LOAN FOR PURCHASE OF ARECANUT PROCESSING MACHINE
LOAN FOR PURCHASE OF ARECANUT PROCESSING MACHINE
Area of operation of the Bank consists of different geographical areas and also different crops grown in the area. Arecanut is a commercial crop which is being grown in Davanagere & Chitradurga districts of our area. Hence we have designed a loan product known as “Loan for Purchase of Arecanut Processing Machine” specially for the branches situated at the places where Areca Nut is grown.
Salient Feature of the Loan Product
ELIGIBILITY
Farmers having at least 3 acres of land are eligible to avail loan under this scheme.
QUANTUM OF FINANCE
Loan amount can be granted as under depending upon the capacity of the machine.
Minimum Loan Amount – Rs. 1 Lakh
Maximum Loan amount – Rs. 5 Lakh
Minimum Loan Amount – Rs. 1 Lakh
Maximum Loan amount – Rs. 5 Lakh
RATE OF INTEREST
Rate of interest will be @14% PA. It will be reviewed and communicated by the Head Office from time to time. Penal interest will be @ 3% pa on overdue amount.
SECURITY
- Hypothecation of Machinery as prime security.
- No collateral security is to be insisted upon under this loan scheme. Managers can explore the possibilities of getting liquid security .
- Two co-obligants are to be obtained from other than family members. Co-obligants may be Government Servants / Farmers with at least 3 acres of land / Businessman whose annual income should not be less than 3 lakh as per IT returns.
SANCTIONING AUTHORITY
Cluster Managers have been empowered to sanction these loans based on the recommendations from the ABM. However the sanctions should get ratified by the Credit department.
PURPOSE OF LOAN
Loan is to be granted for purchase of Arecanut Processing unit which consists of a peeling machine and dryer. Cost of the machine is varied from Rs. 1 lakh to Rs. 5 lakh depending upon the capacity of the machine.
MARGIN MONEY
30% of the total cost of the machine is to be collected from the borrower before disbursement of the loan and credited to the borrower SB account and
70% of the total machine cost is to be granted as loan and is also to be credited to their SB account. Next by debiting the total amount from SB account issue Demand Draft / Pay Order for the total quotation amount along with a covering letter addressed to the dealer is to be sent to the dealer for supply of processing machine to the borrower.
70% of the total machine cost is to be granted as loan and is also to be credited to their SB account. Next by debiting the total amount from SB account issue Demand Draft / Pay Order for the total quotation amount along with a covering letter addressed to the dealer is to be sent to the dealer for supply of processing machine to the borrower.
PROCESSING FEE
Processing fee @1% has to be collected from the borrower before disbursement of the loan.
SUBMISSION OF DOCUMENTS
• Before Disbursement :
a. R O R (Pahani) of 3 Acres for 3 years.
b. KYC documents
c. Quotation of Machinery to be purchased
d. Co-obligants :Govt. Servant – Job proof / Salary certificate / Xerox copy of the passbook where his salary is credited.
Farmer – ROR of 3 acres for 3 years.
Businessman – ITR for 2 years with income declaration of
Rs. 3 lakh or more.
• After Disbursement :
a) Collect original Invoice of the Machine
b) Collect Insurance Policy of the Machine with Banks hypothecation clause.
REPAYMENT PERIOD
Entire loan amount along with interest shall be repaid in 4 Half yearly installments.