SCHEMES FOR GOOD BORROWERS

1. The Corporation has introduced new schemes for the benefit of our existing and regular borrowers who have a proven track record of timely payment. These schemes provide speedy sanction and liberal disbursement procedures.

2. FUNCTION

a) Providing financial assistance to existing good borrowers of the corporation under different schemes. These schemes provide financial assistance to entrepreneurs to meet out their working capital requirement and also for funding their expansion modernisation and diversification projects.

b) Documentation and disbursement of loans sanctioned under GB Schemes is done at HO except in cases having request of the promoter, for documentation and disbursement is allowed in branches.

3. SCHEMES FOR GOOD BORROWERS

i) Short term loan to good borrowers(STL).
ii) Working capital term loan to good borrowers(WCTL).
iii) Special purposes working capital term loan(SPWCTL):
a) For acquiring set of diamond blade and/or segments by marble gangsaw units.
b) For acquiring set of back up roll/work roll, bearings, for replacement of machinery/ machinery parts and consumables specific to the need of the unit by SS Manufacturing units.
c) For replacement of card cloth by carpet woollen yarn manufacturing units.
d) For textile units for replacement of parts of Stenter Machine, printing machine and thermax boiler.
iv) Financial assistance to existing non assisted units with proven track record and new units promoted by the good borrowers of the Corporation(UPGB).
v) Working capital term loan to non assisted units (WCTL to NAU).
vi) Gold Card Scheme (GCL).
vii) Platinum Card Scheme (PCL).

4. ELIGIBILITY CRITERIA FOR GOOD BORROWERS

Existing Units assisted by corporation fulfilling the following norms would be eligible: -

(i) The unit should be an existing one and assisted by the corporation irrespective of whether the account of the unit is in operation or the account is squared up in past.
(ii) The unit should be in production during the last 3 preceeding years(two years in respect of Special purposes WCTL Schemes) on date to date basis and working results of atleast 2 years (one year in respect of Special purposes WCTL Schemes) out of 3(2) years, should reveal positive cash generations including the positive cash generations in immediate preceding year.

iii) The unit should have repaid atleast 30% of loan disbursed.(For STL, and WCTL Schemes only)

iv) The unit's account is classified as standard assets during last 3 (two years in respect of Special purposes WCTL Scheme) full preceding years.

v) The unit has not availed of any concession/relief by way of reschedulement, except refixation based on actual loan disbursed, during last 3 years. However, if borrower’s request for reschedulement is considered before committing default in three preceding years (provided it fulfills all other eligibility criteria of the respective G.B. scheme), the case may be covered under G.B. scheme.

vi) If any unit/entrepreneur or its sister or family/associate concern have availed benefit of rebate/relief by way of waivement of penal interest/interest in the last 3 financial years, the same is required to be refunded/deposited back while considering financial assistance to such units/entrepreneurs under Good Borrower Scheme.

vii) There should be no overdues in the loan account of sister/associate concern, if any, financed by the Corporation.

viii) COMMERCIAL COMPLEX CASES
(a) The unit should be operating/dealing with the Corporation for at least 2 years and repaid 50% of loan disbursed.

(b) The account of the unit should have been classified as standard assets in last 2 financial years.

(c) Working results and financial performance of the unit should be satisfactory in the last 2 financial years and should have shown positive cash generation.

(d) The other norms of the GB schemes shall remain unchanged. However, if there is short fall in prescribed norms of the security debt ratio, the Corporation may accept immovable property which is marketable and mortgagable for the amount of gap.




