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Key Features of Indian Bank Overdraft (OD) Facility

  • Flexible Withdrawals: Allows multiple withdrawals up to a pre-approved limit without restrictions, ideal for managing short-term cash flow gaps or urgent expenses.
  • Interest on Utilized Amount: Interest is charged only on the amount withdrawn and for the duration of use, not on the entire sanctioned limit, making it cost-effective.
  • OD Against Salary Account: For employees with salaries credited to Indian Bank savings accounts (minimum ₹25,000 monthly salary credited for at least 3 months), the OD limit equals 1 month’s gross salary (max ₹2 lakh). Auto-debit feature linked to the salary account ensures interest payments, reducing the risk of default.
  • OD Against Term Deposits: Available at 1% above the pledged Term Deposit rate (0.50% above for Indian Bank staff/retirees). Maximum loan amount is 90% of the accrued deposit value. Requires pledging the term deposit as security, with a 10% margin on the deposit’s value.
  • Convenient Repayment: Repayment is flexible and linked to your account balance. Interest is serviced monthly and there is no fixed EMI schedule, offering ease of repayment as per your cash flow.
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    • No Fixed Repayment Schedule: Unlike term loans, OD facilities allow repayment at the borrower’s convenience. Interest is typically serviced monthly, but principal repayment is flexible.
    • Quick Access: Immediate fund access without the waiting period of traditional loans, especially for pre-approved OD facilities.
    • No Pre-Closure Charges: Borrowers can close the OD account or repay the outstanding amount without penalties, enhancing flexibility.
    • Eligibility for OD: Employees of government, PSUs, listed companies, or autonomous bodies with salary accounts at Indian Bank. Organizations with 50+ salary accounts at Indian Bank are also eligible.
    • Credit Score Requirement: A credit score of 750+ improves chances of approval and may qualify for lower interest rates.
    • Tenure: Typically up to 5 years. The OD tenure may be aligned with the borrower's employment period or maturity of the pledged deposit.
    • Documentation: Minimal documentation for existing customers (e.g., salary slips, Form 16, identity and address proof). New customers may need to submit PAN, Aadhaar, and income proof for verification.
    • Flexible Repayment: Interest is serviced monthly, while principal repayment can be done as per convenience, making it suitable for irregular income earners.
    • Interest Rates: Generally lower than credit card interest rates and competitive with personal loans. Interest is charged only on the utilized amount.
    • Limit Determination: OD limit is based on salary (typically one month's gross salary) or up to 90% of pledged deposit value in case of OD against Term Deposits.
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Benefits of Indian Bank Overdraft (OD) Facility

  • Flexible Fund Access: Borrowers can withdraw funds multiple times up to the sanctioned limit, ideal for recurring or unexpected expenses like business cash flow or emergencies.
  • Interest on Utilized Amount Only: Interest is charged only on the withdrawn amount and for the duration of use, not the entire limit, making it cost-effective compared to term loans.
  • No Fixed Repayment Schedule: Unlike personal loans with fixed EMIs, OD allows flexible repayments based on cash flow, with only monthly interest servicing required.
  • Quick and Easy Access: Funds are available instantly for pre-approved OD accounts (e.g., linked to salary accounts), ensuring immediate liquidity.
  • No Pre-Closure Charges: Borrowers can repay the outstanding amount or close the OD account without penalties, offering financial flexibility.
    • OD Against Salary Account: For employees with salaries credited to Indian Bank accounts (minimum ₹25,000/month), OD up to 1 month’s gross salary (max ₹2 lakh) provides a safety net for short-term needs.
    • OD Against Term Deposits: Offers OD at a low rate (1% above deposit rate), with up to 90% of deposit value as the limit, leveraging savings without breaking deposits.
    • Renewable Facility: OD limits can often be renewed or extended (e.g., up to 5 years), subject to bank policies, providing long-term financial support.
    • Minimal Documentation: For salary account holders or deposit-linked OD, documentation is minimal, and approval is faster for existing customers.
    • Customizable Limits: OD limits are tailored based on salary, deposit value, or organizational tie-ups (e.g., companies with 50+ salary accounts at Indian Bank), ensuring personalized solutions.
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How to Apply for Indian Bank Overdraft (OD) Facility

