Credit facility for Business

Sr. No. Particulars Details
i Eligibility All proprietorship firms, registered partnership firms, and companies engaged in trade or industry who are bona fide members of the Bank.
ii Purpose Pre-sale and post-sale working capital requirements.
iii Nature of Facility The credit facility may be sanctioned either as an overdraft or a term loan.
iv Method of Assessment 50% of sales as per latest audited/actual/provisional/projected financials.
v Securities As per merit of the case, by way of:
– Mortgage of immovable property
– Hypothecation or pledge of any other tangible security owned by borrower or surety(ies)
– Sureties to stand as guarantors
vi Sureties At least two satisfactory sureties of good means.
vii Margin 35% of marketable value of mortgaged property.
viii Limit Minimum: ₹5.00 Lacs
Maximum: Subject to the Bank’s exposure limit

Debt Service Coverage Ratio (DSCR) should not be less than 1.50 in case of term loan.
ix Period Overdraft: 12 months (subject to annual review)
Term Loan: Maximum 120 months (based on repayment capacity)
x Rate of Interest As per Bank’s guidelines, including penal charges for non-compliance with terms of sanction.
xi Insurance All primary and collateral securities to be insured adequately and comprehensively with Bank’s clause at party’s cost.
Other Conditions – Borrowers must route sales and other transactions through their Overdraft A/c with the branch.

– Branch must ensure end use verification.

– Pre-sanction inspection of business unit & property is mandatory.
– Property inspection: once per year; keep inspection report on record.
– Business inspection: quarterly/half-yearly/yearly (depending on exposure); keep report on record.

– Borrower must submit an undertaking declaring no overdue statutory dues (GST, Income Tax, etc.) and valid trading licenses.

– Submit relevant documents as per business constitution and sanction terms.

– Submit financial statements, annual sales declarations with Returns/GST/Income Tax at annual review.

– Rented property cases: finance allowed only on submission of Registered Rent Agreement.

– Borrower, mortgagor, and guarantors must be Bank members before loan processing.

– Other usual terms and conditions apply as per Bank’s rules.

– CEO may recommend, and BOD may relax margin requirements based on merits.
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