¼ Sponsor-punjab national bank )
Tel.: 0121-2767793,2767796
Fax % 0121-4007290
e-mail: loan@upgb.com
website: www.upgb.com
Tel.: 0121-2767518
Tel.: 0121-2767731
Date : 14.01.08
TO ALL BRANCHES
In supersession of all previous circulars of
UPGB/RLKGB/DKGB/KGB regarding the subject.
LOAN & ADVANCE CIRCULAR NO 71 / 07
Applicability of Securitisation And Reconstruction of Financial Assets and Enforcement of
Security Interest Act, 2002 (SARFAESI).
The Govt. of India, vide Notification dated 17.05.07 has specified ‘Regional Rural Bank’ as
“Bank” for the purpose of the SARFAESI Act. Thus the Act has become applicable to
RRBs. Accordingly, the Securitisation And Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (SARFAESI), (Amendment) Act 2004 has been adopted in our Bank.
The SARFAESI Act 2002 as amended in 2004 provides for:
1. Setting up of Securitisation/Reconstruction Companies in India for acquisition of financial assets (NPAs) of the Banks/FIs by such companies.
2 Enforcement of security interest for realization of dues without the intervention of the
Courts or Tribunals.
3 Registration of Security Interest – for which Central Registry is yet to be set up by
Central Govt.
Salient Features of Enforcement of Security Interest
1. Security interest is defined as right, title and interest of any kind whatsoever upon property, created in favour of any secured creditor and includes mortgage, charge, hypothecation and assignments.

2 However, the exercise of lien and rights under pledge are excluded. Besides, in terms of
Section 31 the powers given under the Act cannot be exercised in respect of security interest created in agricultural land, security interest for securing the repayment of any financial asset not exceeding Rs. One lac or in any case in which the amount due is less than 20% of the principal amount and interest thereon.
3 The powers conferred on the secured creditor can be exercised in respect of accounts which are classified as non performing asset as per the norms/guidelines prescribed by
RBI.
4 When the account is an NPA and there is default in repayment of the secured debt, the secured creditor may require the borrower by notice in writing to discharge in full his liabilities within 60 days from the date of notice. In default, the secured creditor shall be entitled to exercise the powers. In case the borrower makes any representation or raises any objection against the notice, the secured creditor shall consider such representation or objection and shall communicate to the borrower within one week of receipt of representation or objection, the reasons for non-acceptance of the representation or objection.
5 The notice shall give details of the amount payable by the borrower and the secured assets intended to be enforced.
6 If the borrower fails to discharge his liability in full within the period specified, the secured creditor may take recourse to one or more of the following measures :-
1 Take possession of the secured assets including the right to transfer by way of lease, assignment or sale for realising the secured assets .
2 Take over management of the business of the borrower including the right to transfer by way of lease, assignment or sale for realising the secured assets in cases where substantial part of the borrower is held as security for the debt.
3 Appoint any person to manage the secured assets the possession of which has been taken over by the secured creditor .
4 Require any person who has acquired any of the secured assets from the borrower and from whom any money is due or may become due to the borrower, to pay the secured creditor.
Any transfer of secured assets by the secured creditor shall vest in the transferee all rights in the asset transferred.

