RECURRING DEPOSIT - LOAN (HALF WITHDRAWAL)
(1) (i). Loan restricted to 50 per cent of the balance on the date of application from an account not treated as ‘discontinued’ once in 5 years can be allowed after the account has been in operation for at least one year and 12 monthly instalments have been paid. The balance in the account for the purpose of loan on the date of application shall include all deposits including advance deposits. The amount of loan shall be in multiples of ten rupees.
(ii). The interest for the loan shall be simple interest at the rate of two percentage points over and above the interest rate applicable to the RD account of the loan. The amount of interest recoverable on loan repaid on any one occasion shall be rounded off to the nearest rupee and for this purpose the amount of fifty paisa or more shall be treated as one rupee and any amount less than fifty paisa shall be ignored.
Repayment of Loan (Withdrawal)
(1). When an account holder takes loan against his/her RD Account, he/she will have the option to repay the loan amount with interest, either in the lump sum or in monthly instalments. If lump sum option is selected, the loan amount may be repaid in one lump sum along with the interest at the prescribed rate at any time during the currency of the account.
(2). (i) When the repayment of Loan taken in a RD account is made in monthly instalments, the number of instalments shall not exceed the number of months remaining for maturity of the account or the post maturity period for which the account is continued. There is no limit on the number of instalments in which the repayment of loan can be made except that the number of instalments will not exceed the number of months remaining for maturity of the account or the post maturity period for which the account is continued.
(ii). The payment made in instalments, was in multiples of Rs. 5/- in respect of the accounts opened before 18.12.2019. Since 18.12.2019, the instalment amount of repayment of loan shall be in multiples of Rs. 10/- (Ten).
(iii). The amount of loan should be divisible both by 10 as well as the number of instalments in which the repayment is to be made by the depositor subject to the further condition that it will not exceed 50% of the balance at credit of the account.
(iv). A depositor can make the usual monthly deposits without the monthly instalment of repayment, and repayment of the loan shall be made along with monthly deposits where loan repayment is made in monthly instalments.
(v). The interest on the withdrawal at the prescribed rate shall be calculated at the end of the period of repayment on the outstanding unpaid amount of loan at the end of each month and recovered in one instalment along with the last instalment or in the month following the last instalment.
(vi). In case the interest to be recovered is more than the interest payable on the deposits, the account holder shall be paid the amounts of deposits minus the amount of withdrawal made. The amount of interest to be recovered on the loan shall be reduced in order to make it equal to the amount of interest payable on the deposits so that the account holder may get back the net deposits.
Note 1: The depositor will give a declaration in the following form in the application for loan exercising the option to pay in instalments or in lump sum of every withdrawal made.
“I desire to repay the withdrawal of Rs...............now applied for in one lump sum/in................ instalments of Rs..................each”.
Note 2: The option exercised by the depositor under Note 1 can also be changed at a later stage. There should not be any objection to the repayment in lump sum if the depositor so desires even after a few instalments of the repayment of the loan have been made.
Note 3: There should be no objection to the repayment in instalments if the depositor so desires even if he has opted to pay the amount of withdrawal in lump sum.
(3). When the loan is availed by Guardian on behalf of minor, the following certificate shall be obtained in the loan application.
“Certified, that the amount of loan to be availed is required for the use of .............................................who is alive and still a Minor.
(4). (i). Where, for any reason, the amount of loan or a part thereof has not been repaid or the interest thereon has not been paid by the account holder before the closure of the account, the outstanding amount due from him in this behalf shall be recovered from the amount payable to him or to his/her nominee or legal heir, as the case may be, on the closure of the account.
Note 2: Closure of RD account shall be done only through Cash (below 20,000)/Transfer to Account holder's PO Savings Account/Cheque. Closure of matured RD accounts having outstanding RD loan/interest is not allowed through ECS outward facility, due to adjustment of RD loan/interest paid through office account (SOL ID+0023) from maturity value.
