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Andhra Bank ABhivrudhi Scheme

Andhra Bank ABhivrudhi Scheme

Andhra Bank ABhivrudhi Scheme

The Andhra Bank has launched a scheme entitled “ABhivrudhi Scheme” which promotes Micro and Small Enterprises (MSEs) of the economy. Under this scheme, the bank offers working capital and term loan for MSME borrowers against property. In this article, we look at the ABhivrudhi Scheme in detail.

To know about Andhra Bank Pattabhi Sitaramayya Scheme

Eligibility Criteria

The below-specified criteria are needed to apply for the ABhivrudhi Scheme in Andhra Bank:

  • All MSE (Micro and Small Enterprises) both existing and new units including retail as well as wholesale traders subject to investment in Plant and Machinery/ Equipment as per MSMED Act 2006 are eligible to apply for the scheme.
  • The applicant must have a minimum of 2 years of financial standing record and should be a profit making unit for the past 2 years.
  • New entrants are also covered under the scheme if the provided estimates/projections are reasonable. (only for limits up to Rs.1 Crore)

Documents Required

The below following are the documents that need to be furnished at the time of applying for the ABhivrudhi Scheme:

  • Identity Proof: PAN, Driving License, Aadhar Card, Voter ID Card, Proprietor, partner of Director (if a company), etc.
  • Address Proof: Legal Passport, Property tax bill, Utility bill, etc.
  • KYC documents for promoters and units
  • Passport size photographs of the individual borrower
  • Ownership documents
  • Copy of partnership deed/ Copy of MOA and AOA
  • Copy of IT Returns of promoters/ Firm for the last three years

ABhivrudhi Loan Details

The following are the details of Interests, charges, fees and Commissions:

S.No.TypeLoan Details
1.Interest Rate

The applicable interest rate is calculated as follows:

Secured Over Draft (SOD): 1 year MCLR + 2.35% per annum

Term Loan: 1 year MCLR + 1.90% per annum

2.Limit/Quantum of the loanThe minimum loan amount offered is Rs. 10 lakhs whereas the maximum amount is Rs. 6 crores
3.Tenor

For Term Loan: Repayable in maximum 7 years including the holiday period.

For Working Capital limits: 2 years

4.Minimum Margin Money

15% cash margin money for BG/LC

10% on liquid securities such as term deposits of the bank, NSCs or life insurance policies

20% on Semi-urban/ urban/ metro immovable properties

50% on rural properties (only for limits up to Rs. 1 Crore)

5.Other concessions

100% concession in Unit inspection charges

50% concession in the TL annual review charges applicable to MSME units.

No pre-payment charges for full or part pre-payment provided the pre-payment is from the unit’s own sources.

Conduct of Stock & Receivables Audit may be waived for the accounts upto Rs. 3 Crores sanctioned under the subject scheme. However, sanctioning authorities shall ensure the end use of funds and satisfactory performance of the units by conducting periodical unit inspections.

If the limit sanctioned is higher than the S&R value, then further disbursement should be made only for acquiring stock.

Security

Primary for Term Loan: All the assets created out of the TL

Primary for Bank Guarantee or Letter of Credit: Cash margin money of minimum 15%, the applicant’s counter-guarantee and extension of charge on entire current assets of the unit.

Collateral for TL/Security for SOD, BG and LC: Security coverage for SOD/Collateral coverage and TL/Collateral coverage for a clean portion of BG/LC are as follows:

    • Minimum of 125% (margin money of 20%) by way of Semi-Urban/Urban/Metro immovable property
    • Minimum of 111.11% (margin money of 10%) by way of Liquid securities viz., term deposits of the bank, NSCs or life insurance policies (surrender value has to be considered)

Note:

  • Third party securities would not be accepted. Properties must be in the name of the borrower (Proprietor/Partner/Director) or family members.
  • Land must be non-agricultural and building age must not exceed 30 years.
  • Rural properties (Non-agricultural and enforceable under SARFAESI) can be accepted with a margin of 50% for the limits up to Rs. 1 Crore.
  • In case of a vacant land/plot, prior permission from the ZLCC(A) to be obtained duly ensuring that the vacant site is holding an approved layout design with clear demarcated boundaries with right of way and is not a landlocked property.
  • Extension of available surplus value of security offered by the borrower for the HL obtained can be considered subject to fulfilling the LTV preferred in the sanction of HL and satisfying service of HL instalments for the time frame of 12 months continuously.
  • Hypothecation of stocks and receivables and charge on entire Current Assets of the unit is to be obtained in case of WC limits.
  • Extant loan policy rules with regard to valuation of properties, creation of mortgage, registration with SRO & CERSAI, Registration of charges with ROC (in case of companies), verification of title deeds, search report, visit of the properties, re-verification of title deeds etc., are to be followed scrupulously.

Processing Charges

As per extant loan policy guidelines of the bank. However, a concession of 25% in the applicable processing fees may be permitted by the respective sanctioning authority.

Application Procedure

Kindly follow the procedure given below to apply for the ABhivrudhi Scheme.

Step 1: Approach the nearest Andhra Bank branch.

Step 2: Then, the applicant have to fill out the business loan application form in a prescribed format.

Step 3: Submit the application business loan form in the prescribed format to the concerned bank official along with all the proofs mentioned above.

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