5. ELIGIBILITY CRITERIA FOR GOLD CARD

i) The unit should have operating/dealing with the corporation for at least 4 years.

ii) The existing debt equity ratio should not be more then 1.5:1 as per balance sheet of the last financial year.

iii) The account of the unit should have been classified as standard assets in the last 3 financial years.

iv) Working results and financial performance of the unit should be satisfactory in the last 3 financial years.

v) The borrower should not have availed any benefit by way of waiver of interest/penal interest or grant of reschedulement in the last 3 financial years and during current financial year.

vi) There should be no overdue in sister/associate/family concern of the unit and also no benefit of waiver of penal interest should have been granted during last three years.

vii) The working result of the concerns should justify repayment of existing and proposed loan.

viii) The loan cases which have been paid off in past as per the LDR(excluding prepayment) will be eligible for gold card loan provided their account were classified as standard assets in the last three years from the date of clearance of account and they have not availed term loan from bank. In case they have availed term loan from bank (excluding working capital loan) and want to avail gold card loan from the corporation then at first instance they shall have to avail the loan from corporation under any other scheme and operate the loan account at least for one year with satisfactory dealings.
ix) COMMERCIAL COMPLEX CASES
(a) The unit should be operating/dealing with the Corporation for at least 2 years and repaid 50% of loan disbursed.
(b) The account of the unit should have been classified as standard assets in last 2 financial years.
(c) Working results and financial performance of the unit should be satisfactory in the last 2 financial years and should have shown positive cash generation.
(d) The other norms of the gold card schemes shall remain unchanged. However, if there is short fall in prescribed norms of the security debt ratio, the Corporation may accept immovable property which is marketable and mortgagable for the amount of gap.

Note:- Under this scheme, minimum security debt ratio of 1.75:1 shall be kept.

6. BRIEF OF THE SCHEMES


a) Working capital term loan


This Scheme has been introduced for financing gap in working capital requirement and working capital available from Bank. The loan admissible under the scheme is Rs. 2.00 lac to Rs. 300.00 lac to the existing units assisted by the Corporation. The assistance is granted on the basis of the gap in working capital assessed by the Corporation based on requirements and working capital facilities made available by the banks. The assistance is granted on the basis of security of immovable property (only land and building excluding plant & machinery) which should be 150% of the total assistance(including outstanding in existing term loan account) being considered under the scheme.

b) Short term loan

The above scheme has been introduced to provide short term financial assistance to our regular borrowers for meeting their needs for acquiring P&M, balancing equipments or for expansion, modernisation, replacement of fixed assets or for acquisition of any other assets. The assistance under the scheme is considered from Rs. 2.00 lac to Rs. 500.00 lac. However, the total amount of assistance is restricted to 4 times of the amount of principal repaid in term loan availed from the Corporation.

c) Assistance to Non-assisted Units(UPGB Scheme)

The Corporation has introduced this scheme to provide financial assistance to well established units assisted by banks or other financial institutions. This Scheme also covers new units that are being set up or promoted by our existing good borrowers.The financial assistance is available for the purpose of meeting their needs for expansion, modernisation, diversification, purchasing of balancing equipments etc.

Under this scheme assistance is being granted by the Corporation to the following:-

i)New units promoted by our existing good borrowers.

ii)Units with proven track record not assisted by the Corporation but have availed financial assistance from Bank or other financial institutions.

Under the scheme term loan assistance ranging from minimum of Rs. 20.00 lac to Rs. 2000.00 lac as per the maximum permissible limit of RFC is being considered subject to maximum of four times of the principal repaid.
d) Special purposes WCTL Schemes.

Under this scheme financial assistance is provided:-
(i) To replace the existing blades/segments by marble gangsaw units.
(ii) For acquiring set of back up roll/work roll, bearings, for replacement of machinery/ machinery parts and consumables specific to the need of the unit by SS Manufacturing units.
(iii) To replace card clothing by carpet yarn manufacturing units.
(iv) For textile units for replacement of parts of Stenter Machine, printing machine and thermax boiler.

The maximum loan admissible is equal to amount of loan repaid against principal by a unit in the existing term loan account.

