Project Finance (T.Loan) under this product shall be made available for:
Cost of new Machinery/Technology.
Removal charges of old machinery (technology) and Installation of new machinery (technology). However, these costs should not exceed 15% of the total cost of machinery/technology to be acquired under the scheme
Operative/Administrative expenses for the transition period (Wages, Rent, taxes, etc) wherever existing technology/machinery is replaced with a new one. However, if new machinery/technology is installed as an additional line, only normal pre-operative & preliminary expenses shall be included in the project cost.
Salvage value of existing machinery/technology, if any, shall be adjusted towards the margin requirement or liquidation of existing bank loan, if any. Existing machinery shall be disposed of by inviting quotations from the interested buyers or sold off as scrap.
In case the existing machinery is to be replaced with new one, the total finance shall also include a component equivalent to the outstanding bank finance (against existing machinery/technology), if any. This component shall be used for adjusting the existing bank finance ((against existing machinery/technology).