In case financing is done by joint financing or by more than one secured creditor , then secured creditor can exercise such right only if secured creditor/s representing not less than 3/4 th in value of the amount outstanding consent/s.
The sale proceeds of the secured assets shall be distributed, having regard to the provisions of
Section 529A of Companies Act, if the company is in liquidation .
The secured creditor is entitled to proceed against the guarantors or sell the pledged assets without first exercising the powers under the Act .
Section 13(13) provides that no borrower shall, after receipt of notice, transfer by way of sale, lease or otherwise (other than in the ordinary course of his business) any of his secured assets referred to in the notice without prior written consent of the secured creditor. However, this provision does not make such sale a void one . If the borrower contravenes this provision, it may be an offence .
Section 14 empowers the secured creditor to take the assistance of the Magistrate for the purpose of taking possession or control of secured assets.
Section 15 empowers the secured creditor to take over the management of the business by publication of a notice in newspaper in the manner specified.
In terms of Section 17, any person (including borrower) aggrieved by the measures taken by the secured creditor under Sec.13(4) of the Act may file an application to DRT . However, DRT shall consider whether measures taken under Section 13(4) are in accordance with the provisions of the SARFAESI Act and the rules thereunder, if DRT finds it not proper, it can order for restoration of the management of the secured assets to the borrower or can declare that the measures taken are invalid. In this regard, DRT has to take a decision within 60 days, but the time may be further extended by DRT after recording reasons in writing but the period so extended shall not exceed four months from the date of making the application.
If the application is not disposed off by DRT within four months, any party to the application can file an application before DRAT and DRAT shall make an order for expeditious disposal of application by DRT.
In Jammu & Kashmir, such an application can be filed before the Court of District Judge in that
State having jurisdiction over the borrower, which shall pass an order on such application.
If the entire dues together with costs, charges and expenses are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured assets shall not be sold .
Against the order of DRT/Distt. Judge, the party aggrieved can file appeal before DRAT/High
Court (for J&K) on payment of prescribed fee. DRAT/High Court shall not entertain the appeal unless the borrower has deposited with Appellate Tribunal/High Court 50% of the amount of debt due from him as claimed by the secured creditor or determined by DRT whichever is less.
It is also further provided that for the reasons to be recorded in writing, DRAT/High Court may reduce the amount to be deposited but not less than 25% of debt as claimed by secured creditor or determined by DRT/Distt. Judge.

Further in terms of Section 19, DRT/Distt. Judge or DRAT/High Court, if it comes to the conclusion that the secured creditor has acted wrongfully , it may order return of the secured asset and may award compensation and costs to the borrower.
As per definition, the term borrower also includes the person who has given any guarantee or created any mortgage as security. So, in respect of security interest created by guarantor or by mortgagor, the powers conferred on Secured Creditor can be exercised.
Various DRATs and High Courts have given different judgements in number of petitions filed in respect of recovery of debts through DRT and simultaneous action under
SARFAESI Act.
Salient Features of Setting up of Securitisation Company (SC)/Reconstruction Company
(RC) & Sale of NPAs to SC/RC
1.
A certificate of registration needs to be obtained from RBI for setting up of RC/SC.
Further, for commencing the business of Securitisation or Reconstruction the minimum owned fund of the company shall be an amount not less than 15% of total financial asset acquired by the Securitisation/Reconstruction Company on an aggregate basis or Rs.100
Crore, whichever is lower irrespective of whether the assets are transferred to a trust set up for the purpose of securitization or not.
2.
As per the definition of ‘Secured Creditor’ under SARFAESI Act, Secured Creditor includes ‘Securitisation Company’ or ‘Reconstruction Company’ whether acting as such or managing a trust set up by such Securitisation Company or Reconstruction Company for the securitization or reconstruction as the case may be.
3.
RBI is empowered to prescribe and determine the policy and prudential norms to be followed by Securitisation and Reconstruction Company. RBI also give directions and formulate guidelines.
4.
On acquisition, the Securitisation Company or Reconstruction Company becomes the lender and rights of the Bank/Financial Institution shall vest in such Securitisation
Company or Reconstruction Company.
5.
If assets which are subject matter of litigation are transferred, then the Securitisation
Company or Reconstruction Company can continue such litigation.
6.
The Securitisation Company or Reconstruction Company may file an application to the
Appellate Tribunal having jurisdiction over any of the Tribunals in which such applications are pending for transfer of all pending applications to any one of the Debts
Recovery Tribunals as it deems fit. The Appellate Tribunal may after giving the parties to the application an opportunity of being heard, pass an order for transfer of pending applications to any one of the Debts Recovery Tribunals. Orders passed by Appellate
Tribunal shall be binding on all the Debts Recovery Tribunals as if such order had been passed by the Appellate Tribunals having jurisdiction on each such Debts Recovery
Tribunal.

