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).

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.