Overdrafts can be sanctioned to wholesale and retail traders in essential
commodities and other goods, professional and self-employed persons, licensed
contractors, business enterprises, timber merchants, quarry owners etc. In the case of
working capital requirements, limit shall be fixed in accordance with the cash flow,
availability of stock etc.
Wholesale and retail traders in essential commodities and other goods
are those
engaged in selling goods in small lots/quantities to the general public or to ultimate
consumers,
Professional and self employed persons are those persons whose activities are carried out
by using the skill and labour of the individual or that of his/her family members. Medical
practitioners including dentists, chartered accountants, lawyers, engineers, architects,
surveyors etc. come under this category. Applications of such members for working capital
requirements will alone be considered under the category. Registration certificate,
professional certificate from the respective institute/authority shall also be produced.
Business Enterprises: Individuals or firms managing small and medium business
enterprises established mainly for the purpose of providing services, personal or household,
such as laundry, beauty salon, computer center, Xeroxing, advertising agency, travel
agency, yoga center, bakeries, boutique, interior designing center, wedding planner, food
truck, pottery, floral shop, organic farming, jewelry, restaurant, coaching center, hobby
center,. Daycare center, .stationary shops, repairing and servicing center, or similar other
establishments having investment in plant and machinery will be eligible for overdraft/cash
credit facilities.
Quarries:Breaking of rocks into pieces of rubble, metals of different sizes and rock
powders by using explosives or otherwise will mean as quarry for the purpose of
advancing. The plot where rock blasting is done and collateral security sufficient enough to
have a margin of 50% should be provided as security.
Licensed Contractors intending to avail overdraft have to present the details of work
allotted showing the amount, as certified by the authority granting the work, and the limit
that can be sanctioned will be limited to 75% of such amount or 50% of the distress value
of the security offered, as valued by the empanelled chartered valuator, whichever is lower.
On sanction, the borrower has to execute an irrevocable power of attorney in favour of the
Bank and accepted by the competent authority, to receive the full amount of the work
allotted and it shall be deemed as primary security. Limit will be reduced to proportion of
payments received being part bills, released at various times. On renewal of the credit
facility, borrower has to present a letter from the authority concerned showing the quantum
of amount already released, and the balance if any, remain to be released.
Overdrafts are usually allowed for a maximum period of one year.
Maximum amount sanctioned as overdraft shall be ₹ 50 lakhs. Maximum amount sanctioned will be fixed in accordance with the cash flow, availability of stock, value of security etc.
A margin of 10% to 50% in the case of primary securities, depending upon the type and 50% in the case of collateral securities shall be maintained, while considering the limit of Cash Credit.