7.
Any recovery certificates, issued by the Debts Recovery Tribunal to which all the pending applications are transferred shall be executed and other provisions of the
Recovery of Debts Due to Banks and Financial Institutions Act, 1993 shall accordingly, apply to such execution.
8.
The Act provides for giving notice (of acquisition of financial assets by any
Securitisation Company or Reconstruction Company) to the borrower and other liable parties and to the concerned registering authority by the bank or financial institution.
9.
Act empowers the Securitisation Company or Reconstruction Company to change/take over the management of the business of the borrower, sell or lease part or whole of the business of the borrower, take possession of the secured assets, enforce the security interest etc. in accordance with the guidelines framed by RBI. Section 15 details the manner and effect of takeover of management.
Management is taken over by appointing Directors, in case borrower is a company, and an Administrator, in case the borrower is other than a company.
10.
Provisions of the Act enable Securitisation Company or Reconstruction Company to perform functions such as :
1.
to act as an agent for any bank or financial institution for recovering the dues from the borrower;
2.
to act as ‘manager’ to manage the assets taken over by secured creditor;
3.
to act as receiver if appointed by any court or tribunal.
11.
If any dispute crops up between Securitisation Company or Reconstruction Company and the financial institution, then the same has to be settled by arbitration as provided in the
Arbitration and Conciliation Act,1996.
12.
The scheme for the purpose of offering security receipts or raising funds may be in the nature of a trust to be managed by the securitization company, and the securitization company or reconstruction company shall hold the assets so acquired or the funds so raised for acquiring the assets, in trust for the benefit of the qualified institutional buyers holding the security receipts or from whom the funds are raised.
13.
The Reserve Bank may at any time direct a securitization company or reconstruction company to furnish it within such time as may be specified by Reserve Bank, with such statements and information relating to the business or affairs of such securitization company or reconstruction company (including any business or affairs with which such company is concerned) as the Reserve Bank may consider necessary or expedient to obtain for the purposes of this Act.
Other basic features, terminology, delegated powers / jurisdiction are as under:
-Authorised Officers : all officers in the rank of Regional Development Manager working in controlling offices for branches in their jurisdiction do act as “Authorised Officer” for the purpose of the Act. As such, RDMs of Meerut, Bijnor, Jhansi, Badaun & Gonda are hereby appointed as Authorised Officers for branches of their respective Regions.

Assets Sale Committees : Standing Committees known as the “Assets Sale Committees” shall work as nodal agencies in the Bank pertaining to the activity of transfer/ sale of financial assets to Securitisation Companies / Reconstruction Companies. The composition of Assets Sale
Committees shall be as under:
(A) RDOASC (Regional Development Office Assets Sale Committee)
(i) Regional Development Manager (Chairperson)
(ii) Manager (NPA/ Recovery)
(iii)Manager (Credit)
(B) HOASC (Head Office Assets Sale Committee)
(i) Chairman (Chairperson)
(ii) GM
(iii)Manager (NPA/ Recovery)
(iv)Manager (Credit/ P&D)
Note: An authority who sanctioned a loan shall not be the member of the Assets Sale
Committee considering sale of the concerned secured asset.
-Powers delegated to RDOCESI / HOCESI Committees: The delegations of power to the said committees for giving concurrence on behalf of the bank in fixing the “Reserve Price” shall be as under:
(a) RDOCESI - Ledger Outstanding not exceeding Rs. 10 lacs
(b) HOCESI - Full Powers
-The Valuers (for valuation of immovable secured assets) & the Managers (to manage the secured assets the possession of which has been taken over by the secured creditor) shall be approved by the Board of Directors of the Bank.
Competent Authority: In matters where permission to recall the advance is moved or in cases where the permission is already obtained and recall has been made, before venturing to exercise the powers under the Act, sanction of the competent authority as specified below needs to be obtained for initiating Action under the act:
COMPETENT AUTHORITY
1.
AMOUNT OF LOAN OUTSTANDING powers
2. General Manager (HO)
3. Regional Development Manager
Upto Rs. 15 lac
Upto Rs. 10 lac
( Note: Authority who sanctioned the loan shall himself not grant permission for initiating action under the act and in such cases the relevant powers shall be exercised by next higher authority.)
-INITIATION OF ACTION: The vested powers for initiation of action including issuance of notices for enforcement of security interest under SARFAESI Act 2002 shall be as under:
COMPETENT AUTHORITY AMOUNT OF LOAN OUTSTANDING
Chairman
2. General Manager (HO)
3. Regional Development Manager
Upto Rs. 15 lac
Upto Rs. 10 lac

