The Tamil Nadu Cooperation Department has increased the maximum personal (Surety) loan limit offered by Employee Cooperative Banks to their members from Rs 20 lakh to Rs 35 lakh, subject to prescribed conditions.
In a circular, Registrar of Cooperative Societies K. Latha authorised the enhancement following recommendations of a committee headed by the Additional Registrar and Managing Director of TANCUBFED.
The move aims to strengthen the lending capacity of Employee Cooperative Banks, utilise surplus funds and improve their Credit-Deposit (CD) ratio.
Under the revised guidelines, the loan amount must not exceed Rs 35 lakh or 25 times the member’s gross monthly salary, whichever is lower. Banks must collect 5% of the sanctioned loan amount as share capital.
Further, the member’s net salary after all deductions, including loan instalments, must remain at least 25% of the gross salary.
Banks can implement the revised limit only after assessing their financial position and registering the required amendments to their bye-laws with the jurisdictional Deputy Registrar.
Regional Joint Registrars and the Additional Registrar, Chennai, have been directed to monitor compliance with the guidelines.
