Traders Loans (Scheme for financing Working Capital Requirements secured by Collateral)

Eligibility :

 

All persons/proprietorship firms/Regd. Partnership firms/Companies engaged in trade or service of any commodity/goods and are in their line of business for at least 2 years, who are the bona fide members of the bank.

Purpose :

For working capital requirements.

Nature of Facility :

The credit facility may be sanctioned either in the form of an overdraft or as a loan.  Method of Assessment of Working Capital:

The credit limit is to be considered as under:-

(a)        Advance value (market value – margin) of the collateral assets to be charged

                                                            or

(b)        20% of the projected Sales subject to verification of VAT/Sales Tax Returns of previous years/quarters.

Whichever is lower of column (a) or (b).

 

Limit :

Minimum         : ` 5.00 Lacs

Maximum        : Subject to the exposure limit of the Bank

Margin :         – 35% of the market value of immovable property, in case of residential

                     property.

                      40 %  of the market value of immovable property in case of commercial

                      properties.

 

Security :

  1. i) Primary: Hypothecation of stocks and Book Debts
  2. ii) Collateral: Tangible collateral securities in the form of mortgage of non-

                               agricultural freehold land and buildings, National Savings

                               Certificates, our Bank Term Deposits, Life Insurance Policies

                               (Surrender Value) etc.

 

 

 

Valuation :

The value of the property, to be  charged to the Bank as collateral security for the facility is to be as per the Valuation Report given by approved valuers on the panel of the Bank,  as per Bank’s policy to be in force from time to time.

 

Insurance :

  1. Comprehensive insurance of immovable property with Bank’s clause at party’s cost.
  2. ii) Comprehensive insurance of stock with bank’s clause at party’s cost

Period :

Overdraft        :           12 months subject to annual review

Loan                :           Maximum 120 months (depending on the repayment

capacity

Repayment schedule of Loan :         Repayable in equal monthly instalments.

 

Rate of Interest :                   As per Bank’s Rules, subject to penal interest for non-compliance

                                          of terms of sanctions.

Other Conditions :

  • Undertaking from the borrowers to exclusively deal with our Bank to be obtained.
  • Borrowers to route their entire sales through their Overdraft/Current A/c with the branch.
  • Stock statements to be obtained only twice a year i.e. as of August  & February  every year.
  • Inspection to be conducted once a year. Pre-sanction inspection to be conducted and report to be kept on record.
  • The undertaking from the borrower declaring that he does not owe any overdue statutory dues like Sales Tax, Income Tax, Corporation Tax, Professional Tax etc. and has obtained/renewed licences from concerned authorities required for trading in the merchandise/goods, on annual basis.
  • Branch to endeavor to display Bank’s name as financier from publicity angle.
  • Borrower must be a member of the Bank.

 

On the recommendations of Chief Executive Officer:-

 

  • BOD may relax the margin on the merits of ca

 

 

 

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