In banking, the term PDD stands for Post Disbursal Document(s). This refers to the set of documents that a borrower is required to submit to the bank or financial institution after the disbursement of a loan. These documents are crucial for the completion of the loan process and ensure that the terms of the loan are being met by the borrower.

Purpose of PDD

The primary purpose of Post Disbursal Documents is to verify that the borrower has utilized the loan for the intended purpose. For instance, if the loan was taken for purchasing property or assets, the bank requires documents such as receipts, invoices, or sale agreements to confirm the purchase. PDD serves as proof of compliance with the loan agreement and ensures that the funds have been used as per the stipulated guidelines.

Common PDD Requirements

Typical Post Disbursal Documents may include:

• Invoice or Purchase Receipt: For loans used for buying assets like vehicles, machinery, or property.
• Insurance Proof: Banks may ask for insurance documents covering the asset purchased with the loan.
• Property Registration Documents: For home loans, proof of property registration is a common post-disbursal requirement.
• Proof of Repayment: In case of secured loans, additional documents related to the repayment schedule may be requested.

Importance of PDD in Loan Management

PDD is crucial for effective loan monitoring. It ensures that banks and financial institutions can track the end-use of the funds and take corrective measures if the borrower deviates from the loan purpose. Non-submission of PDD may result in penalties or even a recall of the loan.