Loans

Loans shall be given to ‘A’ class members only.But no member can claim a loan as a matter of right.There shall be 5 loans viz,

• Own Fund
• DCB
• Hire Purchase
• Emergency
• Educational.

All applications for loans shall be made to the Secretary in the form,if any,prescribed for the purpose who shall place them before the Board of Directors,with his remarks,if any loans shall be made

•  On the joint and several responsibility of the borrower and one or more members standing surety for him.
• On mortgage of unencumbered immovable property the value of which shall be at least double the loan.

    Loans shall be given only for useful and necessary purpose.among such purposes are:

Purchasing land and building house for the personal use of the borrowing member.

• Education of member’s children.
• Liquidation of prior debts.
• Purchase of good materials.
• Illness of the borrowing member or his dependents.
• Marriages,funerals or other ceremonies on a suitable scale to the borrowing member’s income and position in life.
• Obligatory religious rites.
• Unavoidable litigation.
• Reclamation and improvement of land.
• Agricultural purposes.

The purpose for which a loan is required shall be clearly and truly stated in the written application to the Committee.
The Committee shall see that the loan is properly used for the purpose for which it was granted.If it is  mis-applied the Committee shall have power to require payment in full within one month with interest and penal interest at 50% of the interest.
The following loans shall normally fall due at once and be returned with interest without delay and without any reference to the term for which the loan was given.

• Should the membership of a borrower cease for any reason whatever.
• Should any surety cease for any reason to be eligible to continue his suretyship and
• should the borrower fail to provide another surety to the satisfaction of the Committee.
• Should a loan be used for any purpose other than for which it was granted.
• Failure of a borrower to inform the committee of the death or ineligibility to be a surety or inability to fulfil the obligations.

  Loan shall be disbursed to members only after complete execution of necessary bond or registration of mortgage.
When a member takes a loan or becomes surety for a loan he shall agree to the deduction of instalments and interest from  his salary by the employer and he shall sign for the full amount of his salary as if such deduction had not been made.
The loan shall be repaid in such instalments and such rate of interest as may be fixed by the Board of Directors from time to time,subject to the approval of the Deputy Registrar and financing bank.

In the extraordinary gazette Notification No.G.O(P) No.283/2005/Coop.dated 14-11- 2005 exempted Rubber Board Employees Co-Operative Society from the provisions of   sub Rule(1) of  rule 56,enabling the society to grant long term loan to its members for a  maximum period of 120 months or till the retirement of the employee’s from service,whichever is earlier for the purpose of house construction.Accordingly,all other   loans other than house construction is limited to maximum period of 60 months or till the period of retirement of the employees from service,whichever is earlier.

The maximum borrowing power of a member shall be 100 times of his paid up share capital or Rs.10,00,000/- or 20 times of his salary, or his repaying capacity which ever is  least.Incase of surety  A’class member can stand surety.  When any instalment of loan is over due for more than three months it shall be the duty  of the committee to recover the balance with interest from the principal borrower or   sureties.If they fail to pay up the amount on demand  the Committee shall decide to close up the account and direct the Secretary to refer it to arbitration before the court  of the Deputy Registrar.

If any borrower find it really difficult to pay up the amount in the stipulated period or  finds it essential to reduce the rate of his instalment,he along with his sureties shall  submit an application before the Board.The Board shall consider the application and   reject or accept it according to the discretion in the light of the reasons mentioned in    the application.The decision of the Board shall be final.Board shall not accept any such   application wherein the surety or sureties have not signed.