Dinesh Divekar
Business Mentor, Consultant And Trainer
Loginmiraclelogistics
Asso.prof.(commerce & Management) Pg

Dear Team, As my company is providing finance to buy a laptop and employee should pay the amount as installment. So required your help to form a policy. Thanks
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Dear Amrutha,
Since you are making the initial payment to the distributor of the laptop and then recovering the amount I recommend you treating the payment to the distributor as loan to the employee. Therefore, handle the case as per policy on loan.
Anyway, include the following points in the agreement:
a) Mode of recovery of the payment, apportionment of capital and interest per instalment etc
b) Who will be the guarantors and their role in case of the abandonment of the employment by the employee
c) Method of recovery of the dues in case of separation from the company before payment of all the instalments
d) Method of recovery of the dues in case of the death of the employee
Thanks,
Dinesh Divekar
In addition to what Mr.Dineshji has stated, one more way out if the co. is short of cash. Arrange for a personal loan with your banker facilitating individual loans (lap top loan), co. can sign as a co-borrower/guarantor. This loan EMI will be recovered by the bank from their salary. Once the loan is fully repaid the laptop will be their own. There is coverage of insurance policy against theft and damages as well.
However it's also equivalently important to safe guard co's data carried in the laptop.
Dear Kumar S,
If the company becomes co-borrower/guarantor, then what is liability to the employee if he/she abandons the employment? I doubt there will be any liability as when the first owner fails to pay the EMI, the second owner or co-owner will have to pay. This is a little messy arrangement. Secondly, when a loan is taken from the bank or any other financial institution, obviously one has to pay interest. Then it will not be a employee welfare measure at all.
Purchase of laptop is personal matter of the employee. Therefore, company must restrict its activity only to the extent of giving loan to the employee and nothing else.
Thanks,
Dinesh Divekar
Dear Dineshji,

The bank tie up I suggested for the following reasons (from the employer's point of view):

1) If co faces cash flow problem to buy and provide to its' employees;

2) There is a tendency with some employees either to damage or lose the laptop itself by not taking enough care. You'll agree there is a difference between safe guarding one's own property vs others (co's) and especially when balance of EMI is still there to discharge. Moreover employees will be motivated to maintain it in good condition as it's going to be their own sooner or later. Further, most of the co's write off laptops in over a shorter period compared to other eqipt as its wear & tear is very high.

3) The interest component can always be compensated by reimbursing to the employees, thus no cost to employee.

4) Ofcourse, a co-borrower/guarantor carries more responsibility than the borrower itself. But since the salary itself being credited by the employer thru' the employees' bank a/c, including the F & F settlement any dues can be recovered. Coming to worse, the risk to the co. more or less the same in both the cases.

5) I don't think providing laptop facility, now a days, a welfare measure at all. This has become part of their essential job appliances like, stationery, calculator, desk top etc. More so in the 'work from home' regime/circumstances.

I don't advocate fully via a bank loan route but in the above circumstances it's preferable.
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