26. Essential Parameters for acceptance of shares as security

Essential Parameters for acceptance of shares as security to take a loan (SBI Bank)

(i) The equity shares and debentures offered as security should be fully paid.

Preference shares will not be acceptable as security

(ii) The shares/ debentures offered as security must be in demat form.

(iii) The share/ debenture should be of a company listed in BSE 100 Index, except those of SBI (list of BSE 100 Index companies is available on www.bseindia.com).

(iv) The market price of the security should not have fallen below par for preceding 52 weeks.

(v) The market price of the security should not be as variance with the arithmetical average of preceding 52 weeks high and low by more than 25% in downward direction.

(vi) ( P/E ratio of the company should not exceed 40 as published in Economic Times. In case P/E ratio is not available the shares/ debentures of the company should not be accepted as security.

(vii) The total number of shares of the company traded on NSE and BSE should exceed 25000 on the day of financing and on each preceding 2 days.

(viii) Security where the market price 52 week high is 4 times of the 52 week low should not be accepted. (Information related to 52 weeks high and low, P/E ratio and traded volumes in NSE and BSE is available in Economic Times).