To Avail Overdraft against Property you have to mortgage your Property with the bank or lending institute to get Overdraft against Property facility. The value of the property generally appreciates hence they are preferred as securities. On defaulting on the settlement of overdrawn amount the bank or lending institute may sell the property to recover the overdrawn amount with interest thereon and balance, if any, is returned to the customer.
Over Draft Against Property : Documents
The documents required are as follows :-
Address Proof : Latest Electricity/Telephone Bill or Receipt of Maintenance Charges or Valid Passport or Voter’s Identity Card or Purchase/Lease Deed/ Leave & License Agreement of Residence or Office Premises.
Identity Proof : Valid Passport, PAN Card, Voter’s Card, Any other photo identification issued by Government Agencies.
Business Proof : VAT/CST Registration No. or MIDC Agreement or SSI Permanent Registration Certificate or Warehouse Receipts or Shop & Establishment Act Certificate or Copy of Lease Agreement along with the latest Rent paid Receipt.
Business Profile on Company’s Letterhead.
Partnership deed in case of partnership firms
Certificate of incorporation, Date of Commencement of Business and Memorandum of Title Deeds, Form 32 in for Addition or Deletion of Directors in case of companies
Detailed Project Report ( for new ventures)
Last three years Trading, Profit & Loss A/c. and Balance Sheets (duly signed by a Chartered Accountant wherever applicable)
Last one years’ Bank statement of the Firm
If existing loan, then sanctioning letter and repayment schedule of the same
Firm/Company’s PAN Cards
Individual Income Tax Returns of the Individual/Partners/Directors for last three years
Last one years’ Bank statement of Individuals, Partners, Directors
SEBI formalities in case of listed companies
Share Holding pattern of Directors duly certified by a Chartered Accountant
List of the Existing Directors of the company from the Registrar of the Companies
Written & approved confirmation of having No Legal Suit filed against any of the directors. If any such legal suit or proceedings are pending then the details of such legal suit or proceeding
When Overdraft against Property
All Title Documents of the property including Chain of Documents from first purchase from the Builder or Society
Legal opinion of an Advocate regarding the title of the property
Over Draft Against Property : Process
The following are the sequence of steps taken by the banks on receipt of completed application forms.
Application form is accepted and acknowledged.
Personal interview /discussions is held with the customers by the bank’s officials.
Bank's Field Investigation team visits the business place/work place of the applicant.
(All the documents submitted are verified by the bank with the originals so as to ensure the authenticity of the same.)
Bank verifies the track record of the applicant with the common information sharing bureau (CIBIL).
In case of fresh projects the bank analyses the back ground of the applicant/firm/company and the Technical feasibility/financial viability of the project based on various parameters and also the existing market conditions.
Depending on the size of the project the file is put up for sanction to the appropriate level of authority.
SANCTION AND DISBURSEMENT :
On approval/sanction, the sanction letter, is issued specifying the terms and conditions for the disbursement of the loan. The acceptance to the terms of sanction is taken From the Applicant.
The processing charges as specified by the bank have to be paid to proceed further with the disbursement procedure.
The documentation procedure takes place viz.Legal opinion of various property documents and also the valuation reports.(Original Documents to title of the immovable assets are to be submitted)
All the necessary documents as specified by the legal dept., according to the terms of sanction of the loan of the bank are executed.
Disbursement of the loan takes place after the Legal Dept. Certifies the Correctness of execution documents.
