Hire Purchase In

8/3/2019 Hire Purchase In

1/22

HIRE PURCHASE INHIRE PURCHASE IN

CANARA BANKCANARA BANK

Brundha Rajam

Deepika S R

Divya C B

Jaya Priya

Sathya A N

Vinodhini C


2/22

Company ProfileCompany Profile

y

Name of the Company Canara Bank

y Year of establishment 1906

y Founder - Shri Ammembal Subba Rao Pai

y Head office - Bangalore

y No of Branches- 3432

y No of ATM - 2623 , covering 899 centres

y Products & Services- Personal Banking, Corporate

Banking, NRI Banking and Priority & SME Credit

Services.


3/22

Canara BankCanara Bank -- Vadavalli BranchVadavalli Branch

y Establishment - September, 2008

y Address Canara bank, Vadavalli branch, Coimbatore -46

y No of employees 11

y Branch Manager Mr. M. Jeevan

y Canara mobile officer Mr. S. Ravi Kumar

y Daily Turnover 20 lakhs

y Loan products Home loans, Education loans, Canara

mobile


4/22

Hire PurchaseHire Purchase

y A method of buying goods through making installment

payments overtime.

y

During the re-payment period the ownership of the gooddoes not pass to the buyer.

y Only after the full payment of loan the ownership will

transfer to the buyer.


5/22

TwoTwo--WheelersWheelers

Purpose

y Financing, the purchase of brand new two

wheelers.

Eligibility

y

All individuals (including professionals andsalaried class) who are credit-worthy and

respectable.


6/22

Salaried individuals should have a minimum monthly net take

home salary of 25% of their gross salary or Rs.2000/- after

meeting the loan instalment for the proposed loan, whichever is

more.

In respect to the salaried class, an irrevocable mandate by the

borrower to deduct the instalment amount from the salary

payable to him by the employer for onward remittance to the

company promptly should be registered with the latter. In the

alternative, the borrowers salary should be credited to his

account in the Canara bank.


7/22

Professionals and other salaried persons should have a

minimum annual income of Rs.50, 000/- to be evidenced byIncome Tax Assessment order / income tax return.

Where the borrower is an existing customer, the branch/

sanctioning authority should satisfy that the account is well

operated during the last 6 months.

There is no bar / restrictions for financing a new

customer who is not already banking with Canara Bank.

But, the proposed borrower should be properly introduced

to the bank and satisfy other eligibility norms / comply with

KYC guidelines.


8/22

Quantum of LoanQuantum of Loan

y Salaried Persons - Loan may be granted up to 80% of the value

inclusive of invoice value, tax, registration charges, insurance

premium and other accessories or 15 months of net salary,

whichever is less.

y Professionals and other non-salaried individuals - Loan may

be granted up to 80% of the total value inclusive of invoice value,

tax, registration charges, insurance premium and other accessories

or to the extent to 50% of their annual net income in the

immediate previous year, whichever is less.


9/22

Sanctioning powers:

Branches/offices may permit loans under this scheme withintheir delegated powers as per Delegation of Power.

Rate of interest:

y Fixed rate of interest will be charged at the rate prevailing

on the date of disbursement of the respective loan, as

advised by HO from time to time.

y Diarising and follow- up for reset of interest is mandatory.

y Based on the bank the Interest is calculated on a monthly

reducing balance or an annual reducing balance basis.


10/22

Monthly Reducing Balance

y In the case of monthly reducing balance method, the

principal gets reduced at the end of every month and the

interest is calculated on the outstanding principal at the end

of the month.

Annual Reducing Balance

y In the case of annual reducing balance method, the principal

gets reduced at the end of the year and the interest is

calculated on the outstanding principal at the end of the

year.


11/22

RepaymentRepayment

y Repayment period not exceeding 4years.

y Payment based on EMI on EMI chart.

y

Period may extend to 5yrs with permission

y DM and AGM for small amount

y Chief manager for Huge amount

y Present central hub


12/22

FourwheelerFourwheeler

Who can avail of Car Loans?

y Salaried individuals in the age group of 21 to 60 years (at

the end of the tenure)

y Self-employed individuals in the age group of 21 to 65

years (at the end of the tenure)

y Partnership Firms

y Public & Private Ltd. companies

HUFs and Trusts are not eligible


13/22

y

Salaried class- Minimum gross salary of notless thanRs.0.75 lakhs p.a. with the net take

home salary of 40% of gross salary at the

time of applying for loan

y Other than salaried individuals -Should

have a minimum annual income of Rs.0.75

lakhs and to be evidenced by ITAO.


14/22

Quantum of loan or marginQuantum of loan or margin

y For new vehicles -Loan may be granted up to 90% of the

total value inclusive of invoice value, life tax, registration

charges, insurance premium, etc

y For pre owned vehicles - Loan under this scheme can be

considered for purchase of second hand vehicles which are

not older than 5 years. 75% of the value of vehicle as

appraised or assessed by an automobile engineer


15/22

Time to Process Loan 7 days

Preferred Manufacturers

Chevrolet, FIAT, Ford, GENERAL

MOTORS INDIA, HINDUSTAN

MOTORS, Honda, Hyundai,

Mahindra, Maruti, Mercedes-

Benz, Mitsubishi, Nissan, Reva,

SAN Engineering, Skoda, Tata

Motors, Toyota


16/22

Interest RatesInterest Rates

PERIOD INTEREST RATE

FIRST 12 MONTHS 8.50% (FX)

NEXT 24 MONTHS 9.50% (FX)

ABOVE 36 MONTHS UPTO

60 MONTHS

10.00% (FL)

ABOVE 60 MONTHS 10.50% (FL)


17/22

RepaymentRepayment

y Repayment period not exceeding 72 months from the date

of grant of the loan may be permitted.

y Repayment shall be in the form of EMI.

y Repayment period may be enhanced to 7 years.

Processing Charges:

y 0.1% on the loan amount with a minimum of Rs.250/- and

maximum of Rs.500/-.


18/22

MiscellaneousMiscellaneous

y

The entire cost of the vehicle is to be directly remitted tothe dealer against their invoice.

y Before remittance the bank has to verify whether the

dealer is an authorized dealer.

y The dealer should be instructed to receive an

acknowledgment from the borrower for having received

vehicle in good condition.

y The dealer should also be instructed to get banks HP

endorsement while registering vehicle and should send

RC to the branch.


19/22

DocumentationDocumentation

Following document to be obtained at the time of sanction:

Application form NF 965

Rating sheet cum credit report NF 990

Hypothecation agreement for Canara mobile NF 928

Letter evidencing execution of documents should duly be

signed by the officials NF 803

Original invoice

Stamped receipt from the seller for the amount received.


20/22

y Form 29, 20, 30, 35 with respect to RTO should be duly

registered and signed.

y Comprehensive insurance policy assigned in the name of bank

and for risk of Strike, Riot and Civil commotion(SRCC).

y

In case of partnership firm, loan papers should be signed by

all the partners.

y Vehicle should be verified physically within a week.

y

Wherever third party guarantee is stipulated respectiveGuarantee letter should be produced.


21/22

PrePre--owned vehicleowned vehicle

The following set of documents or loan papers should be

obtained.

y Valuation certificate from an approved automobile engineer.

y Stamped receipt from the vendor.

y Original RC book to be obtained.

y If the vehicle is to be registered with a different RTA(Roads

And Transport Authority), a no objection certificate should

be obtained.


22/22

Hire Purchase In

Documents

Transcript of Hire Purchase In