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RAJASTHAN FINANCIAL CORPORATION


Term Loan Assistance:
* Purpose
* Norms of Financing
* Security/ Mortgage of Assets
* Nature of Mortgage
* Personal Guarantee and Collateral Security
* Security Margin
* Interest Rate
* Period of Repayment
* Favourable Indicators
* When We Say Sorry
* Restrictive List

Purpose:

RFC grants loans for meeting the long term requirements of the concerns in the form of land, building, plant and machinery etc. Working capital requirement is also considered in its special schemes such as composite term loan scheme and single window scheme. In case of our regular and good borrowers assistance for working capital is also considered, under good borrower's scheme.


Norms of Financing:

*Minimum promoter's contribution: The Corporation stipulates a condition of minimum promoter's contribution which is presently 33% of the project cost. It may be suitably increased on case to case basis considering various factors of the project.
*Debt Equity Ratio (DER): Not to exceed 2:1 in any case.

* Debt Service Coverage Ratio(DSCR) : Not below 1.7:1


Security/ Mortgage of Assets:

Loans are granted against the first charge ( pari- passu charge in case of joint finance) of the existing and future fixed assets ( viz. land, building, machinery and other tangible assets of the concern). However, on availability of working capital finance from Banks, the second charge in favour of bank on the fixed assets mortgaged to the corporation, can also be considered/ allowed, on the request.

Nature of Mortgage:


To minimize the expenditure and delay in obtaining the loan by the entrepreneurs, RFC does not insist on registered mortgage of land and buildings, except in rare cases, allows advances on equitable mortgage of land and buildings and hypothecation of plant and machinery wherever original documents are available. We expect from our entrepreneurs that only unencumbered assets having clear and marketable title deeds are offered as security.

Personal Guarantee and Collateral Security:

The Corporation creates the charge on the assets being financed. In addition to the charge on existing as well as proposed assets, the Corporation also secures the loan by taking personal guarantee of the promoter, partners and directors. 
In cases where the project is considered risky or where net worth of the promoters is not adequate, collateral security, 3rd party guarantee is also taken of persons of repute. The Corporation also takes collateral security in certain cases which involve acquisition of second hand plant and machinery, assistance under Single Window Scheme, under NEF scheme, Assistance in rented premises, mining industry, transport loan or projects which are considered risky or in cases of those industries where in the opinion of the Corporation there is limited scope or fast changing technology projects. The collateral security may be of full value of loan, or reduced amount depending upon the risk perception. The property furnished for collateral security should be easily marketable/ mortgageable having clear title and should not be an agricultural land.

Security Margin:

The Corporation generally grants loans retaining a security margin of 30% on assets. Higher margin varying from 40% to 50% is retained on moulds, dies, kilns and certain traditional industries like cotton ginning, oil , guargum etc. and for second hand P&M if considered for finance.


Interest Rate Structure:

A glance at the chart given below will show the prevailing rate of interest applicable in your case. The interest rates are subject to change from time to time. 
Chart :

INTEREST RATE STRUCTURE EFFECTIVE FROM  12.09.2013

APPLICABLE TO  MSME /NON MSME SECTOR IRRESPECTIVE OF COST OF PROJECT

S.

No.

NAME OF THE SCHEME

RATE OF INTEREST

1.

MSME Sector Units (Industrial & Service Sector) Upto Rs. 50,000/.

11.25%

2.

MSME Sector Units (Industrial projects) above Rs. 50,000/- & upto Rs. 20.00 Crores.

14.00%

3.

MSME  Service Sector projects (including Hotels projects, Technical/ Professional Educational Projects/ Guest-House projects,  Tourism Projects ,  Hospitals/ Nursing Home Projects and  Medical Equipment Scheme cases)

14.75%

 

 

 

4.

a) Scheme for Financing Against Assets

 

b) Scheme for Financing for Builders/commercial /residential complexes/  Multiplexes, Hotels, Hospitals etc. for purchase of land & building

 

c) Saral Scheme for SME sector

17.00%

 

19.00%

 

 

 

16.00%

5.

Projects for Construction of Commercial /Residential Complexes

16.75%

 APPLICABLE TO  GOOD BORROWER SCHEMES

S. No

NAME OF THE SCHEME

RATE OF INTEREST

1.

a) Short Term Loan Scheme (STL), Working Capital Term Loan Schemes (WCTL), Special Purpose Working Capital Term Loan Scheme (SPWCTL).

 

b) Units Promoted By Good Borrower (UPGB)

 

13.50%

 

 

 

13.50%

2.

Working Capital Term Loan to Non Assisted Units

 

15.00%

3.

Platinum Card Scheme

 

13.50%

4.

Gold Card Scheme

 

13.75%

5.

Flexi Loan Scheme

14.00%

 


 NOTES  :-


1.

