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Rice Mill

enabling rice mills to grow and prosper

Learn more about our Loan to meet the financial requirements for running / setting / take over of rice mills. This loan product is primarily targetted at increasing the food processing capabilities of the country for a long term food security ecosystem for India.

Purpose
To meet the financial requirements of rice mills.
To set-up new rice mills and to acquire existing rice mills.
Take over of rice mills advances as per our policy.
Eligibility
Proprietory, Partnership, Company, Individual (running rice mills on own or lease basis)
Takeover of credit limits also permitted subject to strict compliance of take-over norms in our Loan Policy.
In case of Existing units:
Credit Rating below “A (TMB-4)” category is not eligible for takeover or for sanctioning fresh limits (first time) under the scheme.
Loan Quantum
  • All types of fund and non-fund based limits can be sanctioned upto a maximum of Rs. 500 Lakhs.
  • TERM LOAN:
To construct Factory Building, Godown, Office Building etc. To Purchase new / second hand indigenous machineries. To import new machineries. For installation, electrical fittings, fixtures and other equipments etc. (To import machinery one time FLC limit can be sanctioned along with suitable back-up finance)
  • WORKING CAPITAL:-
    • Regular limit :- 20% of the estimated sales turnover.
    Seasonal Limit :- 15% of estimated sales turnover (Period depending upon the season).
  • For Existing units:
    • The estimated sales turnover should be properly justified by having comparison with actual sales turnover in the preceding years. The estimated sales turnover should also be justified by comparing the utilization capacity during the previous year and proposed utilization for the current financial year both in terms of quantity and value. Average paid stock / debtors holding of the unit during normal and seasonal period should also be taken into consideration.
  • For New units:
    • The estimated sales turnover should be justified on the basis of installed capacity and capacity utilization.
    Appraisal
    • For existing units:
    Last 3 years financial statements should be thoroughly analysed along with all the required back-up papers such as schedules for financial statement, sales tax, income tax assessment order, etc.
    If 3 years have not completed from the date of establishment, available financial data for the completed years should be obtained and analysed along with all back-up papers as mentioned above.
    Estimated financial statement for the current financial year should be obtained and analysed.
  • For new units:
    • 1. Projected financial statements should be thoroughly analysed and scrutinised in all aspects.
    2. The cost of construction and cost of machinery should be compared with peers of same capacity projects financed by us, if not with others.
    3. Technical feasibility and viability report should be obtained from technically qualified persons.
    4. All the required licenses / clearances for rice mill should be obtained from relevant authorities and kept on record.
    5. Comparison of Sales and Cash Profit with Peers of same capacity.
  • Common:
    • 1. All other general appraisal norms/standard requirements for working capital and term loan finance would also apply.
    2. Reasons for slippage in credit rating should be thoroughly analysed.
    Financial Ratios
    Current ratio - 1.33:1 (*). Leverage ratio - 4.00:1 (*).
    (*) The current ratio upto 1.20:1 and Leverage ratio upto 5.00:1 may be considered in deserving cases based on the merits of the case by respective sanctioning authority with proper justification and steps to be taken by the applicant to improve the ratios.
    For Term Loans:-
    ADSCR - 1.50:1, Debt equity ratio - 3.00:1
    Margin
    Stock - 20%, Bookdebt - 25% (Cover period 60 days), KL/WHR - 25%, FLC - 25%, BG - 10%, Cheque / DD Purchase - Nil
    TL:
    For construction - 25%, For purchase of new (indigenous / imported) machinery - 25%, For purchase of second hand indigenous machinery - 50% (Subject to submission of chartered Engineer’s valuation certificate confirming the residual life of the machinery covering the project period).
    Repayment
    Working Capital - One Year.
    TL - Maximum of 84 months excluding maximum holiday period of 12 months.
    Primary
    Term Loan:-
    On Equitable Mortgage over land & building, if loan is sanctioned for construction. On hypothecation over the assets created out of our bank finance.
    Working Capital:-
    On hypothecation over stock, bookdebts and receivables.
    Collateral Security
    Must be covered by tangible and marketable collateral security to cover atleast 50% of the total limit sanctioned.
    Conditions for collateral security:
    Easily saleable immovable property other than Agricultural property must be obtained and forced sale value must be taken. For LIC Policy, surrender value can be taken as security. Our Bank deposit can be taken as security. Machineries, Vehicles should not be taken as security. No collateral is necessary for KL / WHR loan.
    Note:-
    In case, the credit limits include term loan towards construction of building, 200% of term loan (towards construction) outstanding including unavailed amount should be deducted from the land & building value (after construction) and the residual value may be included in the collateral securities for arriving security coverage of other limits. An additional 0.50% concession will be given in the rate of interest for existing units, if the credit limits are covered with 100% collateral security.
    Rate of Interest
    • Existing Units Below Rs. 20 Lakhs: BR + 3.25% (14.00% p.a.).
    • Even though, the rate of interest is not linked with rating, Credit rating should be done as per our bank norms.
    • Existing Units Rs. 20 Lakhs & above: Prime, AAA & AA - BR + 3.25% (14.00% p.a.), A, BBB & BB - BR + 3.75% (14.50% p.a.), B, C & Below C - BR + 5.50% (16.25% p.a.) (requires close monitoring).
    • (An additional 0.50% concession will be given for existing units, if the credit limits are covered with 100% collateral security)
    • For new units: - BR + 3.75% (14.50% p.a.)
    (For 24 months or one year from the date of commencement of commercial production, whichever is earlier)
    After the above period, the rate of interest should be charged as per Credit rating as mentioned above.
  • Current Base Rate for Lending (BR) is 10.75% p.a.
    • Penal Interest & Pre-Payment Charges
    As per Bank Norms
    Processing Charges
    • Term Loan: 1.00% of Limit sanctioned without any maximum cap.
    • Working Capital [Fund and Non-Fund Based]: 0.50% of the loan amount without maximum cap.

    All the above Terms and Conditions are subject to change and sanctioning of the loans is at the sole discretion of the Bank. Service Tax on All Service Charges extra wherever applicable.