J&K Bank Handicrafts Sustenance Finance (Outside Tripartite Agreement)

Working Capital Term Loan

The objective of the product is to enable the Exporters/Traders/Manufacturers (Outside Tripartite Agreement) associated with the industry to overcome the difficulties on account of Global Recession. The finance shall be a one time facility and can be applied for up to September 2009 only. The facility shall be over & above the existing limits, if any, being availed by the borrowers.

  • Exporters: Those only involved in overseas exports of handicrafts items.
  • Manufacturers: Those involved in manufacturing handicrafts in one or more workshops.
  • Traders (National):Those who are not manufacturers but trade across states
  • Traders (Local): Those who are not manufacturers but restrict their trading activity within J&K state.
  • Retailer (Shop Owners): Those having own retail shops/ Showrooms within India. They can be manufacturers/traders also
  • All Handicrafts Exporters, Traders, Retailers and Manufacturers availing Cash Credit facility from our bank.
  • The accounts must be running satisfactorily.
  • Manufacturers registered with Department of Handicrafts, J&K state and not having any business relationship with us or with any other financial institution shall also be eligible.

Maximum amount of finance shall be as follows:

S.No

Category

Maximum Amount of finance

1 Manufacturer For Manufacturers availing Limit from our bank:
Lower of the following shall be provided:
50% of the existing limits
Or
 10 Lacs – Carpets
 2.10 Lacs – Kani Shawls
 2.10 Lacs – Shawl Embroidery
 2.50 Lacs –Chain Stitch.
 3.50 Lacs –Crewel
 3.50 Lacs – Wood Carving.
 3.50Lacs- Paper Machie.

For Manufacturers not maintaining a business account with any bank:
Finance  requirement shall be assessed on the basis of :
Average sales, Cash & Credit, for 18 months.
Of this assessed amount, 75% shall be provided as WCTL to the Manufacturer & 25% shall be provided as cash credit limit.
The aggregate amount for both WCTL plus C/C facility shall be subject to the following ceilings:
 10 Lacs – Carpets
 2.10 Lacs – Kani Shawls
 2.10 Lacs – Shawl Embroidery
 2.50 Lacs –Chain Stitch.
 3.50 Lacs –Crewel
 3.50 Lacs – Wood Carving.
 3.50Lacs- Paper Machie.
To enable assessment, Manufacturer shall submit Financial statements/Fardihisab, for past 3 years.

2. Exporter Lower of the following:
50% of the existing limit. . 
Or 
 50 lacs
3. Trader (National). Lower of the following:
50% of the existing limit. . 
Or 
 30 lacs
4. Trader ( Local)  Lower of the following:
50% of the existing limit. . 
Or 
 20 lacs.
5. Retailer, Show room/Shop owner Lower of the following:
50% of the existing limit. . 
Or 
 30 lacs.
  1. For Exporters/ Traders (National):
    To be repaid in 8 Equal Quarterly Installments after a period of 12 Months from the date of initial disbursement. However, the borrowers shall be required to serve the interest during the initial 12 months also.
  2. For Others:
    The loan amount is to be repaid in 8 Equal Quarterly Installments after a period of 18 Months from the date of initial disbursement.. However, the borrowers shall be required to serve the interest during the initial 18 months also.
  1. Primary Security: Hypothecation of stocks & book debts.
  2. Collateral: Mortgage of unencumbered immovable property(The condition of providing unencumbered tangible collateral security stands relaxed for all such cases where tangible collateral security already provided in the existing loan facility is of sufficient value to cover the WCTL as well. Accordingly, existing tangible security provided by borrowers for securing existing facilities shall be acceptable as collateral for securing WCTL facility. However, the valuation of the security must be valid and applicable as per the extant guidelines or else fresh valuation should be sought from the prospective borrower) equivalent to:
  3. 1. Exporter 110% of the WCTL (If it falls outside ECGC cover)..
    70 %( if it falls under ECGC cover).
    2. Trader (National). 110% of the WCTL.
    3. Trader ( Local)  100% of the WCTL.
    4. Retailer, Show room/Shop owner  100% of the WCTL.
    5. Manufacturers 75% of the WCTL.

    However, upto & including  5 lacs, borrowers shall provide collateral security in the form of Third Party Guarantee of two persons only. Mortgage shall be applicable for WCTL above  5 lacs.

    1.

    Exporter

    20%.

    2.

    Trader (National).

    20%.

    3.

    Trader ( Local)

    10%.

    4.

    Retailer, Show room/Shop owner

     25%

    5.

    Manufacturers

    5%.

*For manufacturers who shall be provided 75% as WCTL & 25% AS C/C AS C/C limit:
5% for both.

The stocks in trade/stocks in transit & the mortgaged property must be comprehensively insured against all risks for its value with the usual bank clause at party’s cost.

0.10% of the loan amount subject to a maximum of  1000/-

Each borrower shall necessarily submit a list of Manufacturers/ Craftsmen/Suppliers/Buyers/Exporters, etc as applicable on quarterly basis which shall be verified by branches through inspections.

  • Prepayment of WCTL, entire outstanding amount, shall be allowed. Partial prepayment shall not be allowed.

    For Exporters/Traders(National): There shall be an incentive of 0.50% on the amount prepaid if prepayment is within 24 Months from the date of first disbursement & 0.25% on the amount paid if prepayment is within 30 Months from the date of first disbursement. 
    For Others: There shall be an incentive of 0.50% on the amount prepaid if prepayment is within 2 years from the date of first disbursement & 0.25% on the amount paid if prepayment is within 3 yrs from the date of first disbursement. 
  • Exporters furnishing evidence of exports through export orders or related items shall be eligible for availing the finance at concessional rates applicable to exports
  • Traders (National): Supply to exporters based on export orders shall be considered as deemed exports and, therefore, eligible for concessional interest rates applicable to exports.