Cash Credit Hypothecation

Purpose

To meet working capital requirement in any gainful Business/Industrial activity.
To take over cash credit facility (regular a/c) availed for such purpose from another Bank.

Firms engaged in gainful Business /Industrial activity in the area of operation of the Bank.

Generally working capital requirement in Business activity is estimated at 25% of sales turnover of a firm, out of this 25%, keeping Borrower’s stake at 5%, remaining 20% of projected sales turnover for the next year (subject to maximum Rs.2.30 crore) may be financed by the Bank.
Where working capital requirement is more in some Business/Industrial activity due to Longer Production/Processing/realization cycle, working capital finance more than 20% (subject to maximum Rs. 2.30 crore) may be allowed.

For loan upto 2 lakh Hypothecation of stock and assignment of trade debts.Third party guarantee of two person will be required.
Where credit limit exceeds Rs. 2.00 lac, collateral security by way of equitable mortgage of immovable property of sufficient value will be obtained. Personal guarantee one persons will also be obtained.

Cash credit (hypothecation) limit will be sanctioned for a period of 12 months and before expiry of 12 months period limit has to be renewed.