The entrepreneurs requiring the financial assistance from KSFC are required to follow the following
PROCEDURE:
The customer is required to visit any of the branch office of KSFC. The entrepreneurs are required to carry with them a brief project report, details on constitution of the unit, bio-data and net worth of the promoters, location proposed for the unit, extent of term loan required etc. at the time of visit.
PROCEDURE:
The customer is required to visit any of the branch office of KSFC. The entrepreneurs are required to carry with them a brief project report, details on constitution of the unit, bio-data and net worth of the promoters, location proposed for the unit, extent of term loan required etc. at the time of visit.
The entrepreneurs are required to attend the screening committee on advice from EG department / branch manager at head office/ branch office at the case may be get prima facie clearance for their project and to get applications forms and checklist.
The field loan applications form’s have to be submitted in triplicate along with enclosures as per checklist and handed over to AGM ( EG) at Ho/branch manager as the case may be and obtain acknowledgement, the entrepreneurs are required to pay loan applications processing fee by cash, cheque or DD and obtain receipt as per the schedule given below.
UP FRONT FEE:
SSI and Other Half percentage of the loan amount.
Medium Scale Industries one percent of the loan amount.
Legal fee:
In addition to the above, document fee for legal scrutiny of the title deeds, execution of hypothecation and mortgage deed @ .1% loan amount is being charged.
LENDING POLICY OF THE CORPORATION:
The corporation formulates lending policy @ the beginning of each year. The loan are given based on the lending policy of the corporation, the lending policy covers various aspects like the negative list, the industrial policies of the state and central government are also taken into account while formulating the lending policy of the corporation,
NORMS AND PARAMETERS:
Cost of project:
The project cost selling for extending financial assistance by KSFC is Rs.9,102 crore in respect of SSI and MSI, however in respect of service sector projector the selling on cost of the project is its. Narasimhan Committee the entrepreneurs whose project cost exceeds the above limits will have to approach banks or other institutions, “ in respect of national equity fund scheme the project cost selling is Rs.9,733crore in respect of RTDM scheme the selling on project cost is Rs.9,733 crore. However depending on the merits of the case said selling can be exceeds with the prior approved of SIDBI in respect of RTDM only.
PROMOTERS CONTRIBUTION:
The minimum promoter’s contribution as the percentage of the total project cost varies between KSFC depending on the location of the project various schemes of SIDBI operated by the corporation, class of entrepreneurs, etc.
DEBT EQUITY RATIO (DER):
The corporation adopts the norms of promoter’s contribution and debt equity ratio etc, as per the guidelines issued by the small industries development bank of India from time to time
The Present norms are DER
For loans up to Rs.10.00 lakhs upto 3:1
For loans above Rs.10.00 lakhs upto 2:1
DEBT SERVICE COVERAGE RATIO (DSCR):
The repayment period of loan is fixed by the corporation with due regard to the cash generation and profitability of the project, for this purpose, average DSCR ranging between, 1.5:1 and 2:1 has been accepted as reasonable DSCR for projects below up to 1.25: 1.00 will bee accepted in extremely deserving cases, the DSCR indicates the ability of the project to services the debts during the term period of loan.
REPAYMENT PERIOD:
The repayment period of the term loan varies between 3 to 8 years including moratorium period of maximum 2 year depending on the period of implementation. In respect of corporate loan, the maximum repayment period is 30 months including six month moratorium period.
SECURITY:
In addition to the primary security i.e., assets financed by the corporation, collateral security as per the lending policy of the corporation is insisted, the collateral security requirement depends upon the type of projects location, sector quality of primary assets etc.
KSFC’s RECOVERY POLICY:
Rights of financial corporation in case of default (sect 29 of the KSFCs act)
Where any industry concern, which is under a liability to the financial corporation under an agreement, makes any default in repayment of any loan or advance or any installment there of or in meeting its obligation in relation to any guarantee given by the corporation or otherwise fails to comply with the terms of its agreement with the financial corporation, the financial corporation shall have the right to take over the management or possession or both of the industrial concern, as well the right to transfer by way of lease or sale and realize the property pledged, mortgaged, hypothecated or assigned to the financial corporation.
UP FRONT FEE:
SSI and Other Half percentage of the loan amount.
Medium Scale Industries one percent of the loan amount.
Legal fee:
In addition to the above, document fee for legal scrutiny of the title deeds, execution of hypothecation and mortgage deed @ .1% loan amount is being charged.
LENDING POLICY OF THE CORPORATION:
The corporation formulates lending policy @ the beginning of each year. The loan are given based on the lending policy of the corporation, the lending policy covers various aspects like the negative list, the industrial policies of the state and central government are also taken into account while formulating the lending policy of the corporation,
NORMS AND PARAMETERS:
Cost of project:
The project cost selling for extending financial assistance by KSFC is Rs.9,102 crore in respect of SSI and MSI, however in respect of service sector projector the selling on cost of the project is its. Narasimhan Committee the entrepreneurs whose project cost exceeds the above limits will have to approach banks or other institutions, “ in respect of national equity fund scheme the project cost selling is Rs.9,733crore in respect of RTDM scheme the selling on project cost is Rs.9,733 crore. However depending on the merits of the case said selling can be exceeds with the prior approved of SIDBI in respect of RTDM only.
