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PART
I-Financial Norms Of Industrial Development Bank Of India
(IDBI)
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| Loans
under the TUFS will be provided on the following terms and conditions
: |
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| Amount
Of Loan |
The assitance will be need-based subject
to the attainment of minimum economic size. |
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| Rate
Of Interest |
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- Rupee
loan
Loans under TUF shall carry interest at normal applicable
rates of the lending institutions prevailing at the time
of sanction/execution of loan documents. Ministry of Textiles,
Government of India will provide interest reimbursement
of 5% p.a. which would be credited to the loan account of
the borrower availing of assistance under TUF.
- Foreign
Currency loan
As applicable for normal FC loan. However, Ministry Textiles,
Govt. of India would provide a cover for exchange fluctuations
not exceeding 5% p.a
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| Period
Of Interest Re-Imbursement |
Interest reimbursement of 5% as also
cover for exchange fluctuation will be available during the
period of loan as specified in the Letter of Intent or as may
be specified in the loan document. In case of subsequent extension
of the repayment period, no incentive towards interest/exchange
fluctuation will be available for the extended period. |
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| Up-Front
Fee |
1.05% of the amount of the loan. |
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| Period
Of Loan |
To be linked to repaing capacity. Normally
not exceeding 8 years (inclusive of the moratorium). |
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| Security |
First charge on fixed assets. Additional
security, such as personal/other guarantees and/or pledge of
promoters’ shareholdings might be stipulated by the lender,
if considered necessary. |
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| Conversion
Option |
Not applicable, except in case of defaults. |
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| Debt-Equity
Ratio |
1.5 : 1, relaxable in exceptional cases. |
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| Management |
One of the main requirements for sanction
of assistance under the TUFS will be the availability of competent
management to the unit concerned to carry out the project implementation
and also to manage the operations of the unit efficiently. Towards
this end, IDBI may stipulate conditions relating to broad-basing
of the Board, appointment of senior technical/financial executives,
professionalisation of the management and constitution of such
committees as may be considered necessary. |
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| Working
Capital Requirements |
Since the success of the project would
crucially depend upon the availability for adequate working
capital to achieve the full benefit of the modernisation programme,
IDBI would like to be assured that the units have made adequate
arrangements with their bankers for meeting working capital
requirements at reasonable rates of interest. |
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| Role
Of Nodal Agency |
- Receipt
of application;
- Processing
and sanctioning of loan assistance;
- Attending
to disbursement and other matters;
- Setting
up of a separate cell for TUFS; and
- Furnishing
information to Textile Commissioner periodically.
In view of
likely expectation of large inflow of applications and the volume
of assistance, it is proposed that other All India Financial
Institutions viz., ICICI, IFCI and IIBI and some select banks
will also receive applications and sanction and disburse assistance
to the borrowers as per the YUFS norms. IDBI, being the nodal
agency, will co-ordinate with other institutions. However, the
lead bank will co-ordinate in respect of other banks and furnish
the information to the Textile Commissioner direct. |
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| General |
Applications for assistance under the
TUFS from non-SSI undertakings may be submitted in the prescribed
form available from IDBI/ICICI/IFCI/IIBI. The applications duly
completed (5 copies) may be submitted to any one of the four
institutions either at their Head Offices or Zonal/Branch Offices.
Every effort will be made to process applications and sanction
assistance applied for as expeditiously as possible. As a general
rule, IDBI endeavours to sanction assistance sought for within
2 months from the date of receipt of complete information. |