In case of loans upto Rs. 5.00 lacs to SC/ST entrepreneurs the rate of interest shall be 2% less than the rate of interest applicable to other entrepreneurs in terms of PG circular No. 535 dated 7th Aug., 1993.

 

2.

In case of loans upto Rs. 5.00 lacs, to disabled persons, a firm in which disabled person is partner having majority (not less than 51%) share, the rate of interest shall be 2% less than the rate of interest applicable to other entrepreneurs in terms of PG Circular No. 612 dated 13.06.1995.

 

3

In case of loans upto Rs. 5.00 lacs, the rate of interest shall be 1% less under Scheme for Women Entrepreneurs in terms of P&G circular No. 1353 dated 10.11.2010.

 

4.

Liquidated damages in case of default shall be charged on amount in default for the period of default at rates applicable prescribed by Corporation from time to time. No interest would be charged on the liquidated damages. However, the mode of appropriation of receipts shall remain uncharged.

 

5.

 In  all cases  Post Dated Cheques for equated quarterly / monthly        installments are to be obtained as per PG circular No. 1307 dated 28.01.2010.  Cheques shall be taken for EQI/EMI based  on documented rate of interest. It should be clearly stipulated that EQI/ EMI has been calculated on documented rate of interest. In case cheque is not realized, the BO shall ask the borrower for enhanced amount of EQI/ EMI by including applicable rate of liquidated damages.


Period of Repayment:
The period of repayment of loan is decided in each case depending upon the cash generation of the project. It varies from 5 to 10 years. The principal amount is repayable in quarterly instalments usually after 12 to 18 months from the date of commercial production. In case of projects relating to setting up of hotels or hospitals where comparatively higher implementation period is envisaged then the repayment period is determined after 24 months from the date of implementation of the project. Additionally the repayment schedule is also drawn up in a manner that the repayment obligation is tapered by asking for smaller Instalments in the initial years with progressively increasing amount.


Favourable Indicators:
While examining the applications approvals are granted considering the following favourable indicators. In case of new promoters the appraisal is done carefully to assess the viability of the project:
* Promoters should already have industrial experience either in the same industry or in some other industry.
* Promoters with high net worth and having adequate investible funds.
* Promoters disclosing high total income in their income tax returns.
* Promoters having good past track record with the Corporation with satisfactory dealings.
* Promoters should have invested heavily in the proposed project of their own without waiting for Corporation's assistance.
* Units where there is a firm tie-up arrangement for sale of the goods or who have experience of bulk exports.
* Promoters having adequate financial resources and setting up a 50% EOU/ infrastructure projects.


When We Say Sorry:

Our endeavour is to support every viable project of good promoter but we have to say sorry, if :
* The aggregate paid up capital and free reserves of your company/ concern exceeds Rs. 30 crores.
* Any Director of our Corporation is Proprietor/ Partner/Director/ Manager/ Agent/Employee or guarantor in your concern or having substantial interest in your concern (except for those Directors nominated by the Government or the Corporation).
* You propose to set up an industry, registration of which has been banned by the Industries Department/ RPCB/ State Govt.
* Your proposed industry, in the opinion of the Corporation, is hazardous in nature or otherwise not to be encouraged.
* It is in restrictive list of the Corporation/ SIDBI/IDBI, if any.
* When the antecedents/ banker's report about the promoters is not satisfactory.
* Setting up of a unit would adversely affect the existing units.
* Promoter's contribution is not adequate and promoter does not agree to increase it.
* Process technology is not proven on commercial scale.
* Availability of raw material is inadequate.
* Product does not have adequate market potential.
* Promoter hails from a group which is not taking steps to rehabilitate other assisted unit.
* Proprietor/ Partner/ Director of the company and / or their family members are defaulter in other assisted units of the Corporation/ Financial Institution.
* When the Corporation feels that proposed loan is not adequately secured.

Restrictive List of RFC (Schedule LA (S) 1/6 A)

S.No.

Name of Item

1-

Textile processing house except at Bhilwara and financing under RTUF Scheme.

2-

Waste Spinning.

3-

Ara Machine.

4-

MICR and Computer Stationery.

5-

Lement.

6-

Aluminum Utensils.

7-

Special Alloy Steel Castings.

8-

Welding Electrodes.

9-

Plastic Re-processing.

10-

Solvent Extraction Units.

11-

Mini Cement Plants & Clinker Grinding Units.

12-

Granite tiling plants of size 1’X 2’ and below

13-

All Types of Projects based on ODS (Ozone Depleting Substances).

14-

Mining Project for Granite Blocks.

15-

Projects of traditional and Mini Off Set Printing Press.

16-

Paper Board.

17-

Photostate machine.

18-

Paraffin Wax & Chlorinated Paraffin Wax.

19-

Salt manufacturing units

mail:info@rfc.rajasthan.gov.in
Nodal Officer : Dr. K.K.Gupta, Dy.Manager (Computer)
Office :
0141-2385522 (Ext. 333)
Last Updated on 29-Sep-2014
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