APPROVING AUTHORITY: Negotiations with approved supporting agencies and their short-listing shall be undertaken by the concerned Authorised Officer.
The Authorised Officer shall therafter seek approval of the Competent Authority for supporting agensy to be engaged and fees to be paid. The Approving/ Competent Authority for this purpose shall be as under:
COMPETENT AUTHORITY
1.
AMOUNT OF LOAN OUTSTANDING powers
2. General Manager (HO)
3. Regional Development Manager
Upto Rs. 15 lac
Upto Rs. 10 lac
PROPOSAL RELATING TO SALE OF FINANCIAL ASSETS: Looking to sensitivity involved in cases relating to sale of financial assets, such proposals shall not be concerned by any authority below the General Manager (HO). The powers shall be as under:
(amt. in lacs)
SACRIFICE AMT. INVOLVED G.M. (HO)
BOARD
Sacrifice being debit to bank revenue/ 1.00
CHAIRMAN
5.00
Set off of SI / DI / Waiver of RI / PI /
Legal & other expenses on transfer /
Sale of the NPA.
DISPLAY ON WEBSITE: Details of those assets which are in possession of the Bank under
SARFAESI / Orders of the Courts / DRTs for sale shall be displayed on Website.
RATES FOR SUPPORTING AGENCIES : As per schedule ‘A’
(Policy for transfer/ sale of financial assets to Securitisation Companies / Reconstruction
Companies is enclosed herewith, together with prescribed format SFA-I, SFA-II, SFA-III).
General Manager.

Schedule ‘A’
Rates for Supporting Agencies shall be as under -
Book outstandings or estimated value of whichever is lower
Pretakeover secured assets, of identified units/ assets including survey
Facilitating Obtaining seizure of securities/
District
Magistrates/ taking possession of moveable and immoveable asets
Metropolitan
Magistrates as possession of the securities
Security watch and custodian of manager to ward for preservation and protection and when required for insurance manage the secured assets possession of which has been taken over
1
Upto Rs.10 lac
More than Rs. 10 lac
& up to Rs.50 Lac
2 3 4 5 6 7
1% of Book Rs.2000/- Rs.2000/- Minimum Transportation To be outstanding
/ value of secured assets or wages per
Security
Personnel fixed by the actual basis) +
Godown
Charges decided on case to case basis
Rs. 3000/- whichever is lower
Rs. 5000/- Rs.3000/- plus out of pocket expenses
Rs.3000/- plus out of pocket expenses respective
State Act
(Number of security personnel to be deployed
RDMs are permitted to sanction fee not exceeding
Rs.5000/- per
To be decided on case to decided by the custodian services over case basis competent authority and above watch and ward expenses, looking to the nature of assets acquired and need for its maintenance.
1. Travelling expenses equivalent to Ist Class Railway Fare for one person in case of outstation visits. No travel expenses in case of local securities or securities within 100 Km. radius of the agency.
2. Out of pocket expenses wherever applicable shall be maximum 20% of the fee payable under that head.
3. Godown Charges @ Rs.1/- per sq. ft. per week or part thereof

5. Fees payable to supporting agencies for sale of acquired assets through auction or otherwise shall be as under:
Amount realized from sale of assets Fees payable
Up to Rs. 10 lac 3% of realization proceeds
More than Rs. 10 lac but up to Rs. 50 lac Rs 30,000/- + 2.5% of the excess of realization proceeds over Rs 10 lac.
In case where supporting agencies have played a proactive role in recovering bank’s dues through OTS or otherwise pursuant to the possession taken under the Act, Chairman may approve fee to the Agency at the rate of 50% of normal fee (i.e. fee payable for realization of proceeds from sale of asset with the ceiling of Rs.50,000/- and payable out of actual recovery only. Moreover, such fee should be considered only if OTS fructify within a reasonable period of taking possession of assets say not exceeding three months.
Regional Development Office Head may settle pending cases for payment of fee to Supporting
Agencies in similar cases where recoveries were made from the party without even entering into
OTS on merit of each case within the framework of the scheme.

