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Interest

Effective Rate

The loan shall carry interest at concessional rate mentioned in Special Conditions. The interest shall be payable in quarterly instalments on first day of March, June, September and December every year, beginning after three months from the date of first disbursement. The first interest would normally carry a moratorium period of 90 days. However, without prejudice to the right of the Corporation to recall entire outstanding loan after expiry of stipulated repayment period, the amount outstanding shall carry normal rate of interest prevailing at that time.

Liquidated Damages

In case of default, the Corporation shall charge liquidated damages on the amount in default, for the period at rates applicable, presently these are:

The rate of liquidated damages (penal interest) in case of default on all existing as well as future loan A/cs. (excluding all GB schemes ) w.e.f. 1.4.2004 would be as follows:

Particulars

Loans upto Rs. 2.00 lacs Loans above Rs. 2.00 lacs but upto Rs. 10.00 lacs Loans above Rs. 10.00 lacs
For general Loan Cases NIL 2.00% 3.00%
For good borrowers and potential good borrower cases NIL 2.00 % 2.00%

The borrower shall further agree and authorise the Corporation to Charge interest at such higher rate as may be reviewed and revised by the Corporation from time to time consequent upon change in the rate of interest by IDBI/ SIDBI on refinance against the aforesaid loan.

The borrower shall also agree to pay the interest tax and also other levies as may be made applicable by the Government from time to time during the currency of aforesaid loan.

Security

The loan will be secured by an Equitable Mortgage of land / buildings and/or hypothecation of plant & machinery to cover by way of first charge on all existing and future assets (excluding raw materials, stock-in-trade and finished and unfinished goods) of the concern/company. The concern/company shall execute and register in favour of the Corporation a Mortgage Deed in the form prescribed by the Corporation where equitable mortgage is not possible.

The Corporation shall also have its first charge on the book debts, outstanding moneys, receivable claims, bills, contracts, marketable securities, investments rights and other assets also like the uncalled capital and goodwill of the concern/company, but the concern/ company shall be at liberty to obtain working capital loan from any bank against the security of the liquid assets and in that case the charge of the Corporation shall rank subsequent to the charge of the bank providing working Capital loans to concern / company.

A negative charge on the stock of machinery stores, machinery spares shall be kept by the Corporation.

The concern/company shall not create any further encumbrances on its assets mortgage to the Corporation without prior permission of the Corporation in writing.

In the event of fall in the value of the assets mortgaged, hypothecated or assigned to the Corporation and the value of such assets not providing the stipulated margin during the currency of the loan; the concern/company shall be required to furnish such additional security as may be considered reasonable by the Corporation.

The lease of land/premises shall be assigned in favour of the Corporation.

The concern/company shall put plate and also write on the machines the words: “Hypothecated to the Rajasthan Financial Corporation.”

The assets offered in security shall be evaluated by the Corporation.

The title of the concern to the properties offered in security shall be examined by the Corporation and loan will be disbursed if the title is found to be clear and marketable.

Insurance

In case of fire prone industries (as may be specified by the Corporation from time to time), the entire assets to be mortgaged to the Corporation shall be insured for their full value as may be determined by the Corporation at its sole discretion during the currency of the loan against fire, cyclone, natural calamities or such other risks as may be regarded appropriate by the Corporation with approved Insurance Companies including LIC in the joint names of the Corporation and the concern/company and should ascertain the usual mortgage clause. As regards the existing insurance policies, the same shall be assigned in favour of the Corporation. All such policies will have to be deposited with the Corporation.

Guarantee

Such Directors of the company as may be required by the Corporation shall give personal guarantee in their individual and several capacities for repayment of the term loans with interest and other charges due thereon. The guarantors shall undertake not to charge any fee or commission directly or indirectly from the company for giving such guarantees to the Corporation.

Approval of Plans

The plan of buildings to be constructed shall be got approved by the authority concerned (Director of Industries/Rajasthan State Industrial Development & Investment Corporation Ltd./Local Authority) wherever applicable as per norms of the RIICO/State Govt.

Negative Convenants

Proprietor/Partners shall not draw any amount towards remuneration, interest on capital or on any account in any year till any sum due to the Corporation by way of instalment of interest fallen due in that year remains unpaid.

Undertakings

Rights of the Corporation

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