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Star Channel Credit - Dealer
To meet working capital requirement of dealers for purchase goods/spares/inventory purchase etc from the corporate sponsor.
Objective
Providing finance to dealers of sponsor corporates
Target client
- Selected Dealers identified by the sponsor corporate.
- Facility would be extended based on the referral letter/recommendations of the corporate.
Sponsor Corporates
- Existing corporate borrowers of our Bank availing credit limits with us. The Credit Rating of our existing borrowers should not be below Investment Grade
- Other Corporates, who are not our existing borrowers but with minimum external credit rating of A & above. The sponsor corporates should be manufacturers/service providers of branded goods/products.
Nature of Facility
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).
Star Channel Credit - Dealer
Security
- Referral letter from the sponsor corporate, agreeing to stop making further supply to the dealer and to provide assistance to the Bank for recovery of dues, if there is any default in payment by the dealer, or/otherwise repossess the goods and liquidate bank’s dues
- Hypothecation charge to be created on the stock/inventory financed by the Bank
- Additionally branch may explore obtention of comfort letter from the corporate that overdues of the dealer may be cleared by appropriation of security deposit/or by invoking Bank Guarantee submitted by the dealer to their principals
Collateral coverage
- Minimum 20% wherein the sponsor corporates are the borrowers of the Bank and the dealers are having more than 05 years of experience.
- Minimum 25% wherein the sponsor corporates are the borrowers of the Bank and the dealers are having less than 05 years of experience.
- Minimum 25% in all other cases with dealers having more than 05 years of experience.
- Minimum 30% in all other cases with dealers having less than 05 years of experience.
- CGTMSE Coverage: CGTMSE Coverage can be obtained for limits upto Rs 200 lakhs only and if the borrower is under Micro & Small category and if we are the sole bankers.
- Personal Guarantee of all the promoters/partners/directors of the borrowal dealer company as the case may be.
- Debit mandate (in case the borrower is maintaining account with us), PDC/ECS mandate, in the cases wherein the dealer is maintaining account with some other Bank.
- Corporate guarantee of sponsor corporate is to be explored.
Star Channel Credit - Dealer
*Terms & Conditions apply. For further details, Please contact your Nearest Branch
Star Channel Credit - Dealer
Maximum 90 Days
Extent of Finance
- 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.
Margin
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
MOU with sponsor corporate is mandatory
Star Channel Credit - Dealer
*Terms & Conditions apply. For further details, Please contact your Nearest Branch
Star Channel Credit - Dealer
As applicable
Principal Repayment
- 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.
Interest Repayment
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.
Star Channel Credit - Dealer
*Terms & Conditions apply. For further details, Please contact your Nearest Branch
Star Channel Credit - Dealer
*Terms & Conditions apply. For further details, Please contact your Nearest Branch
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