RFC/PG/1163

(FR SECTION)

Ref.No.RFC/FR/HO/Policy/9/2359                                          Dated: 08.12.06

CIRCULAR
(FR No 416)

Sub: Time frame for initiation of legal action where two or more instalments of principal sum or interest are in default

In order to streamline the procedure and to bring uniformity with regard to initiation of legal action u/s 30/29 of the SFCs Act, 1951 in the event of default in all cases. It has been decided that on default of two or more consecutive instalments of principal sum or interest legal action should invariably be initiated u/s 30/29 of the SFCs Act.

It has also been observed that there is no uniformity in the time frame for legal notices issued by the branch offices. It has also been observed that after expiry of legal notice prompt action is not taken in fixing date of takeover of possession u/s 29.

It has, therefore, been decided to prescribe the time frame with regard to initiation of legal action u/s 30/29 of the SFCs Act as follows:

�If the persuasive efforts after first default do not yield results and the loanee fails to clear overdues as per the norms then, legal action u/s 30/29 should be invariably be initiated immediately on default of two or more instalments of principal sum or interest as follows:

  • Legal notice should be issued u/s 30 immediately after two defaults within seven days giving 15 days time;
  • After expiry of legal notice date of takeover of possession should be fixed giving not more than 15 days time. It should be ensured that notice for takeover of possession is issued within seven days from the date of expiry of legal notice.
  • In those cases, where Branch Office has strong reasons for not issuing legal notice even after two or more insgtalments are in default, then the BM should record the reasons and send to DGM(R), who after due scrutiny may take a view to dispense within issuance of legal notice u/s 30 and direct to branch office to initiate legal action u/s 32(G).�

Accordingly, point No.4.1, 4.3, 4.4, 4.6 and 4.8 of Chapter No. FR-4 of P&G are hereby amended.

All concerned are advised to make note of the above and ensure strict compliance of these instructions in all cases of assisted units in default.

(B.N. Sharma)
Chairman & Managing Director


RFC/PG/1163

RAJASTHAN FINANCIAL CORPORATION
(FR SECTION)

Ref.No.RFC/FR/HO/Policy/15/1831                                Dated: 06.10.06

CIRCULAR
(FR No 404)

Sub: Premium on pre payment of principal instalments in cases where legal notice has been issued

Attention is invited to FR circular No. 261 dated 20/31 st December, 2001 regarding above. The Board of Directors in their meeting held on 15.9.06 have decided that in the cases where legal notice has been issued and in compliance thereof the loanee concern desires to clear the entire outstanding amount within 45 days from the date of issue of legal notice, no premium shall be charged as the party is depositing the amount at the behest of the Corporation in terms of legal notice. However, if entire outstanding is not repaid by the loanee concern within the stipulated period, premium as applicable would be chargeable.

All other provisions / terms and conditions of PG circular No. 915 dated 30.4.01 and referred FR circular No. 261 dated 20/31 st December, 2001 shall remain unchanged.

All concerned are advised to take a note of above and act accordingly.

(Karni Singh Rathore)
Chairman & Managing Director


RFC/PG/979

RAJASTHAN FINANCIAL CORPORATION
(FR SECTION)

Ref.No.RFC/23FR/HO/Policy/9/5076                                Dated: 08.08.02

CIRCULAR
(FR No 269)

Sub: Default in Deferred Sale cases

Asper policy on initiatinag legal acation, so far considerations have been defined under Section 4.3 of PG on FR. Analysis has revealed that the units sold on deferred payment basis start commiting default and instead of alleviating the health code category by virtue of sale of unit in new hands, add to sticky accounts. Therefore, the management has laid down the following guidelines to deal with the incidence of default in units sold on deferred payment basis:

  • No case should be registered for settlement of the account in respect of units sold on deferred payment basis unless prior permission of CMD is obtained.
  • Units sold on deferred payment basis prior to 1.4.2000 having overdues of more than two consecutive principal instalments need immediate legal action including taking over possession, after seeking approval of Head Office.
  • Legal action, including Section 29, is required to be initiated as per delegated power in the cases sold on deferred payment basis after 1.4.2000 where default of more than two consecutive principal instalments has occurred.
  • All out efforts should be made to dispose off the units taken into possession on priority basis as per delegated powers regarding sale of units. Offers received should not be rejected outright if it is equivalent to the amount disbursed or 75% of the MRV.