Subsequent Loans : Fresh Loan for the above purpose is also admissible even when earlier loan has not been repaid in total.
Further admissible loan (on the same margin of security) and outstanding amount in the existing SPWCTL account should not exceed the original sanctioned amount under this scheme provided the unit is running.

e) Gold Card Scheme

Under this scheme, Corporation is providing speedy sanction and disbursement of loan for meeting out immediate financial requirement of working capital and/or for acquisition of fixed assets at free disposal in the hands of borrower. The maximum loan admissible is equal to loan repaid with minimum security debt ratio of 1.50:1 subject to maximum of MRV of land & building.
The maximum loan admissible under Gold card loan scheme on the basis of security debt ratio is as under:

f) Working capital term loan to non assisted units


This Scheme provides to finance gap in working capital requirement and working capital available from bank subject to maximum of Rs. 100.00 lac on security debt ratio of 1.50:1. To become eligible under this scheme, a unit should have been in production during last 3 years and should reveal positive cash generation in 2 years out of last 3 years including cash generation in immediate preceding year and ready to provide prime security under Ist charge in favour of the Corporation.

Under this scheme, prevailing rate of interest shall be charged.  Further the security debt ratio shall be kept at 1.50:1 excluding the value of plant and machinery and the loan amount shall be restricted to the MRV of land & building.

g) PLATINUM CARD LOAN SCHEME
Introduction:
RFC is providing financial assistance to the SSI and medium scale units since last four decades. During the course of financing, a number of entrepreneurs have established themselves as good borrowers (GB) of the Corporation and the Corporation has already taken steps to provide financial assistance to them on liberal terms through its various exclusive schemes.
In order to encourage the existing entrepreneurs/good borrowers to have continued business relationship with the Corporation in a competitive business scenario, the Corporation has now introduced a new scheme termed as "Platinum Card Loan Scheme" so that the existing entrepreneurs availing loan facilities under GB schemes with satisfactory repayment behaviour may be further elevated/upgraded under this new scheme.

Purpose:
Providing of financial assistance to the existing good borrowers of the Corporation availing loan facilities under GB Schemes, with satisfactory repayment behaviour, to meet out their immediate requirement, either for working capital limit or to acquire fixed assets or both.
Eligible Units:
- Existing gold card holders with proven track record of repayment of two years under Gold Card Scheme.
OR
- Existing gold card holders with proven track record of repayment of one year under Gold Card Scheme and two years in other Good Borrowers Schemes.
Note: This facility would not be available in joint finance cases.
Eligibility criteria:
 - The existing debt equity ratio of the unit is not more than 1.50:1 as per balance sheet of the last financial year.
OR
- On considering the proposed platinum card limit, the debt equity ratio should not exceed 2:1.

- Working results and financial performance of the unit should have been satisfactory in the last 4 financial year and it should have revealed positive cash generation at least for 2 years in the last 3 years.


- There should be no overdue in sister/associate/ family concern of the unit and also no benefit of waiver of penal interest should have been granted during last three years.

- The working result of the concerns should justify repayment of existing and proposed loan.
Eligible amount:
The eligibility of loan shall be assessed by the Corporation, which shall not be more than 1.25 times of the loan repaid against principal in term loan, including UPGB and short term loan under GB scheme (loan repaid in WCTL/Silver Card/Gold Card loan account shall also be considered).
-         The eligible amount under Platinum Card Scheme would be considered in two segments ie. Fixed limit and floating limit.
-         The floating limit would be equal to 10% to 35% of total platinum card loan admissible, subject to maximum of Rs.10.00 lac.
-         Platinum card would be considered only in the cases where admissible loan under this scheme is Rs.10 lac or above.
- The maximum loan admissible under Platinum card loan scheme on the basis of security debt ratio is as under:

Securities and security debt ratio:
The security debt ratio should not be less than 1.50:1. For the purpose of calculation of security, MRV of land and building and book value of plant and machinery and MFA (subject to maximum of MRV of land and building) shall be considered.
Note: If any gold card holder becomes eligible for platinum card, while considering the eligible amount under Platinum Card Scheme, the outstanding in existing gold card account will be simultaneously squared up and shall be upgraded to the Platinum Card Scheme by way of roll over. In other words, the entrepreneur cannot have gold card as well as platinum card simultaneously. However, no prepayment charges would be charged for such upgradation of gold card loan amount. The borrower shall, however, have to surrender his gold card to get Platinum Card.
Processing of loan application:

No detailed appraisal would be carried out. Only entrepreneurs shall be identified by analysing past track records with regards to repayment behaviour with the Corporation and financial performance for the last four financial years.

