substantial amount is spent by the lessee on fit-outs,

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 furnishing of rental premises, it may be good reason to
presume that lease period would be extended further.

 In case of lease agreement of less than 120 months say 36 /60

months, discounting of rental may be considered up to 120
months ( up to 180 months, applicable in case of point ‘e’
mentioned earlier under eligibility) i.e. beyond the effective
lease period.

 For considering loan covering the period beyond the period of

effective (Unexpired) lease, it will be considered assuming
that 75% of the area under lease will be occupied at any given
point of time.
CRE and  Non-CRE: The portion of loan amount calculated taking into
Non CRE consideration the effective lease period up to the lock-in
Portion period and without exit clause. Further, there should not be a
clause in lease agreement which allows a downward revision
in the rentals.
 CRE: The portion of loan amount calculated taking into
consideration the period of lease rental beyond the period of
Non-CRE i.e. Lock-in period as above.
(The CRE portion of loan covering the period beyond the lock-in
period will be treated as Non-CRE under Union Rent Scheme up
to the extension of lock in period, if any on renewal or execution
of fresh lease agreement)
Security  Up to Rs.1.00 Lakhs - On Clean basis
 Above Rs.1.00 Lakhs - EM of property, in respect of which
rent is charged to the loan. In case the security of the said
property is not available, EM of alternate property is
permitted.
However, It should be ensured that the property:
 Have clear & marketable title and there should not be any
litigation of any nature outstanding on the property.
 Should be held as free hold and
 The value of the alternate property is not less than 150% of
the loan amount.
 Other chargeable securities such as NSCs, Bank own deposit,
LIC policies etc. having value sufficient to cover the loan

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 amount may also be obtained.
ROI  Rate of interest depends upon tenor of loan, CRE vs. Non-CRE
portion of loan. Further there is lower ROI for loan against
rent receivables from the premises leased to:
• Our Bank
• Other PSBs/PSUs/Govt. Department

Repayment  Up to 120 months or within the unexpired period of lease,

whichever is earlier
 Repayment capacity is to be assessed as per amortization
sheet of the available net cash flows.
 For loans having both CRE and Non-CRE portion, the Non-CRE
portion will generally be liquidated first. However, interest is
to be paid as and when due for both CRE and Non-CRE
portion.
 The CRE and Non-CRE component of loan should be
mentioned and separate accounts should be opened in the
system for CRE and Non-CRE portion of Loan for operational
convenience and proper classification.
 In case of large commercial projects like IT parks, Malls,
properties in industrial area/SEZ etc. where investments
made by the promoter are large, the expected returns from
these types of properties are spread over the year. In such
cases, securitization of lease rentals may be considered up to
180 months.
 For lease rent discounting above 120 months, Debt Service
Reserve Account (DSRA) of 3 months to be created.
 Where repayment period is more than 120 months, sensitivity
analysis to be carried out on the following parameters.
 Increase in interest rate by 100 bps.
 Decrease realizable value of property by 10% &
 Decrease in rental receipt by 10%

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Union Enterprise

(IC 1762-2019 dated 14.11.2019)

Eligibility  All MSME units engaged in Manufacturing and Service activities

(other than trade).
 Existing and new unit proposed to be established by
promoter(s) having good market standing as per due diligence
report.
 All business units irrespective of constitution
 Credit rating should be CR-1 to CR-4
 CR-5 can be considered by next higher authority
 Maximum age 70 years in case of Individual and proprietorship
 Sole Banking (however exception to be given to those
borrowers availing credit facilities under Channel financing
/TReDS /Inventory funding facility from other bank/FI wherein
our Bank doesn’t have tie-up arrangement with OEM)
 Even Current accounts should not be maintained with other
banks. Relaxation may be permitted by CAC-III & above on case
to case basis.
 In case of existing accounts being migrated to this scheme, all
terms and conditions of last sanction to be complied with.
Purpose  Term loans for purchase/ construction / renovation of factory /
offices / shop / godown / plant & machinery / equipment etc
for business activities
 Working Capital needs of business
Quantum  Minimum: above Rs.10 lakh, Maximum Rs.50 crores
Assessmen  As per norms prescribed in the loan policy
t
Security  In this scheme, the concept is ‘Security Coverage’
Coverage  Security Coverage: Min.75%
 Security coverage and valuation in terms of Land & Building to
be calculated on the basis of entire Land & Building charged to
the bank at the time of sanction & renewal both Prime and
Collateral security and other Liquid security as collateral.
 In case of existing TL secured by landed property, the value of
property in excess of 200% of TL o/s may be considered as
eligible collateral under the scheme. (this will be useful in case
of existing TL which can not be migrated under the scheme)