All concerned are advised to strictly adhere to the above guidelines in dealing with the cases sold by the Corporation on deferred payment basis and to make note of the guidelines referreed at at (i) to (iv) above under a new sub-para 4.3. A in Chapter FR.4.

�Units sold on deferred payment basis prior to 1.4.2000 having overdues of more than two consecutive principal instalments need immediate legal action including take over of possession by the concerned DGM(R) except in cases of joint finance and the cases of units relating to SC/ ST.�

(D.K. Vijay)
General Manager (Dev.)


RFC/PG/992/2002/

RAJASTHAN FINANCIAL CORPORATION
(FR SECTION)

Ref.No.RFC/FR/HO/Policy/9/6391                                Dated: 17.12.02

CIRCULAR
(FR No 273)

Sub: Empowered Settlement Committees

In partial modification of PG Circular No.979 dated 8.8.02, point No. (ii) �Units sold on deferred payment basis prior to 1.4.2000 � after seeking approval of HO� be read as :

�Units sold on deferred payment basis prior to 1.4.2000 having overdues of more than two consecutive principal instalments need immediate legal action including take over of possession by the concerned DGM(R) except in cases of joint finance and the cases of units relating to SC/ ST.�

(D.K. Vijay)
General Manager (Dev.)


RFC/PG/1163

RAJASTHAN FINANCIAL CORPORATION
(FR SECTION)

Ref.No.RFC/FR/HO/Policy/17/1957                                Dated: 13.10.06

CIRCULAR
(FR No 408)

Sub: Empowered Settlement Committees

In partial modification of PG Circular No.1038 dated 28/29.1.2004 (FR Circular No.297), the revised position of constitution and jurisdiction of HOLC, Special HOLC and SLC is as under :

1) Head Office Level Committee (HOLC)

The Committee shall entertain cases having financial implications upto Rs.30.00 lac and appeal cases of DLC.

Constitution :

1.

Executive Director

:

Chairman

2.

General Manager (D)

:

Member Secretary

3.

General Manager (A/Cs)

:

Member

4.

Financial Advisor -
General Manager (Finance)

:

Member

5.

Incharge (Law Section)

:

Member

6.

Dy.General Manager(Loans)

:

Member

7.

Dy.General Manager(FR)/(ARRC)concerned

:

Member

Quorum : Four

Other DGM(s) may also be nominated by CMD from time to time.

2) Special Head Office Level Committee :

Constitution :

1.

CMD, RFC

:

Chairman

2.

ED, RFC

:

Member

3.

Financial Advisor �
General Manager (F)

:

Member

4.

General Manager (Accounts)

:

Member

5.

General Manager (Dev.)

:

Member Secretary

6.

Dy. General Manager(Loans)

:

Member

7.

Manager (Incharge Law)

:

Member

Quorum : Four

The jurisdiction of Special HOLC shall be as under :-

  • Appeals of HOLC (there will be only one appeal) will lie with Spl. HOLC. Appeals of fresh decision of Spl. HOLC will lie with SLC.
  • Cases having sacrifices amount of more than Rs.30 lacs and upto Rs.1.00 Crore.
  • Cases of waivement of penal interest upto Rs.10.00 lac.
  • Granting extension in time, waiver of interest etc. in respect of settled cases by HOLC.
  • Redressal of all types of grievances of entrepreneurs and grant of relief, any dispute related to interest, MRV etc.
  • Other matters to be decided by the CMD (if any).

3) State Level Committee (SLC) :

The committee will consider the cases where sacrifice amount is more than Rs.1.00 crore. Besides this, appeals of Special HOLC will also be considered by this Committee (appeal except the decision of Spl. HOLC in appellate matter).

