MSME LAP

Entry Level Age / Exit Level Age of the owner/s of the immovable property offered as security

·         Minimum Entry level Age: 18 years

·         Maximum Exit Level Age: 70 years

ZLCC can relax upto 75 years & FGMCAC can relax upto 80 years

·         Business expansion, Improvements / Extension.

·         Purchase of Machineries / Fixed / Movable / Immovable Assets

·         Purchase  / Acquisition / Construction  / Renovation / Built up  / Under Construction of property for Business Purposes.

Maximum Loan Amount: Rs.10.00 Crores

·         40% in case of commercial vacant properties.

ZLCC can permit the margin upto 10%.

Annual Cash Profit can be arrived as:

Profit before Tax @100 % subject to 150% of Previous year.

Add: Depreciation @ 100 % subject to 150% of previous year.

Add: Salary / Rent / Interest etc as expenses debited to P & L (vetted by Tax Audit report & Individual ITR) @ 100% subject to 150% of previous year.

Add: Interest on Term Loan / retail loan debited to P & L being closed within 12 months (maximum)

To be excluded: Exceptional business transactions like profit / loss from one-time sale, purchase, write off, if any

Illustration for arriving Annual Cash Profit is detailed in Annexure – II

Quantum of loan is subject to the availability of compliance to LTV norms and DSCR as per policy guidelines.

Income Clubbing Norms: Income of applicant and co-applicants can be clubbed for arriving eligibility in case of Individual borrowers. In case of Partnership Firm, LLP’s and Limited Companies – Other Income of partners/promoters/directors can be clubbed.

9.2.      Collateral Security: Since the facility is already secured by immovable property, respective sanctioning authority can take decision on requirement of further collateral security on case to case basis.

9.3.      The residual life of the building should be at least 5 years more than the proposed repayment period.

9.4.      CGTMSE: Not applicable

9.5.      Personal Guarantee:

o   Personal Guarantee of property owner/s whose security has been considered.

o   Corporate Guarantee of group concern/s which had offered the security.

o   Personal Guarantee of Partners / Directors as per extant guidelines.

9.6.      The immovable property offered as security should be SARFAESI Compliant.

9.7.      The immovable property offered should be located in Tier I to Tier 4 Centres. Property located in Tier 5 & Tier 6 (i.e. centres with population less than 10000) should not be accepted as security for considering loan under this product.

9.8.      Leasehold Residential / Commercial / Industrial properties allotted by State Government development authorities like MMDA, DDA, CMDA, HUDA, RIICO, HSIIDC etc. wherein residual lease period should not be less than proposed repayment period (door to door) plus 5 years, Lease hold amount is fully paid upfront and with mortgage rights / permission from the lessor can be considered for sanction by respective sanctioning authority.

9.9.      The property offered as security can be held by

o   MSME enterprise (applicant) OR

o   Proprietor/ Proprietary, his/her Spouse, Adult Children & Parents OR

o   Partners OR

o   Directors / Shareholders (major shareholder i.e., more than 5%) OR

o   Group concern/s

9.10.   Agricultural properties, disputed properties, properties attached by Tax authorities, Properties belonging to Trusts / HUFs / Societies are not to be considered as security.

9.11.   The property held as security for this loan can be extended for other facility /ies sanctioned by our Bank to the applicant concern or group accounts (however only on residual value after ensuring adequate margin for this limit).

9.12.   The security should be exclusively charged to our Bank i.e., charge on Pari-passu basis not to be accepted as security

9.13.   If Vacant Land is to be considered as security, and there is no deviation in norms of the scheme, the administrative clearance to be obtained from ZLCC & above.

Terms

o   Door to Door : Maximum 120 Months

o   Holiday period : Maximum 6 Months from the date of disbursement.

o   Repayment period : 84 Months.

10.2     For relaxation in repayment period beyond 84 months, ZLCC shall accord administrative clearance on case to case basis subject to  180 months  and above(Door to Door tenor)

10.3     Method of Repayment:

o   Principal in equal Monthly Instalments.

o   Equated Monthly Instalments (EMIs).

o   Negotiated repayment of Principal.

10.4     Interest to be serviced during holiday period.

10.5     While fixing repayment period, projected cash flow of the applicant and residual life of the building (which is offered as security) is to be taken into account.

(Repo Based Rate of Interest)

Powers

other charges

15.2.     All securities should be adequately insured with Bank Clause – Premium to be borne by the borrower.

15.3.     Pre-release Audit / Legal Audit are to be conducted as per extant guidelines of Credit Policy.

15.4.     A Declaration from the borrower that the loan amount has been utilized for the purpose/s for which it is sanctioned, to be obtained, to ensure end use of loan.

15.5.     In case of existing securities, where the residual value to be considered, the valuation report should not be fresh valuation and neither it should be more than 3 years old.

15.6.     Bank officials should visit the property and satisfy themselves about the approachability, marketability and value of the property before sanction. The value of the property should be discreetly enquired by the Bank officials and reasonableness of valuation reported by panel valuer should be ensured. A report about this should form part of the appraisal.

15.7.     Deviation if any in any of the product features to be placed to COLCC(GM) for approving relaxations.

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