Nature of facility Term loan and working capital Segment Small Business Firms Purpose To finance Franchisees for Petroleum Retail Outlet (RO) dealership, under tie-up arrangement.

Eligible amount of finance

1. Term Loan:

75 -85 % of cost of the project excluding cost of land but including cost of acquisition/construction of the building for setting up office/show room/shop. However, the cost of land will be included while computing overall security margin. Where the RO is also required to sell tyres, spares and other related essential products/services as specified by Petroleum Company, these requirements will be assessed accordingly.

2. Cash Credit:

75% of cost of stocks of petroleum or 4 days' cost of sales of petroleum, whichever is lower. Where the RO is also required to sell tyres, spares and other related essential products/services as specified by Petroleum Company, these requirements will be assessed accordingly.

Quantum of finance

1. Term Loan  : Maximum: Rs. 100 lacs.
2. Cash Credit: As per eligibility.

Eligible customers

Corporate/ Non-corporate/ Individuals having dealership-appointment letter from Petroleum Company.

Application

The loan proposal will be forwarded through Petroleum Companyand   must accompany a detailed   project report, as estimated by the oil company for the concerned RO. A copy of the dealership agreement, indenture of lease and valid license should also be provided therewith.

Margin

15 - 25% for Term Loan and 25% for Working Capital.

Repayment

1. Term Loan: For Fixed rate of interest - Maximum in 54 EMls, starting after 6 months from the first disbursement. For Floating rate of interest - Maximum in 78 EMIs, starting after 6 months from the first disbursement.
2. Cash Credit: Repayable on demand, renewal every year.

Rate of Interest

Competitive rates based on credit rating of proposal

Prepayment

Term Loan: Waiver of prepayment charge, if the fixed interest rate Term Loan is repaid in full, due to upward resetting of interest rates.

Security

Primary

1.      Mortgage of land.

2.      Hypothecation of stocks / other assets created out of Bank’s finance.

Collateral:

1.      Tangible collateral security to be such that the total security coverage (Primary + Tangible coverage) of minimum 150% of the Bank’s exposure in the unit is ensured.  Reduction on the security upto 125% instead of 150% of the Bank’s exposure, may be considered in deserving cases, on a highly selective basis.

2.      An undertaking will be obtained from the Dealers stating that they shall not raise any further loans for the Petro Retailing business without Bank's prior written consent.