Constitution :

1.

CMD, RFC

:

Chairman

2.

MD, RIICO

:

Member

3.

ED, RFC

:

Member

4.

Representative of LIC

:

Member

5.

General Manager, SIDBI

:

Member

6.

Shri Kamal Mehta, Director, RFC

:

Member

7.

General Manager (Accounts)

:

Member

8.

General Manager (Dev.)

:

Member Secretary

Quorum : Four

Senior-most Officer � CMD, RFC/RIICO will chair the meeting of the Committee.

Accordingly clause 12.2(b) (c) (d) of PG Chapter regarding Empowered Settlement Committees be updated with the above changes.

All other provisions/terms and conditions of referred PG Circular No.1038 dated 28/29.1.04 shall remain unchanged.

All concerned are advised to take a note of above and act accordingly.

(Karni Singh Rathore)
Chairman & Managing Director


RAJASTHAN FINANCIAL CORPORATION
(FR SECTION)

Ref. No. RFC/ HO/23.FR/Policy-20/1950                                Dated : 12.10.2006

C I R C U L A R
(FR No. 407)

Sub : Non compliance of PG provisions with regard to withdrawal of Legal Notice

As per P&G(FR-4), point no.4.11 and 4.12, Legal Notice U/s 30 may be withdrawn on payment of 50% of the overdues as on date of Legal Notice and in case the unit is not in a position to pay an amount equivalent to 50% of overdues then PG provides that it should make payment atleast to the following extent depending upon the Category of the account :-

Category of Account

Minimum payment
(% of amount outstanding on the date of issue of legal notice)

Loss assets

5%

Doubtful assets Category B

10%

Doubtful assets Category A

15%

Standard and sub standard assets

20%

In the spirit of the aforesaid clear provisions contained in PG the loanee should deposit either 50% of the overdues or the minimum amount as per category of account as specified above after issuance of Legal Notice immediately and in case they fail to deposit the said amount then action U/s 29 for take over of possession should invariably be taken meaning thereby either the party should make the payment as per above or immediately after expiry of Legal Notice, date of possession should be fixed by the BO and possession should be taken over in case payments have not been made as per above.

It has come to notice that many Branches are accepting Post Dated Cheques for the aforesaid stipulated amount which is in contravention of provisions of PG contained in Point No.4.12(B).

It is, therefore, once again reiterated that in case the party failsl to deposit the amount on cash down basis immediately after issue of Legal Notice as per existing provisions then date of possession should be fixed and possession should be taken over on expiry of Legal Notice.

Only in those cases where party makes the payment as per above provisions then Legal Notice should be withdrawn after arriving at a clear understanding with the party for payment of remaining dues regularly PDCs should also be obtained for the remaining dues and accounts should be regularized as per norms.

Any violation will be viewed seriously.

(Karni Singh Rathore)
Chairman and Managing Director


/RFC/FR/PG-1079/

RAJASTHAN FINANCIAL CORPORATION
(FR Section)

Ref: RFC/23FR/HO/Policy/25/1667                                27 th September,2004

CIRCULAR
(FR No.314 )

Reg: Delegation of Powers

The Corporation is poised for much higher achievements in the fields of Sanction, Disbursement & Recovery where fast decision-making is the corner-stone. In view of this objective, the Board of Directors in their meeting held on 13.9.04 has delegated FR powers in a big way at field level. The structure of delegation of FR powers is enclosed to replace Schedule-3/1 & 3/2.

It is enjoined upon all concerned to exercise these powers with prudence.

(Sanjay Dixit)
CHAIRMAN & MANAGING DIRECTOR


RAJASTHAN FINANCIAL CORPORATION
(FR Section)

Reg.: Proposed Delegation of Powers Schedule-3/1

S.No.

Item

Authority Delegated

 

 

General

Joint Finance

I

Deferment & Postponment

Of principal & interest for one quarter only

BM

CMD

II

Refixation

Disbursing Authority

BM

CMD

III

Reschedulement

  • Only of principal-1 st Reschedulement with extn. in 2yrs.LDR

2 nd reschedulment(with extn. of

Original LDR upto 5 yrs.)

