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Corporate Loan
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Corporate Loan

We are happy to inform you that Bank has introduced a new scheme of Corporate Loan for our existing and prospective Private limited / Public limited company customers. The scheme will help us to meet the financial need of our Private limited / Public limited company without involving acquisition of fixed assets. The scheme will induce our existing borrowers who are proprietary concern or partnership firm to convert into corporates.
The corporate Loans can be sanctioned to a corporate customer for any genuine purpose in line with the regular business activity, Viz.
  1. Shoring up the net working capital (NWC)
  2. Ongoing capital expenditure such as replacement of part of machines, upgradation, renovation, etc.
  3. Replacement of high cost debts
  4. Research and development expenditures,
  5. Acquisition of tools and jigs etc.
  6. Implementing voluntary retirement scheme in the company,
  7. Acquisition of trade marks/patents/brand equity ( in exceptional cases only)
Guidelines for sanction and conduct of the Corporate Loan are as under
Exposure Limit: Minimum loan amount will be Rs. 50.00 lacs
Maximum Loan amount would be Rs.10.00 crores.
Eligibility: Existing customers with credit rating B, A and Prime are eligible. Request for non-customers may be considered on selective basis and in such cases opinion report from the existing bankers and short C E D before disbursal is must. Also the existing banker must be suitably advised of the disbursal. In case of corporate loan above Rs. 100.00 lacs full-fledged C E D should be undertaken.
Sanctioning Authority: Sanctioning powers will be as applicable to term loans as per the Scheme of delegation of financial powers.
Assessment and monitoring: As applicable to Term loans DSCR as per the credit policy. Strict monitoring of end use of funds will have to be ensured to guard against diversion for unauthorized purposes.
Rate of Interest : To be linked to PLR and spread as applicable to the credit rating of the account may be considered and rate of interest @ 1% above the applicable interest rate be charged.
Repayment Period: 3 years maximum However in deserving cases sanctioning authority may extend the repayment period maximum upto 5 years. Quarterly/half yearly or even bullet repayment may be permitted, if the cash flow so justify.
Processing Fees: As applicable to term loan for existing/ prospective borrowers.
Security:
  1. Exclusive first charge on the fixed assets or on pari passu basis with other Term lenders.
  2. If first charge cannot be taken for valid reasons, a second charge on fixed assets may be obtained.
  3. Where the sole purpose is to shore up NWC,extention of charge on current assets should be obtained.
Collateral Security: Personal guarantee of promoter directors, pledge of equity shares of promoters (upto an amount of Rs. 20.00 lacs), charge on unencumbered assets of the corporate, independent tangible security of promoter director/s etc. should also be insisted and obtained wherever possible.
Documents: As applicable to Term Loans in consultation with Legal Department/Legal advisers. Charge to be registered with ROC as usual.
Shareholdings: 2.5% of the loan amount, maximum upto Rs.25000.00.
Number of Loans: A second Corporate Loan, even if another Corporate Loan is already outstanding may be considered for sanction subject to –
  1. The new loan should be strictly for the genuine commercial purpose in line with the regular business activity of the customer.
  2. Number of corporate loans outstanding in the name of the borrower at any point of time should not be more than three.
  3. Corporate loans already sanctioned should have been used for the purpose intended and no evidence of any diversion for unauthorized purpose should be on the banks record.
  4. Conduct of the existing corporate loan(s) and other loans, including working capital limits should be regular.
  5. There should be no default in repayment of interest/ installment under any of the loans outstanding in the name of the borrower.
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Saraswat-Bank
Saraswat-Bank