LOAN ON WARE HOUSE RECEIPTS
1) The goods covered by the warehouse Receipts should be approved by the Board and have good market value.
2) Such advances should be granted against such Warehouse Receipts which are marked ‘Negotiable’ and such receipts marked as ‘Negotiable’ should not be accepted for advance.
3) While making such advance, the Bank should obtain a letter from the borrower confirming his lawful ownership of the goods covered under warehouse receipts.
4) Ware House Receipts are transferable by endorsement and may be accepted from the original owner.
5) The clause in the Warehouse Receipts should be carefully examined to ensure that the interests of the Bank and not adversely affected by them.
6) The Signatures of the Warehouse man on the receipt should be verified with his specimen signature duly attested by the Corporation which the Bank should obtain and keep on its record.
7) The goods covered by warehouse receipts should be insured against the risk of loss by fire, theft, burglary etc., Bank should periodically verify the quantity and quality of goods.
8) Whenever part delivery is to be effected, the original warehouse receipt should be sent to the warehouseman, so that he could make necessary entries in the receipt before effecting the delivery and return the receipt to the Bank.
9) On repayment of all dues, the Bank should note to advise the warehouseman, so that the goods covered by such receipts may be removed from the Bank’s charge.
10) Documents : The following documents should be obtained while making such advances : i) Demand Promissory Note ii) Original Warehouse Receipt iii) Ownership declaration letter iv) Pledge deed v) Letter of lien and Set Off vi) Insurance Policy