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  P&M not to be considered as collateral security
 1.50 times weightage for clearly defined liquid securities may
be considered for the purpose of pricing only
Guarantee  Personal guarantee of promoters/promoter directors of
Company / partners of the firm must.
Margin  Term Loan:
o Plant & Machinery:25%
o L&B and Civil construction:35%
o Outright purchase of Building/Shop for commercial purpose
for service industries - 30% (Maximum allowed for such
purpose is Rs.5.00 crore only)
 FBWC: 20%
 Non Fund Based Limit: For limits having security coverage of
minimum 100%, minimum margin of 15% in the form of Cash
Margin/Term Deposit to be obtained. Accounts with security
coverage less than 100%, minimum 25% in form of cash margin/
DRIC only.
 Further relaxation in margin shall not be permitted.
Drawing  Stock up to 3 months + Debtors up to 3 months less creditors
Power
Calculatio
n
Submissio  Up to Rs.1 crore: on quarterly basis
n of Stock  Above Rs.1 crore: on monthly basis
& B. debt
Statement
Financial  As per Loan Policy
Benchmar  Further SLCC & above may permit deviation in the following
ks cases:
Current ratio:
SLCC up to 1:1 with justification.
Any relaxation/deviation beyond this level can be
considered by RLCC-I on case to case basis.
TOL/TNW ratio (Including quasi equity in TNW) is within the
benchmark level
Interest Very attractive rate of interest (please refer latest circular)
(same ROI as applicable for Union Trade Plus scheme)
 For TL, credit risk premium is to be added

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Repayment  TL: Maximum Door to Door repayment shall be 7 years
including moratorium period not exceeding 12 months
Scheme Code  CC: CCENT
 TL: TL016
Migration  Existing WC limits permitted for migration at the time
of next renewal subject to satisfactory compliance of
the Terms and condition of previous sanction. TL not
permitted for migration.
Top Up Loan  Branches/Sanctioning authority may sanction In-built
top up loan maximum up to 20% of assessed amount
(both Term Loan, NFB/FB working capital).
 Maximum limit allowed including in-built top up not to
exceed Rs.5.00 crores.
 This will be used only for purchase of equipment and
Commercial vehicles (under Union Parivahan Scheme) to
be used for existing business purpose.
 This facility may also be extended to enterprises for
need based purchase of Plant & Machinery after
satisfactory operation of minimum one year with the
bank.
 Mortgage to be created for total amount including both
assessed and in-built top up amount.
 However, processing charges to be recovered for
assessed amount only and whenever the in-built top up
amount will be utilized applicable processing charges
only to the extent of top up sanction amount utilized
will be recovered.
 Sanction letter to the borrowers/guarantors should
mention all the above conditions and proper
acknowledgement of sanction letter to be obtained.
 Collateral coverage of minimum 100% along with top up
amount to be ensured.
 Original Assessed limit should be without deviation in
benchmark ratio, then only Top Up loan can be
considered. Deviation to this may be approved by RLCC-
I.
Note:- While releasing the top up amount branch to ensure
the following :
i. All sanction terms and conditions are complied with.
ii. End use of existing Term Loan and working capital limit
is ensured.
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 iii. There is no overdue in the accounts and operation in
all facility extended is regular.
iv. No negative observations made on the borrower.
v. This facility is available to the borrower for a period of
six months subject to further revalidation of the top up
limit for next six months by sanctioning authority.
vi. Bank charges with RTO and applicable authority to be
ensured.
vii. For releasing the Top up amount branches to seek
permission from sanctioning authority confirming
satisfaction of above, after which sanctioning authority
will allow them to disburse and send a request to LAS,
DIT to allow the branch to make disbursement.
Special condition  For new account under the scheme, salary accounts of
all the employees, current/savings accounts of
promoters/ proprietor/ directors are to be opened with
Union Bank of India at the earliest.
 In case of migration of existing account to the scheme
salary accounts of the employees, current/savings
accounts of promoters/proprietor/directors are to be
opened with Union Bank of India within six month of
migration.
 Separate flag/labeling to be created for each
connection under the scheme.
 The same will be reviewed by the sanctioning authority
at the time of review/renewal.
 Above condition will be mentioned in the sanction letter
invariably.
 Branches to actively canvass other loan, retail loan,
third party product, PoS machine, Aadhar Pay, to the
promoters/ proprietor/directors, employees of the unit
/ enterprise.
Miscellaneous  Preferably, constructed property should be obtained
under the scheme as collateral. The acceptance of open
land as collateral as far as possible should be avoided.
However, in exceptional cases, the same may be
considered by next Higher Authority only by taking
additional precautions like:
 It should be easily identifiable,
 There should be clear cut demarcation,
 Should have free access to the property
 In case of Lease holds property, unexpired lease period

