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Mortgage Loan Scheme Details
 

SCHEME OF 'MORTGAGE LOAN' FOR TRADE & SERVICE SECTORS

(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.
(2) Nature of Facility :
Cash Credit/Overdraft.
(3) Eligibility :
(i) Existing customers with a satisfactory track record of three years(cash profits during last 3 years and net profit in the immediately preceding year).
(ii) New connections including take-over with minimum existence of 3 years. Performance and credentials to be excellent. The following categories of borrowers will be covered :
(a) Retail Traders/Whole Sale Traders.
(b) Professionals and Self-Employed.
(c) Small Business Enterprises.
(4) Quantum of Loan :
Maximum Rs. 100 lacs.
(5) Assessment of Limits :
(i) For Traders and Business Enterprises:
60% of realizable value of property OR 15% of projected annual turnover, whichever is lower. Realizable value of property will be decided on the basis of the valuation report of an approved valuer not older than three years. Projected annual turnover will not exceed 125% of turnover achieved in immediately preceding year.
(ii) Professional and Self-employed :
60% of realizable value of property or 75% of gross annual income as per IT return, whichever is lowser.
(6) Validity :
Sanctioned limit will be valid for a period of 3 years, subject to review/renewal at the end of every year.
(7) Review :
If credit summations in the account are less than 60% of sales, the limit will be re - assessed. Excess limit, if any, will be required to be repaid in monthly instalments.
(8) Interest Rate :
As prescribed from time to time (@BPLR). (Floating rate).
(9) 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.
Inspection : By the Bank Officer/Manager at quarterly intervals.
(10) Security :
Primary : Hypothecation of stocks and receivalables.
Collateral : Tangible collateral security of muminim of 167% of loan in the form of Equitable mortgage of land & building.
(11) Documentation :
As applicable to working capital advances for trade and services, under SIB & C&I Segments, as the case may be, keeping in view the cellings prescribed by the Bank under SBF segments
(12) Insurance :
Comprehensive insurance for market value of primary and collateral security will be obtained.
(13) Classification :
A) Under SBF :
i) Retail Traders : Maximum limit Rs.10.00 lacs.
ii) Business Enterprise : Original cost price of the equipments used for the purpose of business does not exceed Rs. 20 lacs, irrespective of limit.
iii) Professional & Self-Employed Persons :
(a) Maximum Rs. 2.00 lacs for W.C. Limit.
(b) For professionally qualified medical practitioners setting up practice in semi-urban & rural areas : Maximum limit for W.C. Rs.3.00 lacs.
B) Under C&I :
Any limit above the ceilings prescribed in (A) above to be classified under C & I segment.

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