Civil Bank Loan against Fixed Deposit Receipt

The Loan against Fixed Deposit is an added feature in the Fixed Deposit product and enables the depositor/accountholder to withdraw a certain percentage of the deposit amount as a loan to cater to his/her various immediate needs.

Loan Limit
Normally, the Bank will finance up to 90% of the value of the FD, if the same is issued by itself. In case of loan against FDR issued by other Banks/financial institutions, the Bank may not finance more than 80% of the face value. However, in exceptional cases, the credit may be extended up to the face value of the instrument upon approval from competent authority. In case issuance of a performance guarantee, the credit can be extended up to the face value of the instrument. The rate of interest on loan against FDR should not be lower than the coupon rate of the FD.

In case the currency of denomination of FDR and the currency of loan is different, the Bank will not generally finance more than 80% of the face value of the instrument. In case the financing is more than 80%, it needs to be reviewed on monthly basis to guard against the foreign exchange fluctuation risk.

Loan Tenure
The loan shall be for a maximum tenure of 1 year renewable periodically up to the expiry date of FDR held as security. It should be ensured that loan maturity date is prior to Fixed Deposit Maturity date.

Interest Rate
Interest rate on 'Loan against FDR' will be decided by the competent authority from time to time.