Subsequent Reschedulement(s)

  • Of Principal & Interest

-Reschdulement(without extension of

LDR)

*Reschedulement will be allowed on

documented interest rate or prevailing

interest rate whichever is higher.

BM

DGM(R)

GMD/

GM(Z)

GM(D)/

GM(Z)

CMD

CMD

CMD

CMD

IV

V

VI

VII

VIII

IX

Stoppage of Facilities

Declaring of unit as willful defaulter

Legal Action(in case of default)

  • Closed Units

a) To issue notice u/s 30 of SFCs Act

i) Doubtful & Loss

ii))Other Categories

  • To take over possession u/s 29 of

SFCs Act

SC/ST

  • To withdraw notice issue u/s 30 of SFCs Act
  • To give back possession of assets

taken over u/s 29 of SFCs Act

e) To file application u/s of SFCs Act

f) To issue notice u/s.32G of SFCs Act

  • Running Units
    • To issue & withdraw notice u/s 30 of SFCs Act
    • To take over possession u/s 29 of

SFCs Act:

  • Sanctioned loan upto Rs.75 lakhs
  • Above Rs.75 lakhs to Rs.150

Lakhs

  • Above Rs.150 lakhs
  • SC/ST/Joint Finance
    • To give back possession of assets u/s 29 of SFCs Act
    • To file application u/s. 31 of SFCs Act
    • To issue notice* u/s. 32G of SFCs Act

*Requisition of Demand to collection

(Recovery)

.

Grant of Charges

Pari Passu charge, 2 nd charge and subsequent charges over mortgaged assets:

  • 2 nd charge
  • Pari-passu charge

Charge in Constitution

At Headquarters

Mutual Sale

a) Cases in which balance outstanding in loan account of concern is upto Rs.15 lakhs(as on date of mutual sale)

b)Cases in which balance outstanding is above Rs.15 lakhs & upto Rs.40 lakhs(as on date of sale)

c) Cases above Rs.40.00 lakhs

d) Joint finance cases

Part Sale

Note:

a) Acceptable value will be equivalent to the MRV of the assets.

b) That by sale of part assets the feasibility and viability of the project not impair.

BM

BM

BM

BM

-

BM

BM

BM

BM

BM

-

-

-

-

BM

BM

BM

DGM(R)

BM

GMD/

GM(Z)

As per sanction

-ing

authority

GMD/

GM(Z)

BM

DGM(R)

GMD/

GM(Z)

-

BM

CMD

CMD

CMD

CMD

CMD

CMD

CMD

CMD

CMD

CMD

BM

DGM(R)

GMD/GM(Z)

CMD

CMD

CMD

CMD

CMD

CMD

As per sanction

-ing

authority

CMD

CMD

CMD

CMD


RAJASTHAN FINANCIAL CORPORATION
(FR SECTION)

Ref.No.23FR/HO/P-25/148                                Dated : 13/15.4.2005

CIRCULAR
(FR-340)

Sub : Delegation of Powers

The delegated authority structure was defined vide FR Circular No.314, dated 27.9.04. While implementing the circular, it was observed that in the case of Reschedulement of Principal and Interest extension in LDR was very much required. Therefore, the matter was placed before the Board and amendments made in the delegated structure are as under :

Existing

Amended

Authority

 

 

General

Joint Finance

III (b)Reschedulement of principal & Interest reschedulement

Of Principal & interest Reschedulement with extension in LDR upto 5 years

GM(D)/

GM(Z)

CMD

B Running
Units
(b)Possession u/s 29 of SFCs Act

     

i) Sanctioned loan upto Rs.75.00 lac

 

BM

CMD

ii)Above Rs.75.00 lac to Rs.150.00 lac

 

DGM(R)

CMD

iii)Above Rs.150.00 lac

 

GM(D)/
GM(Z)

CMD

All concerned are advised to take note of the above modification.

(Karni Singh Rathore)
Chairman & Managing Director


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