CASH CREDIT LOAN

 

 

Brief Introduction

  • Cash credit is an arrangement by which Bank shall allow the customer to borrow money up to a certain limit. <>Operation in cash credit account shall be allowed any number of times during currency of the limit sanctioned. It shall be operative for period of one year which can be renewed or enhanced or, satisfactory operation of accounts. Sanction of cash credit shall be guided as per Loan Rules of the Bank specified in the following chapter.

    • Eligibility of borrower:

    • Having current account holder of the Bank.
    • Borrower/Partners/Directors/Guarantors must be a member of the Bank.

Purpose of Loan:

  • To meet Working capital Requirement


Quantum of Finance:

  • 20% of annual turnover/sales.
  • Up to 65% of the value of the stock.

    • Repayment period:

  • Review/renewal in 1 Year.


Features:

  • Nominal Processing Charge.
  • 2% closure charge of limit outstanding amount will be charged, In case of Cash credit limit closed above Rs. 10 Lacs through Bank transfer.
  • Easy Process
  • Two Guarantors, out of one must be a non-relative guarantor


Security:

  • 20% of annual turnover/sales.
  • Up to 65% of the value of the stock.

    • Primary Security:

    • Stock and book debts should be hypothecated to the Bank.
    • Stock should be stored in R.C.C. Built godown owned/rented by the borrower.
    • Letter of access will have to be got duly signed by the owner.
    • Bank's name plate indicating stocks hypothecated to the Bank will have to be displayed on godown where the stocks stored.
    • Godown premises and Stocks hypothecated to the Bank should be fully insured against the risk of fire, theft, burglary, flood, riots etc by the borrower at his own cost and the policy has to be with Bank clause.
    • Borrower has to submit stock statement monthly or as instructed by the Bank within 15 days of the succeeding month otherwise penalty will be levied for delayed submission.

      • Collateral Security:

      • Mortgage of property