Comprehensive HR Policy Guidelines for Loans and Advances Including Employee Repayment Protocols

I am in the process of preparing an HR policy for Loans and Advances. Could anyone send me a draft of such a policy?

Ramana

Hi,

A policy on Salary Advances can be as follows:

The facility should be extended to all confirmed employees of the company or after completion of 12 months of service, with approval from the CHRO.

No fresh advances should be given until the previous one is settled.

Only 2 months' net salary can be provided as an advance.

The advance can be recovered through EMIs over a period ranging from 6 to 12 months.

Advances can only be granted for specific reasons:
- Death in the Family
- Medical emergency
- School admission of children
- Housing assistance
- Assisting in times of natural calamities
- Higher education for self and family members
- Others at the discretion of the CHRO

The format should be designed to provide all necessary details, including a declaration by the employee agreeing to repay the advance and authorizing the company to deduct the amount from their salary if they leave the job before the repayment tenure is complete. This declaration should be signed by the Reporting Manager.

Regards,
Deepak M

Thanks a ton, Deepak. It was actually matching my thoughts on the topic. I have a query: how to collect the balance amount if an employee quits the organization without any information and without any salary dues? Please let me know what is the practice generally followed in such situations since PF and Gratuity cannot be withheld or adjusted against any advance.

Ramana.