ASSET INFORMATION BROCHURE (PRE-ACQUISITION)
NAME OE THE BORROWER :______________________________________
SFA - I
Details of Loan Assets under consideration for transfer to ARC
Name of the Branch /
Region
Gross amount principal outstanding - assistance wise (Rs. crores)
{as on .................}
Term Loan* Working Capital **
* In case of term loan, please give balance as on the date the account became NPA, or amount advanced whichever is lower. Rest is to be mentioned as interest / other overdues.
** In the case of working capital assistance, please give the gross amount outstanding and the interest not collected, as on the date the account became
NPA, separately.
% of principal ... % (as on....) outstanding mentioned above to total secured
(first and second charge combined) debt
Asset classification .................. since .................
Company Details
Regd. office
Date of incorporation
Names of directors with status (promoter, independent, nominee)
Shareholding pattern
(as on ......... )
Name
Brief background and present status
Details of technical collaboration / validity thereof
Share price (as on .....................)
No. of shares % holding

Details of restructuring packages granted in the past through CDR/BIFR/AAIFR/internal etc.
Reasons for failure thereof.
PERFORMANCE
Industry
Status of unit
(location wise)
(In operation / closed. If closed, please indicate date from which closed, security / insurance arrangements and who is in possession of the units.)
Installed capacity
Physical performance
Key Financial indicators for the past five years
For the year ended/ as on (Rs crore)
Net sales
EBDIT
Cash accruals
Net profit/(loss)
Paid up capital
Net worth
Term debt
Working Capital debt
Inventories
Receivables
Term debt / equity
Total debt / equity
Current ratio
Relevant notes to the accounts in the last annual report
1)
2)
3)
..
Product Capacity Location
Product Capacity utilization
(%)
For the period
Please mention any special features / observations significantly affecting the company in the past

Legal/BIFR/SARFAESI status
Wilful default - reported to RBI
Litigation initiated and status of litigation
BIFR case Case No ....... Date .....
BIFR case status
SARFAESI action Please provide details
Debt / exposure profile (please give lender wise)
Secured debt Lender Principal o/s
(Rs. crore)
Term loans a) b)
..
Debentures a) b)
..
Bank borrowing for working capital
- Fund based a) b)
..
% of secured debt
Security

- Non fund based
Unsecured debt lender wise (as on
....................) a) b)
..
Lender
Total
Principal o/s
(Rs. crore)
% o f unsecured debt
Other exposure of lenders in the borrower (as on ......................)
Preference shares
Lender Rs.crore
Comments
Equity shares
Others (explain nature)
Other General Information
Promoter group
Group companies Name Listed/Unlisted
In respect of profitable unlisted Group Companies please give details like product, industry, net sales, EBDIT, net profit, cash accruals, net worth etc., for last three accounting periods
Date of last site visit (unit wise) and comments thereof
Insurance details

SFA – II
Document wise details of Loan Assets under consideration for transfer to ARC
Account _________________________________________
BO:____________________, RO:_______________
Exposure (as on......................)
Amount (Rs.crore)
Please attach separate sheet for each loan document/facility agreement
Date of loan agreement
Nature of facility
Amount of sanction
Amount disbursed (in case of term debt)
Principal outstanding
(as on ----------------)
In case of term loan, please give balance as on the date the account became NPA, or amount advanced whichever is lower. Rest is to be mentioned as interest / other overdues.
In the case of working capital assistance, please give the gross amount outstanding and the interest not collected, as on the date the account became NPA, separately.
Interest overdues
(as on ----------------)
Other overdues
(as on ----------------)
Security stipulated
Security created
Charge filed (yes/no)
ROC location
Conversion option
(yes/no)
Conversion option period
Major amendments to the terms of sanction
Whether unit is closed or in operation?
Whether the account is operative or is inoperative?

____________________
3. Status of Account:
Non suit filed / suit filed / decreed
SFA – III
Sarv U.P. Gramin Bank……………………..
Proposal for sale / transfer Financial Asset to M/s_______ under SARFAESI Act
1. Name of the Borrower: RECOMMENDED for acceptance of Bid Offer of
Rs.____ lac made by M/s ______ for Sale/ Transfer
____________________
2 . Branch/Region/Zone: of financial asset-M/s _________ (against Book outstanding of Rs.________ as on _________) under
SARFAESI Act.
(Amount in Rs)
7. Details of dues:
Balance as on ________ : _____________
(including SI/DI of Rs. ______)
Add debits (on account of
_____________) : ___________
Less Recovery made : ___________
Book Outstanding
as on _________ : ___________
4. Asset Classification:
NPA Date
Amount
P A date
Amount
: __________
: __________
: __________
: __________
Add interest @ ___ % from the date of classification of the account as NPA i.e. from
________ to __________ (simple): ____________
Legal & other charges : ___________
Recoverable dues as on _________ : ___________
Provision held
(i) as on 31 st March of previous year Rs. ___ ( α )
(ii) as at end of the previous quarter Rs._____
Debit to Bank’s revenue -----------
(µ)
Net Impact on profitability /
Release of Provision, if any ------- (
- µ)
α
Investment in Shares/
Debentures/Bonds etc. : ___________
Sale/bid offer by ARC : ___________
Appropriation of DICGC /
ECGC Claim, if any. : ___________
WAIVER
% of Bid Offer
: ___________ to recoverable dues to book outstanding
___________
_____________
Waiver to be accounted for:
To set off of SI/DI ____________
Debit to Bank’s revenue ____________
Waiver of legal/ other charges ____________
Waiver of RI upto __________ : ____________ plus future interest w.e.f. ---------------
5. Constitution :
Name of Sole Proprietor / Partners /
Directors (S/Sh)
(Give net means, value of IPs and date of latest CR)

