hire purchase in
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HIRE PURCHASE INHIRE PURCHASE IN
CANARA BANKCANARA BANK
Brundha Rajam
Deepika S R
Divya C B
Jaya Priya
Sathya A N
Vinodhini C
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
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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.
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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
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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
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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)
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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/-.
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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.
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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.
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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.
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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.
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