Corporation Bank – Loan for Professionals
Corporation Bank – Loan for Professionals
Corp Professional is a loan scheme for professionals from Corporation Bank to help them acquire office premises. Under the Corp Professional scheme, Doctors, Practicing Advocates, Chartered Accountants, Company Secretaries, Consulting Engineers and Architects can avail loan of upto Rs. 1 crore. In this article, we look at the Corp Professional loan scheme in detail.
Corporation Bank is a public sector bank, established in 1906 headquartered in Mangalore, Karnataka, India. The bank has over 2000 branches and provides the gamut of banking services. As on 31 March 2016, the total business of the bank was Rs. 345,493 crore (US$51 billion). Total deposits were Rs. 205,171 crore (US$30 billion) and total advances were Rs. 140,322 crore (US$21 billion). The bank’s net worth was Rs. 11,344 crores (US$1.7 billion).
The Corporation Bank loan scheme for professionals is designed to help professionals like Doctors, Advocates, Chartered Accountants, Company Secretaries, Consulting Engineers and Architects – purchase readily built office premises or premises under construction in commercial complexes or independent building or for construction of office premises in the land owned by the Professional or for purchase of site and construction of office premises. If the loan is for purchase of site and construction of office premises, then the value of the land is not to be in excess of 50% of the project cost.
In addition to financing of land and building, under the scheme loan can also be provided for purchase of office furniture and fixture, solar water or electricity systems too considered for usage at the office premises obtained under the Scheme.
To be eligible for the scheme, the applicant must be a professional who is a practicing doctor or lawyer or chartered accountant or company secretary or consulting engineer or architect having three years of experience in the age of 26 – 65 years. The applicant could also be a practising firm of that is individually or jointly owned by practising professionals. Further, Spouse of professional with regular or independent income can also be joined as a co-applicant to increase the loan amount eligibility and repayment capacity.
The applicant must be an Income Tax assessee with a minimum net annual income of Rs. 1,50,000. The applicant must not have any outstanding statutory dues. Further, any professional having a business would not be eligible under this scheme for financing.
Comprehensive list of “Professionals” eligible under the scheme:
- Medical Practitioners
- Chartered Accountants
- Cost Accountants
- Company Secretaries
- Construction Contractors
- Management Consultants
- Freelance accredited Journalists or Cameramen OR a person trained in any other art or craft who holds either a Degree OR Diploma from any institution established, aided or recognized by Government OR a person who is considered by the Bank as technically qualified OR skilled in the field in which he is engaged etc.
Amount of Loan
Under the scheme, loan is provided in the form of a term loan. For professionals based out of metros or port towns, the maximum amount of loan is Rs.100 lakhs. For professionals in urban and semi-urban areas, the maximum loan amount is Rs. 50 lakhs and Rs.25 lakhs, respectively. For professionals at rural areas, the maximum amount of loan is Rs.5 lakhs.
The professional would be expected to provide a margin of 25% of cost of construction or purchase consideration of the property, inclusive of stamp duty, registration fee, etc., Further, upto 40% of the loan can be used for furniture and fixtures. In case the loan is for purchase of site and construction of office premises, value of the land should not to be in excess of 50% of the project cost. In case of purchase of building, the building must not be over 20 years old.
The loan can be paid back in EMI fixed based on the repayment capacity of the borrower and the DSCR. The maximum tenure of the loan is 10 years, with an initial moratorium of upto 12 months. A processing fee of 0.75% of loan is also chargeable, with a minimum fee of Rs.5000.
The loan would be secured through an equitable mortgage of office premises. In addition, hypothecation of furniture and fixtures financed would also be required. Third party guarantee is not required. However, the personal guarantee of the applicants would be