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05:43 AM Fri, 06 December 2019

05:43 AM Fri, 06 December 2019

Loan / Limit Against Property

Eligibility

  1. Individual, Firms (Proprietorship/Partnership) & Private / Public Limited Companies.
  2. Prospective Borrower should have experience in the trade, proven past track integrity and satisfactory market report.
  3. Newly established concerns can also be financed if the Key persons controlling the business have proven past track, integrity and satisfactory market repot along with their project report.

Scope
Scope of the Scheme is to cover retail & wholesale traders/manufactures especially, the traders/manufactures who have satisfactory financial background and good collateral security to offer such as

  1. ​Whole Sale & Retail Merchants (Provision Store/ Karyana Stores)
  2. ​Readymade Garments /wholesale cloth merchants.
  3. Hardware, Construction material, sanitary Stores.
  4. ​Auto Spare Parts dealers Retail outlets of petroleum Products (Petrol Pumps)& Mobile Oil Dealers.
  5. ​Departmental/Cosmetics Stores.
  6. ​Electrical Goods Sales/Services Shop TV, Refrigerators & Other Electronic items.
  7. ​Small Scale Services Business Entrepreneurs as per Priority Sector Lending. Persons engaged in Printing, repairing, advertising Agency, Equipment Rental and photo copying Centre, Auto Repair Services, Dry Cleaning, Servicing of Agricultural Farm Equipment, e.g. Pump, Beauty Parlour., etc.

Classification of Advances

  1. Retail Trade upto Rs. 20.00 Lac (Priority Sector)
  2. Micro & Small Enterprises (Manufacturing & Service Sector upto Rs.10.00 Lac
  3. Other: Non-Priority

Purpose
Expansion of existing business/meeting working Capital requirement (Including newly established concerns with sufficient experience.

Amount of Loan/ Limit
For General Purpose = 60.00 Lac
For Business Purpose = 60.00 Lac

Proposals exceeding Rs.60.00 Lac can be considered by B.O.D in view of the Genuineness Credit worthiness of the Borrower, competition in the Market.

Margin
50% In Case of Term Loan /as well as Limit/Overdraft against Property.

Primary Security

  1. Equitable/regular mortgage of immovable properties Valuation of the property should be double the amount of Loan/Limit required.
  2. Hypothecation & Stock/fixed assets in case of loan for business purpose.

Insurance
The property will be kept insured for construction, fire, riots and earthquake, flood, etc. by the borrower, with usual bank clause.

Precautions relating to Immovable Properties to be held as security
Before accepting the document for proposal of any applicant under their scheme for consideration, Branches has to ensure following

  1. ​Property offered as security is fully paid and ownership is on freehold basis.
  2. ​Legal opinion and search report to be obtained from the Bank’s approved advocate as per Bank’s guidelines.
  3. ​Cost of the legal search report and valuation report payable to advocate/Valuer and other incidental charges such as cost of insurance with agreed Bank clause are to be borne by the Borrower.
  4. ​Branch Heads to ensure that while sanctioning/recommending cases all the parameters of the scheme have been complied with.

Documents Required for Appraisal of Loan / Limit

  1. Loan application
  2. Credit Report of the firm/ Company, Prop./ Partner & Directors and Guarantors with Photograph and supporting documents.
  3. Present Banker’s account Statement for the last 6-12 months.
  4. Previous three Years Actual/audited Balance Sheet and P & L A/c.
  5. Provisional Financial Papers as on latest date, if the final B/s is more than 6 months old
  6. Detail of stock & fixed assets hypothecated in case of loan for business purpose..
  7. Projections for next 2-3 Years.
  8. Up to date VAT Returns/Sale Tax Returns.
  9. PAN and ITRS of the firm/Company, Directors and guarantor for the last 3 Years.
  10. ID, Residential Proof of the borrower/Partner/Director/guarantor.
  11. Photocopies of the title Deeds for the legal verification/valuation memorandum of Article, AOA, Certificate of incorporation, Certificate of Commencement of business (in case of Public Ltd, Co.) Resolution
  12. Partnership Deed in case of Partnership Firm.
  13. Verification Report by Branch Manager.
  14. Valuation of Property by approved Valuer along with Its Photographs and Location Map

Loan Documentation for Disbursement of Loan
As per prevailing Norms issued by Head Office.

Repayment
LAP Limit/overdraft repayable on Demand and is subject to renewal within period of 12 months.
LAP Term Loan repayable in a maximum period of 10 Years or as approved by Board in monthly-equated installment and is to be reviewed by sanctioning Authority once in 3 Years.

Other important precautionary measures of the scheme

  1. The Property dealers/construction contractors/builders are not eligible for lending under the scheme.
  2. Property in the name of the borrower or belonging to close relatives (Spouse, Parents, Son & Daughter) shall only be accepted.
  3. ​The owner of the property (other than the borrower) should also offer his/her personal guarantee for loan/limit.
  4. ​The Loan/limit should not be increased due to increase in the valuation of the mortgaged property.
  5. ​The advances granted under the said scheme should be classified as per the business/economic activity of the Borrower & not under the Real Estate Exposure.

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