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Standby Line of Credit

S. No.ParameterDetails
1Name of the productStandby Line of Credit for MSME (SLC-MSME)
2Product TypeShort Term Loan (STL)
3PurposeTo meet the temporary liquidity mismatch arising out of delayed realisation of receivables, receipts of GST Inputs tax credits (including for Exports) and other Business requirements.
4Eligibility
  • Existing MSME Units having Limits upto Rs.25. crore only with Internal Rating of ‘BBB & above’ and irrespective of external rating.
  • Account to be standard. SMA-0, SMA-1 and SMA-2 accounts are also eligible under the scheme.
5Loan amount (Limit)
  • Calculation based on 25% of the existing working capital limit or total Exposure (Total Exposure = FBWC + NFBWC). Max Rs.1.25cr based on cash flow statement, certified by CA in case of requirement above Rs.10.00 lakh.
  • Existing customers who have availed ‘Mahabank Credit+’ can avail the ‘SLC-MSME’ under this scheme, after repaying the earlier limit under ‘Mahabank Credit+’
  • CA certificate to be obtained certifying the outstanding receivables, amount of pending GST dues up to the month for which the returns have been filed.
  • Charted Accountant (CA) has to get the Unique Document Identification Number of the certificate issued through the UDIN Portal this UDIN should be mentioned on the certificate issued by the CA and verified by the branch on UDIN portal (https://udin.icai.org) by the Branch official
6Disbursal & Repayment

The borrower can avail the sanctioned amount in one go or in tranches. The entire loan under the scheme have to repaid within maximum period of 12 months from the date of disbursal or validity of sanction whichever is earlier.

In case the limits are availed in tranches then the repayment /liquidation of the tranches should be 12 months from the date of disbursal or validity of sanction whichever is earlier.

Borrower may make early repayment. In case of early liquidation / repayment of the loan/ tranche borrower may be allowed to apply again to drawdown in one go or in tranches. However, the subsequent drawls should also be liquidated as above.

  1. The facility will be considered as an exposure on the borrower and guidelines stipulated under the RBI Prudential Norms shall be adhered to.
  2. The facility shall be made available as Fund Based Limit only.
7Margin
  • NIL for the SLC-MSME. However, margin for the existing limits will continue as per the sanctioned terms.
  • As the proposed margin under SLC for MSME will be nil, the market value and the advance value of the security will be same.
  • However, the existing working capital limits have to be covered by the Advance value of the stocks and receivables as hitherto.
  • Operating units shall ensure that the DP has not been provided on the GST portion for extending DP for other facilities – Working Capital limits and ensure that there is no double financing.
8RInterest Rate
  • 0.50 % above the sanctioned Cash Credit rate.
  • Penal Interest as applicable to Cash Credit account will be charged, if not repaid within the stipulated period.
9SecurityHypothecation of stocks and receivables. Extension of charge on the Primary Security / Collateral security.
10Documentation / ROC charge
  • As per extant guidelines, to be executed before disbursal.
  • ROC Formalities to be completed upon sanction and before disbursement.
11Processing Fee

Nil

12Sanctioning Authority

As per the existing sanctioning Powers of Respective Sanctioning Authorities.

13Others
  1. The limit will be over and above the MPBF.
  2. SLC for MSME to be made available at the specific request of the borrower.
  3. IRAC norms as per extant guidelines is applicable.