To maintain a balanced growth and maintenance of healthy credit portfolio with sound Risk Management culture and practices and to enlarge clientele base of Corporate segments through Credit marketing with focus on qualitative credit for meeting corporate objective, Allahabad Bank offers wide range of Corporate Credit products as under:
Working Capital Loan- Cash Credit / Overdraft Limits
Line of Credit
Financing to NBFCs
Finance to Factoring Companies
Loan against Future Rent-Receivables (AL-Bank Rent)
Loan Syndication Services
Further on Clicking every subhead as described above the salient features of the product will open in a new page – which is given as under.
- Working Capital Loan- Cash Credit / Overdraft Limits
Allahabad Bank offers working capital finance to meet the entire range of short-term fund requirements that arise within a corporate’s day-to-day operational cycle. Working capital loans help in financing inventories, managing internal cash flows, supporting supply chains, funding production and marketing operations, providing cash support to business expansion and build up of current assets.
Allahabad Bank’s working capital finance comprises funded and non-funded facilities to meet the different demands from all segments of industry, trade and the services sector. Funded facilities include cash credit, overdraft, demand loan and bill discounting. Demand loans are considered also under the FCNR (B) scheme. Non-funded instruments comprise letters of credit (inland and overseas) as well as bank guarantees (performance and financial) to cover advance payments, bid bonds etc.
The line of credit is allowed to meet requirement under working capital facilities (funded and/ or non-funded) to extend a flexibility to the borrower for utilizing the limit as per requirement.
The Bank may extend facility in the shape of Line of Credit for those Corporate/ PSU units which are enjoying Credit Rating having External Rating AAA/AA/A or equivalent short term rating or internal rating AB-1 to AB-3 and adhering to Short Term Policy of the Bank.
Bank purchases /discount/negotiate bills under LCs in respect of genuine commercial and trade transactions primarily of our regular clients. Accommodation bills are not purchased / discounted / negotiated.
The Bank extends Term Loans for capital investments being made by the clients on account of expansion of existing enterprise or for establishment of a new enterprise. Term Loans are also extended to clients for project implementation purposes, to meet non-recurring expenditure of long term nature, etc.
The repayment of the term loans would be in periodic Instalments with initial moratorium, if needed, during the period of project implementation. The periodicity and the nature & quantum of installments shall be based on the time and quantum of cash generation, operating costs and the surplus available at the disposal of the borrower.
Generally in term loans of Rs.10.00 Cr and above, Techno Economic viability report is asked for by the Bank.
Allahabad Bank has a dedicated Project Finance assessment team at its Head Office for assessment of credit proposals and extends term loans for large industrial and infrastructure projects. Apart from this, project term loans for medium sized projects and smaller clients are delivered through the IFBs and the ELBs.
In general, project finance covers greenfield industrial projects, capacity expansion at existing manufacturing units, construction ventures or other infrastructure projects. Capital intensive business expansion and diversification as well as replacement of equipment may be financed through the project term loans.
Project finance is quite often channeled through special purpose vehicles and arranged against the future cash streams to emerge from the project.
The loans are approved on the basis of strong in-house appraisal of the cost and viability of the ventures as well as the credit standing of promoters.
In case projects with exposure of more than Rs.10.00 Crore, the bank may ask for submission of TEV (Techno Economic Viability) Report duly prepared by Bank’s empanelled agencies/experts (TEV Consultants).
The Bank extends both Pre-Shipment and Post-Shipment finance to Exporters in INR as well as Foreign Currency depending upon the value of export orders, nature of activity, processing time and payment terms.
Pre-Shipment Finance :-Packing Credit in Rupees, Packing Credit in Foreign Currency, Advances against incentives receivable from the Govt. & Advances against duty-drawback.
Post-Shipment Finance: - Purchase and discount of Export Documents under confirmed orders, Negotiation / payment / acceptance of documents under L/C ,Advances against Export Bills sent for collection, Export Bills rediscounted in Foreign Currency.
Bank provides various concessionary facilities to eligible costumers to Gold Card Exporters.
