I have granted Trade Finance Cash Credit Account in my Bank Branch for Rs. 40.00 lacs.We have created Equitable Mortgage by Deposit of Title Deeds followed by Registered Memorandum on the immovable property offered as security.We have taken EC reflecting the Bank Branch name as Mortgagee for the Cash Credit Limit Amount.
The customer has requested for adhoc limit of Rs. 10.00 lacs to support seasonal sales against the same property.Our Higher authorities has sanctioned the amount prescribing extension of mortgage formalities.
The customer is prepared to pay the stamp duty on mortgage deed and enter into supplementary narration in Bank's Title Deed Register but not willing to execute Regd Memorandum as the stamp duty on Registered Memorandum is hiked in Tamilnadu.
What are the implications in not doing the Regd Memorandum on the adhoc limit ofRs. 10.00 lacs?
Suppose if the Regd Memorandum also is done, what will be the position if the adhoc limit is closed.Whether the supplementary narration and Regd Memo on Rs.10.00 will get an annulled?
The party is eligible for adhoc sanction twice in a year.If we sanction second adhoc,has the party to execute one more Supplementary narration and Regd Memorandum and incur expenses for the second time.
If the Bank has not lifted the Regd Memorandum in the Books of Registrar done earlier for Rs. 10 lacs, whether that can be treated as valid for the second adhoc limit in a year.
Radhika Rangarajan
Manager of a Nationalised Bank
