SALIENT
FEATURES OF OUR SCHEME
OF ‘MORTGAGE LOAN’
FOR TRADE & SERVICES SECTORS
Sr.
No
PARAMETER
EXISTING
SCHEME
MODIFICATION
IN SCHEME
1.
Purpose
To
provide hassle free working capital finance to borrowers
in trade & services sector and are willing to furnish
mortgage of property of adequate value.
To
provide hassle free working capital finance to borrowers
in trade & services sector and are willing to furnish
mortgage of property of adequate value.
2
Nature
of facility
Not
Mentioned
Fund
Based & Non Fund Based Limits
3
Type
ofLoan
Term
Loan/Cash Credit
Term
Loan/Cash Credit/Over
Draft
4
Eligibility
(A)
1. Existing customers
2.
New connections including takeovers.
3.
First generation entrepreneurs as promoters of existing
units for the purpose of setting up new unit.
The
following categories of borrowers will be covered.
Small
business enterprises
Retail
Traders/wholesale traders
c. Professionals
and Self-Employed
(B)
SCORING:
The
simplified scoring model as per Annexure `D' is to
be used for selection of a beneficiary under the scheme.
The applicant should get minimum 60% mark i.e. 36 out
of 60 marks. If any of the parameters is not applicable
then the scoring should be normalized out of 60.
(A)
1. Existing customers
2.
New connections including takeovers.
3.
First generation entrepreneurs as promoters of existing
units for the purpose of setting up new unit.
The
following categories of borrowers will be covered.
Small
business enterprises
Retail
Traders/wholesale traders
Professionals
and Self-Employed
Commission
Agents
Proprietor
/ Partnership / Corporate clients may be granted the
loans.
(B)
SCORING:
The
simplified scoring model as per Annexure `D' is to
be used for selection of a beneficiary under the scheme.
The applicant should get minimum 60% mark i.e. 36 out
of 60 marks. If any of the parameters is not applicable
then the scoring should be normalized out of 60.
In
case of Partnership or Corporate concerns, the scoring
should be made of the Key Partner or Director. Where
equal share is there, the Partner or Director as decided
by the concern to be treated as Key Partner or Director.
5
Quantum
of Loans
Minimum-
Rs. 25000/-
Maximum-
Rs. 3.00 crores
No
Change--------
6
Margin
25%
on Realizable Value of the Mortgaged Property for Term
Loan & Cash Credit Limits
35%
on Realizable Value of the Mortgaged Property for Term
Loan & Cash Credit Limits and Overdraft Limits.
7
Processing
Fee
As
per our usual instruction for Upfront Fee for Term
Loan and Proposal Processing Charges for W.C. limits
as being issued from time to time.
As
per our usual instruction for Upfront Fee for Term
Loan and Proposal Processing Charges for W.C. limits
as being issued from time to time.
8
Assessment
of Limits
(i)
For Traders and business enterprises (C&I &
SBF Segment)
Business
Enterprises: Individuals and firms engaged
in providing any service other than professional
service, including high volume retail/ wholesale
trading, super markets, malls etc.
Retail
Traders:Any retail outlet / trading activity
including dealers of groceries, consumer durables,
cooperative stores, etc.
(Persons
technically qualified or skilled in the field in which
they are employed, which includes Medical Practitioners,
Chartered Accountants, Cost Accountants, Practicing
Company Secretaries, Lawyers, Engineers, Architects,
Surveyors, Construction Contractors, Management Consultants,
etc.)
75%
of the realizable value of the property. Realizable
value of the property will be decided on the basis
of the valuation report (lower of two where two valuations
are obtained as per extant instruction), which is not
more than three months old, of an approved valuer).
(i)
For Traders and business enterprises (C&I &
SBF Segment)
Business
Enterprises: Individuals and firms engaged
in providing any service other than professional
service, including high volume retail/ wholesale
trading, super markets, malls etc.
RetailTraders:Any retail outlet / trading activity includingdealers of groceries,
consumer durables, cooperative stores, etc.
(Persons
technically qualified or skilled in the field in which
they are employed, which includes Medical Practitioners,
Chartered Accountants, Cost Accountants, Practising
Company Secretaries, Lawyers, Engineers, Architects,
Surveyors, Construction Contractors, Management Consultants,
etc.)
65%
of the realizable value of the property. Realizable
value of the property will be decided on the basis
of the valuation report (lower of two where two valuations
are obtained as per extant instruction), which is not
more than three months old, of an approved valuer).