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 should be at least 5 years longer than the repayment
period.
 Further, agriculture property, tenanted premises (other
than those to PSUs, PSBs, MNCs), property with
statutory claims are not preferred collateral and hence
should be avoided.
 Enterprises engaged in Speculative Activities/Real
Estate activities are not eligible for finance under this
scheme.
 No deviation from the norms other than those
specifically defined under the scheme is permitted.
 Standing instruction for deduction of interest and
installment of Term Loan from CC/CD account is
mandatory.
 At any point account’s turnover to commensurate with
sales.

MUDRA (PMMY):

IC 1391-2018 dated 01.11.2018

To garner more quality business existing ‘MUDRA’ scheme has been reviewed
and named as ‘Union Mudra’

Eligibility  All micro enterprises are eligible

(manufacturing/service/trading etc.)
 Allied agriculture activities are also eligible (excluding
crop loans, land improvement such as canals, irrigation
wells)
 In case of individual and proprietary concerns, their
relatives i.e. spouse, father, mother, son, daughter etc.
(relative as defined in Loan Policy) may join as co-
borrower
Facility  Working Capital / OD / TL
o OD limit may be allowed when obtaining stock statement
is not feasible e.g. in cases of OD limits are given to
professionals etc.
Quantum  Maximum: Rs.10.00 lakh as per Shishu / Kishore / Tarun
category
Margin  5% for ‘Shishu’ category and 10% for Kishore & Tarun

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 categories
Interest rate  ROI duffers as per Shishu, Kishore or Tarun category

Security  Primary: Assets created out of bank finance

 Collateral: NIL
 No 3rd party guarantee: a/c to be covered under CGFMU
Repayment  TL to be repaid in maximum 84 months inclusive of
maximum moratorium of 6 months.
 Repayment in EMI (Equated Monthly Installments)
Delegation  As per existing scheme of delegation of loaning powers
Others  Nil processing charges
 Credit rating applicable for exposure more than Rs.2 lakh
 Income proof like ITR/Balance sheet may not be insisted
upon unless otherwise available.
 Financial projections for term loan may be obtained for 1
year, which may be extrapolated for remaining tenor of
the loan.
 MUDRA card will be issued (which will work on Rupay
platform) by earmarking sanctioned working capital
limit: 20% of sanctioned limit subject to minimum
Rs.5000/ and maximum Rs.50,000/-. Two accounts for
working capital i.e. one for MUDRA Card limit and other
OD/CC limit will be opened.
 Scheme code: W. Capital- CCMUD, Overdraft- ODMUD, TL
– TLU41
 All agriculture accounts eligible to be classified as
MUDRA accounts to be opened under their existing
scheme codes and to be flagged as ‘PMMY’.
 Check list of papers to be obtained under different
category of MUDRA loans given as Annexure I of the
circular
 One undertaking to be obtained from borrower /
guarantor is given as Annexure II of the circular.

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 Wish you
All the Best!!

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