All the cash flows shall be routed through Trust and Retention account opened with the Bank.
- Hypothecation of all movable assets including furniture and fixtures, vehicles, instruments, computers and all other equipments as well as infrastructural requirements required for the institutions, not specifically charged to any other Bank/FIs.
- Overdraft facility not to exceed 50% of the realizable value of the property taken as collateral security.
- In case OD limit to Educational institutions already availing Term loan from our Bank, the primary security (land & building only) and collateral security, already mortgaged with our Bank against Term Loan can be treated as collateral security for OD limit.
In such cases, the residual realizable value of the immovable property (primary and collateral) after netting of 100% term loan exposure should be reckoned for computing collateral coverage for OD limit.
|Coll. Security / Security Coverage
Equitable/ Registered mortgage of Land & Building (but not agricultural land) of the institute (wherever permissible and not restricted by affiliating/ approval authority of education institution/ local Govt. laws/guidelines) and/or belonging to promoters viz. Trustees/ Members of the Society/Proprietor/Partners /Directors, who shall also stand as guarantor.
In case of partial constructed property, the realizable value of land is to be considered for collateral coverage. Asset Coverage Ratio of at least 2.0 times to be maintained including Term loan outstanding, if any.
- While sanctioning credit facilities to the Educational Institutions, comfort should not be derived from the securities being offered. The viability of the project and cash flows of the Educational Institutions are to be relied upon while considering any credit facilities to the Educational Institutions.
- No benchmark prescribed for Current Ratio as liquidity of Educational Institution is analyzed in the light of projected cash flows and Current Ratio is not of much significance.
- Before sanction of any loan, verification of property about its clear, marketable, enforceable title must be undertaken by the Branch Head/ Cluster Head/ Credit-in-charge and kept on record. Extant guidelines about valuation of property, title clearance and inspection by the branch shall be strictly adhered to.