(iii)
For borrowers, who have been sanctioned other limits
against mortgage of property, Mortgage loan can be
extended, against the residual value of the same property
subject to the stipulation that,
(a)
The existing loan account is conducted satisfactorily
for over 3 years.
(b)
The eligible amount i.e. outstandings under the loan already
availed and the proposed loan shall be within 65% of the
realizable value of the property.
9
Review
/ Renewal
Term
Loan review, Cash Credit renewal on an annual basis,
on the basis of the level of activity, credit summations
in the account, the interest serviced up to the previous
quarter end, and the installments paid.
No
Change
10
Interest
Rate
For
all borrowers, interest will be charged as under:
i)
CASH CREDIT: @ 0.25% below BPLR, Minimum
12.25%
p.a.
ii)
TERMLOAN: @ BPLR, Minimum 12.50 % p.a.
In
deserving cases, branches may approach for concession
in Interest Rate on case to case basis for consideration
by appropriate authority.
No
Change
11
Repayment
Maximum
60 Months for Term Loans
For
Term Loans: Maximum repayment period will be 60 months.
However, sanctioning authority may fix a shorter repayment
period in consultation with the borrower, in case cash
generation is more.
Sanctioning
authority may fix the repayment schedule in case
of Term Loans, on monthly/quarterly/half yearly basis
depending upon the cash flows.
12
Security
Primary:
Hypothecation
of stocks and receivables.
Collateral :
Tangible
security of minimum of 133% of loan amount in the form
of Equitable Mortgage of land & building.
(NOTE:
Since this relies mainly on Mortgage, the documentation
has to be proper & the legal clearance of Title
should be done systematically. It is often observed
that lawyers give legal opinion with qualifying remarks,
leaving it to the branch to satisfy themselves on
the qualifying remarks. The lawyer should give a
report, which takes care of all aspects related to
Title.) Moreover an Encumbrance Certificate (E.C.)
should be obtained every 12 months, and valuation
once every 3 years.
Primary:
Hypothecation
of stocks and receivables and/or assets acquired
of Bank Finance.
Collateral :
Tangible
security of minimum of 153% of loan amount in the form
of Equitable Mortgage of land & building.
(NOTE:
Since this relies mainly on Mortgage, the documentation
has to be proper & the legal clearance of Title
should be done systematically. It is often observed
that lawyers give legal opinion with qualifying remarks,
leaving it to the branch to satisfy themselves on
the qualifying remarks. The lawyer should give a
report, which takes care of all aspects related to
Title.) Moreover an Encumbrance Certificate (E.C.)
should be obtained every 12 months, and valuation
once every 3 years.
The
property to be mortgaged should be business/trading
premises, residential property. Agricultural property
or open sites outside the urban limits should not be
accepted.
Care
should be taken to ensure that the property is not
located in a zone earmarked for demolition by town
planning/city development authority or road widening
etc.
The
property in the name of the proprietor/partner/director/or
their family members, say spouse, son, daughter, father,
mother, brother, unmarried sister etc., can be accepted
as collateral security for the mortgage loan. The owner
of the property should also offer his/her personal
guarantee for the loan. Moreover the implications of
offering the property as security should be clearly
explained to the guarantor.
13
Stock
Statement & Inspection
Periodic
Stock statements have been dispensed with. However,
stock statement will be obtained only once at the time
of execution of documents.
All
immovable properties offered should be inspected
by the field staff, once before sanction and at the
following periodicity after disbursal.
For
Standard Asset: Once in a year by Field Officer.
Sub
Standard Asset :The account to be reviewed immediately
and the inspection to be done at quarterly intervals.
Periodic
Stock statements have been dispensed with. However,
stock statement will be obtained only once at the time
of execution of documents and as on 28 th February
every year, to evidence Bank`s hypothecation charge
against the current assets of the borrower.
All
immovable properties offered should be inspected
by the field staff, once before sanction and at the
following periodicity after disbursal.
For
Standard Asset: Once in a year by Field Officer.
Sub
Standard Asset :The account to be reviewed
immediately and the inspection to be done at quarterly
intervals.
14
Insurance
Comprehensive
insurance for market value of primary and collateral
security will be obtained.
Insurance
for the full market value of the Property to be mortgaged
with Bank clause incorporated will be obtained.
Comprehensive
insurance for market value of assets acquired out
of loan will be taken.