Eligibility for Gold Card
- Risk Rating AB 1 to AB 4
- Exporters whose accounts have been classified as “Standard” continuously for a period of 3 consecutive years and there is no irregularity/adverse features in the conduct of the account.
- In case of consortium advance, Upgradation of “Gold Card” status shall be considered in terms of consortium decision, subject to adherence to our Bank guidelines.
- In case of takeover accounts, if the exporter is enjoying the status of Gold Card from the existing bank, he may be extended the same status by our Bank.
- This scheme will not be applicable to those exporters who are blacklisted by ECGC or included in RBI defaulter list or making losses for past 3 years or having overdue export bill over 10% of the previous turnover.
Benefits available to Gold Card holder: Gold card holders are eligible for standby limit of 20% of the assessed limit for taking care of their urgent credit needs. The standby limit can be sanctioned in excess of the delegated authority. The concessional rate of interest will be applicable.
Bank may also bear the premium on Packing Credit under Export Credit Insurance for Banks– Whole Turnover Packing Credit (ECIB-WTPC) for Gold Card Exporters on case to case basis subject to the following conditions.
- Credit turnover in the account is proportionate to export business.
- The account is regular and export bills are not normally overdue.
- Conduct of the account is satisfactory in all respects.
- There are no adverse remarks in inspection reports conducted internally and by the regulator.
- Risk Rating AB 1 to AB 3.
- To explore possibility of ancillary / supplementary business including salary account, cross selling of Bank’s retail products.
Banks extends need based working capital facilities as well as term loans to all NBFCs registered with RBI and engaged in infrastructure financing, equipment leasing, hire- purchase, loan, factoring and investment activities.
In the light of the experience gained by NBFCs in financing second hand assets, bank also extends finance to NBFCs against second hand assets financed by them.
Bank will not take any exposure to NBFCs which are not registered with RBI except Housing Finance Companies being regulated by the National Housing Bank (NHB) which have been exempted from the requirement of registration by RBI,
In respect of finance to Residuary Non-Banking Companies (RNBC), Bank continue to restrict financing to the extent of Net Owned Funds (NOF) of the RNBC.
- Finance to Factoring Companies
A new category of NBFC under the name NBFC Factor is permitted to get financial assistance to support the factoring business. NBFC factor should derive at least 75% of their income from factoring activity. The receivables purchase/ financed, irrespective of whether on “with recourse” or “without recourse” basis, should form at least 75% of the assets of the Factoring Company.
- Loan against Future Rent-Receivables (AL-Bank Rent)
The Scheme envisages financing Owners of the property who have let out the same to reputed companies/ shops for commercial purpose/ Industrial/ software companies, MNC’s, Bank, PSUs / Reputed Govt. / Semi-Govt Institutions / Organizations, Financial Institutions, Insurance Companies etc. for their occupation or and also providing services in the form of office infrastructure with/ without manpower etc (Plug & play model) and have future cash flows /receivables including lease rentals, service charges, Agency Commission assuring Minimum Guaranteed Amount etc. as per agreed terms.
Owner of the property who have rented out their premises to Allahabad Bank are also eligible.
Loan amount will be assessed in such a way that it is repaid within the residual lease period or maximum 120 months, whichever is earlier. Net rent/ service charges receivable will be calculated after making necessary deduction of TDS , Advance rent or Security Deposit , Lease rent payable if the land is allotted by statutory authorities, Annual Maintenance Charges, Municipal Taxes & Service tax to the extent payable by the lessor from gross receivable
Further from Net rent/ service charges receivable Margin @ 10% of Net rent/ service charges & Gross Interest assumption @ present rate of interest for the tenure of the loan will be deducted for arriving at MPBF.
- Loan Syndication
Allahabad Bank leverages its vast network of relationships to arrange syndicated credit products for corporate clients and industrial projects.
Syndication Team of the bank is placed at its Head Office at Kolkata.
With its rich experience, the syndication desk is capable of assembling large loan packages involving a ring of reputed financial entities mainly domestic that match the large credit requirements of infrastructure projects.