Providing finance to dealers of sponsor corporates
The sponsor corporates should be manufacturers/service providers of branded goods/products.
To meet working capital requirement of dealers for purchase goods/spares/inventory purchase etc from the corporate sponsor.
Selected Dealers identified by the sponsor corporate.
Facility would be extended based on the referral letter/recommendations of the corporate.
Invoice discounting — tenor of bill as per the arrangement between the dealer and the sponsor corporate, however not to exceed 90 days from the date of invoice. Advance granted on FIFO basis in running account (CC/OD).
Maximum 90 Days
Limit for each dealer is to be fixed need based and in consultation with the sponsor corporate, and within the maximum MPBF allowed based on the Actual/Projected Turnover.
Aggregate exposure on the sponsoring corporate is to be capped at maximum 30% of previous year’s total sales as per the corporate’s financial statement.
5% per invoice. (Maximum funding will be to the extent of 95% of the invoice value).
However Sanctioning authority may waive the Margin Stipulation on case to case basis.
MOU with sponsor corporate is mandatory
ROI should not be lower than the rate charged to the sponsor corporate.
RBLR+BSS (0.0%)+CRP(0.30%) i.e. effectively 7.15% at present
The Repayment will be done by Dealer on or before due date.
Each Credit in the account will be appropriated on FIFO basis as per the due date.
The Interest could be recovered, upfront (i.e. at the time of disbursement) or at the back end (on the due date of Bills), on the basis as agreed by the sponsor corporate.
In case the dealer defaults in payment, the same should be immediately intimated to the sponsoring corporate and the branch should follow up with the sponsoring corporate to discontinue supplies to the dealer till the dues are recovered by the Bank.
Providing finance to dealers of sponsor corporates
The sponsor corporates should be manufacturers/service providers of branded goods/products.
To meet working capital requirement of dealers for purchase goods/spares/inventory purchase etc from the corporate sponsor.
Selected Dealers identified by the sponsor corporate.
Facility would be extended based on the referral letter/recommendations of the corporate.
Drawee Bill/Invoice Finance — tenor of bill as per the arrangement between the supplier/vendor and the sponsor corporate; however not to exceed 90 days from the date of invoice. If the due date falls on Sunday or holiday the bill becomes due for payment the following working day and No penal interest to be charged.
Maximum 90 Days
Vendor /Supplier wise limit to be fixed in consultation with Corporate and the maximum limit is to be capped at 20% of the estimated annual supplies to the corporate.(Total supplies as per last financial year)
Aggregate exposure on the sponsoring corporate is to be capped at maximum 50% of previous year’s total sales as per the corporate’s financial statement.
Nil
Since the payment obligation of the invoice discounted always lies with the sponsor corporate, as it has been accepted by them and they are the recipient of goods supplied, principal is to be repaid by sponsor corporate.
MOU with sponsor corporate to be executed
RBLR+BSS (0.0%)+CRP(0.30%) i.e. effectively 7.15% at present
Principal should be repaid by the sponsor corporate on due date. Cash Credit/Current Account of the corporate, as the case may be debited on the due date and credit should be made to the account of vendor.
Opening of current account of sponsor corporate should be explored.
The Interest could be recovered, upfront (i.e. at the time of disbursement) or at the back end (on the due date of Bills), on the basis as agreed by the sponsor corporate.
a) In case the Interest payment is upfront, the notional interest may be deducted from the actual Bill amount discounted and the proceeds after recovering the interest may be credited to the Vendors account.
b) In case the Interest Payment is back ended, the same will be borne by the vendor and to be paid on the due date. However insistence should be made by the branches for collecting the interest upfront at the first place
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