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Commercial and Institutional / School Plus

Nature of Facility: Term Loan

Purpose :

Construction of new building/repair, renovation of existing building with adequate safe infrastructure.
Purchase of electronic equipments such as computers/computer peripherals etc.
Cost of acquiring software programmes, purchase of costly manuals/books related to training, teaching materials.
Purchase of Lab equipments.
Purchase of furniture/fixtures
Other equipments necessary for teaching/sports/mid-day meals scheme.

Eligibility :
Educational Institutions with adequate source of income (both Government aided schools/Schools governed by Private management). The school should have run successfully for at least three years.

Institutions run by trusts/private management with good standing and adequate source of income, provision to borrow from financial institutions/Banks etc. backed by Trust deed/Bye laws/Resolutions.

Institutions should have necessary approvals from Government agencies to run the school.

Building construction/alteration/renovation should have proper approval from local bodies.

The Promoters/Trustees/Key persons of the school should be persons of good standing in the society. The assessing/recommending authority has to satisfy the credit standing of the borrower.

In case the institutions which are not banking with us, necessary safeguards are to be taken while considering the loan proposal. Conduct of the account with other Banks has to be verified from the Bank statement.

In case of Government aided schools, the loan should not be a substitute for Government grant/budgetary allocation.

Quantum of Loan :
Minimum Loan amount - Rs.0.50 lakhs
Maximum Loan amount - Rs.25.00 lakhs
Projects exceeding Rs.25.00 lakhs may be considered subject to administrative clearance by sanctioning authority one step higher.

Disbursal :
In stages, in case of construction/renovation/repair.
Direct to supplier in case of purchase of equipments etc.
Refinance is not permissible.

Margin :
15% of the project cost (minimum) depending upon the financial capacity of the institutions.

Rate of Interest :

Size of Credit Limit	Repayable up to 3 years	Repayable in 3 years & above
Up to Rs.2.00 lakhs	10.00%	10.00%
Above Rs.2.00 lakhs & up to Rs.5.00 lakhs	11.00%	11.50%
Above Rs.5.00 lakhs & up to Rs.25.00 lakhs	11.75%	12.50%

Repayment :
For loan amounts up to Rs.2.00 lakhs, the loan will be repayable in 36 equated monthly installments.

For loan amounts from Rs.2.00 lakhs to Rs.5.00 lakhs, the loan amount will be repayable in 60 equated monthly installments.

For loan amounts above Rs.5.00 lakhs, the loan will be repayable in 84 equated monthly installments.

Faster repayment may be negotiated, where the school has better revenues.

Repayment to be fixed to suit fee/other income in such a way that DSCR should not exceed 2 in all the years of repayment.

Security :
Primary : Hypothecation of charge over the assets acquired out of Bank Finance.
Collateral : Personal guarantee of the Key Manager/Trustees/Promoters/any other person/body acceptable to the Bank.

Depending upon the availability, the sanctioning authority may consider the following – Equitable Mortgage of the land and building of the school or of the Guarantor.

For loans above Rs.2.00 lakhs for construction of new building/repairs or renovation, mortgage of the relative property to be insisted on. In case our loan is a second loan and property is already charged to another Bank/financial institution, obtention of pari passu charge can be stipulated.

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