Application and application fee:

After prima facie clearance of the case of the unit, the entrepreneurs shall submit formal application in the prescribed format alongwith the application fee as per the existing norms.

Margin and promoter's contribution:

No additional margin and promoter's contribution will be required to be brought in, provided that the existing debt equity ratio is not more than 1.5:1. However, if after proposed availment of platinum card limit, the debt equity ratio increases beyond 2:1, the concern/unit has to bring additional capital or unsecured (Interest Free) loan so as to keep the debt equity ratio below 2:1.

Interest rate:

The unit would have the option to choose fixed or flexi rate of interest at the time of filing the application. Request for change in option in interest from fixed to flexi and vice versa can be considered by the GM(Loans) before execution of loan documents. After execution of loan documents, no such request shall be entertained.

-         Fixed rate of interest:  Prevailing applicable rate of interest under the Platinum Card Scheme, interest being payable quarterly.

OR

-         Flexi rate of interest :  The rate of interest applicable under the Platinum Card Scheme prevailing from time to time.
Note:
-        No premium on prepayment would be charged.

Liquidated damages:
No default in interest and principal shall be allowed. In case of default following action shall be initiated :
a)Action u/s 138(b) of NI Act .
b) The status of card holder may be switched over to general loan scheme if the default is not regularized with in 15 days of default .
c) The card, if any, issued to such borrower may stand cancelled .
d)The corporation shall charge liquidated damages @ 2% p.a on the amount in default for the period of default from day one.

Repayment period:

A)Fixed limit :
 i)The loan shall be repayable in maximum 5 years in quarterly  installments including a moratorium period not exceeding six months through 19  PDCs. The first installment shall fall due on first day of month  falling immediately after expiry of six months from the date of first disbursement .
ii) The unit may pre-pay without attracting pre payment premium.
iii) The concern shall  make the payment of interest on first day of each quarter i.e March,June ,September and December.

Moratorium period:

The moratorium period for payment of principal sum would not exceed six months. However, interest shall be paid quarterly.

Disbursement:
The disbursement will be released in maximum two instalments.

Validity of sanction:

The sanction will be valid for 6 months only from the date of communication of sanction. Extension in sanction beyond 6 months to 12 months shall be considered by the sanctioning authority.

7. MISCELLANEOUS

a) Interest rate:
Prevailing rate of interest is chargeable in all the Schemes of good borrowers,  UPGB Scheme and WCTL to non assisted units and Special purposes WCTL Scheme.

b) Processing Charges:
Processing charges is chargeable under STL, UPGB, WCTL, SPWCTL, WCTL to non assisted units for good borrowers as per prevailing norms.

d) Repayment:

Under all the Schemes repayment is taken through PDCs.

8. DELEGATION OF POWERS

Exclusively powers for sanction of loan are available to field offices under GB Schemes to the extent power available in general term loan scheme. However power for sanction of loan under Gold card and Platinum Card schemes are available at HO only irrespective of amount.

9. Application form under different schemes of Good borrowers:-

i. Short term loan(STL) - Annexure-A
ii. Working Capital term loan(WCTL) - Annexure-B
(Under GB Scheme and WCTL to non assisted
units)

iii. Unit promoted by Good borrower(UPGB) – Application form above Rs. 2.00 lac applicable under general term loan Scheme may be used.

Note: These forms are available on Website and can be electronically transmitted. Application form can be submitted to the office along with cost of form besides application fee prescribed.

Application forms for Special purposes WCTL Scheme and Gold Card and Platinum Card schemes can be obtained from our branch office.

Please ensure filling of correct application form relating to concerned scheme.