6. Guarantors
(Give names, net means, value of IPs and date of latest CR)
- Certified that recoverable dues have been calculated as per guidelines approved by the Board
- As per module approach the account has secured ___ points, according to which indicative sale price comes to Rs _____ lac against which ARC has offered Rs. _____ lac.
- Dues payable as per Memoranda Record of the Account : Rs ________ lac.
8. NAMES OF ALL OTHER LENDERS AND THEIR RESPECTIVE
OUTSTANDINGS as on ___________ (As per Balance Sheet)
(Rs. in lacs)
Amount Name of Bank/FI Amount Name of Bank/FI

9.
PERFORMANCE
(a) Status of unit
(b) Installed capacity
(c) Physical
Performance
(In operation / closed. If closed, please indicate date from which closed, security / insurance arrangements and who is in possession of the units.)
Product Capacity Location
(%)
For the period
(d) Key Financial Indicators for the last three years
For the year ended / as on __________
(Rs crore)
Net Sales
EBDIT
Net Profit / (loss)
Paid up capital
Tangible Net Worth
Net Working Capital
Inventories
Current Ratio
Relevant notes to the accounts in the last annual report
1)
2)
3)
..
Please mention any special features / observations significantly affecting the borrower in the past
10. (A) DOCUMENTATION ASPECTS:
(Please confirm that all documentation and the filing of all necessary forms, in relation to the financial assistance is adequate, valid, duly executed, complete and enforceable.)
(B) LIMITATION ASPECTS: a) In case of Non Suit Filed Accounts i. Limitation for filing suit(s) in the
account available upto ……………. ii. Limitation for filing suit(s) against
guarantor(s) available upto ……….

b). In case of Suit filed accounts i. Date of filing suit : …………….. Rs……………
ii. Present stage of suit :…………………………….
iii. Last date of hearing with purpose:
iv. Next date of hearing with purpose..……………. c) In case of decreed accounts
i. Date of decree:......................... Rs. .....................
ii. Terms of decree: .....................
1. In case decree has been passed contrary to the terms of prayer in the plaint, indicate the variation and whether appeal is filed or not.
2. Indicate whether decree passed is preliminary decree or final decree
(applicable in case of mortgage suits only).
3. If application for final decree has been filed, indicate the date of such application and the present status. iii. Amount recoverable in terms of : upto: ..................... Rs........................
decree awarded
iv. Execution petition filed on .................... for Rs. ......................
(If not filed, mention reasons)
11.
POSITION OF DICGC/ECGC CLAIM
(indicate, whether applicable)
- Claim lodged for Rs………………. (date) : ……………..
- Claim settled for Rs………………. (date) : ……………..
- Amt. lying in imprest a/c Rs………………. (date) : ……………..
- Amt. to be remitted to the Corpn. Rs……………….
on receipt of the sale amount.
(Give reasons, if any, for rejection/non lodging of claim and staff side thereof.
If staff side not initiated/ decided, time upto which staff side will be decided)
12. DETAILS OF ALLIED/ASSOCIATE CONCERN (S) :
-Name of the concern(s).
-Details of the facility(ies) allowed by our bank/ other bank (s).
-Present o/s with date in respect of each of the facility and security available.
-Comments on the conduct of the account(s).