15
Documentation
As
applicable to Working Capital and Term Loan advances
for trade and services, under SIB & C&I Segments,
as the case may be , keeping in view the ceilings prescribed
under SBF segments
(
as stated in para 17 hereinafter) .
As
applicable to Working Capital advances for Industry/
Trade/ Services sectors, under SSI/ SBF/ C&I Segments,
as the case may be , keeping in view the ceilings prescribed
under SBF segments ( as stated in para 17 hereinafter)
.
Arrangement
letter.
16
Sanction
As
per extant delegation of financial powers.
No
Change
17
Classification
of Loans
(A) Under
SBF:
i) Retail
Traders: Maximumlimit Rs.10.00 lacs
iii)
Business Enterprise :Original cost price
of theequipments used for the purpose of business doesnot
exceed Rs. 20 lacs, irrespective of limit.
iii) Professional & Self-Employed
Persons:
Maximum
Rs.10.00 lacs (Rs. 2.00 lacs for W.C.) , except for
professionally qualified medical practitioners setting
up practice in semi urban & rural areas : Maximum
limit Rs.15.00 lacs (Rs.3.00 lacs for W.C.).
(B) Under
C&I :Any limit above the ceilingprescribedat
(A)
above to beclassified under C&Isegment.
No
Change
18
Application
Form
A
simplified application form as per Annexure `C' to
be obtained
A
simplified application form (revised) as per Annexure
`C' to be obtained
19
Proposal-cum-Sanction
Note-cum-Report for Control
A
simple Report for Control as circulated separately
to the branches to be used.
A
Proposal-cum-Sanction Note-cum-Report for Control
to be used as per Annexure `E'
SCHEME
OF `MORTGAGE LOAN FOR TRADE & SERVICES SECTORS'
-UNDER
SBF & C&I SEGMENTS: - EXTENSION OF SCHEME
TO SSI UNITS
Opinion
report on the Bank’s prescribed format should be
prepared byBranch
Officials.
6
a.Name& Address of the Key Partner / Director:
7.Present
credit facility enjoyed, if any :
Name
of the Bank & Branch
Facility*
Limit
Outstanding
In
case no credit facility enjoyed and only a current
account is maintained,Please
advise specifically.
8.
Associate/Sister concerns, if any :
Name
of the Unit
Name
of Partners/Proprietors etc.
Banking
with
1/3
9.
Credit Facilities Required :
Fund-based
Cash
Credit /Overdraft :
Term
Loan:
Non-
Fund Based
10.Details
of Security Offered :
Primary :
Collateral :
(i) Immovable
Property
Description
of Property
Name
of the owner*
Market
Value *
*
This should be based on valuation report not older
than 3 months from Bank’s
approved valuer.
If
owner is other than the proprietor/partner of
the firm (i.e. guarantor), details of the
guarantor viz. Name, Age, Residential Address and
Phone No. Etc. should be given :
Name
of the Guarantor
&
Address
Age
Qualification
Means
11.Key
Financial Parameters : (for
two years)
As
on 31.3.
As
on 31.3
(i)
Sales
(ii)
Net
Profit
(iii)
Depreciation
(iv)
Cash
Profit
(v)
Tangible
Net Worth
I/We
declare that the information given in the
application form are true, correct and complete
and that they shall form the basis of any
kind of facility State Bank ofSaurashtra
may decide to give under the‘Mortgage
Loan for Trade & Services Sector’ Scheme.
I/We confirm that I/We are not defaulters
of any Bank.
I/We also confirm that I/We have/had no insolvency
proceedings against me/us nor have I/We ever been
adjudicated insolvent. I/We undertake to abide
by the Rules and Regulations of State Bank ofSaurashtra
in respect of‘Mortgage Loan for Trade & Services
Sector’ Scheme.
DATE
:
PLACE
: _____________
(Signature
of borrower)
2/3
Check
List of Documents to be attached :
1. Copy
of documents pertaining to the collateral
security being offered.
Latest
copy of income-tax return/Assessment
order etc.
Statement
of account from the existing banker
for last 6 months.
Copies
of relevant license, documents pertaining
to ownership/tenancy/lease agreement
etc.
in respect of premises where activity will
be carried out.
Audited
/ Unaudited balance sheetsfor the last
three years, in case of old establishments,
and projected balance sheet for new establishments.
Other
documents required as per application
form andfor compilation of Scoring
Model.
(The
list is not exhaustive. The branch specific/unit
specific requirement of document(s),
if any,
should also be submitted).
