Switch over Loan Scheme / Takeover of High Cost Borrowings
|Product||Take over of loan (TL/STL/WCTL) from other Banks/Financial Institutions and also replacing high cost borrowings of assisted and non-assisted units which are having good track record irrespective of the type of constitution.|
The product is to support
a) an applicant’s genuine need for the shift
b) in cases where a high cost borrowing has been resorted to from any source like Banks, Financial Institutions, NBFC, Private Equity, Angel investors, the market/multanis etc. for genuine business needs.
c) To start with, this product is meant for MSMEs only. Units in the services sector are not being considered now.
|Causes for requests for takeover from existing banker||
|Replacement of High Cost Borrowings||
Resorting to high cost borrowing from channels (other than banks) like NBFC, Market (Multanis) may have happened due to cases like
a. The reasons for shifting from their present banks should be acceptable.
b. They could be the Corporation’s clients or non-clients.
c. The constitution could be Proprietary, Partnership, Companies or Co-op. Societies.
|Quantum of Loan||
The quantum will be the least of the following:
a) 75% of the value of fixed assets financed by the previous financier or
b) The loan outstanding with the Bank / Financial Institution whichever is least subject to a minimum amount of Rs.25 lakh.
i) In case of working capital limits, the actual outstanding with Bank
ii) In case of replacement of high cost borrowing, the actual outstanding
iii) Maximum Loan – Rs.10 Crore
Minimum Loan – Rs.25 lakh
a) All securities as offered by the applicant for his existing loan will be switched to TIIC and additional security if required to meet shortfall as per the norms of the Corporation.
b) A fresh revaluation may be done by TIIC for primary & collateral security to assess risk coverage.
c) Where the unit is unable to shift the existing security to TIIC, we may accept alternate security with the permission of sanctioning authority.
d) Personal guarantee of all promoters shall be obtained.
e) For replacement of high cost borrowings: 150% collateral security shall be offered. For takeover of TL/WCTL from Banker TIIC norms shall apply.
|Sanctioning Authority||The takeover / replacement loans will be sanctioned by the Executive Committee / Board.|