13. SECURITY POSITION:
(Rs. in Crores) a. Primary b. Collateral
Value Realisable value
Basis of valuation Our share
Value of our share block assets c. Other attachable assets
Basis of valuation
Dues of 1 charge holders st Residual value for banks
Our share
Value of our share
Total
14. Brief History of the Account:
Please indicate the original amount advanced/ facilities sanctioned for Rs ………….. on…….... , for what activity, further enhancements, final/last sanction, details of amendments in terms and conditions, if any. In addition to the normal information/ developments from time to time indicate the reasons as to how the account became irregular/ difficult of recovery (specify Internal / External reasons like non availability of Raw Material or Govt. Policy etc.); steps taken for regularization of account ; date of last site visit (unit-wise) and comments thereof, details of relief granted or restructuring packages granted in the past-
Legal / SARFAESI status
Wilful default – reported to RBI
Litigation initiated and status of litigation
SARFAESI action Please provide details

15. The Offer by ARC:
The ARC in their offer letter no. __________________ dated _______has given us a bid of Rs.
___________ in the account.
15.1 Settlement :
As soon as possible but not later than ............ unless otherwise extended by mutual consent of
Buyer (ARC) and Seller (PNB).
15.2 Terms stipulated by ARC :
[Please mention terms and conditions stipulated by ARC for acquisition of the financial assets.
Please clarify if all expenses relating to the transaction (i.e. stamp duty etc) shall be borne by
ARC. Please also mention acquisition fee etc to be charged by the ARC, whether there would be up-side sharing etc.]
16. Evaluation of offer made by the ARC:
(i) Internal Valuation
Bank’s share on charged securities is Rs.----- lac as per para 13 above. Assuming that realization of bank’s share on charged securities may take --years (approximately), the net present value (obtained by discounting for____ years@ _____%) of the available securities comes to Rs ---- lac. The net present value of our share in charged securities has been taken as Fair Market Value of the financial asset. Accordingly, the Fair market value has been estimated at Rs. --- lac as under:
Bank’s share on charged securities
Fair Market Value
(Net Present value of our share in charged securities)
Rs ----- lac
Rs. ---- lac
(ii) External Valuation (if any)
(In terms of the policy, when the ARC and/or lenders have undertaken valuation of the financial asset, the bank may not carry out another independent valuation.
Please comment if the valuation exercise has already been carried out by ARC and if other banks/FIs have accepted the same.)
17. Indicative Sale Price
In terms of the Module Approach (laid down in the General Guidelines for Settlement of
NPAs), the account has secured a score of ---. Accordingly, the indicative sale amount comes to Rs --- lac.
18. Comments on Sale Offer
(Please give comments about reasonableness of the offer in view of para 7.2 of the policy.)

19. Sanctioning / Renewing / Reviewing Authority :
Name:
Designation:
Original Sanction Last Renewal/ Enhancement
Present place of Posting:
20. Staff accountability and decision taken:
(a) Whether there is staff accountability Yes/No
(b) In case, it is yes at (a), name(s) & designation(s) of concerned officials be given along with specific comments on the present status/decision taken on the staff accountability aspects.
(c) If staff side action is not initiated, the reasons thereof and the time by which the final decision will be taken should be indicated.
21. Justifications & Recommendations:
As the sale to ARC is at a price less than the net Book value (i.e. book value less SI/DI and provision held) in terms of the prudential norms laid down by RBI for sale transaction, the shortfall would be debited to the profit and loss account of the current year. As such the sale involves net debit of Rs. _____________ to bank’s profit and loss account during the year, as under:
OR
The sale to ARC is at a price above the net Book value (i.e. book value less SI/DI and provision held). Accordingly, in terms of the prudential norms laid down by RBI for sale transaction, the excess provision would not be reversed but would be utilized to meet the shortfall / loss on account of sale of other financial assets to ARCs. As such the sale involves release of excess provision as under:
Book
SI ___________
Less Provision held as on
31 st March of previous year Rs. ___________
Net Book Value of the financial asset Rs. ___________
Bid
Net debit to P & L Account Rs. ___________
OR
Release of Provision Rs. ___________

(While recommending the proposal, it should be ensured that appropriate steps to recover the dues have been taken and the sale of the financial asset is in the larger interest of the bank. Justification should cover present means/ financial standing of the obligants, realisable value of security, suit stage, chances of realization through court/ SARFAESI, present net asset value, reasons why sale is in the interest of the bank etc).
MEMBERS OF THE RDO ASSETS SALE COMMITTEE