  • 1. Online Application
    • Visit the Indian Bank Website: Go to the official Indian Bank website www.indianbank.in and navigate to the “Loan Products” section under “Retail/Personal” or “Digital Loans.”
    • Check Eligibility: Use the online eligibility calculator or contact the bank to check eligibility based on salary account, Term Deposit, or other securities.
    • Apply Online:
      • Select the OD facility (e.g., Loan/OD Against Deposit, Salary Overdraft).
      • Fill in the application form with personal, professional, and financial details.
      • Upload required documents such as identity proof, income proof, and deposit/security details.
    • Submit Application: Review and submit the application. You may receive “Approval in Principle” quickly, subject to verification.
    • Document Verification: The bank may request original/photocopies of uploaded documents for authentication.
    • Fund Disbursal: Once approved, the OD limit is set up in your account, and you can access the funds as needed.
  • 2. Offline Application
    • Visit a Branch: Locate the nearest Indian Bank branch using the branch locator on the website.
    • Consult a Loan Officer: Discuss your requirements (OD against Term Deposit, salary, or securities) with a bank representative.
    • Fill Application Form: Obtain and complete the OD application form at the branch or download it from the “Forms Download” section of the website.
    • Submit Documents: Provide the required documents physically at the branch.
    • Verification and Approval: The bank will verify your documents, creditworthiness, and pledged assets. This process may take 2–7 business days.
    • OD Activation: Once approved, the OD limit will be linked to your savings/current account.
  • 3. Mobile Banking
    • Use the Mobile Banking App: Open the Indian Bank mobile banking app and navigate to the loans/OD section.
    • Check Eligibility and Apply: Follow the prompts to check your eligibility, fill in details, upload documents, and submit the application digitally.
    • Track Application: You can monitor the status of your OD application directly through the app.

Eligibility Criteria for Indian Bank Overdraft (OD) Facility

  • OD Against Term Deposits:
    • Must hold an active Term Deposit (Fixed Deposit) with Indian Bank (in individual or joint name).
    • Deposit must be free from encumbrances.
    • Applicable for both Resident and NRI customers.
    • Applicant should be 18 years or older (legally competent to enter into a contract).
  • OD Against NSC/KVP/Relief Bonds of RBI/LIC Policies:
    • Ownership of securities like NSC, KVP, RBI Bonds, or LIC Policies in applicant's name.
    • Securities must be free from encumbrances and eligible for pledging.
    • Must provide valid certificates, proof of ownership, and surrender value (for LIC).
    • Applicant must be 18 years or older.
  • Salary Overdraft Facility:
    • Employment Type:
      • Permanent employees of Central/State Govt., PSUs, listed companies, or autonomous bodies.
      • Employees of reputed private companies (turnover above ₹100 crores with a credit rating of "A" or higher).
      • Employees of organizations maintaining 50+ salary accounts with Indian Bank.
    • Minimum monthly salary: ₹25,000 credited to Indian Bank savings account for the last 3 months.
    • Minimum 2 years of continuous service with the current employer.
    • Credit score of at least 700 (750+ preferred for better terms).
    • Age: 21 to 60 years (subject to bank’s discretion).
  • Professionals for Salary Overdraft:
    • Eligible professions: Doctors, CAs, CSs, Engineers, Architects, Designers, Consultants, etc.
    • Must have valid membership/license or degree (e.g., MBBS, CA certificate).
    • At least 2 years of professional experience.
    • Monthly income ≥ ₹25,000 credited to Indian Bank account.
    • Credit score: Minimum 700.
    • Age: Typically 21–60 years.
  • Indian Bank Staff and Retirees:
    • Eligible for OD against Term Deposits at concessional interest rates.
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Documents Required for Indian Bank Overdraft (OD) Facility

