Security


PRIMARY

The primary security against term loan from the Corporation shall be by way of:-
- Assignment of lease hold rights in land(in respect of lease hold land);
- First legal mortgage over land(free hold land),factory buildings including site developments, plant and machinery and other Misc,. fixed assets;
- Hypothecation charge over moveable assets viz. stocks in process, finished and semi finished goods etc. and first charge on such assets can be in form  of the bank granting Working Capital facility to the unit;
- Hypothecation charge over transport vehicle, house boats.

COLLATERAL

In addition to the primary security, loans granted in industrial and service sectors, invariably, are secured collaterally by way of first legal mortgage over landed property with clear marketable title on slabs of loans as under:-

a

Loans upto ` 2.00 lakh

No collateral security

b

Loans upto ` 10.00 lakh

40% of the loan amount.

c

Loans exceeding ` 10.00lakh

30% of the loan amount.

Transport Sector and Excavators/Loaders etc.

a

Loans upto ` 2.00 lakh

No collateral security

b

Loans upto ` 9.00 lakh

 FDR @10% of the loan amount duly pledged to SFC with a minimum of Rs. 25000/- & maximum of ` 75000/-

c

Loans exceeding ` 9.00lakh

Collateral in the shape of immovable /movable property like vehicle, machinery, of the value of 40% of the loan. OR A third paty guarantee (in addition to the guarantee by two persons with good track record to be certified as such by the officer in charge in LBOs or Dos. Alternatively guarantee of an employee of the Central /State Govt., or any Central /State PSU with service tenure of more than 5 years shall be obtained And;
FDR as collateral security of equal to 15% of the loan amount. Or Pledging of insurance policy with a realizable value equal to above; OR Combination of C+D covering the requisite security amount.

d.

Loans beyond ` 15.00 lakh

Collateral security in the shape of immovable property only ( land, building) for a value of not less than 60% of the loan amount.

To enlarge the area of operation of the Corporation it is prescribed that the proposals where cost of land and or existing assets is quite substantial to meet the requirements of additional security to the stipulated extent, this condition may not be insisted on  in such cases.
The necessary papers/documents/title deeds in respect of land free from all encumbrances shall have to be deposited by the unit holders with the Corporation. On conclusion of mortgage transaction the charge held by Corporation on mortgaged properties shall also be endorsed thereupon with the Revenue and other designated authorities in their records.
In case of lease hold land, the lease agreement should provide for tenancy for a period of 25-30 years with permission to lessee to mortgage, assign the lease hold rights on the land to the Corporation with further powers to the Corporation to transfer said leased hold rights to a third party in the event of foreclosure. The lease deed should further provide that in case lessee  commits defaults in payment of dues of the Corporation or violates any provision of the mortgage deed to be executed by the lessee in favour of the Corporation and the Corporation transfers the lease hold rights to a third party in exercise of its powers U/S 29 of SFCs Act or any other law irrespective of the facts that whether lease period has expired, in that eventuality the lessor shall be bound either to execute fresh deed or extend lease period as the case may be in favour of the person/party in whose favour such lease hold rights have been transferred and under the terms and conditions as shall be mutually agreed upon by the lessor and that such person/party i.e transferee.

GUARANTEE

The loan sanctioned by the Corporation shall be guaranteed by the promoter(s)/promoter directors of Pvt./Public limited Company/Trustees and Executive Members of Co-operative societies Or societies registered under relevant law in the state in their personal capacities.
The loans in respect of all constituents shall additionally be guaranteed by a person(two persons i.r.o transport sector) of repute in the market, having sound financial background and acceptable to the Managing Director of the Corporation. The guarantee shall be joint and several