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Eligibility
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- Existing SME borrowers with good track record, whose existing credit limits are sanctioned by RO/NBGM/CO, are eligible. All accounts of the borrower should be regular, standard and performing accounts.
- Branch may sanction Term Loan for purchase of Plant and Machinery, Transport Vehicles, Car etc., as per requirement of the borrower, with a ceiling of Rs.25 Lacs as term loan.
- The Branch Manager can consider such emergent requirements on the basis of merit and sanction the loan, without prior reference to sanctioning authority.
- More than one loan can be sanctioned to the same borrower subject to total loan amount not exceeding the discretionary powers under the scheme, during the year. However, it will be reported to the sanctioning authority along with the subsequent review/ renewal of the credit limit within one year.
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Purpose
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- Purchase of Plant and Machinery, Transport Vehicles, Car etc., as per requirement of the borrower, with a ceiling of Rs.25 Lacs as term loan.
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Loan Amount
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- Cost of Plant & Machinery/Equipment, vehicle to be purchased less stipulated margin or
- Rs.25 lacs per borrower in a year or
- Discretion available to Branch Manager under the scheme Whichever is least
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Margin
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- As per existing sanction/guidelines applicable to the borrower (15% to 25%)
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Rate of Interest
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- As applicable to existing borrowal account.
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Collateral Security
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- Existing collateral securities to be extended for the fresh loan also.
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Repayment Period
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Other Conditions
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- The loan amount along with margin should be directly paid to the seller. However, if the machinery/equipment has already been purchased, the amount can be granted by way of reimbursement also, subject to satisfactory proof of purchase but it should be in the same financial year.
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