PECCU provides loans to its members of up to 1 million rupees for provident and productive purposes. Loans are granted based on the number of shares held by the borrower.
The maximum repayment period is 200 months and the rate of interest applicable is 0.70% on the monthly balance.
Loans up to Rs. 700,000 can be secured by the signatures of co-members. shares also can be used as security for loans .
Members who own real estates and members who are authorised by another person to use his real estate as security for their loans can create a fixed charge in favour of the Credit Union and be eligible for loans up to 1 million rupees.
Borrowers can recast their loans after having settled at least 12 instalments or half of the total number of instalments which ever is lower.
LOAN POLICY
The loan policy has been updated and is hereunder outlined.
1. Loans are granted to members of the Postal Employees Cooperative Credit Union (the PECCU) in proportion to 4 times the number of shares cum savings up to a maximum of Rs. 1,000, 000/-
2. Chargeable interest on loan is 0.7% on a reducing balance basis every month.
3. Loans are granted according to the repayment capacity and the credit history of the member.
4. Where a member authorises his employer to deduct any amount from his monthly salary for repayment of a loan taken from PECCU, such authorisation shall be made in writing.
5. Members, whose total deductions, including the deduction for loan from the PECCU, do not, in the aggregate, exceed 50% of their salary, shall qualify for check off from the monthly salary in respect of the loan deduction.
6. A member who does not qualify for check off under clause 4 above may, subject to Board’s approval, opt for monthly repayment of the loan by bank standing order provided that: –
(a) he submits to the Board a certified copy of his bank statements for the last 3 months;
(b) he signs an undertaking to the effect that he will ensure that sufficient funds will always be available to allow the execution of the standing order;
(c) he discloses in writing to the Board whether he has made any other simultaneous application for loan with other financial institutions; and
(d) his net monthly salary does not fall below Rs, 8, 000 after all deductions have been made.
7. Additional revenue, if any, of the member referred to in clause 5 may be considered for the repayment of loan, provided tangible proof of such revenue is submitted.
8. Subject to the written consent of the spouse of a member referred to in Clause 5, the salary of the spouse may be considered for the repayment of loan where the latter is also a member of the PECCU and the salary is recurrent and consistent.
9. Where the Board considers the financial situation of a borrower/member as being precarious, it reserves the right, to inform latter’s sureties accordingly.
The Board shall then request for a further commitment-(guarantee), as it thinks fit, from the member.
10. The number of sureties needed varies with the amount of loan applied for and is as follows: –
Loan Amounts (Rs) No of Sureties
(a) Up to Rs. 10, 000 1
(b) Above Rs. 10, 000 and up to Rs.100, 000 2
(c) Above Rs. 100, 000 and up to Rs. 700,000 3
(d) For loans above Rs. 700,000 a fixed Charge should be created in favour of the Credit Union.
No surety will be required from members of the PECCU who are pensioners for loans up to Rs. 25,000. Repayment in such cases shall be made, with the written consent of the pensioner, by check off from his monthly pension payable by Sicom Ltd.
11. The responsibility to ensure that deductions are made in time on a monthly basis either check-off or by standing order, as the case may be, shall lie on the borrower/member. In case no deduction has been made for a particular month, the Secretary of the PECCU shall be so informed by the borrower/member and the due amount shall be paid in cash within a delay of 10 days. Where a member fails, without a valid reason, to make the monthly repayment in time, a penalty of Rs. 100 by way of deduction from the member’s savings shall be applicable.
12. Repayment of a loan falls due on the last day of the month following the month of issue.
13. In case the service of an Attorney-at-Law will be required to recover unpaid loans the cost thereof will have to be borne by the borrower.
14. The Board reserves the right to request for any other relevant information prior to the approval of a loan.
This is the main Service offered by PECCU. A shares account is a pre-requisite for membership. It opens access to all available services.
The Minimum balance is Rs.100. Shares are dividend bearing. Dividends are paid yearly based on surplus and computed on the number of shares held. The appropriation of the surplus is decided at the Annual General Meeting by members.
Shares can be withdrawn on request in whole or part at any time. It can also be used as security for loans.
The Christmas Savings Scheme has been introduced with the objective to further promote the savings culture among our members. This goes in line with the philosophy of Credit Unions. The scheme has known quite a bit of success with a constant yearly increase in the number of members subscribing thereto.
It inspires members to plan for expected recurring expenses such as the purchase of school materials and uniforms, payment of insurance premiums, end-of-year gifts to kids and beloved ones, etc.
Open to all members. Start at the End Of November every year.
Payment is effected by the end of November of the following year.
The interest rate payable is actually 2.5% yearly on the balance held at the end of the year.
This Scheme is reserved for children of members.
The age limit is 18 years.
Interest is decided at AGM.
No withdrawal is permitted.
OBJECTIVE
Over indebtedness is the ill of modern society. Awareness on thrift and money management should start at a tender age so that citizens of tomorrow would be better prepared to wisely manage their earnings. With this end in mind, as an integral part of the educational strategy of the Society, the iSave plan has seen light.
AIMS
• To educate our off springs to learn about thrift and money management
• To provide our kids an opportunity to understand the importance of managing their money and to gain knowledge of different financial products at an early age
• To educate the youngsters how to make sound financial decisions throughout their lives
• Allows parents to open a savings account with a modest amount
ADVANTAGES
• Better returns on investments in comparison to Banks
• Gives the young account holders a sense of personal identity
• Compounded interest
• No charge on minimum account balance as practised by banking organisations
• No charge on inactive accounts
• Children on attaining majority will automatically become members of the Society and benefit of all facilities of the Credit Union. Accumulated savings will be transferred to the account of the incumbent member.
• No limit on number of small deposits