Oriental Traders Loan Scheme (OTLS)

Home » Learn » Banking » Oriental Traders Loan Scheme (OTLS)

Oriental Traders Loan Scheme (OTLS)

Oriental Traders Loan Scheme (OTLS) enables hassle free credit to Traders to manage working capital requirements or augment long term margin or financing of fixed assets associated with business activity of the borrower or for expansion of business of the borrower.

Type of Facility

Oriental Traders Loan Scheme can be sanctioned as:

  • Fund-based working capital
  • Non-fund working capital
  • Term or Demand loan for development of shop.

Eligibility Criteria

Proprietorship, Partnership firms, Private Limited Company or One Person Company involved in trading of any commodity or goods can be sanctioned loan under the scheme. However, the business must have been operational for atleast one year. Further, aall businesses sanctioned loan under the scheme  must act in accordance with applicable statutory requirements, such as State or Central Sales Tax Registration Certificate, License under Shops and Commercial Establishment Act, Registration with Excise Department, etc.,

Amount of Loan

Maximum limit per borrower based on the area (Rural, Semi Urban, Urban and Metro) where the branch is located will be subject to the maximum lending powers of the permitting authority according to a discretionary power chart whichever is lesser. The aggregate of Working capital and term loan put together should not exceed sanctioning authority limits.

Further, working capital limits are subject to renewal every year, while term loan can be sanctioned for a maximum 60 months together with moratorium period of maximum 3 months(depending upon repayment capacity).


The assets created out of the loan would be hypothecated to the Bank. Further, in case of loan above Rs.1 crore, mortgage (Registered or Equitable) of immovable property and / or any other property will be required. Land and building but not agriculture land or plot of land or partially constructed property belonging to promoters, viz. Proprietor or Partners or Directors or close relatives, (viz. spouse, parent, brother, sister, son, daughter) would be acceptable.

In the event property is older than 25 years – the branch would be required to carry out inspection of the property every year at the time of review of facility and guarantee that the property is in good physical condition. In case of term or demand loan, the residual life of the building must be at least 5 years greater that the repayment period of the loan.

In case, any defect is observed for the duration of inspection of the security or in architect’s report, the Bank will be required to make certain substitution of the security with requisite value immediately or ensure liquidation of the facility at the earliest but not later than 12 months.

Assessment of Limit

The limit to be sanctioned must be assessed based on the value of the property. For working capital finance, 50% of the distress sale value of the property or 25% of the estimated annual sales, whichever is less can be sanctioned. In case of term loan, 75% of the cost of the furniture and fixture to be bought subject to a maximum of 25% of area wise branch limit fixed.  

Interest Rate

All accounts would be rated according to the permitted specific internal credit risk rating model for the OTLS scheme.  The interest rate would be fixed based on the risk rating of the account. In case of delayed payment, a penalty of 2% on the unpaid amount for the overdue period will be charged.   

Talk to an IndiaFilings Business Expert for your business loan requirements.

Other Related Guides

Loan for Women Entrepreneurs Loan for Women Entrepreneurs In the 2015 Female Entrepreneurship Index reported by The Global Entrepreneurship and Development Institute (GEDI), Indi...
HDFC Business Loan HDFC Business Loan HDFC Bank is offering business loans for existing businesses at very attractive rates. Business loans are one of the most importan...
Crowdfunding in India Crowdfunding in India Crowdfunding is a concept that has existed for a while in western countries and is relatively new in India. Crowdfunding is a m...
Canara Bank – Energy Saving Loan Scheme for SMEs Canara Bank – Energy Saving Loan Scheme for SMEs Canara Bank – Energy Saving Loan Scheme for SMEs offers concessional loan financing of SME energy sa...
Allahabad Bank Trade Finance Scheme Allahabad Bank Trade Finance Scheme Allahabad Bank is a nationalized bank headquartered in Kolkata, India. It is the oldest joint stock bank in India...

Post by IndiaFilings

IndiaFilings.com is committed to helping entrepreneurs and small business owners start, manage and grow their business with peace of mind at an affordable price. Our aim is to educate the entrepreneur on the legal and regulatory requirements and be a partner throughout the entire business life cycle, offering support to the company at every stage to make sure they are compliant and continually growing.