  • General Documents (Applicable to All OD Types):
    - Proof of Identity (any one): PAN Card (mandatory), Aadhaar Card, Passport, Driver’s License, Voter ID
    - Proof of Address (any one): Aadhaar Card, Passport, Latest Utility Bill (not older than 3 months), Registered Rent Agreement
    - 2–3 recent passport-size photographs (as per branch requirement)
    - Duly filled and signed OD application form
    - KYC documents (self-attested copies and originals for verification)
  • For OD Against Term Deposits:
    - Original or attested copy of the Term Deposit receipt/passbook
    - Pledge undertaking form/letter
    - Consent or NOC from joint holders (if applicable)
    - Updated KYC documents (if not available in bank records)
  • For OD Against NSC/KVP/Relief Bonds/LIC Policies:
    - Original certificates/policies (NSC, KVP, RBI Relief Bonds, LIC Policies)
    - Pledge undertaking
    - Surrender value certificate (for LIC policies)
    - Proof of ownership and non-encumbrance
    - KYC documents (if required)
  • For Salary Overdraft:
    - Salary slips for the last 6 months
    - Form 16 or last year’s ITR
    - Indian Bank salary account statement (last 3–6 months)
    - Appointment letter or employment certificate
    - Employer's undertaking/check-off letter (if applicable)
    - Service certificate/ID showing 2+ years of continuous employment
    - Credit score report (may be requested, 700+ preferred)
    - KYC documents (if not updated)
  • For Professionals:
    - Valid license/membership (e.g., CA certificate, MBBS degree)
    - Proof of 2 years of professional experience (e.g., practice certificate)
    - KYC and income documents
  • For Pensioners:
    - Pension Payment Order (PPO)
    - Pension account statement (last 3–6 months)
    - Spouse guarantee (if eligible for family pension)
    - Legal heir or third-party guarantee (if applicable)
    - Undertaking not to shift the pension account during OD tenure
    - Age proof to confirm entry eligibility (maximum age: 75 years)
    - KYC documents
  • For Indian Bank Staff and Retirees:
    - Term Deposit receipt/passbook
    - Employment/Retirement proof (employee ID or retirement certificate)
    - Pledge undertaking form
    - Updated KYC documents (if required)

Factors for Indian Bank Personal Loan Overdraft (OD) Facility

  • Age:
    - Salary OD: 21–60 years
    - Pensioners: Up to 75 years (entry), 78 years (exit), 73 for family pensioners.
    - Secured ODs: No strict limit, but applicant must be 18+ and legally competent.
  • Account Relationship:
    - Minimum 3-month salary/pension credit in Indian Bank account is required.
    - For Term Deposit OD: Deposit must be held with Indian Bank.
  • Creditworthiness:
    - Minimum CIBIL score: 700 (750+ preferred).
    - Clean credit history, no defaults or late payments.
    - High existing EMIs or debts may reduce OD limits.
  • Collateral/Security:
    - Term Deposits: OD up to 90% of deposit value.
    - NSC/KVP/LIC/RBI Bonds: Based on face or surrender value.
    - Securities must be in applicant's name, free from liens.
    - Secured ODs have lower interest rates than unsecured salary ODs.
  • Income and Repayment Capacity:
    - Salary OD: Minimum ₹25,000/month salary in Indian Bank account.
    - Professionals: Verified income primarily from profession.
    - DTI ratio should ideally be below 50–60%.
    - Salary OD limit: Up to 20x monthly salary, capped at ₹50 lakhs.
    - Pension OD: Limit based on pension and age.
  • Interest Rates:
    - Secured OD: 1% above Term Deposit rate (0.5% for staff/retirees).
    - Salary OD: 9.75%–15.25% p.a., based on credit score and profile.
    - Special rates for home loan borrowers with salary credited to Indian Bank.
  • Documentation:
    - Must be complete and accurate (e.g., KYC, salary slips, deposit receipts).
    - Verified documents affect processing time (2–7 days).
    - Additional docs: Pension order, Form 16, professional license, employer undertaking (if applicable).
  • Employer/Organization Profile:
    - Reputed employers (Govt, PSUs, listed firms) boost approval chances.
    - 50+ salary accounts with Indian Bank can qualify for relaxed terms.
    - Check-off facility from employer improves OD eligibility.
  • Processing Fees and Charges:
    - Secured OD: Usually no processing fees.
    - Salary OD: ₹255 above ₹25,000, nil below.
    - Additional legal, valuation, or documentation charges may apply.
  • Loan Tenure and Flexibility:
    - OD has no fixed EMI; interest charged on used amount and duration.
    - Pension OD: 60 months (pensioners), 36 months (family pensioners).
    - No prepayment penalties; repayment flexibility available.

