Can We Show Overtime in Bank Records for a Loan? Understanding PF Implications

We pay the overtime salary in cash and maintain records separately. One of our employees wants to take a loan from the bank, and his monthly earnings in the bank are 23,400 Rs, with overtime nearly about 10,000 Rs. He has requested to show his overtime in the bank for loan purposes.

What if I mention his overtime in the bank?
Is PF applicable on overtime?

Note: The bank will not accept the overtime salary letter for loan purposes.

Hi, PF is not applicable for OT payment. OT is a variable pay (which means it differs from month to month), and hence the bank will not consider it for the purpose of loan eligibility. You may issue a certification letter to the employee mentioning his date of joining, fixed salary details, and also state that the employee is eligible for OT payment, which is a variable component.