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  • June 18,2018
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cotton ginning units

  • Finance
    Nature of facility

    Cash Credit (Hypo) and Term Loan

    MPBF Calculation

    The assessment of limits will be done both as per traditional method and on turnover basis. The higher of the two limits may be allowed as bank finance on merits of the case. However, the units which are also engaged in the trading activity of cotton ginning besides manufacturing may be allowed adding of trading sales subject to the quantum of projected trading sales turnover should not exceed 40% of the total projected sales turnover achievable on the basis of which working capital assessment should be calculated.
    During off season, Regional Offices/Branches may consider sub-limit to cotton ginning units which are having oil expeller machine against the stock of mustard/cotton seed/oil/cake depending upon the installed capacity for oil extraction for periods as per requirement of the borrower after proper assessment.

    Service Charges:

    As per schedule of Charges.
    However, No process fees shall be charged for credit limits upto ₹ 5.00 lacs to MSE borrower.

    Rating

    IMaCs Rating In all account irrespective of amount.
    Further, external rating in all eligible cases be got done as per bank’s policy. In case of default penal interest shall be levied @1% over and above normal rate of interest for non compliance of guidelines of external rating as per Bank’s policy.

    Inventory Norms

    Inventory norms, as prescribed in the latest loan policy and as per acceptable industry level may be followed.

    • The yield of cotton fiber and cotton seed should be taken as 34% (max.) & 64% respectively. (2% be considered as normal loss).
    • The period of credit available on purchases can be assumed depending upon the local market practices/trend.
    Other Conditions

    In case of units taken on lease ROs may be permitted to sanction term loans and working capital limits provided Banks exposure is 100% secured by tangible collateral.

  • Security and Margin
    Pry Security

    Hypo of Stocks and book debts

    Coll. Security / Security Coverage

    Mortgage (Registered or Equitable) of factory land and building and / or any other property (Land & Building) belonging to promoters or in the name of Guarantors, viz. Proprietor/ Partners/Directors/or in the name of the firm/company or gurantor

    Margin

    Branches shall apply a uniform margin of 25% on stocks and book debts within their powers as prescribed in General Loan Policy .

  • Rate of Interest and Repayment
    ROI
    Collateral Coverage Rate of Interest
    100% or Above MCLR+0.50%
    Less than 100%-upto75% MCLR+0.75%
    Less than 75%-upto50% MCLR+1.25%
    Less than 50%-upto30% MCLR+1.50%

    Below 30%, Rating applicable to MSME based on Internal Rating.

    Repayment Period

    Working Capital Limit :12 Month ,
    Term Loan : 7 years

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