Frequently Asked Questions (FAQs)

What is an Overdraft (OD) facility offered by Indian Bank?
The Overdraft (OD) facility is a flexible credit option that allows you to withdraw funds beyond your account balance up to a pre-approved limit. Interest is charged only on the amount utilized and for the duration it is used. Indian Bank offers OD against Term Deposits, NSC/KVP/LIC policies, or as a salary/pension overdraft.
Who is eligible for an Indian Bank OD facility?
Eligibility depends on the type of OD:
  • OD Against Term Deposits: Individuals (resident or NRI) with a Fixed Deposit in their name at Indian Bank.
  • OD Against NSC/KVP/LIC Policies: Individuals holding these securities in their name, free from encumbrances.
  • Salary OD: Permanent employees of Government, PSUs, listed companies, or reputed private firms (turnover >₹100 crores, “A” rating). Professionals (e.g., doctors, CAs) with 2 years of experience and income credited to Indian Bank. Minimum monthly salary: ₹25,000, credited to Indian Bank account for 3 months. Minimum credit score: 700.
  • Pensioners: Central/State Government pensioners, Indian Bank retirees, or family pensioners with pension accounts at Indian Bank (entry age ≤75, exit age ≤78).
  • Indian Bank Staff/Retirees: Eligible for concessional rates on OD against Term Deposits.
What is the maximum OD limit I can get?
  • OD Against Term Deposits: Up to 90% of the accrued value of the Term Deposit.
  • OD Against NSC/KVP/LIC Policies: Based on the surrender or face value of the securities (contact the bank for specifics).
  • Salary OD: Up to 20 times monthly gross salary, capped at ₹50 lakhs.
  • Pensioners: Determined by pension amount and repayment capacity, with a maximum tenure of 60 months (36 months for family pensioners).
What are the interest rates for the OD facility?
  • OD Against Term Deposits: General customers: 1% above the Term Deposit rate. Indian Bank staff/retirees: 0.50% above the Term Deposit rate.
  • OD Against NSC/KVP/LIC Policies: Rates vary; contact the bank for details.
  • Salary OD: 9.75%–15.25% p.a., based on credit score and applicant profile. Special rates (e.g., 10.75% p.a.) for existing home loan borrowers with salary credited to Indian Bank.
Interest is charged only on the utilized amount, calculated daily.
What documents are required to apply for an OD facility?
General Documents:
  • Identity proof (PAN, Aadhaar, Passport, etc.)
  • Address proof (Aadhaar, utility bill, rent agreement, etc.)
  • 2–3 passport-size photographs
  • Completed OD application form
Specific Requirements:
  • OD Against Term Deposits: Term Deposit receipt/passbook, pledge undertaking
  • OD Against NSC/KVP/LIC Policies: Original securities, surrender value certificate (for LIC), pledge undertaking
  • Salary OD: 6 months’ salary slips, Form 16/ITR, 3–6 months’ bank statement, employment proof, professional license (if applicable)
  • Pensioners: Pension Payment Order, pension account statement, spouse/legal heir guarantee, undertaking not to shift pension account
How can I apply for an OD facility with Indian Bank?
Online:
  • Visit www.indianbank.in, navigate to “Loan Products,” select the OD scheme, fill the application form, and upload documents
  • Receive approval in principle, followed by document verification
Offline:
  • Visit a nearby Indian Bank branch, consult a loan officer, submit the application form and documents
  • Processing typically takes 2–7 days
Other Channels: Use Indian Bank’s mobile banking app or call customer care at 1800 425 00 000 for guidance.
Are there any processing fees for the OD facility?
  • OD Against Term Deposits: Generally, no processing fees
  • Salary OD: Minimal fee (e.g., ₹255 for loans above ₹25,000; nil for loans up to ₹25,000)
  • Other Charges: Documentation or legal fees may apply. Confirm with the bank
Is there a prepayment penalty for the OD facility?
No, there are no prepayment penalties. You can repay the overdrawn amount at any time without additional charges.
What is the repayment process for an OD facility?
There is no fixed EMI or tenure. Interest is charged on the daily outstanding balance. You must maintain the account within the sanctioned limit and clear interest periodically to avoid penalties. For pensioners, repayment tenure is capped at 60 months (36 months for family pensioners).
Can I get an OD facility if I don’t have a credit score?
  • Secured OD (against Term Deposits or securities): A credit score is typically not required, as the loan is backed by collateral
  • Salary OD: A minimum credit score of 700 is required. Without a credit score, approval is unlikely unless you provide strong income proof and employer backing

List of Overdraft (OD) Facilities at Indian Bank

  • IB Clean Loan to Salaried Class
  • IB Pension Loan
  • Overdraft Facility in SB Salary A/C ("IB Insta Cash")
  • Loan/OD Against Deposits
  • Overdraft Against Term Deposit (Facility Deposit)
  • Overdraft Against Salary (IB Flexi Cash)
  • Overdraft Against Pension
  • Overdraft Against NSC/KVP/Relief Bonds of RBI/LIC Policies