PROMOTERS CONTRIBUTION:
The minimum promoter’s contribution as the percentage of the total project cost varies between KSFC depending on the location of the project various schemes of SIDBI operated by the corporation, class of entrepreneurs, etc.
DEBT EQUITY RATIO (DER):
The corporation adopts the norms of promoter’s contribution and debt equity ratio etc, as per the guidelines issued by the small industries development bank of India from time to time
The Present norms are DER
For loans up to Rs.10.00 lakhs upto 3:1
For loans above Rs.10.00 lakhs upto 2:1
DEBT SERVICE COVERAGE RATIO (DSCR):
The repayment period of loan is fixed by the corporation with due regard to the cash generation and profitability of the project, for this purpose, average DSCR ranging between, 1.5:1 and 2:1 has been accepted as reasonable DSCR for projects below up to 1.25: 1.00 will bee accepted in extremely deserving cases, the DSCR indicates the ability of the project to services the debts during the term period of loan.
REPAYMENT PERIOD:
The repayment period of the term loan varies between 3 to 8 years including moratorium period of maximum 2 year depending on the period of implementation. In respect of corporate loan, the maximum repayment period is 30 months including six month moratorium period.
SECURITY:
In addition to the primary security i.e., assets financed by the corporation, collateral security as per the lending policy of the corporation is insisted, the collateral security requirement depends upon the type of projects location, sector quality of primary assets etc.
KSFC’s RECOVERY POLICY:
Rights of financial corporation in case of default (sect 29 of the KSFCs act)
Where any industry concern, which is under a liability to the financial corporation under an agreement, makes any default in repayment of any loan or advance or any installment there of or in meeting its obligation in relation to any guarantee given by the corporation or otherwise fails to comply with the terms of its agreement with the financial corporation, the financial corporation shall have the right to take over the management or possession or both of the industrial concern, as well the right to transfer by way of lease or sale and realize the property pledged, mortgaged, hypothecated or assigned to the financial corporation.
Any transfer of property made by the financial corporation, exercise of its powers under sub-section (1), shall vest in the transferee all rights in or the property transferred as if the transfer had been made by the owner of the property.
The financial corporation shall have the same rights and powers with respect to goods manufactured or produced wholly or partly from goods forming part of the security held by it as it had with respect to the original goods.
Where any action has been taken against a industrial concern the provisions of sub-section.
In discharge of the debt due to the financial corporation, and the residue of the money so received shall be paid to the person entitled thereto.
Where the financial corporation has taken any action against an industrial concern under the provisions of sub-section (1), the financial corporation shall be deemed to be the owner of such concern.
POWER TO CALL FOR REPAYMENT BEFORE AGREED PERIOD (section 30 of the SFCs act ):
Not with standing anything in any agreement to the contrary, the financial corporation may, by notice in writing, require any industrial concern to which it has granted any loan or advance to discharge forth with in full its liabilities to the financial corporation, If it appears to the board that false or misleading information in any material particular was given by the industrial concern in its application for the loan or advance.
If the industrial concern has failed to comply with terms of its contract with the financial corporation in the matter of the loan of advance, If there is a reasonable apprehension that the industrial concern is unable to pay its debts or that proceedings of liquidation may be commenced in respect there of or If the property pledged, mortgaged, hypothecated or assigned to the financial corporation as security for the loan or advance is not insured and kept insured by the industrial concern to the satisfaction of the financial corporation.
If any reason it is necessary to protect the interest of the financial corporation.
SPECIAL PROVISIONS FOR ENFORCEMENT OF CLAIMS BY FINANCIAL CORPORATION (section 31 of the SFCs act):
Where an industrial concern, in branch of any agreement. Make any default, in repayment of any loan or advance or any installment there of or in meeting its obligation & in relation to any guarantee given by the corporation or otherwise fails to comply with the terms of its agreement with the financial corporation an industrial concern fails to make such repayment, “without prejudice to the provisions of section 29 of this act and of section 69 of the transfer of property act, 1882 ( 4 of 1882 ) any officer of the financial corporation, generally or specially authorized by the board in this behalf, may apply to the direct judge within the limits of whose jurisdiction the industrial concern carries on the whole or substantial part of its business for one or more of the following relief’s namely.
For a order for the sale of property pledged. Mortgaged, hypothecated or assigned to the financial corporation as security for the loan, For transferring the management of the industrial concern to the financial corporation.
For an ad interim injunction restraining the industrial concern from transferring or removing ifs machinery or plant or equipment from the premises of the industrial concern without the permission of the board. Where such removal is apprehended an application under sub-section I Shall state the nature and extent of the liability of the industrial Concern to the financial corporation, the ground on which it is made and such other particulars as may be prescribed.
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